HIGHLIGHTS:
- The Company reported higher production volumes in the fourth
quarter of 2014 at its Mountain Pass, California rare earth
facility, with 1,328 metric tons ("mt") of rare earth oxide ("REO")
equivalent production. That compares to 1,034 mt in the fourth
quarter of 2013 and 691 mt in the third quarter of 2014. Full year
2014 production at Mountain Pass totaled approximately 4,769 mt,
compared to 3,473 mt in 2013.
- The Chlor-Alkali plant at Mountain Pass is performing well and
the Company is able to produce or purchase sufficient supplies of
hydrochloric acid for rare earth production.
- Per-unit cash production costs at Mountain Pass declined in the
fourth quarter of 2014 to $21.02 per kilogram, a 38% decrease over
the third quarter of 2014 costs of $33.80 per kilogram.
- The Company reported fourth quarter product sales volume of
3,149 mt, a 6% decrease over the third quarter, at an average
selling price ("ASP") of $36.91 per kilogram. For the full year
2014, the Company reported sales volume of 13,019 mt, a 1% increase
over 2013, at an ASP of approximately $36.53 per kilogram.
- Net revenues for the quarter were $116.2 million, a 6% decrease
from the third quarter. Full year 2014 net revenues were $475.6
million, a 14% decrease as compared to 2013.
- The Company reported a net loss of $1.43 per share for the
quarter. The Company reported a net loss of $0.39 per share for the
quarter on an adjusted non-GAAP basis.
- For the full year 2014, the Company reported a net loss of
$2.70 per share. On an adjusted non-GAAP basis, the Company
reported a net loss of $1.31 per share for the full year, due
largely to impairment of goodwill and other intangible assets and
write-offs of certain tangible assets.
Molycorp, Inc. (NYSE:MCP) ("Molycorp" or the "Company") today
announced financial and operating results for the fourth quarter
and full year 2014.
FOURTH QUARTER 2014 RESULTS
The Company reported consolidated net revenues of $116.2
million, a 6% decrease over the third quarter of 2014. The decrease
in revenues was largely driven by a shifting product mix, lower
sales volumes from all segments, except for Rare Metals', and
softened pricing for rare earths.
During the fourth quarter, the Company sold 3,149 mt of product
at an ASP of $36.91 per kilogram, and generated a gross loss of
$44.8 million. This compares to sales volumes of 3,356 mt at an ASP
of $36.93 per kilogram and a gross loss of $15.1 million during the
third quarter of 2014. The Company produced 691 mt and 1,328 mt of
rare earth oxides at its Mountain Pass facility during the third
and fourth quarters of 2014, respectively. Actual production was
lower than expected as a result of production interruptions while
the Company continues to optimize operations, and this lower than
expected production has continued through the first two months of
2015.
Molycorp reported a loss attributable to common stockholders of
$329.8 million, or $1.43 per share. Adjusted loss per share of
$0.39 in the fourth quarter of 2014 does not reflect impairment
charges for goodwill and other intangible assets, out-of-ordinary
business expenses, and certain other non-cash items.
The Company reported negative cash flows from operating
activities of $75.8 million during the fourth quarter, and had
$211.7 million in cash and cash equivalents as of December 31,
2014.
During the three months ended December 31, 2014, Molycorp's
capital expenditures were $23.3 million on a cash basis.
FULL YEAR 2014 RESULTS
The Company reported consolidated net revenues of $475.6
million, a 14% decrease as compared to the full year 2013. The
decrease in revenues was largely driven by softened rare earth
pricing.
For the full year, the Company sold 13,019 mt of product at an
ASP of $36.53 per kilogram, and generated a gross loss of $99.6
million. This compares to volume sales of 12,873 mt at an ASP of
$43.07 per kilogram and a gross loss of $67.2 million for the full
year 2013.
Molycorp reported a full year loss attributable to common
stockholders of $607.8 million, or $2.70 per share. Adjusted loss
per share of $1.31 for the full year 2014 eliminates the effect of
operational expansion items, out-of-ordinary business expenses, and
certain other non-cash items.
The Company reported negative cash flows from operating
activities of $222.2 million during the year. Capital expenditures
for the Company on a cash basis for the full year were $86.2
million. For the full year ending December 31, 2015, the Company
estimates that its capital expenditures will total approximately
$60-$65 million.
