OCI Resources LP (OCIR)

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Oci Resources LP (OCIR)

Q4 2013 Earnings Conference Call

February 14, 2014 11:00 ET


Scott Humphrey - Director, Investor Relations

Kirk Milling - Chief Executive Officer

Charles Kim - Chief Financial Officer


P.J. Juvekar - Citi

Brian Maguire - Goldman Sachs



Welcome to OCI Resources Fourth Quarter 2013 Earnings Conference Call and Webcast. Hosting the call today from OCI Resources is Mr. Kirk Milling, Chief Executive Officer. He is joined by Charles Kim, Chief Financial Officer, Mike Hohn, General Manager, Soda Ash and Scott Humphrey, Director of Investor Relations. Today’s call is being recorded. At this time all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. (Operator Instructions).

It is now my pleasure to turn the floor over to Scott Humphrey. You may begin.

Scott Humphrey - Director, Investor Relations

Thank you, Laurie. Good morning. This is Scott Humphrey, the Director of Investor Relations for OCI Resources. Thank you for joining us to discuss OCIR’s fourth quarter 2013 earnings results. Kirk Milling our CEO will discuss our fourth quarter results. Charles Kim our CFO will provide additional details related to our fourth quarter and full year 2013 financials. Kirk will follow that with our outlook for 2014. We will then take your questions.

Before we begin, I would like to remind you that the comments included in today’s conference call constitute forward-looking statements. Actual results may differ materially from the results suggested by these comments for a number of reasons, which are discussed in more detail in the company’s SEC filings. Certain financial measures discussed during this call are considered pro forma and are therefore non-GAAP financial measures. Reconciliations of these non-GAAP financials can be found in our earnings press release.

I’ll now turn the call over to Kirk.

Kirk Milling - Chief Executive Officer

Thank you, Scott. Good morning everyone. Welcome to the fourth quarter 2013 earnings call for OCI Resources. Today we’re going to provide an overview of our fourth quarter performance and discuss our initial outlook for 2014. If we roll back to November as many of you will recall we discuss that we anticipate our fourth quarter revenue was going to be up about 10% and as you see our fourth quarter revenue up was 11.4% sequentially compared to the third quarter and even 2% compared to fourth quarter of 2012.

The drivers to these results were international volume was up almost 15%, 14.6% and international pricing improved by 4.8% sequentially over the third quarter 2013. On a full year basis our volumes were up 1.5% but revenues decreased 4.4% compared to 2012 due to the lower international pricing, again very similar trend that we’ve seen throughout the year. We ended our first year as a public company with pro forma earnings per unit of $1.94 in the fourth quarter was our best quarter of 2013 as we generated earnings per unit of $0.62 per unit.

In January we declared our first ever quarterly distribution of $0.50 per unit for the fourth quarter plus the $0.07 for the post IPO period which was in September. So in general I feel like our results played out as we expected with raising volumes from increased production rates and Asia pricing continue to rebound from the trough that we experienced earlier in 2013. All-in-all I think these were good results and or given us some momentum as we head into 2014.

So with that I’m going to turn it over to Charles who will now review our financial results in more detail.

Charles Kim - Chief Financial Officer

Thank you, Kirk. Our revenues for the quarter were $117.6 million up 2% compared to the first quarter of 2012. The international sales increased by 5.7% to $69.9 million in the quarter compared to $66.1 million in the 2012 quarter. The increase in revenue was due to a 3.5% increase in average sales price against 2012 primarily from higher (indiscernible) pricing and also due to a 2.2% increase in volume of tons sold.

Domestic sales increased by 3% to $47.7 million for the three months ended December 31, 2013 compared to $49.2 million in the fourth quarter of 2012, primarily as a result of 5.6% decrease in sales volume in the domestic market. The drop in volume was partially offset by a 2.6% increase in average sales price in the fourth quarter of 2013. Revenues for the full year of 2013 were $442.1 million down 4.4% compared to 2012. This variance was driven by international prices which were 9.7% lower in 2013 against 2012.

Cost of goods sold increased by 1.7% in the fourth quarter of 2013 to $87.4 million compared to $85.9 million in 2012. The increase was primarily caused by a year-over-year increase in energy cost. Year-to-date 2013 our cost of goods sold increased 5.3% to $349 million compared to $331.5 million in 2012, again due to an increase in energy cost.

Our (associates) had earnings per unit of $0.62 in the fourth quarter and $1.94 year-to-date. We spend $6.3 million on CapEx in the fourth quarter bringing our total spend for the year to $17 million. Our expansion CapEx range for 2014 will be between $24 million and $30 million. While maintenance CapEx will be in the range of $12 million to $15 million.

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