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EX-32.2 - EX-32.2 - RENTECH, INC.rtk-ex322_9.htm
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EX-31.1 - EX-31.1 - RENTECH, INC.rtk-ex311_7.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File No. 001-15795

 

RENTECH, INC.

(Exact name of registrant as specified in its charter)

 

 

Colorado

 

84-0957421

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

1000 Potomac Street NW, 5th Floor

Washington, DC 20007

(Address of principal executive offices)

(202) 791-9040

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

  (Do not check if a smaller reporting company)

Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

The number of shares of the Registrant’s common stock outstanding as of October 31, 2016 was 23,191,502.

 

 

 

 


 

RENTECH, INC.

Form 10-Q

Table of Contents

 

 

 

2


 

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

RENTECH, INC.

Consolidated Balance Sheets

(Amounts in thousands, except per share data)

 

 

 

As of

 

 

 

September 30,

2016

 

 

December 31,

2015

 

 

 

(Unaudited)

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash

 

$

39,674

 

 

$

33,119

 

Accounts receivable, including unbilled revenue

 

 

8,987

 

 

 

9,495

 

Inventories

 

 

28,876

 

 

 

23,771

 

Prepaid expenses and other current assets

 

 

4,002

 

 

 

3,784

 

Other receivables

 

 

4,558

 

 

 

3,106

 

Assets of discontinued operations

 

 

5,853

 

 

 

63,854

 

Total current assets

 

 

91,950

 

 

 

137,129

 

Property, plant and equipment, net

 

 

239,420

 

 

 

240,700

 

Construction in progress

 

 

5,618

 

 

 

4,240

 

Other assets

 

 

 

 

 

 

 

 

Equity investment

 

 

54,508

 

 

 

 

Goodwill

 

 

40,255

 

 

 

40,255

 

Intangible assets

 

 

33,793

 

 

 

36,084

 

Deposits and other assets

 

 

4,512

 

 

 

4,457

 

Property held for sale

 

 

 

 

 

2,359

 

Assets of discontinued operations

 

 

 

 

 

185,067

 

Total other assets

 

 

133,068

 

 

 

268,222

 

Total assets

 

$

470,056

 

 

$

650,291

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

10,327

 

 

$

12,266

 

Accrued payroll and benefits

 

 

5,064

 

 

 

5,340

 

Accrued liabilities

 

 

22,744

 

 

 

18,675

 

Deferred revenue

 

 

1,550

 

 

 

1,401

 

Current portion of long term debt

 

 

14,039

 

 

 

18,744

 

Accrued interest

 

 

313

 

 

 

337

 

Other

 

 

1,860

 

 

 

2,554

 

Liabilities of discontinued operations

 

 

150

 

 

 

54,052

 

Total current liabilities

 

 

56,047

 

 

 

113,369

 

Long-term liabilities

 

 

 

 

 

 

 

 

Debt

 

 

111,887

 

 

 

157,268

 

Earn-out consideration

 

 

921

 

 

 

871

 

Asset retirement obligation

 

 

240

 

 

 

223

 

Deferred income taxes

 

 

18,221

 

 

 

7,301

 

Other

 

 

1,923

 

 

 

1,675

 

Liabilities of discontinued operations

 

 

 

 

 

354,164

 

Total long-term liabilities

 

 

133,192

 

 

 

521,502

 

Total liabilities

 

 

189,239

 

 

 

634,871

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

Mezzanine equity

 

 

 

 

 

 

 

 

Series E convertible preferred stock: $10 par value; 4.5% dividend rate; 100 shares authorized, 0 and 100

   shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively

 

 

 

 

 

95,840

 

Stockholders' equity (deficit)

 

 

 

 

 

 

 

 

Preferred stock: $10 par value; 1,000 shares authorized; 90 series A convertible preferred shares authorized and

   issued; no shares outstanding and $0 liquidation preference

 

 

 

 

 

 

Series C participating cumulative preferred stock: $10 par value; 500 shares authorized; no shares issued and

   outstanding

 

 

 

 

 

 

Series D junior participating preferred stock: $10 par value; 45 shares authorized; no shares issued and outstanding

 

 

 

 

 

 

Common stock: $.01 par value; 45,000 shares authorized; 23,191 and 23,033 shares issued and outstanding at

   September 30, 2016 and December 31, 2015, respectively

 

 

232

 

 

 

230

 

Additional paid-in capital

 

 

533,167

 

 

 

543,724

 

Accumulated deficit

 

 

(233,543

)

 

 

(531,971

)

Accumulated other comprehensive loss

 

 

(21,797

)

 

 

(27,204

)

Total Rentech stockholders' equity (deficit)

 

 

278,059

 

 

 

(15,221

)

Noncontrolling interests

 

 

2,758

 

 

 

(65,199

)

Total equity (deficit)

 

 

280,817

 

 

 

(80,420

)

Total liabilities and stockholders' equity (deficit)

 

$

470,056

 

 

$

650,291

 

 

See Accompanying Notes to Consolidated Financial Statements.

 

 

3


 

RENTECH, INC.

