Pacific Ethanol, Inc. Reports Third Quarter 2013 Financial Results *Grew net sales $18.0 million over third quarter 2012 to $233.9 million *Improved gross profit $6.0 million over third quarter 2012 to $3.5 million *Improved operating income $6.3 million over third quarter 2012 to $1.0 million *Improved adjusted EBITDA $4.3 million over third quarter 2012 to $3.4 million *Retired a combined $8.4 million of senior and convertible debt *Began production of corn oil at the Stockton plant *Purchased surplus raw beet sugar for use as ethanol feedstock SACRAMENTO, Calif., Nov. 6, 2013 (GLOBE NEWSWIRE) -- Pacific Ethanol, Inc. (Nasdaq:PEIX), the leading marketer and producer of low-carbon renewable fuels in the Western United States, reported its financial results for the three- and nine-months ended September 30, 2013. Neil Koehler, the company's president and CEO, stated: "Our results for the third quarter of 2013 reflect an improved market environment and the positive impact of our increased ownership of the Pacific Ethanol plants over the year-ago period. We further diversified our revenue and feedstock as sorghum contributed significantly to our feedstock supply during the quarter, and we began production of corn oil at our Stockton plant in October. More recently, we purchased surplus raw beet sugar to be blended with corn for use as ethanol feedstock. We made the purchase at a significant discount to the cost of corn and hedged our position to lock in at least $3 million in feedstock cost savings in 2014." "California's Low-Carbon Fuel Standard has been instrumental in driving innovation to reduce the carbon intensity of fuel. Oregon and Washington recently joined California and British Columbia by agreeing to implement their own low-carbon fuel standards with the vision of building an integrated market for low-carbon fuels on the West Coast, which is an exciting growth opportunity for Pacific Ethanol," added Koehler. Financial Results for the Three Months Ended September 30, 2013 Net sales were $233.9 million for the third quarter of 2013, compared to $215.9 million for the third quarter of 2012. The increase in net sales was attributable to an increase in production gallons sold, slightly offset by a reduction in average sales price per gallon. Gross profit was $3.5 million for the third quarter of 2013, compared to a loss of $2.4 million in the third quarter of 2012. The improvement in gross margin was tempered by a decline in ethanol prices, uncommonly high corn basis costs and related derivative losses. SG&A expenses were $2.5 million in the third quarter of 2013, down from $2.9 million in the third quarter of 2012. Operating income for the third quarter of 2013 was $1.0 million, compared to an operating loss of $5.3 million for the same period in 2012. Loss available to common stockholders for the third quarter of 2013 was $5.3 million including a $2.6 million non-cash loss on extinguishments of debt, compared to $6.3 million for the third quarter of 2012. Adjusted EBITDA improved to positive $3.4 million for the third quarter of 2013, compared to Adjusted EBITDA of negative $0.9 million in the third quarter of 2012. Bryon McGregor, the company's CFO, stated: "During the third quarter, we made significant progress on our goal to strengthen our balance sheet. We retired nearly $1 million in senior debt and $7.5 million of our original $14 million in convertible notes. An additional $2.3 million under our convertible notes was converted subsequent to quarter end, leaving only $250,000 outstanding." Financial Results for the Nine Months Ended September 30, 2013 For the nine months ended September 30, 2013, net sales were $693.1 million, compared to $619.0 million for the same period in 2012. For the first nine months of 2013, loss available to common stockholders was $10.3 million, compared to $14.5 million for the same period in 2012. Adjusted EBITDA for the first nine months of 2013 was positive $10.4 million, compared to Adjusted EBITDA of negative $5.0 million for the first nine months of 2012. Q3 Results Conference Call Management will host a conference call at 8:00 a.m. PT/11:00 a.m. ET on November 7, 2013. Neil Koehler, Chief Executive Officer, and Bryon McGregor, Chief Financial Officer, will deliver prepared remarks followed by a question and answer session. The webcast for the call can be accessed from Pacific Ethanol's website at www.pacificethanol.net. Alternatively, you may dial the following number up to ten minutes prior