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Renewable Energy Group Reports Fourth Quarter and Full Year 2012 Financial Results

  Renewable Energy Group Reports Fourth Quarter and Full Year 2012 Financial
  Results

                               Key Achievements

  *Annual revenue exceeds $1 billion, up 23% compared to 2011
  *Fourth quarter revenues were $232 million, down 13% from the prior year
    period
  *188 million gallons sold, up 25% compared to 2011
  *Adjusted EBITDA of $96.5 million for 2012
  *Net income of $22.3 million for 2012
  *Significant expansion of distribution network
  *Nameplate production capacity increased to 227 million gallons/year
  *Strengthened balance sheet with REG Seneca debt retirement and loan
    extension at REG Newton

Business Wire

AMES, Iowa -- March 4, 2013

Renewable Energy Group, Inc. (NASDAQ:REGI) today announced its financial
results for the quarter and full year ended December 31, 2012.

Revenues for the fourth quarter were $232 million, a decline of 13% compared
to revenues of $267 million for the same period in 2011. Fourth quarter 2012
adjusted EBITDA was $13.6 million, a decrease of 54% compared to $29.5 million
for the same period in 2011. Fourth quarter 2012 adjusted EBITDA includes an
allocation of part of the $58 million benefit that will be received from the
January 3, 2013 retroactive reinstatement of the federal blenders tax credit.
The balance sheet remained strong with cash of $66.8 million, and the company
improved its financial position by retiring $34.5 million of Seneca plant
debt. Total debt was reduced to $37 million from the third quarter 2012
balance of $76.4 million.

Revenues for the full year 2012 were $1.02 billion, an increase of 23%
compared to $824 million for the full year 2011. Full year 2012 adjusted
EBITDA was $96.5 million, a decrease of 10% compared to $107.3 million for the
full year 2011.

“2012 was an excellent year for REG and positions us well for 2013,” said
Daniel J. Oh, President and Chief Executive Officer. “In addition to
generating $1 billion in revenue, we met the strategic commitments we made at
the start of the year to expand our production network, upgrade existing
facilities, and extend our distribution network to both coasts of the
country.”

“We strengthened our financial position both through the IPO and substantial
cash flow generation. This enabled us to increase our cash balance while
continuing to invest in plant modernization and pay down debt,” continued Oh.

“We enter 2013 as one of the stronger players in the biodiesel industry. Both
the 2013 RVO and the extension of the blenders tax credit lead us to
anticipate industry growth of nearly 30% this year. We intend to protect our
market share and capture a portion of this growth.”

Operating Highlights

REG produced 36 million gallons of biodiesel in the fourth quarter of 2012,
compared to 43 million gallons in the same period in 2011. REG sold 38 million
gallons of biodiesel in the fourth quarter, a decrease of 19% compared to the
same period in 2011. The decrease in Q4 2012 as compared to 2011 is the result
of the expiration of the blenders tax credit and RVO requirements making Q4
2011 unusually strong.

For the full year 2012, REG produced 163 million gallons of biodiesel,
compared to 135 million gallons in the same period in 2011. REG sold 188
million gallons of biodiesel in 2012, an increase of 25% compared to the same
period in 2011.

During the quarter, REG executed its plan to grow its domestic distribution
footprint by acquiring two additional biorefineries and entering into
distribution relationships creating a large biodiesel terminal network in New
York/New Jersey.

On October 26, 2012, REG acquired a 15 million gallon-per-year multi-feedstock
biorefinery in New Boston, Texas, near Texarkana. The company purchased the
off-line refinery for 900,000 shares of common stock and cash of $0.3 million.
The acquisition expands the company’s nameplate production capacity to 227
million gallons per year, strengthening its leadership position within the
industry. The company expects to commence production at REG New Boston in the
second quarter of 2013.

On November 16, 2012, REG acquired a 15 million gallon-per-year capacity
biorefinery in Ellenwood, Georgia, near Atlanta. REG acquired the former
BullDog Biodiesel operation for cash and in-kind consideration of
approximately $2.6 million. The biorefinery has run intermittently since
January 2008 and ceased operations in April 2012 due to a combination of poor
market conditions and upgrades needed to make the facility more efficient. The
plant was idled prior to REG’s acquisition and will remain so until repairs
and upgrades are completed. The company has not yet set a date for restarting
production.

