Phosphate Holdings, Inc. (OTC: PHOS), today reported fourth
quarter 2010 income of $0.9 million, or $0.10 per share of
common stock, compared to losses of $2.8 million, or
$0.36 per share of common stock for the same period in 2009.
Net income for the year ended December 31, 2010 was $1.1
million, or $0.13 per share of common stock, as compared to losses
of $13.6 million, or $1.76 per share of common stock for the
same period last year. The Company’s 2009 year-to-date results were
materially impacted by inventory write-downs to net realizable
value of approximately $10.4 million.
Net sales for the fourth quarter of 2010 were $68.5 million, a
45 percent increase from net sales of $47.2 million for the
fourth quarter of 2009. The average sales price per short ton of
DAP during the fourth quarter of 2010 was $534, a 93 percent
increase from the prior-year period average sales price of $276.
During the fourth quarter, the Company sold 126,560 tons of DAP,
with 114,142 tons moving into domestic markets. The Company had
operating income of $1.3 million for the fourth quarter of 2010,
compared to operating losses of $4.4 million for the prior-year
period. Earnings before interest, taxes, depreciation, amortization
and accretion (EBITDA) for the fourth quarter of 2010 were
$5.2 million, compared to EBITDA of negative $1.9 million for
the fourth quarter of 2009.
Net sales for the year ended December 31, 2010 were $261.1
million, a 40 percent increase from net sales of
$186.3 million for the year ended December 31, 2009. The
Company had operating income of $2.3 million for the year
ended December 31, 2010, compared to an operating loss of $21.7
million for the prior-year period. EBITDA for the year ended
December 31, 2010 was $15.1 million, compared to negative EBITDA of
$10.9 million for the same period in 2009. EBITDA in 2009 was
negatively impacted by inventory write-downs of $10.4 million.
Robert E. Jones, Chief Executive Officer, said, “In November
2010, we performed a major maintenance turnaround. This turnaround
was designed to address all known issues constraining sulfuric
acid, phosphoric acid and DAP production. Upon completion of the
turnaround, we saw improvements in our DAP production rates, as we
produced approximately 55,000 short tons in December 2010. However,
with operational issues at the beginning of the quarter and
substantial downtime associated with the turnaround, our DAP
production was limited to approximately 127,000 short tons in the
fourth quarter of 2010. This production volume limited our
participation in a favorable phosphate market.
“From a market perspective, the average posted DAP price was
$551 per short ton, NOLA, in the fourth quarter of 2010.
Sulfur prices in the fourth quarter were posted at $160 per long
ton, CFR, Tampa. Ammonia prices began the fourth quarter at $465
per metric ton, CFR, Tampa, and closed the fourth quarter at $475
per metric ton, CFR, Tampa.
“While we believe we have improved the operating performance of
our plants, phosphate rock shortages have hindered first quarter
2011 production. Severe flooding conditions in Morocco created
logistical issues for our phosphate rock supplier, resulting in
significant delays in the delivery of phosphate rock to our
facility. Accordingly, we curtailed production during the latter
half of January and early February to avoid a shutdown of our DAP
granulation plant. With the curtailed production due to the
phosphate rock shortage, we anticipate first quarter 2011 DAP
production to be approximately 140,000 to 150,000 short tons.
Currently, we are experiencing timely phosphate rock deliveries and
our production rates are at satisfactory levels.”
In addressing the industry outlook, Jones added, “Phosphate
markets are expected to be very favorable through the spring
season, weather permitting. Producers’ inventories remain at
manageable levels and grain prices remain strong. Currently, the
U.S. corn-to-stock use ratio is at a 15-year low, with planted corn
acreage in the U.S. projected at 92 million acres. Internationally,
DAP prices are improving as China’s participation in the export
market should be diminished and strong phosphate demand is
anticipated from India and other parts of the world.”
On March 4, 2011, the Company and the Mississippi Department of
Environmental Quality (MDEQ) executed an agreed order, which
settled all matters previously cited by a Notice of Violation
received by the Company from the MDEQ and certain other pending
environmental matters with the MDEQ. In connection with this
settlement, the Company agreed to pay a civil penalty of $297,000.