CONFERENCE CALL TOMORROW AT 9:00 A.M. EASTERN STANDARD
TIME
Molycorp will conduct a conference call on March 17, 2015 to
discuss these results at 9:00 a.m. EST, hosted by Geoff Bedford,
President and Chief Executive Officer, and Michael Doolan,
Executive Vice President and Chief Financial Officer. Investors
interested in participating in the live call from the U.S. should
dial +1 (866) 543-6403 and reference passcode number 20720733.
Those calling from outside the U.S. should dial +1 (617) 213-8896
and reference the same passcode as above.
There will also be a simultaneous live audio webcast available
on the Investor Relations section of the Company's website at
www.molycorp.com/investors. The webcast will be archived on the
website. A PowerPoint presentation that will be broadcast live via
webcast during the conference call will be made available on the
website immediately prior to the call.
NON-GAAP ADJUSTED NET LOSS, OIBDA and ADJUSTED
OIBDA
Adjusted Net Loss excludes certain non-cash items and other
out-of-ordinary business expense and operational expansion items.
The Company defines OIBDA as operating income before depreciation,
amortization and accretion. Adjusted OIBDA consists of OIBDA
excluding certain non-cash items and other out-of-ordinary business
expense and operational expansion items. Adjusted Net Loss, OIBDA
and Adjusted OIBDA are all non-GAAP financial measures. There have
been no changes in the calculation method of previously disclosed
non-GAAP financial measures. The Company's management believes
adjusting out these items from Net Loss and OIBDA, including but
not limited to purchase accounting adjustments, stock-based
compensation, out-of-ordinary expenses/income, asset impairment
charges and other miscellaneous charges, is useful to investors
because it provides an overall understanding of the Company's
historical financial performance and future prospects. Management
believes that Adjusted Net Loss, OIBDA and Adjusted OIBDA are an
indication of the Company's base-line performance. Exclusion of
these items permits evaluation and comparison of results for the
Company's core business operations, and it is on this basis that
management internally assesses the Company's performance.
MOLYCORP, INC. -
FINANCIAL STATEMENTS AND SUPPLEMENTARY TABLES |
|
TABLE 1: CONSOLIDATED
BALANCE SHEETS |
|
(In thousands, except
shares and per share amounts) |
|
|
At December
31, |
|
2014 |
2013 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 211,685 |
$ 314,317 |
Trade accounts receivable,
net |
44,575 |
61,757 |
Inventory |
169,323 |
171,783 |
Prepaid expenses and other
current assets |
29,332 |
29,210 |
Total current assets |
454,915 |
577,067 |
Non-current assets: |
|
|
Deposits |
31,078 |
25,997 |
Property, plant and equipment,
net |
1,707,970 |
1,762,874 |
Inventory |
25,127 |
25,329 |
Intangible assets, net |
215,871 |
330,867 |
Investments |
8,801 |
48,875 |
Goodwill |
102,808 |
228,750 |
Other non-current assets |
29,416 |
7,043 |
Total non-current assets |
2,121,071 |
2,429,735 |
Total
assets |
$ 2,575,986 |
$ 3,006,802 |
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Trade accounts payable |
$ 40,842 |
$ 84,449 |
Accrued expenses |
51,966 |
48,501 |
Debt and capital lease
obligations |
12,560 |
16,362 |
Other current liabilities |
4,686 |
4,063 |
Total current liabilities |
110,054 |
153,375 |
Non-current liabilities: |
|
|
Asset retirement
obligation |
17,799 |
16,966 |
Deferred tax liabilities |
63,802 |
85,481 |
Debt and capital lease
obligations |
1,559,781 |
1,363,916 |
Other non-current
liabilities |
20,247 |
10,002 |
Total non-current
liabilities |
1,661,629 |
1,476,365 |
Total
liabilities |
$ 1,771,683 |
$ 1,629,740 |
Commitments and contingencies |
|
|
Stockholders' equity: |
|
|
Common stock, $0.001 par value;
700,000,000 shares authorized at December 31, 2014 and 350,000,000
