Molycorp Reports Fourth Quarter & Full Year 2013 Financial Resu

 
FSC / Press Release 
Molycorp Reports Fourth Quarter & Full Year 2013 Financial Results 
HIGHLIGHTS: 
* The Company announced that the Chlor-Alkali plant at its Mountain Pass,
California rare earth facility has successfully completed commissioning and is
now operational, which facilitates increased production volumes at lower
production costs. 
* The Company reported fourth quarter product sales volume of 3,201 metric tons
(mt), a 12% decrease over the third quarter, at an average selling price ("ASP")
of $38.68 per kilogram. Net revenues for the quarter were $123.8 million, a 17%
decrease from the third quarter. 
* For the full year 2013, the Company reported sales volume of 13,118 mt, a 42%
increase over 2012, at an ASP of $42.26 per kilogram. Net revenues for the year
were $554.4 million, a 5% increase as compared to 2012. 
* The Company reported a net loss of $0.95 per share for the quarter. The
Company reported a net loss of $0.28 per share for the quarter on an adjusted
non-GAAP basis. 
* For the full year 2013, the Company reported a net loss of $2.21 per share,
which includes a loss of $0.04 per share related to discontinued operations. On
an adjusted non-GAAP basis, the Company reported a net loss of $1.09 per share
for the full year. 
Greenwood Village, CO US, March 03, 2014 /FSC/ - Molycorp, Inc (MCP - NYSE),
("Molycorp" or the "Company") today announced financial and operating results
for the fourth quarter and full year 2013. 
The Company announced that it had achieved a significant milestone with the
completion of commissioning and the operational start-up of the Chlor-Alkali
plant at its Mountain Pass, California rare earth facility.  That plant utilizes
recycled wastewater from Mountain Pass operations to produce chemical reagents
used in rare earth production. 
"Putting our Chlor-Alkali plant into operation is a major milestone. Producing
our own chemical reagents and reducing our water discharge will lower our costs,
and this unit further reduces the environmental footprint of rare earth
production at Mountain Pass," said Molycorp President and CEO Geoff Bedford. "It
will play a key role in helping us achieve operating break-even cash flow,
before interest, this year." 
FOURTH QUARTER 2013 RESULTS 
The Company reported consolidated net revenues of $123.8 million, a 17% decrease
over the third quarter of 2013. The decrease in revenues was largely driven by a
shifting product mix, with higher sales volumes from its Chemicals and Oxides
segment, offset by softened pricing for rare earths and lower volumes of
magnetic powders in its Magnetic Materials and Alloys segment. 
During the fourth quarter, the Company sold 3,201 mt of product at an ASP of
$38.68 per kilogram, and generated a gross loss of $27.0 million. This compares
to sales volumes of 3,620 mt at an ASP of $41.18 per kilogram and a gross loss
of $17.8 million during the third quarter of 2013. The Company produced 1,099
metric tons and 1,000 metric tons of rare earth oxides at its Mountain Pass
facility during the third and fourth quarters of 2013, respectively. Actual
production was lower than expected as a result of production interruptions while
the Company continues to optimize operations, and this lower than expected
production has continued through the first two months of 2014. 
Molycorp reported a loss attributable to common stockholders of $197.2 million,
or $0.95 per share. Adjusted loss per share of $0.28 in the fourth quarter of
2013 does not reflect impairment charges for goodwill and other intangible
assets, out-of-ordinary business expenses, and certain other non-cash items. 
The Company reported negative cash flows from operating activities of $64.3
million during the fourth quarter, and had $314.3 million in cash and cash
equivalents as of December 31, 2013. 
During the three months ended December 31, 2013, Molycorp's capital expenditures
were $44.7 million on a cash basis. 
FULL YEAR 2013 RESULTS 
Note: Prior year numbers exclude operating results from the Napanee facility,
which is treated as a discontinued operation for comparative purposes. 
The Company reported consolidated net revenues of $554.4 million, a 5% increase
as compared to the full year 2012. The increase in revenues was largely driven
by increased volume sales within its Magnetic Materials and Alloys segment, and
its Rare Metals segment, slightly offset by lower realized pricing within its
Resources segment. As a reminder, full year 2012 financial results included a
partial year of contribution from its Molycorp Canada business, which was
acquired in June 2012. 