On November 29, 2012, REG announced new biodiesel distribution points in
Whippany, New Jersey and metropolitan New York locations in New Hyde Park,
Port Chester and near Brookhaven. In addition to these four distribution
points, REG is also selling biodiesel from a terminal located in Ontario, New
York. These distribution agreements advanced the company’s strategy to expand
into the northeast market. These distribution points offer quick access for
blending biodiesel to augment heating oil and diesel supplies. The company
expects growing demand in the region, due in part to the 2012 implementation
of New York City’s Bioheat® law requiring 2% biodiesel content in heating oil.

The fourth quarter capacity acquisitions and distribution deals extended the
expansive footprint that REG built throughout the year. Earlier in 2012, the
company announced new terminal distribution from its own REG Clovis facility
as well as terminal agreements in Long Beach, California and Lebanon, Ohio.

Fourth Quarter 2012 Financial Results

Revenues for the fourth quarter were $232 million, representing a 13% decline
compared to the fourth quarter of 2011. During the quarter, the average B100
price per gallon sold by REG was $4.33, a decrease of 17% from Q4 2011.
Gallons sold in Q4 2012 of 38.4 million decreased 19% when compared to Q4
2011. Revenue in the quarter declined from exceptionally high production and
sales in fourth quarter 2011, which we believe was influenced by the
expiration of the federal blenders tax credit on December 31, 2011.

Adjusted EBITDA, defined as earnings before interest, taxes, depreciation and
amortization and further adjusted for certain items identified below under
“Adjusted EBITDA Reconciliation”, decreased 54% year–over-year to $13.64
million. Fourth quarter 2012 adjusted EBITDA includes an allocation of part of
the $58 million benefit that will be received from the January 2, 2013
retroactive reinstatement of the federal blenders tax credit.

Investors are cautioned that this allocation is an estimate made by the
company as an aid to comparing results with prior periods. The allocation is
an approximation of the amount of the benefit that might have been received if
the blenders tax credit were in force at the time. The blenders tax credit
benefit is allocated based upon gallons sold for each quarter. The allocation
for each quarter of 2012 is presented in the table below that reconciles GAAP
results to Adjusted EBITDA.

The table below summarizes REG’s results for Q4 2012:


REG Q4 2012 Revenue and Adjusted EBITDA Summary
(dollars and gallons in thousands)
                                              
                           Q4 2012      Q4 2011      Change
                                                          
Gallons sold               38,376       47,512       -19%
                                                          
Revenues                   $231,948     $266,782     -13%
                                                          
Adjusted EBITDA            $13,641      $29,520      -54%
                                                          
Adjusted EBITDA Margin   5.9%       11.1%          
                                                          

Full Year 2012 Financial Results

Revenue for 2012 was $1.02 billion, a 23% increase over 2011 revenue of $824
million. The growth was driven by increased production capacity at REG Albert
Lea and the third train at REG Seneca being operational throughout the entire
year of 2012. In addition, production benefited from yield improvements across
the fleet. For 2012, REG’s average B100 sales price per gallon of biodiesel
was $4.60, a decrease of 12% compared to the 2011 average price of $5.23. We
sold 188.4 million gallons during 2012, an increase of 26% compared to 149.8
million gallons sold during 2011. Biodiesel pricing declined in the second
half of the year due to softening demand as more obligated parties fulfilled
their RVO requirements. The company estimates its 2012 market share at 17%.

Adjusted EBITDA was $96.5 million in 2012, compared to $107.3 million in 2011,
resulting in an Adjusted EBITDA margin of 9.5%. Net income for 2012 was $43.48
million as compared to $42.75 million 2011.

