Renewable Power Firm Fails to Energize Investors

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Renewable energy solutions company Rentech Inc. can’t seem to find a solution to its plummeting stock price.

Shares fell 22 percent last week and are down 80 percent since this time last year.

The struggling Westwood company reported third-quarter revenue for the period ended Sept. 30 of $80.3 million, well short of analysts’ estimates of about $118 million.

The company tallied a net loss for the quarter of $24.3 million (-$1.06 a share), more than doubling the net loss of $11.7 million (-$0.51 a share) during the same period last year.

Rentech’s stock closed at $2.97 on Nov. 18 on the Nasdaq stock exchange, making it the biggest loser on the LABJ Stock Index. (See Page 48.)

The market appears to have been concerned by comments concerning liquidity in the company’s earnings press release, which stated that unless nitrogen facilities in East Dubuque, Ill., and Pasadena, Texas, are sold in a timely manner, it might need to find additional means of financing.

In a subsequent conference call, the company downplayed that concern noting that additional borrowing or sale of some of its units could provide the funding required and said discussions on those options are underway.

Rentech owns the intellectual property for a number of energy technologies. It also owns and operates wood-fiber processing and nitrogen fertilizer manufacturing businesses.

Formed in 1981, the company now operates 38 facilities in four countries and employs nearly 900 staff. It pivoted in 2013 by changing its main focus from biofuels to wood pellet production. In May 2014, Rentech acquired New England Wood Pellets, the largest producer of wood pellets for the U.S. heating market.

But investors have been unimpressed with the way things are going for the firm.

“Reported numbers had substantial differences with our expectations, some due to underperformance,” said Brent Rystrom, analyst at Felt and Co. in Minneapolis, in a report.

Nevertheless, his securities brokerage is maintaining its “strong buy” rating on Rentech due to the value of the company’s assets and expected strong revenue gains from production at its two new wood pellet plants due to open next year.

Rystrom did not respond to an interview request.

Rentech did not return requests for comment. But in his third- quarter earnings call, Chief Executive Keith Forman pointed out that others in their industry are going through struggles, too.

“It was a quarter that many of our peers found challenging for a variety of reasons,” he said.

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