Green Plains Renewable Energy, Inc. (NASDAQ: GPRE) announced today
its financial results for the nine-month transition period ended
December 31, 2008. The Company reported revenues of $186.9 million
and a net loss of $1.8 million, or $0.08 per share, for the
three-month period ended December 31, 2008. The quarterly financial
results include merger-related expenses of $2.7 million, most of
which were non-cash expenses, which resulted from the combination
of Green Plains with VBV LLC and its majority-owned subsidiaries on
October 15, 2008. Excluding the merger-related charges, Green
Plains' net income was $0.9 million, or $0.04 per share, for the
three-month period ended December 31, 2008.
"We made substantial progress in establishing our platform
during 2008. Since July, we have concluded the merger with VBV and
started operations at three new ethanol plants which increased our
expected operating capacity to 330 million gallons per year. These
accomplishments have significantly increased our production
capacity, strengthened our balance sheet and positioned Green
Plains as a significant player in the biofuels industry," said Todd
Becker, President and Chief Executive Officer. "We have quickly
moved through the start-up phase of operations and can now focus on
optimizing the efficiency of each of the new plants. Going forward,
we will utilize our comprehensive risk management program to
respond to challenges and opportunities in our industry."
"If you remove the merger-related expenses, we achieved solid
financial results for the final quarter of 2008 while operating in
a very challenging industry environment," continued Becker. "This
is largely the result of our diversified income stream, especially
from our Agribusiness segment which exceeded our expectations. I am
very proud of our dedicated employees who worked diligently and
cohesively to bring our companies together and meet the challenges
of this environment."
The VBV merger was accounted for as a reverse merger, with Green
Plains treated as the acquired company and VBV as the acquiring
company. Consequently, 2008 financial results exclude the
operations of Green Plains prior to October 15, 2008, the date of
the merger. In addition, the Company changed to a calendar year end
(from VBV's fiscal year end of March 31). As a result, Green
Plains' reported financial results are for the nine-month
transition period ended December 31, 2008.
Green Plains reported revenues of $188.8 million and a net loss
of $6.9 million, or $0.56 per share for the nine-month transition
period ended December 31, 2008. These results do not include
earnings of Green Plains' pre-merger legacy operations. Prior to
completion of the merger, VBV had a controlling interest in two
development stage ethanol plants. Operations commenced at these
plants in September 2008 and November 2008. Accordingly, VBV, the
acquiring entity for accounting purposes, was a development stage
company until September 2008. The net loss includes pre-production
expenses, net of minority interests, of the VBV companies of $4.1
million.
"Reporting a loss related to pre-production expenses was fully
expected and is typical for a development stage company engaged in
plant construction," stated Becker.
Cash flow, as measured by earnings before interest, income
taxes, depreciation and amortization ("EBITDA"), was $6.5 million
and $0.6 million for the three-month period and nine-month
transition period ended December 31, 2008, respectively. Green
Plains had $64.8 million in cash and equivalents as of December 31,
2008.
"Green Plains closed the fiscal year with a strong balance sheet
and liquidity position that provides us with the working capital
needed to effectively manage our business segments during difficult
times. We have now established a low-cost, scalable operation and a
management team with extensive experience in commodity processing
business," said Becker. "We are positioned to take advantage of
opportunities for future growth and we remain focused on building
long-term value for our shareholders as a diversified ethanol
company."
Recent Business Highlights
Significant recent accomplishments include:
-- Green Plains completed its merger with VBV on October 15, 2008. At
closing, VBV's two ethanol plants and its ethanol marketing and
distribution business were combined with Green Plains' ethanol production,
grain, agronomy, feed and fuel distribution businesses. Simultaneously at
closing, NTR plc, a leading international developer and operator of
renewable energy and sustainable waste management projects and the majority
equity holder of VBV prior to the merger, invested $60 million in Green
Plains' common stock at a price of $10 per share. With this investment,
NTR is our largest shareholder.
-- Green Plains' ethanol plant in Bluffton, Indiana, announced "first
grind" on September 11, 2008. Green Plains' ethanol plant in Obion,
Tennessee, announced "first grind" on November 9, 2008. With no current
construction projects, the Ethanol Production segment is fully operational
with four plants and an expected operating capacity of 330 million gallons
of ethanol per year.