This penalty has been recorded in the accompanying 2010
consolidated financial statements.
As of December 31, 2010, the Company had a cash balance of
approximately $2.3 million and $9.0 million in borrowings
under its revolving credit agreement. We spent approximately $3.8
million on capital expenditures in the fourth quarter of 2010, and
$9.7 million for the year ended December 31, 2010. Based
on current phosphate market conditions, DAP production rates and
available credit facilities, the Company should have adequate
liquidity to meet its operating and other cash flow needs
throughout 2011.
At the end of 2010, our Board of Directors appointed a special
committee of independent directors to initiate a comprehensive
review of strategic options. While this review is ongoing, we will
not hold an earnings call to discuss our fourth quarter and year
end 2010 financial results and will not otherwise discuss this
strategic process. When the strategic process is completed, we
intend to resume regular quarterly earnings calls. We look forward
to providing a more comprehensive update at our annual meeting in
late June in New York City. Details regarding the date and time of
this meeting will be forthcoming.
The Company is a Delaware corporation and the sole stockholder
of Mississippi Phosphates Corporation. Mississippi Phosphates
Corporation is a Delaware corporation with its executive
headquarters in Madison, Miss. Mississippi Phosphates Corporation
owns and operates manufacturing facilities in Pascagoula, Miss.,
which produce diammonium phosphate, the most common form of
phosphate fertilizer used as a source of phosphate on all major row
crops.
Forward-looking Statements
This release contains “forward-looking statements” within the
meaning of the federal securities law, which are intended to
qualify for the safe harbor from liability provided thereunder. All
statements which are not historical statements of fact are
“forward-looking statements” for purposes of these provisions and
are subject to numerous risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
in the forward-looking statements. Future events, risks and
uncertainties that could cause a material difference in such
results include, but are not limited to, (i) changes in
matters which affect the global supply and demand of phosphate
fertilizer products, phosphate rock, ammonia, sulfur and sulfuric
acid, (ii) a variety of conditions in the agricultural
industry such as grain prices, planted acreage, projected grain
stocks, U.S. government policies, weather, and changes in
agricultural production methods, (iii) changes in the
availability and cost of phosphate rock and our other primary raw
materials, (iv) changes in capital markets, (v) possible
unscheduled plant outages and other operating difficulties,
(vi) price competition and capacity expansions and reductions
from both domestic and international competitors, (vii) the
concentration of our sales with one large customer,
(viii) foreign government agricultural policies (in
particular, the policies of the governments of India and China),
(ix) the relative unpredictability of international and local
economic conditions, (x) the relative value of the
U.S. dollar, (xi) regulations regarding the environment
and the sale and transportation of fertilizer products,
(xii) our potential inability to obtain or maintain required
permits and governmental approvals or to meet financial assurance
requirements, (xiii) loss of key members of management, and
(xiv) impact of future storms. The Company undertakes no
obligation to update any forward-looking statement, whether as a
result of new information, future events, or otherwise.
