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Green Plains Reports Third Quarter 2016 Financial Results

  • Net income attributable to the company of $7.9 million, or $0.20 per diluted share
  • Company completes nearly $500 million in acquisitions over the last 45 days
  • Based on current markets, the company expects a stronger fourth quarter

OMAHA, Neb., Oct. 31, 2016 (GLOBE NEWSWIRE) -- Green Plains Inc. (NASDAQ:GPRE) today announced financial results for the third quarter of 2016. Net income attributable to the company was $7.9 million, or $0.20 per diluted share, for the third quarter of 2016 compared with net income of $6.2 million, or $0.16 per diluted share, for the same period in 2015. Revenues were $841.9 million for the third quarter of 2016 compared with $742.8 million for the same period last year.

“We generated $42 million of segment operating income for the third quarter of 2016, which is our best performance since the end of 2014. Based on current markets, we expect a stronger fourth quarter,” said Todd Becker, president and chief executive officer. “We have grown significantly over the last year as we have increased our ethanol production capacity organically and through acquisitions by nearly 50 percent to approximately 1.5 billion gallons per year, and acquired Fleischmann’s Vinegar Company. We continue to focus on our core competencies as we efficiently integrate these acquisitions and aggressively grow our platform to create long-term shareholder value.”

During the third quarter, Green Plains produced 292.2 million gallons of ethanol compared with 215.6 million gallons for the same period in 2015. The consolidated ethanol crush margin was $52.6 million, or $0.18 per gallon, for the third quarter of 2016 compared with $34.9 million, or $0.16 per gallon, for the same period in 2015. The consolidated ethanol crush margin is the ethanol production segment’s operating income before depreciation and amortization, which includes corn oil production, plus intercompany storage, transportation and other fees, net of related expenses.

Revenues were $2.5 billion for the nine-month period ended Sept. 30, 2016, compared with $2.2 billion for the same period in 2015. Net loss for the nine-month period ended Sept. 30, 2016, was $(8.0) million, or $(0.21) per diluted share, compared with net income of $10.7 million, or $0.27 per diluted share, for the same period in 2015.

“We experienced a stable ethanol margin environment in the third quarter as we continued to see strong ethanol demand worldwide driven by increasing consumption of gasoline and broader appetites for an efficient source of octane,” added Becker. “As we continue to expand and diversify our operations, we expect to immediately benefit from the recently acquired businesses.”

Recent Highlights

  • On Aug. 15, 2016, Green Plains completed a private offering of $170 million aggregate principal amount of 4.125% convertible senior notes that will mature on Sept. 1, 2022. The net proceeds from the offering were used to finance the recent acquisitions.
  • On Sept. 23, 2016, Green Plains acquired three ethanol plants located in Madison, Ill., Mount Vernon, Ind. and York. Neb. for approximately $237 million in cash plus certain working capital adjustments from Abengoa BioEnergy. Concurrently, the ethanol storage assets were sold to Green Plains Partners LP for $90 million. All three plants are currently operational and will add 236 million gallons per year of ethanol production capacity.
  • On Oct. 3, 2016, Green Plains acquired SCI Ingredients Holdings, Inc. and its wholly owned subsidiary, Fleischmann’s Vinegar Company, Inc., for approximately $250 million, financing the transaction with $135 million of debt and the balance with cash on hand. Fleischmann’s Vinegar Company will operate as a standalone business.

Results of Operations
Consolidated revenues increased $99.1 million for the three months ended Sept. 30, 2016, compared with the same period in 2015. Revenues from ethanol, corn oil and cattle sales increased $82.7 million, $20.9 million and $13.1 million, respectively, while revenues from grain decreased $17.1 million. Ethanol and cattle revenues were affected by increased volumes sold, partially offset by lower average realized prices. Corn oil revenues were impacted by increased volumes sold. Grain revenues were impacted by both lower volumes sold and lower average realized prices.