For the full year, the Company sold 13,118 mt of product at an ASP of $42.26 per
kilogram, and generated a gross loss of $67.2 million. This compares to volume
sales of 9,207 mt at an ASP of $57.00 per kilogram and a gross profit of $18.8
million for the full year 2012. 
Molycorp reported a full year loss attributable to common stockholders of $385.8
million, or $2.21 per share. Adjusted loss per share of $1.09 for the full year
2013 eliminates the effect of operational expansion items, out-of-ordinary
business expenses, and certain other non-cash items. 
The Company reported negative cash flows from operating activities of $154.4
million during the year. Capital expenditures for the Company on a cash basis
for the full year were $379.3 million. For the full year ending December 31,
2014, the Company estimates that its capital expenditures will total
approximately $85-$90 million. 
CONFERENCE CALL TOMORROW AT 9:00 A.M. EASTERN STANDARD TIME 
Molycorp will conduct a conference call on Tuesday, March 4, 2014 to discuss
these results at 9:00 a.m. EST, hosted by Geoff Bedford, President and Chief
Executive Officer, and Michael Doolan, Executive Vice President and Chief
Financial Officer. Investors interested in participating in the live call from
the U.S. should dial +1 (866) 318-8617 and reference passcode number 35281723.
Those calling from outside the U.S. should dial +1 (617) 399-5136 and reference
the same passcode as above. 
There will also be a simultaneous live audio webcast available on the Investor
Relations section of the Company's website at www.molycorp.com/investors. The
webcast will be archived on the website. A PowerPoint presentation that will be
broadcast live via webcast during the conference call will be made available on
the website immediately prior to the call. 
NON-GAAP ADJUSTED NET LOSS, EBITDA and ADJUSTED EBITDA 
Adjusted net loss is a non-GAAP measure that excludes certain non-cash items and
other out-of-ordinary business expense and operational expansion items. EBITDA
is also a non-GAAP measure that excludes interest, tax, depreciation and
amortization. Adjusted EBITDA consists of EBITDA excluding certain non-cash
items and other out-of-ordinary business expense and operational expansion
items. The Company's management believes adjusting out these items, including
but not limited to purchase accounting adjustments, stock-based compensation,
out-of-ordinary expenses/income, asset impairment charges and other
miscellaneous charges, is useful to investors because it provides an overall
understanding of the Company's historical financial performance and future
prospects. Management believes adjusted net loss, EBITDA and adjusted EBITDA are
an indication of the Company's base-line performance. Exclusion of these items
permits evaluation and comparison of results for the Company's core business
operations, and it is on this basis that management internally assesses the
Company's performance. 
# # # 
FOR MORE INFORMATION: 
Company Contacts:
Jim Sims, +1 (303) 843-8062
Vice President Corporate Communications
jim.sims@molycorp.com 
Brian Blackman, +1 (303) 843-8067
Vice President Investor Relations
brian.blackman@molycorp.com 
FINANCIAL STATEMENTS AND SUPPLEMENTARY TABLES 
TABLE 1: BALANCE SHEETS 
MOLYCORP, INC. 
