Rentech Announces Results for Fourth Quarter and Full Year 2013

  Rentech Announces Results for Fourth Quarter and Full Year 2013     Solid Results in Wood Fibre Processing Offset by Challenges in Nitrogen                                    Products           Company Provides Outlook for Growth in Wood Fibre Processing  Business Wire  LOS ANGELES -- March 11, 2014  Rentech, Inc. (NASDAQ: RTK) today announced financial and operating results for the three and twelve months ended December 31, 2013.  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. (NYSE: RNF) (Rentech Nitrogen), of which Rentech owns the general partner and approximately 60% of the common units representing limited partner interests. 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 include two operating segments: the East Dubuque Facility and the Pasadena Facility. Results of the Company’s energy technologies business are reported in a separate segment.  Rentech today posted a presentation on the Investor Relations section of its website, to provide additional detail on the Company’s financial results and wood fibre processing business.  D. Hunt Ramsbottom, President and CEO of Rentech, said, “We made a strong entry into the wood fibre processing business this year. Our wood chipping business, Fulghum Fibres, is generating solid revenues and EBITDA. Our two industrial wood pellet projects in Canada are on schedule, on budget and on track to provide the returns we expect, based on long-term contracts. We are also pleased that our facilities at both Fulghum Fibres and Rentech Nitrogen have exceeded our safety goals.”  “Although we made significant strategic progress in 2013, our fourth quarter and full year financial results were muted by challenges at Rentech Nitrogen. We saw significant industry-wide declines in nitrogen product prices, as well as downtime at both of our facilities that reduced production and sales volumes. Both facilities are currently operating exceptionally well and at increased operating rates, due to investments we made in capacity expansion and improvements. We continue to see higher prices for nitrogen products compared to the lows we witnessed during the second half of last year, and we are confident that the higher prices and expanded capacity will lead to improved financial and operating results for Rentech Nitrogen in 2014.”  Mr. Ramsbottom continued, “Overall, 2013 was a significant year for Rentech, as we wound down our energy technology business and entered the wood fibre processing industry, strategically re-positioning the company around opportunities with significant revenue growth and strong shareholder returns. We see specific opportunities to invest capital at attractive and predictable returns. We can leverage our existing fibre team and assets to create a fibre business that could generate an annual EBITDA run-rate of approximately $55 million by the end of next year, and $150 million in four to five years. We also see a compelling opportunity for an IPO of the wood fibre business as an MLP as early as next year. We believe execution of this plan for the wood fibre processing business would create substantial value for our shareholders, due to its strong business model, the value of a successful IPO, and the benefits of an MLP structure.”  Wood Fibre Processing Business Strategy Highlights  Rentech plans to build on the foundation established with the acquisition of Fulghum Fibres to invest in the wood chips and pellets sectors of the wood fibre processing industry. These sectors are projected to exceed $25 billion of revenue by 2020. Rentech has identified specific investment opportunities in the industry to create significant value for Rentech shareholders. Specifically identified opportunities to invest with unlevered returns of mid-teens or higher could lead to an annual EBITDA run-rate of about $55 million by the end of 2015, which the Company believes is adequate scale for an IPO of the business as an MLP. Those opportunities would require approximately $100 million of investment beyond the investment required for the Atikokan and Wawa wood pellet projects. Additional similar opportunities representing up to $600 million of investments could lead in four to five years to annual revenues exceeding $600 million, and EBITDA above $150 million.  Financial Highlights  Three months ended December 31, 2013  The financial results of Fulghum Fibres are included in 2013 results of operations only since the date of acquisition, which was May 1, 2013. The financial results for the three months ended December 31, 2013 and 2012 include three months of operating results for the Pasadena Facility in 2013 and two months in 2012.  Consolidated revenues for the three months ended December 31, 2013 were $79.3 million compared to $92.5 million in the prior-year period, comprised primarily of:    *$24.5 million from Fulghum Fibres; and   *$54.6 million from Rentech Nitrogen which represents a decrease of $37.8     million from the prior year. Current year results reflect a 37% decline in     revenues from the Pasadena Facility and a 44% decline in revenues from the     East Dubuque Facility, due to industry-wide declines in nitrogen product     prices, plant outages and lower production and sales volumes.  Gross loss for the three months ended December 31, 2013 was $2.6 million, compared to gross profit of $28.6 million in the prior-year period, comprised primarily of:    *Contribution of $5.3 million in gross profits at Fulghum Fibres; which was     more than offset by   *Gross loss of $8.0 million at Rentech Nitrogen, which decreased from a     gross profit of $28.6 million in the prior-year period primarily due to     lower sales volumes and higher input costs.  Operating loss for the three months ended December 31, 2013 was $15.8 million, compared to operating loss of $9.3 million in the prior-year period, comprised primarily of the following:    *Operating loss of $13.6 million from Rentech Nitrogen, which reflected a     loss of $9.7 million at the Pasadena Facility and costs associated with     downtime at both facilities;   *Operating income of $7.3 million from Fulghum Fibres;   *Operating loss of $1.3 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     constructing the wood pellet mills at Atikokan and Wawa;   *Operating loss of $2.0 million from energy technologies, which reflected     taxes, insurance, security and other administrative costs related to 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 $6.2     million, including non-cash compensation of $1.7 million.  Consolidated Adjusted EBITDA for the three months ended December 31, 2013 was ($13.3) million, a decline of $23.6 million compared to the prior-year period, which included the following:    *Contribution of $4.7 million from Fulghum Fibres; and   *($8.6) million of Adjusted EBITDA from Rentech Nitrogen.  Further explanation of Adjusted EBITDA, a non-GAAP financial measure, has been included below in this press release.  