– Net sales grew 38% over the third quarter of
2014 –
– Record total gallons sold for the third quarter
of 2015 at 211.6 million –
– GAAP net loss per share was $0.36 and adjusted
net loss per share was $0.18 –
– Adjusted EBITDA was $2.4 million –
– Reflects first quarter of consolidating
Aventine operations –
Pacific Ethanol, Inc. (NASDAQ:PEIX), a leading
producer and marketer of low-carbon renewable fuels in the United
States, reported its financial results for the three- and
nine-months ended September 30, 2015.
Neil Koehler, the company's president and CEO,
stated: "Our third quarter of 2015 results were impacted by the
lower production margin environment and one-time expenses related
to our recent acquisition of the Aventine assets. We made great
strides at integrating and improving the new production facilities
and are beginning to see the benefits of this important
acquisition. We remain focused on optimizing all of our assets,
expanding our ethanol marketing, and building on our success of
implementing plant improvement and yield enhancement initiatives.
We are well positioned to expand our market share and improve our
financial results."
Financial Results for the Three Months Ended September
30, 2015
Net sales were $380.6 million for the third quarter of 2015, an
increase of 38% when compared to $275.6 million for the third
quarter of 2014.
Cost of goods sold was $388.0 million for the third quarter of
2015 and included $8.7 million in purchase accounting adjustments.
These one-time, largely non-cash adjustments were related to the
company's acquisition of Aventine Renewable Energy, which closed on
July 1, 2015. Cost of goods sold for the third quarter of 2014 was
$257.6 million.
Gross loss was $7.4 million for the third quarter of 2015,
compared a gross profit of $18.0 million for the third quarter of
2014, reflecting a decrease in production margins compared to the
prior year.
Selling, general and administrative ("SG&A") expenses were
$7.4 million for the third quarter of 2015, compared to $4.4
million for the third quarter of 2014.
Operating loss for the third quarter of 2015 was $14.8 million,
compared to operating income of $13.6 million for the third quarter
of 2014.
Interest expense, net for the third quarter of 2015 was $5.2
million, compared to $1.1 million for the third quarter of
2014.
Provision for income taxes for the third quarter of 2015 was a
benefit of $3.9 million, compared to an expense of $3.2 million for
the third quarter of 2014.
Net loss available to common stockholders for the third quarter
of 2015 was $15.0 million, or $0.36 per diluted share, and includes
$8.7 million in purchase accounting adjustments. This compares to
net income available to common stockholders of $3.7 million, or
$0.15 per diluted share, for the third quarter of 2014.
Adjusted net loss was $7.5 million, or $0.18 per diluted share,
for the third quarter of 2015, compared to adjusted net income of
$8.1 million, or $0.33 per diluted share, in the third quarter of
2014.
Adjusted EBITDA was $2.4 million for the third quarter of 2015,
compared to $15.5 million for the third quarter of 2014.
Cash and cash equivalents were $53.1 million at September 30,
2015, compared to $62.1 million at December 31, 2014.
Financial Results for the Nine Months Ended September
30, 2015
Net sales were $814.4 million for the first nine months of 2015,
compared to $851.3 million for the same period of 2014.
Gross loss was $2.1 million for the first nine months of 2015,
compared to a gross profit of $90.1 million for the same period of
2014.
SG&A expenses were $16.3 million and included approximately
$1.4 million in acquisition-related expenses for the first nine
months of 2015, compared to SG&A expenses of $12.4 million for
the same period of 2014.
Operating loss for the first nine months of 2015 was $18.5
million, compared to operating income of $77.7 million for the same
period of 2014.
Net loss available to common stockholders was $19.0 million for
the first nine months of 2015, or $0.63 per diluted share, compared
to net income available to common stockholders of $7.8 million, or
$0.35 per diluted share, for the same period of 2014.
Adjusted net loss was $11.7 million, or $0.39 per diluted share,
for the first nine months of 2015, compared to adjusted net income
of $50.0 million, or $2.26 per diluted share, for the same period
of 2014.
Adjusted EBITDA was $5.1 million for the first nine months of
2015, compared to $78.7 million for the same period of 2014.
Q3 Results Conference Call
Management will host a conference call at 8:00 a.m. PT/11:00
a.m. ET on November 5, 2015. Neil Koehler, Chief Executive Officer,
and Bryon McGregor, Chief Financial Officer, will deliver prepared
remarks followed by a question and answer session. The webcast for
the call can be accessed from Pacific Ethanol's website at
www.pacificethanol.com. Alternatively, you may dial the following
number up to ten minutes prior to the scheduled conference call
time: (877) 847-6066. International callers should dial 00-1-(970)
315-0267. The pass code will be 69485612#.
