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Arabian American Releases Fourth Quarter and Full Year 2012 Results

March 7, 2013

Record Year for Revenue and Volume

SUGAR LAND, Texas, March 7, 2013 /PRNewswire/ — Arabian American Development Co. (NYSE:ARSD) released their financial results for the fourth quarter and full year ended December 31, 2012.

“We are happy to report record revenue and volume for 2012 and delighted with the progress made during the year by the Al Masane Al Kobra Mining Co. (“AMAK”) mine which achieved important shipping and production milestones after years of development,” said Nick Carter, President and Chief Executive Officer of Arabian American. “While we exited 2012 waiting on customer orders, we are now seeing orders resume on pace to maximize the utilization of our capacity this calendar year. Combined with ongoing AMAK shipments of copper and zinc concentrate, we believe that we have good momentum moving into 2013.”

Mr. Carter continued, “There is a change to be noted in these financial statements that is important to the clarity of our information. As we had mentioned in previous communications, based upon the receipt of accurate financial information for our investment in AMAK as of and for the years ended December 31, 2012, 2011 and 2010 and also our ability to significantly influence the operation of the company, we concluded in the fourth quarter of 2012 that our investment in AMAK should be presented using the equity method of accounting. The investment had previously been presented using the cost method as of and for the years ended December 31, 2011 and 2010. The 2011 financial statements, as set forth herein, have been adjusted to apply the change in accounting method retroactively. We believe that now and going forward, this will present a more accurate picture of the value and performance of this investment”

Fourth Quarter and Full Year 2012 Highlights
Revenue for the quarter was $49.9 million, a 18.8% decrease from the fourth quarter of 2011, and an 8% sequential decrease as compared to the third quarter of 2012. Revenue for the full year was a record $223 million, a 11.7% increase from $200 million in 2011.

Volume for the quarter was 14.1 million gallons versus 16.9 million gallons for the same period of 2011, a decrease of 16.8%. Full year volume was a record 63.6 million for 2012 compared to 54.3 million in 2011, a 17.1% increase.

Gross profit for the quarter was $6.9 million compared to $10.2 million in 2011, a 32.0% decrease. Gross profit for full year 2012 was $30.8 million compared to $25.9 million, an 18.7% increase.

Adjusted EBITDA for the fourth quarter was $3.7 million compared to $7.2 million for fourth quarter 2011. Adjusted EBITDA for the full year 2012 was $20.9 million compared to $16.9 million for the full year 2011.

Net income for the fourth quarter including our equity in AMAK was $2.9 million or $0.12 per share as compared to net income of $3.8 million or $0.16 per share in the fourth quarter of 2011. Net income including our equity in earnings from AMAK for the full year was $11.4 million or $0.46 per diluted share as compared to net income of $13.9 million or $0.57 per diluted share in the prior year. The change in accounting method for AMAK increased diluted 2011 EPS by approximately $.22 from what was originally reported.

We completed the year with $9.5 million in cash compared to $6.7 million as of December 31, 2011. We had $29.2 million in working capital compared to $29.7 million at 2011 year end and a current ratio of 3.4 to 1.

Earnings Call
Arabian American will host a conference call and live webcast at 4:30 p.m. Eastern Time, today. All parties interested in participating should call 1-877-941-4774 if calling within the United States or 1-480-629-9760 if calling internationally. An audio playback will be available until March 14, 2013. To listen to the playback, please call 1-877-870-5176 if calling within the United States or 1-858-384-5517 if calling internationally. Use pin number 4601831 for the audio replay.

A link to the simultaneous webcast of today’s call will be available at http://www.arabianamericandev.com under the investor relations tab and is available through Windows Media Player or RealPlayer. A webcast replay of the call will also be available on the Company’s website under the investor relations tab for one year after the call date.

About Arabian American Development Company (ARSD)
ARSD owns and operates a petrochemical facility located in southeast Texas, just north of Beaumont which specializes in high purity petrochemical solvents and other solvent type manufacturing. The Company is also the original developer and a 35% owner of Al Masane Al Kobra Mining Co., a Saudi Arabian joint stock company.

Use of Non-GAAP Measures
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). This press release contains the non-GAAP measure of EBITDA. We have also included “adjusted EBITDA” which excludes the effect of equity in earnings (loss) from AMAK. 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.