After the close of the fourth quarter, the American Taxpayer Relief Act of
2012 reinstated the federal biodiesel blenders tax credit for 2013 and
retroactively reinstated the credit for 2012. The retroactive credit for 2012
is expected to result in a net benefit to REG of approximately $58 million in
the first half of 2013. Because there are no material associated costs, the
payment will increase the Company’s Q1 2013 pre-tax income by a similar
amount. Although GAAP requires this benefit to be recognized in the period in
which the law was passed, the company is presenting 2012 Adjusted EBITDA as if
the credit were in effect for 2012.

The tables below summarize the quarterly and year end results for 2012 and
2011, as well as adjusted EBITDA for 2012.


REG Annual Results Summary
(dollars and gallons in thousands except per gallon data)
                                                             
                        Q1         Q2         Q3         Q4         Year
Gallons sold 2012       34,087     54,239     61,699     38,376     188,401
Gallons sold 2011       20,117     37,981     44,217     47,512     149,827
Y/Y Growth              69.4%      42.8%      39.5%      -19.2%     25.7%
                                                                    
Average B100 sales
price per gallon        $5.53      $4.58      $4.44      $4.33      $4.60
2012
Average B100 sales
price per gallon        $4.36      $5.19      $5.72      $5.20      $5.23
2011
                                                                    
Total Revenue 2012      $188,247   $271,927   $322,912   $231,948   $1,015,034
Total Revenue 2011      $104,435   $196,312   $256,502   $266,782   $824,031
Y/Y Growth              80.3%      38.5%      25.9%      -13.1%     23.2%
                                                                    
Adjusted EBITDA         $23,167    $43,077    $16,624    $13,641    $96,509
2012
Adjusted EBITDA         $5,297     $25,770    $46,714    $29,520    $107,301
2011
Y/Y Growth              337.4%     67.2%      -64.4%     -53.8%     -10.1%
                                                                    
Adjusted EBITDA         12.3%      15.8%      5.1%       5.9%       9.5%
margin 2012
Adjusted EBITDA       5.1%      13.1%     18.2%     11.1%     13.0%
margin 2011
                                                                    

Balance Sheet and Liquidity

At December 31, 2012, REG had cash and cash equivalents of $66.8 million.
Operating cash flow for the quarter was positively impacted by a $20.0 million
decrease in accounts receivable, offset by a $5.8 million increase in
inventory and an $8.3 million reduction in accounts payable. Accounts
receivable shrank as the company collected on sales made during the seasonally
strong second and third quarters.

On December 27, 2012, REG announced that its subsidiary REG Seneca, LLC 
retired its outstanding long-term debt obligation of $34.5 million with cash
generated from operations at the plant since August 2010. At the close of the
quarter, consolidated debt was $37 million, compared to $76 million as of
September 30, 2012. As of December 31, 2012, debt represents only 7.5% of
capitalization.

REG also announced that its subsidiary REG Newton, LLC extended its loan with
AgStar Financial Services for an additional year. The loan, in the amount of
$21.2 million, is now due in March 2014. All other material terms of the loan
remain unchanged.

Adjusted EBITDA Reconciliation

REG presents Adjusted EBITDA because the company believes it assists investors
in analyzing its performance across reporting periods on a consistent basis.
In addition, REG uses Adjusted EBITDA to evaluate, assess and benchmark its
financial performance on a consistent and comparable basis. REG excludes
non-cash stock-based compensation and non-cash other income (expense) items
because it does not believe that they are indicative of the company’s ongoing
operating performance. REG includes the portion of the blenders tax credit
that was earned for its performance in 2012 but will not be recognized until
2013 as discussed above. REG’s measure of Adjusted EBITDA might be different
than similar financial measures used by other companies. Non-GAAP metrics are
not determined in accordance with GAAP and are not a substitute for or
superior to financial measures determined in accordance with GAAP. Adjusted
EBITDA Margin is calculated by dividing Adjusted EBITDA by revenues.