If you are unable to participate on the live call, the webcast
will be archived for replay on Pacific Ethanol's website for one
year. In addition, a telephonic replay will be available at 2:00
p.m. Eastern Time on Thursday, November 5, 2015 through 11:59 p.m.
Eastern Time on Thursday, November 12, 2015. To access the replay,
please dial (855) 859-2056. International callers should dial
00-1-(404) 537-3406. The pass code will be 69485612#.
Use of Non-GAAP Measures
Management believes that certain financial measures not in
accordance with generally accepted accounting principles ("GAAP")
are useful measures of operations. The company defines Adjusted Net
Income (Loss) as unaudited income (loss) available to common
stockholders before fair value adjustments and warrant inducements,
purchase accounting adjustments and gain (loss) on extinguishments
of debt. The company defines Adjusted EBITDA as unaudited net
income (loss) attributed to Pacific Ethanol before interest,
provision for income taxes, purchase accounting adjustments,
depreciation and amortization and fair value adjustments and
warrant inducements. Tables are provided at the end of this release
that provide a reconciliation of Adjusted Net Income (Loss) and
Adjusted EBITDA to their most directly comparable GAAP measures.
Management provides these non-GAAP measures so that investors will
have the same financial information that management uses, which may
assist investors in properly assessing the company's performance on
a period-over-period basis. Adjusted Net Income (Loss) and Adjusted
EBITDA are not measures of financial performance under GAAP, and
should not be considered alternatives to net income (loss) or any
other measure of performance under GAAP, or to cash flows from
operating, investing or financing activities as an indicator of
cash flows or as a measure of liquidity. Adjusted Net Income (Loss)
and Adjusted EBITDA have limitations as analytical tools and you
should not consider these measures in isolation or as a substitute
for analysis of the company's results as reported under GAAP.
About Pacific Ethanol, Inc.
Pacific Ethanol, Inc. (PEIX) is the leading producer and
marketer of low-carbon renewable fuels in the Western United
States. With the addition of four Midwestern ethanol plants in July
2015, Pacific Ethanol more than doubled the scale of its
operations, entered new markets, and expanded its mission to be the
industry leader in the production and marketing of low carbon
renewable fuels. Pacific Ethanol owns and operates eight ethanol
production facilities, four in the Western states of California,
Oregon and Idaho, and four in the Midwestern states of Illinois and
Nebraska. The plants have a combined production capacity of 515
million gallons per year, produce over one million tons per year of
ethanol co-products such as wet and dry distillers grains, wet and
dry corn gluten feed, condensed distillers solubles, corn gluten
meal, corn germ, corn oil, distillers yeast and CO2. Pacific
Ethanol markets and distributes ethanol and co-products
domestically and internationally. Pacific Ethanol's subsidiary,
Kinergy Marketing LLC, markets all ethanol for the Pacific Ethanol
plants as well as for third parties, with over 800 million gallons
of ethanol marketed annually based on historical volumes. Pacific
Ethanol's subsidiary, Pacific Ag. Products LLC, markets wet and dry
distillers grains. For more information please visit
www.pacificethanol.com.
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995
Statements and information contained in this communication that
refer to or include the Pacific Ethanol's estimated or anticipated
future results or other non-historical expressions of fact are
forward-looking statements that reflect Pacific Ethanol's current
perspective of existing trends and information as of the date of
the communication. Forward looking statements generally will be
accompanied by words such as "anticipate," "believe," "plan,"
"could," "should," "estimate," "expect," "forecast," "outlook,"
"guidance," "intend," "may," "might," "will," "possible,"
"potential," "predict," "project," or other similar words, phrases
or expressions. Such forward-looking statements include, but are
not limited to, market conditions, including the supply of and
demand for ethanol and co-products, as well as margins and
statements about the benefits of the Aventine acquisition,
including future financial and operating results, synergies and
cost savings that may result from the acquisition; and Pacific
Ethanol's other plans, objectives, expectations and intentions. It
is important to note that Pacific Ethanol's plans, objectives,
expectations and intentions are not predictions of actual
performance. Actual results may differ materially from Pacific
Ethanol's current expectations depending upon a number of factors
affecting Pacific Ethanol's business and risks associated with
acquisition transactions. These factors include, among others,
adverse economic and market conditions, including for ethanol and
its co-products; raw material costs, including ethanol production
input costs; changes in governmental regulations and policies; and
insufficient capital resources. These factors also include, among
others, the inherent uncertainty associated with financial and
other projections; integration of Aventine and the ability to
recognize the anticipated synergies and benefits of the Aventine
acquisition; the anticipated size of the markets and continued
demand for Pacific Ethanol's products; the impact of competitive
products and pricing; the risks and uncertainties normally incident
to the ethanol production and marketing industries; the difficulty
of predicting the timing or outcome of pending or future litigation
or government investigations; changes in generally accepted
accounting principles; successful compliance with governmental
regulations applicable to Pacific Ethanol's facilities, products
and/or businesses; changes in the laws and regulations; changes in
tax laws or interpretations that could increase Pacific Ethanol's
consolidated tax liabilities; the loss of key senior management or
staff; and other events, factors and risks previously and from time
to time disclosed in Pacific Ethanol's filings with the Securities
and Exchange Commission including, specifically, those factors set
forth in the "Risk Factors" section contained in the Company's Form
10-Q filed with the Securities and Exchange Commission on August
10, 2015.
