Green Plains Partners Reports Second Quarter 2017 Financial Results
July 31 2017 - 4:50PM
Green Plains Partners LP (NASDAQ:GPP) today announced financial and
operating results for the second quarter of 2017. Net income was
$13.1 million, or $0.40 per common unit, for the second quarter of
2017 compared with $14.0 million, or $0.43 per common unit, for the
same period in 2016. The partnership reported adjusted EBITDA of
$16.7 million and distributable cash flow of $15.3 million for the
second quarter of 2017, compared with adjusted EBITDA of $16.0
million and distributable cash flow of $15.4 million for the same
period in 2016. Distribution coverage for the last twelve months
(LTM) ended June 30, 2017, was 1.16x.
“Overall storage and throughput volumes were lower this quarter
versus last quarter, but we expect them to return to normal levels
in the last half of the year,” said Todd Becker, president and
chief executive officer of Green Plains Partners. “We maintained
strong distribution coverage and increased our distributions for
the seventh consecutive quarter. We continue to focus on growing
our downstream platform and believe our strong base of business
provides a strategic and financial advantage.”
Second Quarter Highlights
- On July 20, 2017, the board of directors of the partnership’s
general partner declared a quarterly cash distribution of $0.45 per
unit, or approximately $14.6 million, for the quarter ended June
30, 2017. The second quarter distribution is payable on Aug. 11,
2017, to unitholders of record at the close of business on Aug. 4,
2017.
- Effective June 1, 2017, the partnership’s joint venture with
Delek Renewables LLC, NLR Energy Logistics LLC, signed a five-year
lease with the Little Rock Port Authority to construct and operate
an ethanol unit-train terminal within the 2,600-acre industrial
park, which is served by two Class I railroads and has convenient
access to major highways. The joint venture also executed five-year
terminal throughput agreements with affiliates of its partners that
will provide the terminal minimum volume commitments upon
completion, which is expected during the first quarter of
2018.
Results of OperationsConsolidated revenues
decreased $0.4 million for the three months ended June 30, 2017,
compared with the same period for 2016. Revenues generated from the
partnership’s rail transportation services agreement with Green
Plains Trade decreased $0.6 million due to lower average rates
charged for volumetric capacity provided. This decrease was offset
by revenues generated from the partnership’s storage and throughput
agreement and terminal agreements with Green Plains Trade, which
increased $0.6 million due to higher throughput volumes related to
ethanol storage assets acquired in September 2016, reduced by lower
system-wide throughput volumes. Green Plains Trade experienced
lower throughput volumes than expected due to the weak ethanol
margin environment during the three months ended June 30, 2017.
Revenues generated from the partnership’s terminal services
agreements with other customers decreased $0.4 million due to lower
third-party ethanol and biodiesel volumes at the partnership’s
Birmingham facility and other terminals.
Operations and maintenance expenses decreased $0.2 million for
the three months ended June 30, 2017, compared with the same period
for 2016, primarily due to lower railcar lease expense. Selling,
general and administrative expenses increased $0.1 million for the
three months ended June 30, 2017, compared with the same period for
2016, due primarily to higher accounting expenses.
Green Plains Trade is obligated to throughput a minimum of 296.6
million gallons of ethanol per quarter, according to its storage
and throughput agreement with the partnership. During the second
quarter of 2017, Green Plains Inc. slowed its production in
response to the weak ethanol margin environment, resulting in
throughput below the minimum volume commitment. The partnership
charged Green Plains Trade approximately $1.0 million for a
deficiency payment related to the minimum volume commitment.
The deficiency payment may be applied as a credit toward volumes
throughput in excess of the minimum volume commitment during the
next four quarters. As a result, it was recorded as unearned
revenue and included in adjusted EBITDA for the three months ended
June 30, 2017.