Operating income increased $11.0 million for the three months ended Sept. 30, 2016, compared with the same period last year primarily due to increased margins on ethanol production and cattle. Interest expense increased $1.6 million for the three months ended Sept. 30, 2016, compared with the same period last year primarily due to higher average debt outstanding. Income tax expense was $5.1 million for the three months ended Sept. 30, 2016, compared with income tax benefit of $0.6 million for the same period in 2015.

Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the third quarter of 2016 was $49.1 million compared with $36.3 million for the same period last year.

GREEN PLAINS INC.
SEGMENT OPERATIONS
(unaudited, in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2016 2015 % Var. 2016 2015 % Var.
Revenues:
Ethanol production $532,441 $389,917 36.6 % $1,471,757 $1,286,519 14.4 %
Agribusiness 443,330 310,190 42.9 1,300,862 974,883 33.4
Marketing and distribution 735,983 670,327 9.8 2,173,826 1,980,360 9.8
Partnership 26,205 21,410 22.4 75,487 28,251 *
Intersegment eliminations (896,107) (649,047) 38.1 (2,543,149) (2,044,338) 24.4
841,852 742,797 13.3 2,478,783 2,225,675 11.4
Gross margin:
Ethanol production 38,216 24,569 55.5 61,037 101,924 (40.1)
Agribusiness 8,748 2,195 298.5 22,651 11,904 90.3
Marketing and distribution 9,660 13,393 (27.9) 26,023 30,033 (13.4)
Partnership 26,205 21,410 22.4 75,487 28,251 *
Intersegment eliminations 140 1,882 (92.6) 490 5,184 (90.5)
82,969 63,449 30.8 185,688 177,296 4.7
Operating income (loss):
Ethanol production 15,311 5,528 177.0 (7,385) 43,139 (117.1)
Agribusiness 6,251 365 * 15,039 5,833 157.8
Marketing and distribution 5,252 9,406 (44.2) 13,908 17,446 (20.3)
Partnership 15,084 11,030 36.8 42,958 416 *
Intersegment eliminations 141 1,882 (92.5) 491 5,264 (90.7)
Segment operating income 42,039 28,211 49.0 65,011 72,098 (9.8)
Corporate activities (11,184) (8,378) 33.5 (29,393) (23,759) 23.7
$30,855 $19,833 55.6 % $35,618 $48,339 (26.3)%
* Percentage variance not considered meaningful.


GREEN PLAINS INC.
OPERATING DATA BY PRODUCT
(unaudited, in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2016 2015 % Var. 2016 2015 % Var.
Ethanol production
Ethanol sold (gallons) 292,238 215,561 35.6 % 813,464 686,791 18.4 %
Distillers grains sold (tons) 790 577 36.8 2,170 1,837 18.1
Corn oil sold (pounds) 72,176 55,918 29.1 196,530 175,975 11.7
Corn consumed (bushels) 102,113 75,538 35.2 284,282 241,720 17.6
Agribusiness
Grain sold (bushels) 112,754 63,171 78.5
320,612 206,554
55.2
Marketing and distribution
Ethanol sold (gallons) 335,980 294,348 14.1 1,017,806 869,989 17.0
Partnership
Storage and throughput (gallons) 292,238 215,561 35.6 813,464 215,561 *
* Percentage variance not considered meaningful.


GREEN PLAINS INC.
CONSOLIDATED CRUSH MARGIN
(unaudited, in thousands except per gallon amounts)
Three Months Ended
September 30,
Three Months Ended
September 30,
2016 2015 2016 2015
($ in thousands) ($ per gallon produced)
Ethanol production operating income $15,311 $5,528 $0.05 $0.03
Depreciation and amortization 15,725 13,887 0.06 0.06
Total ethanol production 31,036 19,415 0.11 0.09
Intercompany fees, net:
Storage and logistics (partnership) 15,675 11,852 0.05 0.05
Marketing and agribusiness fees 5,885 3,622 0.02 0.02
Consolidated crush margin $52,596 $34,889 $0.18 $0.16

Liquidity and Capital Resources
On Sept. 30, 2016, Green Plains had $441.6 million in cash and cash equivalents, and $168.9 million available under revolving credit agreements, some of which are subject to restrictions and other lending conditions. Total debt outstanding was $923.5 million, including $229.1 million outstanding under working capital revolvers and other short-term borrowing arrangements for the marketing and distribution, and agribusiness segments at Sept. 30, 2016.