to the scheduled conference call time: (877) 847-6066. International callers should dial 00-1-(970) 315-0267. The pass code will be 94453896#. If you are unable to listen to the live call, the webcast will be archived for replay on Pacific Ethanol's website for one year. In addition, a telephonic replay will be available at 2:00 p.m. Eastern Time on November 7, 2013 through 11:59 p.m. Eastern Time on November 14, 2013. To access the replay, please dial (855) 859-2056. International callers should dial 00-1-(404) 537-3406. The pass code will be 94453896#. Reconciliation of Adjusted EBITDA to Net Loss Management believes that certain financial measures not in accordance with generally accepted accounting principles ("GAAP") are useful measures of operations. The company defines Adjusted EBITDA as unaudited earnings before interest, taxes, depreciation and amortization, noncash gain (loss) on extinguishments of debt and fair value adjustments and warrant inducements. The table at the end of this release provides a reconciliation of Adjusted EBITDA to net loss attributed to Pacific Ethanol, Inc. Management provides an Adjusted EBITDA measure so that investors will have the same financial information that management uses, which may assist investors in properly assessing the company's performance on a period-over-period basis. Adjusted EBITDA is not a measure of financial performance under GAAP, and should not be considered an alternative to net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of the company's results as reported under GAAP. About Pacific Ethanol, Inc. Pacific Ethanol, Inc. (Nasdaq:PEIX) is the leading marketer and producer of low-carbon renewable fuels in the Western United States. Pacific Ethanol also sells co-products, including wet distillers grain ("WDG"), a nutritious animal feed. Serving integrated oil companies and gasoline marketers who blend ethanol into gasoline, Pacific Ethanol provides transportation, storage and delivery of ethanol through third-party service providers in the Western United States, primarily in California, Arizona, Nevada, Utah, Oregon, Colorado, Idaho and Washington. Pacific Ethanol has an 85% ownership interest in New PE Holdco LLC, the owner of four ethanol production facilities. Pacific Ethanol operates and manages the four ethanol production facilities, which have a combined annual production capacity of 200 million gallons. The facilities in operation are located in Boardman, Oregon, Burley, Idaho and Stockton, California, and one idled facility is located in Madera, California. The facilities are near their respective fuel and feed customers, offering significant timing, transportation cost and logistical advantages. Pacific Ethanol's subsidiary, Kinergy Marketing LLC, markets ethanol from Pacific Ethanol's managed plants and from other third-party production facilities, and another subsidiary, Pacific Ag. Products, LLC, markets WDG. For more information please visit www.pacificethanol.net. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 With the exception of historical information, the matters discussed in this press release including, without limitation, the ability of Pacific Ethanol to continue as the leading marketer and producer of low-carbon renewable fuels in the Western United States; and whether an integrated market for low-carbon fuels on the West Coast will develop and be a growth opportunity for Pacific Ethanolare forward-looking statements and considerations that involve a number of risks and uncertainties. The actual future results of Pacific Ethanol could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, adverse economic and market conditions, including for ethanol and its co-products, and in particular, low-carbon rated ethanol; raw material costs; changes in governmental regulations and policies; and other events, factors and risks previously and from time to time disclosed in Pacific Ethanol's filings with the Securities and Exchange Commission including, specifically, those factors set forth in the "Risk Factors" section contained in Pacific Ethanol's Form 10-K filed with the Securities and Exchange Commission on April 1, 2013. (Tables follow) PACIFIC ETHANOL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2013 2012 2013 2012 Net sales $233,880 $215,860 $693,147 $619,026 Cost of goods sold 230,357 218,300 681,813 633,843 Gross profit (loss) 3,523 (2,440) 11,334 (14,817) Selling, general and administrative 2,511 2,898 9,649 9,400 expenses Income (loss) from