8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 5, 2019

Trecora Resources

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation) 1-33926 (Commission File Number) 75-1256622 (IRS Employer Identification No.)

1650 Hwy 6 South, Suite 190

Sugar Land, Texas 77478

(Address of principal executive offices)

(281) 980-5522

(Registrant’s Telephone Number, Including Area Code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

	Emerging growth company	o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.		o

Item 2.02. Results of Operations and Financial Condition

The Company’s press release dated August 5, 2019, regarding its financial results for the quarter ended June 30, 2019, including consolidated financial statements for the quarter ended June 30, 2019, is Exhibit 99.1 of this Form 8-K.

The information in this Item 2.02, including the corresponding Exhibit 99.1, is being furnished with the Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.

Item 7.01. Regulation FD Disclosure.

The slides for the Company’s second quarter 2019 earnings presentation on August 6, 2019, are Exhibit 99.2 to this Form 8-K.

The information in this Item 7.01, including the corresponding Exhibit 99.2, is being furnished with the Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description of Exhibit
99.1	Earnings Release of the Company, dated August 5, 2019
99.2	Earnings Presentation of the Company, dated August 6, 2019

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TRECORA RESOURCES
Date: August 6, 2019	By:	/s/ Sami Ahmad
		Sami Ahmad
		Chief Financial Officer

EX-99.1

Trecora Resources Reports Second Quarter 2019 Results

• Second quarter net income of $2.4 million compared to net income of $1.8 million in first quarter 2019 and net income of $2.2 million in second quarter 2018

• Reliability and cost control drove second quarter Adjusted EBITDA of $9.2 million compared to $8.4 million in first quarter 2019 and $6.2 million in second quarter 2018 (a 49% increase versus second quarter 2018)

• Prime Products sales volume of 17.7 million gallons in second quarter 2019 versus 16.1 million gallons in second quarter 2018

• Reduced debt by $5.1 million in the second quarter and an additional $4 million in July 2019

• AMAK second quarter net loss of $1.3 million and EBITDA of $7.3 million

• Conference call at 10:00 am ET Tomorrow, August 6, 2019

SUGAR LAND, Texas, August 5, 2019 – Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and waxes, today announced financial results for the second quarter ended June 30, 2019.

“Our second quarter’s performance demonstrates our ability to increase earnings and achieve strong cash flow, when we execute well. As we strive towards positive and sustainable operational and financial performance, I am pleased with the current results, specifically in our Specialty Petrochemicals business. Driven by solid operational reliability and cost control, the Company was able to exceed first quarter 2019 results, despite approximately $4 million of headwinds in our P&L attributable to higher feedstock costs. This resulted in consolidated Adjusted EBITDA of $9.2 million, which compares to $8.4 million in first quarter 2019 and $6.2 million in second quarter 2018, a 49% increase,” said Pat Quarles, Trecora’s President and Chief Executive Officer.

“Enhanced safety, running our assets reliably across our operations, delivering on productivity initiatives, and executing on key projects according to plan, all while meeting the high quality expectations of our customers, will continue to be the key drivers to improve our results. While we have further work to do, I am very encouraged by the advances made thus far,” Mr. Quarles added.

Mr. Quarles concluded, “Our process to monetize our ownership in AMAK, which had second quarter EBITDA of $7.3 million, continues to advance and, simultaneously, AMAK continues to make progress in throughput rates, concentrate quality and recoveries. In addition, the Guyan gold project is proceeding on schedule and on budget for a second half 2020 startup. Once complete, the project should significantly add to AMAK’s earnings and cash flow.”

Sami Ahmad, Trecora's Chief Financial Officer stated, “In the second quarter, prime products sales volume of 17.7 million gallons was virtually unchanged from first quarter 2019. Healthy demand from polyethylene and polyurethane markets offset lower sales to the Canadian Oil Sands. In addition, margins for by-products improved from the first quarter due to continued reliable operation of the Advanced Reformer unit and higher by-product prices compared to the first quarter. Strong operating cash flow in the quarter allowed for meaningful debt reduction of $5.1 million. We further reduced debt by an additional $4 million in July, bringing our total outstanding debt to approximately $94 million. Looking ahead, our focus continues to be the safe and reliable operation of our plants, the quality of our products, strong cost management and continued debt reduction.”