Consolidated Balance Sheets
(In thousands, except share and per share amounts) 
-***- 
At December 31, 
------------------------------- 
2013             2012 
---------------- -------------- 
ASSETS
Current assets:
Cash and cash equivalents                        $      314,317   $     227,790
Trade accounts receivable, net                           61,757          52,430
Inventory                                               171,783         287,376
Deferred charges                                          1,046           9,412
Deferred tax assets                                       1,456           9,789
Income tax receivable                                       787          25,087
Prepaid expenses and other current assets                25,921          21,794 
---------------- --------------
Total current assets                                    577,067         633,678 
---------------- --------------
Non-current assets:
Deposits                                                 25,997          26,769
Property, plant and equipment, net                    1,762,874       1,544,304
Inventory                                                25,329          26,096
Intangible assets, net                                  330,867         450,938
Deferred tax assets                                         109               -
Investments                                              48,875          64,036
Goodwill                                                228,750         239,742
Other non-current assets                                  6,934           6,972 
-------------- 
----------------
Total non-current assets                              2,429,735       2,358,857 
---------------- --------------
Total assets                                     $    3,006,802   $   2,992,535 
================ ============== 
2013             2012 
---------------- -------------- 
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
Trade accounts payable                           $       84,449   $     241,994
Accrued expenses                                         48,501          59,013
Income tax payable                                        1,946          15,267
Deferred tax liabilities                                  1,500               -
Debt and capital lease obligations                       16,362          39,604
Other current liabilities                                   617           3,539 
---------------- --------------
Total current liabilities                               153,375         359,417 
---------------- --------------
Non-current liabilities:
Asset retirement obligation                              16,966          18,586
Deferred tax liabilities                                 85,481         160,675
Debt and capital lease obligations                    1,363,916       1,188,832
Derivative liability                                      6,089           7,816
Pension liabilities                                       2,044           3,292
Other non-current liabilities                             1,869           2,659 
---------------- --------------
Total non-current liabilities                         1,476,365       1,381,860 
---------------- --------------
Total liabilities                                $    1,629,740   $   1,741,277 
---------------- --------------
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value;
350,000,000 shares authorized at
December 31, 2013                                           241             139
Preferred stock, $0.001 par value;
5,000,000 shares authorized at
December 31, 2013                                             2               2
Additional paid-in capital                            2,194,405       1,691,429
Accumulated other comprehensive loss                     (6,451)         (9,433)
Accumulated deficit                                    (840,474)       (466,091) 
---------------- --------------
Total Molycorp stockholders' equity                   1,347,723       1,216,046
Noncontrolling interests                                 29,339          35,212 
---------------- --------------
Total stockholders' equity                            1,377,062       1,251,258 
---------------- --------------
Total liabilities and stockholders' equity       $    3,006,802   $   2,992,535 
================ ============== 
-****- 
TABLE 2: INCOME STATEMENTS 
MOLYCORP, INC. 
Consolidated Statements of Operations and Comprehensive Income
(In thousands, except share and per share amounts) 
-***- 
Quarter Ended        Years Ended December 31, 
--------------------------- 
December 31, 2013        2013            2012 
------------------------------------------------
Revenues                        $      123,814   $     554,390   $     527,696
Costs of sales:
Costs excluding
depreciation and amortization         (132,419)       (553,831)       (478,253)
Depreciation and amortization          (18,444)        (67,727)        (30,621) 
------------------------------------------------ 
-----------------
Gross (loss) profit                    (27,049)        (67,168)         18,822
Operating expenses:
Selling, general and
administrative                         (30,723)       (107,169)       (113,437)
Corporate development                        9            (247)        (19,796)
Depreciation, amortization
and accretion                          (11,764)        (38,037)        (22,187)
Research and development                (4,696)        (23,172)        (27,796)
Impairment of goodwill
and other long-lived assets           (119,403)       (120,898)       (301,755) 
------------------------------------------------
Operating loss                        (193,626)       (356,691)       (466,149) 
------------------------------------------------
Other (expense) income:
Other expense                           (8,669)         (7,525)        (38,798)
Foreign exchange gain
(loss), net                             (1,420)           (376)          2,872
Interest expense, net
of capitalized interest                (24,877)        (67,684)        (22,116) 
------------------------------------------------ 
(34,966)        (75,585)        (58,042) 
------------------------------------------------
Loss from continuing
operations before income
taxes and                             (228,592)       (432,276)       (524,191)
equity earnings
Income tax benefit                      32,021          70,943          54,075
Equity in results of
affiliates                                (480)         (9,169)         (3,490) 
------------------------------------------------
Loss from continuing
