Results for the Third Quarter of 2013
- Net income of $9.4 million
- Earnings per diluted share of $0.28
Revenues were $2.3 billion for the nine-month period ended September 30, 2013 compared to $2.6 billion for the same period in 2012. Net income for the nine-month period ended September 30, 2013 was $17.9 million, or $0.56 per diluted share, compared to a net loss of ($21.2) million, or ($0.70) per diluted share, for the same period in 2012.
Third quarter 2013 EBITDA, which is defined as earnings before interest, income taxes, noncontrolling interests, depreciation and amortization, was $37.4 million compared to $21.7 million for the same period in 2012. Green Plains had $362.1 million in total cash and equivalents and $159.1 million available under committed loan agreements at subsidiaries (subject to satisfaction of specified lending conditions and covenants) at September 30, 2013. For reconciliations of EBITDA to net income attributable to Green Plains, see "EBITDA" below. Current Business Highlights- On September 20, 2013, Green Plains issued $120 million of 3.25% Convertible Senior Notes due 2018. The notes are convertible at an initial conversion rate of 47.9627 shares of the Company's common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $20.85 per share. The net proceeds to the Company from this issuance was approximately $115 million, after deducting initial purchasers' discounts and commissions and offering expenses payable by the Company.
- On August 22, 2013, Green Plains announced that its Board of Directors approved the initiation of a quarterly cash dividend. An initial dividend of $0.04 per common share was paid on September 26, 2013 to all shareholders of record as of September 5, 2013. The Company anticipates declaring a cash dividend in future quarters on a regular basis; however, future declarations of dividends are subject to Board approval and may be adjusted as business needs or market conditions change.
- During the third quarter, Green Plains completed its 2013 grain storage expansion project with the construction of 9.4 million bushels of grain storage capacity at six ethanol plants and three grain elevator locations. The expansion project was completed at a cost of $6.0 million and brings the Company's total grain storage capacity to 27.7 million bushels.
Safe Harbor
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such statements are identified by the use of words such as "anticipates," "believes," "estimates," "expects," "goal," "intends," "plans," "potential," "predicts," "should," "will," 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 and other industries in which the Company operates, commodity market risks including those that may result from current weather conditions, financial market risks, counter-party 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 the growth potential of the algal biomass industry, and other risks detailed in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2012, and in the Company's subsequent filings with the SEC. 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. Consolidated Financial Results The following are consolidated statements of operations for Green Plains (in thousands, except per share amounts):| Three Months Ended September 30, | Nine Months Ended September 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Revenues | $ 757,971 | $ 947,413 | $ 2,328,142 | $ 2,593,163 |
| Cost of goods sold | 716,947 | 919,516 | 2,227,294 | 2,538,363 |
| Gross profit | 41,024 | 27,897 | 100,848 | 54,800 |
| Selling, general and administrative expenses | 15,490 | 19,273 | 44,048 | 58,350 |
| Operating income (loss) | 25,534 | 8,624 | 56,800 | (3,550) |
| Other income (expense) | ||||
| Interest income | 64 | 46 | 166 | 144 |
| Interest expense | (7,608) | (9,832) | (23,440) | (28,741) |
| Other, net | (947) | (448) | (2,077) | (1,859) |
| Total other income (expense) | (8,491) | (10,234) | (25,351) | (30,456) |
| Income (loss) before income taxes | 17,043 | (1,610) | 31,449 | (34,006) |
| Income tax expense (benefit) | 7,633 | (604) | 13,519 | (12,749) |
| Net income (loss) | 9,410 | (1,006) | 17,930 | (21,257) |
| Net loss attributable to noncontrolling interests | -- | 4 | -- | 13 |
| Net income (loss) attributable to Green Plains | $ 9,410 | $ (1,002) | $ 17,930 | $ (21,244) |