Second Quarter 2019 Financial Results

Net income in the second quarter of 2019 was $2.4 million, or $0.10 per diluted share, compared to net income of $2.2 million, or $0.09 per diluted share², in the second quarter of 2018. Net income for the second quarter includes the impact of equity in losses from AMAK of $0.1 million. Adjusted Net Income for the second quarter of 2019 was $2.5 million, or $0.10 per diluted share¹, compared to Adjusted Net Income of $2.0 million, or $0.08 per diluted share, in the second quarter 2018.

Total revenue in the second quarter was $69.4 million compared to $68.1 million in the second quarter of 2018. This year-over-year increase was primarily due to an 8.7% increase in Specialty Petrochemicals sales volume, partially offset by a 4.0% decline in average selling prices, which was mainly due to lower feedstock costs. Revenues from processing declined as compared to the second quarter of 2018 due to the termination of a contract in the fourth quarter of 2018.   

Gross profit in the second quarter was $10.6 million, or 15.2% of total revenues, compared to $8.1 million, or 12.0% of total revenues, in the second quarter of 2018.  Operating income in the second quarter was $4.3 million compared to $3.4 million for the second quarter of 2018. The improved margins were primarily driven by lower feedstock costs, operation of the Advanced Reformer unit and lower labor costs as a result of the cost reduction program implemented in December 2018.

Specialty Petrochemicals 

Specialty Petrochemicals net income was $4.7 million in the second quarter of 2019, compared to net income of $2.9 million in the second quarter of 2018. Specialty Petrochemicals volume in the second quarter was 21.4 million gallons, compared to 22.5 million gallons in the first quarter of 2019 and 19.7 million gallons in the second quarter of 2018.  Prime product volume in the second quarter was 17.7 million gallons, compared to 17.6 million gallons in the first quarter of 2019 and 16.1 million gallons in the second quarter of 2018. By-product sales volume was 3.7 million gallons in second quarter 2019.  Adjusted EBITDA for Specialty Petrochemicals in the second quarter was $9.9 million compared to $11.4 million in the first quarter of 2019 and $6.1 million in the second quarter of 2018.

Dollar amounts in thousands/rounding may apply	THREE MONTHS ENDED
	JUNE 30,
	2019		2,018		% Change
Product sales		$58,583		$56,135	4%
Processing fees	1,527		1,685		(9)%
Gross revenues		$60,110		$57,820	4%
Operating profit before depreciation and amortization	10,028		6,095		65%
Operating profit	7,104		4,440		60%
Net profit before taxes	6,375		3,859		65%
Depreciation and amortization	2,925		1,655		77%
Adjusted EBITDA	9,853		6,125		61%
Capital expenditures	1,461		3,529		(59)%

Specialty Waxes

Specialty Waxes net loss was $1.0 million in the second quarter of 2019, compared to a net loss of $0.5 million in the second quarter of 2018. Specialty Waxes generated revenues of approximately $9.3 million in the second quarter, a $1.0 million increase from the first quarter of 2019, and a $1.0 million decrease from the second quarter of 2018.  Revenue included $6.7 million of wax product sales and $2.5 million of processing revenues. Wax sales volumes decreased approximately 5.6% from second quarter 2018 due to disruptions of wax feed supply from our suppliers. Adjusted EBITDA for Specialty Waxes in the second quarter was $0.7 million compared to $(0.9) million in the first quarter of 2019 and $1.1 million in the second quarter of 2018.

Dollar amounts in thousands/rounding may apply	THREE MONTHS ENDED
	JUNE 30,
	2019		2,018		% Change
Product sales		$6,745		$7,434	(9)%
Processing fees	2,516		2,852		(12)%
Gross revenues		$9,261		$10,286	(10)%
Operating profit before depreciation and amortization	766		1,164		(34)%
Operating loss	(633)		(201)		215%
Net loss before taxes	(1,013)		(506)		100%
Depreciation and amortization	1,399		1,365		2%
Adjusted EBITDA	734		1,140		(36)%
Capital expenditures	426		877		(51)%

Al Masane Al Kobra Mining Company (“AMAK”)

AMAK had a net loss of $1.3 million in the second quarter of 2019, compared to a net loss of $0.3 million in the second quarter of 2018. AMAK’s sales revenue was $20.6 million in the second quarter of 2019, an increase of 5.5% compared to the second quarter of 2018. AMAK’s EBITDA was $7.3 million in the second quarter 2019 compared to $8.3 million in the second quarter of 2018. The year-over-year decline in EBITDA was primarily due to increased cost of sales resulting from a change in inventory valuation methodology and one-time non-recurring expenses. Trecora reported equity in losses of approximately $0.1 million dollars in the second quarter of 2019 compared to equity in earnings of approximately $0.2 million in second quarter of 2018.

