Green Plains Partners Reports Third Quarter 2018 Financial Results
November 07 2018 - 4:51PM
Green Plains Partners LP (NASDAQ:GPP) today announced financial and
operating results for the third quarter of 2018. Net income was
$14.5 million, or $0.44 per common unit, for the third quarter of
2018 compared with $14.5 million, or $0.45 per common unit, for the
same period in 2017. The partnership reported adjusted EBITDA of
$16.8 million and distributable cash flow of $14.9 million for the
third quarter of 2018, compared with adjusted EBITDA of $16.4
million and distributable cash flow of $14.9 million for the same
period in 2017. Distribution coverage was 0.96x for the three
months ended September 30, 2018.
“The partnership will remain the primary vehicle to expand our
downstream logistics activities,” said Todd Becker, president and
chief executive officer of Green Plains Partners. “As Green Plains
Inc. finalizes its current portfolio optimization plan, we will
continue to pursue accretive opportunities to grow the
partnership’s revenue and earnings, and provide diversification for
our unitholders.”
Third Quarter Highlights and Recent
Developments
- On August 13, 2018, all of the 15,889,642 outstanding
subordinated units held by Green Plains Inc. were converted into
common units on a one-for-one basis. The conversion of the
subordinated units does not impact the amount of cash distributions
paid or the total number of outstanding units.
- On October 8, 2018, Green Plains Inc. announced that it entered
into an asset purchase agreement for the sale of three ethanol
plants located in Bluffton, Ind., Lakota, Iowa, and Riga, Mich..
Correspondingly, the partnership entered into an asset purchase
agreement to sell select storage and transportation assets to Green
Plains Inc. for $120.9 million and is subject to certain
post-closing adjustments. Approximately 525 railcars of the 3,500
railcars leased by the partnership are anticipated to be conveyed
to Green Plains Inc. upon closing. The partnership will receive
approximately 8.9 million units owned by Green Plains Inc. as
payment for the transaction. The Conflicts Committee reviewed and
approved these transactions.
- Also on October 8, 2018, the partnership and its parent have
agreed, upon closing of the above transaction, to extend the
storage and throughput services agreement with Green Plains Trade
for an additional three years to June 30, 2028. Upon closing, the
quarterly minimum volume commitment associated with the storage and
throughput services agreement will be 235.7 million gallons or,
approximately 80% of the revised Green Plains Inc. annual
production capacity of 1.183 billion gallons.
- On October 12, 2018, the partnership amended its revolving
credit facility to allow the sale of the ethanol storage assets
associated with up to six ethanol plants owned by Green Plains
with no more than 600 million gallons of production capacity. Upon
close of such sale, the revolving credit facility available will be
decreased from $235 million to $200 million. In addition, the
lenders permitted the exchange of units as consideration for the
transaction and also permitted modifications of various key
operating agreements. There were no significant changes in other
covenants.
- Effective October 15, 2018, the partnership and Green Plains
Inc. agreed to extend the offer period related to the company’s
interest in JGP Energy Partners, a joint venture with Jefferson
Ethanol Holdings LLC, to June 30, 2019. The Conflicts Committee
reviewed and approved this transaction.
- On October 18, 2018, the board of directors of the
partnership’s general partner declared a quarterly cash
distribution of $0.475 per unit, or approximately $15.5 million,
for the third quarter of 2018. The distribution is payable on Nov.
9, 2018, to unitholders of record at the close of business on Nov.
2, 2018.
Results of OperationsConsolidated revenues
decreased $0.7 million for the three months ended September 30,
2018, compared with the same period for 2017. Revenues generated
from rail transportation services decreased $1.2 million due to
lower average rates charged for the railcar volumetric capacity
provided. Revenues generated from terminal services decreased $0.2
million due to lower throughput at our fuel terminals. These
decreases were partially offset by an increase in trucking and
other revenue of $0.4 million primarily due to expansion of our
truck fleet and an increase in storage and throughput services
revenue of $0.3 million primarily due to an increase in throughput
and transload volumes.