operations 1,012 (5,338) 1,685 (24,217) Fair value adjustments and warrant 762 (900) 1,507 352 inducements Interest expense, net (4,530) (3,378) (11,983) (9,380) Loss on extinguishments of debt (2,573) — (1,795) — Other expense, net (106) (105) (321) (499) Loss before provision for income taxes (5,435) (9,721) (10,907) (33,744) Provision for income taxes — — — — Consolidated net loss (5,435) (9,721) (10,907) (33,744) Net loss attributed to noncontrolling 464 3,750 1,533 20,191 interest in variable interest entity Net loss attributed to Pacific Ethanol $(4,971) $(5,971) $(9,374) $(13,553) Preferred stock dividends $(319) $(319) $(946) $(949) Loss available to common stockholders $(5,290) $(6,290) $(10,320) $(14,502) Net loss per share, basic and diluted $(0.40) $(0.82) $(0.91) $(2.26) Weighted-average shares outstanding, 13,177 7,712 11,380 6,414 basic and diluted PACIFIC ETHANOL, INC. CONSOLIDATED BALANCE SHEETS (unaudited, in thousands, except par value) September 30, December 31, ASSETS 2013 2012 Current Assets: Cash and cash equivalents $9,175 $7,586 Accounts receivable, net 27,102 26,051 Inventories 13,729 16,244 Prepaid inventory 11,232 5,422 Other current assets 2,036 2,129 Total current assets 63,274 57,432 Property and equipment, net 156,309 150,409 Other Assets: Intangible assets, net 3,378 3,734 Other assets 3,508 3,388 Total other assets 6,886 7,122 Total Assets $226,469 $214,963 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable – trade $8,579 $5,104 Accrued liabilities 3,198 3,282 Current portion – capital leases 5,129 — Current portion – long-term debt 2,133 4,029 Total current liabilities 19,039 12,415 Long-term debt, net of current portion 108,834 117,253 Accrued preferred dividends 3,657 5,852 Warrant liabilities and conversion features 6,630 4,892 Other liabilities 8,154 1,644 Total Liabilities 146,314 142,056 Stockholders' Equity: Pacific Ethanol, Inc. Stockholders' Equity: Preferred stock, $0.001 par value; 10,000 shares authorized; Series A: 0 shares issued and outstanding as of September 30, 2013 and December 31, 2012 Series B: 927 shares issued and outstanding as of 1 1 September 30, 2013 and December 31, 2012 Common stock, $0.001 par value; 300,000 shares authorized; 14,737 and 9,789 shares issued and 15 10 outstanding as of September 30, 2013 and December 31, 2012, respectively Additional paid-in capital 612,880 582,861 Accumulated deficit (540,630) (530,310) Total Pacific Ethanol, Inc. Stockholders' Equity 72,266 52,562 Noncontrolling interest in variable interest entity 7,889 20,345 Total Stockholders' Equity 80,155 72,907 Total Liabilities and Stockholders' Equity $226,469 $214,963 Reconciliation of Adjusted EBITDA to Net Loss Three Months Ended Nine Months Ended September 30, September 30, (in thousands) (unaudited) 2013 2012 2013 2012 Net loss attributed to Pacific Ethanol $(4,971) $(5,971) $(9,374) $(13,553) Adjustments: Interest expense* 3,997 2,223 10,122 4,565 Interest income* — — — (3) Extinguishments of debt – noncash 2,573 — 3,610 — Fair value adjustments (762) 900 (1,507) (352) Depreciation and amortization expense* 2,608 1,956 7,523 4,389 Total adjustments 8,416 5,079 19,748 8,599 Adjusted EBITDA $3,445 $(892) $10,374 $(4,954) ________________ * Adjusted for noncontrolling interest in variable interest entity. Commodity Price Performance Three Months Ended Nine Months Ended September 30, September 30, (unaudited) 2013 2012 2013 2012 Ethanol production gallons sold (in 37.1 33.5 109.2 106.0 millions) Ethanol third party gallons sold (in 67.8 73.8 197.7 232.7 millions) Total ethanol gallons sold (in millions) 104.9 107.3 306.9 338.7 Ethanol average sales price per gallon $2.62 $2.65 $2.67 $2.43 Average CBOT ethanol price per gallon $2.23 $2.51 $2.39 $2.29 Corn cost – CBOT equivalent $5.02 $7.72 $6.22 $6.73 Average basis $2.42 $1.17 $1.68 $1.09 Delivered corn cost $7.44 $8.89 $7.90 $7.82 Total co-product tons sold (1) (in 335.9 295.1 974.1 942.7 thousands) Co-product return % (2) 28.6% 27.1% 28.1% 26.2% ________________ (1) Includes corn oil. (2) Co-product revenue as a percentage of delivered cost of corn. CONTACT: Company IR Contact: Pacific Ethanol, Inc. 916-403-2755 866-508-4969 Investorrelations@pacificethanol.net IR Agency Contact: Becky Herrick LHA 415-433-3777 Media Contact: Paul Koehler Pacific Ethanol, Inc. 503-235-8241 firstname.lastname@example.org company logo
Pacific Ethanol, Inc. Reports Third Quarter 2013 Financial Results
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