operations                            (197,051)       (370,502)       (473,606)
Loss from discontinued
operations, net of tax                  (1,237)         (6,427)         (1,737) 
------------------------------------------------
Net loss                              (198,288)       (376,929)       (475,343)
Net loss (income)
attributable to
noncontrolling
interests                                3,980           2,546          (5,826) 
------------------------------------------------
Net loss attributable to
Molycorp stockholders           $     (194,308)  $    (374,383)  $    (481,169) 
================================================ 
Net loss                        $     (198,288)  $    (376,929)  $    (475,343)
Other comprehensive
income (loss), net of tax:
Foreign currency
translation adjustments                     38           1,623             248
Actuarial gain (loss)                    1,359           1,359          (1,200) 
------------------------------------------------
Comprehensive loss              $     (196,891)  $    (373,947)  $    (476,295) 
================================================
Comprehensive (loss)
income attributable to:
Molycorp stockholders                 (200,871)       (376,493)       (470,469)
Noncontrolling interests                 3,980           2,546          (5,826) 
----------------- 
------------------------------------------------ 
$     (196,891)  $    (373,947)  $    (476,295) 
================================================
 Loss per share of common stock:
Basic:
Continuing operations           $        (0.94)  $       (2.17)  $       (4.58)
Discontinued operations                  (0.01)          (0.04)          (0.02) 
------------------------------------------------ 
$        (0.95)  $       (2.21)  $       (4.60) 
================================================ 
-****- 
TABLE 3: STATEMENTS OF CASH FLOWS 
MOLYCORP, INC
Consolidated Statements of Cash Flows
(In thousands) 
-***- 
Years Ended December 31, 
------------------------- 
2013          2012 
-------------------------
Cash flows from operating activities:
Net (loss) income                                      $ (376,929)  $  (475,343)
Adjustments to reconcile net (loss)
income to net cash from operating
activities:
Depreciation, amortization and accretion                  105,764        52,808
Deferred income tax (benefit) expense                     (68,290)      (23,563)
Inventory write-downs                                     100,346        83,039
Release of inventory step-up value                          3,068        24,729
Impairment of goodwill and other long-lived assets        120,898       301,755
Impairment of cost-method investment                        9,411             -
Stock-based compensation                                    5,392         3,434
Allowance for doubtful accounts                                 -         2,556
Foreign exchange loss                                        (454)        1,988
Equity in results of affiliates                             9,169         3,490
Other operating activities                                  1,993        (4,648)
Net change in operating assets and liabilities            (64,719)      (59,880) 
-------------------------
Net cash (used in) provided by operating activities      (154,351)      (89,635) 
-------------------------
Cash flows from investing activities:
Cash paid in connection with acquisitions,
net of cash acquired                                            -      (591,011)
Investment in joint ventures                               (3,423)      (33,044)
Deposits                                                        -        (3,999)
Capital expenditures                                     (379,312)     (791,469)
Acquisition of exploration rights                               -        (8,167)
Other investing activities                                  5,477         4,761 
-------------------------
Net cash used in investing activities                    (377,258)   (1,422,929) 
-------------------------
Cash flows from financing activities:
Issuance of shares to Molymet                                   -       390,093
Repayments of debt                                        (26,823)     (228,708)
Net proceeds from sale of common stock                    495,717       132,130
Issuance of 5.50% Senior Secured Notes                    165,600             -
Issuance of 10% Senior Secured Notes                            -       635,373
Issuance of 6.00% Convertible Notes                             -       395,712
Payments of preferred dividends                           (11,385)      (11,385)
Distribution paid to noncontrolling interests              (4,546)       (5,977)
Proceeds from debt                                              -        14,699
Other financing activities                                 (1,297)       (1,554) 
-------------------------
Net cash provided by financing activities                 617,266     1,320,383
Effect of exchange rate changes on cash                       870         1,116 
-------------------------
Net change in cash and cash equivalents                    86,527      (191,065)
Cash and cash equivalents at beginning of the period      227,790       418,855 
-------------------------
Cash and cash equivalents at end of period             $  314,317   $   227,790 
========================= 
-****- 
TABLE 4: SEGMENT INFORMATION 
-***- 
Year ended                                   Magnetic
December 31,                   Chemicals    Materials  Rare Metals
2013             Resources    and Oxides   and Alloys
------------------------------------------------------------------
Revenues:                     (In thousands of dollars)
External          33,621         181,815      252,713       86,241
Intersegment      26,040          37,256            -            - 
------------------------- -------------------------
Total revenues    59,661         219,071      252,713       86,241 
========================= ========================= 
Depreciation,    (46,318)       (22,754)     (27,812)      (8,652)
amortization
and accretion
Operating loss  (223,702)       (87,889)      23,087      (21,108)
Loss before
income taxes
and equity
earnings        (231,944)       (87,848)      62,107      (18,326)
Total assets at
December 31,
2013           1,791,421         485,642      590,516       82,538
Capital
expenditures     231,027           6,961        3,700        7,549 
Year ended                                     Total
December 31,        Corporate              Molycorp,
2013                and other Eliminations      Inc.
