Exhibit 99.1

 

 

 

Company IR Contact:  IR Agency Contact:  Media Contact:
Pacific Ethanol, Inc.  Becky Herrick  Paul Koehler
916-403-2755  LHA  Pacific Ethanol, Inc.
866-508-4969  415-433-3777  916-403-2790
   Investorrelations@pacificethanol.com  paulk@pacificethanol.com

 

Pacific Ethanol Reports Record First Quarter 2014 Results with
Operating Income of $34.9 Million

oEstablished records in quarterly gross profit of $38.5 million, operating income of $34.9 million and adjusted EBITDA of $35.4 million
oCommenced production of ethanol at the Madera plant
oEliminated $50 million in total debt so far in 2014

 

Sacramento, CA, April 30, 2014 – Pacific Ethanol, Inc. (NASDAQ: PEIX), the leading producer and marketer of low-carbon renewable fuels in the Western United States, reported its financial results for the three-months ended March 31, 2014.

 

Neil Koehler, the company’s president and CEO, stated: “Our first quarter 2014 results reflect the company’s exceptional performance in both production and marketing at a time of overall favorable market conditions in the industry. Our operating results allowed us to significantly reduce debt and improve our cash position, further strengthening our balance sheet. I am thrilled to announce that today we commenced ethanol production at our Madera plant. We have achieved this important milestone of bringing all 200 million gallons of annual operating capacity back online. The company is in a strong position to meet the increasing demand for low-carbon renewable fuels and to continue to grow the business.”

 

Financial Results for the Three Months Ended March 31, 2014

Net sales were $254.5 million for the first quarter of 2014, an increase of 13% when compared to $225.5 million for the first quarter of 2013. The company’s increase in net sales was attributable to an increase in production gallons sold and an increase in the company’s average sales price per gallon of ethanol.

1
 

 

Gross profit was a record $38.5 million for the first quarter of 2014, compared to $0.8 million in the first quarter of 2013. The improvement in gross profit was driven by significantly improved production margins and an increase in production gallons sold.

 

Selling, general and administrative expenses were $3.7 million in the first quarter of 2014, compared to $4.0 million in the first quarter of 2013.

 

Operating income for the first quarter of 2014 was a record $34.9 million, compared to an operating loss of $3.2 million for the first quarter of 2013.

 

Fair value adjustments for the first quarter of 2013 were $35.8 million due to the significant increase in the price of the company’s common stock during the quarter, and therefore a corresponding increase in the value of the company’s outstanding warrants. As these non-cash fair value adjustments were not tax deductible, the company generated taxable income for the quarter and recorded income tax expense of $3.3 million, reflecting the company’s use of a portion of its net tax assets, resulting in no tax liability for the first quarter of 2014.

 

Net loss available to common stockholders for the first quarter of 2014 was $11.1 million, which includes the aforementioned $35.8 million in non-cash fair value adjustments.

 

Adjusted EBITDA improved to a record $35.4 million for the first quarter of 2014, compared to Adjusted EBITDA of $0.4 million for the first quarter of 2013.

 

Bryon McGregor, the company’s CFO, stated: “During the first quarter, we raised $12.1 million in cash from warrant exercises, we retired in full our $22.2 million in original principal amount of senior unsecured notes by repaying the remaining principal balance of less than $1.0 million and, through April 25th, we have eliminated a total of $50 million in debt. Our company’s consolidated cash position exceeds $34 million, providing us with a solid cash balance and improved liquidity.”

2
 

 

Q1 Results Conference Call

Management will host a conference call at 8:00 a.m. PT/11:00 a.m. ET on May 1, 2014. 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.com. 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 34319349#.

 

If you are unable to participate on 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 Thursday, May 1, 2014 through 11:59 p.m. Eastern Time on Thursday, May 8, 2014. To access the replay, please dial (855) 859-2056. International callers should dial 00-1-(404) 537-3406. The pass code will be 34319349#.

 

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, income taxes, depreciation and amortization and fair value adjustments. 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.

3
 

 

 

About Pacific Ethanol, Inc.

Pacific Ethanol, Inc. (PEIX) is the leading producer and marketer of low-carbon renewable fuels in the Western United States. Pacific Ethanol also sells co-products, including wet distillers grain ("WDG"), a nutritional 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 a 91% ownership interest in PE Op Co., 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. These operating facilities are located in Boardman, Oregon, Burley, Idaho, Stockton, California, and 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.com.