[Tables Follow]
PACIFIC ETHANOL,
INC. |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
(unaudited, in
thousands, except per share data) |
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Net sales |
$ 380,622 |
$ 275,573 |
$ 814,419 |
$ 851,260 |
Cost of goods sold |
388,002 |
257,587 |
816,532 |
761,153 |
Gross profit (loss) |
(7,380) |
17,986 |
(2,113) |
90,107 |
Selling, general and administrative
expenses |
7,446 |
4,392 |
16,344 |
12,377 |
Income (loss) from operations |
(14,826) |
13,594 |
(18,457) |
77,730 |
Fair value adjustments and warrant
inducements |
1,202 |
(4,378) |
1,413 |
(39,737) |
Interest expense, net |
(5,167) |
(1,133) |
(7,187) |
(8,370) |
Loss on extinguishments of debt |
— |
— |
— |
(2,363) |
Other income (expense), net |
203 |
(172) |
16 |
(734) |
Income (loss) before provision for income
taxes |
(18,588) |
7,911 |
(24,215) |
26,526 |
Provision (benefit) for income taxes |
(3,925) |
3,163 |
(6,095) |
13,629 |
Consolidated net income (loss) |
(14,663) |
4,748 |
(18,120) |
12,897 |
Net (income) loss attributed to
noncontrolling interests |
— |
(723) |
87 |
(4,126) |
Net income (loss) attributed to Pacific
Ethanol |
$ (14,663) |
$ 4,025 |
$ (18,033) |
$ 8,771 |
Preferred stock dividends |
$ (319) |
$ (319) |
$ (946) |
$ (946) |
Net income (loss) available to common
stockholders |
$ (14,982) |
$ 3,706 |
$ (18,979) |
$ 7,825 |
Net income (loss) per share, basic |
$ (0.36) |
$ 0.16 |
$ (0.63) |
$ 0.40 |
Net income (loss) per share, diluted |
$ (0.36) |
$ 0.15 |
$ (0.63) |
$ 0.35 |
Weighted-average shares outstanding,
basic |
41,861 |
22,986 |
30,170 |
19,713 |
Weighted-average shares outstanding,
diluted |
41,861 |
24,307 |
30,170 |
22,073 |
|
|
PACIFIC ETHANOL,
INC. |
CONSOLIDATED BALANCE
SHEETS |
(unaudited, in
thousands, except par value) |
|
|
|
|
September 30, |
December 31, |
ASSETS |
2015 |
2014 |
Current Assets: |
|
|
Cash and cash equivalents |
$ 53,056 |
$ 62,084 |
Accounts receivable, net |
51,379 |
34,612 |
Inventories |
48,238 |
18,550 |
Income tax receivables |
14,097 |
— |
Prepaid inventory |
11,100 |
11,595 |
Other current assets |
5,084 |
12,710 |
Total current assets |
182,954 |
139,551 |
Property and equipment, net |
472,632 |
155,302 |
Other Assets: |
|
|
Intangible assets, net |
2,566 |
2,786 |
Other assets |
9,882 |
1,863 |
Total other assets |
12,448 |
4,649 |
Total Assets |
$ 668,034 |
$ 299,502 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
Current Liabilities: |
|
|
Accounts payable – trade |
$ 41,447 |
$ 13,122 |
Accrued liabilities |
5,846 |
6,203 |
Current portion – capital leases |
4,217 |
4,077 |
Current portion – long-term debt |
17,003 |
— |
Other current liabilities |
7,120 |
2,045 |
Total current liabilities |
75,633 |
25,447 |
|
|
|
Long-term debt, net of current portion |
190,166 |
34,533 |
Capital leases, net of current portion |
5,279 |
2,055 |
Warrant liabilities at fair value |
501 |
1,986 |
Deferred tax liabilities |
5,293 |
17,040 |
Other liabilities |
20,451 |
459 |
Total Liabilities |
297,323 |
81,520 |
|
|
|
Stockholders' Equity: |
|
|
Pacific Ethanol, Inc. Stockholders'
Equity: |
|
|
Preferred stock, $0.001 par value; 10,000
shares authorized; Series A: 0 shares issued and outstanding as
of September 30, 2015 and December 31, 2014 Series
B: 927 shares issued and outstanding as of September 30, 2015 and
December 31, 2014 |
1 |
1 |
Common stock, $0.001 par value; 300,000
shares authorized; 38,986 and 24,499 shares issued and outstanding
