Rentech Announces Results for Third Quarter 2013

  Rentech Announces Results for Third Quarter 2013

Business Wire

LOS ANGELES -- November 7, 2013

Rentech, Inc. (NASDAQ: RTK) today announced its results for the three and nine
months ended September 30, 2013. Rentech owns and operates wood fibre
processing and nitrogen fertilizer businesses. Rentech also owns technologies
designed to produce certified synthetic fuels and renewable power, when
integrated with third-party technologies, that it is seeking to license or
sell.

Rentech’s financial results reflect the consolidated results of Rentech, Inc.
and its subsidiaries, including its wood fibre processing business and Rentech
Nitrogen Partners, L.P. (Rentech Nitrogen). The results of the wood fibre
processing business are reported as two operating segments: Fulghum Fibres
(wood chipping) and wood pellets. The results of Rentech Nitrogen are reported
as the nitrogen products manufacturing subsidiary of Rentech, which includes
two operating segments: the East Dubuque Facility and the Pasadena Facility.
Results of the energy technologies business are reported in a separate
segment.

D. Hunt Ramsbottom, President and CEO of Rentech, said, “We are extremely
pleased with the performance in our wood fibre processing business, as Fulghum
Fibres generated solid gross margin of 19% and progress continues to be made
on our two wood pellet production facilities. Fulghum remains on track to
generate annualized revenues and EBITDA of $95 million and $20 million,
respectively. Construction of the Atikokan and Wawa pellet facilities in
Eastern Ontario commenced in August, and we remain on schedule to meet our
pellet delivery obligations to OPG and Drax next year.”

Mr. Ramsbottom continued, “The nitrogen fertilizer business reported cash
distributions that were in line with our expectations reflected in our
guidance of August 8. Although prices for our products, and all nitrogen
products, have declined significantly from earlier in the year, we expect the
nitrogen market to improve during the fourth quarter as we believe buyers are
deferring additional purchases until this year’s late harvest is completed.
This could lead to improved pricing and volumes as we move into fall and
spring application periods.” Mr. Ramsbottom added, “The turnaround at the East
Dubuque Facility was completed safely and on time. We’re now in the
commissioning phase of our ammonia production and storage capacity expansion
project at the facility. We expect to commence the ammonium sulfate expansion
and reliability enhancement projects at our Pasadena Facility next month. The
additional volume from these expansion projects should position us well in
2014.”

Financial Highlights

Three months ended September 30, 2013

Consolidated revenues for the three months ended September 30, 2013 increased
by $55.6 million to $115.8 million compared to the prior-year period,
comprised of:

  *$22.4 million from Fulghum Fibres; and
  *An increase of $33.2 million from the nitrogen products manufacturing
    subsidiary, which reflected $42.7 million of revenues from the Pasadena
    Facility, partially offset by a 16% decline in revenues from the East
    Dubuque Facility.

Gross profit for the three months ended September 30, 2013 was $21.2 million,
a decrease of $13.8 million compared to the prior-year period, and which
included the following:

  *19% gross margin at Fulghum Fibres; and
  *A decline in gross margin at the nitrogen products manufacturing
    subsidiary to 18% from 58% in the prior-year period, primarily due to the
    acquisition of the Pasadena Facility, which typically realizes lower gross
    margin than the East Dubuque Facility. Gross margin at the Pasadena
    Facility was negative, reflecting write-downs of inventory, during the
    period.

Operating loss for the three months ended September 30, 2013 was $20.2
million, compared to operating income of $16.6 million in the prior-year
period, comprised of the following:

  *Contribution of $1.8 million from Fulghum Fibres, which included $3.4
    million of depreciation and amortization expense;
  *Operating loss of $2.4 million from the wood pellets segment, which
    reflected selling, general and administrative (SG&A) costs associated with
    developing the business, and non-capitalized costs associated with early
    work on acquiring and converting the wood fibre mills at Atikokan and Wawa
    for pellet production;
  *Operating loss of $18.3 million from the nitrogen products manufacturing
    subsidiary, which reflected a loss on goodwill impairment of $30.0 million
    for the Pasadena Facility;
  *Operating income of $4.5 million from energy technologies, which reflected
    a gain on sale of the Natchez site of $6.3 million, partially offset by
    costs associated with decommissioning the Product Demonstration Unit
    (PDU); taxes, insurance, security and other administrative costs of the
    Company’s energy technology facilities and sites; protecting patents; and
    efforts to sell and seek partners for its energy technologies and related
    assets; and
  *Corporate and unallocated expenses recorded as operating expenses of $5.9
    million, which included $0.7 million in transaction costs related to the
    acquisition of Fulghum Fibres.

Consolidated Adjusted EBITDA for the three months ended September 30, 2013 was
$11.5 million, a decline of $9.4 million compared to the prior-year period,
which included the following:

  *Contribution of $5.2 million from Fulghum Fibres; and
  *$16.1 million of Adjusted EBITDA from the nitrogen products manufacturing
    subsidiary.

Net loss for the three months ended September 30, 2013 was $14.6 million or
($0.06) per basic share. Excluding the loss on goodwill impairment, gain on
fair value adjustment to earn-out consideration, gain on sale of the Natchez
property, and an income tax benefit, net income allocated to common
shareholders for the current period was $7.6 million or $0.03 per basic share.
A reconciliation of net income exclusive of these items is provided below.
This compares to net income of $4.3 million or $0.02 per basic share for the
same period last year.

Fulghum Fibres
Fulghum Fibres generated revenues of $22.4 million for the three months ended
September 30, 2013. Gross profit was $4.3 million for the period. SG&A and
interest expenses for the period were $1.3 million and $0.7 million,
respectively.

Wood Pellets
The wood pellets segment incurred SG&A expenses of $2.4 million for the three
months ended September 30, 2013, which included acquisition-related and
development costs associated with the Company’s two previously announced
pellet projects in Eastern Canada, as well as other costs for the development
of the Company’s wood pellet business.

