Renewable Energy Group Reports First Quarter 2013 Financial Results

  Renewable Energy Group Reports First Quarter 2013 Financial Results

                           Q1 2013 Key Achievements

  *39 million gallons sold, up 14% compared to Q1 2012
  *40 million gallons produced, up 4% compared to Q1 2012
  *Adjusted EBITDA of $22 million
  *Net income of $46 million up from $14 million in Q1 2012
  *Demand driven by reinstated blenders tax credit, increased RVO for 2013,
    biodiesel RINs and new counter-seasonal demand

Business Wire

AMES, Iowa -- May 1, 2013

Renewable Energy Group, Inc. (NASDAQ:REGI) today announced its financial
results for the quarter ended March 31, 2013.

First quarter 2013 adjusted EBITDA was $22.0 million after adjusting for the
$57.4 million related to the 2012 retroactive reinstatement of the Biodiesel
Mixture Excise Tax Credit, commonly referred to as the blenders tax credit
(BTC). The first quarter 2012 adjusted EBITDA was $12.7 million before
including the allocation of the 2012 retroactive BTC of $10.4 million. REG
sold 38.9 million gallons of biodiesel in the first quarter, an increase of
14% compared to the same period in 2012.

“This was our strongest first quarter ever for production and gallons sold,”
said Daniel J. Oh, President and Chief Executive Officer. “Biodiesel demand is
being driven by a number of positive factors including the 2013 RVO and
biodiesel’s ability to meet certain advanced biofuel targets that are not
being fulfilled by imported sugar cane ethanol.”

Oh added, “Demand also benefited from the reinstated tax credit, and new
counter-seasonal markets such as Northeast heating oil. We are optimistic
about industry conditions for the months ahead, and are taking concrete
actions to capitalize on them.”

Operating Highlights

During the quarter, REG positioned itself to capitalize on strong demand
opportunities. Biodiesel RINs can be used to fulfill the advanced biofuel and
renewable fuel (corn ethanol) renewable volume obligations (RVO) in addition
to biomass based diesel volumes. In the future, strong demand is expected from
petroleum refiners and importers using biodiesel to fulfill advanced biofuels
targets.

As a result of ongoing yield and throughput improvement programs across the
company’s manufacturing sites, REG was able to produce 39.9 million gallons of
biodiesel, compared to 38.5 million gallons in the same period in 2012. The
company built inventory of its higher cloud point biodiesel in anticipation of
warmer weather sales during 2013.

The company added another northeast U.S. distribution point in Rochester, New
York to meet extended winter heating oil blending demand. The company remains
on track to complete its lower cost feedstock upgrade at the Albert Lea,
Minnesota facility in Q2. REG’s New Boston, Texas plant is serving as a
terminal location while repair activity is underway with biodiesel production
planned to begin in Q2. In addition, we have approval and are proceeding on
the construction of barge load out capabilities at our Seneca, Illinois
facility to expand distribution capabilities. The project is expected to be
completed in the first quarter 2014.

After the close of the quarter, the company signed a contract manufacturing
agreement with Iowa Renewable Energy, LLC to use their 30 million gallon per
year, multiple feedstock biorefinery in Washington, Iowa.

First Quarter 2013 GAAP Financial Results

All figures refer to the quarter ending March 31, 2013, unless otherwise
noted.

During the quarter, the average B100 price per gallon sold by REG was $4.44, a
decrease of 8% from Q1 2012. REG sold 38.9 million gallons of biodiesel, an
increase of 14% when compared to Q1 2012.

Gross profit was $86.7 million, a 409% increase when compared to Q1 2012.
Gross margin was 26%.

Operating income of $77.1 million increased substantially compared to $4.1
million in Q1 2012.

Net income attributable to common stockholders was $38.4 million, or $1.25
fully diluted per share. This compares to $40.0 million, or $0.06 fully
diluted per share during the first quarter of 2012.

First Quarter 2013 Adjusted Financial Results

All figures refer to the quarter ending March 31, 2013, unless otherwise
noted.