PHOSPHATE HOLDINGS, INC. AND SUBSIDIARIES Consolidated
Balance Sheets (In thousands, except share data)
(Unaudited)
December 31, Assets 2010 2009
Current assets: Cash and cash equivalents $ 2,261 2,067 Trade
accounts receivable 9,128 3,059 Income taxes receivable
--
574 Other receivables 2,297 5 Inventories 26,141 17,587 Prepaid
expenses and other 8,329 4,854 Deferred income taxes 336
--
Total current assets 48,492 28,146 Freight deposits 5,636
--
Restricted investments held in trust, at fair value 5,657 4,350
Property, plant and equipment, net 61,402 48,751 Other 553 163
Total assets $ 121,740 81,410
Liabilities and Stockholders’
Equity Current liabilities: Accounts payable $ 1,804 1,578
Accrued expenses 29,783 11,031 Current maturities of long-term debt
--
600 Short-term financing obligations 3,492 1,989 Revolving credit
agreement 9,000
--
Deferred income taxes
--
124 Total current liabilities 44,079 15,322 Long-term debt, less
current maturities
--
1,800 Asset retirement obligations 16,307 5,128 Deferred income
taxes 1,836 706 Total liabilities 62,222 22,956 Stockholders’
equity:
Common stock ($0.01 par; 30,000,000 shares
authorized; 8,411,308 shares issued and outstanding)
84 84 Additional paid-in capital 35,660 35,660 Retained earnings
23,774 22,710 Total stockholders’ equity 59,518 58,454 Total
liabilities and stockholders’ equity $ 121,740 81,410
PHOSPHATE HOLDINGS, INC. AND SUBSIDIARIES Consolidated
Statements of Operations (In thousands, except per share
data) (Unaudited)
Three months
ended
December 31,
Twelve months
ended
December 31,
2010 2009 2010 2009 Net
sales: DAP $ 67,553 46,459 257,233 182,780 Other 986
766 3,863 3,531 Total net sales 68,539
47,225 261,096 186,311 Cost of sales 66,063 49,637
249,931 205,501 Gross profit (loss) 2,476
(2,412 ) 11,165 (19,190 ) Selling, general and administrative
expenses 2,204 1,268 6,858 5,843 Environmental remediation 297 730
4,028 1,330 Litigation expenses (recoveries), net (1,303 ) 220
(2,053 ) (2,821 ) Insurance recoveries
--
--
--
(1,615 ) Reduction in asset retirement obligations
--
(190 )
--
(190 ) Operating income (loss) 1,278 (4,440 ) 2,332 (21,737
) Other income (expense): Interest, net (257 ) (142 ) (1,107 ) (596
) Other, net 356 88 534 670
Total other income (expense) 99 (54 ) (573 ) 74
Income (loss) before income taxes 1,377 (4,494 ) 1,759
(21,663 ) Income tax expense (benefit) 524 (1,674 ) 695
(8,110 ) Net income (loss) $ 853 (2,820 )
1,064 (13,553 ) Earnings (loss) per share – basic $
0.10 (0.36 ) 0.13 (1.76 ) Earnings (loss) per share – diluted $
0.10 (0.36 ) 0.13 (1.76 ) Weighted average common shares
outstanding – basic 8,411 7,844 8,411 7,713 Weighted average common
shares outstanding – diluted 8,411 7,844 8,411 7,713
PHOSPHATE HOLDINGS, INC. AND SUBSIDIARIES Consolidated
Statements of Cash Flows (In thousands)
(Unaudited)
Years ended
December 31,
2010 2009 Cash flows from operating
activities: Net income (loss) $ 1,064 (13,553 )
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation of property, plant and equipment 7,571 6,779
Amortization of prepaid maintenance turnaround costs 3,967 2,912
Accretion of asset retirement obligation 659 477 Deferred loan cost
amortization 229 72 Unrealized restricted investment gain (507 )
(560 ) Share-based compensation 702 340 Deferred income taxes 670
(7,683 ) Reduction in asset retirement obligation
--
(190 ) Other 3 3 Changes in operating assets and liabilities: Trade
and other accounts receivable (8,361 ) 6,199 Income taxes
receivable 574 20,840 Inventories (8,554 ) 5,458 Prepaid expenses
and other (7,442 ) (2,687 ) Freight deposits (5,636 )
--
Accounts payable and accrued expenses 18,276 (2,149 ) Net
cash provided by operating activities 3,215 16,258
Cash flows from investing activities: Purchases of restricted
investments held in trust (800 ) (800 ) Purchases of property,
plant and equipment (9,702 ) (4,937 ) Net cash used in investing
activities (10,502 ) (5,737 ) Cash flows from financing activities:
Net borrowings (payments) on revolving credit agreement 9,000
(11,494 ) Proceeds from financing obligations 4,836 3,248 Payments
on financing obligations (3,333 ) (3,440 ) Payment of deferred loan
costs (622 ) (108 ) Payments on term loan (2,400 ) (600 ) Capital
contributions from exercise of stock options
--
1,787 Net cash provided by (used in) financing
