Molycorp Reports Record Financial Performance in Q3 2011
- Project Phoenix Accelerated
- Company Sets Records for Sales, Margin, and Income
Molycorp, Inc. (NYSE: MCP):
HIGHLIGHTS
The Company′s 'Project Phoenix? modernization and expansion project
has been accelerated to target Phase 1 production run rate of 19,050
metric tons per year by September 30, 2012, three months earlier than
originally planned. Mechanical completion of Phase 2 has been
accelerated by six months to year-end 2012.
Company achieves record sales in Q3 of $138.1 million, a 39% increase
over Q2 2011.
Average sales price (ASP) rose 75% to $131.19 per kilogram of REO
equivalent versus $75.14 in Q2 2011.
Q3 gross margin increased to a record 63%, up from 57% in Q2 2011.
Record operating income increased 72% to $72.1 million over Q2 2011.
Q3 EPS of $0.52 per diluted share, or $0.67 adjusted for certain
non-cash and other out-of-ordinary items (non-GAAP), per diluted share.
Molycorp, Inc. (NYSE: MCP) ('Molycorp? or the 'Company?) today announced
financial and operating results for the third quarter of 2011, which
included record performance in sales, margin, and income.
RECORD SALES, MARGIN, AND INCOME
The Company generated record sales of $138.1 million in Q3 2011, a 39%
increase as compared to sales of $99.6 million in Q2 2011 and
significantly higher than $8.5 million in Q3 2010. Sequential growth
resulted from increased sales volume of lanthanum and didymium as well
as a robust pricing environment across all products.
Record operating income in Q3 increased 72% to $72.1 million as compared
to Q2 2011, a material increase from the operating loss of $(10.2
million) in Q3 2010.
Net income attributable to common stockholders increased 4% to $45.3
million, from $43.5 million in Q2 2011. Diluted earnings per share for
Q3 2011 was $0.52, in-line with Q2 2011 of $0.52. Non- GAAP diluted
earnings per share was $0.67, as compared to $0.56 per diluted share in
Q2 2011. Non-GAAP earnings per share adjusts certain non-cash and other
non-recurring items as compared to U.S. GAAP earnings per share.
COMPANY ACCELERATING PROJECT PHOENIX
Molycorp′s 'Project Phoenix? modernization and expansion plan at its
flagship Mountain Pass, California rare earth facility has been
accelerated, with the Company now expecting to achieve its Phase 1
production run rate of 19,050 metric tons per year by September 30,
2012, three months earlier than originally planned. The Company′s Board
of Directors authorized an additional investment of $114 million to fund
the acceleration, which includes contingency funds. The acceleration of
Project Phoenix Phase 1 will increase the Company′s estimated 2012
production by approximately 3,500 metric tons of Rare Earth Oxide
equivalent ('REO?), to between 8,000 and 10,000 metric tons.
The project acceleration will also advance mechanical completion of
Project Phoenix Phase 2 by six months, allowing the Company the
capability of producing at an annual rate of 40,000 metric tons per year
as early as mid-2013, if customer demand warrants.
'During the third quarter, we achieved record sales, margin, and
income,? said Mark Smith, Molycorp President and Chief Executive
Officer. 'This is a phenomenal accomplishment by our Molycorp family,
particularly as we have simultaneously announced accelerated plans for
Project Phoenix Phase 1 and 2 at Mountain Pass.?
'In addition, we are pleased to have signed a new three-year agreement
with the United Steelworkers, opened a customer service office in Japan,
expanded initial sales of XSORBX, and announced our four-pronged
strategy for heavy rare earth elements,? Smith said. 'We continue to see
favorable global market trends for rare earths, and our team is working
hard to provide an increased, stable supply of rare earth products for
these markets.?
Other milestones during Q3 and the first several weeks of Q4 included
the Company′s $20 million investment in Boulder Wind Power and its
acquisition of the remaining Molycorp Sillamäe shares for $10 million.
Q3 SALES
The Company achieved consolidated sales of $138.1 million for Q3 2011.