Nitrogen Products Manufacturing
The nitrogen products manufacturing business generated revenues of $93.3
million, compared to $60.1 million for the comparable period in the prior
year. Revenues increased due to the contribution of $42.7 million from the
Pasadena Facility, partially offset by a 16% decline in revenues from the East
Dubuque Facility. Product prices in the current period were lower than in the
prior year, having been negatively affected by a delayed spring application
season and significantly higher urea exports from China offered at competitive
prices. Lower ammonia volumes in the third quarter were partly a consequence
of holding a portion of inventory to meet the expected increase in demand for
the fall 2013 application season, as production was restricted due to the
October turnaround of the East Dubuque Facility. Deliveries of UAN were higher
than expected, shifting revenue from the fourth quarter to the current period.

During the three months ended September 30, 2013, Rentech Nitrogen generated
an operating loss of $18.3 million, compared to $29.2 million of operating
income during the comparable period in the prior year. The primary cause of
the operating loss in the current period was a loss of $30.0 million due to
the impairment of goodwill related to the Pasadena Facility. The operating
loss was also increased by lower gross profits at the East Dubuque Facility,
negative gross margin at the Pasadena Facility that reflected a write-down of
product inventories, and the addition of SG&A expenses and depreciation and
amortization expenses for the Pasadena Facility.

Adjusted EBITDA for the three months ended September 30, 2013 was $16.1
million, compared to $32.9 million in the corresponding period in 2012.
Adjusted EBITDA excluding Partnership level expenses totaled $18.0 million for
the current period. The East Dubuque Facility and the Pasadena Facility
reported $25.8 million and ($7.8) million in EBITDA, respectively, during the
three months ended September 30, 2013. Further explanation of Adjusted EBITDA,
a non-GAAP financial measure, has been included below in this press release.

Gross margin for the three months ended September 30, 2013 was 18%, compared
to 58% for the same period last year. Gross margin at the East Dubuque
Facility was 50% for the current period, compared to 58% for the prior-year
period, due to lower product prices and higher natural gas prices, partially
offset by lower depreciation expense. Gross loss margin at the Pasadena
Facility was 19% for the current period, which reflected inventory write-downs
and lower margins on sales of products that were produced from higher-cost raw
materials purchased earlier in the year. During the quarter, the Partnership
incurred a write-down of ammonium sulfate inventories of approximately $5.0
million because the costs of raw materials purchased in prior months and
reflected in inventory were higher than current and projected market prices.
Gross loss margin excluding the inventory write-down at the Pasadena Facility
was 8%, while gross margin at Rentech Nitrogen excluding the inventory
write-down was 23%.

SG&A expenses were $4.1 million for the three months ended September 30, 2013,
compared to $5.5 million for the prior-year period. The decrease was primarily
due to a $2.0 million decline in Partnership level expenses for business
development and unit-based compensation, and lower fees for professional
services and unused credit facility fees at the East Dubuque Facility,
partially offset by the addition of $1.2 million of SG&A expenses from the
Pasadena Facility.

Due to a reduced outlook for profitability at the Pasadena Facility compared
to projections made when the Partnership acquired Agrifos, Rentech Nitrogen
performed an impairment test for goodwill and determined that the carrying
amount of the reporting unit exceeded its fair value. As a result, the
Partnership recorded a loss due to goodwill impairment of $30.0 million at its
Pasadena Facility during the period. The $30.0 million charge is the
Partnership’s best estimate of the probable loss and is subject to further
adjustments as the goodwill impairment analysis is finalized at fiscal
year-end.

Interest expense was $4.0 million for the three months ended September 30,
2013, compared to $0 for the prior-year period. The increase was attributable
to debt incurred for the purchase of the Pasadena Facility and to fund
expansion projects at the East Dubuque and Pasadena Facilities.

Rentech Nitrogen realized a non-cash gain of $0.3 million for the three months
ended September 30, 2013 as a result of a decrease in the potential earn-out
consideration related to the acquisition of Agrifos. The reduction in fair
value was primarily due to lower results in 2013 caused by a delayed and
abbreviated spring application season and higher levels of urea exports from
China, suppressing product prices, and reduced expectations for profits from
the Pasadena Facility.

Energy Technologies
The energy technologies segment includes SG&A (including costs formerly booked
as research and development (R&D) expenses) related to the Company’s
technologies that are designed to convert carbon-bearing solids or gases into
hydrocarbons and electric power. The segment incurred SG&A expenses of $1.8
million during the current period, compared to $0.7 million for the prior-year
period. SG&A expenses increased primarily due to the inclusion of $1.1 million
of costs for activities that were previously reported as R&D expenses. These
former research and development expenses include costs in support of
de-commissioning the PDU, costs associated with efforts to sell and obtain
partners for the PDU and the Company’s energy technologies, patent protection
expenses, taxes, insurance costs, security and other administrative costs of
energy technology facilities and sites. R&D expenses for the energy
technologies segment were zero for the three months ended September 30, 2013,
since all R&D activity ceased in the first quarter of 2013. R&D expenses for
the prior-year period were $5.6 million, which were entirely related to the
Company’s alternative energy technologies. During the three months ended
September 30, 2013, the segment sold the Natchez site for proceeds of $8.6
million and realized gains of $6.3 million.

Nine months ended September 30, 2013

Consolidated revenues for the nine months ended September 30, 2013 increased
by $126.1 million to $295.6 million compared to the prior-year period,
comprised of:

  *$38.5 million from Fulghum Fibres; and
  *An increase of $87.6 million from the nitrogen products manufacturing
    subsidiary, which reflected $110.0 million of revenues from the Pasadena
    Facility, partially offset by a 13% decline in revenues from the East
    Dubuque Facility.

Gross profit for the nine months ended September 30, 2013 was $86.3 million, a
decrease of $17.0 million compared to the prior-year period, and which
included the following:

  *18% gross profit margin at Fulghum Fibres; and
  *A decline in gross margin at the nitrogen products manufacturing
    subsidiary to 31% from 61% in the prior-year period, primarily due to the
    acquisition of the Pasadena Facility, which typically realizes lower gross
    margin than the East Dubuque Facility. Gross margin at the Pasadena
    Facility was negative during the period.