----------------------------------------------------
Revenues:
External                                 -   554,390
Intersegment                      (63,296)         - 
-----------------------
Total revenues                    (63,296)   554,390 
======================= 
Depreciation,           (228)           -  (105,764)
amortization
and accretion
Operating loss       (46,126)        (953) (356,691)
Loss before
income taxes
and equity
earnings            (155,312)        (953) (432,276)
Total assets at
December 31,
2013                1,547,267  (1,490,582) 3,006,802
Capital
expenditures              250            -   249,487 
-****- 
-***- 
Quarter ended                                Magnetic
December 31,                   Chemicals    Materials  Rare Metals
2013             Resources    and Oxides   and Alloys
--------------------------------------------------------------------
Revenues:                (In thousands of dollars)
External             3,386        46,635      59,296      14,497
Intersegment         7,872         8,780           -           - 
----------------------------------------------------
Total revenues      11,258        55,415      59,296      14,497 
====================================================
Depreciation,      (14,782)       (5,667)     (7,452)     (2,250)
amortization
and accretion
Operating
income (loss)      (87,647)      (68,010)     (5,376)    (18,936)
Loss before
income taxes
and equity
earnings           (96,897)      (69,410)     (4,982)    (18,380)
Capital
expenditures        25,358         1,289         790       1,954 
Quarter ended                                       Total
December 31,     Corporate                      Molycorp,
2013             and other    Eliminations           Inc.
----------------------------------------------------------
Revenues:
External                 -               -      123,814
Intersegment             -         (16,652)           - 
-----------------------------
Total revenues           -         (16,652)     123,814 
=============================
Depreciation,          (57)              -      (30,208)
amortization
and accretion
Operating
income (loss)      (13,805)            148     (193,626)
Loss before
income taxes
and equity
earnings           (39,071)            148     (228,592)
Capital
expenditures             6               -       29,397 
-****- 
-***- 
Year ended                                   Magnetic
December 31,                   Chemicals    Materials  Rare Metals
2012             Resources    and Oxides   and Alloys
------------------------------------------------------------------
Revenues:                        (In thousands of dollars)
External            88,870      181,849      179,335      77,642
Intersegment         7,256       25,717 
---------------------------------------------------
Total revenues      96,126      207,566      179,335      77,642 
=================================================== 
Depreciation,      (13,991)     (13,110)     (19,737)     (5,837)
amortization
and accretion
Operating loss     (70,220)    (191,059)    (125,543)    (18,671)
Loss before
income taxes
and equity
earnings           (70,469)    (190,094)    (126,981)    (18,181)
Total assets at
December 31,
2012             1,802,842      639,847      593,197     117,961
Capital
expenditures       814,054       10,910        5,614      10,750 
Year ended                                         Total
December 31,    Corporate                      Molycorp,
2012            and other    Eliminations           Inc.