This does not include an additional $37.2 million of intercompany sales,
such as feedstock sent from Molycorp Mountain Pass to Molycorp Sillamäe
for additional processing into higher-value products, and other
intercompany sales. Gross sales at Molycorp Mountain Pass grew 64% to
$124.9 million as compared to Q2 2011. The growth in Molycorp Mountain
Pass gross sales was driven both by higher realized prices and by higher
didymium and lanthanum product sales volumes, and was offset by lower
cerium sales volume. Molycorp Sillamäe recorded sales of $35.9 million
during the quarter, while Molycorp Tolleson recognized $14.4 million of
sales in the period.
Molycorp Mountain Pass sold 1,002 gross metric tons of REO equivalent
products, a slight increase over Q2 2011 and a 92% year-over-year
increase. Mountain Pass realized an average sales price of $124.65 per
kilogram of REO equivalent. Molycorp Sillamäe′s sales in Q3 2011
included 384 gross metric tons of REO equivalent products at an average
sales price of $57.08 per kilogram and also included 88 metric tons of
rare metals (niobium and tantalum) at an average sales price of $151.50
per kilogram. Molycorp Tolleson sold alloys, including
neodymium-iron-boron and samarium-cobalt alloy, containing approximately
52 metric tons REO equivalent products to contribute $14.4 million in
sales.
UPDATED Q4 2011 & FY 2012 PRODUCTION GUIDANCE
The following table provides ranges for expected production of rare
earth products at Molycorp′s three production facilities for the
remainder of 2011*. The Company has also established an annual
production guidance range for 2012, and anticipates production of REO
equivalent products to be in a range of 8,000 metric tons to 10,000
metric tons for the full year.
? | Molycorp Minerals | ? | Molycorp Sillamäe | ? | Molycorp Tolleson | ? |
Total | ||||||||||
| Low | ? | High Range | Low Range | ? | High Range | Low Range | ? | High Range | Low Range | ? | High Range | |||||
1Q2011 (actuals) | 499 | 499 | 229* | 229* | 68* | 68* | 796 | 796 | |||||||||
2Q2011 (actuals) | 815 | 815 | 381 | 381 | 53 | 53 | 1,249 | 1,249 | |||||||||
3Q2011 (actuals) | 739 | 739 | 417 | 417 | 72 | 72 | 1,228 | 1,228 | |||||||||
4Q2011 | 850 | 1,200 | 400 | 430 | 63 | 72 | 1,313 | 1,702 | |||||||||
| 2,903 | 3,253 | 1,427 | 1,457 | 256 | 265 | 4,586 | 4,975 | ||||||||||
|
| ||||||||||||||||
*Prior to our acquisitions in April 2011
CONFERENCE CALL TODAY AT 4:30 P.M. EASTERN
Molycorp will conduct a conference call today to discuss these results
at 4:30 p.m. EST, hosted by Mark Smith, Chief Executive Officer, and Jim
Allen, Chief Financial Officer. Investors interested in participating in
the live call from the U.S. should dial +1 (888) 334-3032 and reference
confirmation number 7475624. Those calling from outside the U.S. should
dial +1 (719) 457-2674 and use the same confirmation number. A telephone
replay will be available approximately two hours after the call
concludes through Thursday, November 24, 2011 by dialing +1 (877)
870-5176 from the U.S., or +1 (858) 384-5517 from international
locations, and entering passcode: 7475624.
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 for 180 days.