| Earnings per share: | ||||
| Basic | $ 0.31 | $ (0.03) | $ 0.60 | $ (0.70) |
| Diluted | $ 0.28 | $ (0.03) | $ 0.56 | $ (0.70) |
| Weighted average shares outstanding: | ||||
| Basic | 30,204 | 29,655 | 30,100 | 30,499 |
| Diluted | 37,483 | 29,655 | 36,831 | 30,499 |
Diluted EPS is computed by dividing net income on an if-converted basis available to common stockholders by the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of any outstanding dilutive securities. For the three and nine month periods ended September 30, 2012, the Company's net income and weighted average number of common shares outstanding are not adjusted since the effect would be antidilutive. The following summarizes the effects of this method on net income (loss) attributable to Green Plains and weighted average shares outstanding for the periods indicated (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Net income (loss) attributable to Green Plains | $ 9,410 | $ (1,002) | $ 17,930 | $ (21,244) |
| Interest and amortization on convertible debt, net of tax effect: | ||||
| 5.75% convertible notes due 2015 | 883 | -- | 2,643 | -- |
| 3.25% convertible notes due 2018 | 79 | -- | 79 | -- |
| Net income (loss) on an if-converted basis | $ 10,372 | $ (1,002) | $ 20,652 | $ (21,244) |
| Effect on weighted average shares outstanding - diluted | ||||
| 5.75% convertible notes due 2015 | 6,284 | -- | 6,294 | -- |
| 3.25% convertible notes due 2018 | 688 | -- | 232 | -- |
| Total effect on weighted average shares outstanding - diluted | 6,972 | -- | 6,526 | -- |
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Revenues: | ||||
| Ethanol production | $ 516,869 | $ 492,899 | $ 1,556,332 | $ 1,417,966 |
| Corn oil production | 17,290 | 14,531 | 49,304 | 43,521 |
| Agribusiness | 279,155 | 175,700 | 541,367 | 434,776 |
| Marketing and distribution | 722,779 | 769,095 | 2,179,495 | 2,143,781 |
| Intersegment eliminations | (778,122) | (504,812) | (1,998,356) | (1,446,881) |
| $ 757,971 | $ 947,413 | $ 2,328,142 | $ 2,593,163 | |
| Gross profit (loss): | ||||
| Ethanol production | $ 22,269 | $ (3,701) | $ 34,228 | $ (20,610) |
| Corn oil production | 9,649 | 7,865 | 25,431 | 25,205 |
| Agribusiness | 815 | 12,513 | 2,986 | 27,357 |
| Marketing and distribution | 8,615 | 10,980 | 39,074 | 21,769 |
| Intersegment eliminations | (324) | 240 | (871) | 1,079 |
| $ 41,024 | $ 27,897 | $ 100,848 | $ 54,800 | |
| Operating income (loss): | ||||
| Ethanol production | $ 17,851 | $ (7,520) | $ 22,508 | $ (32,435) |
| Corn oil production | 9,596 | 7,811 | 25,226 | 25,011 |
| Agribusiness | 163 | 5,849 | 781 | 8,916 |
| Marketing and distribution | 4,456 | 7,162 | 26,654 | 10,546 |
| Intersegment eliminations | (324) | 240 | (826) | 1,113 |
| Segment operating income | 31,742 | 13,542 | 74,343 | 13,151 |
| Corporate activities | (6,208) | (4,918) | (17,543) | (16,701) |
| $ 25,534 | $ 8,624 | $ 56,800 | $ (3,550) | |
Ethanol Production Segment
The table below presents key operating data within the ethanol production segment for the periods indicated:| Three Months Ended Septmeber 30, | Nine Months Ended September 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Ethanol sold | 177,799 | 161,574 | 521,169 | 507,923 |
| (thousands of gallons) | ||||
| Ethanol produced | 176,815 | 160,832 | 519,597 | 508,358 |
| (thousands of gallons) | ||||
| Distillers grains sold | 491 | 438 | 1,456 | 1,397 |
| (thousands of equivalent dried tons) | ||||
| Corn consumed | 62,435 | 56,706 | 183,149 | 178,924 |
| (thousands of bushels) | ||||
Cost of goods sold in the ethanol production segment decreased by $2.0 million for the three months ended September 30, 2013 compared to the same period in 2012. Consumption of corn increased by 5.7 million bushels but the average cost per bushel decreased by 18% during the three months ended September 30, 2013 compared to the same period in 2012. As a result of the factors identified above, gross profit and operating income for the ethanol production segment increased by $26.0 million and $25.4 million, respectively, for the three months ended September 30, 2013 compared to the same period in 2012. Depreciation and amortization expense for the ethanol production segment was $11.4 million for the three months ended September 30, 2013 compared to $11.2 million during the same period in 2012.