Forward-Looking Statements
Statements in this press release 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 our belief, as well as, assumptions made by and information currently available to us. 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 Arabian American’s filings with the Securities and Exchange Commission, including Arabian American’s Annual Report on Form 10-K for the year ended December 31, 2012, and the Company’s subsequent Quarterly Reports on Form 10-Q. All forward-looking statements included in this press release are based upon information available to the company as of the date of this press release.

Company Contact:
Nick Carter, President and Chief Executive Officer
(409) 385-8300
ncarter@arabianamericandev.com

Investor Relations Contact:
Kim Rogers-Carrete, Principal
Genesis Select
(303) 415-0200
krogersc@genesisselect.com

Or

Matthew Selinger, Principal
Genesis Select
(303) 415-0200
mselinger@genesisselect.com

- Tables follow -

    ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES

    CONSOLIDATED BALANCE SHEETS

                                                       December 31,
                                                       ------------

                                                      2012         2011
                                                      ----         ----

                                                            (restated)

                                                     (thousands of
                                                       dollars)

    ASSETS
    ------

    CURRENT ASSETS

      Cash and cash equivalents                     $9,508       $6,674

      Derivative instruments                             -          393

      Trade receivables, net                        15,802       23,198

      Advance to AMAK                                2,162          120

      Prepaid expenses and other assets              1,561          562

      Contractual based intangible assets              250          250

      Inventories                                    9,840        9,456

      Deferred income taxes                          1,054        1,169

      Taxes receivable                               1,182            -
                                                     -----          ---

              Total current assets                  41,359       41,822

      PLANT, PIPELINE, AND EQUIPMENT - AT COST      68,482       60,624

        LESS ACCUMULATED DEPRECIATION              (28,062)     (23,672)
                                                   -------      -------

      PLANT, PIPELINE, AND EQUIPMENT, NET           40,420       36,952

      INVESTMENT IN AMAK                            38,971       38,105

      MINERAL PROPERTIES IN THE UNITED STATES          588          588

    CONTRACTUAL BASED INTANGIBLE ASSETS, net
     of current portion                                104          355

      OTHER ASSETS                                      11           11
                                                       ---          ---

    TOTAL ASSETS                                  $121,453     $117,833
                                                  ========     ========

    ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES

    CONSOLIDATED BALANCE SHEETS - Continued

                                                           December 31,
                                                           ------------

                                                          2012         2011
                                                          ----         ----

                                                                (restated)

                                                         (thousands of
                                                           dollars)

    LIABILITIES
    -----------

      CURRENT LIABILITIES

        Accounts payable                                $6,306       $5,857

        Accrued interest                                    96          116

        Current portion of derivative instruments          301          345

        Accrued liabilities                              2,687        2,944

        Accrued liabilities in Saudi Arabia                140          140

        Notes payable                                       12           12

        Current portion of post-retirement benefit         269          258

        Current portion of long-term debt                1,500        1,500

        Current portion of other liabilities               880          937
                                                           ---          ---

              Total current liabilities                 12,191       12,109

      LONG-TERM DEBT, net of current portion            14,239       22,739

      POST- RETIREMENT BENEFIT, net of current
       portion                                             649          649

      DERIVATIVE INSTRUMENTS, net of current
       portion                                             592          789

      OTHER LIABILITIES, net of current portion            379        1,071

      DEFERRED INCOME TAXES                             10,094        9,394
                                                        ------        -----

              Total liabilities                         38,144       46,751

    COMMITMENTS AND CONTINGENCIES
    -----------------------------

    EQUITY
    ------

      Common Stock ? authorized 40 million shares
       of $.10 par value;                                2,381        2,373

          issued and outstanding, 23.8 million and
           23.7 million shares

          in 2012 and 2011, respectively

      Additional Paid-in Capital                        44,791       44,138

      Accumulated Other Comprehensive Loss                (580)        (748)

      Retained Earnings                                 36,428       25,030
                                                        ------       ------

     Total Arabian American Development Company
      Stockholders'                                     83,020       70,793

        Equity

     Noncontrolling interest                               289          289
                                                           ---          ---

           Total equity                                 83,309       71,082
                                                        ------       ------

         TOTAL LIABILITIES AND EQUITY                 $121,453     $117,833
                                                      ========     ========

    ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF INCOME

                                                          THREE MONTHS ENDED            12 MONTHS ENDED

                                                                31-Dec                       31-Dec
                                                                ------                       ------