activities 7,481 (10,607 ) Net increase (decrease) in cash
and cash equivalents 194 (86 ) Cash and cash equivalents at
beginning of year 2,067 2,153 Cash and cash
equivalents at end of year $ 2,261 2,067
PHOSPHATE HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (In thousands)
(Unaudited)
Three Months
ended
December 31,
2010 2009 Cash flows from operating
activities: Net income (loss) $ 853 (2,820)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation of property, plant and equipment 2,063 1,747
Amortization of prepaid maintenance turnaround costs 1,185 631
Accretion of asset retirement obligation 282 120 Deferred loan cost
amortization 27 18 Unrealized restricted investment gain (357) (88)
Share-based compensation 304 106 Deferred income taxes 524 (1,116)
Reduction in asset retirement obligation
--
(190) Changes in operating assets and liabilities: Trade and other
accounts receivable (2,103) 12,861 Income taxes receivable
--
631 Inventories 1,057 3,036 Prepaid expenses and other (3,851)
(1,170) Freight deposits (1,054)
--
Long-term prepaid insurance 607
--
Accounts payable and accrued expenses 3,131 (5,788) Net cash
provided by operating activities 2,668 7,978 Cash flows from
investing activities: Purchases of restricted investments held in
trust (200) (200) Purchases of property, plant and equipment
(3,764) (258) Net cash used in investing activities (3,964) (458)
Cash flows from financing activities: Net payments on revolving
credit agreement (295) (8,319) Proceeds from financing obligations
1,052 924 Payments on financing obligations (839) (803) Payments on
term loan
--
(150) Capital contributions from exercise of stock options
--
1,787 Net cash used in financing activities (82) (6,561)
Net increase (decrease) in cash and cash
equivalents
(1,378) 959 Cash and cash equivalents at beginning of year 3,639
1,108 Cash and cash equivalents at end of year $ 2,261 2,067
PHOSPHATE HOLDINGS, INC. AND
SUBSIDIARIES
Reconciliation of Net Income (Loss) to
EBITDA
(In thousands)
(Unaudited)
We define EBITDA as net income (loss) before interest; income
taxes; depreciation, amortization and accretion. EBITDA is used as
a supplemental financial measure by our management and by external
users of our financial statements to assess:
- the financial performance of our assets
without regard to financing methods, capital structure or
historical cost basis;
- our operating performance and return on
capital as compared to other companies in the fertilizer business,
without regard to financing or capital structure; and
- the viability of acquisitions and
capital expenditure projects and the overall rates of return on
alternative investment opportunities.
We use EBITDA as a primary operating performance measure and an
important indicator of our ability to provide cash flows to meet
future debt service, if any, capital expenditures and working
capital requirements and to fund future growth.
The U.S. Generally Accepted Accounting Principles, or GAAP,
measure most directly comparable to EBITDA is net income (loss).
Our non-GAAP financial measure of EBITDA should not be considered
as an alternative to GAAP net income (loss). You should not
consider EBITDA in isolation or as a substitute for analysis of our
results as reported under GAAP. Because EBITDA excludes some, but
not all, items that affect income from continuing operations and is
defined differently by different companies in our industry, our
definition of EBITDA may not be comparable to similarly titled
measures of other companies.
We compensate for the limitations of EBITDA as an analytical
tool by reviewing the comparable GAAP measures, understanding the
differences between the measures and incorporating this information
into our decision-making processes.
The following table shows the reconciliation of net income
(loss) to EBITDA for the periods indicated:
Three Months
ended
December 31,
Twelve Months
ended
December 31,
2010 2009 2010 2009 Net
income (loss) $ 853 (2,820 ) 1,064 (13,553 ) Interest, net 257 142
1,107 596 Income tax expense (benefit) 524 (1,674 ) 695 (8,110 )
Depreciation, amortization and accretion 3,530 2,498 12,197
10,168 EBITDA
$
5,164 (1,854 )
15,063
(10,899 )
Phosphate (CE) (USOTC:PHOS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Phosphate (CE) (USOTC:PHOS)
Historical Stock Chart
From Jul 2023 to Jul 2024