Pacific Ethanol, Inc. Announces Adjustment to Its Third Quarter 2008 Financial Results
SACRAMENTO, Calif., Nov. 17 /PRNewswire-FirstCall/ -- Pacific Ethanol, Inc. (Nasdaq: PEIX), the leading West Coast-based marketer and producer of ethanol, today announced an adjustment to its previously reported financial results for the quarter ended September 30, 2008.
The Company previously reported a non-cash asset impairment charge of $26.6 million related to its suspended Imperial Valley ethanol plant construction project, which represented $43.8 million in property and equipment less $17.2 million in construction-related liabilities. The Company increased its impairment charge by $14.3 million to a total of $40.9 million. The increase represents impairment on the gross amount of $43.8 million in property and equipment less estimated future undiscounted cash flows. This increase will result in future non-cash gains to the extent the Company is discharged from its construction-related liabilities.
The Company's independent registered public accounting firm has completed its review of the Company's financial statements for the period and the Company expects to file its Form 10-Q for the period on November 17, 2008.
The Company's updated Consolidated Statements of Operations and Balance Sheets are set forth below.
About Pacific Ethanol, Inc.
Pacific Ethanol is the largest West Coast-based marketer and producer of ethanol. Pacific Ethanol has ethanol plants in Madera and Stockton, California; Boardman, Oregon; and Burley, Idaho. Pacific Ethanol also owns a 42% interest in Front Range Energy, LLC which owns an ethanol plant in Windsor, Colorado. Central to Pacific Ethanol's growth strategy is its destination business model, whereby each respective ethanol plant achieves lower process and transportation costs by servicing local markets for both fuel and feed. Pacific Ethanol has achieved its goal of 220 million gallons per year of ethanol production capacity in 2008 and has the goal to increase total production capacity to 420 million gallons per year in 2010. In addition, Pacific Ethanol is working to identify and develop other renewable fuel technologies, such as cellulose-based ethanol production and bio-diesel.
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 are forward-looking statements 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, the ability of Pacific Ethanol to obtain additional debt or equity financing, including additional working capital financing, or absent new sources of financing, the ability of Pacific Ethanol to reschedule or restructure its indebtedness; the ability of Pacific Ethanol to successfully capitalize on its internal growth initiatives; the ability of Pacific Ethanol to operate its plants at their planned production capacities; the price of ethanol relative to the price of corn and other production inputs; the price of ethanol relative to the price of gasoline; and the factors contained in the "Risk Factors" section of Pacific Ethanol's Form 10-K filed with the Securities and Exchange Commission on March 27, 2008 and the "Risk Factors" section of Pacific Ethanol's Form 10-Q for the quarterly period ended September 30, 2008 to be filed with the Securities and Exchange Commission.
(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,
2008 2007 2008 2007
Net sales $183,980 $118,118 $543,489 $331,123
Cost of goods sold 204,265 113,359 547,673 299,902
Gross profit (loss) (20,285) 4,759 (4,184) 31,221
Selling, general and
administrative expenses 6,731 5,920 24,275 23,742
Impairment of asset group 40,900 -- 40,900 --
Impairment of goodwill -- -- 87,047 --
Income (loss) from
operations (67,916) (1,161) (156,406) 7,479
Other income (expense),
net (2,774) (998) (4,184) 312
Income (loss) before
noncontrolling interest
in variable interest
entity (70,690) (2,159) (160,590) 7,791
Noncontrolling interest in
variable interest entity 1,523 (2,683) 47,939 (7,502)
Net income (loss) before
provision for income
taxes (69,167) (4,842) (112,651) 289
Provision for income taxes -- -- -- --
Net income (loss) $(69,167) $(4,842) $(112,651) $289
Preferred stock dividends $(807) $(1,050) $(3,296) $(3,150)
Deemed dividend on
preferred stock $-- $-- $(761) $--
Loss available to common
stockholders $(69,974) $(5,892) $(116,708) $(2,861)
Net loss per share, basic $(1.23) $(0.15) $(2.44) $(0.07)
Net loss per share,
diluted $(1.23) $(0.15) $(2.44) $(0.07)
Weighted-average shares
outstanding, basic and
diluted 56,717 39,928 47,791 39,833
PACIFIC ETHANOL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
ASSETS 2008 2007
(unaudited) *
Current Assets:
Cash and cash equivalents $13,979 $5,707
Investments in marketable securities 7,452 19,353
Accounts receivable, net 30,837 28,034
Restricted cash 12,152 780
Inventories 33,279 18,540
Prepaid expenses 1,828 1,498
Prepaid inventory 2,403 3,038
Derivative instruments 195 1,613
Other current assets 3,884 3,630
Total current assets 106,009 82,193
Property and equipment, net 537,833 468,704
Other Assets:
Goodwill -- 88,168
Intangible assets, net 5,766 6,324
Other assets 9,689 6,211
Total other assets 15,455 100,703
Total Assets $659,297 $651,600
* Amounts derived from the audited financial statements for the year ended
December 31, 2007.
PACIFIC ETHANOL, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(in thousands, except par value)
September 30, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 2008 2007
(unaudited) *
Current Liabilities:
Accounts payable - trade $21,613 $22,641
Accrued liabilities 14,248 8,526
Accounts payable and accrued liabilities -
construction-related 34,308 55,203
Contract retentions 948 5,358
Other liabilities - related parties 212 900
Current portion - notes payable 46,407 11,098
Short-term note payable 1,500 6,000
Derivative instruments 10,350 10,353
Total current liabilities 129,586 120,079
Notes payable, net of current portion 234,537 151,188
Other liabilities 3,493 1,965
Total Liabilities 367,616 273,232
Commitments and Contingencies
Noncontrolling interest in variable interest
entity 47,936 96,082
Stockholders' Equity:
Preferred stock, $0.001 par value; 10,000 shares
authorized;
Series A: 0 and 5,316 shares issued and
outstanding as of September 30, 2008 and
December 31, 2007, respectively
Series B: 2,346 and 0 shares issued and
outstanding as of September 30, 2008 and
December 31, 2007, respectively 2 5
Common stock, $0.001 par value; 100,000 shares
authorized; 57,779 and 40,606 shares issued
and outstanding as of September 30, 2008 and
December 31, 2007, respectively 58 41
Additional paid-in capital 478,231 402,932
Accumulated other comprehensive income (loss) 471 (2,383)
Accumulated deficit (235,017) (118,309)
Total stockholders' equity 243,745 282,286
Total Liabilities and Stockholders' Equity $659,297 $651,600
* Amounts derived from the audited financial statements for the year ended
December 31, 2007.
SOURCE Pacific Ethanol, Inc.
Released November 17, 2008