Your Specialty Chemical Partner Click to edit Master title style Annual Stockholders’ Meeting May 17, 2016 TREC
Safe Harbor Statements in this presentation that are not historical facts are forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward looking statements are based upon Management's belief, as well as, assumptions made by and information currently available to Management. Because such statements are based upon expectations as to future economic performance and are not statements of fact, actual results may differ from those projected. These risks, as well as others, are discussed in greater detail in Trecora Resources' filings with the Securities and Exchange Commission, including Trecora Resources' Annual Report on Form 10-K for the year ended December 31, 2015, and the Company‘s subsequent Quarterly Reports on Form 10-Q. 2
Directors Nicholas N. Carter Simon Upfill-Brown Chairman President and CEO TREC – 2006 TREC – 2014 AMAK - 2009 TOCCO - 1977 John R. “Dick” Townsend Allen P. McKee Compensation TREC – 2009 Committee Chair TREC – 2011 Joseph P. Palm Karen A. Twitchell Gary K. Adams Nominations/Governance Audit Committee TREC – 2012 Committee Chair Chair TREC – 2011 TREC – 2015 3
Officers • CEO/President – Simon Upfill-Brown (2012) • President of Trecora Chemical – Peter M. Loggenberg (2014) • CFO/Secretary – Connie J. Cook (1991) • Vice President of Marketing – Mark D. Williamson (1987) • Vice President of Manufacturing – Ronald R. Franklin (2009) 4
Counsel/Auditors/Transfer Agent • Germer PLLC • Charles Goehringer, Jr. • BKM Sowan Horan LLP • Rick Sowan, CPA (Managing Partner) • Trey Kennedy, CPA (Partner) • Brad Marckx, CPA (Partner) • Computershare • Brenda Baril – Relationship Manager 5
Proposals 1. Re-election of Directors Simon Upfill-Brown Gary K. Adams Karen A. Twitchell 6
Proposals 2. Ratification of BKM Sowan Horan, LLP for 2016 3. Non-binding approval of NEO’s compens ation 7
2015 Performance • Record petrochemical volume up 5% to 87 million gallons • Record gross margin 24.5% • Record operating income up 41.4% to $36 million • Net income was $18.6 million or $0.74 per diluted share up 19.4% • Adjusted EBITDA was $47.3 million up 43.3% 8
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES(1) YEAR ENDED December 31, 2015 2014 EBITDA Calculation Net Income $ 18,598 $ 15,571 Add: Depreciation and amortization 725 560 Depreciation/amortization in COGS 8,335 5,116 Interest expense 2,217 1,420 Taxes 9,764 7,147 39,639 29,814 EBITDA Share based compensation 2,353 2,141 Equity in losses in AMAK 5,325 1,072 $ 47,317 $ 33,027 Adjusted EBITDA Revenue $ 241,976 $ 289,643 Adjusted EBITDA Margin 19.6% 11.4% (adjusted EBITDA/revenue) (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. 9
SHR Capital Project & Expansion Summary � SHR D-Train � $30 million; completed 4Q-15 � Enables additional 45 million gallons/year of pentane sales � 4-5 year payback � SHR Advanced Reformer � $46 million; completion expected Q2-17 � Convert ~30-40 million gallons/year of byproducts sold at cost/loss to higher value aromatics; technology proven in trial at SHR � Add ~$13m/year in EBITDA; 3 year payback � Custom Processing � Anellotech’s TCat-8 Pilot Plant now installed � Reactor installed to expand Gevo’s isobutanol-to-jet capacity to meet growing demand � New Products � One successfully piloted in 1Q16; expect to begin production in 3Q � Trial campaign on another in 2Q16 or 3Q16 10
SHR Anellotech Project 11
SHR Expansion Update 12
Trecora Chemical Progress � Wax Markets � Hot Melt Adhesives – major customer now buying on a regular basis � PVC Lubricants – testing plant produced highest quality wax recently introduced � Coatings (Road marking) – new customer started purchasing � Custom Processing � Successful trials for two new customers � Finalized long term agreement with former spot customer � TC Hydrogenation/Distillation Unit � $20 million; completion expected January 2017 � Doubles potential custom processing revenue � Add ~$6m/year in EBITDA; 3-4 year payback 13
TC Hydrogenation/Distillation Project 14
TC Plant Purchase from BASF 15
Key Attributes of New Facility � 6.5 acres surrounded by existing TC facilities � Production equipment that expands TC’s high melt point separation and forming capabilities � 25 tanks – some high pressure which can be used as reactors � Various small vessels and condensers � Micronizing and crystallization equipment � Rail and truck loading spots � Hot oil heater and two boilers � Waste water and electricity tie-ins already shared with TC 16
AMAK Mine Developments � First quarter results impacted by: � Settlement of contract with former operator of facility � Reduction of previously accrued operating expenses ~$16.2 million � Expect restart of copper and zinc mine in 4Q16 � Refurbishment and upgrades remain on schedule � Ore reserve update to be completed by January 2017 � Exploration at 10 km 2 Guyan gold mining license well underway � Drilling is just over 20% complete – core analysis progressing � Will result in detailed mine plan in 3Q16 � Processing historic gold dumps at Guyan to start in 4Q16 17
Mission Statement/Values • We will deliver maximum value for our customers, our employees and for Trecora Resources’ shareholders by safely and reliably producing and supplying high purity hydrocarbons, synthetic waxes and premier custom processing services for niche chemical and other end-use markets. • We will protect each other and our environment by operating responsibly and having a positive impact on our communities and the lives of those with whom we have a shared relationship. • By utilizing the full scope of our chemistry, technology and global business understanding, we will partner with our customers to develop new solutions as well as find uses for our existing products and services that solve their essential needs. • We will remain devoted and collaborative in our support of joint venture entities. • We stand behind these commitments, have a uncompromising drive to do the right thing in every respect and are relentless in our desire to achieve the highest levels of performance. Values : Integrity Respect for others Customer Focus Agility 18 Efficiency
Conclusion • Report of Election Judge • Other Business • Adjournment 19
Additional Information Please visit our websites: www.trecora.com www.southhamptonr.com www.TrecChem.com www.amak.com.sa 20
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