Financial Statements: Balance Sheet
| MOLYCORP, INC. | ||||||||
(A Company in the Development Stage) | ||||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
(In thousands, except share and per share amounts) | ||||||||
? | ? | |||||||
September 30, 2011 | December 31, 2010 | |||||||
| ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 561,955 | $ | 316,430 | ||||
Trade accounts receivable | 67,929 | 16,421 | ||||||
Inventory | 95,660 | 18,822 | ||||||
Deferred charges | 12,391 | - | ||||||
Prepaid expenses and other assets | 7,540 | ? | 1,759 | ? | ||||
Total current assets | 745,475 | ? | 353,432 | ? | ||||
? | ||||||||
Non-current assets: | ||||||||
Deposits | $ | 23,287 | $ | 26,200 | ||||
Property, plant and equipment, net | 376,496 | 93,966 | ||||||
Deferred tax assets | 17,982 | - | ||||||
Inventory | 4,678 | 5,212 | ||||||
Intangible assets, net | 2,319 | 639 | ||||||
Investments | 20,000 | - | ||||||
Other assets | 314 | ? | 111 | ? | ||||
Total non-current assets | 445,076 | ? | 126,128 | ? | ||||
| Total assets | $ | 1,190,551 | ? | $ | 479,560 | ? | ||
? | ||||||||
| LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 98,245 | $ | 13,009 | ||||
Accrued expenses | 11,141 | 4,225 | ||||||
Income taxes payable | 2,869 | - | ||||||
Debt | 540 | - | ||||||
Short-term borrowing - related party | 1,750 | 3,085 | ||||||
Current portion of asset retirement obligation | 395 | ? | 393 | ? | ||||
Total current liabilities | 114,940 | ? | 20,712 | ? | ||||
? | ||||||||
Non-current liabilities: | ||||||||
Asset retirement obligation | $ | 12,883 | $ | 12,078 | ||||
Debt | 196,482 | - | ||||||
Other non-current liabilities | 344 | ? | 257 | ? | ||||
Total non-current liabilities | 209,709 | ? | 12,335 | ? | ||||
| Total liabilities | $ | 324,649 | ? | $ | 33,047 | ? | ||
? | ||||||||
? | ||||||||
Equity: | ||||||||
Common stock, $0.001 par value; 350,000,000 shares authorized | ||||||||
at September 30, 2011 | 84 | 82 | ||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized | ||||||||
at September 30, 2011 | 2 | - | ||||||
Additional paid-in capital | 865,865 | 539,866 | ||||||
Accumulated other comprehensive loss | (3,817 | ) | - | |||||
Deficit accumulated during the development stage | (5,342 | ) | (93,435 | ) | ||||
Total Molycorp stockholders' equity | 856,792 | 446,513 | ||||||
Noncontrolling interest | 9,110 | ? | - | ? | ||||
Total equity | 865,902 | ? | 446,513 | ? | ||||
| Total liabilities and equity | $ | 1,190,551 | ? | $ | 479,560 | ? | ||
? | ||||||||
Financial Statements:Income Statement
| MOLYCORP, INC. | ||||||||||||||||||||
(A Company in the Development Stage) | ||||||||||||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) | ||||||||||||||||||||
(In thousands, except share and per share amounts) | ||||||||||||||||||||
? | ||||||||||||||||||||
? | ? | ? | ? | Total from | ||||||||||||||||
Three Months Ended | Nine Months Ended | June 12, 2008 | ||||||||||||||||||
September 30, | September 30, | (Inception) Through | ||||||||||||||||||
2011 | ? | ? | ? | 2010 | ? | ? | ? | 2011 | ? | ? | ? | 2010 | ? | ? | ? | September 30, 2011 | ||||
Sales | $ | 138,050 | $ | 8,533 | $ | 263,927 | $ | 13,455 | $ | 308,313 | ||||||||||
Operating costs and expenses: | ||||||||||||||||||||
Cost of goods sold | (50,548 | ) | (7,742 | ) | (110,148 | ) | (19,268 | ) | (182,551 | ) | ||||||||||
