- Grew net sales $18.0 million over third quarter 2012 to $233.9
million
- Improved gross profit $6.0 million over third quarter 2012 to
$3.5 million
- Improved operating income $6.3 million over third quarter 2012
to $1.0 million
- Improved adjusted EBITDA $4.3 million over third quarter 2012
to $3.4 million
- Retired a combined $8.4 million of senior and convertible
debt
- Began production of corn oil at the Stockton plant
- Purchased surplus raw beet sugar for use as ethanol
feedstock
Pacific Ethanol, Inc. (Nasdaq:PEIX), the leading
marketer and producer of low-carbon renewable fuels in the Western
United States, reported its financial results for the three- and
nine-months ended September 30, 2013.
Neil Koehler, the company's president and CEO, stated: "Our
results for the third quarter of 2013 reflect an improved market
environment and the positive impact of our increased ownership of
the Pacific Ethanol plants over the year-ago period. We further
diversified our revenue and feedstock as sorghum contributed
significantly to our feedstock supply during the quarter, and we
began production of corn oil at our Stockton plant in October. More
recently, we purchased surplus raw beet sugar to be blended with
corn for use as ethanol feedstock. We made the purchase at a
significant discount to the cost of corn and hedged our position to
lock in at least $3 million in feedstock cost savings in 2014."
"California's Low-Carbon Fuel Standard has been instrumental in
driving innovation to reduce the carbon intensity of fuel. Oregon
and Washington recently joined California and British Columbia by
agreeing to implement their own low-carbon fuel standards with the
vision of building an integrated market for low-carbon fuels on the
West Coast, which is an exciting growth opportunity for Pacific
Ethanol," added Koehler.
Financial Results for the Three Months
Ended September 30, 2013
Net sales were $233.9 million for the third quarter of 2013,
compared to $215.9 million for the third quarter of 2012. The
increase in net sales was attributable to an increase in production
gallons sold, slightly offset by a reduction in average sales price
per gallon.
Gross profit was $3.5 million for the third quarter of 2013,
compared to a loss of $2.4 million in the third quarter of 2012.
The improvement in gross margin was tempered by a decline in
ethanol prices, uncommonly high corn basis costs and related
derivative losses.
SG&A expenses were $2.5 million in the third quarter of
2013, down from $2.9 million in the third quarter of 2012.
Operating income for the third quarter of 2013 was $1.0 million,
compared to an operating loss of $5.3 million for the same period
in 2012.
Loss available to common stockholders for the third quarter of
2013 was $5.3 million including a $2.6 million non-cash loss on
extinguishments of debt, compared to $6.3 million for the third
quarter of 2012.
Adjusted EBITDA improved to positive $3.4 million for the third
quarter of 2013, compared to Adjusted EBITDA of negative $0.9
million in the third quarter of 2012.
Bryon McGregor, the company's CFO, stated: "During the third
quarter, we made significant progress on our goal to strengthen our
balance sheet. We retired nearly $1 million in senior debt and $7.5
million of our original $14 million in convertible notes. An
additional $2.3 million under our convertible notes was converted
subsequent to quarter end, leaving only $250,000 outstanding."
Financial Results for the Nine Months Ended
September 30, 2013
For the nine months ended September 30, 2013, net sales were
$693.1 million, compared to $619.0 million for the same period in
2012. For the first nine months of 2013, loss available to common
stockholders was $10.3 million, compared to $14.5 million for the
same period in 2012.
Adjusted EBITDA for the first nine months of 2013 was positive
$10.4 million, compared to Adjusted EBITDA of negative $5.0 million
for the first nine months of 2012.
Q3 Results Conference Call
Management will host a conference call at 8:00 a.m. PT/11:00
a.m. ET on November 7, 2013. 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.net. 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 94453896#.
If you are unable to listen to 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 November 7, 2013 through 11:59 p.m. Eastern Time on
November 14, 2013. To access the replay, please dial (855)
859-2056. International callers should dial 00-1-(404) 537-3406.
The pass code will be 94453896#.
Reconciliation of Adjusted EBITDA to Net
Loss
Management 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 earnings before interest, taxes, depreciation
and amortization, noncash gain (loss) on extinguishments of debt
and fair value adjustments and warrant inducements. The table at
the end of this release provides a reconciliation of Adjusted
EBITDA to net loss attributed to Pacific Ethanol, Inc. Management
provides an Adjusted EBITDA 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 not a measure of
financial performance under GAAP, and should not be considered an
alternative 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 it in isolation or as a
substitute for analysis of the company's results as reported under
GAAP.