Operating income for the nine months ended September 30, 2013 was $6.9
million, a decline of $45.7 million compared to the prior-year period,
comprised of the following:

  *Contribution of $2.7 million from Fulghum Fibres, which included $5.7
    million of depreciation and amortization expense;
  *Operating loss of $4.2 million from the wood pellets segment, which
    reflected SG&A costs associated with developing the business and
    non-capitalized costs associated with early work on acquiring and
    converting the wood fibre mills at Atikokan and Wawa;
  *Contribution of $32.7 million from the nitrogen products manufacturing
    subsidiary, which included a loss on goodwill impairment of $30.0 million
    for the Pasadena Facility;
  *Operating loss of $5.0 million from energy technologies, which reflected
    costs associated with R&D, decommissioning the PDU; taxes, insurance,
    security and other administrative costs of the Company’s energy technology
    facilities and sites; protecting patents; efforts to sell and seek
    partners for its energy technologies and related assets; partially offset
    by a $6.3 million gain on the sale of the Natchez site; and
  *Corporate and unallocated expenses recorded as operating expenses of $19.2
    million, which included $1.8 million in transaction costs for the
    acquisition of Fulghum Fibres.

Consolidated Adjusted EBITDA for the nine months ended September 30, 2013 was
$49.3 million, compared to $63.8 million for the prior-year period, which
included the following:

  *Contribution of $8.3 million from Fulghum Fibres; and
  *$75.1 million of Adjusted EBITDA from the nitrogen products manufacturing
    subsidiary.

For the nine months ended September 30, 2013, the Company recorded a net
income tax benefit of approximately $26.7 million which is comprised of an
income tax benefit for Rentech of approximately $27.1 million and an income
tax expense for Rentech Nitrogen of approximately $0.4 million. The income tax
benefit for Rentech was due to the release of a valuation allowance of $27.2
million that had been recorded against Rentech’s net operating loss
carryforwards. The release of the valuation allowance resulted from the
recording of deferred tax liabilities related to the Fulghum Fibres
acquisition.

Net income for the nine months ended September 30, 2013 was $13.0 million or
$0.06 per basic share. Excluding loss on goodwill impairment, loss on debt
extinguishment, the gain on fair value adjustment to earn-out consideration,
the gain on sale of the Natchez property, and the income tax benefit, net
income allocated to common shareholders for the current period was $10.5
million or $0.05 per basic share. This compares to net income of $10.5 million
or $0.05 per basic share for the same period last year.

Fulghum Fibres
Fulghum Fibres generated revenues of $38.5 million from May 1, 2013 through
September 30, 2013. Gross profit was $6.7 million for the period. SG&A and
interest expenses for the period were $2.1 million and $1.3 million,
respectively.

Wood Pellets
The wood pellets segment incurred SG&A expenses of $4.2 million for the nine
months ended September 30, 2013, which included acquisition-related and
development costs associated with the Company’s two previously announced
pellet projects in Eastern Canada as well as other costs for the development
of the Company’s wood fibre processing business.

Nitrogen Products Manufacturing
The nitrogen products manufacturing business generated revenues of $256.8
million, compared to $169.2 million for the comparable period in the prior
year. Revenues increased due to the contribution of $110.0 million of revenues
from the Pasadena Facility, partially offset by a 13% decline in revenues from
the East Dubuque Facility. Results in the current period were significantly
impacted by unfavorable weather. In the spring of this year, product
deliveries from both facilities were reduced and delayed by wet weather which
caused a delayed and abbreviated planting season and lower product demand and
prices. Significant increases in exports of urea from China also contributed
to the downward pressure on nitrogen pricing. Furthermore, in anticipation of
lower production due to the October turnaround of the East Dubuque Facility, a
portion of ammonia inventory was held to meet the expected increase in demand
for the fall 2013 application season. These effects were partially offset by
higher deliveries of UAN in the third quarter of 2013, shifting expected
revenue from the fourth quarter to the current period.

During the nine months ended September 30, 2013, Rentech Nitrogen generated
operating income of $32.7 million compared to $90.3 million during the
comparable period in the prior year. Operating income in the current period
was reduced by lower gross profits at the East Dubuque Facility, negative
gross margin that reflected write-downs of product inventories and loss on
goodwill impairment at the Pasadena Facility, and the addition of SG&A
expenses and depreciation and amortization expenses for the Pasadena Facility.

Adjusted EBITDA for the nine months ended September 30, 2013 was $75.1
million, compared to $99.7 million in the corresponding period in 2012.
Adjusted EBITDA excluding Partnership level expenses, totaled $81.6 million
for the current period. The East Dubuque Facility and the Pasadena Facility
reported $84.2 million and ($2.6) million in Adjusted EBITDA, respectively,
during the nine months ended September 30, 2013. Further explanation of
Adjusted EBITDA, a non-GAAP financial measure, has been included below in this
press release.

Gross margin for the nine months ended September 30, 2013 was 31%, compared to
61% for the same period last year. Gross margin at the East Dubuque Facility
was 55% for the current period, compared to 61% for the prior-year period,
primarily due to lower ammonia sales volume and prices, and higher natural gas
costs, partially offset by lower depreciation expense. Gross loss margin at
the Pasadena Facility was 2% for the current period, which reflected inventory
write-downs and sales of products that were produced from higher-cost raw
materials. During the nine months ended September 30, 2013, the Partnership
incurred write-downs of sulfur and sulfuric acid inventories of approximately
$0.5 million, and of ammonium sulfate inventories of approximately $6.8
million due to lower market prices. Gross margin excluding the inventory
write-down at the Pasadena Facility was 5%, while gross margin at Rentech
Nitrogen excluding the inventory write-down was 34%.

SG&A expenses were $13.7 million for the nine months ended September 30, 2013,
compared to $12.0 million for the prior-year period. The increase was
primarily due to the addition of $3.8 million of SG&A expenses from the
Pasadena Facility, partially offset by a $1.0 million decrease in Partnership
level expenses and a $1.1 million decline in expenses at the East Dubuque
Facility primarily due to lower unused credit facility fees and legal
expenses.