Selling, general and administrative | (14,290 | ) | (4,117 | ) | (36,597 | ) | (12,851 | ) | (70,643 | ) | ||||||||||
Stock-based compensation | (611 | ) | (6,527 | ) | (3,922 | ) | (21,660 | ) | (33,052 | ) | ||||||||||
Depreciation and amortization | (305 | ) | (83 | ) | (670 | ) | (239 | ) | (1,200 | ) | ||||||||||
Accretion expense | (240 | ) | ? | ? | (216 | ) | ? | ? | (715 | ) | ? | ? | (695 | ) | ? | ? | (2,882 | ) | ||
Operating income (loss) | 72,056 | ? | ? | ? | (10,152 | ) | ? | ? | 111,875 | ? | ? | ? | (41,258 | ) | ? | ? | 17,985 | ? | ||
? | ||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||
Other (expense) income | (117 | ) | 14 | (152 | ) | 80 | 238 | |||||||||||||
Foreign currency transaction losses, net | (2,000 | ) | - | (1,850 | ) | - | (1,850 | ) | ||||||||||||
Interest expense, net | (671 | ) | ? | ? | (7 | ) | ? | ? | (461 | ) | ? | ? | (7 | ) | ? | ? | (396 | ) | ||
(2,788 | ) | ? | ? | 7 | ? | ? | ? | (2,463 | ) | ? | ? | 73 | ? | ? | ? | (2,008 | ) | |||
Income (loss) before income taxes | 69,268 | (10,145 | ) | 109,412 | (41,185 | ) | 15,977 | |||||||||||||
Income tax expense | (20,852 | ) | ? | ? | - | ? | ? | ? | (14,439 | ) | ? | ? | - | ? | ? | ? | (14,439 | ) | ||
Net income (loss) | 48,416 | (10,145 | ) | 94,973 | (41,185 | ) | 1,538 | |||||||||||||
Net loss (income) attributable to noncontrolling interest | 255 | ? | ? | ? | - | ? | ? | ? | (713 | ) | ? | ? | - | ? | ? | ? | (713 | ) | ||
Net income (loss) attributable to Molycorp stockholders | $ | 48,671 | $ | (10,145 | ) | $ | 94,260 | $ | (41,185 | ) | $ | 825 | ||||||||
? | ||||||||||||||||||||
Net income (loss) | $ | 48,416 | $ | (10,145 | ) | $ | 94,973 | $ | (41,185 | ) | $ | 1,538 | ||||||||
Other comprehensive income: | ||||||||||||||||||||
Foreign currency translation adjustments | (5,564 | ) | - | ? | (4,240 | ) | - | ? | (4,240 | ) | ||||||||||
Comprehensive income (loss) | $ | 42,852 | ? | $ | (10,145 | ) | $ | 90,733 | ? | $ | (41,185 | ) | $ | (2,702 | ) | |||||
? | ||||||||||||||||||||
Comprehensive income (loss) attributable to: | ||||||||||||||||||||
Molycorp stockholders | $ | 43,661 | $ | (10,145 | ) | $ | 90,443 | $ | (41,185 | ) | $ | (2,992 | ) | |||||||
Noncontrolling interest | (809 | ) | - | ? | 290 | ? | - | ? | 290 | ? | ||||||||||
$ | 42,852 | ? | $ | (10,145 | ) | $ | 90,733 | ? | $ | (41,185 | ) | $ | (2,702 | ) | ||||||
? | ||||||||||||||||||||
Weighted average shares outstanding | ||||||||||||||||||||
(Common shares) (1) | ||||||||||||||||||||
Basic | 83,847,119 | ? | 69,550,649 | ? | 83,321,816 | ? | 56,027,460 | ? | 56,239,632 | ? | ||||||||||
Diluted | 87,069,256 | ? | 69,550,649 | ? | 84,596,676 | ? | 56,027,460 | ? | 56,239,632 | ? | ||||||||||
Income (loss) per share of common stock : | ||||||||||||||||||||
Basic | $ | 0.54 | ? | $ | (0.15 | ) | $ | 1.05 | ? | $ | (0.74 | ) | $ | (0.11 | ) | |||||
Diluted | $ | 0.52 | ? | $ | (0.15 | ) | $ | 1.03 | ? | $ | (0.74 | ) | $ | (0.11 | ) | |||||
? | ||||||||||||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
Financial Statements:Statement of Cash Flows
| MOLYCORP, INC | ||||||||||||||
(A Company in the Development Stage) | ||||||||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||||||||
(In thousands) | ||||||||||||||
? | ? | ? | ||||||||||||
Total from | ||||||||||||||
Nine Months Ended | June 12, 2008 | |||||||||||||
September 30, | (Inception) Through | |||||||||||||
