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SEC
FILE NUMBER: 000-21467
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UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, DC
20549
FORM 12b-25
NOTIFICATION
OF LATE FILING
(Check
one): ¨ Form 10-K ¨ Form 20-F ¨ Form 11-K þ
Form 10-Q ¨
Form 10D
¨ Form N-SAR
¨ Form N-CSR
For
Period Ended: March
31, 2008
¨ Transition Report on
Form 10-K
¨ Transition Report on
Form 20-F
¨ Transition Report on
Form 11-K
¨ Transition Report on
Form 10-Q
¨ Transition Report on
Form N-SAR
For the
Transition Period Ended:____________________________________
Read
Instructions (on back page) Before Preparing Form. Please Print or
Type.
Nothing
in this form shall be construed to imply that the Commission has verified any
information contained herein.
If the
notification relates to a portion of the filing checked above, identify the
item(s) to which the notification relates:
PART
I
REGISTRANT
INFORMATION
Full
name of registrant
Former
name if applicable
400 Capitol Mall, Suite 2060
Address
of Principal Executive Office (Street and
number)
City,
state and zip code
PART
II
RULES
12b-25(b) AND (c)
If the
subject report could not be filed without unreasonable effort or expense and the
registrant seeks relief pursuant to Rule 12b-25(b), the following should be
completed. (Check box if appropriate)
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S
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(a)
The reasons described in reasonable detail in Part III of this form could
not be eliminated without unreasonable effort or
expense;
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S
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(b)
The subject annual report, semi-annual report, transition report on
Form 10-K, Form 20-F, Form 11-K, Form N-SAR or Form N-CSR,
or portion thereof, will be filed on or before the fifteenth calendar day
following the prescribed due date; or the subject quarterly report or
transition report on Form 10-Q or subject distribution report on Form
10-D, or portion thereof, will be filed on or before the fifth calendar
day following the prescribed due date; and
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(c)
The accountant’s statement or other exhibit required by Rule 12b-25(c) has
been attached if applicable.
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PART
III
NARRATIVE
State
below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CSR,
or the transition report or portion thereof, could not be filed within the
prescribed time period.
Introductory
Note: Please
see the information under the caption “Cautionary Statements” below which sets
forth important disclosure regarding forward-looking statements contained in
this Form.
Pacific
Ethanol, Inc. and its subsidiaries (collectively referred to as the “Company,” “we,” “us” or similar terms
unless the context otherwise requires) are engaged in the business of marketing
and producing ethanol and its co-products. As previously disclosed,
our capital needs have historically been provided to a significant extent by our
existing debt financing facilities.
We were
unable to timely complete our consolidated financial statements for the quarter
ended March 31, 2008 and file our Quarterly Report on Form 10-Q for this period
(“Quarterly
Report”), because (i) we have been negotiating a Forbearance Agreement
and Release (“Forbearance
Agreement”) with Comerica Bank (“Comerica”) with
respect a Loan and Security Agreement dated August 17, 2007 (as amended, and
together with all related loan documents, the “Loan Agreement”)
between Comerica and Kinergy Marketing, LLC (“Kinergy”), one of our
wholly-owned subsidiaries; and (ii) we did not complete the annual valuation of
our intangible assets, which is scheduled to occur for the first quarter of each
year, until Monday, May 12, 2008.
Comerica
provided Kinergy with an operating line of credit of up to $25.0 million under
the Loan Agreement. With the completion of a preliminary draft of
Kinergy’s financial statements for the quarter ended March 31, 2008, which were
provided to Comerica on April 29, 2008 pursuant to the reporting requirements of
the Loan Agreement, we became aware that Kinergy was out of compliance with
certain financial covenants, specifically, that Kinergy maintain “Tangible
Effective Net Worth” of at least $12.0 million and that Kinergy maintain a “Debt
to Tangible Effective Net Worth” ratio of no greater than 3.50 to
1.00. We commenced discussions with Comerica immediately, and have
been in discussions with Comerica since that time, which culminated in the
signing of the Forbearance Agreement on May 13, 2008. Our
noncompliance, despite the execution of the Forbearance Agreement by Comerica,
is expected to require adjustments to our quarterly financial statements to
record our obligations under the Loan Agreement as current
liabilities.