Operations and maintenance expenses decreased $1.1 million for
the three months ended September 30, 2018, compared with the same
period for 2017, primarily due to lower railcar lease expense.
General and administrative expenses increased $0.2 million for
the three months ended September 30, 2018, compared with the same
period for 2017, primarily due to increases in board expenses and
professional fees. Interest expense increased $0.5 million due to
costs associated with increasing the partnership’s revolving credit
facility and higher interest rates.
During the third quarter of 2018, Green Plains
Inc.'s average utilization rate was approximately 81.3% of
capacity, resulting in ethanol production of 304.8 million gallons
for the third quarter of 2018, compared with 313.6 million gallons,
or 83.7% of capacity, for the same quarter last year. Green Plains
Inc. continues to evaluate production run rates and may flex
production depending on market conditions. Green Plains Trade
exceeded the minimum volume commitment for the three months ended
September 30, 2018, and received a $0.4 million credit related to
the $0.7 million deficiency payment charged by the partnership for
the three months ended March 31, 2018.
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GREEN PLAINS PARTNERS
LP |
SELECTED OPERATING
DATA |
(unaudited, in million
gallons) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September
30, |
|
September
30, |
|
2018 |
|
2017 |
|
% Var. |
|
2018 |
|
2017 |
|
% Var. |
Product volumes |
|
|
|
|
|
|
|
|
|
|
|
|
|
Storage and throughput services |
314.1 |
|
308.3 |
|
1.9 |
|
% |
|
926.7 |
|
913.9 |
|
1.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminal services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate |
35.2 |
|
33.1 |
|
6.3 |
|
|
|
101.3 |
|
124.5 |
|
(18.6 |
) |
|
Non-affiliate |
28.1 |
|
38.8 |
|
(27.6 |
) |
|
|
90.7 |
|
99.3 |
|
(8.7 |
) |
|
|
63.3 |
|
71.9 |
|
(12.0 |
) |
|
|
192.0 |
|
223.8 |
|
(14.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railcar capacity billed (daily average) |
98.2 |
|
95.1 |
|
3.3 |
|
|
|
98.6 |
|
91.9 |
|
7.3 |
|
|
Liquidity and Capital ResourcesTotal liquidity
as of September 30, 2018, was $107.4 million, including $0.4
million in cash and cash equivalents, and $107.0 million available
under the partnership’s revolving credit facility. The balance
outstanding on the partnership’s revolving credit facility was
$128.0 million as of September 30, 2018.
Conference Call InformationGreen Plains
Partners LP and Green Plains Inc. will host a joint conference call
Thursday Nov. 8th at 11 a.m. Eastern time (10 a.m. Central time),
to discuss third quarter 2018 financial and operating results for
each company. Domestic and international participants can access
the conference call by dialing 877.711.2374 and 281.542.4862,
respectively, and referencing conference ID 1476588. Participants
are advised 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, plus adjustments for transaction costs related to
acquisitions or financings, minimum volume commitment deficiency
payments, unit-based compensation expense, net gains or losses on
asset sales and the partnership’s proportional share of EBITDA