---------------------------------------------------------
Revenues:
External                               -       527,696
Intersegment                     (32,973)            - 
-----------------------------
Total revenues                   (32,973)      527,696 
============================= 
Depreciation,        (133)             -       (52,808)
amortization
and accretion
Operating loss    (85,459)        24,803      (466,149)
Loss before
income taxes
and equity
earnings         (143,269)        24,803      (524,191)
Total assets at
December 31,
2012              575,964       (737,276)    2,992,535
Capital
expenditures        1,733              -       843,061 
-****- 
TABLE 5: LOSS PER SHARE 
-***- 
Quarter Ended 
December 31, 2013 
----------------------- 
(In thousands, except share and per share amounts) 
-----------------------
Net (loss) income attributable to Molycorp         $          (194,308)
stockholders
Dividends on Convertible Preferred Stock                        (2,846) 
-----------------------
(Loss) income attributable to common stockholders             (197,154) 
======================= 
Continuing operations                           $          (195,917) 
Discontinued operations                                      (1,237) 
----------------------- 
$          (197,154) 
======================= 
Weighted average common shares outstanding-basic           208,080,170 
Basic (loss) earnings per share from: 
Continuing operations                           $             (0.94) 
Discontinued operations                                       (0.01) 
----------------------- 
$             (0.95) 
======================= 
Years Ended December 31, 
----------------------------- 
2013              2012 
----------------------------- 
(In thousands, except share and per share amounts) 
-----------------------------
Net (loss) income attributable to Molycorp         $  (374,383)  $     (481,169)
stockholders
Dividends on Convertible Preferred Stock               (11,385)         (11,385) 
-----------------------------
(Loss) income attributable to common stockholders     (385,768)        (492,554) 
============================= 
Continuing operations                           $  (379,341)  $     (490,817) 
Discontinued operations                              (6,427)          (1,737) 
----------------------------- 
$  (385,768)  $     (492,554) 
============================= 
Weighted average common shares outstanding-basic    174,528,717      107,064,892 
Basic (loss) earnings per share from: 
Continuing operations                                 (2.17)  $        (4.58) 
Discontinued operations                               (0.04)           (0.02) 
----------------------------- 
(2.21)  $        (4.60) 
============================= 
-****- 
TABLE 6: PRODUCT REVENUES, VOLUMES, ASP 
-***- 
Quarter Ended   Years Ended December 31, 
---------------------------
Revenues (in thousands)              December 31,      2013             2012 
2013 
--------------  ---------------------------
Resources (1)                       $   11,258     $  59,661    $      96,126
Chemicals and Oxides (2)                55,415       219,071          207,566
Magnetic Materials and Alloys (3)       59,296       252,713          179,335
Rare Metals (4)                         14,497        86,241           77,642
Intersegments eliminations             (16,652)      (63,296)         (32,973) 
--------------  ---------------------------
Total Net Revenues                  $  123,814     $ 554,390    $     527,696 
==============  =========================== 
Quarter Ended   Years Ended December 31, 
---------------------------
Volumes (in metric tons)             December 31,      2013             2012 
2013 
--------------  --------------------------- 
Resources                                1,034         3,926            2,661
Chemicals and Oxides                     1,760         6,588            4,631
Magnetic Materials and Alloys            1,353         5,884            3,115
Rare Metals                                 58           317              350
Intersegments eliminations              (1,004)       (3,597)          (1,550) 
Quarter Ended   Years Ended December 31, 
---------------------------
ASP per kilogram                     December 31,      2013             2012 
2013 
--------------  --------------------------- 
Resources                           $    10.89     $   15.20    $       36.12
Chemicals and Oxides                $    31.48     $   33.25    $       44.82
Magnetic Materials and Alloys       $    43.82     $   42.95    $       57.57
Rare Metals                         $   249.93     $  272.05    $      221.83 
----------------------------------------------------------------------------
1. The Resources segment includes operations at our Molycorp Mountain Pass
facility where we conduct rare earth minerals extraction to produce: purified
unseparated light rare earth concentrates, or LREC; separated rare earth oxides,
 including lanthanum, cerium and neodymium/praseodymium; heavy rare earth
concentrates, which include samarium, europium, gadolinium, or SEG, terbium,
dysprosium and others; and a line of proprietary rare earth-based water
treatment products, including SorbX(TM) and PhosFIX(TM). 
2. The Chemicals and Oxides division includes: production of rare earths at our
operations at Molycorp Silmet; heavy rare earths and other custom engineered
materials from our facilities in Jiangyin, Jiangsu Province, China; and
production of rare earths, salts of REEs, zirconium-based engineered materials
and mixed rare earth/zirconium oxides from our facilities in Zibo, Shandong
Province, China. Rare earth and zirconium applications from products made in
this segment include catalytic converters, computers, television display panels,
 optical lenses, mobile phones, electronic chips, and many others. 
3. The Magnetic Materials and Alloys segment includes: the production of Neo
Powders(TM) through our wholly-owned manufacturing facilities in Tianjin, China,
 and Korat, Thailand, under the Molycorp Magnequench brand. This operating
segment also includes manufacturing of neodymium and samarium magnet alloys,
other specialty alloy products and rare earth metals at our MMA facility. Neo
Powders(TM) are used in micro motors, precision motors, sensors, and other
applications requiring high levels of magnetic strength, flexibility, small size
 and reduced weight. 