Conference Call Information
On Nov. 1, 2016, Green Plains Inc. and Green Plains Partners LP will host a joint conference call at 11 a.m. Eastern time (10 a.m. Central time) to discuss third quarter 2016 financial and operating results for each company. Domestic and international participants can access the conference call by dialing 888.765.5576 and 913.312.0837, respectively. Participants are advised to call at least 10 minutes prior to the start time. Alternatively, the conference call and presentation can be accessed on Green Plains’ website at http://investor.gpreinc.com/events.cfm. A transcript of the conference call will also be made available on the company’s website as soon as practicable.

Non-GAAP Financial Measures
Management uses earnings before interest, income taxes, depreciation and amortization, or EBITDA, and consolidated ethanol crush margin to measure the company’s financial performance and to internally manage its businesses. Management believes these measures provide useful information to investors for comparison with peer and other companies. These measures should not be considered an alternative to net income or segment operating income, which are determined in accordance with generally accepted accounting principles. EBITDA calculations may vary from company to company. Accordingly, the company’s computation of EBITDA may not be comparable with a similarly-titled measure of another company.

About Green Plains Inc.
Green Plains Inc. (NASDAQ:GPRE) is a diversified commodity-processing business with operations related to ethanol, distillers grains and corn oil production; grain handling and storage; a cattle feedlot; and commodity marketing and distribution 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, through its wholly owned subsidiary Fleischmann’s Vinegar Company, provides specialized ingredient solutions for leading food and feed manufacturers. 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.

About Green Plains Partners LP
Green 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.

Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include words such as “anticipates,” “believes,” “estimates,” “expects,” “goal,” “intends,” “plans,” “potential,” “predicts,” “should,” “will,” and other words with similar meanings in connection with future operating or financial performance. Such statements are based on management’s current expectations, which are subject to various factors, risks and uncertainties that may cause actual results, outcomes, timing and performance to differ materially from those expressed or implied. Green Plains may experience significant fluctuations in future operating results due to a number of economic conditions, including competition in the industries in which Green Plains operates; commodity market risks, including those resulting from current weather conditions; financial market risks; counterparty risks; risks associated with changes to federal policy or regulation; risks related to closing and achieving anticipated results from acquisitions; risks associated with the joint venture to commercialize algae production and growth potential of the algal biomass industry; risks associated with the recent acquisitions of three Abengoa BioEnergy ethanol plants and Fleischmann’s Vinegar; and other risks detailed in Green Plains’ reports filed with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended Dec. 31, 2015, and subsequent filings with the SEC. Green Plains is not obligated nor intends to update its forward-looking statements at any time unless it is required by applicable securities laws. Unpredictable or unknown factors not discussed in this release could also have material adverse effects on forward-looking statements.

Consolidated Financial Results

GREEN PLAINS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30,
2016
December 31,
2015
(unaudited)
ASSETS
Current assets
Cash and cash equivalents$407,359 $384,867
Restricted cash 34,219 27,018
Accounts receivable, net 132,574 96,150
Inventories 324,287 353,957
Other current assets 54,583 50,585
Total current assets 953,022 912,577
Property and equipment, net 1,139,592 922,070
Other assets 84,344 83,273
Total assets$2,176,958 $1,917,920
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$129,317 $166,963
Accrued and other liabilities 46,373 32,026
Short-term notes payable and other borrowings 229,086 226,928
Current maturities of long-term debt 13,244 4,507
Other current liabilities 24,927 8,245
Current liabilities 442,947 438,669
Long-term debt 681,182 432,139
Other liabilities 87,290 88,203
Total liabilities 1,211,419 959,011
Stockholders’ equity
Total Green Plains stockholders’ equity 849,833 797,830
Noncontrolling interests 115,706 161,079
Total liabilities and stockholders’ equity$2,176,958 $1,917,920