Due to a reduced outlook for profitability at the Pasadena Facility compared
to projections made when the Partnership acquired Agrifos, Rentech Nitrogen
performed an impairment test for goodwill and determined that the carrying
amount of the reporting unit exceeded its fair value. As a result, the
Partnership recorded a loss due to goodwill impairment of $30.0 million at its
Pasadena Facility during the period. The $30.0 million charge is the
Partnership’s best estimate of the probable loss and is subject to further
adjustments as the goodwill impairment analysis is finalized at fiscal
year-end.

Interest expense was $9.7 million for the nine months ended September 30,
2013, compared to $0.2 million for the prior-year period. The increase was
attributable to debt incurred for the purchase of the Pasadena Facility and
expansion projects at the East Dubuque and Pasadena Facilities.

Rentech Nitrogen realized a non-cash gain of $4.9 million for the nine months
ended September 30, 2013 as a result of a decrease in the potential earn-out
consideration related to the acquisition of Agrifos. The reduction in fair
value was primarily due to lower results in 2013 caused by a delayed and
abbreviated spring application season and higher levels of urea exports from
China, suppressing product prices, and reduced expectations for profits from
the Pasadena Facility.

Energy Technologies
The segment incurred SG&A expenses of $5.5 million during the current period,
compared to $3.3 million for the prior-year period. SG&A expenses increased
primarily due to the inclusion of $3.1 million in costs for activities that
were previously reported as R&D expenses, partially offset by a decrease in
project development costs of approximately $0.9 million. These former R&D
expenses included costs in support of de-commissioning the PDU, costs
associated with efforts to sell and obtain partners for the PDU and the
Company’s energy technologies, patent protection expenses, taxes, insurance
costs, security and other administrative costs of energy technology facilities
and sites. R&D expenses for the energy technologies segment were $5.7 million
for the nine months ended September 30, 2013, all of which were incurred in
the first three months of the year. R&D expenses for the prior-year period
were $14.7 million. During the nine months ended September 30, 2013, the
segment sold the Natchez site for proceeds of $8.6 million and realized gains
of $6.3 million.

Wood Fibre Processing Business Update

Update on Pellet Projects

At the inception of the projects in 2012, Rentech retained two affiliated
firms, AgriRecycle and EAD, who together have 27 years of experience designing
and building 11 pellet plants, to perform engineering and project design.
After the joint venture (JV) with Graanul Invest (Graanul) was formed in May
of this year, Graanul reviewed the engineering and project plans. Rentech and
Graanul then jointly decided that AgriRecycle and EAD would continue their
work, while the resources of the JV and Graanul would be focused on other
projects under development. Since Graanul would not be providing EPC services,
the Wawa and Atikokan projects would not be financed and owned by the JV.
Rentech will continue to own the projects outright and be responsible for
construction. The Rentech team includes the former plant manager, wood yard
manager, and manager of capital projects at the Wawa facility, all of whom
worked at the plant when it was operated by Weyerhaeuser as an OSB mill
processing nearly 750,000 green metric tons of logs annually.

Rentech began construction of the Atikokan and Wawa wood pellet facilities in
August and remains on schedule to begin producing wood pellets from these
facilities in 2014. Demolition work at the sites has been completed within
budget. Rentech has placed orders or received bids for all major equipment,
with costs consistent with the budget. The Company has decided to increase
capital costs at the Wawa facility, by installing two electric 170 foot radial
log cranes, to be purchased from Fulghum Industries, rather than using
diesel-powered mobile equipment to manage the wood yard, offloading and
feeding. It is expected that the project cost will increase by approximately
$8 million due to this decision. Cranes are typically more reliable, safer,
reduce emissions, and are significantly less expensive to operate for large
capacity facilities such as the Wawa plant. The use of these cranes should
result in annual operating cost savings of at least $1 million, with an
expected useful life of 20 years or more.

The design of the facilities has been further modified to add capacity, which
will increase capital costs. The expected production of the Wawa plant has
increased to approximately 450,000 tonnes. The Wawa plant is now expected to
supply the entire 400,000 tonnes of annual pellet deliveries to Drax, with
50,000 tonnes available for sale to Drax or other customers. The production of
the Atikokan facility is now expected to be approximately 100,000 tonnes,
which will fulfill the existing contract with OPG for 45,000 tonnes, with the
remaining 55,000 tonnes available for sale to OPG or other customers. When the
increased output anticipated from the design changes and the operating
efficiencies anticipated from the cranes are balanced against higher capital
costs, the expected return profile of the projects remains unchanged, with
stabilized annual EBITDA now projected in the range of $17 to $20 million. The
projected EBITDA is based on estimated operating income in the range of $8 to
$11 million. Further explanation of EBITDA, a non-GAAP financial measure, has
been included below in this press release.

Rentech entered the wood fibre processing business to create value by
investing in high return projects with stable cash flows and long-term
contracts, diversifying the Company’s exposure to commodity fluctuations in
the nitrogen business. The Company is pursuing specific opportunities in both
wood chipping and pellet operations that could lead to substantial growth.
Some of the opportunities depend on the consummation of transactions, the
success and timing of which are unpredictable. Rentech believes that an IPO of
the fibre business as an MLP is possible, depending on market conditions, and
could best be accomplished at a scale somewhat larger than that of the Wawa
and Atikokan projects combined with Fulghum Fibres. If the wood fibre
processing business is able to achieve a larger scale through development and
transactions, Rentech believes that it could accomplish an IPO in
approximately 2 years or less.