GREEN PLAINS PARTNERS LP |
SELECTED OPERATING DATA |
(unaudited, in million gallons) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2017 |
|
2016 |
|
% Var. |
|
2017 |
|
2016 |
|
% Var. |
Product volumes |
|
|
|
|
|
|
|
|
|
|
|
|
|
Storage
and throughput services |
284.5 |
|
278.9 |
|
2.0 |
|
% |
|
605.6 |
|
526.4 |
|
15.0 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminal services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate |
42.5 |
|
30.2 |
|
40.7 |
|
|
|
91.4 |
|
58.9 |
|
55.2 |
|
|
Non-affiliate |
35.0 |
|
47.4 |
|
(26.2) |
|
|
|
60.5 |
|
91.6 |
|
(34.0) |
|
|
|
77.5 |
|
77.6 |
|
(0.1) |
|
|
|
151.9 |
|
150.5 |
|
0.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railcar capacity billed
(daily average) |
91.4 |
|
77.2 |
|
18.4 |
|
|
|
90.3 |
|
75.0 |
|
20.4 |
|
|
Liquidity and Capital ResourcesTotal liquidity
as of June 30, 2017, was $30.0 million, including $2.9 million in
cash and cash equivalents, and $27.1 million available under the
partnership’s revolving credit facility. The balance outstanding on
the partnership’s revolving credit facility was $127.9 million as
of June 30, 2017.
Conference Call InformationOn Aug. 1, 2017,
Green Plains Partners LP and Green Plains Inc. will host a joint
conference call at 11 a.m. Eastern time (10 a.m. Central time) to
discuss second quarter 2017 financial and operating results for
each company. Domestic and international participants can access
the conference call by dialing 888.417.8531 and 719.457.2080,
respectively. The company advises participants to call at least 10
minutes prior to the start time. Alternatively, the conference
call, transcript and presentation will be accessible on Green
Plains Partners’ website at http://ir.greenplainspartners.com.
Non-GAAP Financial MeasuresAdjusted EBITDA and
distributable cash flow are supplemental financial measures used to
assess the partnership’s financial performance. Management believes
adjusted EBITDA and distributable cash flow provide investors
useful information in assessing the partnership’s financial
condition and results of operations. Adjusted EBITDA is defined as
earnings before interest expense, income tax expense, depreciation
and amortization, and adjustments for transaction costs related to
acquisitions or financings, minimum volume commitment deficiency
payments, unit-based compensation expense and net gains or losses
on asset sales. Distributable cash flow is defined as adjusted
EBITDA less interest paid or payable, income taxes paid or payable
and maintenance capital expenditures. Adjusted EBITDA and
distributable cash flow are not presented in accordance with
generally accepted accounting principles (GAAP) and therefore
should not be considered in isolation or as alternatives to net
income or any other measure of financial performance presented in
accordance with GAAP to analyze the partnership’s results.
About Green Plains Partners LPGreen Plains
Partners LP (NASDAQ:GPP) is a fee-based Delaware limited
partnership formed by Green Plains Inc. to provide fuel storage and
transportation services by owning, operating, developing and
acquiring ethanol and fuel storage tanks, terminals, transportation
assets and other related assets and businesses. For more
information about Green Plains Partners, visit
www.greenplainspartners.com.
About Green Plains Inc.Green Plains Inc.
(NASDAQ:GPRE) is a diversified commodity-processing business with
operations related to ethanol production, grain handling and
storage, cattle feedlots, food ingredients, and commodity marketing
and logistics services. The company is the second largest
consolidated owner of ethanol production facilities in the world
with 17 dry mill plants, producing nearly 1.5 billion gallons of
ethanol at full capacity. Green Plains owns a 62.5% limited partner
interest and a 2.0% general partner interest in Green Plains
Partners. For more information about Green Plains, visit
www.gpreinc.com.
Forward-Looking StatementsThis news release
includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, as amended.
Forward-looking statements reflect management’s current views,
which are subject to risks and uncertainties including, but not
limited to, anticipated financial and operating results, plans and
objectives that are not historical in nature. These statements may
be identified by words such as “believe,” “expect,” “may,”
“should,” “will” and similar expressions. Factors that could cause
actual results to differ materially from those expressed or implied
are discussed in Green Plains Partners’ reports filed with the
Securities and Exchange Commission. Investors are cautioned not to
place undue reliance on forward-looking statements, which speak
only as of the date of this news release. Green Plains Partners
assumes no obligation to update any such forward-looking
statements, except as required by law.