We are
preparing additional disclosure regarding the Forbearance Agreement and the
consequences of entering into the Forbearance Agreement, which we expect to
include in a Current Report on Form 8-K as soon as
practicable. Because the Forbearance Agreement was only finalized on
May 13, 2008, we require additional time to complete the additional
disclosure.
PART
IV
OTHER
INFORMATION
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(1)
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Name
and telephone number of person to contact in regard to this
notification
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Christopher
W. Wright
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(916)
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403-2123
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(Name)
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(Area
Code)
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(Telephone
Number)
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(2)
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Have
all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment
Company Act of 1940 during the preceding 12 months or for such
shorter period that the registrant was required to file such report(s)
been filed? If the answer is no, identify
report(s).
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Yes x No
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(3)
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Is
it anticipated that any significant change in results of operations from
the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion
thereof?
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Yes x No ¨
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If
so: attach an explanation of the anticipated change, both narratively and
quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be
made.
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Unaudited
Preliminary Results of Operations
The
following results of operations are preliminary and have not been audited or
otherwise reviewed by our independent auditors. The Company’s final,
unaudited results of operations could be materially different from the unaudited
preliminary results of operations set forth below.
Three
Months Ended March 31, 2008
The
Company anticipates reporting net sales of approximately $161.5 million for the
first quarter of 2008 as compared to net sales of $99.2 million for the same
period in 2007. The increase in net sales for the first quarter of
2008 as compared to the same period in 2007 was primarily due to a substantial
increase in sales volume, which was partially offset by lower average sales
prices. The volume of ethanol sold by the Company in the first quarter of 2008
increased by approximately 58% as compared to the same period in
2007. The Company’s average sales price of ethanol decreased by $0.04
per gallon, or 2%, to $2.30 per gallon in the first quarter of 2008 from an
average sales price of $2.34 per gallon in the same period in 2007.
The
Company anticipates reporting gross profit of approximately $15.7 million for
the first quarter of 2008 as compared to gross profit of $15.3 million for the
same period in 2007. The Company anticipates reporting that its gross
profit margin was approximately 9.7% for the first quarter of 2008 as compared
to a gross profit margin of 15.4% for the same period in 2007. The
decline in the Company’s gross profit and gross profit margin was primarily due
to a lower average sales price of ethanol, as discussed above, and higher corn
costs.
The
Company anticipates reporting a net loss of approximately $36.2 million for the
first quarter of 2008 as compared to net income of $3.0 million for the same
period in 2007. The Company’s net loss for the first quarter of 2008
included a net $39.8 million of goodwill impairment, which is comprised of a
total of $88.2 million, less impairment of $48.4 million representing the
Company’s noncontrolling interest in Front Range Energy, LLC, its variable
interest entity.
The
Company anticipates reporting a loss available to common stockholders of
approximately $37.3 million, inclusive of preferred stock dividends, for the
first quarter of 2008 as compared to income available to common stockholders of
$1.9 million, net of preferred stock dividends, for the same period in
2007.
The
Company anticipates reporting basic and diluted net loss per common share of
approximately $0.93 for the first quarter of 2008 as compared to basic and
diluted net income per common share of $0.05 for the same period in
2007. The loss per share for the first quarter of 2008 includes a
noncash goodwill impairment of $0.99 per share. Excluding the impairment, the
Company would have reported income of $0.06 per share. The Company had
approximately 40.1 million weighted-average basic and diluted shares outstanding
for the first quarter of 2008.
Cautionary
Statements
This
Form includes forwarding looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934 regarding us and our business that are not
historical facts and are indicated by words such as “anticipate,” “expect,”
“believe,” other formulations of those terms and similar terms. Such
forward looking statements involve risks and uncertainties including, in
particular, whether our final unaudited financial results as of and for the
three months ended March 31, 2008, will comport with the preliminary information
summarized herein. Material risks and uncertainties exist regarding
these matters, and we can not assure you that our Quarterly Report will be
completed on the terms described herein, or at all. In addition,
investors should also review the factors contained in the “Risk Factors” section
of our Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 27, 2008.
Pacific Ethanol,
Inc.
(Name
of Registrant as Specified in Charter)
has
caused this notification to be signed on its behalf by the undersigned thereunto
duly authorized.
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Date:
May 13,
2008
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By:
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/s/ Christopher W.
Wright
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Name:
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Christopher
W. Wright
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Title:
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Vice
President, General Counsel & Secretary
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