Net loss for the three months ended December 31, 2013 was $14.5 million or ($0.06) per basic share, compared to net loss of $24.5 million or ($0.11) per basic share for the same period last year.  Fulghum Fibres  Fulghum Fibres processed 3.8 million green metric tons of wood during the three months ended December 31, 2013. Fulghum Fibres’ revenues were $24.5 million for the current period, of which approximately $15.4 million and $9.1 million were generated from the U.S. and South American operations, respectively. Gross profit for the period was $5.3 million on margins of 22%. SG&A and interest expenses for three months ended December 31, 2013 were $1.6 million and $0.5 million, respectively.  Wood Pellets  Wood pellets segment SG&A expenses were $1.2 million for the three months ended December 31, 2013, compared to $1.1 million in the prior period. SG&A expenses include costs associated with developing the business, and non-capitalized costs associated with converting the wood pellet mills at Atikokan and Wawa.  Nitrogen Products Manufacturing  The financial results for the three months ended December 31, 2013 and 2012 include three months of operating results for the Pasadena Facility in 2013 and two months in 2012.  Revenues for the three months ended December 31, 2013 were $54.6 million, compared to $92.4 million for the comparable period in the prior year. Revenues for the fourth quarter of 2013 declined 44% year-over-year at the East Dubuque Facility and by 37% at the Pasadena Facility, due to industry-wide declines in nitrogen product prices, plant outages and lower production and sales volumes.  Production was reduced at both facilities during the quarter due to scheduled and unscheduled downtime, which totaled 60 days at the East Dubuque Facility and 37 days at the Pasadena Facility. The East Dubuque Facility was out of commission for 31 days during the quarter for work related to the bi-annual turnaround. Production at the East Dubuque Facility was also halted for 29 days in late November and much of December to accommodate repairs following a fire at the ammonia converter. Additionally, the East Dubuque Facility operated at reduced rates for 45 days, 27 of which were during the quarter following the turnaround, as a result of the need to replace the foundation underneath one of four syngas compressors, rendering the compressor out of service. The replacement of the compressor foundation took 84 days to complete, most of which occurred while the plant was down due to the fire. The Pasadena Facility experienced several small, unplanned disruptions during the quarter, and also was offline for 23 days in December to conduct the scheduled ammonium sulfate expansion and reliability improvement project as well as other turnaround maintenance.  Limited production volume reduced deliveries of UAN from the East Dubuque Facility in the fourth quarter of 2013, resulting in the postponement of 19,000 tons of scheduled UAN deliveries until the first quarter of 2014. Ammonia demand for the quarter was limited due to an abbreviated fall application period as a result of wet weather. Sales volume at the Pasadena Facility was reduced by the delay into the first quarter of 2014 of a 27,000 metric ton vessel shipment of ammonium sulfate (AS), caused by the late arrival of the vessel.  Gross loss margin was 15% for the three months ended December 31, 2013, compared to gross profit margin of 31% for the same period last year. Lower product prices and higher fixed costs per ton in cost of sales reduced margins for both facilities, as fixed production costs, including those incurred during the downtime that would normally be included in product inventory costs but were expensed as cost of sales, were spread across lower sales volumes. Gross loss margin at the East Dubuque Facility was 2% for the current period, compared to gross profit margin of 55% for the prior-year period, partially due to lower sales prices, higher natural gas prices and repair costs. Gross loss margin at the Pasadena Facility was 32% for the current period, compared to 5% for the prior-year period, due primarily to lower product pricing relative to the cost of inputs, and a write-down of inventories. Downtime in the fourth quarter lowered nitrogen production by an aggregate of approximately 191,000 tons at both facilities and increased per-ton costs, as fixed production costs, including those incurred during the downtime that would normally be included in product inventory costs but were expensed as cost of sales, were spread across lower sales volumes. Scheduled and unscheduled downtime at both facilities resulted in turnaround and related costs of $15.5 million reflected in cost of sales. Natural gas costs were 37% of the East Dubuque Facility’s cost of sales, while ammonia and sulfur costs were 57% of the Pasadena Facility’s cost of sales.  SG&A expenses were $3.6 million for the three months ended December 31, 2013, compared to $6.4 million for the prior-year period. The reduction in SG&A expenses was primarily the result of a $2.2 million reduction in business development expenses and unit based compensation at the Partnership level, and lower payroll expenses at the East Dubuque Facility.  During the three months ended December 31, 2013, operating loss was $13.6 million, compared to operating income of $21.3 million during the comparable period in the prior year. The operating loss in the quarter was primarily due to costs associated with scheduled and unscheduled downtime at both facilities, lower sales volume resulting from reduced production and limited demand during the shortened fall application season, as well as lower sales prices.  Adjusted EBITDA for the three months ended December 31, 2013 was ($8.6) million, or $6.9 million excluding costs related to planned and unplanned outages, which compares to $24.3 million in the corresponding period in 2012. The East Dubuque Facility reported $0.3 million in Adjusted EBITDA, or $14.1 million excluding costs related to planned and unplanned outages. The Pasadena Facility reported ($7.5) million in Adjusted EBITDA, or ($5.8) million excluding costs related to planned and unplanned outages. Further explanation of Adjusted EBITDA, a non-GAAP financial measure, has been included below in this press release.  Interest expense was $4.4 million for the three months ended December 31, 2013, compared to $1.3 million for the prior-year period. The increase was due to additional borrowings to finance expansions, major maintenance projects, and the acquisition of the Pasadena Facility.  Energy Technologies  The energy technologies segment includes SG&A expenses (including costs formerly recorded 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 Company has been actively winding down its alternative energies business since announcing in the first quarter of 2013 plans to cease operations, reduce staffing at, and mothball its Product Demonstration Unit (PDU), in Commerce City, CO, and to eliminate all related R&D activities. Recently, the Company entered into a definitive agreement with Sunshine Kaidi New Energy Group Co., Ltd (Kaidi) to sell its alternative energy technologies and decommissioned PDU, in Commerce City, Colorado for an initial cash payment of $15.3 million, with another $16.2 million if Kaidi successfully constructs and operates its demonstration-scale plant in China. The sale is expected to close in mid-2014 subject to customary conditions, including regulatory approvals in the United States and the People’s Republic of China.  The segment incurred SG&A expenses of $2.2 million, compared to $1.3 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 R&D expenses include personnel and other costs associated with efforts to sell the Company’s energy technologies, its decommissioned PDU and site in Commerce City, Colorado, patent protection expenses, taxes, insurance costs, security and other administrative costs. R&D expenses for the energy technologies segment were zero for the three months ended December 31, 2013, since all R&D activity ceased in the first quarter of 2013. R&D expenses for the prior-year period were $6.3 million.  Year ended December 31, 2013  The financial results of Fulghum Fibres are included in 2013 results of operations only since the date of acquisition, which was May 1, 2013. The financial results for the twelve months ended December 31, 2013 and 2012 include twelve months of operating results for the Pasadena Facility in 2013 and two months in 2012.  Consolidated revenues for the year ended December 31, 2013 were $374.9 million, compared to $261.9 million in the prior-year period, comprised primarily of:    *$63.0 million from Fulghum Fibres; and   *The inclusion of the Pasadena Facility’s results for the full twelve     months of 2013 in comparison to two months of results for 2012, partially     offset by a 21% decline in revenues from the East Dubuque Facility.  Gross profit for the year ended December 31, 2013 was $83.7 million compared to $131.9 million in the prior-year period, comprised primarily of:    *Contribution of $12.0 million in gross profits at Fulghum Fibres; and   *$71.4 million in gross profits at Rentech Nitrogen which was negatively     affected by lower nitrogen product prices, higher input costs and lower     sales volume.  Operating loss for the year ended December 31, 2013 was $8.9 million, compared to operating income of $43.3 million in the prior-year period, comprised primarily of the following:    *Contribution of $9.9 million from Fulghum Fibres;   *Operating loss of $5.5 million from the wood pellets segment, which     reflected SG&A costs associated with developing the business and     acquisition-related and non-capitalized costs associated with constructing     the wood pellet mills at Atikokan and Wawa;   *Contribution of $19.2 million from Rentech Nitrogen, which included a     goodwill impairment of $30.0 million for the Pasadena Facility and costs     associated with downtime at the both facilities;   *Operating loss of $7.0 million from energy technologies, which reflected     costs associated with R&D and decommissioning of the PDU; administrative     costs related to the Company’s energy technologies, facilities and sites;     efforts to sell and seek partners for the energy technologies and related     assets; partially offset by a $6.3 million gain on the sale of property     the Company owned in Natchez, Mississippi; and   *Corporate and unallocated expenses recorded as operating expenses of $25.4     million, which included $1.5 million in transaction costs related to the     acquisition of Fulghum Fibres and non-cash compensation of $5.9 million.  Consolidated Adjusted EBITDA for the year ended December 31, 2013 was $36.1 million, compared to $74.1 million for the prior-year period, which included the following:    *$13.0 million contribution from Fulghum Fibres; and   *$66.5 million of Adjusted EBITDA from Rentech Nitrogen.  Further explanation of Adjusted EBITDA, a non-GAAP financial measure, has been included below in this press release.  For the year ended December 31, 2013, the Company recorded a net income tax benefit of approximately $26.6 million which was comprised of a net income tax benefit for Rentech of approximately $26.5 million and an income tax benefit for Rentech Nitrogen of approximately $0.1 million. The income tax benefit for Rentech was due to the release of a valuation allowance of $27.6 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 loss for the year ended December 31, 2013 was $1.5 million or ($0.01) per basic share. Excluding the Agrifos goodwill impairment, loss on debt extinguishment, fair value adjustment to earn-out consideration, gain on sale of the site in Natchez, and income tax benefit, net loss allocated to common shareholders for the current period was $16.0 million or ($0.07) per basic share. This compares to net loss of $14.0 million or ($0.06) per basic share for the same period last year. Further explanation of net income excluding these items, a non-GAAP financial measure, has been included below in this press release.  Fulghum Fibres  Fulghum Fibres processed approximately 9.9 million green metric tons of wood from May 1, 2013 through December 31, 2013. The segment generated revenues of $63.0 million from May 1, 2013 through December 31, 2013, of which approximately $40.7 million and $22.3 million were generated from the U.S. and South American operations, respectively. Gross profit for the period was $12.0 million on margins of 19%. SG&A and interest expenses for the period were $3.8 million and $1.8 million, respectively.  Wood Pellets  Rentech achieved several key milestones with respect to the Company’s two industrial wood pellet projects in Eastern Canada. The majority of outside civil and concrete construction work and all remaining detailed engineering packages were completed, and nearly 80% of all required equipment and materials have been procured. The Company has also received rail cars at the Wawa facility and the first delivery of logs at the Atikokan facility.  Wood pellets segment SG&A expenses were $5.5 million for the twelve months ended December 31, 2013, compared to $1.9 million for the comparable period in the prior year. The increased SG&A was due to acquisition-related and development costs associated with the wood pellet projects as well as other costs for the development of the Company’s wood fibre processing business, and non-capitalized project costs of $0.7 million.  Nitrogen Products Manufacturing  The financial results for the year ended December 31, 2013 and 2012 include twelve months of operating results for the Pasadena Facility in 2013 and two months in 2012.  Revenues for the year ended December 31, 2013 were $311.4 million, compared to $261.6 million for the prior year. Revenues increased due to the inclusion of the Pasadena Facility’s results for the full twelve months of 2013 in comparison to two months of results for 2012, partially offset by a 21% decline in revenues from the East Dubuque Facility as the result of declines in nitrogen prices and lower production and sales volumes.  Gross profit margin for the year ended December 31, 2013 was 23%, compared to 50% for the same period last year. Gross profit margin at the East Dubuque Facility was 46% for the current period, compared to 60% for the prior-year period. Gross loss margin at the Pasadena Facility was 7% for the current period, compared to 5% for the prior-year period. Gross margin at both facilities was reduced by downtime, which reduced production and sales volumes and increased costs in the fourth quarter of 2013. In addition, gross margin for both facilities was reduced by lower nitrogen product prices, higher input costs and allocation of fixed production costs, including those incurred during downtime that would normally be included in product inventory costs, which were expensed as cost of sales and were spread across lower sales volume. Gross loss margin at the Pasadena Facility was further reduced by approximately $5.0 million in inventory write-downs of product that had not been delivered and remained in inventory at the end of the year.  SG&A expenses were $17.3 million for the year ended December 31, 2013, down from $18.4 million in the prior-year period. The decrease was primarily due to a decline of $3.5 million in Partnership level business development expenses and a $1.7 million decline in unused credit facility fees and professional service expenses. These declines were partially offset by the inclusion of the Pasadena Facility’s SG&A for the full twelve months of 2013 compared to two months of 2012.  During the year ended December 31, 2013, operating income was $19.2 million compared to $111.6 million during the comparable period in the prior year. The year-over-year decline in operating income was a result of lower gross profits at the East Dubuque Facility due to lower sales volumes and product prices of ammonia and UAN and a result of negative gross profits at the Pasadena Facility. In addition, operating income in 2013 was reduced by a $30.0 million non-cash charge for impairment of goodwill related to the Pasadena Facility. The impairment was the result of a reduced outlook for profitability at the Pasadena Facility compared to projections at the time of the acquisition.  Adjusted EBITDA for the twelve months ended December 31, 2013 was $66.5 million, or $82.0 million excluding costs related to planned and unplanned outages, which compares to $124.0 million in the corresponding period in 2012. The East Dubuque Facility reported $84.5 million in Adjusted EBITDA, or $98.4 million excluding costs related to planned and unplanned outages. The Pasadena Facility reported ($10.1) million in Adjusted EBITDA, or ($8.4) million excluding costs related to planned and unplanned outages. Further explanation of Adjusted EBITDA, a non-GAAP financial measure, has been included below in this press release.  Interest expense was $14.1 million for the year ended December 31, 2013, compared to $1.5 million for the prior-year. The increase was due to additional borrowings to finance expansions, major maintenance projects, and the acquisition of the Pasadena Facility.  Rentech Nitrogen realized a non-cash gain of $4.9 million for the year ended December 31, 2013 as a result of a decrease in the potential earn-out consideration related to the acquisition of the Pasadena Facility. The reduction was caused by a decline since the time of the acquisition in the outlook for profitability in 2013 and 2014, primarily due to lower levels of nitrogen fertilizer prices.  Energy Technologies  The segment incurred SG&A expenses of $7.7 million during the current period, compared to $4.5 million for the prior-year period. SG&A expenses increased primarily due to the inclusion of $4.4 million in costs for activities that were previously recorded 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 2013, all of which were incurred in the first three months of the year. R&D expenses for the prior-year period were $20.9 million. In 2013, the segment sold the Natchez site for proceeds of $8.6 million and a gain of $6.3 million.  2014 Outlook  Rentech  Rentech provided the following guidance for 2014, excluding Rentech Nitrogen:  RTK Guidance (excludes RNF) (Financial metrics in $U.S.                            2014 million)                                                  Guidance Revenues Fulghum Fibres                                            $       95 Wood Pellets ^(1)                                                20 Total Revenues                                            $       115                                                            Cash SG&A Fulghum Fibres                                            $       5 Wood Pellets ^(2)                                                 7 Energy Technologies ^(3) (4)                                      5 Unallocated                                                      15 Total Cash SG&A                                           $       32                                                            EBITDA Fulghum Fibres                                            $       20 Wood Pellets - Atikokan & Wawa                            $       2 ^(1) (5)                                                            Maintenance Capital Expenditures Fulghum Fibres                                            $       3 Wood Pellets                                              $       -                                                            Production (in 000 tonnes)                                                            Fulghum Fibres – Logs Processed                                   15,000 (GMT)                                                                    Wood Pellets (MT)                                                 80,000                                                            (1) Assumes first shipment to Drax in December 2014. (2) Includes assumed plant related start-up costs of approximately $1 million. (3) Assumes sale of technology and PDU closes 6/30/14. (4) Q1-Q3 includes Kaidi sale related transaction & closing costs; Q4 SG&A, post closing, is approximately $ 0.2 million. (5) Atikokan & Wawa Plant EBITDA only.   Rentech Nitrogen  The Company expects that a number of factors may contribute to improved operating and financial results in 2014 compared to 2013 at Rentech Nitrogen. Completed capacity expansion projects have increased production rates, and should increase production for the year at both facilities. Projects to improve reliability have been completed at the Pasadena Facility. Both facilities are forecasted to operate at increased capacity in 2014, with no scheduled down-time for the East Dubuque Facility and no scheduled interruptions to the production of AS, other than normal scheduled maintenance for the Pasadena Facility. The sulfuric acid plant is scheduled to be down for approximately 20 days beginning in mid-July to install a new converter and to complete final tie-ins for the co-generation power project. AS production should not be impacted during this period as we plan to purchase sulfuric acid in the open market. The Partnership currently expects positive EBITDA at the Pasadena Facility for the year due to increased production, improved margins and higher operating rates.  Recent increases in prices for nitrogen products from the lower levels experienced late in 2013 are encouraging. However, the current market environment is different this year relative to early 2013, with lower corn prices and somewhat lower, albeit strong, anticipated corn plantings. These factors and the dynamics that affect input prices could rapidly change based on weather patterns and other conditions, and could positively or negatively affect product prices, margins, deliveries and cash distributions. Cash distributions in 2014 may be less than cash available for distribution if the Board of Directors elects to reduce distributions in order to replenish working capital reserves that were diminished by $20 million of negative cash available for distribution in the fourth quarter of 2013.  Conference Call with Management  The Company will hold a conference call today, March 11, 2014, 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 March 11 through 11:59 p.m. PST on March 21. 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 Year                          Ended December 31,          Ended December 31,                          2013         2012          2013         2012                                                                                              (unaudited)   (unaudited) Revenues                 $ 79,273      $ 92,459      $ 374,855     $ 261,925                                                                     Cost of Sales             81,867      63,872      291,164     130,006                                                                      Gross Profit               (2,594  )     28,587        83,691        131,919 (Loss)                                                                     Operating Expenses Selling, general and administrative         14,713        14,409        59,076        48,240 expense Research and               -             6,270         5,747         20,944 development Depreciation and           2,342         1,268         3,113         3,754 amortization ^1 Agrifos goodwill           -             -             30,029        - impairment Loss on                    -             15,965        -             15,965 impairments (Gain) loss on             840           272           (5,379  )     272 sale of assets Other                     1           (309    )    (15     )    (600    )                                                                     Total Operating           13,212      37,875      92,571      88,575   Expenses                                                                     Operating Income           (15,806 )     (9,288  )     (8,880  )     43,344 (Loss)                                                                     Other Income (Expense), Net Interest expense           (5,362  )     (3,661  )     (16,382 )     (8,949  ) Loss on debt               -             (4,801  )     (6,001  )     (4,801  ) extinguishment Fair value adjustment to              (75     )     -             5,122         - earn-out consideration Other income              9           (39     )    (170    )    (693    ) (expense), net                                                                     Total Other               (5,428  )    (8,501  )    (17,431 )    (14,443 ) Expenses, Net                                                                     Income (Loss) from Continuing Operations Before          (21,234 )     (17,789 )     (26,311 )     28,901 Income Taxes and Equity in Loss of Investee Income tax                138         122         (26,591 )    1,364    (benefit) expense                                                                     Income (Loss) from Continuing Operations Before          (21,372 )     (17,911 )     (280    )     27,537 Equity in Loss of Investee Equity in Loss of         104         -           242         -        Investee                                                                     Income (Loss) from Continuing                 (21,476 )     (17,911 )     38           27,537 Operations Income from discontinued              -           16          -           150      operations, net of tax                                                                     Net Income (Loss)          (21,476 )     (17,895 )     38           27,687 Net loss (income) attributable to           6,945       (6,630  )    (1,570  )    (41,687 ) noncontrolling interests                                                                     Net Loss Attributable to          $ (14,531 )   $ (24,525 )   $ (1,532  )   $ (14,000 ) Rentech Common Shareholders                                                                     Net Loss per Common Share Allocated to Rentech Common Shareholders:                                                                     Basic and Diluted: Continuing                 (0.06   )     (0.11   )     (0.01   )     (0.06   ) operations Discontinued              0.00        0.00        0.00        0.00     operations                                                                     Net Loss                  (0.06   )    (0.11   )    (0.01   )    (0.06   )                                                                     Weighted-Average Shares Used to Compute Net Loss per Common Share: Basic and Diluted         227,026     221,757     226,139     223,189    ^1 Amortization of unfavorable agreements exceeds amortization of favorable agreements resulting in a credit in depreciation and amortization for Fulghum Fibres.   Rentech, Inc. Statements of Operation by Business Segment (Stated in Thousands)                        For the Three Months       For the Year                          Ended December 31,          Ended December 31,                          2013         2012          2013         2012                          (unaudited)   (unaudited) Revenues East Dubuque             $ 30,862      $ 54,977      $ 177,700     $ 224,205 Pasadena                   23,714        37,430        133,675       37,430 Fulghum Fibres             24,491        -             62,974        - Energy                    206         52          506         290      Technologies Total Revenues           $ 79,273     $ 92,459     $ 374,855    $ 261,925                                                                      Gross Profit (Loss) East Dubuque             $ (470    )   $ 30,290      $ 80,883      $ 133,543 Pasadena                   (7,563  )     (1,704  )     (9,529  )     (1,704  ) Fulghum Fibres             5,283         -             12,032        - Energy                    156         1           305         80       Technologies Total Gross Profit       $ (2,594  )   $ 28,587     $ 83,691     $ 131,919  (Loss)                                                                     Selling, General and Administrative Expense East Dubuque             $ 1,153       $ 1,762       $ 4,576       $ 6,242 Pasadena                   953           361           4,764         361 Fulghum Fibres             1,645         -             3,754         - Wood Pellets               1,246         1,080         5,479         1,919 Energy                    2,165       1,262       7,709       4,514    Technologies Total Selling, General and              $ 7,162      $ 4,465      $ 26,282     $ 13,036   Administrative Expense                                                                     Research and Development Energy                   $ -          $ 6,270      $ 5,747      $ 20,944   Technologies Total Research and       $ -          $ 6,270      $ 5,747      $ 20,944   Development                                                                     Depreciation and Amortization East Dubuque             $ 39          $ 81          $ 191         $ 807 Pasadena                   1,164         583           3,886         583 Fulghum Fibres ^1          (3,692  )     -             (1,708  )     - Wood Pellets               26                          26            - Energy                    -           405         122         1,573    Technologies Total Depreciation and Amortization         $ (2,463  )   $ 1,069      $ 2,517      $ 2,963    Recorded in Operating Expenses                                                                     Other Operating (Income) Expenses East Dubuque             $ 770         $ 226         $ 806         $ 510 Pasadena                   -             -             30,029        - Fulghum Fibres             73            -             72            - Energy                    (2      )    15,703      (6,272  )    15,126   Technologies Total Other              $ 841        $ 15,929     $ 24,635     $ 15,636   Operating Expenses                                                                     Operating Income (Loss) East Dubuque             $ (2,432  )   $ 28,221      $ 75,310      $ 125,984 Pasadena                   (9,680  )     (2,648  )     (48,208 )     (2,648  ) Fulghum Fibres             7,257         -             9,914         - Wood Pellets               (1,272  )     (1,080  )     (5,505  )     (1,919  ) Energy                    (2,007  )    (23,637 )    (7,001  )    (42,077 ) Technologies Total Operating          $ (8,134  )   $ 856        $ 24,510     $ 79,340   Income (Loss)                                                                     Interest (Income) Expense East Dubuque             $ -           $ 13          $ -           $ 194 Pasadena                   2             -             8             - Fulghum Fibres             505           -             1,755         - Energy                    -           6           (3      )    (1,576  ) Technologies Total Interest           $ 507        $ 19         $ 1,760      $ (1,382  ) (Income) Expense                                                                     Net Income (Loss) East Dubuque             $ (2,139  )   $ 26,095      $ 75,244      $ 123,721 Pasadena                   (9,442  )     (2,648  )     (48,357 )     (2,648  ) Fulghum Fibres             6,026         -             6,967         - Wood Pellets               (1,239  )     (1,080  )     (5,180  )     (1,919  ) Energy                    (1,988  )    (23,644 )    (6,891  )    (40,498 ) Technologies Total Net Income         $ (8,782  )   $ (1,277  )   $ 21,783     $ 78,656   (Loss)                                                                     Reconciliation of Segment Net Income (Loss) to Consolidated Net Income (Loss): Segment net income       $ (8,782  )   $ (1,277  )   $ 21,783      $ 78,656 (loss) RNF – Partnership and unallocated expenses recorded as selling,                (1,457  )     (4,271  )     (7,945  )     (11,773 ) general and administrative expenses RNF – Partnership and unallocated income (expenses)          -             -             (1,081  )     232 recorded as other income (expense) RNF – Unallocated interest expense and loss on                (4,370  )     (1,319  )     (14,096 )     (2,226  ) interest rate swaps RNP – Income tax           1             (303    )     303           (303    ) benefit (expense) Corporate and unallocated expenses recorded as selling,                (6,094  )     (5,673  )     (24,849 )     (23,432 ) general and administrative expenses Corporate and unallocated depreciation and           (121    )     (199    )     (596    )     (791    ) amortization expense Corporate and unallocated income (expenses)                 38            (2,683  )     19            (2,708  ) recorded as other income (expense) Corporate and unallocated                (485    )     (2,367  )     (532    )     (9,055  ) interest expense Corporate income tax benefit                (206    )     181           27,032        (1,063  ) (expense) Income from Discontinued              -           16          -           150      Operations Consolidated Net         $ (21,476 )   $ (17,895 )   $ 38         $ 27,687   Income (Loss)                                                                      ^1 Amortization of unfavorable agreements exceeds amortization of favorable agreements resulting in a credit in depreciation and amortization for Fulghum Fibres.  Rentech, Inc. Selected Balance Sheet Data                                         As of              As of Consolidated Balance Sheet Data          December 31, 2013   December 31, 2012 Cash                                     $     106,369       $     141,736 Working Capital                                69,822              107,059 Construction in Progress                       60,136              61,417 Total Assets                                   703,590             479,202 Total Debt                                     421,979             193,290 Total Rentech Stockholders' Equity             158,073             157,987                                                                                                        As of               As of                                          December 31, 2013   December 31, 2012 Cash - Rentech Nitrogen Partners         $     34,060        $     55,799 Cash excluding Rentech Nitrogen               72,309             85,937 Partners Total Cash                               $     106,369       $     141,736                                                                                                        As of               As of                                          December 31, 2013   December 31, 2012 Debt - Rentech Nitrogen Partners         $     320,000       $     193,290 Debt excluding Rentech Nitrogen               101,979            - Partners Total Debt                               $     421,979       $     193,290                                                                      Disclosure Regarding Non-GAAP Financial Measures  Net income (loss) excluding Agrifos goodwill impairment, loss on debt extinguishment, gain on sale of Natchez, fair value adjustment to earn-out consideration and income tax (benefit) expense 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, Agrifos goodwill impairment, loss on debt extinguishment, loss on interest rate swaps, income tax expense (benefit), depreciation and amortization, gain on fair value adjustment to earn-out consideration and gain on sale of Natchez. Adjusted EBITDA for Fulghum Fibres is defined as net income plus net interest expense, depreciation and amortization and other adjustments. Pro-Forma Adjusted EBITDA is Adjusted EBITDA plus turnaround expenses, the cost to repair the foundation underneath one of our syngas compressors, the insurance deductible on equipment damaged by the fire that occurred in November 2013 and fixed costs incurred during downtime for repairs related to the fire.  Cash selling, general and administrative expenses exclude non-cash compensation expenses.  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 loss attributable to Rentech excluding Agrifos goodwill impairment, loss on debt extinguishment, gain on sale of Natchez, gain on fair value adjustment to earn-out consideration and income tax benefit to net loss attributable to Rentech for the year ended December 31, 2013 (stated in thousands, except per share data).                                                      For the Year                                                        Ended December 31, 2013                                                         Net Loss Attributable to Common Shareholders           $      (1,532      ) Agrifos Goodwill Impairment                                   17,957 Loss on Debt Extinguishment                                   3,589 Gain on Sale of Natchez                                       (6,275      ) Fair Value Adjustment to Earn-out consideration               (3,144      ) Income Tax Benefit                                           (26,591     ) Net Loss Attributable to Common Shareholders Excluding Agrifos Goodwill Impairment, Loss on Debt              $      15,996       Extinguishment and Fair Value Adjustment to Earn-out Consideration                                                         Net Loss per Share Attributable to Rentech             $      (0.01       ) Common Shareholders Loss per Share on Agrifos Goodwill Impairment                 0.08 Loss per Share on Debt Extinguishment                         0.02 Gain per share on Sale of Natchez                             (0.03       ) Per Share Fair Value Adjustment to Earn-out                   (0.01       ) Consideration Income Tax Benefit per Share                                 (0.12       ) Net Loss per Share Attributable to Rentech Common Shareholders Excluding Agrifos Goodwill Impairment,                                            $      (0.07       ) Loss on Debt Extinguishment and Fair Value Adjustment to Earn-out Consideration                                                         Weighted-Average Common Shares Outstanding                    226,139                                                                             The table below reconciles Rentech’s consolidated Adjusted EBITDA from net income (loss) for the three months ended and year ended December 31, 2013 (stated in thousands).                                    For the Three Months  For the Year                                      Ended December 31,     Ended December 31,                                     2013                   2013                                                              Net Income (Loss)                    $    (21,476    )      $    38         Add: Interest Expense                          5,362                  16,382 Income Tax Expense                        138                    (26,591   ) Depreciation and Amortization             2,515                  21,184 Agrifos Goodwill Impairment               -                      30,029 Loss on Debt Extinguishment               -                      6,001 Gain on Sale of Natchez                   -                      (6,275    ) Fair Value Adjustment to                  75                     (5,122    ) Earn-out Consideration Other                                    95                   412        Adjusted EBITDA                      $    (13,291    )      $    36,058                                                                                  The table below reconciles Fulghum Fibres’ Adjusted EBITDA from net income for Fulghum for the three months and year ended December 31, 2013 (stated in thousands)                                    For the Three Months   For the Year                                      Ended December 31,     Ended December 31,                                      2013                   2013                                                              Fulghum Net Income                   $        6,026         $       6,967 Add Fulghum Items: Interest Expense                              505                   1,755 Depreciation and Amortization                 (2,563      )         3,128 ^1 Other                                        726                  1,192 Fulghum's Adjusted EBITDA            $        4,694         $       13,042                                                               ^1Amortization of unfavorable agreements exceeds amortization of favorable agreements resulting in a credit in depreciation and amortization for Fulghum Fibres.  The table below reconciles consolidated Adjusted EBITDA from net loss for Rentech Nitrogen for the three months ended December 31, 2013. The table also presents Pro-Forma Adjusted EBITDA that reverses the impact of turnaround expenses at both plants and the impacts of the compressor foundation replacement and fire at the East Dubuque Facility for the period (stated in thousands, except per unit data).                       For the Three Months Ended December 31, 2013 (Stated in              East Dubuque   Pasadena     Partnership thousands, except                                              Consolidated per unit data)          Facility       Facility     Level Net Loss                $  (2,139  )   $ (9,442 )   $  (5,826 )   $  (17,407 ) Plus: Interest             -             2             4,371         4,373 expense Less: Income tax           (294    )     (240   )      -             (534    ) benefit Plus: Depreciation and           2,739         2,192         -             4,931 amortization Less: Other               -           -           (1     )     (1      ) Adjusted EBITDA         $  306         $ (7,488 )   $  (1,456 )   $  (8,638  ) Plus: Turnaround           7,754         1,709         -             9,463 expense Plus: Syngas compressor                 776           -             -             776 foundation crack expense Plus: Insurance deductible on              1,000         -             -             1,000 equipment damaged by fire Plus: Fixed costs during downtime           4,279       -           -           4,279    for fire^(1) Pro-Forma               $  14,115      $ (5,779 )   $  (1,456 )   $  6,880 Adjusted EBITDA  ^(1) Represents fixed plant costs incurred during the fire-related downtime that are recorded to cost of sales rather than capitalized into inventory and recorded as cost of sales when the volume produced during the period of the fire is subsequently delivered. GAAP requires that fixed costs incurred during a plant interruption such as the fire at the East Dubuque Facility are expensed as incurred as opposed to inventoried.  The table below reconciles consolidated Adjusted EBITDA from net income (loss) for Rentech Nitrogen for the twelve months ended December 31, 2013. The table also presents Pro-Forma Adjusted EBITDA that reverses the impact of turnaround expenses at both plants and the impacts of the compressor foundation replacement and fire at the East Dubuque Facility for the period (stated in thousands, except per unit data).                        For the Year Ended December 31, 2013 (Stated in               East         Pasadena      Partnership thousands, except        Dubuque                               Consolidated per unit data)                        Facility      Level                          Facility Net income (loss)        $  75,244    $ (48,357 )   $ (22,819 )   $  4,068 Plus: Interest              -           8             14,090         14,098 expense Plus: Agrifos goodwill                    -           30,029        -              30,029 impairment Plus: Loss on debt          -           -             6,001          6,001 extinguishment Less: Fair value adjustment to               -           -             (4,920  )      (4,920  ) earn-out consideration Plus: Loss on interest rate               -           -             7              7 swaps Plus: Income tax            66          141           (303    )      (96     ) (benefit) expense Plus: Depreciation          9,239       8,073         -              17,312 and amortization Less: Other                -          -           (1      )     (1      ) Adjusted EBITDA          $  84,549    $ (10,106 )   $ (7,945  )   $  66,498 Plus: Turnaround            7,754       1,709         -              9,463 expense Plus: Syngas compressor                  776         -             -              776 foundation crack expense Plus: Insurance deductible on               1,000       -             -              1,000 equipment damaged by fire Plus: Fixed costs during downtime            4,279      -           -            4,279    for fire^(1) Pro-Forma Adjusted       $  98,358    $ (8,397  )   $ (7,945  )   $  82,016 EBITDA  ^(1) Represents fixed plant costs incurred during the fire-related downtime that are recorded to cost of sales rather than capitalized into inventory and recorded as cost of sales when the volume produced during the period of the fire is subsequently delivered. GAAP requires that fixed costs incurred during a plant interruption such as the fire at the East Dubuque Facility are expensed as incurred as opposed to inventoried.  The table below reconciles consolidated Adjusted EBITDA to net income for Rentech Nitrogen for the three months and year ended December 31, 2012 (stated in thousands).                                   For the Three Months  For the Year                                     Ended December 31,     Ended December 31,                                     2012                   2012                                                             Net income                          $       17,554         $    107,003 Add: Interest Expense                            1,287               1,424 Income Tax Expense                          303                 303 Depreciation and Amortization               3,004               12,460 Loss on Debt Extinguishment                 2,114               2,114 Loss on Interest Rate Swaps                 44                  951 Other                                      -                  (232      ) Adjusted EBITDA                     $       24,306         $    124,023                                                                                The tables below reconcile forecasted EBITDA to net income for Fulghum Fibres and the Atikokan and Wawa pellet facilities for the year ending December 31, 2014 (stated in millions).  Fulghum Fibres EBITDA             2014                                      Guidance                                       Fulghum Fibres Net Income            $   6 Add: Interest Expense                         2 Depreciation and Amortization            11 Other                                   1 Fulghum Fibres Adjusted EBITDA       $   20                                            Wawa & Atikokan Pellet Facilities    2014                                         Guidance                                          Wawa & Atikokan Operating Income        $    - Add: Depreciation and Amortization               2 Facility Level Adjusted EBITDA          $    2   The table below reconciles cash selling, general and administration expenses for Rentech, excluding Rentech Nitrogen, for 2012, 2013 and 2014 (stated in thousands).                                    2012 Actual  2013 Actual  2014 Guidance Total Cash SG&A                      $   21,842    $   35,851    $    32,000 Add: Non-Cash Compensation Expenses          8,023        5,940         7,000 GAAP SG&A                            $   29,865    $   41,791    $    39,000                                                                         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: potential investment opportunities, including projected revenues and EBITDA for the wood fibre business; the possibility of a MLPIPOfor the wood fibre business; our ability to complete the wood pellet mills on a timely basis and on budget; the outlook for our wood processing and nitrogen fertilizer businesses and our ability to close on the sale of our energy technologies business. 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.  References to an initial public offering of our wood fibre business in this press release are being made solely to advise Rentech’s investors regarding the Company’s current business plan. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities. Any such offer or solicitation will be made only by means of a prospectus.  Contact:  Rentech, Inc. Julie Dawoodjee Cafarella Vice President of Investor Relations and Communications 310-571-9800 ir@rentk.com  
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