Revolving Loan Facility
In September 2013, Rentech, Inc. entered into a $100 million revolving loan
facility. Proceeds from the facility are intended to be used to fund growth in
Rentech’s wood fibre processing business. The facility is collateralized by a
portion of the units of Rentech Nitrogen Partners, L.P. owned by a subsidiary
of Rentech, Inc. The revolving loan facility has a maturity of three years and
an interest rate on outstanding loan amounts of LIBOR plus 4.0% per annum.
Rentech drew down $50 million of the facility upon closing of the transaction,
with the remaining $50 million of capacity available for future borrowings, so
long as certain conditions are satisfied at the time of borrowing. The
facility is secured by 15.4 million of the 23.25 million common units of
Rentech Nitrogen currently owned by Rentech as initial collateral. Under
certain circumstances, up to 19.4 million units may be pledged as collateral.
Depending on the market price of the units, among other things, Rentech may be
restricted from borrowing the full $100 million maximum amount. Rentech will
continue to receive all cash distributions paid on the common units and retain
the right to sell units not held as collateral as long as certain conditions
outlined in the loan facility are met. Rentech, Inc. is the guarantor of the
revolving loan facility.

2013 Outlook

Rentech
Rentech reiterated expectations for Fulghum Fibres for the full year 2013, of
approximately $95 million of pro forma revenue and $20 million of pro forma
EBITDA, of which Rentech would recognize eight months of results since the
acquisition. For the twelve months ending December 31, 2013, Rentech
reiterated its guidance of total cash operating expenses for Rentech,
including Fulghum Fibres and excluding the nitrogen products manufacturing
business, of approximately $34 million.

Rentech Nitrogen
In its press release dated November 7, 2013, Rentech Nitrogen indicated that
cash available for distribution for the fourth quarter of 2013 could be as low
as zero, and provided an updated outlook.

Based on Rentech Nitrogen’s current guidance, and assuming Rentech’s current
ownership of 23.25 million units of Rentech Nitrogen, Rentech’s cash
distributions could total approximately $38 million for 2013, assuming that
the distribution related to fourth quarter results is zero.

Conference Call with Management
The Company will hold a conference call today, November 7, 2013, at 3:00 p.m.
PST, during which Rentech's senior management will review the Company's
financial results for this period and provide an update on corporate
developments. Callers may listen to the live presentation, which will be
followed by a question and answer segment, by dialing 888-517-2513 or
847-619-6533 and the pass code 9069023#. An audio webcast of the call will be
available at www.rentechinc.com within the Investor Relations portion of the
site under the Presentations section. A replay will be available by audio
webcast and teleconference from 5:30 p.m. PST on November 7 through 11:59 p.m.
PST on November 17. The replay teleconference will be available by dialing
888-843-7419 or 630-652-3042 and the audience passcode 9069023#.

 Rentech, Inc.
  Consolidated Statements of Operations
  (Amounts in Thousands, Except per Share Data)
                                                            
                       For the Three Months          For the Nine Months
                       Ended September 30,           Ended September 30,
                       2013           2012           2013          2012
                       (unaudited)    (unaudited)    (unaudited)   (unaudited)
  Revenues             $ 115,762      $ 60,170       $ 295,582     $ 169,465
  Cost of Sales        94,563        25,130        209,297       66,134  
  Gross Profit         21,199         35,040         86,285          103,331
  Operating Expenses
  Selling, general
  and administrative   15,195         12,058         44,363          33,832
  expense
  Research and         -              5,563          5,747           14,675
  development
  Depreciation and     2,454          670            5,455           2,486
  amortization
  Loss on goodwill     30,029         -              30,029          -
  impairment
  Other                (6,263     )   145           (6,235     )   (292    )
  Total Operating      41,415        18,436        79,359        50,701  
  Expenses
  Operating Income     (20,216    )   16,604         6,926           52,630
  (Loss)
  Other Income
  (Expense), Net
  Interest expense     (4,753     )   (828       )   (11,020    )    (5,288  )
  Loss on debt         -              -              (6,001     )    -
  extinguishment
  Gain on fair value
  adjustment to        586            -              5,197           -
  earn-out
  consideration
  Other expense, net   (68        )   (265       )   (179       )   (652    )
  Total Other          (4,235     )   (1,093     )   (12,003    )   (5,940  )
  Expenses, Net
                                                                   
  Income (Loss) from
  Continuing
  Operations Before    (24,451    )   15,511         (5,077     )    46,690
  Income Taxes and
  Equity in Loss of
  Investee
  Income tax           (976       )   68            (26,729    )   1,243   
  (benefit) expense
  Income (Loss) from
  Continuing
  Operations Before    (23,475    )   15,443         21,652          45,447
  Equity in Loss of
  Investee
  Equity in Loss of    103           -             138           -       
  Investee
  Income (Loss) from
  Continuing           (23,578    )   15,443         21,514          45,447
  Operations
  Income from
  discontinued         -             134           -             134     
  operations, net of
  tax
  Net Income (Loss)    (23,578    )   15,577         21,514          45,581
  Net (income) loss
  attributable to      8,985         (11,307    )   (8,515     )   (35,056 )
  noncontrolling
  interests
  Net Income (Loss)
  Attributable to      $ (14,593  )   $ 4,270       $ 12,999     $ 10,525  
  Rentech Common
  Shareholders
                                                                   
  Net Income (Loss) per Common Share Allocated

  to Rentech Common Shareholders:
                                                                   
  Basic:
  Continuing operations $ (0.06   )   $ 0.02         $ 0.06        $ 0.05
  Discontinued           0.00        0.00          0.00         0.00    
  operations
  Net Income (Loss)     $ (0.06   )   $ 0.02         $ 0.06        $ 0.05    
  Diluted:
  Continuing operations $ (0.06   )   $ 0.02         $ 0.05        $ 0.04
  Discontinued           0.00        0.00          0.00         0.00    
  operations
  Net Income (Loss)     $ (0.06   )   $ 0.02         $ 0.05        $ 0.04    
                                                                   
  Weighted-Average Shares Used to Compute

  Net Income (Loss) per Common Share:
  Basic                  226,305     220,063       225,840      223,572 
  Diluted                226,305     229,815       232,171      232,773 
                                                                   

 Rentech, Inc.
  Statements of Operations by Business Segment
  (Stated in Thousands)
                                                               