                                                                                                                              
                                                                     Full Year                                                            Full Year
(In             1Q-2012       2Q-2012      3Q-2012      4Q-2012      2012            1Q-2011      2Q-2011      3Q-2011      4Q-2011       2011
thousands)
                                                                                                                                          
Net income      $ 14,017      $ 14,433     $ (6,040 )   $ (151   )   $ 22,259        $ 3,736      $ (948   )   $ (2,007 )   $ 88,088      $ 88,869
(loss)
                                                                                                                                          
Adjustments:
(Income) loss
from equity       -             -            -            -            -               65           83           (649   )     59            (442    )
investments
Income tax
(benefit)         1,363         4,471        (2,165 )     (2,215 )     1,454           -            -            4,752        (1,770  )     2,982
expense
Interest          1,053         1,059        1,150        1,417        4,679           1,708        1,751        2,183        2,453         8,095
expense
Other
(income)          (37     )     (28    )     (56    )     (46    )     (167    )       (275   )     (200   )     (239   )     (216    )     (930    )
expense, net
Change in
fair value of     (349    )     -            -            -            (349    )       (727   )     2,250        977          (403    )     2,097
Seneca Holdco
liability
Change in
fair value of
preferred
stock             (11,975 )     -            -            -            (11,975 )       (2,557 )     19,645       38,483       (63,510 )     (7,939  )
conversion
feature
embedded
derivatives
Stock issued
for glycerin      1,898         -            -            -            1,898           -            -            -            -             -
agreement
termination
Straight-line     (102    )     (104   )     (31    )     (51    )     (288    )       798          618          393          93            1,902
lease expense
Depreciation      2,026         2,069        2,097        1,832        8,024           1,689        1,705        1,851        1,939         7,184
Amortization      (139    )     (206   )     (208   )     (200   )     (753    )       (130   )     (124   )     (97    )     (100    )     (451    )
Non-recurring
business          -             -            -            863          863             -            -            -            -             -
interruption
Blenders tax      10,448        16,625       18,912       11,760       57,745          -            -            -            -             -
credit
Non-cash
stock            4,964       4,758      2,965      432        13,119        990        990        1,067      2,887       5,934   
compensation
                                                                                                                                          
Adjusted        $ 23,167     $ 43,077    $ 16,624    $ 13,641    $ 96,509       $ 5,297     $ 25,770    $ 46,714    $ 29,520     $ 107,301 
EBITDA
                                                                                                                                                    

Fourth Quarter Conference Call

REG will sponsor a conference call to discuss results today at 4:30 p.m.
EST/3:30 p.m. CST. Daniel J. Oh, President and Chief Executive Officer, and
Chad Stone, Chief Financial Officer, will host the call.

Investors in the U.S. interested in participating in the live call should dial
+1 (877) 810-3368 and enter pass code: 93273156. Those calling from outside
the U.S. should dial +1 (760) 298-5082 and use the same pass code: 93273156. A
telephone replay will be available approximately two hours after the call
concludes through March 10, 2013 by dialing from the U.S. +1 (855) 859-2056,
or from international locations +1 (404) 537-3406, and entering pass code:
93273156 A simultaneous live webcast will be available on the Investor
Relations section of the Company's website athttp://investor.regi.com/. The
webcast will be archived on the website for one year.

About Renewable Energy Group

Renewable Energy Group® is a leading North American biodiesel producer with a
nationwide distribution and logistics system. Utilizing an integrated value
chain model, Renewable Energy Group is focused on converting natural fats,
oils and greases into advanced biofuels. With more than 225 million gallons of
owned/operated annual production capacity at biorefineries across the country,
REG is a proven biodiesel partner in the distillate marketplace.

For more than a decade, REG has been a reliable supplier of biodiesel which
meets or exceeds ASTM quality specifications. We sell REG-9000® biodiesel to
distributors so Americans can have cleaner burning fuels that help lessen our
dependence on foreign oil and reinforce food security. REG-9000® branded
biodiesel is distributed in most states in the U.S.

