Taminco Corporation Announces Fourth Quarter and Full Year 2013 Results

   Taminco Corporation Announces Fourth Quarter and Full Year 2013 Results

PR Newswire

ALLENTOWN, Pa., Feb. 25, 2014

ALLENTOWN, Pa., Feb. 25, 2014 /PRNewswire/ -- Taminco Corporation ("Taminco"
or the "Company") (NYSE: TAM), the world's largest integrated producer of
alkylamines and alkylamine derivatives for use in the manufacturing of
everyday products, today announced results for its fourth quarter and full
fiscal year of 2013. Unless otherwise noted, year ago comparisons refer to
the three month period and "pro forma" twelve month periods ending December
31, 2012.

Fiscal 2013 Fourth Quarter Highlights

  oVolume increased 3% year over year to 131K tons
  oNet Sales rose 8% year over year to $283 million
  oAdjusted EBITDA grew 16% to $57 million for a 20% margin
  oEntered new specialty chemical niche market with acquisition of Kemira's
    Formic Acid business
  oMethylamine expansion project at our Pace, Florida site is progressing and
    on schedule to be completed by the third quarter of 2014

Fiscal 2013 Highlights

  oVolume increased 3% year over year to 565K tons
  oNet Sales rose 8% year over year to $1.2 billion
  oAdjusted EBITDA grew 6% to $255 million for a 21% margin

Record Fourth Quarter with 16% Adjusted EBITDA Growth

"We are extremely pleased with the results we delivered during 2013 as we
executed on the strategic goals we communicated during our IPO. We achieved a
record fourth quarter and 2013 was the strongest in the Company's history.
Taminco reported growth in volume, net sales and Adjusted EBITDA. In addition
to our strong financial results, we acquired the Formic Acid Business of
Kemira Oyj . Taminco's entry in the formic acid market is consistent with our
strategy to seek leadership into niches with attractive end markets and high
level of similarities with Taminco's core competences," said Taminco Chief
Executive Officer Laurent Lenoir.

For the quarter ended December 31, 2013, the Company generated net sales of
$283 million, an improvement of $22 million, or 8%, compared to $261 million
in the corresponding period of 2012. This increase was primarily due to volume
growth in our Specialty Amines segment, as well as favorable product mix and
pricing in our Crop Protection business. Additionally, global demand remained
strong in our most important end-markets driven by favorable mega trends,
including agriculture, personal & home care, water treatment, animal
nutrition, and energy.

On a regional basis, for the year, 48% of our net sales were sold in North
America, 37% in Europe, and 15% in the emerging markets (7% in Latin America
and 8% in Asia). The Company experienced double digit net sales growth in both
North America and Europe, both outpacing the broader economies in those
regions.

Adjusted EBITDA for the three months ended December 31, 2013 was $57 million
compared to $49 million in the period ended December 31, 2012 due to volume
growth, product mix and pricing, for an Adjusted EBITDA margin of 20%.

Fiscal Year 2013 Comparison versus "Pro Forma" Fiscal Year 2012

Net sales for the year ended December 31, 2013 grew by 8% to $1.2 billion
versus the fiscal year 2012. The increase was primarily due to an increase in
volumes in the Specialty Amines segment supported by the DIMLA plant start up
and an increase in the Functional Amines segment as a result of improved
pricing, mix effects and strong growth in Latin America. During the period,
net sales grew by 11% in Specialty Amines, 6% in Functional Amines and 2% in
Crop Protection.

Adjusted EBITDA for the year ended December 31, 2013 was $255 million,
compared to $240 million in the fiscal year 2012. The increase was mainly due
to volume and margin increases.

Quarterly Segment Results

Functional Amines

Volume in the Functional Amines segment was 65 kT for the quarter ended
December 31, 2013, a decrease of 2% from the corresponding period of 2012. Net
sales were $119 million for the quarter ended December 31, 2013, which was
flat from the corresponding period of 2012. Net sales were flat primarily due
to decreased volume, which was caused by weaker performance in methylamines
and solvents. Adjusted EBITDA from the Functional Amines segment was $26
million for the three months ended December 31, which was flat compared to the
corresponding period of 2012.

Specialty Amines

Volume in the Specialty Amines segment was 56 kT for the quarter ended
December 31, 2013, an increase of 12% from the corresponding period of 2012.
Net sales were $135 million for the quarter ended December 31, 2013, an
increase of 17% from the corresponding period of 2012. The increase was
primarily due to strong demand in personal & home care in US and Europe.
Adjusted EBITDA from the Specialty Amines segment was $23 million for the
three months ended December 31, 2013, a 28% increase from the corresponding
period of 2012.

