– Grew net sales 17% quarterly and 36% annually
over the same periods in 2015 –– Recorded net income available to
common stockholders of $12.6 million for Q4 and $0.1 million for
the full year 2016 –– Reported adjusted EBITDA of $27.4 million for
Q4 and $58.9 million for the full year 2016 –– Achieved record
924.5 million total gallons sold for the full year 2016 –
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 twelve
months ended December 31, 2016.
Neil Koehler, the company’s president and CEO,
stated: “Our fourth quarter 2016 performance represents a strong
close to a very productive year for Pacific Ethanol. We grew net
sales by 17% and improved gross profit by $17.2
million compared to the fourth quarter of 2015. These results
reflect the benefits of the acquisition and successful integration
of our Midwest assets, and the incremental value we have generated
through our efforts to optimize all of our plants. In addition, we
successfully refinanced our term debt and improved liquidity during
the fourth quarter, significantly lowering our cost of capital and
accomplishing a major milestone for the company.”
“The outlook for 2017 is encouraging. We expect
ethanol demand to remain strong, supported by healthy exports and
increasing gasoline demand. We also continue to evaluate growth
opportunities such as plant investment initiatives that further
optimize our production, lower our carbon score and produce
high-value and near-term returns.”
Financial Results for the Three Months
Ended December 31, 2016 Compared to 2015
- Net sales were $441.7 million, compared to $376.8 million. The
increase was attributable to increases in gallons sold from both
production and third party sales, as well as a higher average
ethanol sales price per gallon.
- Gross profit was $26.7 million, compared $9.5 million. The
improvement reflects stronger production margins in the fourth
quarter of 2016.
- Selling, general and administrative ("SG&A") expenses were
$7.9 million, compared to $7.1 million.
- Operating income was $18.8 million, compared to $0.5
million.
- Net income available to common stockholders was $12.6 million,
or $0.30 per share, compared to a net loss of $1.1 million, or
$0.03 per share.
- Adjusted EBITDA was $27.4 million, compared to $11.0
million.
- Cash and cash equivalents were $68.6 million at December 31,
2016, compared to $52.7 million at December 31, 2015.
Financial Results for the Twelve Months
Ended December 31, 2016 Compared to 2015
- Net sales were $1,624.8 million, compared to $1,191.2
million.
- Gross profit was $51.8 million, compared to $7.4 million.
- SG&A expenses were $28.3 million, compared to $23.4
million.
- Operating income was $23.5 million, compared to an operating
loss of $18.0 million.
- Net income available to common stockholders was $0.1 million,
or $0.00 per share, compared to a net loss of $20.1 million, or
$0.60 per share.
- Adjusted EBITDA was $58.9 million, compared to $16.1
million.
Fourth Quarter and Year-end Results
Conference CallManagement will host a conference call at
8:00 a.m. PT/11:00 a.m. Eastern Time on March 2, 2017. CEO Neil
Koehler and CFO Bryon McGregor will deliver prepared remarks
followed by a question and answer session.
The webcast 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 76702142. 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, March 2, 2017 through 11:59 p.m.
Eastern Time on Thursday, March 9, 2017. To access the replay,
please dial (855) 859-2056. International callers should dial
00-1-(404) 537-3406. The pass code will be 76702142.
Use of Non-GAAP
MeasuresManagement believes that certain financial
measures not in accordance with generally accepted accounting
principles ("GAAP") are useful measures of operations. The company
defines Adjusted EBITDA as unaudited net income (loss) attributed
to Pacific Ethanol before interest expense, benefit for income
taxes, asset impairments, purchase accounting adjustments, fair
value adjustments, and depreciation and amortization expense. A
table is provided at the end of this release that provides a
reconciliation of Adjusted EBITDA to its most directly comparable
GAAP measure. Management provides this non-GAAP measure 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
EBITDA is a not measure 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 EBITDA has
limitations as an analytical tool and you should not consider this
measure 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
advance its position as an 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 – on a dry matter
basis – 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 Pacific Ethanol’s plants as well as
for third parties, approaching one billion 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 1995Statements 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
domestic and international demand for ethanol and co-products 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. These factors
include, among others, adverse economic and market conditions,
including for ethanol and its co-products; fluctuations in the
price of and demand for oil and gasoline; raw material costs,
including ethanol production input costs and changes in
governmental regulations and policies. These factors also include,
among others, the inherent uncertainty associated with financial
and other projections; 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; changes in generally accepted accounting principles;
successful compliance with governmental regulations applicable to
Pacific Ethanol’s facilities, products and/or businesses; changes
in laws and regulations; 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 November
8, 2016.