2011 | 2010 | September 30, 2011 | ||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | $ | 94,973 | $ | (41,185 | ) | $ | 1,538 | |||||||
? | ||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) | ||||||||||||||
operating activities: | ||||||||||||||
Depreciation and amortization | 11,294 | 4,059 | 22,141 | |||||||||||
Accretion of asset retirement obligation | 715 | 695 | 2,882 | |||||||||||
Deferred income tax benefit | (4,544 | ) | - | (4,544 | ) | |||||||||
Non-cash inventory write-downs | 1,585 | 1,555 | 23,602 | |||||||||||
Non-cash share-based compensation expense | 4,042 | 21,660 | 33,172 | |||||||||||
Impairment of fixed assets | - | - | 3,114 | |||||||||||
Foreing currency transaction losses, net | 1,665 | - | 1,665 | |||||||||||
Other operating adjustments | 796 | 13 | 739 | |||||||||||
? | ||||||||||||||
Increase (decrease) in cash, excluding the effects of acquisitions and dispositions, resulting from changes in: | ||||||||||||||
Accounts receivable | (42,250 | ) | (3,966 | ) | (59,221 | ) | ||||||||
Inventory | (32,521 | ) | (2,955 | ) | (56,390 | ) | ||||||||
Prepaid expenses and other | (1,596 | ) | 388 | (2,619 | ) | |||||||||
Accounts payable | (7,099 | ) | 3,265 | (2,914 | ) | |||||||||
Asset retirement obligation | (581 | ) | (507 | ) | (1,600 | ) | ||||||||
Accrued expenses | ? | 2,245 | ? | ? | (4,264 | ) | 8,731 | ? | ||||||
Net cash provided by (used in) operating activities | ? | 28,724 | ? | ? | (21,242 | ) | (29,704 | ) | ||||||
Cash flows from investing activities: | ||||||||||||||
Acquisition of the Mountain Pass facility | - | - | (82,150 | ) | ||||||||||
Cash paid in connection with acquisitions, net of cash acquired | (20,021 | ) | - | (20,021 | ) | |||||||||
Proceeds from sale of investment in joint venture | - | - | 9,700 | |||||||||||
Cash paid to acquire non-marketable securities | (20,000 | ) | - | (20,000 | ) | |||||||||
Deposits | 2,946 | (20,200 | ) | (23,254 | ) | |||||||||
Capital expenditures | (160,917 | ) | (12,965 | ) | (201,652 | ) | ||||||||
Other assets | - | - | (111 | ) | ||||||||||
Proceeds from sale of assets | ? | 19 | ? | ? | 9 | ? | 33 | ? | ||||||
Net cash used in investing activities | ? | (197,973 | ) | ? | (33,156 | ) | (337,455 | ) | ||||||
Cash flows provided by financing activities: | ||||||||||||||
Capital contributions from original stockholders | - | 15,000 | 125,004 | |||||||||||
Repayments of short-term borrowings - related party | (2,343 | ) | - | (3,450 | ) | |||||||||
Repayments of debt | (5,447 | ) | - | (5,447 | ) | |||||||||
Net proceeds from sale of common stock in conjunction with | ||||||||||||||
the initial public offering | - | 378,633 | 378,633 | |||||||||||
Net proceeds from sale of preferred stock | 199,642 | - | 199,642 | |||||||||||
Net proceeds from sale of convertible notes | 223,100 | - | 223,100 | |||||||||||
Payment of financing costs | - | - | (185 | ) | ||||||||||
Payment of preferred dividends | (6,167 | ) | - | (6,167 | ) | |||||||||
Proceeds from exercise of stock options | - | 300 | 350 | |||||||||||
Proceeds from short-term borrowings - related party | - | 5,008 | 11,645 | |||||||||||
Proceeds from debt | ? | 6,337 | ? | ? | - | ? | 6,337 | ? | ||||||
Net cash provided by financing activities | ? | 415,122 | ? | ? | 398,941 | ? | 929,462 | ? | ||||||
Effect of exchange rate changes on cash | ? | (348 | ) | ? | - | ? | (348 | ) | ||||||