Consolidated Statements of Operations

(Amounts in thousands, except per share data)

 

 

 

For the Three Months Ended

September 30,

 

 

For the Nine Months Ended

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

$

22,998

 

 

$

24,742

 

 

$

62,650

 

 

$

67,198

 

Service revenues

 

 

15,600

 

 

 

18,087

 

 

 

47,678

 

 

 

51,992

 

Total revenues

 

 

38,598

 

 

 

42,829

 

 

 

110,328

 

 

 

119,190

 

Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

 

26,645

 

 

 

23,710

 

 

 

73,803

 

 

 

63,893

 

Service

 

 

12,748

 

 

 

13,368

 

 

 

38,868

 

 

 

40,205

 

Total cost of sales

 

 

39,393

 

 

 

37,078

 

 

 

112,671

 

 

 

104,098

 

Gross profit (loss)

 

 

(795

)

 

 

5,751

 

 

 

(2,343

)

 

 

15,092

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expense

 

 

9,338

 

 

 

12,146

 

 

 

26,194

 

 

 

37,300

 

Depreciation and amortization

 

 

732

 

 

 

903

 

 

 

2,515

 

 

 

3,537

 

Asset impairment

 

 

 

 

 

704

 

 

 

 

 

 

704

 

Other expense, net

 

 

2,221

 

 

 

6

 

 

 

3,885

 

 

 

9

 

Total operating expenses

 

 

12,291

 

 

 

13,759

 

 

 

32,594

 

 

 

41,550

 

Operating loss

 

 

(13,086

)

 

 

(8,008

)

 

 

(34,937

)

 

 

(26,458

)

Other expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(2,494

)

 

 

(3,725

)

 

 

(8,577

)

 

 

(7,238

)

Loss on debt repayment

 

 

 

 

 

 

 

 

(3,295

)

 

 

 

Other income (expense)

 

 

218

 

 

 

(845

)

 

 

731

 

 

 

1,143

 

Total other expenses, net

 

 

(2,276

)

 

 

(4,570

)

 

 

(11,141

)

 

 

(6,095

)

Loss from continuing operations before income taxes and equity in

   loss of investee

 

 

(15,362

)

 

 

(12,578

)

 

 

(46,078

)

 

 

(32,553

)

Income tax (benefit) expense

 

 

(6,769

)

 

 

(2,044

)

 

 

(118,660

)

 

 

177

 

Income (loss) from continuing operations before equity in loss of

   investee

 

 

(8,593

)

 

 

(10,534

)

 

 

72,582

 

 

 

(32,730

)

Equity in loss of investee

 

 

1,115

 

 

 

 

 

 

2,475

 

 

 

421

 

Income (loss) from continuing operations

 

 

(9,708

)

 

 

(10,534

)

 

 

70,107

 

 

 

(33,151

)

Income (loss) from discontinued operations, net of tax

 

 

(401

)

 

 

(22,302

)

 

 

231,813

 

 

 

(78,350

)

Net income (loss)

 

 

(10,109

)

 

 

(32,836

)

 

 

301,920

 

 

 

(111,501

)

Net (income) loss attributable to noncontrolling interests

 

 

71

 

 

 

9,812

 

 

 

(3,492

)

 

 

32,754

 

Loss on redemption of preferred stock

 

 

 

 

 

 

 

 

(11,049

)

 

 

 

Preferred stock dividends

 

 

 

 

 

(1,320

)

 

 

(1,320

)

 

 

(3,960

)

Net income (loss) attributable to Rentech common shareholders

 

$

(10,038

)

 

$

(24,344

)

 

$

286,059

 

 

$

(82,707

)

Net income (loss) per common share allocated to Rentech common

   shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.42

)

 

$

(0.51

)

 

$

2.42

 

 

$

(1.62

)

Discontinued operations

 

$

(0.01

)

 

$

(0.55

)

 

$

9.65

 

 

$

(1.98

)

Net income (loss)

 

$

(0.43

)

 

$

(1.06

)

 

$

12.07

 

 

$

(3.60

)

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.42

)

 

$

(0.51

)

 

$

2.39

 

 

$

(1.62

)

Discontinued operations

 

$

(0.01

)

 

$

(0.55

)

 

$

9.54

 

 

$

(1.98

)

Net income (loss)

 

$

(0.43

)

 

$

(1.06

)

 

$

11.93

 

 

$

(3.60

)

Weighted-average shares used to compute net income (loss) per common

   share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

23,189

 

 

 

23,005

 

 

 

23,098

 

 

 

22,969

 

Diluted

 

 

23,189

 

 

 

23,005

 

 

 

23,378

 

 

 

22,969

 

 

See Accompanying Notes to Consolidated Financial Statements.

 

 

4


 

RENTECH, INC.

