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Green Plains Reports First Quarter 2017 Financial Results

  • Net loss of $3.6 million, or $(0.09) per diluted share
  • EBITDA of $43.8 million, up $49.6 million from prior year’s first quarter
  • Solid performance from non-ethanol segments

OMAHA, Neb., May 01, 2017 (GLOBE NEWSWIRE) -- Green Plains Inc. (NASDAQ:GPRE) today announced financial results for the first quarter of 2017. Net loss attributable to the company was $3.6 million, or $(0.09) per diluted share, for the first quarter of 2017 compared with net loss of $24.1 million, or $(0.63) per diluted share, for the same period in 2016. Revenues were $887.7 million for the first quarter of 2017 compared with $749.2 million for the same period last year.

“We reported a nearly $50 million improvement in EBITDA year over year despite a seasonally soft first quarter,” said Todd Becker, president and chief executive officer. “We had solid earnings contributions from our non-ethanol businesses during the quarter, with both Green Plains Cattle and Fleischmann’s Vinegar reporting record quarters. We continue to diversify our revenue and income streams with a more balanced portfolio of businesses to minimize the impact of a soft ethanol quarter.”

During the first quarter, Green Plains produced 326.4 million gallons of ethanol compared with 247.0 million gallons for the same period in 2016. The consolidated ethanol crush margin was $37.7 million, or $0.12 per gallon, for the first quarter of 2017 compared with $4.1 million, or $0.02 per gallon, for the same period in 2016. 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.

“U.S. ethanol exports have started 2017 stronger than any year on record and we have continued to focus on international markets, exporting approximately 20% of our production in the first quarter,” Becker added. “Global demand for each of the products we produce, whether ethanol, corn oil or distillers grains, is strong and we are well positioned to benefit from these opportunities.”

“We believe that 2017 could develop into a favorable year for ethanol margins as the forward curve is stronger going into the summer driving season compared with 2016. Our focus is to drive free cash flow in the current environment and further strengthen our balance sheet in 2017.”

Recent Developments

  • On April 25, 2017, Green Plains Cattle Company LLC entered into an asset purchase agreement to acquire two cattle-feeding operations for $36.7 million, excluding working capital. The transaction includes feed yards located in Leoti, Kan. and Yuma, Colo., adding combined cattle capacity of 155,000 head to the company’s operations, supported by a multi-year offtake agreement with Cargill Meat Solutions. The transaction is expected to be completed in May 2017 and be accretive to 2017 earnings. On April 28, 2017, Green Plains Cattle entered into an amendment of its senior secured asset-based revolving credit facility used to finance the working capital for all of the cattle feedlot operations. The amendment increases the maximum commitment from $100 million to $200 million until July 31, 2017, when it increases to $300 million. The maturity date was extended from October 31, 2017 to April 30, 2020

  • On April 12, 2017, Green Plains entered into a privately negotiated agreement with a holder, on behalf of certain beneficial owners, of the company’s 3.25% Convertible Senior Notes due 2018. Under the agreement, approximately 1.3 million shares of the company’s common stock were exchanged for approximately $24.1 million in aggregate principal amount of the 2018 notes.
  • In March 2017, Green Plains Cattle purchased a 30,000 head cattle feeding operation located approximately 20 miles from Green Plains’ Hereford, Texas ethanol facility.

Results of Operations
Consolidated revenues increased $138.5 million for the three months ended March 31, 2017, compared with the same period in 2016. Revenues were impacted by an increase in ethanol, corn oil and cattle volumes sold, plus the addition of Fleischmann’s Vinegar during the fourth quarter of 2016. This was partially offset by a decrease in grain trading activity volumes and lower average realized prices for grain and cattle.

Operating income increased $40.0 million for the three months ended March 31, 2017, compared with the same period last year primarily due to increased margins on ethanol and cattle production. Interest expense increased $7.7 million for the three months ended March 31, 2017, compared with the same period in 2016, primarily due to higher average debt outstanding and borrowing costs. Income tax benefit was $2.4 million for the three months ended March 31, 2017, compared with $14.9 million for the same period in 2016.

Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the first quarter of 2017 was $43.8 million compared with $(5.8) million for the same period last year.