Crop Protection

Volume in Crop Protection was stable year over year at 10 kT for the quarter
ended December 31, 2013, compared to the corresponding period of 2012. Net
sales were $29 million for the quarter ended December 31, 2013, an increase of
7% from the corresponding period of 2012. This increase was primarily due to
strong sales in soil fumigants. Adjusted EBITDA from the Crop Protection
segment was $8 million for the three months ended December 31, 2013, a 60%
increase from the corresponding period in 2012.

Segment Results for the Year Ended 2013

Functional Amines

Volume in the Functional Amines segment was 288 kT for the year ended December
31, 2013, an increase of 1% from the corresponding period of 2012. Net sales
were $529 million for the year ended December 31, 2013, an increase of 6% from
the corresponding period in 2012. The increase was due to sales growth in all
regions except Asia. Adjusted EBITDA from the Functional Amines segment
remained stable at $122 million for the year ended December 31, 2013, compared
to the corresponding period of 2012.

Specialty Amines

Volume in the Specialty Amines segment was 228 kT for the year ended December
31, 2013, an increase of 10% from the corresponding period of 2012. Net sales
were $531 million for the year ended December 31, 2013, an 11% increase from
the corresponding period in 2012. The increase was primarily due to strong
demand in personal & home care in US and Europe. Adjusted EBITDA from the
Specialty Amines segment was $91 million for the year ended December 31, 2013,
a 14% increase from the corresponding period of 2012.

Crop Protection

Volume in Crop Protection was 49 kT for the year ended December 31, 2013, a
decrease of 4%, from the corresponding period of 2012. Net sales were $140
million for the year ended December 31, 2013, a 2% increase from the
corresponding period in 2012. For the year, strong sales in soil fumigants
were partly offset by lower sales in fungicides and industrial applications.
Adjusted EBITDA from the Crop Protection segment was $42 million for the year
ended December 31, 2013, a 11% increase from the corresponding period of 2012.

Balance Sheet and Cash Flow

As of December 31, 2013, the Company had cash and cash equivalents of
approximately $88 million on the balance sheet.

The Company's total indebtedness as of December 31, 2013 consisted of $507
million in Term Loan Facilities, $400 million in Senior Secured Notes, and $7
million of capital lease obligations. Net debt totaled $826 million as of
December 31, 2013. The Company's net debt to Adjusted EBITDA is 3.2x.

The Company generated Recurring Free Cash Flow of $116 million for the year
ended December 31, 2013. Tangible capital expenditures were $66 million for
the year ended December 31, 2013, which includes our accretive growth capital
expenditures.

Outlook for Full Year 2014

"We are encouraged by the solid performance across all three segments of our
business in 2013. We continued to outperform the broader North American and
European regions in which we primarily operate. 2014 started off with the
announcement of our joint venture with Balchem Corporation to build and
operate a choline chloride facility in Louisiana. Looking ahead at the full
year 2014 outlook, we expect the positive underlying trends to continue and
anticipate another record year of volume, net sales and Adjusted EBITDA. We
are projecting FY'14 Adjusted EBITDA guidance of $290-295 million, including
10 months of ownership of the Formic Acid Solutions business, at an Adjusted
EBITDA margin of 20% or higher," Lenoir commented.

Conference Call

As previously announced, the Company will host a conference call to discuss
its fourth quarter and full fiscal year of 2013 results before the market open
on Tuesday, February 25, 2014 at 8:00 a.m. (Eastern Time). A slide
presentation for the call will be available on the Investors section of the
Company's Web site at www.taminco.com. The conference call can be accessed
live over the phone by dialing 1-877-407-0784, or for international callers,
1-201-689-8560. A replay will be available one hour after the call and can be
accessed by dialing 1-877-870-5176, or for international callers,
1-858-384-5517. The passcode for the live call and the replay is 13575961. The
replay will be available until Tuesday, March 11, 2014 at 11:59 p.m.

Interested investors and other parties may also listen to a simultaneous
webcast of the conference call by logging onto the Investor Relations section
of the Company's website at www.taminco.com. The on-line replay will be
available for a limited time beginning immediately following the call.

To learn more about Taminco, please visit the Company's Web site at
www.taminco.com. Taminco uses its Web site as a channel of distribution of
material company information. Financial and other material information
regarding Taminco is routinely posted on the company's Web site and is readily
accessible.

About Taminco Corporation

Taminco is the world's largest integrated producer of alkylamines and
alkylamine derivatives. Our products are used by customers in the manufacture
of a diverse array of everyday products for the agriculture, water treatment,
personal & home care, animal nutrition and oil & gas end-markets. Our products
provide these goods with a variety of ancillary characteristics required for
optimal performance. We currently employ about 850 people and operate in 19
countries with seven production facilities in the US, Europe and Asia.