at December 31, 2013 |
260 |
241 |
Preferred stock, $0.001 par
value; 5,000,000 shares authorized at December 31, 2013 |
— |
2 |
Additional paid-in capital |
2,245,478 |
2,194,405 |
Accumulated other comprehensive
loss |
(3,323) |
(6,451) |
Accumulated deficit |
(1,445,408) |
(840,474) |
Total Molycorp stockholders'
equity |
797,007 |
1,347,723 |
Noncontrolling interests |
7,296 |
29,339 |
Total stockholders' equity |
804,303 |
1,377,062 |
Total liabilities and
stockholders' equity |
$ 2,575,986 |
$ 3,006,802 |
|
TABLE 2: CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
|
(In thousands, except
per share amounts) |
|
|
Quarter Ended |
Years Ended
December 31, |
|
December 31,
2014 |
2014 |
2013 |
Revenues |
$ 116,242 |
$ 475,612 |
$ 554,390 |
Costs of sales: |
|
|
|
Costs excluding depreciation
and amortization |
(122,912) |
(481,417) |
(553,831) |
Depreciation and
amortization |
(38,174) |
(93,782) |
(67,727) |
Gross loss |
(44,844) |
(99,587) |
(67,168) |
Operating expenses: |
|
|
|
Selling, general and
administrative |
(14,204) |
(74,490) |
(107,169) |
Corporate development |
— |
— |
(247) |
Depreciation, amortization and
accretion |
(7,327) |
(29,879) |
(38,037) |
Research and development |
(3,662) |
(15,265) |
(23,172) |
Impairment of goodwill and
other long-lived assets |
(231,650) |
(231,650) |
(120,898) |
Operating loss |
(301,687) |
(450,871) |
(356,691) |
Other (expense) income: |
|
|
|
Other (expense) income |
(3,615) |
(5,092) |
1,886 |
Foreign exchange loss, net |
(2,784) |
(3,146) |
(376) |
Interest expense, net of
capitalized interest |
(55,008) |
(167,375) |
(67,684) |
Gain on extinguishment of
convertible notes, net |
19,719 |
19,719 |
— |
Impairment of investments at
cost |
— |
(12,000) |
(9,411) |
|
(41,688) |
(167,894) |
(75,585) |
Loss from continuing operations
before income taxes and equity earnings |
(343,375) |
(618,765) |
(432,276) |
Income tax benefit |
16,832 |
22,594 |
70,943 |
Equity in loss of
affiliates |
(21,395) |
(26,763) |
(9,169) |
Loss from continuing
operations |
(347,938) |
(622,934) |
(370,502) |
Loss from discontinued
operations, net of tax |
— |
— |
(6,427) |
Net loss |
(347,938) |
(622,934) |
(376,929) |
Net loss attributable to
noncontrolling interests |
18,142 |
18,000 |
2,546 |
Net loss attributable to Molycorp
stockholders |
$ (329,796) |
$ (604,934) |
$ (374,383) |
Net loss |
$ (347,938) |
$ (622,934) |
$ (376,929) |
Other comprehensive loss, net of tax: |
|
|
|
Foreign currency translation
adjustments |
13,524 |
4,271 |
1,623 |
Actuarial (loss) gain |
(1,143) |
(1,143) |
1,359 |
Comprehensive loss |
$ (335,557) |
$ (619,806) |
$ (373,947) |
Comprehensive (loss) income attributable
to: |
|
|
|
Molycorp stockholders |
(317,415) |
(601,806) |
(371,401) |
Noncontrolling interests |
(18,142) |
(18,000) |
(2,546) |
|
$ (335,557) |
$ (619,806) |
$ (373,947) |
Loss per share of common stock: |
|
|
|
Basic: |
|
|
|
Continuing operations |
$ (1.43) |
$ (2.70) |
$ (2.17) |
Discontinued operations |
— |
— |
(0.04) |
|
$ (1.43) |
$ (2.70) |
$ (2.21) |
|
TABLE 3: CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
(In thousands) |
|
|
Years Ended
December 31, |
|
2014 |
2013 |
Cash flows from operating activities: |
|
|
Net loss |
$ (622,934) |
$ (376,929) |
Adjustments to reconcile net loss to net cash
from operating activities: |
|
|
Depreciation, amortization and
accretion |
123,661 |
105,764 |
Deferred income tax
benefit |
(38,996) |
(68,290) |
Inventory write-downs |
84,414 |
100,346 |
Release of inventory step-up
value |
993 |
3,068 |
Impairment of goodwill and
other long-lived assets |
231,650 |
120,898 |
Impairment of investments |
12,000 |
9,411 |
Stock-based compensation |
5,261 |
5,392 |
Equity in results of
affiliates |
26,763 |
9,169 |
Gain on extinguishment of
convertible notes, net |
(19,719) |
— |