On January 2, 2013, the American Taxpayer Relief Act of 2012 reinstated the
blenders tax credit (BTC) for 2013 and retroactively reinstated the credit for
2012. Although the retroactive benefit is associated with activity that took
place in 2012, GAAP requires this benefit to be recognized in the period in
which the law was passed. All GAAP results presented here and in the company’s
SEC filings reflect the full value of the 2012 benefit in the first quarter of
2013. In order to aid in period-to-period comparisons, the company is also
presenting selected financial data adjusted to approximate the effect of the
2012 BTC benefits as if they were earned in the period in which the associated
economic activity transpired.

Adjusted EBITDA, defined as earnings before interest, taxes, depreciation and
amortization and further adjusted for certain items identified below under
“Adjusted EBITDA Reconciliation”, was $22 million after adjusting for the
$57.4 million net benefit related to the 2012 retroactively reinstated BTC for
the quarter. The 2012 adjusted EBITDA presented below allocates the $57.4
million net benefit from the 2012 retroactive reinstatement of the BTC based
upon the biodiesel gallons sold during the quarter. First quarter 2013
adjusted EBITDA removes the net benefit of $57.4 million which was previously
allocated to 2012.

Our GAAP revenues in the quarter were $339.3 million. This compares to our
GAAP revenues in Q1 2012 of $188.2 million. GAAP revenues in the first quarter
of 2013 include $127 million related to the 2012 blenders tax credit, of which
approximately $70 million was owed by the company to customers under
contractual arrangements related to potential reinstatement of the BTC.

The table below summarizes REG’s recent results as adjusted for the BTC.

                                                  
                                                
REG Q1 2013 Revenues and Adjusted EBITDA Summary
(dollars and gallons in thousands)
                                                         
                           Q1 13        Q1 12            Y/Y Growth
Gallons sold               38,876       34,087           14%
                                                         
GAAP Treatment – 2012 BTC Benefit in Q1 2013
Total Revenues             $339,284     $188,247         80%
                                                         
Adjusted EBITDA            $79,354      $12,719          524%
                                                         
Restated to allocate 2012 BTC benefit into 2012
Adjusted EBITDA            $21,982      $23,167 ^(1)     -5%
Adjusted EBITDA margin   6.50%      12.30%         
                                                         

        The first quarter 2012 adjusted EBITDA was $12.7 million before
        including the allocation of the 2012 retroactive BTC of $10.4 million,
 (1)  totaling $23.2 million adjusted EBITDA. This is based upon an
        estimated sales allocation based on pro rata sales gallons across
        2012. Comparing the $21,982 to $12,719, is a 73% increase.

Balance Sheet and Liquidity

At March 31, 2013, REG had cash and cash equivalents of $49.0 million. The
company utilized cash during the first quarter 2013 to build summer blend
inventory to take advantage of favorable margins and anticipated increased
demand. Total inventory was $89.5 million as of March 31, 2013. Accounts
receivable was $172.5 million and accounts payable was $116.8 million at March
31, 2013, with the majority of the increase of approximately $127 million and
$70 million, respectively, due to the recognition of the 2012 retroactively
reinstated BTC, as well as increased sales and production. Borrowings on our
Wells Fargo line of credit were $27.4 million at March 31, 2013, reflective of
our increased production to meet increasing demand.

Adjusted EBITDA Reconciliation

We use earnings before interest, taxes, depreciation and amortization,
adjusted for certain additional items, identified in the table below, or
Adjusted EBITDA, as a supplemental performance measure. We present Adjusted
EBITDA because we believe it assists investors in analyzing our performance
across reporting periods on a consistent basis by excluding items that we do
not believe are indicative of our core operating performance. In addition, we
use Adjusted EBITDA to evaluate, assess and benchmark our financial
performance on a consistent and a comparable basis and as a factor in
determining incentive compensation for our executives.

The following table provides our Adjusted EBITDA for the periods presented, as
well as a reconciliation to net income:

                                                             
                                                 Three Months     Three Months
                                                 Ended            Ended
                                                 March 31,        March 31,
(In thousands)                                   2013             2012
                                                                  
Net income                                       $  46,403        $  14,017
                                                                  
Adjustments:
Income tax expense                                  30,189           1,363
Interest expense                                    576              1,053
Other income (expense), net                         (117    )        (37     )
Change in fair value of Seneca Holdco               -                (349    )
liability
Change in fair value of preferred stock             -                (11,975 )
conversion feature embedded derivatives
Stock issued for glycerin agreement                 -                1,898
termination
Straight-line lease expense                         (159    )        (102    )
Depreciation                                        2,080            2,026
Amortization                                        (199    )        (139    )
Non-recurring business interruption                 (863    )        -
Cash-in-lieu board of director stock                88               -
compensation
Non-cash stock compensation                        1,356          4,964   
Adjusted EBITDA before blenders tax credit          79,354           12,719
                                                                  
