Targeted Stock: Trecora Resources (NYSE: TREC)

On 15 Jan 2020, Trecora Resources (NYSE: TREC) spotted trading -31.40% off 52-week high price. On the other end, the stock has been noted 3.14% away from the low price over the last 52-weeks. The stock changed -1.77% to recent value of $7.23. The stock transacted 40148 shares during most recent day however it has an average volume of 51.43K shares. The company has 25.78M of outstanding shares and 21.38M shares were floated in the market.

Trecora Resources (TREC) recently reported financial results for the third quarter ended September 30, 2019.

“On top of the improved operating results, we recently reported a definitive contract to sell our entire stake in Al Masane Al Kobra Mining Co., or “AMAK”, for $70M in gross proceeds, with an predictable close later in the fourth quarter and subject to government authorization s and other closing conditions.  Upon close, we will have delivered on our commitment to monetize this asset which will enable us to importantly reduce our debt.  Further, what will remain after the completion of this transaction, is a Company with a singular focus on improving our operating businesses, a solid balance sheet and financial flexibility to create shareholder value,” Mr. Quarles added.

Third Quarter 2019 Financial Results
Net income from continuing operations in the third quarter of 2019 was $1.6M, or $0.06 per diluted share1, contrast to a net loss from continuing operations of $(0.7M), or $(0.03) per diluted share2, in the third quarter of 2018.

Total revenue in the third quarter of 2019 was $62.7M contrast to $73.4M in the third quarter of 2018.  This year-over-year decrease was primarily Because of a 4.8% decrease in Specialty Petrochemicals sales volume and a 9.2% decline in average selling prices, which was primarily Because of lower feedstock costs.  Revenues from processing declined as contrast to the third quarter of 2018, primarily Because of the termination of a contract in the fourth quarter of 2018.

Gross profit in the third quarter of 2019 was $9.6M, or 15.3% of total revenues, contrast to $6.8M, or 9.3% of total revenues, in the third quarter of 2018.  Operating income in the third quarter of 2019 was $3.0M contrast to $0.3M for the third quarter of 2018.  The improved margins were primarily driven by lower feedstock costs, operation of the Advanced Reformer unit and lower labor costs as a result of the cost reduction program implemented in December 2018.

Specialty Petrochemicals 
Specialty Petrochemicals net income was $6.3M in the third quarter of 2019, contrast to net income of $2.5M in the third quarter of 2018. Specialty Petrochemicals volume in the third quarter of 2019 was 20.5M gallons, contrast to 21.4M gallons in the second quarter of 2019 and 21.6M gallons in the third quarter of 2018.

Prime product volume in the third quarter of 2019 was 16.4M gallons, contrast to 17.7M gallons in the second quarter of 2019 and 17.0M gallons in the third quarter of 2018.  By-product sales volume was 4.1M gallons in the third quarter of 2019.  Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the third quarter of 2019 was $9.9M contrast to $6.2M in the third quarter of 2018.

Its earnings per share (EPS) expected to touch remained -131.10% for this year while earning per share for the next 5-years is expected to reach at 17.50%. TREC has a gross margin of 12.10% and an operating margin of 5.50% while its profit margin remained 2.40% for the last 12 months. According to the most recent quarter its current ratio was 3.3 that represents company’s ability to meet its current financial obligations. The price moved ahead of -1.43% from the mean of 20 days, -6.70% from mean of 50 days SMA and performed -18.53% from mean of 200 days price. Company’s performance for the week was -3.60%, -6.47% for month and YTD performance remained 1.12%.


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