Year-to-Date 2019 Financial Results

Net income in the first half of 2019 was $4.2 million, or $0.17 per diluted share, compared to net income of $4.6 million, or $0.18 per diluted share⁴, for the same period in 2018.  Adjusted Net Income in the first half of 2019 was $4.3 million, or $0.17 per diluted share³ compared to Adjusted Net Income of $4.2 million or $0.17 per diluted share, for the same period in 2018. Net income in the first half of 2019 includes the impact of equity in losses from AMAK of $0.2 million.

Total revenue in the first half of 2019 was $134.5 million, compared to $139.8 million for the same period in 2018, a decrease of 3.8%. This decrease was primarily due to a decrease in the average selling price of Specialty Petrochemicals products of 4.0% and lower Specialty Petrochemicals processing revenue of $0.8 million. These two factors were partially offset by a 2.1% increase in Specialty Petrochemicals sales volume.

Gross profit in the first half of 2019 was $20.6 million, or 15.3% of total revenues, compared to $18.3 million, or 13.1% of total revenues, for the same period in 2018. Operating income in the first half of 2019 was $8.1 million, compared to operating income of $7.0 million for the same period in 2018. The improved margins were primarily driven by lower feedstock costs, operation of the Advanced Reformer unit and lower labor costs as a result of the cost reduction program implemented in December 2018. 

Specialty Petrochemicals 

Specialty Petrochemicals net income was $10.8 million in the first half of 2019, compared to net income of $7.9 million for the same period in 2018. Specialty Petrochemicals volume in the first half of 2019 was 43.9 million gallons, compared to 43.0 million gallons for the same period in 2018.  Prime product volume in the first half of 2019 was 35.4 million gallons, compared to 33.7 million gallons in the same period 2018. Adjusted EBITDA for Specialty Petrochemicals in the first half of 2019 increased 46% to $21.3 million, compared to $14.5 million for the same period in 2018.

Dollar amounts in thousands/rounding may apply	SIX MONTHS ENDED
	JUNE 30,
	2019		2,018		% Change
Product sales		$114,073		$116,420	(2)%
Processing fees	2,910		3,713		(22)%
Gross revenues		$116,983		$120,133	(3)%
Operating profit before depreciation and amortization	21,435		14,488		48%
Operating profit	15,437		11,119		39%
Net profit before taxes	13,510		9,913		36%
Depreciation and amortization	5,999		3,369		78%
Adjusted EBITDA	21,258		14,515		46%
Capital expenditures	2,839		13,812		(79)%

Specialty Waxes

Specialty Waxes had a net loss of $3.6 million in the first half of 2019 compared to a net loss of $1.7 million for the same period in 2018. Specialty Waxes had revenues of $17.5 million in the first half of 2019, an 11.8% decrease from the same period of 2018.  Revenues included $12.7 million of wax product sales and $4.8 million of processing revenues. Wax sales volumes in the first half of 2019 decreased approximately 11.2% from the same period 2018 due to the planned maintenance turnaround in the first quarter of 2019 along with disruptions of wax feed supply from our suppliers. Adjusted EBITDA for Specialty Waxes in the first half of 2019 was $(0.2) million, compared to $1.5 million for the same period in 2018.

Dollar amounts in thousands/rounding may apply	SIX MONTHS ENDED
	JUNE 30,
	2019		2,018		% Change
Product sales		$12,748		$13,817	(8)%
Processing fees	4,795		6,064		(21)%
Gross revenues		$17,543		$19,881	(12)%
Operating profit (loss) before depreciation and amortization	(83)		1,554		(105)%
Operating loss	(2,830)		(1,115)		154%
Net loss before taxes	(3,552)		(1,687)		111%
Depreciation and amortization	2,747		2,669		3%
Adjusted EBITDA	(154)		1,519		(110)%
Capital expenditures	935		1,622		(42)%

AMAK

AMAK had a net loss of $2.5 million in the first half of 2019, compared with a net loss of $0.6 million in the first half of 2018. Revenue was $41.2 million in the first half of 2019, an increase of 22.8% compared to the first half of 2018. EBITDA was $14.4 million in the first half of 2019, compared to $16.1 million in the first half of 2018. The year-over-year decline in EBITDA was primarily due to increased cost of sales resulting from a change in inventory valuation methodology and one-time non-recurring expenses. Trecora reported equity in losses of approximately $0.2 million dollars in the first half of 2019 compared to equity in earnings of approximately $0.5 million in the first half of 2018.