adjustments of equity method investees. Distributable cash flow is
defined as adjusted EBITDA less interest paid or payable, income
taxes paid or payable, maintenance capital expenditures and the
partnership’s proportionate share of distributable cash flow
adjustments of equity method investees. 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 feeding, food ingredients, and commodity marketing
and logistics services. The company is one of the leading producers
of ethanol in the world and, through its adjacent businesses, is
focused on the production of high-protein feed ingredients and
export growth opportunities. Green Plains owns a 62.4% 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
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GREEN PLAINS PARTNERS
LP |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(in thousands) |
|
|
|
|
|
|
|
September
30, |
|
December 31, |
|
2018 |
|
2017 |
ASSETS |
(unaudited) |
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
432 |
|
|
$ |
502 |
|
Accounts receivable, including from affiliates |
|
18,574 |
|
|
|
19,974 |
|
Other current assets |
|
743 |
|
|
|
1,158 |
|
Total current assets |
|
19,749 |
|
|
|
21,634 |
|
Property and equipment, net |
|
46,156 |
|
|
|
48,305 |
|
Other assets |
|
23,406 |
|
|
|
22,329 |
|
Total assets |
$ |
89,311 |
|
|
$ |
92,268 |
|
|
|
|
|
|
|
LIABILITIES AND PARTNERS' CAPITAL |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable, including to affiliates |
$ |
11,539 |
|
|
$ |
7,960 |
|
Other current liabilities |
|
5,424 |
|
|
|
8,098 |
|
Total current liabilities |
|
16,963 |
|
|
|
16,058 |
|
Long-term debt |
|
136,012 |
|
|
|
134,875 |
|
Other liabilities |
|
3,736 |
|
|
|
4,181 |
|
Total liabilities |
|
156,711 |
|
|
|
155,114 |
|
|
|
|
|
|
|
Partners' capital |
|
(67,400 |
) |
|
|
(62,846 |
) |
Total liabilities and partners' capital |
$ |
89,311 |
|
|
$ |
92,268 |
|
|
|
|
|
|
|
|
|
|
|
|
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GREEN PLAINS PARTNERS
LP |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
(unaudited, in thousands except
per unit amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September
30, |
|
September
30, |
|
2018 |
|
2017 |
|
% Var. |
|
2018 |
|
2017 |
|
% Var. |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate |
$ |
24,472 |
|
|
$ |
24,748 |
|
|
(1.1 |
)% |
|
$ |
72,949 |
|
|
$ |
74,019 |
|
|
(1.4 |
)% |
Non-affiliate |
|
1,298 |
|
|
|
1,701 |
|
|
(23.7 |
) |
|
|
4,546 |
|
|
|
4,724 |
|
|
(3.8 |
) |
Total revenues |
|
25,770 |
|
|
|
26,449 |
|
|
(2.6 |
) |
|
|
77,495 |
|
|
|
78,743 |
|
|
(1.6 |
) |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations and maintenance (excluding depreciation
and amortization reflected below) |
|
7,283 |
|
|
|
8,346 |
|
|
(12.7 |
) |
|
|
23,586 |
|
|
|
25,161 |
|
|
(6.3 |
) |
General and administrative |
|
1,109 |
|
|
|
922 |
|
|
20.3 |
|
|
|
3,689 |
|
|
|
3,258 |
|
|
13.2 |
|
Depreciation and amortization |
|
1,120 |
|
|
|
1,280 |
|
|
(12.5 |
) |
|
|
3,406 |
|
|
|
3,781 |
|
|
(9.9 |
) |
Total operating expenses |
|
9,512 |
|
|
|
10,548 |
|
|
(9.8 |
) |
|
|
30,681 |
|
|
|
32,200 |
|
|
(4.7 |
) |
Operating income |
|
16,258 |