4. The Rare Metals segment produces, reclaims, refines and markets high value
niche metals and their compounds including gallium, indium, rhenium, tantalum,
and niobium.  Our operating facilities in this segment are located in Quapaw,
Oklahoma; Blanding, Utah; Peterborough, Ontario; Sagard, Germany; Hyeongok
Industrial Zone in South Korea; and Sillamae, Estonia. Applications from
products made in this segment include wireless technologies, LED, flat panel
display, turbine, solar, catalyst, steel additive, electronics applications,
and others. 
-****- 
TABLE 7: NON-GAAP ADJUSTED NET LOSS, EBITDA and ADJUSTED EBITDA RECONCILIATION
(In thousands, except share and per share data) 
-***- 
Adjusted Net Loss 
December 31, 2013 
----------------------------------- 
Year Ended      Quarter Ended 
-----------------------------------
Net loss attributable to Molycorp
stockholders                                $     (374,383)  $      (194,308)
Certain non-cash and other items: 
Stock-based compensation                          5,392             2,993 
Inventory write-downs                            70,615            16,816 
Impact of purchase accounting on 
cost of inventory sold                            3,068            (1,376) 
Impairment of Goodwill, 
long-lived asset and intangibles                123,171           119,717 
Investment write-downs                            9,414             9,414
Out-of-ordinary items:
Water removal                                       19,228             5,385
Income tax effect of above adjustments             (35,949)          (15,065) 
-----------------------------------
Adjusted net (loss) income                        (179,444)          (56,424)
Dividends on Convertible Preferred Stock           (11,385)           (2,846) 
-----------------------------------
Adjusted net loss attributed to common
stockholders                                $     (190,829)  $       (59,270) 
===================================
Weighted average common shares
outstanding                                    174,528,717       208,080,170 
=================================== 
Adjusted net (loss) earnings per share      $        (1.09)  $         (0.28) 
=================================== 
-****- 
-***- 
EBITDA and Adjusted EBITDA 
December 31, 2013 
---------------------------------- 
Year Ended     Quarter Ended 
----------------------------------
Operating loss                            $   (356,691)  $       (193,626)
Depreciation and amortization
included in costs of sales                      67,727             18,444
Depreciation, amortization and accretion        38,037             11,764 
----------------------------------
EBITDA                                        (250,927)          (163,418) 
---------------------------------- 
Stock-based compensation                         5,392              2,993
Inventory write-downs                           70,615             16,816
Impact of purchase accounting on cost of
inventory sold                                   3,068             (1,376)
Impairment of Goodwill, long-lived asset
and intangibles                                123,171            119,717
Investment write-downs                           9,414              9,414
Water removal                                   19,228              5,385 
----------------------------------
Adjusted EBITDA                           $    (20,039)  $        (10,469) 
================================== 
-****- 
ABOUT MOLYCORP 
Molycorp is the only advanced material manufacturer in the world that both
controls a world-class rare earth resource and can produce high-purity, custom
engineered rare earth products to meet increasingly demanding customer
specifications. A globally integrated manufacturer, the Company produces a wide
variety of specialized products from 13 different rare earths (lights and
heavies), five rare metals (gallium, indium, rhenium, tantalum and niobium), and
the transition metals yttrium and zirconium. With 27 locations across 11
countries, Molycorp also produces rare earth magnetic materials through its
Molycorp Magnequench subsidiary, including neodymium-iron-boron ("NdFeB") magnet
powders, used to manufacture bonded NdFeB permanent rare earth magnets. Through
its joint venture with Daido Steel and the Mitsubishi Corporation, Molycorp
manufactures next-generation, sintered NdFeB permanent rare earth magnets.
Through its Molycorp Advanced Water Technologies subsidiary, the Company markets
and sells its proprietary, cerium-based advanced water purification technology
called SorbX(TM) for use in municipal and industrial wastewater treatment,
recreational water, and pool and spa water treatment markets. For more
information please visithttp://www.molycorp.com. 