                           For the Three Months      For the Nine Months
                           Ended September 30,       Ended September 30,
                            2013       2012       2013        2012    
  Revenues
  East Dubuque             $ 50,572     $ 60,112     $ 146,838     $ 169,228
  Pasadena                   42,707       -            109,961       -
  Fulghum Fibres             22,378       -            38,483        -
  Energy Technologies       105        58         300         237     
  Total Revenues           $ 115,762   $ 60,170    $ 295,582    $ 169,465 
                                                                   
  Gross Profit (Loss)
  East Dubuque             $ 25,114     $ 35,035     $ 81,353      $ 103,253
  Pasadena                   (8,294  )    -            (1,966  )     -
  Fulghum Fibres             4,324        -            6,749         -
  Energy Technologies       55         5          149         78      
  Total Gross Profit       $ 21,199    $ 35,040    $ 86,285     $ 103,331 
                                                                   
  Selling, General and Administrative
  Expense
  East Dubuque             $ 981        $ 1,661      $ 3,423       $ 4,480
  Pasadena                   1,227        -            3,811         -
  Fulghum Fibres             1,250        -            2,109         -
  Wood Pellets               2,350        518          4,233         839
  Energy Technologies       1,782      738        5,544       3,252   
  Total Selling, General
  and Administrative       $ 7,590     $ 2,917     $ 19,120     $ 8,571   
  Expense
                                                                   
  Research and
  Development
  Energy Technologies      $ -         $ 5,563     $ 5,747      $ 14,675  
  Total Research and       $ -         $ 5,563     $ 5,747      $ 14,675  
  Development
                                                                   
  Depreciation and
  Amortization
  East Dubuque             $ 46         $ 90         $ 152         $ 726
  Pasadena                   972          -            2,722         -
  Fulghum Fibres             1,266        -            1,984         -
  Energy Technologies       18         389        122         1,168   
  Total Depreciation and
  Amortization Recorded    $ 2,302     $ 479       $ 4,980      $ 1,894   
  in Operating Expenses
  East Dubuque             $ 1,666      $ 3,589      $ 6,348       $ 8,730
  Pasadena                   1,702        -            3,159         -
  Fulghum Fibres            2,150      -          3,707       -       
  Total Depreciation and
  Amortization Recorded    $ 5,518     $ 3,589     $ 13,214     $ 8,730   
  in Cost of Sales
  Total Depreciation and   $ 7,820     $ 4,068     $ 18,194     $ 10,624  
  Amortization
                                                                   
  Other Operating (Income) Expenses
  East Dubuque             $ 28         $ 237        $ 36          $ 284
  Pasadena                   30,029       -            30,029        -
  Fulghum Fibres             (4      )    -            (1      )     -
  Wood Pellets               -            -            -             -
  Energy Technologies       (6,287  )   (93    )    (6,270  )    (577    )
  Total Other Operating    $ 23,766    $ 144       $ 23,794     $ (293    )
  (Income) Expenses
                                                                   
                                                                   
                                        
                                                                   
                                                                   
                           For the Three Months      For the Nine Months
                           Ended September 30,       Ended September 30,
                            2013       2012       2013        2012    
  Operating Income
  (Loss)
  East Dubuque             $ 24,059     $ 33,047     $ 77,742      $ 97,763
  Pasadena                   (40,522 )    -            (38,528 )     -
  Fulghum Fibres             1,812        -            2,657         -
  Wood Pellets               (2,350  )    (518   )     (4,233  )     (839    )
  Energy Technologies       4,542      (6,592 )    (4,994  )    (18,440 )
  Total Operating Income   $ (12,459 )  $ 25,937    $ 32,644     $ 78,484  
  (Loss)
                                                                   
  Interest Expense
  East Dubuque             $ -          $ 39         $ -           $ 181
  Pasadena                   -            -            6             -
  Fulghum Fibres             714          -            1,250         -
  Energy Technologies       (4      )   (1,582 )    (3      )    (1,582  )
  Total Interest Expense   $ 710       $ (1,543 )   $ 1,253      $ (1,401  )
                                                                   
                                                                   
  Net Income (Loss)
  East Dubuque             $ 24,069     $ 33,022     $ 77,383      $ 97,625
  Pasadena                   (40,765 )    -            (38,915 )     -
  Fulghum Fibres             813          -            941           -
  Wood Pellets               (2,058  )    (518   )     (3,941  )     (839    )
  Energy Technologies       4,568      (5,010 )    (4,903  )    (16,854 )
  Total Net Income         $ (13,373 )  $ 27,494    $ 30,565     $ 79,932  
  (Loss)
                                                                   
  
  
  Reconciliation of Segment Net Income (Loss) to Consolidated Net Income
  (Loss):
  Segment net income       $ (13,373 )  $ 27,494     $ 30,565      $ 79,932
  (loss)
  Partnership and
  unallocated expenses
  recorded as selling,       (1,872  )    (3,847 )     (6,488  )     (7,502  )
  general and
  administrative
  expenses
  Partnership and
  unallocated income         309          -            (1,081  )     232
  (expenses) recorded as
  other expenses, net
  Unallocated interest
  expense and loss on        (3,996  )    (327   )     (9,726  )     (907    )
  interest rate swaps
  Income tax benefit         -            -            302           -
  Corporate and
  unallocated expenses
  recorded as selling,       (5,733  )    (5,294 )     (18,755 )     (17,759 )
  general and
  administrative
  expenses
  Corporate and
  unallocated                (152    )    (191   )     (475    )     (592    )
  depreciation and
  amortization expense
  Corporate and
  unallocated expenses       7            47           (19     )     (25     )
  recorded as other
  expense
  Corporate and
  unallocated interest       (47     )    (2,370 )     (47     )     (6,688  )
  expenses
  Corporate income tax       1,279        (69    )     27,238        (1,244  )
  benefit (expense)
  Income from
  Discontinued              -          134        -           134     
  Operations
  Consolidated Net         $ (23,578 )  $ 15,577    $ 21,514     $ 45,581  
  Income (Loss)
                                                                   


  
  
  Rentech, Inc. and Subsidiaries
  Selected Balance Sheet Data
  (Stated in Thousands)
                                                               