Consolidated Financial Results
GREEN PLAINS PARTNERS LP |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands) |
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2017 |
|
|
|
2016 |
|
ASSETS |
(unaudited) |
|
|
Current assets |
|
|
|
Cash and
cash equivalents |
$ |
2,939 |
|
|
$ |
622 |
|
Accounts
receivable, including from affiliates |
|
16,303 |
|
|
|
20,290 |
|
Other
current assets |
|
1,162 |
|
|
|
1,363 |
|
Total
current assets |
|
20,404 |
|
|
|
22,275 |
|
Property and equipment,
net |
|
50,073 |
|
|
|
51,022 |
|
Other assets |
|
20,150 |
|
|
|
20,479 |
|
Total
assets |
$ |
90,627 |
|
|
$ |
93,776 |
|
|
|
|
|
LIABILITIES AND
PARTNERS’ CAPITAL |
|
|
|
Current
liabilities |
|
|
|
Accounts
payable, including to affiliates |
$ |
7,194 |
|
|
$ |
6,201 |
|
Other
current liabilities |
|
8,631 |
|
|
|
11,102 |
|
Total
current liabilities |
|
15,825 |
|
|
|
17,303 |
|
Long-term debt |
|
135,851 |
|
|
|
136,927 |
|
Other liabilities |
|
3,167 |
|
|
|
3,712 |
|
Total
liabilities |
|
154,843 |
|
|
|
157,942 |
|
|
|
|
|
Partners’ capital |
|
(64,216) |
|
|
|
(64,166) |
|
Total
liabilities and partners’ capital |
$ |
90,627 |
|
|
$ |
93,776 |
|
|
|
|
|
GREEN PLAINS PARTNERS LP |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(unaudited, in thousands except per unit amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2017 |
|
|
|
2016 |
|
|
% Var. |
|
|
2017 |
|
|
|
2016 |
|
|
% Var. |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate |
$ |
23,514 |
|
|
$ |
23,538 |
|
|
(0.1) |
|
% |
|
$ |
49,271 |
|
|
$ |
45,306 |
|
|
8.8 |
|
% |
Non-affiliate |
|
1,551 |
|
|
|
1,955 |
|
|
(20.7) |
|
|
|
|
3,023 |
|
|
|
3,975 |
|
|
(23.9) |
|
|
Total
revenues |
|
25,065 |
|
|
|
25,493 |
|
|
(1.7) |
|
|
|
|
52,294 |
|
|
|
49,281 |
|
|
6.1 |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations and maintenance |
|
8,284 |
|
|
|
8,504 |
|
|
(2.6) |
|
|
|
|
16,815 |
|
|
|
17,149 |
|
|
(1.9) |
|
|
Selling,
general and administrative |
|
1,124 |
|
|
|
1,051 |
|
|
6.9 |
|
|
|
|
2,336 |
|
|
|
2,259 |
|
|
3.4 |
|
|
Depreciation and amortization |
|
1,247 |
|
|
|
1,488 |
|
|
(16.2) |
|
|
|
|
2,501 |
|
|
|
2,705 |
|
|
(7.5) |
|
|
Total
operating expenses |
|
10,655 |
|
|
|
11,043 |
|
|
(3.5) |
|
|
|
|
21,652 |
|
|
|
22,113 |
|
|
(2.1) |
|
|
Operating
income |
|
14,410 |
|
|
|
14,450 |
|
|
(0.3) |
|
|
|
|
30,642 |
|
|
|
27,168 |
|
|
12.8 |
|
|
Other income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
21 |
|
|
|
21 |
|
|
- |
|
|
|
|
41 |
|
|
|
42 |
|
|
(2.4) |
|
|
Interest
expense |
|
(1,301) |
|
|
|
(410) |
|
|
217.3 |
|
|
|
|
(2,529) |
|
|
|
(794) |
|
|
218.5 |
|
|
Total
