• Pacific Ethanol Reports Third Quarter 2017 Results

    Source: Nasdaq GlobeNewswire / 07 Nov 2017 17:38:45   Eastern Standard Time

    SACRAMENTO, Calif., Nov. 07, 2017 (GLOBE NEWSWIRE) -- Pacific Ethanol, Inc. (NASDAQ:PEIX), a leading producer and marketer of low-carbon renewable fuels and high-quality alcohol products in the United States, reported its financial results for the three and nine months ended September 30, 2017.

    Neil Koehler, Pacific Ethanol’s president and CEO, stated: “For the third quarter 2017, Pacific Ethanol reported improving financial performance in light of challenging commodity margin economics. Combined with the positive impact of the July 3rd ICP acquisition, we reported year-over-year and sequential quarterly increases in net sales, gross profit, operating income and Adjusted EBITDA. We now operate nine plants with a total annual production capacity of 605 million gallons. Shortly after the ICP acquisition, we refinanced the associated promissory notes, strengthening our balance sheet and reducing our cost of borrowing.”

    Financial Results for the Three Months Ended September 30, 2017 Compared to 2016
    The year-over-year increases reflect the impact of the ICP acquisition, including higher professional expenses associated with the acquisition.

    • Net sales were $445.4 million, compared to $417.8 million.
    • Record total gallons sold of 250.0 million, compared to 243.7 million.
    • Record production gallons sold of 141.8 million, compared to 125.5 million.
    • Cost of goods sold was $433.4 million, compared to $411.4 million.
    • Gross profit was $12.1 million, compared to $6.4 million.
    • Selling, general and administrative expenses were $8.7 million, compared to $6.0 million, reflecting increased benefits, non-cash compensation and transaction costs associated with the acquisition of ICP.  
    • Operating income was $3.3 million, compared to $0.4 million.
    • Net loss available to common stockholders was $0.5 million, or $0.01 per share, compared to $3.8 million, or $0.09 per share.
    • Adjusted EBITDA was $13.2 million, compared to $9.3 million.
    • Cash and cash equivalents were $56.9 million at September 30, 2017, compared to $68.6 million at December 31, 2016.

    Financial Results for the Nine Months Ended September 30, 2017 Compared to 2016

    • Net sales were $1,237.0 million, compared to $1,183.0 million.
    • Cost of goods sold was $1,229.0 million, compared to $1,157.9 million.
    • Gross profit was $7.9 million, compared $25.1 million.
    • Selling, general and administrative expenses were $22.9 million, compared to $20.4 million.
    • Operating loss was $15.0 million, compared to operating income of $4.7 million.
    • Net loss available to common stockholders was $22.6 million, or $0.53 per share, compared to $12.6 million, or $0.30 per share.
    • Adjusted EBITDA was $13.9 million, compared to $31.3 million.

    Third Quarter 2017 Results Conference Call
    Management will host a conference call at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time on November 8th, 2017. CEO Neil Koehler and CFO Bryon McGregor 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.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 7063879#. 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 Wednesday, November 8th, 2017 through 11:59 p.m. Eastern Time on Wednesday, November 15th, 2017. To access the replay, please dial (855) 859-2056. International callers should dial 00-1-(404) 537-3406. The pass code will be 7063879#.

    Use of Non-GAAP Measures
    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 net income (loss) attributed to Pacific Ethanol before interest expense, provision (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 not a measure of financial performance under GAAP, and should not be considered as 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 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 a leading producer and marketer of low-carbon renewable fuels and high-quality alcohol products in the United States. Pacific Ethanol owns and operates nine production facilities, four in the Western states of California, Oregon and Idaho, and five in the Midwestern states of Illinois and Nebraska. The plants have a combined production capacity of 605 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 fuel-grade ethanol, high-quality alcohol products and co-products domestically and internationally. Pacific Ethanol’s subsidiary, Kinergy Marketing LLC, markets all ethanol and alcohol products 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 1995
    Statements 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; statements about the benefits of Pacific Ethanol’s refinancing of the ICP promissory notes; and Pacific Ethanol’s 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; export conditions and international demand for ethanol and 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 Pacific Ethanol’s Form 10-Q filed with the Securities and Exchange Commission on August 9, 2017.

     
    PACIFIC ETHANOL, INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (unaudited, in thousands, except per share data)
     
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2017   2016   2017   2016 
                    
    Net sales$445,442  $417,806  $1,236,984  $1,183,039 
    Cost of goods sold 433,377   411,442   1,229,039   1,157,902 
    Gross profit 12,065   6,364   7,945   25,137 
    Selling, general and administrative expenses 8,720   5,971   22,932   20,436 
    Income (loss) from operations 3,345   393   (14,987)  4,701 
    Fair value adjustments    (69)  473   (53)
    Interest expense, net (3,826)  (3,874)  (9,157)  (16,643)
    Other income (expense), net (60)  32   (293)  92 
    Loss before provision (benefit) for income taxes (541)  (3,518)  (23,964)  (11,903)
    Provision (benefit) for income taxes          (245)
    Consolidated net loss (541)  (3,518)  (23,964)  (11,658)
    Net loss attributed to noncontrolling interests 339      2,285    
    Net loss attributed to Pacific Ethanol$(202) $(3,518) $(21,679) $(11,658)
    Preferred stock dividends$(319) $(319) $(946) $(949)
    Net loss available to common stockholders$(521) $(3,837) $(22,625) $(12,607)
    Net loss per share, basic and diluted$(0.01) $(0.09) $(0.53) $(0.30)
    Weighted-average shares outstanding, basic and diluted 42,475   42,226   42,358   42,156 
     