Earnings Call

Tomorrow’s conference call and presentation slides will be simulcast live on the Internet, and can be accessed on the investor relations section of the Company's website at http://www.trecora.com or at https://edge.media-server.com/mmc/p/opeg46ub. A replay of the call will also be available through the same link.

To participate via telephone, callers should dial in five to ten minutes prior to the 10:00 am Eastern start time; domestic callers (U.S. and Canada) should call +1-866-417-5724 or 
+1-409-217-8234 if calling internationally, using the conference ID 5585897. To listen to the playback, please call 1-855-859-2056 if calling within the United States or 1-404-537-3406 if calling internationally. Use pin number 5585897 for the replay.

Use of Non-GAAP Measures

This press release includes the use of both U.S. generally accepted accounting principles ("GAAP") and non-GAAP financial measures. The Company believes certain financial measures, such as EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income (Loss), which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. The Company believes that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. These measures are not measures of financial performance or liquidity under GAAP and should be considered in addition to, and not as a substitute for, analysis of our results under GAAP.

These non-GAAP measures have been reconciled to the nearest GAAP measure in the tables below entitled Reconciliation of Selected GAAP Measures to Non-GAAP Measures.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin: We define EBITDA as net income (loss) plus interest expense (benefit) including derivative gains and losses, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA plus share-based compensation, plus restructuring and severance expenses, plus losses on extinguishment of debt, plus or minus equity in AMAK's earnings and losses or gains from equity issuances, and plus or minus gains or losses on acquisitions. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue.

Adjusted Net Income (Loss): We define Adjusted Net Income (Loss) as net income (loss) plus or minus tax effected equity in AMAK's earnings and losses, minus tax effected restructuring and severance expenses.

Forward-Looking Statements

Some of the statements and information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "should," "could," "expects," "plans," "anticipates," "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions, including, but not limited to: expectations regarding future market trends; expectations regarding our intention to monetize our ownership in AMAK; and expectations regarding the timing and completion of AMAK’s Guyan gold project and its impact on AMAK’s financial performance.

Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such statements. Such risks, uncertainties and factors include, but are not limited to: general economic conditions domestically and internationally; insufficient cash flows from operating activities; difficulties in obtaining financing on favorable conditions, or at all; outstanding debt and other financial and legal obligations; lawsuits; competition; industry cycles; feedstock, product and mineral prices; feedstock availability; technological developments; regulatory changes; environmental matters; foreign government instability; foreign legal and political concepts; foreign currency fluctuations; and other risks detailed in our latest Annual Report on Form 10-K, including but not limited to "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein, and in our other filings with the Securities and Exchange Commission (the "SEC"). There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this press release and the information included in our prior releases, reports and other filings with the SEC, the information contained in this press release updates and supersedes such information. Forward-looking statements are based on current plans, estimates, assumptions and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events.

About Trecora Resources (TREC)

TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities. In addition, the Company is the original developer and a 33.3% owner of Al Masane Al Kobra Mining Co., a Saudi Arabian joint stock company.

Investor Relations Contact:

Jean Marie Young

The Piacente Group, Inc.

212-481-2050

TRECORA RESOURCES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

TRECORA RESOURCES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

TRECORA RESOURCES AND SUBSIDIARIES

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

(thousands of dollars; rounding may apply)

Adjusted Net Income and Estimated EPS Impact

(thousands of dollars, except per share amounts; rounding may apply)

EX-99.2

Second Quarter 2019 Overview August 6, 2019

Safe Harbor Statement Some of the statements and information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "should," "could," "expects," "plans," "anticipates," "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions, including, but not limited to: expectations regarding future market trends; expectations regarding our intention to monetize our ownership in AMAK; and expectations regarding the timing and completion of AMAK’s Guyan gold project and its impact on AMAK’s financial performance. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such statements. Such risks, uncertainties and factors include, but are not limited to: general economic conditions domestically and internationally; insufficient cash flows from operating activities; difficulties in obtaining financing on favorable conditions, or at all; outstanding debt and other financial and legal obligations; lawsuits; competition; industry cycles; feedstock, product and mineral prices; feedstock availability; technological developments; regulatory changes; environmental matters; foreign government instability; foreign legal and political concepts; foreign currency fluctuations; and other risks detailed in our latest Annual Report on Form 10-K, including but not limited to "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein, and in our other filings with the Securities and Exchange Commission (the "SEC"). There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this press release and the information included in our prior releases, reports and other filings with the SEC, the information contained in this press release updates and supersedes such information. Forward-looking statements are based on current plans, estimates, assumptions and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events. 2