PIK interest |
3,851 |
— |
Change in fair value of
embedded derivative |
3,879 |
— |
Amortization of issuance
costs |
7,444 |
— |
Impairment of other
receivables |
3,292 |
— |
Other operating activities |
5,021 |
1,539 |
Net change in operating assets
and liabilities |
(48,784) |
(64,719) |
Net cash used in operating
activities |
(222,204) |
(154,351) |
Cash flows from investing activities: |
|
|
Investment in joint
ventures |
(703) |
(3,423) |
Dividends received from equity
investment |
2,014 |
— |
Capital expenditures |
(86,158) |
(379,312) |
Recovery from insurance
claims |
12,900 |
— |
Other investing activities |
984 |
5,477 |
Net cash used in investing
activities |
(70,963) |
(377,258) |
Cash flows from financing activities: |
|
|
Repayments of debt |
(7,825) |
(26,823) |
Net proceeds from sale of
common stock |
— |
495,717 |
Issuance of 5.50% Convertible
Notes |
— |
165,600 |
|
Payments of preferred
dividends |
(2,846) |
(11,385) |
Dividends paid to
noncontrolling interests |
(4,222) |
(4,546) |
Debt issuance costs |
(15,260) |
— |
Proceeds from the 2014
Financings |
250,000 |
— |
Partial repayment of
convertible notes |
(27,495) |
— |
Other financing activities |
— |
(1,297) |
Net cash provided by financing
activities |
192,352 |
617,266 |
Effect of exchange rate changes
on cash |
(1,817) |
870 |
Net change in cash and cash
equivalents |
(102,632) |
86,527 |
Cash and cash equivalents at beginning of the
year |
314,317 |
227,790 |
Cash and cash equivalents at end of year |
$ 211,685 |
$ 314,317 |
|
TABLE 4: SEGMENT
INFORMATION |
|
Year ended December 31,
2014 |
Resources |
Chemicals and
Oxides |
Magnetic Materials and
Alloys |
Rare Metals |
Corporate and
other(a) |
Eliminations
(b) |
Total Molycorp,
Inc. |
|
(In
thousands) |
Revenues: |
|
|
|
|
|
|
|
External |
$ 14,097 |
$ 159,365 |
$ 222,795 |
$ 79,355 |
|
$ — |
$ 475,612 |
Inter-segment |
34,093 |
22,056 |
7,591 |
— |
|
(63,740) |
— |
Total revenues |
$ 48,190 |
$ 181,421 |
$ 230,386 |
$ 79,355 |
|
$ (63,740) |
$ 475,612 |
OIBDA |
(146,157) |
(202,588) |
52,966 |
(442) |
|
|
|
Depreciation, amortization and accretion |
(78,739) |
(17,401) |
(16,956) |
(10,343) |
|
|
|
Operating (loss) income (c) |
$ (224,896) |
$ (219,989) |
$ 36,010 |
$ (10,785) |
$ (33,195) |
$ 1,984 |
$ (450,871) |
Other expense |
|
|
|
|
|
|
(5,092) |
Foreign exchange loss, net |
|
|
|
|
|
|
(3,146) |
Interest expense, net of capitalized
interest |
|
|
|
|
|
|
(167,375) |
Gain on extinguishment of convertible notes,
net |
|
|
|
|
|
|
19,719 |
Impairment of investments |
|
|
|
|
|
|
$ (12,000) |
Loss before income taxes and equity
earnings |
|
|
|
|
|
|
$ (618,765) |
|
|
|
|
|
|
|
|
Quarter ended December 31,
2014 |
Resources |
Chemicals and
Oxides |
Magnetic Materials and
Alloys |
Rare Metals |
Corporate and
other(a) |
Eliminations
(b) |
Total Molycorp,
Inc. |
|
(In
thousands) |
Revenues: |
|
|
|
|
|
|
|
External |
$ 4,145 |
$ 36,844 |
$ 53,535 |
$ 21,718 |
|
$ — |
$ 116,242 |
Inter-segment |
4,510 |
5,918 |
3,865 |
— |
|
(14,293) |
— |
Total revenues |
$ 8,655 |
$ 42,762 |
$ 57,400 |
$ 21,718 |
|
$ (14,293) |
$ 116,242 |
OIBDA |
(48,327) |
(214,975) |
13,762 |
(1,706) |
|
|
|
Depreciation, amortization and accretion |
(31,307) |
(5,797) |
(4,226) |
(4,116) |
|
|
|
Operating (loss) income (c) |
$ (79,634) |
$ (220,772) |
$ 9,536 |
$ (5,822) |
$ (7,936) |
$ 2,941 |
$ (301,687) |
Other expense |
|
|
|
|
|
|
(3,615) |
Foreign exchange loss, net |
|
|
|
|
|
|
(2,784) |
Interest expense, net of capitalized
interest |
|
|
|
|
|
|
(55,008) |
Gain on extinguishment of convertible notes,
net |
|
|
|
|
|
|
19,719 |
Loss before income taxes and equity
earnings |
|
|
|
|
|
|
$ (343,375) |
(a) Includes business development costs, personnel costs,
stock-based compensation, accounting and legal fees, occupancy
expense, information technology costs and interest expense.