-- Green Plains initiated in-house ethanol and distillers grains
marketing programs through its wholly-owned subsidiary, Green Plains Trade
Group, LLC ("Green Plains Trade"). Effective September 30, 2008, The
Company began to directly market the ethanol produced at the Shenandoah
ethanol plant. In early 2009, Green Plains Trade expanded its in-house
marketing activities to include all of Green Plains' ethanol production,
terminating all external ethanol marketing arrangements.
-- Green Plains announced the formation of a joint venture called
BioProcessAlgae LLC to commercialize algae production technology. In
addition to Green Plains, the other partners in the venture are CLARCOR,
Inc. (NYSE: CLC), BioProcess H20 LLC and NTR plc. BioProcessAlgae LLC
received a grant from the Iowa Office of Energy Independence for
approximately $2.2 million to build a pilot project at Green Plains'
ethanol plant in Shenandoah, Iowa.
-- Green Plains Trade entered into an agreement to provide independent
third-party marketing services to Bushmills Ethanol, Inc. of Atwater,
Minnesota in January 2009. With the addition of Bushmills, Green Plains
Trade now provides ethanol marketing services to three third-party
producers with combined expected operating capacity of over 305 million
gallons per year.
-- Green Plains' listing changed from the NASDAQ Capital Market to the
NASDAQ Global Market concurrent with the completion of the merger. On
December 19, 2008, then Chairman and Chief Executive Officer Wayne
Hoovestol presided over NASDAQ morning market opening ceremonies.
-- On January 1, 2009, Todd Becker was named President and Chief
Executive Officer. On March 10, 2009, Mr. Becker was appointed as a
Director of the Company. Mr. Hoovestol remains as Chairman of the Board of
Directors and was recently appointed Chief Strategy Officer for the
Company. The combined company has assembled a management team with
extensive commodity risk management and marketing experience and expertise.
-- On January 20, 2009, Green Plains acquired majority interest in
Houston-based biofuel terminal operator Blendstar, LLC. The transaction
involved a membership interest purchase whereby Green Plains acquired 51%
of Blendstar from an affiliate of NTR for $9.0 million. Blendstar
currently operates terminal facilities in Oklahoma City, Little Rock,
Nashville, Knoxville, Louisville and Birmingham. Additionally, Blendstar
has announced commitments to build terminals in Collins, Mississippi, and
Shreveport, Louisiana.
Comments on Business Segments
Ethanol Production
"In the current environment, commodity risk management is
critical to our future and one of our core competencies," said
Becker. "We utilize a sophisticated real-time margin management
system designed to capture and lock-in the best possible prices for
commodity inputs and outputs at each of our plants. Even with tight
margins, we have found opportunities to lock in margins at all four
of our plants for the next quarter. With construction and startup
now behind us, we expect future financial results to more fully
depict our ethanol production potential."
Agribusiness
"Agribusiness segment revenues are largely seasonal due to the
nature of the business," said Becker. "Revenues typically peak
during the spring planting season when farmers are purchasing seed,
chemical, fertilizer and agronomy services and again during the
fall harvest. 2008 was no exception as Green Plains Grain had a
very good harvest quarter. We look forward to building on this
success in 2009 and are focusing our efforts on expanding this part
of the platform. We want to handle more grain and sell more
fertilizer, chemicals, seed and fuel. We believe our 20 million
bushels of grain storage capacity gives us a competitive advantage
over a pure play ethanol operator when managing price and supply
risk for corn."
Marketing and Distribution
"Green Plains' independent third-party marketing service
diversifies our revenues and adds an important dimension to our
vertical-integration strategy," added Becker. "The Marketing and
Distribution segment is positioned for significant growth. Combined
with our own ethanol production, we are currently producing,
marketing and/or distributing 635 million gallons of ethanol per
year, or approximately 6% of the nation's total ethanol
demand."