Forward-Looking Statements

Any statements made in this press release that are not statements of
historical fact, including statements about our beliefs and expectations, are
forward-looking statements within the meaning of the federal securities laws,
and should be evaluated as such. Forward-looking statements include
information concerning possible or assumed future results of operations,
including descriptions of our business plan and strategies. These statements
often include words such as "anticipate," "expect," "suggests," "plan,"
"believe," "intend," "estimates," "targets," "projects," "should," "could,"
"would," "may," "will," "forecast," and other similar expressions. For more
information concerning factors that could cause actual results to differ
materially from those contained in the forward-looking statements please refer
to the "Risk Factors" section of the Registration Statement on Form S-1 filed
by the Company with the Securities and Exchange Commission and subsequent
filings by the Company. We base these forward-looking statements or
projections on our current expectations, plans and assumptions that we have
made in light of our experience in the industry, as well as our perceptions of
historical trends, current conditions, expected future developments and other
factors we believe are appropriate under the circumstances and at such time.
In addition, the completion and integration of the Formic Acid transaction
described in this release is subject to a number of uncertainties and closing
will be subject to approvals and other customary conditions. Accordingly,
there can be no assurances that such transaction will be completed or that the
Company's expectations will be realized. Our expectations regarding the
future performance of the business is based upon unaudited non-U.S. GAAP pro
forma financial information provided by Kemira regarding its Formic Acid
business and does not necessarily reflect what the financial results will be
in the future as a part of the Company and will be subject to all of the risks
associated with an acquisition of this type, including the ability of the
Company to successfully integrate the new business into its own and realize
synergies from the proposed transaction, the effects of purchase accounting
that may be different from expectations, as well as the specific risks
associated with the business and the industry in general. As you read and
consider this press release, you should understand that these statements are
not guarantees of performance or results. The forward-looking statements and
projections are subject to and involve risks, uncertainties and assumptions
and you should not place undue reliance on these forward-looking statements or
projections. Although we believe that these forward-looking statements and
projections are based on reasonable assumptions at the time they are made, you
should be aware that many factors could affect our actual financial results or
results of operations and could cause actual results to differ materially from
those expressed in the forward-looking statements and projections. We
undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. If we do
update one or more forward-looking statements, there should be no inference
that we will make additional updates with respect to those or other
forward-looking statements.

Taminco Corporation
Consolidated Statement of Operations
($ in Millions, except per share amounts)

                            Successor                        Predecessor
                                                             Period from
                            Year Ended                       January 1 through
                            December 31,                     February 14,
                            2013             2012            2012
Net sales                   $            $         $        
                            1,200           972               144
Cost of sales               986              810             111
 Gross Profit      214              162             33
Selling, general and        64               52              66
administrative expense
Research and development    12               9               1
expense
Other operating expense    42               49              1
 Operating income  96               52              (35)
(loss)
Interest expense, net       84               70              8
Loss on early               12               -               -
extinguishment of debt
Other non-operating         7                11              2
(income) expense, net
 Income (loss)
before income taxes and     (7)              (29)            (45)
equity in earnings
Income tax expense          -                (3)             9
(benefit)
 Income (loss)
before results from equity  (7)              (26)            (54)
in losses
Equity in (income) loss of  -                2               -
unconsolidated entities
Net income (loss) for the   $         $         $        
period                      (7)             (28)              (54)
                            $         $         $        
                             -               -              -
Net income (loss) per
common share:
Basic                      $           $          $        
                            (0.11)           (0.57)          (0.05)
Diluted                    $           $          $        
                            (0.11)           (0.57)          (0.05)
Weighted average number of
common shares outstanding
Basic                      61,277,020       49,020,506      1,000,000,000
Diluted                    61,277,020       49,020,506      1,000,000,000



Taminco Corporation
Consolidated Balance Sheets
($ in Millions)