Segment Information
During the fourth quarter of 2016, management restructured its operating segments. The four segments are: (1) ethanol production, which includes ethanol, distillers grains and corn oil production, (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading, (3) food and ingredients, which includes the vinegar, cattle feedlot and food-grade corn oil operations and (4) partnership, which includes fuel storage and transportation services. Intercompany fees charged to the ethanol production segment for storage and logistics services, grain procurement and product sales are included in the partnership, and agribusiness and energy services segments and eliminated upon consolidation. Third party costs of grain consumed and revenues from product sales are reported directly in the ethanol production segment. Prior periods have been reclassified to conform to the revised segment presentation.

GREEN PLAINS INC.
SEGMENT OPERATIONS
(unaudited, in thousands)
Three Months Ended
March 31,
2017 2016 % Var.
Revenues:
Ethanol production$ 621,375 $ 528,328 17.6 %
Agribusiness and energy services 177,803 167,553 6.1
Food and ingredients 98,060 58,748 66.9
Partnership 27,229 23,789 14.5
Intersegment eliminations (36,783) (29,214) 25.9
$ 887,684 $ 749,204 18.5 %
Gross margin:
Ethanol production$ 22,237 $ (6,170) *%
Agribusiness and energy services 11,409 8,138 40.2
Food and ingredients 15,025 (506) *
Partnership 27,229 23,789 14.5
Intersegment eliminations (112) (734) (84.7)
$ 75,788 $ 24,517 *%
Operating income (loss):
Ethanol production$ (6,598) $ (29,565) (77.7)%
Agribusiness and energy services 6,369 3,737 70.4
Food and ingredients 9,626 (1,363) *
Partnership 16,619 13,071 27.1
Intersegment eliminations (75) (698) (89.3)
Corporate activities (8,549) (7,828) 9.2
$ 17,392 $ (22,646) *%
Depreciation and amortization:
Ethanol production$ 20,342 $ 15,780 28.9 %
Agribusiness and energy services 660 306 115.7
Food and ingredients 2,880 271 *
Partnership 1,254 1,217 3.0
Corporate activities 947 571 65.8
$ 26,083 $ 18,145 43.7 %
* Percentage variance not considered meaningful.


GREEN PLAINS INC.
OPERATING DATA BY PRODUCT
(unaudited, in thousands)
Three Months Ended
March 31,
2017 2016 % Var.
Ethanol production
Ethanol (gallons) 326,426 246,955 32.2%
Distillers grains (equivalent dried tons) 877 646 35.8
Corn oil (pounds) 75,356 59,839 25.9
Corn consumed (bushels) 113,485 86,531 31.1
Agribusiness and energy services
Domestic ethanol sold (gallons) 293,750 277,156 6.0
Export ethanol sold (gallons) 65,845 49,005 34.4
359,595 326,161 10.3
Food and ingredients
Company-owned cattle on feed (daily average head) 63 61 4.2
Partnership
Storage and throughput (gallons) 321,082 247,510 29.7


GREEN PLAINS INC.
CONSOLIDATED CRUSH MARGIN
(unaudited)
Three Months Ended
March 31,
Three Months Ended
March 31,
2017 2016 2017 2016
($ in thousands) ($ per gallon produced)
Ethanol production:
Operating loss$ (6,598) $ (29,565) $ (0.02) $ (0.12)
Depreciation and amortization 20,342 15,780 0.07 0.07
Total ethanol production 13,744 (13,785) 0.05 (0.05)
Intercompany fees, net:
Storage and logistics (partnership) 16,863 13,137 0.05 0.05
Marketing and agribusiness fees (agribusiness and energy services) 7,120 4,721 0.02 0.02
Consolidated crush margin$ 37,727 $ 4,073 $ 0.12 $ 0.02

Liquidity and Capital Resources
On March 31, 2017, Green Plains had $295.4 million in total cash and cash equivalents, and $129.2 million available under revolving credit agreements, some of which are subject to restrictions and other lending conditions. Total debt outstanding was $1,124.8 million, including $335.7 million outstanding under working capital revolvers and other short-term borrowing arrangements for the agribusiness and energy services, and the food and ingredients segments at March 31, 2017.

Conference Call Information
On May 2, 2017, 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 first quarter 2017 financial and operating results for each company. Domestic and international participants can access the conference call by dialing 888.228.5279 and 913.312.0942, 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 alternatives to net income or segment operating income, which are determined in accordance with generally accepted accounting principles (GAAP). These non-GAAP calculations may vary from company to company. Accordingly, the company’s computation of EBITDA and consolidated ethanol crush margins may not be comparable with similarly titled measures of another company.