Note Regarding Forward-Looking Statements

This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 as amended,
including statements regarding growth in the biodiesel industry and the timing
for commencement of operations at the recently acquired New Boston production
facility. These forward-looking statements are based on current expectations,
estimates, assumptions and projections that are subject to change, and actual
results may differ materially from the forward-looking statements. Factors
that could cause actual results to differ materially include, but are not
limited to, the effect of governmental programs on our business; government
policymaking and mandates relating to renewable fuels; the future price and
volatility of feedstocks; the future price and volatility of petroleum and
products derived from petroleum; expected future financial performance; our
liquidity and working capital requirements; availability of federal and state
governmental tax credits and incentives; anticipated trends and challenges in
our business and competition in the markets in which we operate; our ability
to estimate our feedstock demands and biodiesel sales; our dependence on sales
to a limited number of customers and distributors; technological obsolescence;
our expectations regarding future expenses; our ability to successfully
implement our acquisition strategy; and other risks and uncertainties
described from time to time in REG's annual report on Form 10-K, quarterly
reports on Forms 10-Q and other periodic filings with the Securities and
Exchange Commission. The forward-looking statements are made as of the date of
this press release and REG does not undertake to update any forward-looking
statements based on new developments or changes in our expectations.


RENEWABLE ENERGY GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(Unaudited)                                              
                          2012               2011               2010
REVENUES:
Biodiesel sales           $ 1,006,471        $ 757,987          $ 207,902
Biodiesel government       8,326             65,822           7,240      
incentives
                            1,014,797          823,809            215,142
                                                                
Services                   237               222              1,313      
                           1,015,034         824,031          216,455    
                                                                
COSTS OF GOODS SOLD:
Biodiesel                   956,448            696,622            194,016
Services                   263               198              807        
                            956,711            696,820            194,823
                                                                
GROSS PROFIT                58,323             127,211            21,632
                                                                
SELLING, GENERAL, AND
ADMINISTRATIVE              42,422             34,479             22,187
EXPENSES
                                                                
IMPAIRMENT OF ASSETS       -                 -                7,494      
                                                                
INCOME (LOSS) FROM         15,901            92,732           (8,049     )
OPERATIONS
                                                                
OTHER INCOME
(EXPENSE), NET:
Change in fair value
of preferred stock          11,975             7,939              (8,208     )
conversion feature
embedded derivatives
Change in fair value
of Seneca Holdco            349                (2,097     )       (4,179     )
liability
Other income                167                930                1,625
Interest expense            (4,679     )       (8,095     )       (4,940     )
Impairment of              -                 -                 (400       )
investments
                                                                
                           7,812             (1,323     )      (16,102    )
                                                                
INCOME (LOSS) BEFORE
INCOME TAXES AND            23,713             91,409             (24,151    )
INCOME (LOSS) FROM
EQUITY INVESTMENTS
INCOME TAX BENEFIT          (1,454     )       (2,982     )       3,252
(EXPENSE)
INCOME (LOSS) FROM         -                 442               (689       )
EQUITY INVESTMENTS
                                                                
NET INCOME (LOSS)          22,259            88,869            (21,588    )
                                                                
EFFECTS OF                  39,107             -                  8,521
RECAPITALIZATION
LESS - ACCRETION OF
SERIES A PREFERRED          (1,808     )       (25,343    )       (27,239    )
STOCK TO REDEMPTION
VALUE
LESS - CHANGES IN
UNDISTRIBUTED
DIVIDENDS ALLOCATED         (823       )       (12,723    )       (10,027    )
TO PREFERRED
STOCKHOLDERS
LESS - DISTRIBUTED
DIVIDENDS TO                (3,156     )       -                  -
PREFERRED
STOCKHOLDERS
LESS - EFFECT OF
PARTICIPATING               (8,952     )       (4,186     )       -
PREFERRED STOCK
LESS - EFFECT OF
PARTICIPATING              (3,145     )      (3,864     )      -
SHARE-BASED AWARDS
                                                                
NET INCOME (LOSS)
ATTRIBUTABLE TO THE       $ 43,482           $ 42,753           $ (50,333    )
COMPANY'S COMMON
STOCKHOLDERS
                                                                
NET INCOME (LOSS) PER
SHARE ATTRIBUTABLE TO
COMMON STOCKHOLDERS:
BASIC                     $ 1.53             $ 3.14             $ (4.28      )
DILUTED                   $ 0.27             $ 3.14             $ (4.28      )
                                                                