About Pacific Ethanol, Inc.
Pacific Ethanol, Inc. (Nasdaq:PEIX) is the leading marketer and
producer of low-carbon renewable fuels in the Western United
States. Pacific Ethanol also sells co-products, including wet
distillers grain ("WDG"), a nutritious animal feed. Serving
integrated oil companies and gasoline marketers who blend ethanol
into gasoline, Pacific Ethanol provides transportation, storage and
delivery of ethanol through third-party service providers in the
Western United States, primarily in California, Arizona, Nevada,
Utah, Oregon, Colorado, Idaho and Washington. Pacific Ethanol has
an 85% ownership interest in New PE Holdco LLC, the owner of four
ethanol production facilities. Pacific Ethanol operates and manages
the four ethanol production facilities, which have a combined
annual production capacity of 200 million gallons. The facilities
in operation are located in Boardman, Oregon, Burley, Idaho and
Stockton, California, and one idled facility is located in Madera,
California. The facilities are near their respective fuel and feed
customers, offering significant timing, transportation cost and
logistical advantages. Pacific Ethanol's subsidiary, Kinergy
Marketing LLC, markets ethanol from Pacific Ethanol's managed
plants and from other third-party production facilities, and
another subsidiary, Pacific Ag. Products, LLC, markets WDG. For
more information please visit www.pacificethanol.net.
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995
With the exception of historical information, the matters
discussed in this press release including, without limitation, the
ability of Pacific Ethanol to continue as the leading marketer and
producer of low-carbon renewable fuels in the Western United
States; and whether an integrated market for low-carbon fuels on
the West Coast will develop and be a growth opportunity for Pacific
Ethanol are forward-looking statements and considerations that
involve a number of risks and uncertainties. The actual future
results of Pacific Ethanol could differ from those statements.
Factors that could cause or contribute to such differences include,
but are not limited to, adverse economic and market conditions,
including for ethanol and its co-products, and in particular,
low-carbon rated ethanol; raw material costs; changes in
governmental regulations and policies; 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 Pacific Ethanol's Form 10-K filed
with the Securities and Exchange Commission on April 1, 2013.
(Tables follow)
PACIFIC ETHANOL,
INC. |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
(unaudited, in
thousands, except per share data) |
|
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
September 30, |
|
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
Net sales |
$233,880 |
$215,860 |
$693,147 |
$619,026 |
Cost of goods sold |
230,357 |
218,300 |
681,813 |
633,843 |
Gross profit (loss) |
3,523 |
(2,440) |
11,334 |
(14,817) |
Selling, general and administrative
expenses |
2,511 |
2,898 |
9,649 |
9,400 |
Income (loss) from operations |
1,012 |
(5,338) |
1,685 |
(24,217) |
Fair value adjustments and warrant
inducements |
762 |
(900) |
1,507 |
352 |
Interest expense, net |
(4,530) |
(3,378) |
(11,983) |
(9,380) |
Loss on extinguishments of debt |
(2,573) |
— |
(1,795) |
— |
Other expense, net |
(106) |
(105) |
(321) |
(499) |
Loss before provision for income taxes |
(5,435) |
(9,721) |
(10,907) |
(33,744) |
Provision for income taxes |
— |
— |
— |
— |
Consolidated net loss |
(5,435) |
(9,721) |
(10,907) |
(33,744) |
Net loss attributed to noncontrolling
interest in variable interest entity |
464 |
3,750 |
1,533 |
20,191 |
Net loss attributed to Pacific Ethanol |
$(4,971) |
$(5,971) |
$(9,374) |
$(13,553) |
Preferred stock dividends |
$(319) |
$(319) |
$(946) |
$(949) |
Loss available to common stockholders |
$(5,290) |
$(6,290) |
$(10,320) |
$(14,502) |
Net loss per share, basic and diluted |
$(0.40) |
$(0.82) |
$(0.91) |
$(2.26) |