Disclaimer: Non-GAAP Measures This press release includes the use of both U.S. generally accepted accounting principles ("GAAP") and non-GAAP financial measures. The Company believes certain financial measures, such as EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income (Loss), which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. The Company believes that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. These measures are not measures of financial performance or liquidity under GAAP and should be considered in addition to, and not as a substitute for, analysis of our results under GAAP. These non-GAAP measures have been reconciled to the nearest GAAP measure in the tables below entitled Reconciliation of Selected GAAP Measures to Non-GAAP Measures. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin: We define EBITDA as net income (loss) plus interest expense (benefit) including derivative gains and losses, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA plus share-based compensation, plus restructuring and severance expenses, plus losses on extinguishment of debt, plus or minus equity in AMAK's earnings and losses or gains from equity issuances, and plus or minus gains or losses on acquisitions. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue. Adjusted Net Income (Loss): We define Adjusted Net Income (Loss) as net income (loss) plus or minus tax effected equity in AMAK's earnings and losses, minus tax effected restructuring and severance expenses. 3

Trecora Overview Q2’19 Financials o Adj. EBITDA of $9.2 million ($8.4 million in Q1’19 and $6.2 million in Q2’18) o Net income of $2.4 million ($1.8 million in Q1’19 and $2.2 million in Q2’18) o Reduced debt by $5.1 million (additional $4 million in July 2019) Q2’19 Operational Highlights o Prime Products sales volume of 17.7 million gallons (16.1 million gallons in Q2’18) o Healthy demand from polyethylene and polyurethane markets offset lower sales to the Canadian Oil Sands o Two turnarounds at Silsbee (financial impact $1 million) o Ran key assets reliably, delivering on productivity initiatives and executing on key projects according to plan o Advanced Reformer ran with very high reliability allowing for capture of improved by-product values in the market o Savings from utilization of new on-site rail car storage allowed for the off-set of annual rail freight inflationary increases AMAK Highlights o AMAK Q2’19 net loss of $1.3 million and EBITDA of $7.3 million o Guyan gold project on schedule for 2H’20 startup 4

Trecora Turnaround Demonstrating Early Results Ø Safe and Reliable Assets o Delivered safe and reliable operations, while providing quality products to customers o Implemented strong safety culture o Advanced Reformer ran with very high reliability in Q2 allowing for the capture of improved by-product values in the market Ø Capture Productivity Opportunities o Enhanced productivity by challenging both internal and external cost elements o Aligned resources at Silsbee facility to match scope of operations o Expected to generate $2.5 million in annual savings beginning in 2019 Ø Drive Commercial Excellence o Measured and improved every aspect of value proposition to customers o In Q2, made progress in reviewing and renegotiating commercial contracts with more favorable pricing, price escalators and supply terms, that will cumulatively improve both margins and sales volumes over time 5

Significantly Improving Results (in millions) ($4) to $2 $1 to $2 $1 to $2 $3 to $4 $2.5 $20.3 ($1) Initiatives in order of certainty (left more certain … right less certain) YE 2019 Adjusted EBITDA 2018 Adjusted EBITDA Maintenance investments Cost reductions at SHR Reliable operations Productivity Commercial Excellence Market Volatility run - rate Based on 1H’19 results, trending towards high-end of expected Adjusted EBITDA range 6