(b) Consist of inter-segment sales and gross profits
eliminations as well as eliminations of lower of cost or market
adjustments related to inter-segment inventory.
(c) Includes impairment of goodwill and other long-lived assets
in some segments.
TABLE 4: SEGMENT
INFORMATION (continued) |
|
Year ended December 31,
2013 |
Resources |
Chemicals and
Oxides |
Magnetic Materials and
Alloys |
Rare Metals |
Corporate and other
(a) |
Eliminations
(b) |
Total Molycorp,
Inc. |
|
(In
thousands) |
Revenues: |
|
|
|
|
|
|
|
External |
$ 33,621 |
$ 181,815 |
$ 252,713 |
$ 86,241 |
|
$ — |
$ 554,390 |
Inter-segment |
26,040 |
37,256 |
— |
— |
|
(63,296) |
— |
Total revenues |
$ 59,661 |
$ 219,071 |
$ 252,713 |
$ 86,241 |
|
$ (63,296) |
$ 554,390 |
OIBDA |
(177,384) |
(65,135) |
50,899 |
(12,456) |
|
|
|
Depreciation, amortization and accretion |
(46,318) |
(22,754) |
(27,812) |
(8,652) |
|
|
|
Operating (loss) income (c) |
$ (223,702) |
$ (87,889) |
$ 23,087 |
$ (21,108) |
$ (46,126) |
$ (953) |
$ (356,691) |
Other expense |
|
|
|
|
|
|
1,886 |
Foreign exchange loss, net |
|
|
|
|
|
|
(376) |
Interest expense, net of capitalized
interest |
|
|
|
|
|
|
(67,684) |
Impairment of investment at cost |
|
|
|
|
|
|
(9,411) |
Loss before income taxes and equity
earnings |
|
|
|
|
|
|
$ (432,276) |
|
TABLE 5: LOSS PER
SHARE |
|
|
Quarter Ended |
Years Ended
December 31, |
|
December 31,
2014 |
2014 |
2013 |
|
(In thousands,
except share and per share amounts) |
Net loss attributable to Molycorp
stockholders |
$ (329,795) |
$ (604,934) |
$ (374,383) |
Dividends on Convertible
Preferred Stock |
— |
(2,846) |
(11,385) |
Loss attributable to common stockholders |
(329,795) |
(607,780) |
(385,768) |
|
|
|
|
Continuing operations |
$ (329,795) |
$ (607,780) |
$ (379,341) |
Discontinued operations |
— |
— |
(6,427) |
|
$ (329,795) |
$ (607,780) |
$ (385,768) |
|
|
|
|
Weighted average common shares
outstanding—basic |
229,960,050 |
224,978,752 |
174,528,717 |
|
|
|
|
Basic loss per share from: |
|
|
|
Continuing operations |
$ (1.43) |
$ (2.70) |
$ (2.17) |
Discontinued operations |
— |
— |
(0.04) |
|
$ (1.43) |
$ (2.70) |
$ (2.21) |
|
TABLE 6: PRODUCT
REVENUES, SALES VOLUME, ASP |
|
|
Quarter Ended |
Years Ended
December 31, |
|
December 31,
2014 |
2014 |
2013 |
Revenues (in
thousands) |
|
|
|
Resources (1) |
$ 8,655 |
$ 48,190 |
$ 59,661 |
Chemicals and Oxides (2) |
42,762 |
181,421 |
219,071 |
Magnetic Materials and Alloys (3) |
57,400 |
230,386 |
252,713 |
Rare Metals (4) |
21,718 |
79,355 |
86,241 |
Inter-segment eliminations |
(14,293) |
(63,740) |
(63,296) |
Total Net Revenues |
$ 116,242 |
$ 475,612 |
$ 554,390 |
|
|
|
|
Sales volume (in metric
tons) |
|
|
|
Resources |
898 |
3,945 |
3,926 |
Chemicals and Oxides (b) |
1,446 |
6,605 |
6,346 |
Magnetic Materials and Alloys (a) |
1,440 |
5,748 |
5,884 |
Rare Metals |
126 |
410 |
333 |
Inter-segment eliminations |
(761) |
(3,689) |
(3,597) |
(a) Includes magnetic powders and rare earth
alloys. |
|
|
|
(b) Sales volume and ASP for 2013 have been
restated to exclude 242 mt of certain non-rare earth by-products
that this segment sold for a nominal amount. |
|
|
|
|
|
|
|
ASP per kilogram |
|
|
|
Resources |
$ 9.64 |
$ 12.21 |
$ 15.20 |
Chemicals and Oxides (b) |
29.57 |
27.42 |
34.49 |
Magnetic Materials and Alloys |
39.86 |
40.08 |
42.95 |
Rare Metals |
172.38 |
193.41 |
264.13 |
1. The Resources segment includes operations