|
|
|
15,901 |
|
|
2.2 |
|
|
|
46,814 |
|
|
|
46,543 |
|
|
0.6 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
21 |
|
|
|
20 |
|
|
5.0 |
|
|
|
61 |
|
|
|
61 |
|
|
- |
|
Interest expense |
|
(1,871 |
) |
|
|
(1,412 |
) |
|
32.5 |
|
|
|
(5,253 |
) |
|
|
(3,941 |
) |
|
33.3 |
|
Other |
|
- |
|
|
|
- |
|
|
- |
|
|
|
75 |
|
|
|
- |
|
|
* |
|
Total other expense |
|
(1,850 |
) |
|
|
(1,392 |
) |
|
32.9 |
|
|
|
(5,117 |
) |
|
|
(3,880 |
) |
|
31.9 |
|
Income before income taxes and income (loss) from equity method
investees |
|
14,408 |
|
|
|
14,509 |
|
|
(0.7 |
) |
|
|
41,697 |
|
|
|
42,663 |
|
|
(2.3 |
) |
Income tax expense |
|
(5 |
) |
|
|
(43 |
) |
|
(88.4 |
) |
|
|
(70 |
) |
|
|
(135 |
) |
|
(48.1 |
) |
Income (loss) from equity method investees |
|
48 |
|
|
|
- |
|
|
* |
|
|
|
(82 |
) |
|
|
- |
|
|
* |
|
Net income |
$ |
14,451 |
|
|
$ |
14,466 |
|
|
(0.1 |
)% |
|
$ |
41,545 |
|
|
$ |
42,528 |
|
|
(2.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to partners' ownership interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General partner |
$ |
289 |
|
|
$ |
290 |
|
|
(0.3 |
)% |
|
$ |
831 |
|
|
$ |
851 |
|
|
(2.4 |
)% |
Limited partners - common unitholders |
|
10,726 |
|
|
|
7,097 |
|
|
51.1 |
|
|
|
24,015 |
|
|
|
20,856 |
|
|
15.1 |
|
Limited partners - subordinated unitholders |
|
3,436 |
|
|
|
7,079 |
|
|
(51.5 |
) |
|
|
16,699 |
|
|
|
20,821 |
|
|
(19.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per limited partner unit (basic and diluted): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common units |
$ |
0.44 |
|
|
$ |
0.45 |
|
|
(2.2 |
)% |
|
$ |
1.28 |
|
|
$ |
1.31 |
|
|
(2.3 |
)% |
Subordinated units |
$ |
0.44 |
|
|
$ |
0.45 |
|
|
2.2 |
% |
|
$ |
1.28 |
|
|
$ |
1.31 |
|
|
(2.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average limited partner units outstanding (basic and
diluted): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common units |
|
24,403 |
|
|
|
15,922 |
|
|
|
|
|
|
18,780 |
|
|
|
15,914 |
|
|
|
Subordinated units |
|
7,427 |
|
|
|
15,890 |
|
|
|
|
|
|
13,038 |
|
|
|
15,890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Supplemental Revenues Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Storage and throughput services |
$ |
15,748 |
|
|
$ |
15,416 |
|
|
2.2 |
% |
|
$ |
45,965 |
|
|
$ |
45,695 |
|
|
0.6 |
% |
Railcar transportation services |
|
6,156 |
|
|
|
7,384 |
|
|
(16.6 |
) |
|
|
19,780 |
|
|
|
22,169 |
|
|
(10.8 |
) |
Terminal services |
|
2,447 |
|
|
|
2,688 |
|
|
(9.0 |
) |
|
|
8,028 |
|
|
|
8,716 |
|
|
(7.9 |
) |
Trucking and other |
|
1,419 |
|
|
|
961 |
|
|
47.7 |
|
|
|
3,722 |
|
|
|
2,163 |
|
|
72.1 |
|
Total revenues |
$ |
25,770 |
|
|
$ |
26,449 |
|
|
(2.6 |
)% |
|
$ |
77,495 |
|
|
$ |
78,743 |
|
|
(1.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Percentage variance not considered meaningful. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN PLAINS PARTNERS
LP |
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS |
(unaudited, in thousands) |
|
Nine Months
Ended |
|
September
30, |
|
2018 |
|
2017 |
Cash flows from operating activities: |
|
|
|
|
|
Net income |
$ |
41,545 |
|
|
$ |
42,528 |
|
Noncash operating adjustments: |
|
|