2012 Retroactive blenders tax credit               (57,372 )       10,448  
                                                                  
Adjusted EBITDA                                  $  21,982       $  23,167  
                                                                             

Adjusted EBITDA is a supplemental performance measure that is not required by,
or presented in accordance with, generally accepted accounting principles, or
GAAP. Adjusted EBITDA should not be considered as an alternative to net income
or any other performance measure derived in accordance with GAAP, or as
alternatives to cash flows from operating activities or a measure of our
liquidity or profitability. Adjusted EBITDA has limitations as an analytical
tool, and should not be considered in isolation, or as a substitute for any of
our results as reported under GAAP. Some of these limitations are:

  *Adjusted EBITDA does not reflect our cash expenditures for capital assets
    or the impact of certain cash clauses that we consider not to be an
    indication of our ongoing operations;
  *Adjusted EBITDA does not reflect changes in, or cash requirements for, our
    working capital requirements;
  *Adjusted EBITDA does not reflect the interest expense, or the cash
    requirements necessary to service interest or principal payments, on our
    indebtedness;
  *Although depreciation and amortization are non-cash charges, the assets
    being depreciated and amortized will often have to be replaced in the
    future, and Adjusted EBITDA does not reflect cash requirements for such
    replacements;
  *On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed
    into law, which reinstated a set of tax extender items including the
    reinstatement of the federal biodiesel blenders tax credit for 2013 and
    retroactively reinstated credit for 2012. The retroactive credit for 2012
    results in a net benefit to us that is recognized in first quarter of
    2013, which relates to the operating performance and results of 2012 and
    is thus eliminated;
  *Non-recurring business interruption charge at one of our production
    facilities in November 2012; we have reflected the gain contingency from
    2012 into our operating performance having received the corresponding
    insurance proceeds in February 2013;
  *Non-cash stock compensation expense is an important element of our long
    term incentive compensation program, although we have excluded it as an
    expense when evaluating our operating performance; and
  *Other companies, including other companies in our industry, may calculate
    these measures differently than we do, limiting their usefulness as a
    comparative measure.

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 227 million gallons of active
annual nameplate 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 the biodiesel industry, the timing for
commencement of operations at the New Boston production facility and the
completion of upgrades at the Albert Lea, Minnesota 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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                                                
                                                                
                                             Three Months       Three Months
                                             Ended              Ended
                                             March 31,          March 31,
                                             2013               2012
                                                                
REVENUES:
Biodiesel sales                              $ 189,255          $ 182,780
Biodiesel government incentives               149,987          5,387      
                                               339,242            188,167
                                                                
Services                                      42               80         
                                              339,284          188,247    
                                                                
COSTS OF GOODS SOLD:
Biodiesel                                      240,799            153,467
Biodiesel - related parties                    11,730             17,669
Services                                      60               77         
                                              252,589          171,213    
GROSS PROFIT                                   86,695             17,034
                                                                
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (includes related party amounts
of $2 and $149 for the three months           9,644            12,962     
ended March 31, 2013 and 2012,
respectively)
INCOME FROM OPERATIONS                        77,051           4,072      
                                                                
OTHER INCOME (EXPENSE), NET:
Change in fair value of preferred stock        -                  11,975
conversion embedded derivative
Change in fair value of Seneca Holdco          -                  349
liability
Other income                                   117                37
Interest expense (includes related party
amounts of $20 and $17 for the three          (576       )      (1,053     )
months ended March 31, 2013 and 2012,
respectively)
                                              (459       )      11,308     
INCOME BEFORE INCOME TAXES                     76,592             15,380
INCOME TAX EXPENSE                            (30,189    )      (1,363     )
NET INCOME                                    46,403           14,017     
                                                                