SAFE HARBOR STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 
This release contains forward-looking statements that represent Molycorp's
beliefs, projections and predictions about future events or Molycorp's future
performance. Forward-looking statements can be identified by terminology such as
"may," "will," "would," "could," "should," "expect," "intend," "plan,"
"anticipate," "believe," "estimate," "predict," "potential," "continue" or the
negative of these terms or other similar expressions or phrases. These
forward-looking statements are necessarily subjective and involve known and
unknown risks, uncertainties and other important factors that could cause
Molycorp's actual results, performance or achievements or industry results to
differ materially from any future results, performance or achievement described
in or implied by such statements. 
Factors that may cause actual results to differ materially from expected results
described in forward-looking statements include, but are not limited to:  the
potential need to secure additional capital to implement Molycorp's business
plans, and Molycorp's ability to successfully secure any such capital;
Molycorp's ability to complete its planned capital projects, such as its
modernization and expansion efforts, including the achievement of an initial
annual production rate of 19,050 metric tons at the Mountain Pass rare earth
mine and processing facility, which we refer to as the Molycorp Mountain Pass
facility, and reach full planned production rates for REO and other planned
downstream products, in each case within the projected time frame; the success
of Molycorp's cost mitigation efforts in connection with the modernization and
expansion efforts at the Molycorp Mountain Pass facility, which, if
unsuccessful, might cause its costs to exceed budget; the final costs of
Molycorp's planned capital projects, which may differ from estimated costs;
Molycorp's ability to successfully integrate Neo Material Technologies, Inc.
(now Molycorp Canada), with its operations; Molycorp's ability to achieve fully
the strategic and financial objectives related to the acquisition of Molycorp
Canada, including the acquisition's impact on Molycorp's financial condition and
results of operations; unexpected costs or liabilities that may arise from the
acquisition, ownership or operation of Molycorp Canada; risks and uncertainties
associated with intangible assets, including any future goodwill impairment
charges; market conditions, including prices and demand for Molycorp's products;
Molycorp's ability to control its working capital needs; foreign exchange rate
fluctuations; the development and commercialization of new products; unexpected
actions of domestic and foreign governments; various events which could disrupt
operations, including natural events and other risks; uncertainties associated
with Molycorp's reserve estimates and non-reserve deposit information, including
estimated mine life and annual production; uncertainties related to feasibility
studies that provide estimates of expected or anticipated costs, expenditures
and economic returns, REO prices, production costs and other expenses for
operations, which are subject to fluctuation; uncertainties regarding global
supply and demand for rare earths materials; uncertainties regarding the results
of Molycorp's exploratory drilling programs; Molycorp's ability to enter into
additional definitive agreements with its customers and its ability to maintain
customer relationships; Molycorp's sintered neodymium-iron-boron rare earth
magnet joint venture's ability to successfully manufacture magnets within its
expected timeframe; Molycorp's ability to successfully integrate other acquired
businesses; Molycorp's ability to maintain appropriate relations with unions and
employees; Molycorp's ability to successfully implement its vertical integration
strategy; environmental laws, regulations and permits affecting Molycorp's
business, directly and indirectly, including, among others, those relating to
mine reclamation and restoration, climate change, emissions to the air and water
and human exposure to hazardous substances used, released or disposed of by
Molycorp; and uncertainties associated with unanticipated geological conditions
related to mining; and the outcome of the stockholder class action litigation,
derivative litigation and the SEC investigation, including any actions taken by
government agencies in connection therewith. 
For more information regarding these and other risks and uncertainties that
Molycorp may face, see the section entitled "Risk Factors" of the Company's
Annual Report on Form 10-K for the year ended December 31, 2012 and of the
Company's Quarterly Reports on Form 10-Q. Any forward-looking statement
contained in this release or the Annual Report on Form 10-K or the Quarterly
Reports on Form 10-Q reflects Molycorp's current views with respect to future
events and is subject to these and other risks, uncertainties and assumptions
relating to Molycorp's operations, operating results, growth strategy and
liquidity. You should not place undue reliance on these forward-looking
statements because such statements speak only as to the date when made. Molycorp
assumes no obligation to publicly update or revise these forward-looking
statements for any reason, or to update the reasons actual results could differ
materially from those anticipated in these forward-looking statements, even if
new information becomes available in the future, except as otherwise required by
applicable law. 
To view the press release as a PDF, please click on the following link:
http://www.usetdas.com/pr/molycorp03032014.pdf 
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