Financial Summary – Q2’19 Q2’19 Q1’19 Q4’18 Q3’18 Q2’18 1H’19 1H’18 Diluted EPS $0.10 $0.07 $(0.22) $(0.06) $ 0.09 $0.17 $0.18 Adjusted EPS (1) $0.10 $0.07 $ (0.13) $(0.03) $ 0.08 $0.17 $0.17 Net Income (Loss) $2.4 $1.8 $(5.3) $(1.6) $2.2 $4.2 $4.6 Adjusted EBITDA (1) $9.2 $8.4 $2.0 $4.9 $6.2 $17.7 $13.4 Adj EBITDA Margin (1) 13.3% 13.0% 2.6% 6.7% 9.1% 13.1% 9.6% Cap Ex $1.8 $1.9 $6.2 $3.7 $4.4 $3.7 $15.4 Debt $98.4 $103.4 $102.5 $105.5 $105.1 $98.4 $105.1 (1) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its more directly comparable GAAP measure. Ø Adjusted EBITDA margin of 13.3% in Q2’19 and 13.1% in 1H’19 Ø Cash Flow from Operations of $5.8 million for 1H’19 Ø Debt at June 30, 2019 of $98.4 million (~$94.0 million as of end of July) Ø Revolver balance of $16 million as of June 30 (reduced $4 million in July) with availability of additional $42 million at the end of Q2 7

Specialty Petrochemicals Update Specialty Petrochemicals Sales Volumes Q2’19 Q1’19 Q4’18 Q3’18 Q2’18 Q1’18 (million gallons) All Products 21.4 22.5 25.1 21.6 19.7 23.3 Prime Products 17.7 17.6 18.7 17.0 16.1 17.7 By-products 3.7 4.8 6.4 4.6 3.6 5.6 Deferred Sales 2.0 2.5 2.9 2.3 2.0 2.2 Ø Prime product sales volume grew approximately 10.0% compared to Q2’18 and were flat from Q1’19 Ø By-product margin in Q2’19 of $0.24 per gallon compared to $0.05 per gallon in Q2’18 and $0.16 per gallon in Q1’19 Ø On-track with annual cost savings of $2.5 million from December reorganization Ø Tw o Q 2 ’ 1 9 Silsbee turnarounds (financial impact: $1 million) Ø Decline in by-products sales from the Q1’19 was due to change in the feed mix to the Advanced Reformer unit 8

Petrochemical Feed - Market Price of Natural Gasoline $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Market Price Per Gallon (Source: OPIS) 9

Specialty Waxes Update Specialty Waxes Q2’19 Q1’19 Q4’18 Q3’18 Q2’18 Q1’18 Wax Revenue ($mm) $6.7 $6.0 $6.3 $6.9 $7.4 $6.4 Wax Sales Volume (lbs) 10.0 7.9 8.1 9.1 10.5 9.5 Avg. Wax Sales Price $0.67 $0.76 $0.77 $0.77 $0.71 $0.67 CP Revenue ($mm) $2.5 $2.3 $2.4 $2.8 $2.9 $3.2 Ø Wax o Q2’19 sales volume up 26.6% from Q1’19 and down 5.6% compared to Q2’18 due to disruptions of wax feed supply from our suppliers o Customer demand continues to be strong for higher value specialty waxes including our higher margin products for the Hot Melt Adhesives ("HMA") and PVC Lubricant markets Ø Custom Processing (CP) o Q2’19 processing revenues declined 13.8% from Q2’18 primarily due to minimal revenues from hydrogenation/distillation unit as we work to improve the unit's reliability 10

Specialty Waxes Wax Volume and Revenue (in thousands) $8,000 12,000 $7,000 10,000 $6,000 8,000 $5,000 $4,000 6,000 Volume Revenue $3,000 4,000 $2,000 2,000 $1,000 $- - Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Wax Revenues($) Wax Volume (Lbs) 11

AMAK Update AMAK Q2’19 Q1’19 Q4’18 Q3’18 Q2’18 Q1’18 FY’18 FY’17 (in millions) Sales Revenue $20.6 $20.6 $16.8 $19.9 $19.5 $14.0 $70.2 $36.4 EBITDA ($mm) $7.3 $7.1 $6.0 $5.7 $8.3 $7.8 $27.8 $8.2 Ø First half 2019 EBITDA of $14.4 million Ø Restructuring and transformation of mining operations progressing well Ø Mill feed rate close to capacity of 720,000 tonnes per year and significantly improved concentrate quality and metal recoveries Ø Solid Q2 2019 operational performance o Produced 1.5 kt of copper (+16% QoQ) and 5.7 kt of zinc (+24% QoQ) o Mill throughput increased 8% QoQ to 190 kt o Higher Q2 copper concentrate grade of 25.0% (Q1: 24.7%) and zinc concentrate grade of 52.8% (Q1: 49.3%) Ø Mine Life of 9 years based on Proven/Probable copper reserve of 57 kt (end of life in 2027) Ø 98 kt of measured, indicated and inferred copper resources o Conversion of these resources to reserves through exploration represents potential to extend the mine life beyond 9 years o In 2019 established own drill team and acquired dedicated exploration drill to accelerate exploration program Ø Guyan gold project on schedule for 2H 2020 startup o $36mm capex project that has an expected +25% IRR over a 7-year mine life, based on average $1,350/oz gold price over life-of-mine 12