|
|
|
Depreciation and amortization |
|
3,406 |
|
|
|
3,781 |
|
Other |
|
771 |
|
|
|
744 |
|
Net change in working capital |
|
2,235 |
|
|
|
(1,390 |
) |
Net cash provided by operating activities |
|
47,957 |
|
|
|
45,663 |
|
Cash flows from investing activities: |
|
|
|
|
|
Purchases of property and equipment, net |
|
(1,222 |
) |
|
|
(1,912 |
) |
Contributions to equity method investees |
|
(1,425 |
) |
|
|
(1,284 |
) |
Net cash used in investing activities |
|
(2,647 |
) |
|
|
(3,196 |
) |
Cash flows from financing activities: |
|
|
|
|
|
Payments of distributions |
|
(46,302 |
) |
|
|
(42,839 |
) |
Net proceeds - revolving credit facility |
|
1,100 |
|
|
|
- |
|
Payments of loan fees |
|
(185 |
) |
|
|
- |
|
Other |
|
7 |
|
|
|
3 |
|
Net cash used in financing activities |
|
(45,380 |
) |
|
|
(42,836 |
) |
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
(70 |
) |
|
|
(369 |
) |
Cash and cash equivalents, beginning of period |
|
502 |
|
|
|
622 |
|
Cash and cash equivalents, end of period |
$ |
432 |
|
|
$ |
253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN PLAINS PARTNERS
LP |
RECONCILIATIONS TO
NON-GAAP FINANCIAL MEASURES |
(unaudited, in thousands except
ratios) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
LTM Ended |
|
September
30, |
|
September
30, |
|
September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
2018 |
Net income |
$ |
14,451 |
|
|
$ |
14,466 |
|
|
$ |
41,545 |
|
|
$ |
42,528 |
|
|
$ |
57,884 |
|
Interest expense |
|
1,871 |
|
|
|
1,412 |
|
|
|
5,253 |
|
|
|
3,941 |
|
|
|
6,714 |
|
Income tax expense |
|
5 |
|
|
|
43 |
|
|
|
70 |
|
|
|
135 |
|
|
|
44 |
|
Depreciation and amortization |
|
1,120 |
|
|
|
1,280 |
|
|
|
3,406 |
|
|
|
3,781 |
|
|
|
4,736 |
|
Minimum volume commitment adjustments (1) |
|
(747 |
) |
|
|
(828 |
) |
|
|
- |
|
|
|
182 |
|
|
|
(182 |
) |
Transaction costs |
|
6 |
|
|
|
- |
|
|
|
288 |
|
|
|
- |
|
|
|
288 |
|
Unit-based compensation expense |
|
76 |
|
|
|
40 |
|
|
|
196 |
|
|
|
159 |
|
|
|
256 |
|
Proportional share of EBITDA adjustments of equity
method investees (2) |
|
45 |
|
|
|
- |
|
|
|
45 |
|
|
|
- |
|
|
|
45 |
|
Adjusted EBITDA |
|
16,827 |
|
|
|
16,413 |
|
|
|
50,803 |
|
|
|
50,726 |
|
|
|
69,785 |
|
Interest paid or payable |
|
(1,871 |
) |
|
|
(1,412 |
) |
|
|
(5,253 |
) |
|
|
(3,941 |
) |
|
|
(6,714 |
) |
Income taxes paid or payable |
|
(4 |
) |
|
|
(43 |
) |
|
|
(68 |
) |
|
|
(135 |
) |
|
|
(22 |
) |
Maintenance capital expenditures |
|
(35 |
) |
|
|
(18 |
) |
|
|
(50 |
) |
|
|
(182 |
) |
|
|
(52 |
) |
Distributable cash flow |
$ |
14,917 |
|
|
$ |
14,940 |
|
|
$ |
45,432 |
|
|
$ |
46,468 |
|
|
$ |
62,997 |
|
Distributions declared (3) |
$ |
15,503 |
|
|
$ |
14,932 |
|
|
$ |
46,499 |
|
|
$ |
43,818 |
|
|
$ |
61,805 |
|
Coverage ratio |
|
0.96x |
|
|
1.00x |
|
|
0.98x |
|
|
1.06x |
|
|
1.02x |
(1) Adjustments related to the storage
and throughput quarterly minimum volume commitments. |
(2) Represents the partnership's proportional
share of depreciation and amortization, interest expense, and
income tax expense of equity method investees. |
(3) 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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