     
    PACIFIC ETHANOL, INC.
    CONSOLIDATED BALANCE SHEETS
    (unaudited, in thousands, except par value)
     
     September 30, December 31,
    ASSETS2017 2016
    Current Assets:     
    Cash and cash equivalents$  56,923 $  68,590
    Accounts receivable, net  72,282  86,275
    Inventories 71,819  60,070
    Prepaid inventory 5,622  9,946
    Income tax receivables 129  5,730
    Derivative instruments 3,017  978
    Other current assets 3,026  3,612
    Total current assets 212,818  235,201
    Property and equipment, net 509,369  465,190
    Other Assets:     
    Intangible assets, net 2,678  2,678
    Other assets 5,785  5,169
    Total other assets 8,463  7,847
    Total Assets$  730,650 $  708,238
     


     
    PACIFIC ETHANOL, INC.
    CONSOLIDATED BALANCE SHEETS (CONTINUED)
    (unaudited, in thousands, except par value)
            
      September 30,   December 31, 
    LIABILITIES AND STOCKHOLDERS’ EQUITY 2017   2016 
    Current Liabilities:       
    Accounts payable – trade$  41,178  $  37,051 
    Accrued liabilities 22,245   20,280 
    Current portion – capital leases 799   794 
    Current portion – long-term debt 20,000   10,500 
    Derivative instruments 2,755   4,115 
    Accrued PE Op Co. purchase 3,828   3,828 
    Other current liabilities 1,591   2,273 
    Total current liabilities 92,396   78,841 
            
    Long-term debt, net of current portion 220,304   188,028 
    Capital leases, net of current portion 134   547 
    Warrant liabilities at fair value    651 
    Other liabilities 20,915   21,910 
    Total Liabilities 333,749   289,977 
            
    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, 2017 and December 31, 2016
      Series B: 927 shares issued and outstanding as of
      September 30, 2017 and December 31, 2016
     1   1 
    Common stock, $0.001 par value; 300,000 shares authorized;
      43,971 and 39,772 shares issued and outstanding as of
      September 30, 2017 and December 31, 2016, respectively
     44   40 
    Non-voting common stock, $0.001 par value; 3,553 shares
      authorized; 1 and 3,540 shares issued and outstanding as of
      September 30, 2017 and December 31, 2016, respectively
        4 
    Additional paid-in capital 926,248   922,698 
    Accumulated other comprehensive loss (2,620)  (2,620)
    Accumulated deficit (554,858)  (532,233)
    Total Pacific Ethanol, Inc. Stockholders’ Equity 368,815   387,890 
    Noncontrolling Interests 28,086   30,371 
    Total Stockholders’ Equity 396,901   418,261 
    Total Liabilities and Stockholders’ Equity$  730,650  $  708,238 
     


     
    Reconciliation of Adjusted EBITDA to Net Loss 
       
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
    (in thousands) (unaudited)    2017   2016   2017   2016 
    Net loss attributed to Pacific Ethanol$  (202) $  (3,518) $(21,679) $(11,658)
    Adjustments:               
    Interest expense* 3,781   3,874   9,062   16,643 
    Provision (benefit) for income taxes          (245)
    Fair value adjustments    69   (473)  53 
    Depreciation and amortization expense*   9,573     8,857   26,975   26,526 
    Total adjustments   13,354     12,800   35,564   42,977 
    Adjusted EBITDA$  13,152  $  9,282  $13,885  $31,319 
    ________________
    * Adjusted for noncontrolling interests.
     


      
    Commodity Price Performance 
     
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
    (unaudited)   2017
     2016
     2017
     2016
    Production gallons sold (in millions) 141.8  125.5  374.0
      360.9
    Third party gallons sold (in millions) 108.2  118.2  335.2
      322.6
    Total gallons sold (in millions) 250.0  243.7  709.2
      683.5
                
    Production capacity utilization 93%  96%  91%  92%
                
    Average ethanol sales price per gallon$1.69 $1.62 $1.66
     $1.63
    Average CBOT ethanol price per gallon$1.55 $1.49 $1.54
     $1.49
                
    Corn cost – CBOT equivalent$3.69 $3.58 $3.67
     $3.70
    Average basis 0.11  0.25  0.21
      0.27
    Delivered corn cost$3.80 $3.83 $3.88 $3.97
                
    Total co-product tons sold (in thousands) 803.4  702.1  2,223.2  2,050.3
    Co-product return % (1) 34.0%  35.7%  34.2%  35.3%
    ________________           
    (1)  Co-product revenue as a percentage of delivered cost of corn.           
                


       
    Company IR Contact:IR Agency Contact:Media Contact:
    Pacific Ethanol, Inc.Becky HerrickPaul Koehler
    916-403-2755LHAPacific Ethanol, Inc.
    Investorrelations@pacificethanol.com415-433-3777916-403-2790
     paulk@pacificethanol.com