WEIGHTED-AVERAGE
SHARES USED TO
COMPUTE NET INCOME
(LOSS) PER SHARE
ATTRIBUTABLE TO
COMMON STOCKHOLDERS:
BASIC                      28,381,676        13,607,840        11,770,848
DILUTED                    34,340,466        13,607,840        11,770,848
                                                                             

                                                              
RENEWABLE ENERGY GROUP, INC. AND SUBSIDIARIES
                                                                   
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2012 AND 2011
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(Unaudited)
                                                   2012            2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                          $ 66,785        $ 33,575
Accounts receivable, net (includes amounts
owed by related parties of $771 and $47 as of        18,768          52,833
December 31, 2012 and 2011, respectively)
Inventories                                          45,206          42,110
Deferred income taxes                                2,512           2,416
Prepaid expenses and other assets                   15,812         19,088
Total current assets                                149,083        150,022
                                                                   
Property, plant and equipment, net                   242,885         185,391
Property, plant and equipment, net - variable        5,405           46,832
interest entities
Goodwill                                             84,864          84,864
Intangible assets, net                               4,609           4,438
Deferred income taxes                                969             4,051
Investments                                          2,618           2,581
Other assets (includes amounts owed by related
party of $692 and $0 as of December 31, 2012        5,351          6,268
and 2011, respectively)
                                                                   
TOTAL ASSETS                                       $ 495,784       $ 484,447
                                                                   
LIABILITIES AND EQUITY
                                                                   
CURRENT LIABILITIES:
Revolving line of credit                           $ -             $ 4,035
Current maturities of notes payable                  4,955           6,427
Current maturities of notes payable - variable       283             2,046
interest entities
Accounts payable (includes amounts owed to
related parties of $2,950 and $3,634 as of           28,131          30,166
December 31, 2012 and 2011, respectively)
Accrued expenses and other liabilities               6,475           10,440
Deferred revenue                                    -              6,748
Total current liabilities                            39,844          59,862
                                                                   
Unfavorable lease obligation                         9,035           10,164
Preferred stock embedded conversion feature          -               53,822
derivatives
Seneca Holdco liability, at fair value               -               11,903
Notes payable (includes amounts owed to
related parties of $214 as of December 31,           27,776          34,327
2011)
Notes payable - variable interest entities           4,030           38,752
Other liabilities                                   7,292          7,262
Total liabilities                                   87,977         216,092
                                                                   
COMMITMENTS AND CONTINGENCIES (NOTE 22)

Series A preferred stock ($.0001 par value;
14,000,000 shares authorized; 13,455,522
shares outstanding at December 31, 2011;             -               147,779
redemption amount $222,016 at December 31,
2011)
                                                                   
Series B preferred stock ($.0001 par value;
3,000,000 shares authorized; 2,995,106 shares
issued and outstanding at December 31, 2012;         83,043          -
redemption amount $74,878 at December 31,
2012)
                                                                   
EQUITY:
Company stockholders' equity:
Common stock ($.0001 par value; 140,000,000
shares authorized; 30,559,935 shares                 3               -
outstanding at December 31, 2012)
Class A Common stock ($.0001 par value;
140,000,000 shares authorized; 13,962,155            -               1
shares outstanding at December 31, 2011)
Common stock - additional paid-in-capital            273,989         80,747
Warrants - additional paid-in-capital                147             3,698
Retained earnings                                   53,823         36,528
Total paid-in capital and retained earnings          327,962         120,974
Treasury stock (462,985 and 21,036 shares
outstanding as of December 31, 2012 and 2011,       (3,198  )      (398    )
respectively)
Total equity                                        324,764        120,576
                                                                   
TOTAL LIABILITIES AND EQUITY                       $ 495,784       $ 484,447
                                                                   
See notes to consolidated financial statements.


Contact:

Investor Relations:
ICR, LLC
Gary Dvorchak, CFA, +1 (310) 954-1123
Senior Vice President
gary.dvorchak@icrinc.com
or
Company:
Renewable Energy Group
Chad Stone, +1 (515) 239-8091
Chief Financial Officer
Chad.Stone@regi.com
 
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