at our Mountain Pass facility where we conduct rare earth minerals
extraction and processing to produce: purified unseparated light
rare earth concentrates, or LREC; separated rare earth oxides,
including lanthanum, cerium and neodymium/praseodymium; heavy rare
earth concentrates, which include samarium, europium, gadolinium,
terbium, dysprosium and others; and a line of proprietary rare
earth-based water treatment products, including SorbX® and
PhosFIX™. |
|
2. The Chemicals and Oxides segment includes:
production of rare earths at our operations at Molycorp
Silmet; separated heavy rare earth oxides and other custom
engineered materials from our facilities in Jiangyin, Jiangsu
Province, China; and production of rare earths, salts of REEs,
zirconium-based engineered materials and mixed rare earth/zirconium
oxides from our facilities in Zibo, Shandong Province, China. Rare
earths and zirconium applications from products made in this
segment include catalytic converters, computers, television display
panels, optical lenses, mobile phones, electronic chips, and many
others. |
|
3. The Magnetic Materials and Alloys segment
includes the production of Neo Powders™ through our wholly-owned
manufacturing facilities in Tianjin, China, and Korat, Thailand,
under the Molycorp Magnequench brand. This operating segment also
includes manufacturing of neodymium and samarium magnet alloys,
other specialty alloy products and rare earth metals at our MMA
facility in Tolleson, Arizona. Neo Powders™ are used in the
production of high performance, bonded NdFeB permanent magnets,
which are found in micro-motors, precision motors, sensors, and
other applications requiring high levels of magnetic strength,
flexibility, small size, reduced weight, and energy efficient
performance. |
|
4. The Rare Metals segment produces,
reclaims, refines and markets high value niche metals and their
compounds that include gallium, indium, rhenium, tantalum, and
niobium. Operations in this segment are distributed in several
locations: Quapaw, Oklahoma; Blanding, Utah; Peterborough, Ontario,
Canada; Sagard, Germany; Hyeongok Industrial Zone in South Korea;
and Sillamäe, Estonia. Applications from products made in this
segment include wireless technologies, LEDs, flat panel displays,
turbines, solar power catalysts, steel additives, electronics
applications, and many others. |
|
TABLE 7: NON-GAAP
ADJUSTED NET LOSS |
|
Adjusted Net
Loss |
|
December 31,
2014 |
|
Quarter Ended |
Year Ended |
(In thousands, except
share and per share amounts) |
Net loss attributable to Molycorp
stockholders |
$ (329,795) |
$ (604,934) |
Certain non-cash and other items: |
|
|
Stock-based compensation |
1,476 |
5,261 |
Inventory write-downs (Mountain
Pass) |
26,803 |
72,485 |
Impact of purchase accounting
on cost of inventory sold |
252 |
993 |
Impairment of goodwill and
other long-lived assets |
231,356 |
231,650 |
Write-down of investments and
related receivables |
22,986 |
34,986 |
Gain on debt conversion |
(21,683) |
(21,683) |
Out-of-ordinary items: |
|
|
Water removal |
551 |
10,737 |
Income tax effect of above adjustments |
(20,972) |
(21,201) |
Adjusted net loss |
(89,026) |
(291,706) |
Dividends on Convertible Preferred Stock |
— |
(2,846) |
Adjusted net loss attributed to common
stockholders |
$ (89,026) |
$ (294,552) |
Weighted average common shares
outstanding |
229,960,050 |
224,978,752 |
Adjusted net loss per share |