                                       December 31,       December31,
Assets                                 2013               2012
Current assets:
Cash and cash equivalents             $          $        67
                                       88
Trade receivables, net of allowance
for doubtful accounts of $1.1 and
$1.3
 in 2013 and 2012, respectively   62                 73
Related parties receivables           1                  1
Inventories                           138                126
Deferred income taxes                 4                  4
Prepaid expenses and other current     10                 13
assets
Income tax receivable                 8                  13
Total current assets                  311                297
Property, plant and equipment, net    470                434
Equity method investment              22                 20
Intangible assets, net                539                586
Goodwill                              466                453
Deferred income taxes                2                  0
Capitalized debt issuance costs       46                 57
Total assets                          $1,856             $1,847
Liabilities and Equity
Current liabilities:
Current installments of long-term      $          $         6
debt                                   6
Trade payables                        103                80
Income taxes payable                  1                  4
Other current liabilities             42                 51
Deferred income taxes                 3                  2
Total current liabilities             155                143
Long-term debt                        908                1,155
Deferred income taxes                 241                249
Long-term pension and post employment  20                 16
benefit obligations
Other liabilities                     7                  13
Total liabilities                     1,331              1,576
Common stock ($0.001 par value,
90,824,000 shares authorized,
66,410,220 shares issued and          -                  -
outstanding at December 31, 2013;
49,188,071 shares authorized and
issued at December 31, 2012)
Additional paid-in capital            534                298
Retained earnings                     (35)               (28)
Accumulated other comprehensive        26                 1
income (loss)
Total stockholders' equity            525                271
Total liabilities and equity          $1,856             $1,847



Taminco Corporation
Consolidated Statements of Cash Flow
($ in Millions)

                                 Successor                       Predecessor

                                                                
                                 TwelveMonths  TwelveMonths    January1
                                 Ended          Ended            through
                                 December31,   December31,     February14,
                                 2013           2012             2012

                                                               
Cash flows provided by (used in)
operating activities
Net income (loss)                $    (7)   $     (28)  $      
                                                                 (54)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation and                 115            90               7
amortization
Deferred tax                     (20)           (27)             5
provision
Stock based compensation    1              —                —
Other non-cash adjustments:
Loss on early extinguishment of  5              —                —
debt
Posting share options         —              —                60
Loss from equity method          —              2                —
investment
Amortization of debt-related     9              6                —
costs
Accrued interest on related      —              —                5
party loans
Net change in assets and
liabilities:
(Increase)/Decrease in accounts  13             (8)              11
receivable
(Increase)/Decrease in           (9)            (13)             5
inventories
Increase in accounts payable    16             (9)              15
(Increase)/Decrease in other     9              (5)              (3)
current assets
Increase/(Decrease) in other     (5)            (4)              6
current liabilities
Increase/(Decrease) in other
non-current                      (3)            6                (13)
liabilities
Net cash flows provided by (used
in) operating                    124            10               44
activities
Cash flows used in investing
activities
Acquisition of Taminco Group
Holdings S.à.r.l., net of cash   —              (155)            —
acquired
Purchase of property, plant and  (66)           (51)             (6)
equipment
Purchase of intangible           (10)           (8)              —
assets
Net cash flows used in investing (76)           (214 )           (6)
activities
Cash flows provided by (used in)
financing activities
Proceeds from borrowings         —              1,155            —
Repayments of                    (254)          (1,125)          —
borrowings
Capital contribution —              540              —
Issuance of common stock         233            1                —
Return of capital to             (7)            (236)            —
shareholders
Payments of debt issuance        (2)            (63)             —
costs
Net cash flows provided by (used
in) financing                    (30)           272              —
activities
Effect of exchange rate change   3              (1)              2
on cash and cash equivalents
Net increase (decrease) in cash  21             67               40
and cash equivalents
Cash and cash equivalents,       67             —                131
beginning of period
Cash and cash equivalents, end   $      88 $      67   $      
of period                                                 171


Supplemental Cash Flow
Information:
Interest paid      $      72 $      48   $      
                                                                   1
Income tax payments, net  $      19 $      35   $      
                                                                  —

NON-GAAP FINANCIAL MEASURES: ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN AND
RECURRING FREE CASH FLOW

We present Adjusted EBITDA, Adjusted EBITDA Margin, and Recurring Free Cash
Flow to enhance a prospective investor's understanding of our results of
operations, financial condition, and cash generating ability of the operating
business. EBITDA consists of profit for the period before interest, taxation,
depreciation and amortization. Adjusted EBITDA consists of EBITDA and
eliminates (i) transaction costs, (ii) restructuring charges, (iii) foreign
currency exchange gains/losses, (iv) non-cash equity in earnings/losses of
unconsolidated affiliates net of cash dividends received, (v) stock option
compensation and (vi) sponsor management and director fees and expenses
(successor period only). Adjusted EBITDA for the three month periods ended
September 30, 2013 and 2012 are calculated in the same manner. Adjusted
EBITDA Margin reflects Adjusted EBITDA as a percentage of Net Sales.
Recurring Free Cash Flow consists of net cash flow provided by operations and
eliminates capital expenditures and adds back cash paid for (i) sponsor
management and director fees, (ii) losses on early extinguishment of debt, and
(iii) interest expense of holding company notes. We believe that making such
adjustments provides investors meaningful information to understand our
operating results and ability to analyze financial and business trends on a
period-to-period basis.