                                                             2012         2011          2012         2011
                                                             ----         ----          ----         ----

                                                                   (restated)                 (restated)

                                                                    (thousands of dollars)

    REVENUES

      Petrochemical Product Sales                         $48,831      $60,183      $218,512     $194,620

      Processing Fees                                       1,106        1,295         4,346        4,897
                                                            -----        -----         -----        -----

                                                           49,937       61,478       222,858      199,517

    OPERATING COSTS AND EXPENSES

      Cost of Petrochemical Product

        Sales and Processing                               43,031       51,317       192,100      173,600
                                                           ------       ------       -------      -------

       GROSS PROFIT                                         6,906       10,161        30,758       25,917

    GENERAL AND ADMINISTRATIVE
    EXPENSES

      General and Administrative                            4,027        3,643        12,782       11,778

      Depreciation                                            145          120           520          476
                                                              ---          ---           ---          ---

                                                            4,172        3,763        13,302       12,254
                                                            -----        -----        ------       ------

    OPERATING INCOME                                        2,734        6,398        17,456       13,663

    OTHER INCOME (EXPENSE)

      Interest Income                                           1            -             3            4

      Interest Expense                                       (112)        (185)         (547)        (699)

      Losses on cash flow hedge reclassified
       from OCI                                               (84)         (98)         (359)        (414)

      Equity in earnings (loss) from AMAK                   1,419         (255)          192       (1,018)

      Gain on additional equity issue by AMAK                 184            -           674        8,850

      Miscellaneous Income (Expense)                          (25)         (12)         (117)           3
                                                              ---          ---          ----          ---

                                                            1,383         (550)         (154)       6,726
                                                            -----         ----          ----        -----

     INCOME BEFORE INCOME TAX EXPENSE                       4,117        5,848        17,302       20,389

    INCOME TAXES                                            1,190        2,026         5,904        6,505
                                                            -----        -----         -----        -----

      NET INCOME                                            2,927        3,822        11,398       13,884

    NET LOSS ATTRIBUTABLE TO                                    -            -             -            -
    NONCONTROLLING INTEREST

    NET INCOME ATTRIBUTABLE TO                             $2,927       $3,822       $11,398      $13,884
    ARABIAN AMERICAN DEVELOPMENT CO.

    Net income per common share

      Basic earnings per share                              $0.12        $0.16         $0.47        $0.58

      Basic weighted average number

      of common shares outstanding                         24,105       24,001        24,081       23,993
                                                           ======       ======        ======       ======

      Diluted earnings per share                            $0.12        $0.16         $0.46        $0.57

      Diluted weighted average number

      of common shares outstanding                         24,704       24,523        24,745       24,267
                                                           ======       ======        ======       ======

    ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES RECONCILIATION OF SELECTED
    GAAP MEASURES TO NON-GAAP MEASURES(1)

                                                                       THREE MONTHS ENDED                   12 MONTHS ENDED

                                                                             31-Dec                             31-Dec
                                                                             ------                             ------

                                                                          2012             2011            2012              2011
                                                                          ----             ----            ----              ----

                                                                                         (in thousands)
                                                                                          -------------

    NET INCOME                                                          $2,927           $3,822         $11,398           $13,884

    Add back:

      Interest                                                             196              283             906             1,113

      Taxes                                                              1,190            2,026           5,904             6,505

      Depreciation                                                         145              120             520               476

      Depreciation in Cost of sales                                        817              695           3,053             2,744

    EBITDA                                                              $5,275           $6,946         $21,781           $24,722
                                                                        ------           ------         -------           -------

      Equity in (earnings) losses in AMAK                               (1,603)             255            (866)           (7,832)

    Adjusted EBITDA                                                     $3,672           $7,201         $20,915           $16,890
                                                                        ------           ------         -------           -------

                                     12/31/2012                   12/31/2011
                                     ----------                   ----------

                   (in thousands except ratio)  (in thousands except ratio)
                   --------------------------    --------------------------

    Current
     assets                             $41,359                      $41,822

    Current
     liabilities                        $12,191                      $12,109

    Working
     capital                            $29,168                      $29,713
                                        =======                      =======

    (current
     assets
     less
     current
     liabilities)

    Current
     ratio                                  3.4
                                            ===

     (current
      assets
      divided
      by
      current
      liabilities)

    (1) This press release 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.

SOURCE Arabian American Development Co.


Source: PR Newswire