Conference Call
On March 25, 2009, Green Plains will hold a conference call for
analysts, investors or other interested parties to discuss the 2008
financial results. Green Plains' participants will include Todd
Becker, President and Chief Executive Officer, and Jerry Peters,
Chief Financial Officer. The time of the call is 11:00 a.m. EDT /
10:00 am CDT. To participate by telephone, the domestic dial-in
number is 877-407-8033 and the international dial-in number is
201-689-8033. Participants are urged to call in to the conference
call at least 10 minutes prior to the start time. The conference
call will be webcast and accessible at www.gpreinc.com. The
conference call will be archived and available for replay through
April 8, 2009.
Safe Harbor
This news release contains forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange
Act of 1934, as amended. Such statements are identified by the use
of words such as "anticipate," "estimate," "expect," "project,"
"intend," "plan," "believe," and other words and terms of similar
meaning in connection with any discussion of future operating or
financial performance. Such statements are based on management's
current expectations and are subject to various factors, risks and
uncertainties that may cause actual results, outcome of events,
timing and performance to differ materially from those expressed or
implied by such forward-looking statements. Green Plains may
experience significant fluctuations in future operating results due
to a number of economic conditions, including, but not limited to,
competition in the ethanol industry, risks associated with plant
construction and technology development, commodity market risks,
financial market risks, counter-party risks, risks associated with
changes to federal policy and/or regulation and other risk factors
detailed in Green Plains' SEC filings. Additional information with
respect to these and other factors, which could materially affect
Green Plains and its operations, are included on certain forms
Green Plains has filed with the SEC. Green Plains assumes no
obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise. The
cautionary statements in this report expressly qualify all of our
forward-looking statements. In addition, the Company is not
obligated, and does not intend, to update any of its
forward-looking statements at any time unless an update is required
by applicable securities laws.
GREEN PLAINS RENEWABLE ENERGY, INC.
FINANCIAL INFORMATION
2008 Consolidated Financial Results
For accounting purposes, Green Plains is considered the acquired
company in the merger with VBV. Consequently, 2008 financial
results exclude the operations of Green Plains prior to October 15,
2008, the date of the merger. In addition, the Company changed to a
calendar year end from VBV's fiscal year end of March 31. As a
result, Green Plains reported financial results are for the
nine-month transition period ended December 31, 2008. Prior to
completion of the merger, VBV had a controlling interest in two
development stage ethanol plants. Operations commenced at these
plants in September 2008 and November 2008. Accordingly, VBV, the
acquiring entity for accounting purposes, was a development stage
company until September 2008. As a result, comparative financial
results for prior periods are not presented.
GREEN PLAINS RENEWABLE ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Nine Months
Ended Ended
December 31, December 31,
2008 2008
------------ ------------
Revenues
Ethanol $ 107,495 $ 108,960
Grain 32,766 32,766
Agronomy products 14,966 14,966
Distillers grains 27,892 28,316
Other 3,750 3,750
------------ ------------
Total revenues 186,869 188,758
Cost of goods sold 171,537 175,444
------------ ------------
Gross profit 15,332 13,314
Operating expenses 14,452 18,467
------------ ------------
Operating income (loss) 880 (5,153)
------------ ------------
Other income (expense)
Interest income 121 150
Interest expense, net of amounts capitalized (3,871) (3,933)
Other, net 782 887
------------ ------------
Total other income (expense) (2,968) (2,896)
------------ ------------
Income (loss) before income taxes and minority
interests (2,088) (8,049)
Income tax provision (benefit) - -
Minority interests in losses of consolidated
subsidiaries 239 1,152
------------ ------------
Net income (loss) $ (1,849) $ (6,897)
============ ============
Earnings per share:
Basic $ (0.08) $ (0.56)
============ ============
Diluted $ (0.08) $ (0.56)
============ ============
Weighted average shares outstanding:
Basic 22,048 12,366
============ ============
Diluted 22,048 12,366
============ ============
Total revenues during the nine-month transition period ended
December 31, 2008 were $188.8 million. This amount includes
revenues from the Bluffton and Obion ethanol plants beginning with
commencement of operations on September 11, 2008 and November 9,
2008, respectively. Revenues for this period also included
operations from the Shenandoah and Superior ethanol plants and
Green Plains Grain beginning on October 15, 2008.
