Pacific Ethanol Reports Third Quarter 2016 Results

- Initiated startup of membrane separation system at Madera, CA facility - - Net sales grew 10% over the third quarter of 2015 - - Record 243.7 million total gallons sold for the third quarter of 2016 - - Net loss was $3.8 million or $0.09 per share - - Adjusted EBITDA was $9.3 million -

SACRAMENTO, Calif., Nov. 02, 2016 (GLOBE NEWSWIRE) -- Pacific Ethanol, Inc. (NASDAQ:PEIX), a leading producer and marketer of low-carbon renewable fuels in the United States, reported its financial results for the three and nine months ended September 30, 2016.

Neil Koehler, the company's president and CEO, stated: "During the third quarter, we sold a record 243.7 million gallons of ethanol, reflecting increased output from our eight production facilities as well as a 16% increase in third party sales over the comparable period in 2015. As a result, net sales grew 10% compared to the third quarter of last year. This also demonstrates our success in integrating and optimizing our Midwest assets.

"Net loss of $3.8 million for the third quarter of 2016 was impacted by over $11 million of extraordinary expenses, including higher beginning inventory valuation, lower margins in the Company's ethanol trading business resulting from the intra-quarter drop in ethanol prices, significant repair expenses and non-cash mark-to-market adjustments related to open hedge positions.

"We are now experiencing near the best production margins of the year from strong ethanol demand and low corn input costs aided by a record corn crop. With our diverse platform of efficiently operating assets and multiple products, we are well positioned to profit from the positive market conditions in the fourth quarter."

Recent Business Highlights
  • Initiated startup of an industrial-scale membrane separation system at our Madera facility. Using the Whitefox ICE™ Solution, the system is expected to reduce energy costs and lower the carbon intensity of our ethanol produced.
  • Received EPA approval on our pathway to generate cellulosic ethanol at our Stockton facility. The Company expects to produce over one million gallons of high-value, D3-eligible RINs annually.
  • Contracted to install a 5 megawatt solar photovoltaic power system at our Madera facility. The solar PV system is expected to displace more than 30% of the electricity currently provided by the grid and lower the carbon intensity of the ethanol produced.

Financial Results for the Three Months Ended September 30, 2016Net sales were $417.8 million for the third quarter of 2016, an increase of 10% when compared to net sales of $380.6 million for the third quarter of 2015. The increase was attributable to record gallons sold from both production and third party sales.

Gross profit was $6.4 million for the third quarter of 2016, compared to a gross loss of $7.4 million for the third quarter of 2015. The improvement reflects stronger production margins in the current period, as well as $8.7 million of purchase accounting adjustments recorded in the prior year that did not recur in 2016.

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