$ (0.39) |
$ (1.31) |
|
TABLE 8: NON-GAAP OIBDA
and ADJUSTED OIBDA RECONCILIATION |
|
OIBDA and Adjusted
OIBDA |
|
December 31,
2014 |
Consolidated |
Quarter Ended |
Year Ended |
|
(In
thousands) |
Operating loss |
$ (301,687) |
$ (450,871) |
|
|
|
Depreciation and amortization
included in costs of sales |
38,174 |
93,782 |
Depreciation, amortization and
accretion |
7,327 |
29,879 |
OIBDA |
(256,186) |
(327,210) |
|
|
|
Adjusted OIBDA by
Segment |
|
|
Resources |
|
|
OIBDA |
$ (48,327) |
$ (146,157) |
Stock-based compensation |
180 |
827 |
Inventory write-downs |
26,803 |
72,485 |
Impairment of long-lived
assets |
13,567 |
13,567 |
Water removal |
551 |
10,737 |
Adjusted OIBDA -
Resources |
$ (7,226) |
$ (48,541) |
Chemicals and Oxides |
|
|
OIBDA |
$ (214,975) |
$ (202,588) |
Stock-based compensation |
223 |
834 |
Impact of purchase accounting
on cost of inventory sold |
252 |
441 |
Impairment of goodwill and
other long-lived assets |
215,567 |
215,567 |
Adjusted OIBDA -
Chemicals and Oxides |
$ 1,067 |
$ 14,254 |
Magnetic Materials and
Alloys |
|
|
OIBDA |
$ 13,762 |
$ 52,966 |
Stock-based compensation |
168 |
669 |
Impact of purchase accounting
on cost of inventory sold |
— |
(45) |
Impairment of long-lived
assets |
144 |
174 |
Adjusted OIBDA -
Magnetic Materials and Alloys |
$ 14,074 |
$ 53,764 |
Rare Metals |
|
|
OIBDA |
$ (1,706) |
$ (442) |
Stock-based compensation |
28 |
108 |
Impact of purchase accounting
on cost of inventory sold |
— |
598 |
Impairment of goodwill and
other long-lived assets |
2,077 |
2,077 |
Adjusted OIBDA - Rare
Metals |
399 |
2,341 |
Corporate and other |
(7,004) |
(29,886) |
Eliminations |
2,941 |
1,984 |
Adjusted OIBDA -
Consolidated |
$ 4,251 |
$ (6,084) |
ABOUT MOLYCORP
Molycorp is the only advanced material manufacturer in the world
that both controls a world-class rare earth resource and can
produce high-purity, custom engineered rare earth products to meet
increasingly demanding customer specifications. With production
facilities on three continents, the Company produces a wide variety
of specialized products from rare earth elements and five rare
metals (Gallium, Indium, Rhenium, Tantalum and Niobium). The
Company produces rare earth magnetic materials through its Molycorp
Magnequench subsidiary, including neodymium-iron-boron (NdFeB)
magnet powders, used to manufacture bonded NdFeB permanent rare
earth magnets. The Company also markets and sells a line of rare
earth-based water treatment products. For more information please
visit http://www.molycorp.com.
SAFE HARBOR STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This release contains forward-looking statements that represent
Molycorp's beliefs, projections and predictions about future events
or Molycorp's future performance. Forward-looking statements can be
identified by terminology such as "may," "will," "would," "could,"
"should," "expect," "intend," "plan," "anticipate," "believe,"
"estimate," "predict," "potential," "continue" or the negative of
these terms or other similar expressions or phrases. These
forward-looking statements are necessarily subjective and involve
known and unknown risks, uncertainties and other important factors
that could cause Molycorp's actual results, performance or
achievements or industry results to differ materially from any
future results, performance or achievement described in or implied
by such statements.