Cost of goods sold during the nine-month transition period ended
December 31, 2008 was $175.4 million, resulting in gross profit of
$13.3 million. This included only the costs related to the
operations generating revenues during the periods noted above.
Operating expenses were $18.5 million during the nine-month
transition period ended December 31, 2008. The operating expenses
for the period include aggregate pre-production period expenses at
VBV's two plants of $4.1 million. Operating expenses also included
one-time merger related expenses of $3.0 million, of which $1.9
million was non-cash.
Operating Segment Information
For better understanding of overall operations, Green Plains'
businesses are depicted and divided into three operating segments,
as follows: (1) grain warehousing and marketing, as well as sales
and related services of seed, feed, fertilizer, chemicals and
petroleum products (collectively referred to as "Agribusiness");
(2) production of ethanol and related by-products (collectively
referred to as "Ethanol Production"), and (3) marketing and
distribution of Company-produced and third-party ethanol and
distillers grains (collectively referred to as "Marketing and
Distribution").
The chart below shows revenues, gross profit and operating
income by segment for the three-month period and nine-month
transition period ended December 31, 2008.
Three Months Nine Months
Ended Ended
December 31, December 31,
2008 2008
------------ ------------
Operating Segments Data:
(thousands of dollars)
Revenues
Ethanol Production $ 134,782 $ 136,671
Agribusiness 68,785 68,785
Marketing and Distribution 71,388 71,388
Intercompany eliminations (88,086) (88,086)
------------ ------------
Total revenues $ 186,869 $ 188,758
============ ============
Gross profit
Ethanol Production $ 6,875 $ 4,857
Agribusiness 8,554 8,554
Marketing and Distribution - -
Intercompany eliminations (97) (97)
------------ ------------
Total gross profit $ 15,332 $ 13,314
============ ============
Operating income (loss)
Ethanol Production $ (3,080) $ (9,113)
Agribusiness 4,422 4,422
Marketing and Distribution (365) (365)
Intercompany eliminations (97) (97)
------------ ------------
Total operating income (loss) $ 880 $ (5,153)
============ ============
Ethanol Production Segment
Total revenues for the Ethanol Production segment for the
nine-month transition period ended December 31, 2008 were $136.7
million. This amount includes revenues from the Bluffton and Obion
plants from the commencement of operations, September 11, 2008 and
November 9, 2008, respectively, and from the Shenandoah and
Superior plants since October 15, 2008, the date of the merger.
Prior to commencement of operations at the Bluffton plant there
were no revenues for the Ethanol Production segment.
The following table presents selected operating data for the
Ethanol Production Segment:
Three Months Nine Months
Ended Ended
December 31, December 31,
2008 2008
--------------- ---------------
Operating and Other Data
Ethanol sold 61,547 61,547
(thousands of gallons)
Distillers grains sold 173,956 177,875
(equivalent dried tons)
Average net price of ethanol sold $ 1.73 $ 1.76
($ per gallon)
Average corn cost $ 4.33 $ 4.33
($ per bushel)
Average net price for distillers grains $ 125 $ 125
($ per equivalent dried ton)
During the nine-month transition period ended December 31, 2008,
Green Plains sold 61.5 million gallons of ethanol at an average net
price of $1.76 per gallon. In addition, during the period, we
recognized $22.2 million from sales of distillers grains at an
average net price of $125 per equivalent dried ton.
Cost of goods sold within the Ethanol Production segment during
the nine-month transition period ended December 31, 2008 was $131.8
million, resulting in a gross profit of $4.9 million. Green Plains'
average net corn cost during this period was $4.33 per bushel.
As of December 31, 2008, approximately 8% of Green Plains'
estimated corn usage for the next 12 months was subject to
fixed-price contracts at a weighted average price of approximately
$4.29 per bushel. This included inventory on hand and fixed-price
future-delivery contracts for approximately 12 million bushels.
As of December 31, 2008, approximately 10% of Green Plains'
forecasted ethanol production during the next 12 months has been
sold under fixed-price contracts at a weighted average price of
approximately $1.64 per gallon.