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 feedlots, food ingredients, and commodity marketing and logistics 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 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 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 include: competition in the industries in which Green Plains operates; commodity market risks, 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 ethanol plants and Fleischmann’s Vinegar; and other risks discussed in Green Plains’ 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 assumes no obligation to update any such forward-looking statements, except as required by law.

Consolidated Financial Results

GREEN PLAINS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
March 31,
2017
December 31,
2016
ASSETS
Current assets
Cash and cash equivalents$ 256,468 $ 304,211
Restricted cash 38,974 51,979
Accounts receivable, net 96,986 147,495
Inventories 464,994 422,181
Other current assets 62,456 74,710
Total current assets 919,878 1,000,576
Property and equipment, net 1,171,728 1,178,706
Other assets 329,540 327,210
Total assets$ 2,421,146 $ 2,506,492
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$ 129,100 $ 192,275
Accrued and other liabilities 46,147 67,473
Short-term notes payable and other borrowings 335,695 291,223
Current maturities of long-term debt 6,171 35,059
Other current liabilities 7,131 8,916
Current liabilities 524,244 594,946
Long-term debt 782,957 782,610
Other liabilities 145,296 149,745
Total liabilities 1,452,497 1,527,301
Stockholders’ equity
Total Green Plains stockholders’ equity 851,612 862,507
Noncontrolling interests 117,037 116,684
Total liabilities and stockholders’ equity$ 2,421,146 $ 2,506,492


GREEN PLAINS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except per share amounts)
Three Months Ended
March 31,
2017 2016 % Var.
Revenues
Product$ 886,212 $ 747,183 18.6 %
Service 1,472 2,021 (27.2)
Total revenues 887,684 749,204 18.5
Costs and expenses
Cost of goods sold 811,896 724,687 12.0
Operations and maintenance 8,531 8,645 (1.3)
Selling, general and administrative 23,782 20,373 16.7
Depreciation and amortization 26,083 18,145 43.7
Total costs and expenses 870,292 771,850 12.8
Operating income (loss) 17,392 (22,646) *
Other income (expense)
Interest income 364 410 (11.2)
Interest expense (18,496) (10,798) 71.3
Other, net 10 (1,675) *
Total other expense (18,122) (12,063) 50.2
Loss before income taxes (730) (34,709) (97.9)
Income tax benefit (2,381) (14,893) (84.0)
Net income (loss) 1,651 (19,816) *
Net income attributable to noncontrolling interests 5,248 4,322 21.4
Net loss attributable to Green Plains$ (3,597) $ (24,138) (85.1)%
Earnings per share:
Net loss attributable to Green Plains - basic$ (0.09) $ (0.63) (85.2)%
Net loss attributable to Green Plains - diluted$ (0.09) $ (0.63) (85.2)%
Weighted average shares outstanding:
Basic 38,420 38,197
Diluted 38,420 38,197
* Percentage variance not considered meaningful.


GREEN PLAINS INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands)
Three Months Ended
March 31,
2017 2016
Cash flows from operating activities:
Net income (loss)$ 1,651 $ (19,816)
Noncash operating adjustments:
Depreciation and amortization 26,083 18,145
Deferred income taxes (2,934) (20,387)
Other 6,554 7,706
Net change in working capital (69,766) (65,455)
Net cash used by operating activities (38,412) (79,807)
Cash flows from investing activities:
Purchases of property and equipment (14,902) (18,571)
Acquisition of a business, net of cash acquired (4,074) -
Distributions from (investments in) unconsolidated subsidiaries (2,399) 260
Net cash used by investing activities (21,375) (18,311)
Cash flows from financing activities:
Net proceeds (payments) - long-term debt (32,145) 50,053
Net proceeds - short-term borrowings 44,412 48,248
Other (223) (1,608)
Net cash provided by financing activities 12,044 96,693
Net change in cash and cash equivalents (47,743) (1,425)
Cash and cash equivalents, beginning of period 304,211 384,867
Cash and cash equivalents, end of period$ 256,468 $ 383,442


GREEN PLAINS INC.
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands)
Three Months Ended
March 31,
2017 2016
Net income (loss)$ 1,651 $ (19,816)
Interest expense 18,496 10,798
Income taxes (2,381) (14,893)
Depreciation and amortization 26,083 18,145
EBITDA$ 43,849 $ (5,766)

Contact: Jim Stark | Vice President, Investor & Media Relations | 402.884.8700 | jim.stark@gpreinc.com

Source:Green Plains, Inc.