Weighted-average shares outstanding, basic
and diluted |
13,177 |
7,712 |
11,380 |
6,414 |
|
|
|
PACIFIC ETHANOL,
INC. |
CONSOLIDATED BALANCE
SHEETS |
(unaudited, in
thousands, except par value) |
|
|
|
|
September 30, |
December 31, |
ASSETS |
2013 |
2012 |
Current Assets: |
|
|
Cash and cash equivalents |
$9,175 |
$7,586 |
Accounts receivable, net |
27,102 |
26,051 |
Inventories |
13,729 |
16,244 |
Prepaid inventory |
11,232 |
5,422 |
Other current assets |
2,036 |
2,129 |
Total current assets |
63,274 |
57,432 |
Property and equipment, net |
156,309 |
150,409 |
Other Assets: |
|
|
Intangible assets, net |
3,378 |
3,734 |
Other assets |
3,508 |
3,388 |
Total other assets |
6,886 |
7,122 |
Total Assets |
$226,469 |
$214,963 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current Liabilities: |
|
|
Accounts payable – trade |
$8,579 |
$5,104 |
Accrued liabilities |
3,198 |
3,282 |
Current portion – capital leases |
5,129 |
— |
Current portion – long-term debt |
2,133 |
4,029 |
Total current liabilities |
19,039 |
12,415 |
|
|
|
Long-term debt, net of current portion |
108,834 |
117,253 |
Accrued preferred dividends |
3,657 |
5,852 |
Warrant liabilities and conversion
features |
6,630 |
4,892 |
Other liabilities |
8,154 |
1,644 |
Total Liabilities |
146,314 |
142,056 |
|
|
|
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, 2013 and December 31, 2012 |
|
|
Series B: 927 shares issued and
outstanding as of September 30, 2013 and December 31, 2012 |
1 |
1 |
Common stock, $0.001 par value; 300,000
shares authorized; 14,737 and 9,789 shares issued and outstanding
as of September 30, 2013 and December 31, 2012, respectively |
15 |
10 |
Additional paid-in capital |
612,880 |
582,861 |
Accumulated deficit |
(540,630) |
(530,310) |
Total Pacific Ethanol, Inc. Stockholders'
Equity |
72,266 |
52,562 |
Noncontrolling interest in variable interest
entity |
7,889 |
20,345 |
Total Stockholders' Equity |
80,155 |
72,907 |
Total Liabilities and Stockholders'
Equity |
$226,469 |
$214,963 |
|
|
|
|
|
Reconciliation of Adjusted EBITDA to
Net Loss |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
September 30, |
(in thousands) (unaudited) |
2013 |
2012 |
2013 |
2012 |
Net loss attributed to Pacific Ethanol |
$(4,971) |
$(5,971) |
$(9,374) |
$(13,553) |
Adjustments: |
|
|
|
|
Interest expense* |
3,997 |
2,223 |
10,122 |
4,565 |
Interest income* |
— |
— |
— |
(3) |
Extinguishments of debt –
noncash |
2,573 |
— |
3,610 |
— |
Fair value adjustments |
(762) |
900 |
(1,507) |
(352) |
Depreciation and amortization
expense* |
2,608 |
1,956 |
7,523 |
4,389 |
Total adjustments |
8,416 |
5,079 |
19,748 |
8,599 |
Adjusted EBITDA |
$3,445 |
$(892) |
$10,374 |
$(4,954) |
________________ |
|
|
|
|
* Adjusted for noncontrolling interest in
variable interest entity. |
|
|
|
|
Commodity Price
Performance |
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
September 30, |
(unaudited) |
2013 |
2012 |
2013 |
2012 |
Ethanol production gallons sold (in
millions) |
37.1 |
33.5 |
109.2 |
106.0 |
Ethanol third party gallons sold (in
millions) |
67.8 |
73.8 |
197.7 |
232.7 |
Total ethanol gallons sold (in
millions) |
104.9 |
107.3 |
306.9 |
338.7 |
|
|
|
|
|
Ethanol average sales price per
gallon |
$2.62 |
$2.65 |
$2.67 |
$2.43 |
Average CBOT ethanol price per
gallon |
$2.23 |
$2.51 |
$2.39 |
$2.29 |
|
|
|
|
|
Corn cost – CBOT equivalent |
$5.02 |
$7.72 |
$6.22 |
$6.73 |
Average basis |
$2.42 |
$1.17 |
$1.68 |
$1.09 |
Delivered corn cost |
$7.44 |
$8.89 |
$7.90 |
$7.82 |
|
|
|
|
|
Total co-product tons sold (1) (in
thousands) |
335.9 |
295.1 |
974.1 |
942.7 |
Co-product return % (2) |
28.6% |
27.1% |
28.1% |
26.2% |
________________ |
|
|
|
|
(1) Includes corn oil. |
|
|
|
|
(2) 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.net
IR Agency Contact:
Becky Herrick
LHA
415-433-3777
Media Contact:
Paul Koehler
Pacific Ethanol, Inc.
503-235-8241
paulk@pacificethanol.net
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