As of December 31, 2008, approximately 24% of Green Plains'
forecasted distillers grain production for the next 12 months was
subject to fixed-price contracts and has been sold under
fixed-price contracts at a weighted average price of approximately
$112 per equivalent dried ton.
Agribusiness Segment
Total revenues for the Agribusiness segment for quarter ended
December 31, 2008 were $68.8 million. As a result of reverse merger
accounting the reported Agribusiness segment revenues for this
period consist solely of revenues since October 15, 2008, the date
of the merger. As such, Green Plains' Agribusiness segment
recognized $53.8 million in revenues from grain sales and services,
and $15.0 million from sales of agricultural products. The
Agribusiness segment sold 8.3 million bushels of grain during the
period. Cost of goods sold within the Agribusiness segment during
the period was $60.2 million.
Marketing and Distribution Segment
Total revenues for the Marketing and Distribution segment during
the nine-month transition period ended December 31, 2008 were $71.4
million. Green Plains Trade, a wholly-owned subsidiary of the
Company, has been marketing the ethanol produced at our Shenandoah
plant. Ethanol produced at our other three plants was sold to
third-party marketers. Nearly all of our ethanol that was sold to
third-party marketers was repurchased by Green Plains Trade,
reflected in the Marketing and Distribution segment, and resold to
other customers. Corresponding revenues and related costs of goods
sold were eliminated in consolidation. In January 2009, the
third-party ethanol marketing contract for our Superior plant
terminated, and in February 2009, the third-party ethanol marketing
contracts for our Bluffton and Obion plants terminated. Green
Plains Trade is now responsible for the sales, marketing and
distribution of all ethanol produced at our four production
facilities. Green Plains Trade has entered into an agreement to
provide marketing services to three third-party producers with
expected operating capacity of over 305 million gallons per year.
Our third-party marketing services commenced in January 2009.
Cash Flow
Green Plains evaluates cash flow performance based on EBITDA.
Management uses EBITDA to compare the financial performance of its
segments and to internally manage those business segments.
Management believes that EBITDA provides useful information to
investors as a measure of comparison with peer companies. EBITDA
should not be considered an alternative to, or more meaningful
than, net income or cash flow as determined in accordance with
generally accepted accounting principles (GAAP). EBITDA
calculations may vary from company to company. Accordingly, our
computation of EBITDA may not be comparable with a similarly titled
measure of another company. The following chart sets forth the
reconciliation of net income to EBITDA by operating segment for the
periods indicated:
Three Months Nine Months
Ended Ended
December 31, December 31,
2008 2008
------------ ------------
(thousands of dollars)
Net income (loss) $ (1,849) $ (6,897)
Interest expense 3,871 3,933
Depreciation and amortization 4,675 4,717
Minority interest (239) (1,152)
Income taxes - -
------------ ------------
EBITDA $ 6,458 $ 601
============ ============
Balance Sheet
In accordance with GAAP, Green Plains accounted for the merger
with VBV as a reverse acquisition (i.e., Green Plains was
considered the acquired company and VBV was considered the
acquiring company). As a result, Green Plains' assets and
liabilities as of the date of the merger have been incorporated
into VBV's balance sheet based on the fair values of the net assets
acquired, which equaled the consideration paid for the acquisition.
GAAP also requires an allocation of the acquisition consideration
to individual assets and liabilities including tangible assets,
financial assets, separately recognized intangible assets, and
goodwill. Since the merger occurred toward the end of our fiscal
period and involved complex legal and accounting issues, Green
Plains performed a tentative allocation of the purchase price using
preliminary estimates of the values of the assets and liabilities
acquired. The Company has engaged an expert to assist in the
determination of the final purchase price allocation. Green Plains
believes the final allocation will be determined during 2009 with
prospective adjustments, if any, recorded to its financial
statements at that time in accordance with GAAP. Although VBV was
considered the acquiring entity for accounting purposes, the merger
was structured so that VBV became a wholly-owned subsidiary of
Green Plains Renewable Energy, Inc.