other expense |
|
(1,280) |
|
|
|
(389) |
|
|
229.0 |
|
|
|
|
(2,488) |
|
|
|
(752) |
|
|
230.9 |
|
|
Income before income
taxes |
|
13,130 |
|
|
|
14,061 |
|
|
(6.6) |
|
|
|
|
28,154 |
|
|
|
26,416 |
|
|
6.6 |
|
|
Income tax expense |
|
45 |
|
|
|
79 |
|
|
(43.0) |
|
|
|
|
92 |
|
|
|
252 |
|
|
(63.5) |
|
|
Net income |
$ |
13,085 |
|
|
$ |
13,982 |
|
|
(6.4) |
|
% |
|
$ |
28,062 |
|
|
$ |
26,164 |
|
|
7.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to partners’ ownership interests: |
|
|
|
|
|
|
|
|
|
|
|
|
General
partner |
$ |
262 |
|
|
$ |
280 |
|
|
(6.4) |
|
% |
|
$ |
561 |
|
|
$ |
523 |
|
|
7.3 |
|
% |
Limited
partners - common unitholders |
|
6,416 |
|
|
|
6,852 |
|
|
(6.4) |
|
|
|
|
13,759 |
|
|
|
12,824 |
|
|
7.3 |
|
|
Limited
partners - subordinated unitholders |
|
6,407 |
|
|
|
6,850 |
|
|
(6.5) |
|
|
|
|
13,742 |
|
|
|
12,817 |
|
|
7.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per limited partner unit (basic and diluted): |
|
|
|
|
|
|
|
|
|
|
|
|
Common
units |
$ |
0.40 |
|
|
$ |
0.43 |
|
|
(6.5) |
|
% |
|
$ |
0.86 |
|
|
$ |
0.81 |
|
|
7.2 |
|
% |
Subordinated units |
$ |
0.40 |
|
|
$ |
0.43 |
|
|
(6.5) |
|
% |
|
$ |
0.86 |
|
|
$ |
0.81 |
|
|
7.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average limited partner units outstanding (basic and
diluted): |
|
|
|
|
|
|
|
|
|
|
|
|
Common
units |
|
15,910 |
|
|
|
15,895 |
|
|
0.1 |
|
|
|
|
15,910 |
|
|
|
15,897 |
|
|
0.1 |
|
|
Subordinated units |
|
15,890 |
|
|
|
15,890 |
|
|
- |
|
|
|
|
15,890 |
|
|
|
15,890 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Revenues Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Storage and throughput
services |
$ |
14,225 |
|
|
$ |
13,945 |
|
|
2.0 |
|
% |
|
$ |
30,279 |
|
|
$ |
26,320 |
|
|
15.0 |
|
% |
Terminal services |
|
2,917 |
|
|
|
2,950 |
|
|
(1.1) |
|
|
|
|
6,028 |
|
|
|
5,845 |
|
|
3.1 |
|
|
Railcar transportation
services |
|
7,255 |
|
|
|
7,901 |
|
|
(8.2) |
|
|
|
|
14,785 |
|
|
|
15,675 |
|
|
(5.7) |
|
|
Other |
|
668 |
|
|
|
697 |
|
|
(4.2) |
|
|
|
|
1,202 |
|
|
|
1,441 |
|
|
(16.6) |
|
|
Total
revenues |
$ |
25,065 |
|
|
$ |
25,493 |
|
|
(1.7) |
|
% |
|
$ |
52,294 |
|
|
$ |
49,281 |
|
|
6.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN PLAINS PARTNERS LP |
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS |
(unaudited, in thousands) |
|
|
|
|
|
Six Months Ended June 30, |
|
|
2017 |
|
|
|
2016 |
|
Cash flows from
operating activities: |
|
|
|
Net
income |
$ |
28,062 |
|
|
$ |
26,164 |
|
Noncash
operating adjustments: |
|
|
|
Depreciation and amortization |
|
2,501 |
|
|
|
2,705 |
|
Deferred
income taxes |
|
- |
|
|
|
(3) |
|