AMAK Metal Production Ramp Up UG Production and Plant Throughput (dmt) UG (Actual) Mill Feed (Actual) 190,000 170,000 150,000 130,000 110,000 90,000 70,000 50,000 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 (Source: AMAK) 13

AMAK Recovery Ramp Up Process Plant Performance Cu and Zn Metal Recoveries (%) 90 80 70 60 50 40 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 Zn Rec (Actual) Cu Rec (Actual) (Source: AMAK) 14

Why Invest in Trecora? Significant Value Creation Through Operational Improvement, Increased Cash Flow & Debt Reduction Rapid De-leveraging Opportunity Continues o Cash Flow from Operations of $5.0 million for Q2’19 compared to $0.8 million for Q1’19 o Debt of approx. $94.0 million as of end of July, an $8.5 million reduction since end of 2018 o On track for 2019 capital expenditures of approx. $10-$11 million ($20 million in 2018 and $51.8 million in 2017) o AMAK monetization to provide opportunity for additional debt reduction Turnaround Priorities Delivering Improved Results o Safety and Reliability program demonstrating improved performance o Culture of productivity reducing costs o Commercial contracts with more favorable pricing, price escalators and supply terms o Trending towards high-end of expected Adjusted EBITDA range based on 1H’19 results 15

Q&A Thank You Please visit our website: www.trecora.com 16

Appendix Reconciliation Of Selected GAAP Measures To Non-GAAP Measures THREE MONTHS ENDED THREE MONTHS ENDED 6/30/19 6/30/18 SPEC. SPEC. SPEC. WAX CORP TREC SPEC. WAX CORP TREC PETRO PETRO NET INCOME (LOSS) $ 4,666 $ (1,013) $ (1,249) $ 2,404 $ 2,928 $ (506) $ (207) $ 2,215 Interest 1,053 347 1 1,401 612 281 (78) 815 Taxes 1,209 0 (545) 664 930 0 (334) 596 Depreciation and amortization 172 24 12 208 161 22 8 191 Depreciation and amortization in cost of sales 2,753 1,375 0 4,128 1,494 1,343 0 2,837 EBITDA 9,853 733 (1,781) 8,805 6,125 1,140 (611) 6,654 Share based compensation 0 0 345 345 0 0 (220) (220) Equity in (earnings) losses of AMAK 0 0 91 91 0 0 (228) (228) Adjusted EBITDA $ 9,853 $ 733 $ (1,345) $ 9,241 $ 6,125 $ 1,140 $ (1,059) $ 6,206 Revenue 60,110 9,261 - 69,371 57,820 10,286 - 68,106 Adjusted EBITDA Margin 16.4% 7.9% 13.3% 10.6% 11.1% 9.1% SIX MONTHS ENDED SIX MONTHS ENDED 6/30/19 6/30/18 SPEC. SPEC. SPEC. WAX CORP TREC SPEC. WAX CORP TREC PETRO PETRO NET INCOME (LOSS) $ 10,808 $ (3,552) $ (3,101) $ 4,155 $ 7,898 $ (1,687) $ (1,644) $ 4,567 Interest 2,248 651 1 2,900 1,233 537 (77) 1,693 Taxes 2,203 0 (1,061) 1,142 2,015 0 (829) 1,186 Depreciation and amortization 341 48 32 421 327 44 16 387 Depreciation and amortization in cost of sales 5,658 2,699 0 8,357 3,042 2,625 0 5,667 EBITDA 21,258 (154) (4,129) 16,975 14,515 1,519 (2,534) 13,500 Share based compensation 0 0 558 558 0 0 372 372 Equity in (earnings) losses of AMAK 0 0 150 150 0 0 (458) (458) Adjusted EBITDA $ 21,258 $ (154) $ (3,421) $ 17,683 $ 14,515 $ 1,519 $ (2,620) $ 13,414 Revenue 116,983 17,543 - 134,526 120,132 19,881 (166) 139,847 Adjusted EBITDA Margin 18.2% (0.9%) 13.1% 12.1% 7.6% 9.6% 17