Balance Sheet Data December 31,
(thousands of dollars) 2008
-------------
ASSETS
Current assets $ 192,969
Property and equipment, net 495,772
Other assets 4,325
-------------
Total assets $ 693,066
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 108,249
Long-term debt 299,011
Other liabilities 5,821
-------------
Total liabilities 413,081
-------------
Minority interest 296
-------------
Stockholders' equity 279,689
-------------
Total liabilities and stockholders' equity $ 693,066
=============
On December 31, 2008, Green Plains had $64.8 million in cash and
equivalents and $21.0 million available under committed loan
agreements subject to satisfaction of specified lending conditions
and covenants. Green Plains had total assets of nearly $700 million
and stockholders' equity of approximately $280 million. As of
December 31, 2008, Green Plains had 24,659,250 common shares
outstanding.
Supplemental Historical Financial Data of the Predecessor
Company
The following supplemental historical financial data table has
been derived from the consolidated historical activity of Green
Plains (excluding VBV, which was merged with Green Plains on
October 15, 2008) for the three and nine-month periods ended August
31, 2008. After the Merger, this information is considered to be
non-GAAP financial information to the successor Company because
historical financial results of the acquired company are not
included in the successor Company's financial results under reverse
acquisition accounting rules. Since no GAAP measures of these data
exist, no reconciliation is provided. However, management believes
these data, which were prepared in accordance with GAAP for the
predecessor company and previously filed with the SEC in Form 10-K
and/or Form 10-Q filings, are beneficial to the users of these
financial statements to better understand the historical operations
of the organization. These data may not be reflective of future
results of operations and is for information purposes only. The
presentation of this additional historical non-GAAP financial
information should not be considered in isolation or as a
substitute for results prepared in accordance with GAAP.
GREEN PLAINS RENEWABLE ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Nine Months
Ended Ended
August 31, August 31,
2008 2008
------------ ------------
Revenues
Ethanol $ 40,018 $ 96,050
Grain 46,491 75,596
Agronomy products 11,633 27,858
Distillers grains 6,892 17,729
Other 910 1,833
------------ ------------
Total revenues 105,944 219,066
Cost of goods sold 98,110 180,023
------------ ------------
Gross profit 7,834 39,043
Operating expenses 7,673 17,018
------------ ------------
Operating income (loss) 161 22,025
------------ ------------
Other income (expense)
Interest income 25 220
Interest expense, net of amounts capitalized (1,746) (3,995)
Other, net 103 123
------------ ------------
Total other income (expense) (1,618) (3,652)
------------ ------------
Income (loss) before income taxes and minority
interests (1,457) 18,373
Income tax provision (benefit) (575) 4,696
------------ ------------
Net income (loss) $ (882) $ 13,677
============ ============
Earnings per share:
Basic $ (0.11) $ 1.81
============ ============
Diluted $ (0.11) $ 1.81
============ ============
Weighted average shares outstanding:
Basic 7,821 7,561
============ ============
Diluted 7,821 7,561
============ ============
About Green Plains Renewable Energy, Inc.
Green Plains, based in Omaha, Nebraska, is a
vertically-integrated, low-cost ethanol producer. Green Plains'
Ethanol Production segment operates four ethanol plants in Iowa,
Indiana and Tennessee with a combined expected operating capacity
of 330 million gallons of ethanol per year. Green Plains' Marketing
and Distribution segment operates an independent third-party
ethanol marketing service, with contracted capacity of 305 million
gallons of ethanol per year and owns 51% of Blendstar, LLC, a
Houston-based biofuel terminal operator. Green Plains' Agribusiness
segment operates grain storage facilities and complementary
agronomy, feed, and fuel businesses. Green Plains has grain storage
capacity of approximately 22 million bushels.
Green Plains' largest shareholder NTR plc is a leading
international developer and operator in renewable energy and
sustainable waste management. Founded in 1978, NTR has evolved from
being a developer and operator of infrastructure in Ireland to an
international developer and operator of renewable energy (wind,
solar and bio-ethanol), and sustainable waste management businesses
in the USA, UK, and Ireland. The company employs over 4,100 people
and has a market capitalization in excess of EUR 497 million
($693m). www.ntr.ie
Company Contact: Jim Stark Vice President - Investor Relations
Green Plains Renewable Energy, Inc. (402) 884-8700 Investor
Contact: John Baldissera BPC Financial Marketing (800) 368-1217
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