as of September 30, 2015 and December 31, 2014,
respectively |
39 |
25 |
Non-voting common stock, $0.001 par
value; 3,553 shares authorized; 3,540 and no shares issued and
outstanding as of September 30, 2015 and December 31, 2014,
respectively |
4 |
— |
Additional paid-in capital |
901,978 |
725,813 |
Accumulated deficit |
(531,311) |
(512,332) |
Total Pacific Ethanol, Inc. Stockholders'
Equity |
370,711 |
213,507 |
Noncontrolling interests |
— |
4,475 |
Total Stockholders' Equity |
370,711 |
217,982 |
Total Liabilities and Stockholders'
Equity |
$ 668,034 |
$ 299,502 |
|
|
Reconciliation of
Adjusted Net Income (Loss) to Net Income (Loss) |
|
|
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
(in thousands) (unaudited) |
2015 |
2014 |
2015 |
2014 |
Net income (loss) available to common
stockholders |
$ (14,982) |
$ 3,706 |
$ (18,979) |
$ 7,825 |
Adjustments: |
|
|
|
|
Fair value adjustments and warrant
inducements |
(1,202) |
4,378 |
(1,413) |
39,737 |
Purchase accounting adjustments |
8,700 |
— |
8,700 |
|
Extinguishments of debt |
-- |
-- |
-- |
2,363 |
Total adjustments |
7,498 |
4,378 |
7,287 |
42,100 |
Adjusted net income (loss) |
$ (7,484) |
$ 8,084 |
$ (11,692) |
$ 49,925 |
Adjusted net income (loss) per share –
diluted |
$ (0.18) |
$ 0.33 |
$ (0.39) |
$ 2.26 |
Weighted-average shares outstanding,
diluted |
41,861 |
24,307 |
30,170 |
22,073 |
|
|
Reconciliation of
Adjusted EBITDA to Net Income (Loss) |
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
(in thousands) (unaudited) |
2015 |
2014 |
2015 |
2014 |
Net income (loss) attributed to Pacific
Ethanol |
$ (14,663) |
$ 4,025 |
$ (18,033) |
$ 8,771 |
Adjustments: |
|
|
|
|
Interest expense* |
5,158 |
928 |
7,022 |
7,523 |
Provision (benefit) for income
taxes* |
(3,925) |
3,007 |
(6,095) |
13,473 |
Purchase accounting adjustments |
8,700 |
— |
8,700 |
— |
Fair value adjustments and warrant
inducements |
(1,202) |
4,378 |
(1,413) |
39,737 |
Depreciation and amortization
expense* |
8,355 |
3,116 |
14,919 |
9,168 |
Total adjustments |
17,086 |
11,429 |
23,133 |
69,901 |
Adjusted EBITDA |
$ 2,423 |
$ 15,454 |
$ 5,100 |
$ 78,672 |
* Adjusted for noncontrolling
interests. |
|
Commodity Price
Performance |
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
(unaudited) |
2015 |
2014 |
2015 |
2014 |
West production gallons sold (in
millions) |
47.0 |
46.8 |
139.1 |
133.1 |
Central production gallons sold (in
millions) |
62.6 |
— |
62.6 |
— |
Ethanol third party gallons sold (in
millions) |
102.0 |
86.9 |
286.3 |
245.5 |
Total ethanol gallons sold (in
millions) |
211.6 |
133.7 |
488.0 |
378.6 |
|
|
|
|
|
Average ethanol sales price per
gallon |
$ 1.67 |
$ 2.32 |
$ 1.69 |
$ 2.59 |
Average CBOT ethanol price per
gallon |
$ 1.51 |
$ 2.02 |
$ 1.53 |
$ 2.16 |
|
|
|
|
|
Corn cost – CBOT equivalent |
$ 3.72 |
$ 3.88 |
$ 3.74 |
$ 4.40 |
Average basis |
$ 0.37 |
$ 1.27 |
$ 0.62 |
$ 1.22 |
Delivered corn cost |
$ 4.09 |
$ 5.15 |
$ 4.36 |
$ 5.62 |
|
|
|
|
|
Total co-product tons sold (in
thousands) |
670.0 |
385.0 |
1,398.1 |
1,100.8 |
Co-product return % (1) |
39.0% |
30.8% |
36.3% |
33.9% |
(1) Co-product revenue as a
percentage of delivered cost of corn. |
CONTACT: Company IR Contact:
Pacific Ethanol, Inc.
916-403-2755
866-508-4969
Investorrelations@pacificethanol.com
IR Agency Contact:
Becky Herrick
LHA
415-433-3777
Media Contact:
Paul Koehler
Pacific Ethanol, Inc.
916-403-2790
paulk@pacificethanol.com
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