Other |
|
509 |
|
|
|
560 |
|
Net
change in working capital |
|
1,707 |
|
|
|
(1,210) |
|
Net cash
provided by operating activities |
|
32,779 |
|
|
|
28,216 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Purchases
of property and equipment |
|
(1,131) |
|
|
|
(331) |
|
Acquisition of assets from sponsor |
|
- |
|
|
|
(62,312) |
|
Net cash
used by investing activities |
|
(1,131) |
|
|
|
(62,643) |
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Payments
of distributions |
|
(28,231) |
|
|
|
(26,193) |
|
Net
proceeds (payments) - revolving credit facility |
|
(1,100) |
|
|
|
47,000 |
|
Other |
|
- |
|
|
|
(1) |
|
Net cash
provided (used) by financing activities |
|
(29,331) |
|
|
|
20,806 |
|
|
|
|
|
Net change in cash and
cash equivalents |
|
2,317 |
|
|
|
(13,621) |
|
Cash and cash
equivalents, beginning of period |
|
622 |
|
|
|
16,385 |
|
Cash and cash
equivalents, end of period |
$ |
2,939 |
|
|
$ |
2,764 |
|
|
|
|
|
GREEN PLAINS PARTNERS LP |
RECONCILIATIONS TO NON-GAAP FINANCIAL
MEASURES |
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
LTM Ended June 30, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
2017 |
Net income |
$ |
13,085 |
|
$ |
13,982 |
|
$ |
28,062 |
|
$ |
26,164 |
|
|
$ |
58,703 |
Interest
expense |
|
1,301 |
|
|
410 |
|
|
2,529 |
|
|
794 |
|
|
|
4,280 |
Income
tax expense |
|
45 |
|
|
79 |
|
|
92 |
|
|
252 |
|
|
|
64 |
Depreciation and amortization |
|
1,247 |
|
|
1,488 |
|
|
2,501 |
|
|
2,705 |
|
|
|
5,443 |
Minimum
volume commitments |
|
1,010 |
|
|
- |
|
|
1,010 |
|
|
- |
|
|
|
1,010 |
Transaction costs |
|
- |
|
|
- |
|
|
- |
|
|
(4) |
|
|
|
355 |
Unit-based compensation expense |
|
60 |
|
|
37 |
|
|
119 |
|
|
22 |
|
|
|
240 |
Adjusted EBITDA |
|
16,748 |
|
|
15,996 |
|
|
34,313 |
|
|
29,933 |
|
|
|
70,095 |
Less: |
|
|
|
|
|
|
|
|
|
Interest
paid or payable |
|
1,301 |
|
|
410 |
|
|
2,529 |
|
|
794 |
|
|
|
4,280 |
Income
taxes paid or payable |
|
45 |
|
|
83 |
|
|
92 |
|
|
255 |
|
|
|
63 |
Maintenance capital expenditures |
|
58 |
|
|
140 |
|
|
164 |
|
|
174 |
|
|
|
254 |
Distributable cash
flow |
$ |
15,344 |
|
$ |
15,363 |
|
$ |
31,528 |
|
$ |
28,710 |
|
|
$ |
65,498 |
Distributions
declared(1) |
$ |
14,608 |
|
$ |
13,298 |
|
$ |
28,886 |
|
$ |
26,434 |
|
|
$ |
56,468 |
Coverage ratio |
1.05x |
|
1.16x |
|
1.09x |
|
1.09x |
|
1.16x |
|
|
|
|
|
|
|
|
|
|
(1)
Represents distributions declared for the applicable period and
paid in the subsequent quarter. |
|
|
|
|
|
|
|
|
|
|
Contact: Jim Stark | Vice President, Investor & Media Relations | 402.884.8700 | jim.stark@gpreinc.com
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