Corn Oil Production Segment Revenues in the corn oil production segment increased by $2.8 million for the three months ended September 30, 2013 compared to the same period in 2012. During the three months ended September 30, 2013, the corn oil production segment sold 42.0 million pounds of corn oil compared to 37.2 million pounds in the same period of 2012. The average price for corn oil was 5% higher for the third quarter of 2013 compared to the same period in 2012. Gross profit and operating income in the corn oil production segment increased by $1.8 million for the three months ended September 30, 2013 compared to the same period in 2012. The increase in revenues was partially offset by $1.0 million of additional expense related to increased volumes produced along with higher input costs during the three months ended September 30, 2013 compared to the same period in 2012. Agribusiness Segment Revenues in the agribusiness segment increased by $103.5 million and gross profit and operating income decreased by $11.7 million and $5.7 million, respectively, for the three months ended September 30, 2013 compared to the same period in 2012. The agribusiness segment sold 44.0 million bushels of grain, including 43.5 million bushels to the ethanol production segment, and had no fertilizer sales during the three months ended September 30, 2013 compared to sales of 18.9 million bushels of grain, including 6.2 million bushels to the ethanol production segment, and three thousand tons of fertilizer during the same period in 2012. Subsequent to the sale of certain grain elevators and the agronomy business during the fourth quarter of 2012, the segment increased its focus on supplying corn to the ethanol plants. As a result, 99% of the grain sold by the agribusiness segment was sold to the Company's ethanol plants rather than to external customers. The decrease in gross profit and operating income is due to the factors discussed above.Marketing and Distribution Segment
Revenues in the marketing and distribution segment decreased by $46.3 million for the three months ended September 30, 2013 compared to the same period in 2012. The decrease in revenues was primarily due to a decrease of $71.0 million in ethanol revenue from lower ethanol volumes, lower prices of distillers grains sold and lower volumes of crude oil transportation. These decreases were partially offset by a $26.3 increase in grain trading activity within the marketing and distribution segment. The Company sold 240.2 million and 269.8 million gallons of ethanol during the three months ended September 30, 2013 and 2012, respectively, within the marketing and distribution segment. Gross profit and operating income for the marketing and distribution segment decreased by $2.4 million and $2.7 million, respectively, for the three months ended September 30, 2013 compared to the same period in 2012, primarily due to the factors discussed above. Non-GAAP Reconciliation EBITDA Management uses EBITDA to measure the Company's financial performance and to internally manage its businesses. Management believes that EBITDA provides useful information to investors as a measure of comparison with peer and other 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. 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. The following sets forth the reconciliation of net income (loss) attributable to Green Plains to EBITDA for the periods indicated (in thousands):| Three Months Ended September 30, | Nine Months Ended September 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Net income (loss) attributable to Green Plains | $ 9,410 | $ (1,002) | $ 17,930 | $ (21,244) |
| Net loss attributable to noncontrolling interests | -- | (4) | -- | (13) |
| Interest expense | 7,608 | 9,832 | 23,440 | 28,741 |
| Income taxes (benefit) | 7,633 | (604) | 13,519 | (12,749) |
| Depreciation and amortization | 12,763 | 13,487 | 37,807 | 39,922 |
| EBITDA | $ 37,414 | $ 21,709 | $ 92,696 | $ 34,657 |
| September 30, | December 31, | |
| 2013 | 2012 | |
| ASSETS | ||
| Current assets | $ 595,726 | $ 568,035 |
| Property and equipment, net | 697,751 | 708,110 |
| Other assets | 89,655 | 73,589 |
| Total assets | $ 1,383,132 | $ 1,349,734 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | $ 283,697 | $ 432,384 |
| Long-term debt | 487,926 | 362,549 |
| Other liabilities | 89,453 | 64,299 |
| Total liabilities | 861,076 | 859,232 |
| Total stockholders' equity | 522,056 | 490,502 |
| Total liabilities and stockholders' equity | $ 1,383,132 | $ 1,349,734 |
CONTACT: Jim Stark, Vice President - Investor and Media Relations, Green Plains. (402) 884-8700