Net change in cash and cash equivalents | 245,525 | 344,543 | 561,955 | |||||||||||
Cash and cash equivalents at beginning of the period | ? | 316,430 | ? | ? | 6,929 | ? | - | ? | ||||||
Cash and cash equivalents at end of period | $ | ? | 561,955 | ? | $ | ? | 351,472 | ? | $ | 561,955 | ? | |||
? | ||||||||||||||
Supplemental disclosure of non-cash activities: | ||||||||||||||
Change in accrued capital expenditures | $ | 61,783 | ? | $ | 2,757 | ? | ||||||||
Net cash paid for taxes | $ | 28,505 | ? | $ | - | ? | ||||||||
? | ||||||||||||||
Segment Information
? |
| ? |
| ? |
| ? |
| ? |
| |||||||||||
| Three Months Ended September 30, 2011 (In thousands) | ? | ? | ? | ? | ||||||||||||||||
Sales: | ||||||||||||||||||||
External | $ | 94,341 | $ | 29,260 | $ | 14,449 | $ | - | $ | 138,050 | ||||||||||
Intersegment | ? | 30,535 | ? | ? | 6,652 | ? | ? | - | ? | (37,187 | ) | - | ||||||||
Total sales | 124,876 | 35,912 | 14,449 | |||||||||||||||||
Cost of goods sold | (20,921 | ) | (35,761 | ) | (13,833 | ) | 19,967 | (50,548 | ) | |||||||||||
Selling, general and administrative expenses | (13,897 | ) | (212 | ) | (184 | ) | 3 | (14,290 | ) | |||||||||||
Depreciation, amortization and accretion expense | (338 | ) | (398 | ) | 191 | - | (545 | ) | ||||||||||||
Stock-based compensation | ? | (591 | ) | ? | (7 | ) | ? | (13 | ) | ? | - | ? | ? | (611 | ) | |||||
Operating income (loss) | 89,129 | (466 | ) | 610 | (17,217 | ) | 72,056 | |||||||||||||
Other (expense) income | ? | (695 | ) | ? | (2,099 | ) | ? | 6 | ? | ? | - | ? | ? | (2,788 | ) | |||||
Income (loss) before income taxes | $ | 88,434 | ? | $ | (2,565 | ) | $ | 616 | ? | $ | (17,217 | ) | $ | 69,268 | ? | |||||
Total assets at September 30, 2011 | $ | 1,184,137 | ? | $ | 122,316 | ? | $ | 33,032 | ? | $ | (148,934 | ) | $ | 1,190,551 | ? | |||||
Capital expenditures (accrual basis) | $ | 106,162 | ? | $ | 2,300 | ? | $ | - | ? | $ | - | ? | $ | 108,462 | ? | |||||
? | ||||||||||||||||||||
? |
| ? |
| ? |
| ? |
| ? |
| |||||||||||
| Three Months Ended June 30, 2011 (In thousands) | ? | ? | ? | ? | ||||||||||||||||
Sales: | ||||||||||||||||||||
External | $ | 60,348 | $ | 29,017 | $ | 10,250 | $ | - | $ | 99,615 | ||||||||||
Intersegment | ? | 15,947 | ? | ? | 3,639 | ? | ? | - | ? | (19,586 | ) | - | ||||||||
Total sales | 76,295 | 32,656 | 10,250 | |||||||||||||||||
Cost of goods sold | (21,709 | ) | (20,472 | ) | (11,143 | ) | 10,401 | (42,923 | ) | |||||||||||
Selling, general and administrative expenses | (12,294 | ) | (1,411 | ) | (112 | ) | - | (13,817 | ) | |||||||||||
Depreciation, amortization and accretion expense | (332 | ) | - | (191 | ) | - | (523 | ) | ||||||||||||
Stock-based compensation | ? | (412 | ) | ? | - | ? | ? | - | ? | ? | - | ? | ? | (412 | ) | |||||
Operating income (loss) | 41,548 | 10,773 | (1,196 | ) | (9,185 | ) | 41,940 | |||||||||||||
Other (expense) income | ? | 304 | ? | ? | (103 | ) | ? | 2 | ? | ? | - | ? | ? | 203 | ? | |||||
Income (loss) before income taxes | $ | 41,852 | ? | $ | 10,670 | ? | $ | (1,194 | ) | $ | (9,185 | ) | $ | 42,143 | ? | |||||
Total assets at June 30, 2011 | $ | 1,099,900 | ? | $ | 152,984 | ? | $ | 29,705 | ? | $ | (140,923 | ) | $ | 1,141,666 | ? | |||||
Capital expenditures (accrual basis) | $ | 70,742 | ? | $ | 2,231 | ? | $ | - | ? | $ | - | ? | $ | 72,973 | ? | |||||
? | ||||||||||||||||||||