[Tables Follow]
PACIFIC ETHANOL, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(unaudited, in thousands, except per share
data) |
|
|
Three Months EndedDecember 31, |
Years EndedDecember 31, |
|
2016 |
2015 |
2016 |
2015 |
|
|
|
|
|
Net sales |
$ |
441,719 |
|
$ |
376,757 |
|
$ |
1,624,758 |
|
$ |
1,191,176 |
|
Cost of goods sold |
|
415,024 |
|
|
367,234 |
|
|
1,572,926 |
|
|
1,183,766 |
|
Gross profit |
|
26,695 |
|
|
9,523 |
|
|
51,832 |
|
|
7,410 |
|
Selling, general and
administrative expenses |
|
7,887 |
|
|
7,068 |
|
|
28,323 |
|
|
23,412 |
|
Asset impairments |
|
— |
|
|
1,970 |
|
|
— |
|
|
1,970 |
|
Income (loss) from
operations |
|
18,808 |
|
|
485 |
|
|
23,509 |
|
|
(17,972 |
) |
Fair value
adjustments |
|
(504 |
) |
|
228 |
|
|
(557 |
) |
|
1,641 |
|
Interest expense,
net |
|
(5,763 |
) |
|
(5,407 |
) |
|
(22,406 |
) |
|
(12,594 |
) |
Other income (expense),
net |
|
(93 |
) |
|
2 |
|
|
(1 |
) |
|
18 |
|
Income (loss) before
provision for income taxes |
|
12,448 |
|
|
(4,692 |
) |
|
545 |
|
|
(28,907 |
) |
Benefit for income
taxes |
|
(736 |
) |
|
(3,939 |
) |
|
(981 |
) |
|
(10,034 |
) |
Consolidated net income
(loss) |
|
13,184 |
|
|
(753 |
) |
|
1,526 |
|
|
(18,873 |
) |
Net (income) loss
attributed to noncontrolling interests |
|
(107 |
) |
|
— |
|
|
(107 |
) |
|
87 |
|
Net income (loss)
attributed to Pacific Ethanol |
$ |
13,077 |
|
$ |
(753 |
) |
$ |
1,419 |
|
$ |
(18,786 |
) |
Preferred stock
dividends |
$ |
(319 |
) |
$ |
(319 |
) |
$ |
(1,269 |
) |
$ |
(1,265 |
) |
Income allocated to
participating securities |
$ |
(189 |
) |
$ |
— |
|
$ |
(2 |
) |
$ |
— |
|
Income (loss) available
to common stockholders |
$ |
12,569 |
|
$ |
(1,072 |
) |
$ |
148 |
|
$ |
(20,051 |
) |
Net income (loss) per
share, basic |
$ |
0.30 |
|
$ |
(0.03 |
) |
$ |
0.00 |
|
$ |
(0.60 |
) |
Net income (loss) per
share, diluted |
$ |
0.30 |
|
$ |
(0.03 |
) |
$ |
0.00 |
|
$ |
(0.60 |
) |
Weighted-average shares
outstanding, basic |
|
42,258 |
|
|
42,052 |
|
|
42,182 |
|
|
33,173 |
|
Weighted-average shares
outstanding, diluted |
|
42,489 |
|
|
42,052 |
|
|
42,251 |
|
|
33,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACIFIC ETHANOL, INC. |
CONSOLIDATED BALANCE SHEETS |
(unaudited, in thousands, except par
value) |
|
|
December 31, |
ASSETS |
2016 |
2015 |
Current Assets: |
|
|
Cash and cash equivalents |
$ |
68,590 |
$ |
52,712 |
Accounts receivable, net |
|
86,275 |
|
61,346 |
Inventories |
|
60,070 |
|
60,820 |
Prepaid inventory |
|
9,946 |
|
5,973 |
Income tax receivables |
|
5,730 |
|
10,654 |
Derivative assets |
|
978 |
|
2,081 |
Other current assets |
|
3,612 |
|
4,356 |
Total current assets |
|
235,201 |
|
197,942 |
Property and equipment, net |
|
465,190 |
|
464,960 |
Other Assets: |
|
|
Intangible assets, net |
|
2,678 |
|
2,678 |
Other assets |
|
5,169 |
|
9,100 |
Total other assets |
|
7,847 |
|
11,778 |
Total Assets |
$ |
708,238 |
$ |
674,680 |
|
|
|
|
|
PACIFIC ETHANOL, INC. |
CONSOLIDATED BALANCE SHEETS
(CONTINUED) |
(unaudited, in thousands, except par
value) |
|
|
December 31, |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
2016 |
2015 |
Current Liabilities: |
|
|
Accounts payable – trade |
$ |
37,051 |
|
$ |
30,520 |
|
Accrued liabilities |
|
20,280 |
|
|
10,072 |
|
Current portion – capital leases |
|
794 |
|
|
4,248 |
|
Current portion – long-term debt |
|
10,500 |
|
|
17,003 |
|
Accrued PE Op Co. purchase |
|
3,828 |
|
|
3,828 |
|
Derivative liabilities |
|
4,115 |
|
|
1,848 |
|
Other current liabilities |
|
2,273 |
|
|
5,390 |
|
Total current liabilities |
|
78,841 |
|
|
72,909 |
|
|
|
|
Long-term debt, net of current portion |
|
188,028 |
|
|
203,861 |
|
Capital leases, net of current portion |
|
547 |
|
|
4,183 |
