Exhibit 99.1
 
 
 

FOR IMMEDIATE RELEASE
 
 
INVESTOR RELATIONS:
MEDIA CONTACT:
916-403-2755
Joseph Hansen, Pacific Ethanol, Inc.
866-508-4969
916-403-2123
   
InvestorRelations@pacificethanol.net
jhansen@pacificethanol.net


 
PACIFIC ETHANOL, INC. ANNOUNCES ADJUSTMENT TO ITS THIRD QUARTER 2008 FINANCIAL RESULTS


Sacramento, CA, November 17, 2008 – Pacific Ethanol, Inc. (NASDAQ GM: 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)
 
 
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PACIFIC ETHANOL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)

   
Three Months Ended
September 30,
   
Nine Months Ended
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  

 

 
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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.
 

 


 
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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.
 

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