  
                                                  As of           As of
  Consolidated Balance Sheet Data                 September 30,   December 31,
                                                  2013            2012
  Cash and Cash Equivalents                       $   180,418     $   141,736
  Working Capital                                 $   148,715     $   107,059
  Construction in Progress                        $   119,615     $   61,417
  Total Assets                                    $   734,082     $   479,202
  Total Debt                                      $   426,675     $   193,290
  Total Rentech Stockholders' Equity              $   172,169     $   157,987
                                                                  
                                                
                                                  As of           As of
                                                  September 30,   December 31,
                                                  2013            2012
  Cash and Cash Equivalents – Rentech Nitrogen    $   85,321      $   55,799
  Partners
  Cash and Cash Equivalents Excluding Rentech        95,097         85,937
  Nitrogen Partners
  Total Cash and Cash Equivalents                 $   180,418     $   141,736
                                                                  
                                                
                                                  As of           As of
                                                  September 30,   December 31,
                                                  2013            2012
  Debt – Rentech Nitrogen Partners                $   320,000     $   193,290
  Debt Excluding Rentech Nitrogen Partners           106,675        -
  Total Debt                                      $   426,675     $   193,290
                                                                  

Disclosure Regarding Non-GAAP Financial Measures
Net income (loss) excluding loss on goodwill impairment, loss on debt
extinguishment, gain on sale of Natchez, gain on fair value adjustment to
earn-out contingent consideration and income tax benefit is included to
provide management and investors with net income results for Rentech that are
more easily compared to the prior year period.

Consolidated Adjusted EBITDA for Rentech and Adjusted EBITDA for Rentech
Nitrogen are defined as net income (loss) plus, as applicable, interest
expense and other financing costs, loss on goodwill impairment, loss on debt
extinguishment, loss on interest rate swaps, income tax expense (benefit),
depreciation and amortization, net of gain in fair value adjustment to
earn-out consideration, and gain on sale of Natchez. Adjusted EBITDA for
Fulghum Fibres is defined as net income (loss) plus net interest expense,
depreciation and amortization and other adjustments. The non-GAAP financial
measures described above are used as supplemental financial measures by
management and by external users of our financial statements, such as
investors and commercial banks, to assess:

  *the financial performance of our assets without regard to financing
    methods, capital structure or historical cost basis; and
  *our operating performance and return on invested capital compared to those
    of other publicly traded limited partnerships and other public companies,
    without regard to financing methods and capital structure.

These non-GAAP financial measures should not be considered an alternative to
net income, operating income, net cash provided by operating activities or any
other measure of financial performance or liquidity presented in accordance
with GAAP. These non-GAAP financial measures may have material limitations as
performance measures because they exclude items that are necessary elements of
Rentech’s costs and operations. In addition, EBITDA and Adjusted EBITDA
presented by other companies may not be comparable to Rentech’s presentation
of those measures, since each company may define these terms differently.

The table below reconciles net income attributable to Rentech excluding loss
on goodwill impairment, loss on debt extinguishment, gain on sale of Natchez,
gain on fair value adjustment to earn-out contingent consideration and income
tax benefit to net income (loss) attributable to Rentech for the three and
nine months ended September 30, 2013 (stated in thousands, except per share
data).

                                                       
                                    For the Three Months   For the Nine Months
                                    Ended September 30,    Ended September 30,
                                    2013                   2013
  Net Income (Loss) Attributable    $    (14,593    )      $    12,999
  to Rentech Common Shareholders
  Less: Income Attributable to          -                    348        
  Unvested Restricted Stock
  Net Income (Loss) Attributable    $    (14,593    )      $    12,651     
  to Common Shareholders
  Loss on Goodwill Impairment       $    30,029            $    30,029
  Loss on Debt Extinguishment            -                      6,001
  Gain on Sale of Natchez                (6,275     )           (6,275     )
  Gain on Fair Value Adjustment          (586       )           (5,197     )
  to Earn-out Consideration
  Income Tax Benefit                    (976       )          (26,729    )
  Net Income Attributable to
  Common Shareholders Excluding
  Loss on Goodwill Impairment,
  Loss on Debt Extinguishment,      $    7,599            $    10,480     
  Gain on Sale of Natchez and
  Gain on Fair Value Adjustment
  to Earn-out Consideration
                                                           
  Net Income (Loss) per Share
  Attributable to Rentech Common    $    (0.06      )      $    0.06
  Shareholders
  Loss per Share on Goodwill             0.13                   0.13
  Impairment
  Loss per Share on Debt                 -                      0.03
  Extinguishment
  Gain per Share on Sale of              (0.03      )           (0.02      )
  Natchez
  Gain per Share on Fair Value
  Adjustment to Earn-out                 -                      (0.02      )
  Consideration
  Income Tax Benefit per Share          -                    (0.12      )
  Net Income per Share
  Attributable to Rentech Common
  Shareholders Excluding Loss on
  Goodwill Impairment, Loss on      $    0.03             $    0.05       
  Debt Extinguishment, Gain on
  Sale of Natchez and Gain on
  Fair Value Adjustment to
  Earn-out Consideration
  Weighted-Average Common Shares         226,305                225,840
  Outstanding
                                                                           
                                                                           
                                                                           

The table below reconciles Rentech’s consolidated Adjusted EBITDA to net
income (loss) for the three and nine months ended September 30, 2013 (stated
in thousands)

                                                       
                                    For the Three Months   For the Nine Months
                                    Ended September 30,    Ended September 30,
                                    2013                   2013
  Net Income (Loss)                 $    (23,578    )      $    21,514
  Add:
  Interest Expense                       4,753                  11,020
  Income Tax Benefit                     (976       )           (26,729    )
  Depreciation and Amortization          7,972                  18,669
  Loss on Goodwill Impairment            30,029                 30,029
  Loss on Debt Extinguishment            -                      6,001
  Gain on Sale of Natchez                (6,275     )           (6,275     )
  Gain on Fair Value Adjustment          (586       )           (5,197     )
  to Earn-out Consideration
  Other                                 171                  317        
  Adjusted EBITDA                   $    11,510           $    49,349     
                                                           