Consolidated Statements of Comprehensive Income (Loss)

(Amounts in thousands)

 

 

 

For the Three Months Ended

September 30,

 

 

For the Nine Months Ended

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Net income (loss)

 

$

(10,109

)

 

$

(32,836

)

 

$

301,920

 

 

$

(111,501

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension and postretirement plan adjustments

 

 

 

 

 

4

 

 

 

 

 

 

12

 

Foreign currency translation

 

 

(1,564

)

 

 

(9,345

)

 

 

5,690

 

 

 

(16,132

)

Other comprehensive income (loss)

 

 

(1,564

)

 

 

(9,341

)

 

 

5,690

 

 

 

(16,120

)

Comprehensive income (loss)

 

 

(11,673

)

 

 

(42,177

)

 

 

307,610

 

 

 

(127,621

)

Less: net (income) loss attributable to noncontrolling interests

 

 

71

 

 

 

9,812

 

 

 

(3,492

)

 

 

32,754

 

Less: other comprehensive income attributable to noncontrolling interests

 

 

 

 

 

(1

)

 

 

 

 

 

(5

)

Comprehensive income (loss) attributable to Rentech

 

$

(11,602

)

 

$

(32,366

)

 

$

304,118

 

 

$

(94,872

)

 

See Accompanying Notes to Consolidated Financial Statements.

 

 

5


 

RENTECH, INC.

Consolidated Statements of Stockholders’ Equity (Deficit)

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

Rentech

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholders'

 

 

Noncontrolling

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity (Deficit)

 

 

Interests

 

 

Equity (Deficit)

 

 

 

(Unaudited)

 

Balance, December 31, 2014

 

 

229,308

 

 

$

2,293

 

 

$

543,091

 

 

$

(417,349

)

 

$

(7,302

)

 

$

120,733

 

 

$

3,102

 

 

$

123,835

 

Reverse stock split

 

 

(207,040

)

 

 

(2,070

)

 

 

2,070

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for services

 

 

259

 

 

 

3

 

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for stock

   options exercised

 

 

255

 

 

 

2

 

 

 

27

 

 

 

 

 

 

 

 

 

29

 

 

 

 

 

 

29

 

Dividends - preferred stock

 

 

 

 

 

 

 

 

(3,960

)

 

 

 

 

 

 

 

 

(3,960

)

 

 

 

 

 

(3,960

)

Distributions to noncontrolling

   interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,361

)

 

 

(26,361

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

3,167

 

 

 

 

 

 

 

 

 

3,167

 

 

 

355

 

 

 

3,522

 

Restricted stock units

 

 

229

 

 

 

2

 

 

 

(142

)

 

 

 

 

 

 

 

 

(140

)

 

 

 

 

 

(140

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(78,747

)

 

 

 

 

 

(78,747

)

 

 

(32,754

)

 

 

(111,501

)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,125

)

 

 

(16,125

)

 

 

5

 

 

 

(16,120

)

Other

 

 

 

 

 

 

 

 

144

 

 

 

(1

)

 

 

 

 

 

143

 

 

 

(12

)

 

 

131

 

Balance, September 30, 2015

 

 

23,011

 

 

$

230

 

 

$

544,394

 

 

$

(496,097

)

 

$

(23,427

)

 

$

25,100

 

 

$

(55,665

)

 

$

(30,565

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2015

 

 

23,033

 

 

$

230

 

 

$

543,724

 

 

$

(531,971

)

 

$

(27,204

)

 

$

(15,221

)

 

$

(65,199

)

 

$

(80,420

)

Sale of investment in RNP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

67,812

 

 

 

67,812

 

Common stock issued for services

 

 

125

 

 

 

2

 

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on redemption of preferred stock

 

 

 

 

 

 

 

 

(11,049

)

 

 

 

 

 

 

 

 

(11,049

)

 

 

 

 

 

(11,049

)

Dividends - preferred stock

 

 

 

 

 

 

 

 

(1,320

)

 

 

 

 

 

 

 

 

(1,320

)

 

 

 

 

 

(1,320

)

Distributions to noncontrolling

   interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,345

)

 

 

(3,345

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

1,681

 

 

 

 

 

 

 

 

 

1,681

 

 

 

 

 

 

1,681

 

Restricted stock units

 

 

33

 

 

 

 

 

 

(31

)

 

 

 

 

 

 

 

 

(31

)

 

 

 

 

 

(31

)

Net income

 

 

 

 

 

 

 

 

 

 

 

298,428

 

 

 

 

 

 

298,428

 

 

 

3,492

 

 

 

301,920

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,690

 

 

 

5,690

 

 

 

 

 

 

5,690

 

Other

 

 

 

 

 

 

 

 

164

 

 

 

 

 

 

(283

)

 

 

(119

)

 

 

(2

)

 

 

(121

)

Balance, September 30, 2016

 

 

23,191

 

 

$

232

 

 

$

533,167

 

 

$

(233,543

)

 

$

(21,797

)

 

$

278,059

 

 

$

2,758

 

 

$

280,817

 

 

See Accompanying Notes to Consolidated Financial Statements.

 

 

6


 

RENTECH, INC.

Consolidated Statements of Cash Flows

(Amounts in thousands)

 

 

 

For the Nine Months

Ended September 30,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income (loss)

 

$

301,920

 

 

$

(111,501

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: