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Greenwood Village, CO – Molycorp, Inc. (NYSE: MCP) (“Molycorp” or the “Company”) today announced financial and operating results for the third quarter 2014.
The Company reported consolidated net revenues in the third quarter of 2014 of $123.9 million, a 6% increase over the preceding quarter. Product sales volume in the quarter was 3,356 metric tons (mt), a 12% sequential increase, at an average selling price (“ASP”) of $36.93/kg, a 5% decrease over the preceding quarter’s ASP of $39.02/kg.
The Company reported a net loss of $0.47 per share for the quarter, and a net loss of $0.40 per share for the quarter on an adjusted non-GAAP basis.
Molycorp’s Resources segment, comprised of its Mountain Pass, California rare earth mine and processing facility, sold 1,085 mt of rare earth oxide (“REO”) equivalent products for $13.9 million in revenues, a 39% increase over the second quarter of 2014. ASP for the quarter was $12.84/kg, which was 25% higher than the preceding quarter due to a more favorable product mix. Production volume for the quarter was 691 mt, a 58% decrease over second quarter production of 1,639 mt. Cash cost for production increased to $33.80/kg, a 104% increase over production cash costs of $16.54/kg in the previous quarter, largely due to the limited availability of hydrochloric acid needed for production.
The Company’s Chemicals and Oxides segment sold 1,651 mt and reported $43.5 million in revenues. The slight sequential increase in volume was offset by lower ASP of $26.33/kg. due to a less favorable product mix.
Its Magnetic Materials and Alloys segment sold 1,516 mt of magnetic powders and reported third quarter revenues of $62.7 million on ASP of $40.42/kg. This compares to second quarter revenues of $54.4 million on an ASP of $39.31/kg. for the segment.
Finally, Molycorp’s Rare Metals segment reported sales volume of 104 mt on revenues of $21.3 million. ASP for the segment was $204.51/kg. Second quarter revenues were $15.9 million on ASP of $201.81/kg.
THIRD QUARTER 2014 RESULTS
During the third quarter, the Company sold 3,356 mt of product at an ASP of $36.93/kg, and generated a gross loss of $15.1 million. This compares to sales volumes of 2,996 mt at an ASP of $39.02/kg and a gross loss of $16.6 million during the second quarter of 2014.
Molycorp reported a loss attributable to common stockholders of $105.2 million, or $0.47 per share. Adjusted loss per share of $0.40 in the third quarter does not reflect out-of-ordinary business expenses, and certain other non-cash items.
The Company reported negative cash flows from operating activities of $28.2 million for the quarter ended September 30, 2014, and had $313.5 million in cash and cash equivalents as of September 30, 2014.
During the three months ended September 30, 2014, Molycorp’s capital expenditures were $18.2 million on a cash basis.
CONFERENCE CALL TOMORROW AT 9:00 A.M. EASTERN STANDARD TIME
Molycorp will conduct a conference call on Thursday, November 6, 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 (877) 474-9501 and reference passcode number 59522823. Those calling from outside the U.S. should dial +1 (857) 244-7554 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, OIBDA and ADJUSTED OIBDA
Adjusted Net Loss excludes certain non-cash items and other out-of-ordinary business expense and operational expansion items. The Company defines OIBDA as operating income before depreciation, amortization and accretion. Adjusted OIBDA consists of OIBDA excluding certain non-cash items and other out-of-ordinary business expense and operational expansion items. Adjusted Net Loss, OIBDA and Adjusted OIBDA are all non-GAAP financial measures. There have been no changes in the calculation method of previously disclosed non-GAAP financial measures. The Company’s management believes adjusting out these items from Net Loss and OIBDA, 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 that Adjusted Net Loss, OIBDA and Adjusted OIBDA 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.