Factors that may cause actual results to differ materially from
expected results described in forward-looking statements include,
but are not limited to: Molycorp's ability meet the standards
necessary to maintain its listing on the New York Stock Exchange or
other stock exchange, including its ability to cure any
non-compliance with such listing standards; the need to secure
additional capital to implement Molycorp's business plans, and
Molycorp's ability to successfully secure any such capital,
including the ability to successfully access the remaining
commitment under the financings with certain funds managed by
Oaktree Capital Management, L.P.; Molycorp's ability to make
interest payments on its existing debt; Molycorp's ability to repay
its debt, whether at maturity, pursuant to any acceleration, or
otherwise; Molycorp's ability to optimize and ramp up production at
its Mountain Pass rare earth mine and processing facility, which we
refer to as the Mountain Pass facility, and the ability to develop
internal and external demand for REO and other downstream products,
including the ability to operate at commercial production rates and
competitive cash production costs, in each case within the
projected time frame; Molycorp's ability to economically produce
chemical reagents from waste water at the Mountain Pass facility on
a consistent basis; the success of Molycorp's cost mitigation
efforts in connection with the optimization and ramp up of the
Mountain Pass facility, which, if unsuccessful, might cause its
costs to exceed budget; the final costs of Molycorp's planned
capital projects, which may differ from estimated costs; Molycorp's
ability to achieve fully the strategic and financial objectives
related to its acquisitions, including in respect of Molycorp's
financial condition and results of operations; risks and
uncertainties associated with intangible assets, including any
future goodwill impairment charges and the ability to develop and
protect intellectual property related to products and operations;
risks associated with Molycorp's ability to protect its
intellectual property, including the infringement of intellectual
property of third parties; market conditions, including prices and
demand for Molycorp's products; Molycorp's ability to control its
working capital needs; foreign exchange rate fluctuations; the
development and commercialization of new products; unexpected
actions of domestic and foreign governments; various events which
could disrupt operations, including natural events and other risks;
uncertainties associated with Molycorp's reserve estimates and
non-reserve deposit information, including estimated mine life and
annual production; uncertainties related to feasibility studies
that provide estimates of expected or anticipated costs,
expenditures and economic returns, REO prices, production costs and
other expenses for operations, which are subject to fluctuation;
uncertainties regarding global supply and demand for rare earths
materials; uncertainties regarding the results of Molycorp's
exploration programs; Molycorp's ability to enter into definitive
agreements with its customers, its ability to supply such
customers, and its ability to maintain customer relationships;
Molycorp's ability to maintain appropriate relations with unions
and employees; Molycorp's ability to attract and retain employees
with the necessary experience, skills and training; Molycorp's
ability to successfully implement its vertical integration
strategy; environmental laws, regulations and permits affecting
Molycorp's business, directly and indirectly, including, among
others, those relating to mine reclamation and restoration, climate
change, emissions to the air and water and human exposure to
hazardous substances used, released or disposed of by Molycorp; and
uncertainties associated with unanticipated geological conditions
related to mining; and the outcome of the current stockholder class
action litigation and derivative litigation, including any actions
taken by government agencies in connection therewith.
For more information regarding these and other risks and
uncertainties that Molycorp may face, see the section entitled
"Risk Factors" of the Company's Annual Report on Form 10-K for the
year ended December 31, 2014 and of the Company's Quarterly Reports
on Form 10-Q. Any forward-looking statement contained in this
release or the Annual Report on Form 10-K or the Quarterly Reports
on Form 10-Q reflects Molycorp's current views with respect to
future events and is subject to these and other risks,
uncertainties and assumptions relating to Molycorp's operations,
operating results, growth strategy and liquidity. You should not
place undue reliance on these forward-looking statements because
such statements speak only as to the date when made. Molycorp
assumes no obligation to publicly update or revise these
forward-looking statements for any reason, or to update the reasons
actual results could differ materially from those anticipated in
these forward-looking statements, even if new information becomes
available in the future, except as otherwise required by applicable
law.
CONTACT: FOR MORE INFORMATION:
Company Contacts:
Jim Sims, +1 (303) 843-8062
Vice President Corporate Communications
jim.sims@molycorp.com
Brian Blackman, +1 (303) 843-8067
Vice President Investor Relations
brian.blackman@molycorp.com
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