EFFECTS OF RECAPITALIZATION                    -                  39,107
LESS - ACCRETION OF SERIES A PREFERRED         -                  (1,808     )
STOCK TO REDEMPTION VALUE
LESS - CHANGE IN UNDISTRIBUTED DIVIDENDS       (839       )       (1,451     )
ALLOCATED TO PREFERRED STOCKHOLDERS
LESS - EFFECT OF PARTICIPATING PREFERRED       (6,510     )       (7,615     )
STOCK
LESS - EFFECT OF PARTICIPATING                (619       )      (2,201     )
SHARE-BASED AWARDS
                                                                
NET INCOME ATTRIBUTABLE TO THE COMPANY'S     $ 38,435          $ 40,049     
COMMON STOCKHOLDERS
                                                                
NET INCOME PER SHARE ATTRIBUTABLE TO
COMMON STOCKHOLDERS:
BASIC                                        $ 1.25            $ 1.60       
DILUTED                                      $ 1.25            $ 0.06       
                                                                
WEIGHTED AVERAGE SHARES USED TO COMPUTE
NET INCOME PER SHARE ATTRIBUTABLE TO
COMMON STOCKHOLDERS:
BASIC                                         30,639,284       25,074,194 
DILUTED                                       36,628,662       30,917,291 
                                                                             

                                                             
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
AS OF MARCH 31, 2013 AND DECEMBER 31, 2012
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                                                  
                                                                  
                                                  March 31,       December 31,
                                                  2013            2012
                                                                  
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                         $ 48,977        $  66,785
Accounts receivable, net (includes amounts
owed by related parties of $554 and $771 as         172,493          18,768
of March 31, 2013 and December 31, 2012,
respectively)
Inventories                                         89,513           45,206
Deferred income taxes                               2,545            2,512
Prepaid expenses and other assets                  18,371         15,812  
Total current assets                               331,899        149,083 
PROPERTY, PLANT AND EQUIPMENT, NET                  250,858          242,885
PROPERTY, PLANT AND EQUIPMENT, NET - VARIABLE       5,350            5,405
INTEREST ENTITY
GOODWILL                                            84,864           84,864
DEFERRED INCOME TAXES                               -                969
OTHER ASSETS (includes amounts owed by
related parties of $352 and $692 as of March       12,726         12,578  
31, 2013 and December 31, 2012, respectively)
TOTAL ASSETS                                      $ 685,697      $  495,784 
                                                                  
LIABILITIES AND EQUITY
                                                                  
CURRENT LIABILITIES:
Revolving line of credit                          $ 27,437        $  -
Current maturities of notes payable                 25,023           4,955
Current maturities of notes payable -               290              283
variable interest entity
Accounts payable (includes amounts owed to
related parties of $3,038 and $2,950 as of          116,785          28,131
March 31, 2013 and December 31, 2012,
respectively)
Accrued expenses and other liabilities              30,476           6,475
Deferred revenue                                   1,361          -       
Total current liabilities                          201,372        39,844  
UNFAVORABLE LEASE OBLIGATION                        8,752            9,035
DEFERRED INCOME TAXES                               1,603            -
NOTES PAYABLE                                       6,986            27,776
NOTES PAYABLE - VARIABLE INTEREST ENTITY            3,955            4,030
OTHER LIABILITIES                                  7,198          7,292   
Total liabilities                                  229,866        87,977  
COMMITMENTS AND CONTINGENCIES
SERIES B PREFERRED STOCK ($.0001 par value;
3,000,000 shares authorized; 2,993,966 and
2,995,106 shares outstanding at March 31,
2013 and December 31, 2012, respectively;           83,011           83,043
redemption amount $74,849 and $74,878 at
March 31, 2013 and December 31, 2012,
respectively)
EQUITY:
Company stockholders' equity:
Common stock ($.0001 par value; 140,000,000
shares authorized; 30,649,061 and 30,559,935        3                3
shares outstanding at March 31, 2013 and
December 31, 2012, respectively)
Common stock - additional paid-in-capital           275,800          273,989
Warrants - additional paid-in-capital               147              147
Retained earnings                                  100,226        53,823  
Total paid-in capital and retained earnings         376,176          327,962
Treasury stock (484,660 and 462,985 shares
outstanding at March 31, 2013 and December         (3,356  )       (3,198  )
31, 2012, respectively)
Total stockholders' equity                         372,820        324,764 
TOTAL LIABILITIES AND EQUITY                      $ 685,697      $  495,784 
                                                                             

Contact:

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