Earnings per Share
? |
| ? |
| ? |
| |||||||
| ||||||||||||
|
|
|
|
|
|
|
| |||||
| ? |
|
| ? |
|
| ? |
| ? | |||
| ? |
| ? | ? |
| ? | ? |
|
| |||
|
|
|
| |||||||||
|
|
| ? |
|
| ? |
|
|
| |||
Income (loss) attributed to common stockholders | 44,876 | ? | 43,518 | ? | (10,145 | ) | ||||||
Effect of dilutive Notes | ? | 404 | ? | ? | ? | ? | ? | ? | ? | |||
Income (loss) attributed to common stockholders | ? | 45,280 | ? | ? | 43,518 | ? | ? | (10,145 | ) | |||
Weighted average common shares outstanding ? | ||||||||||||
dilutive | 87,069,256 | 84,413,499 | 69,550,649 | |||||||||
Dilutive earnings (loss) per share | $ | 0.52 | ? | $ | 0.52 | ? | $ | (0.15 | ) | |||
? | ||||||||||||
Non-GAAP Financial Measures
| Adjusted Net Income (Loss) | ? | ? | ? | ? | ? | |||||||||||||||
(in thousands, except per share data) | Three months ended | Nine months ended | Three months ended | |||||||||||||||||
September 30, | September 30, | June 30, | ||||||||||||||||||
2011 | ? | 2010 | 2011 | ? | 2010 | 2011 | ||||||||||||||
Net income (loss) attributable to Molycorp stockholders | $ | 48,671 | $ | (10,145 | ) |
| $ | 94,260 | $ | (41,185 | ) |
| $ | 47,787 | ||||||
Stock-based compensation | 656 | 6,527 | 4,042 | 21,660 | 452 | |||||||||||||||
Asset impairments/ inventory write-down | - | 640 | 1,585 | 1,555 | 955 | |||||||||||||||
Impact of purchase accounting on cost of inventory sold (1) | 10,226 | - | 10,226 | - | - | |||||||||||||||
Net (gain)/loss on asset sales | 150 | - | 37 | 13 | (113 | ) | ||||||||||||||
Project Phoenix administrative expenses | 1,293 | - | 1,293 | - | - | |||||||||||||||
Due diligence and other transaction costs | 728 | 100 | 4,955 | 996 | 2,792 | |||||||||||||||
Organization and operations consulting costs | 1,672 | - | 4,347 | - | 2,108 | |||||||||||||||
Income tax effect of above adjustments | ? | (1,755 | ) | ? | ? | - | ? | ? | (5,723 | ) | ? | ? | - | ? | ? | (2,043 | ) | |||
Adjusted net income (loss) | $ | 61,641 | $ | (2,878 | ) | $ | 115,022 | $ | (16,961 | ) | $ | 51,938 | ||||||||
Cumulative paid and undeclared dividends on preferred stock | (3,795 | ) | - | (7,116 | ) | - | (4,269 | ) | ||||||||||||
Effect of dilutive 3.25% Convertible Notes | ? | 404 | ? | ? | ? | - | ? | ? | 413 | ? | ? | ? | - | ? | ? | - | ? | |||
Adjusted net income (loss) attributed to common stockholders for dilutive EPS purposes | ? | 58,250 | ? | ? | ? | (2,878 | ) | ? | 108,319 | ? | ? | ? | (16,961 | ) | 47,669 | ? | ||||
Weighted average diluted shares outstanding | ? | 87,069,256 | ? | ? | ? | 69,550,649 | ? | ? | 84,596,676 | ? | ? | ? | 56,027,460 | ? | 84,413,499 | ? | ||||
Adjusted diluted net income (loss) per share | $ | 0.67 | ? | ? | $ | (0.04 | ) | $ | 1.28 | ? | ? | $ | (0.30 | ) | $ | 0.56 | ? | |||
? | ||||||||||||||||||||
? | ||||||||||||||||||||
(1) Purchase price adjustment to Molycorp Sillamäe's inventory related to inventory sold as of 9/30/2011. | ||||||||||||||||||||
? | ||||||||||||||||||||
Adjusted EPS is a non-GAAP measure that excludes certain non-cash items
and other out-of-ordinary operational items. The company′s management
believes adjusting out these items, including but not limited to
purchase accounting adjustments, stock based compensation,
out-of-ordinary expenses/income 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 adjusted EPS is 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.