|
Warrant liabilities |
|
651 |
|
|
273 |
|
Other liabilities |
|
21,910 |
|
|
21,910 |
|
Total Liabilities |
|
289,977 |
|
|
303,136 |
|
|
|
|
Stockholders’ Equity: |
|
|
Pacific Ethanol, Inc. Stockholders’ Equity: |
|
|
Preferred
stock, $0.001 par value; 10,000 shares authorized;
Series A: no shares issued and outstanding as of December 31, 2016
and 2015 Series B: 927 shares issued and outstanding
as of December 31, 2016 and 2015 |
|
1 |
|
|
1 |
|
Common
stock, $0.001 par value; 300,000 shares authorized; 39,772 and
38,975 shares issued and outstanding as of December 31, 2016 and
2015, respectively |
|
40 |
|
|
39 |
|
Non-voting common stock, $0.001 par value; 3,553 shares authorized;
3,540 shares issued and outstanding as of December 31, 2016 and
2015 |
|
4 |
|
|
4 |
|
Additional paid-in capital |
|
922,698 |
|
|
902,843 |
|
Accumulated other comprehensive income (expense) |
|
(2,620 |
) |
|
1,040 |
|
Accumulated deficit |
|
(532,233 |
) |
|
(532,383 |
) |
Total Pacific Ethanol, Inc. Stockholders’ Equity |
|
387,890 |
|
|
371,544 |
|
Noncontrolling interests |
|
30,371 |
|
|
— |
|
Total Stockholders’ Equity |
|
418,261 |
|
|
371,544 |
|
Total Liabilities and Stockholders’ Equity |
$ |
708,238 |
|
$ |
674,680 |
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net
Income (Loss) |
|
Three Months EndedDecember 31, |
Years EndedDecember 31, |
(in
thousands) (unaudited) |
2016 |
2015 |
2016 |
2015 |
Net income (loss)
attributed to Pacific Ethanol |
$ |
13,077 |
|
$ |
(753 |
) |
$ |
1,419 |
|
$ |
(18,786 |
) |
Adjustments: |
|
|
|
|
Interest
expense* |
|
5,755 |
|
|
5,402 |
|
|
22,386 |
|
|
12,424 |
|
Benefit
for income taxes |
|
(736 |
) |
|
(3,939 |
) |
|
(981 |
) |
|
(10,034 |
) |
Asset
impairments |
|
— |
|
|
1,970 |
|
|
— |
|
|
1,970 |
|
Purchase
accounting adjustments |
|
— |
|
|
— |
|
|
— |
|
|
8,700 |
|
Fair
value adjustments |
|
504 |
|
|
(228 |
) |
|
557 |
|
|
(1,641 |
) |
Depreciation and amortization expense* |
|
8,825 |
|
|
8,529 |
|
|
35,530 |
|
|
23,448 |
|
Total
adjustments |
|
14,348 |
|
|
11,734 |
|
|
57,492 |
|
|
34,867 |
|
Adjusted EBITDA |
$ |
27,425 |
|
$ |
10,981 |
|
$ |
58,911 |
|
$ |
16,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Adjusted for noncontrolling interests. |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity Price Performance |
|
Three Months EndedDecember 31, |
Years EndedDecember 31, |
(unaudited) |
2016 |
2015 |
2016 |
2015 |
Ethanol
production gallons sold (in millions) |
|
123.1 |
|
|
117.5 |
|
|
484.1 |
|
|
319.2 |
|
Ethanol
third party gallons sold (in millions) |
|
117.8 |
|
|
96.0 |
|
|
440.4 |
|
|
382.3 |
|
Total
ethanol gallons sold (in millions) |
|
240.9 |
|
|
213.5 |
|
|
924.5 |
|
|
701.5 |
|
|
|
|
|
|
Ethanol
production capacity utilization |
|
96 |
% |
|
91 |
% |
|
94 |
% |
|
89 |
% |
|
|
|
|
|
Average
ethanol sales price per gallon |
$ |
1.78 |
|
$ |
1.66 |
|
$ |
1.67 |
|
$ |
1.68 |
|
Average
CBOT ethanol price per gallon |
$ |
1.59 |
|
$ |
1.50 |
|
$ |
1.52 |
|
$ |
1.51 |
|
|
|
|
|
|
Corn cost –
CBOT equivalent |
$ |
3.44 |
|
$ |
3.72 |
|
$ |
3.63 |
|
$ |
3.77 |
|
Average
basis |
$ |
0.26 |
|
$ |
0.35 |
|
$ |
0.27 |
|
$ |
0.52 |
|
Delivered cost of corn |
$ |
3.70 |
|
$ |
4.07 |
|
$ |
3.90 |
|
$ |
4.29 |
|
|
|
|
|
|
Total
co-product tons sold (in thousands) |
|
710.3 |
|
|
701.3 |
|
|
2,760.6 |
|
|
2,099.4 |
|
Co-product
return % (1) |
|
34.5 |
% |
|
35.7 |
% |
|
35.1 |
% |
|
35.8 |
% |
|
|
|
|
|
(1) Co-product revenue as a percentage of delivered
cost of corn. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company IR Contact:
Pacific Ethanol, Inc.
916-403-2755
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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