We believe Adjusted EBITDA, Adjusted EBITDA Margin, and Recurring Free Cash
Flow are useful as supplemental measures in evaluating the performance of our
operating businesses and provides greater transparency into our consolidated
results of operations, financial position, and cash flows. Adjusted EBITDA,
Adjusted EBITDA Margin, and Recurring Free Cash Flow are measures used by our
management, including our chief operating decision maker, to perform such
evaluations, and additionally, Adjusted EBITDA is a factor in measuring
compliance with debt covenants relating to certain of our borrowing
arrangements, including our Senior Secured Credit Facilities and the indenture
governing our Notes.

You should not consider Adjusted EBITDA, Adjusted EBITDA Margin, or Recurring
Free Cash Flow in isolation or as an alternative to (a) operating profit or
profit for the period (as reported in accordance with U.S. GAAP), (b) cash
flows from operating, investing and financing activities as a measure to meet
our cash needs or (c) any other measures of performance under generally
accepted accounting principles. You should exercise caution in comparing
Adjusted EBITDA, Adjusted EBITDA Margin, or Recurring Free Cash Flow as
reported by us to similar measures of other companies. In evaluating Adjusted
EBITDA and Recurring Free Cash Flow, you should be aware that we are likely to
incur expenses and cash outlays similar to the adjustments in this
presentation in the future and that certain of these items could be considered
recurring in nature. Our presentation of Adjusted EBITDA, Adjusted EBITDA
Margin, and Recurring Free Cash Flow should not be construed as an inference
that our future results will be unaffected by non-recurring items.

The following table provides reconciliations of net income (loss) to Adjusted
EBITDA for the periods presented ($ in millions):

                                  Actual                 Actual
                                  Three months           Three months

                                  ended                  ended

                                  December 31, 2012      December 31, 2013
Net Income                        $            $          
                                   1                    (8)
GAAP Income Taxes                (5)                    8
Net Interest Expense & Def Fin.   20                     18
Fees
Operating Depreciation &          6                      10
Amortization
Acquisition Related               20                     20
Depreciation
 EBITDA                          $            $          
                                  42                     48
Transaction related costs         2                      4
Foreign exchange gains/losses     1                      5
Joint-Venture Investment          0                      0
Employee stock comp. charges      0                      0
Loss on Early Extinguishment of   0                      0
Debt
Apollo Termination Fee            0                      0
Apollo management fee             4                      0
 Adjusted EBITDA                 $            $          
                                  49                      57

                     Predecessor                   Successor
                                                   Proforma
                                      Twelve                       Twelve
                     January 1, 2012  months                       months
                     -                             Twelve months
                                      ended        ended December  ended
                     February 14,     December 31, 31, 2012
                     2012             2012                         December
                                                                   31, 2013
                     $         $       $         $     
Net Income (loss)        (54)                 3          
                                      (28)                         (7)
GAAP Income Taxes    9                (3)          15              0
(Benefit)
Net Interest
Expense & Def Fin.   8                70           79              84
Fees
Operating
Depreciation &       7                20           24              35
Amortization
Acquisition Related  0                70           80              80
Depreciation
                     $         $       $         $     
 EBITDA                 (30)               201          
                                      129                          192
Transaction related  0                70           28              4
costs
Foreign exchange     0                4            4               7
gains/losses
Joint-Venture        0                2            2               0
Investment
Employee stock       60               0            0               1
comp. charges
Loss on Early
Extinguishment of    0                0            0               12
Debt
Apollo Termination   0                0            0               35
Fee
Apollo management    0                5            5               4
fee
                     $         $       $         $     
 Adjusted EBITDA        30                240          
                                      210                          255

The following table provides a reconciliation of net cash flows provided by
operating activities to Recurring Free Cash Flow for the period discussed ($
in millions):

                                           Actual
                                           Twelve Months
                                           Ended December 31, 2013
Net Cash Provided by Operating Activities  $                 
                                              124
Capital Expenditures                       (66)
 Free Cash flow                           58
Apollo Termination Fee                     35
Apollo Management Fee                      4
Loss on Early Extinguishment of Debt       7
Interest Expense of Holding Company Notes  12
 Recurring Free Cash flow                 $                 
                                              116

SOURCE Taminco Corporation

Website: http://www.taminco.com
Contact: Taminco Corporation, Investor Relations Inquiries:
investorrelations@taminco.com, 610.366.6925
 
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