GREEN PLAINS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2016 2015 % Var. 2016 2015 % Var.
Revenues
Product $839,786 $740,634 13.4 % $2,472,741 $2,219,319 11.4 %
Service 2,066 2,163 (4.5) 6,042 6,356 (4.9)
Total revenues 841,852 742,797 13.3 2,478,783 2,225,675 11.4
Costs and expenses
Cost of goods sold 758,883 679,348 11.7 2,293,095 2,048,379 11.9
Operations and maintenance 8,564 7,715 11.0 25,713 21,850 17.7
General and administrative 24,264 19,280 25.9 68,225 58,473 16.7
Depreciation and amortization 19,286 16,621 16.0 56,132 48,634 15.4
Total costs and expenses 810,997 722,964 12.2 2,443,165 2,177,336 12.2
Operating income 30,855 19,833 55.6 35,618 48,339 (26.3)
Other income (expense)
Interest income 484 319 51.7 1,263 749 68.5
Interest expense (11,819) (10,196) 15.9 (33,117) (29,918) 10.7
Other, net (1,553) (519) 199.2 (2,050) (2,484) (17.5)
Total other expense (12,888) (10,396) 24.0 (33,904) (31,653) 7.1
Income before income taxes 17,967 9,437 90.4 1,714 16,686 (89.7)
Income tax expense (benefit) 5,083 (604) * (4,339) 2,171 *
Net income 12,884 10,041 28.3 6,053 14,515 (58.3)
Net income attributable to noncontrolling interests 4,956 3,862 28.3 14,072 3,862 264.4
Net income (loss) attributable to Green Plains $7,928 $6,179 28.3 % $(8,019) $10,653 (175.3)%
Earnings per share:
Net income (loss) attributable to Green Plains - basic $0.21 $0.16 $(0.21) $0.28
Net income (loss) attributable to Green Plains - diluted $0.20 $0.16 $(0.21) $0.27
Weighted average shares outstanding:
Basic 38,282 38,066 38,301 37,966
Diluted 39,136 38,556 38,301 39,266
* Percentage variance not considered meaningful.


GREEN PLAINS INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands)
Nine Months Ended
September 30,
2016 2015
Cash flows from operating activities:
Net income $6,053 $14,515
Noncash operating adjustments:
Depreciation and amortization 56,132 48,634
Deferred income taxes (16,413) (39,645)
Other 14,549 11,745
Net change in working capital 660 (42,729)
Net cash provided (used) by operating activities 60,981 (7,480)
Cash flows from investing activities:
Purchases of property and equipment (35,658) (44,464)
Acquisition of businesses, net of cash acquired (252,488) -
Investments in unconsolidated subsidiaries (1,388) (3,309)
Net cash used by investing activities (289,534) (47,773)
Cash flows from financing activities:
Net proceeds (payments) - long-term debt 296,422 (16,419)
Net proceeds (payments) - short-term borrowings 1,843 (9,285)
Other (47,220) 151,310
Net cash provided by financing activities 251,045 125,606
Net change in cash and cash equivalents 22,492 70,353
Cash and cash equivalents, beginning of period 384,867 425,510
Cash and cash equivalents, end of period $407,359 $495,863


GREEN PLAINS INC.
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2016 2015 2016 2015
Net income $12,884 $10,041 $6,053 $14,515
Interest expense 11,819 10,196 33,117 29,918
Income taxes 5,083 (604) (4,339) 2,171
Depreciation and amortization 19,286 16,621 56,132 48,634
EBITDA $49,072 $36,254 $90,963 $95,238


Contact: Jim Stark, Vice President - Investor and Media Relations, Green Plains Inc. (402) 884-8700

Source:Green Plains, Inc.