| Adjusted Gross Margin | ? | ? | ? | ? | ? | ? | ? | ? | ? | |||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Three months ended | Nine months ended | Three months ended | ||||||||||||||||||||||
September 30, | September 30, | June 30, | ||||||||||||||||||||||
? | 2011 | ? | ? | 2010 | ? | ? | 2011 | ? | ? | 2010 | ? | ? | 2010 | ? | ||||||||||
Sales | $ | 138,050 | $ | 8,533 | $ | 263,927 | $ | 13,455 | $ | 99,615 | ||||||||||||||
GAAP cost of goods sold | ? | (50,548 | ) | ? | (7,742 | ) | ? | (110,148 | ) | ? | (19,268 | ) | ? | (42,923 | ) | |||||||||
Gross margin | $ | 87,502 | ? | $ | 791 | ? | $ | 153,779 | ? | $ | (5,813 | ) | $ | 56,692 | ? | |||||||||
Gross margin percentage | ? | 63.4 | % | ? | 9.3 | % | ? | 58.3 | % | ? | -43.2 | % | ? | 56.9 | % | |||||||||
? | ||||||||||||||||||||||||
Sales | $ | 138,050 | $ | 8,533 | $ | 263,927 | $ | 13,455 | $ | 99,615 | ||||||||||||||
GAAP cost of goods sold | (50,548 | ) | (7,742 | ) | (110,148 | ) | (19,268 | ) | (42,923 | ) | ||||||||||||||
Asset impairments/ inventory write-down | - | 640 | 1,585 | 1,555 | 955 | |||||||||||||||||||
Stock-based compensation in cost of goods sold | 45 | - | 120 | - | 40 | |||||||||||||||||||
Operations consulting costs | 1,000 | - | 3,000 | - | - | |||||||||||||||||||
Impact of purchase accounting on cost of inventory sold (1) | ? | 10,226 | ? | ? | - | ? | ? | 10,226 | ? | ? | - | ? | ? | - | ? | |||||||||
Adjusted cost of goods sold | ? | (39,277 | ) | ? | (7,102 | ) | ? | (95,217 | ) | ? | (17,713 | ) | ? | (41,928 | ) | |||||||||
Adjusted gross margin | $ | 98,773 | ? | $ | 1,431 | ? | $ | 168,710 | ? | $ | (4,258 | ) | $ | 57,687 | ? | |||||||||
Adjusted gross margin percentage | ? | 71.5 | % | ? | 16.8 | % | ? | 63.9 | % | ? | -31.6 | % | ? | 57.9 | % | |||||||||
Adjusted Gross margin is a non-GAAP measure that is included to provide
additional detail on segment operations, before intercompany
eliminations. Management believes this presentation provides a better
understanding of the performance of each operating segment in terms of
production volumes, inventory allocation, and costs.
About Molycorp
With offices in the U.S., Europe, and Japan, Molycorp, Inc. is the
largest REO producer outside of China. In addition to its current
production of rare earth oxides at its flagship rare earth mine and
processing facility at Mountain Pass, California, the Company produces
rare earth metals, rare earth alloys (such as neodymium- iron-boron and
samarium-cobalt alloys) and rare metals such as niobium and tantalum.
The rare earths and rare metals Molycorp produces are critical inputs in
existing and emerging applications including: clean energy technologies,
such as hybrid and electric vehicles and wind power turbines; multiple
high-tech uses, including fiber optics, lasers and hard disk drives;
numerous defense applications, such as guidance and control systems and
global positioning systems; advanced water treatment technology for use
in industrial, military and outdoor recreation applications; and other
technologies. 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 to secure additional capital to implement
its business plans; Molycorp′s ability to complete its initial
modernization and expansion efforts, including the accelerated start-up
of the Mountain Pass facility, which management refers to as Project
Phoenix Phase 1, and the second phase capacity expansion plan, which
management refer to as Project Phoenix Phase 2, and reach full planned
production rates for REOs and other planned downstream products; the
final costs of the Project Phoenix Phase 1, including with accelerated
start-up of the Mountain Pass facility, and Project Phoenix Phase 2,
which may differ from estimated costs; uncertainties associated with
Molycorp′s reserve estimates and non-reserve deposit information;
uncertainties regarding global supply and demand for rare earths
materials; Molycorp′s ability to successfully integrate recently
acquired businesses; Molycorp′s ability to reach definitive agreements
for a joint venture to manufacture neodymium-iron-boron permanent rare
earth magnets; Molycorp′s ability to maintain appropriate relations with
unions and employees; Molycorp′s ability to successfully implement its
'mine-to-magnets? 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.
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,
2010 and of the Company′s Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2011. Any forward-looking statement
contained in this press release or the Annual Report on Form 10-K or the
Quarterly Report 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.
Molycorp, Inc.
Jim Sims, +1 303-843-8062
Vice
President Corporate Communications
Jim.Sims@Molycorp.com
or
Brian
Blackman, +1 303-843-8067
Senior Manager, Investor Relations
Brian.Blackman@Molycorp.com