                                                           

The table below reconciles Fulghum Fibres’ Adjusted EBITDA to net income
(loss) for the three and nine months ended September 30, 2013 (stated in
thousands)

                                                       
  
                                    For the Three Months   For the Nine Months
                                    Ended September 30,    Ended September 30,
                                    2013                   2013
  Net Income (Loss)                 $    (23,578    )      $    21,514
  Less: Non-Fulghum (Income) Loss       24,391               (20,573    )
  Fulghum Net Income                     813                    941
  Add Fulghum Items:
  Net Interest Expense                   692                    1,226
  Depreciation and Amortization          3,416                  5,691
  Other                                 307                  490        
  Fulghum's Adjusted EBITDA         $    5,228            $    8,348      
                                                           
                                                           

The table below reconciles forecasted EBITDA from combined Wawa and Atikokan
projects to forecasted operating income for the upper and lower ends of the
range of EBITDA at full operations for both facilities (stated in millions).

                                      Stabilized Operations
                                        In 2016
                                                     
  Operating Income                      $   8    -   $   11
  Plus: Depreciation and Amortization      9    -      9
  EBITDA                                $   17   -   $   20
                                                     
                                                     

The table below reconciles consolidated Adjusted EBITDA to net income (loss)
for Rentech Nitrogen for the three months ended September 30, 2013 (stated in
thousands).

                     For the Three Months Ending September 30, 2013
                      East Dubuque  Pasadena     Partnership  Consolidated
                       Facility       Facility      Level
  Net Income (Loss)    $  24,068      $ (40,764 )   $  (5,559 )   $  (22,255 )
  Plus: Net Interest      -             -              3,996         3,996
  Expense
  Plus: Loss on
  Goodwill                -             30,029         -             30,029
  Impairment
  Less: Gain on Fair
  Value Adjustment        -             -              (309   )      (309    )
  to Earn-out
  Consideration
  Plus: Income Tax        (9      )     242            -             233
  Expense
  Plus: Depreciation     1,712       2,674        -           4,386   
  and Amortization
  Adjusted EBITDA      $  25,771     $ (7,819  )   $  (1,872 )   $  16,080  
                                                                  
                                                                  
                                                                  

The table below reconciles consolidated Adjusted EBITDA to net income (loss)
for Rentech Nitrogen for the nine months ended September 30, 2013 (stated in
thousands).

                       For the Nine Months Ended September 30, 2013
                         East         Pasadena      Partnership
                         Dubuque     Facility     Level        Consolidated
                         Facility
  Net Income (Loss)      $  77,383    $ (38,915 )   $ (16,993 )   $  21,475
  Plus: Net Interest        -           6             9,719          9,725
  Expense
  Plus: Loss on             -           30,029        -              30,029
  Goodwill Impairment
  Plus: Loss on Debt        -           -             6,001          6,001
  Extinguishment
  Less: Gain on Fair
  Value Adjustment to       -           -             (4,920  )      (4,920  )
  Earn-Out
  Consideration
  Plus: Loss on             -           -             7              7
  Interest Rate Swaps
  Plus: Income Tax          360         380           (302    )      438
  Expense (Benefit)
  Plus: Depreciation       6,500      5,881       -            12,381  
  and Amortization
  Adjusted EBITDA        $  84,243    $ (2,619  )   $ (6,488  )   $  75,136  
                                                                  
                                                                  

The table below reconciles consolidated Adjusted EBITDA to net income for
Rentech Nitrogen for the three and nine months ended September 30, 2012
(stated in thousands).

                                                       
                                     For Three Months      For the Nine Months
                                     Ended September 30,   Ended September 30,
                                     2012                  2012
  Net Income                         $       28,848        $    89,448
  Add:
  Net Interest Expense                       25                 138
  Income Tax Expense                         -                  -
  Depreciation and Amortization              3,679              9,456
  Loss on Debt Extinguishment                -                  -
  Loss on Interest Rate Swaps                327                907
  Gain on Fair Value Adjustment to           -                  -
  Earn-out Consideration
  Other                                     -                 (232      )
  Adjusted EBITDA                    $       32,879        $    99,717    
                                                           
                                                           

About Rentech, Inc.
Rentech, Inc. (www.rentechinc.com) owns and operates wood fibre processing and
nitrogen fertilizer manufacturing businesses. The wood fibre processing
business consists of the provision of wood chipping services and the
manufacture and sale of wood chips, through a wholly-owned subsidiary, Fulghum
Fibres, Inc., and the development of wood pellet production facilities.
Rentech’s nitrogen fertilizer business consists of the manufacture and sale of
nitrogen fertilizer through its publicly-traded subsidiary, Rentech Nitrogen
Partners, L.P. (NYSE: RNF). Rentech also owns the intellectual property
including patents, pilot and demonstration data, and engineering designs for a
number of clean energy technologies designed to produce certified synthetic
fuels and renewable power when integrated with third-party technologies.

Safe Harbor Statement
This press release contains forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995 about matters such as:
projected revenues and EBITDA for Fulghum Fibres; our ability to complete the
wood pellet mills on a timely basis, or at all; as well as projected EBITDA
and capital costs for the pellet mills; the outlook for our wood processing,
nitrogen fertilizer and energy businesses; growth opportunities for the wood
fibre business and the possibility of a MLP IPO for that business; and
projected cash available for distribution for Rentech Nitrogen. These
statements are based on management’s current expectations and actual results
may differ materially as a result of various risks and uncertainties. Other
factors that could cause actual results to differ from those reflected in the
forward-looking statements are set forth in the Company’s prior press releases
and periodic public filings with the Securities and Exchange Commission, which
are available via Rentech’s website at www.rentechinc.com. The forward-looking
statements in this press release are made as of the date of this press release
and Rentech does not undertake to revise or update these forward-looking
statements, except to the extent that it is required to do so under applicable
law.

Contact:

Rentech, Inc.
Julie Dawoodjee Cafarella
Vice President of Investor Relations and Communications
310-571-9800
ir@rentk.com
 
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