 

 

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 leading producer and marketer of low-carbon renewable fuels in the Western United States; and expected increasing demand for low-carbon renewable fuels, are 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; 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 and the preliminary prospectus relating to the offering filed with the Securities and Exchange Commission on March 31, 2014 and April 2, 2014, respectively.

 

 

 

 

 

 

 

 

 

 

4
 

 

PACIFIC ETHANOL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

 

   Three Months Ended
March 31,
 
   2014   2013 
Net sales  $254,543   $225,459 
Cost of goods sold   215,998    224,613 
Gross profit   38,545    846 
Selling, general and administrative expenses   3,670    4,005 
Income (loss) from operations   34,875    (3,159)
Fair value adjustments   (35,844)   (692)
Interest expense, net   (4,351)   (3,481)
Gain on extinguishment of debt       817 
Other expense, net   (227)   (87)
Loss before provision for income taxes   (5,547)   (6,602)
Provision for income taxes   (3,270)    
Consolidated net loss   (8,817)   (6,602)
Net (income) loss attributed to noncontrolling interest   (2,009)   1,148 
Net loss attributed to Pacific Ethanol, Inc.  $(10,826)  $(5,454)
Preferred stock dividends  $(312)  $(312)
Net loss available to common stockholders  $(11,138)  $(5,766)
Net loss per share, basic and diluted  $(0.69)  $(0.57)
Weighted-average shares outstanding, basic and diluted   16,181    10,060 

 

 

5
 

 

PACIFIC ETHANOL, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

(in thousands, except par value)

 

ASSETS  March 31, 2014   December 31, 2013 
Current Assets:          
Cash and cash equivalents  $7,846   $5,151 
Accounts receivable, net   51,426    35,296 
Inventories   28,297    23,386 
Prepaid inventory   9,341    12,315 
Other current assets   2,877    3,229 
Total current assets   99,787    79,377 
Property and equipment, net   153,973    155,194 
Other Assets:          
Intangible assets, net   3,141    3,260 
Other assets   3,106    3,218 
Total other assets   6,247    6,478 
Total Assets  $260,007   $241,049 

 

6
 

 

PACIFIC ETHANOL, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(unaudited)

(in thousands, except par value)

 

LIABILITIES AND STOCKHOLDERS’ EQUITY  March 31, 2014   December 31, 2013 
Current Liabilities:          
Accounts payable – trade  $16,110   $11,071 
Accrued liabilities   8,062    5,851 
Current portion – capital leases   4,517    4,830 
Current portion – long-term debt       750 
Accrued preferred dividends   3,657     
Other current liabilities   3,353    5,714 
Total current liabilities   35,699    28,216 
           
Long-term debt, net of current portion   71,645    98,408 
Accrued preferred dividends       3,657 
Capital leases, net of current portion   5,299    6,041 
Warrant liabilities at fair value   32,679    8,215 
Other liabilities   5,086    1,611 
Total Liabilities   150,408    146,148 
           
Stockholders’ Equity:          
Preferred stock, $0.001 par value; 10,000 shares authorized;          
Series A: 0 shares issued and outstanding as of March 31, 2014 and December 31, 2013          

Series B: 927 shares issued and outstanding as of March 31, 2014 and December 31, 2013

   1    1 
Common stock, $0.001 par value; 300,000 shares authorized; 18,014 and 16,126 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively   18    16 
Additional paid-in capital   645,382    621,557 
Accumulated deficit   (543,494)   (532,356)
Total Pacific Ethanol, Inc. stockholders’ equity   101,907    89,218 
Noncontrolling interests   7,692    5,683 
Total stockholders’ equity   109,599    94,901 
Total Liabilities and Stockholders’ Equity  $260,007   $241,049 
7
 

 

Reconciliation of Adjusted EBITDA to Net Loss

 

   Three Months Ended
March 31,
 
(in thousands) (unaudited)  2014   2013 
Net loss attributed to Pacific Ethanol, Inc.  $(10,826)  $(5,454)
Adjustments:          
Interest expense*   4,044    2,731 
Provision for income taxes   3,270     
Fair value adjustments   35,844    692 
Depreciation and amortization expense*   3,063    2,386 
Total adjustments   46,221    5,809 
Adjusted EBITDA  $35,395   $355 

________________

* Adjusted for noncontrolling interests.

 

 

Commodity Price Performance

 

   Three Months Ended
March 31,
 
(unaudited)  2014   2013 
Ethanol production gallons sold (in millions)   39.8    35.3 
Ethanol third party gallons sold (in millions)   73.0    65.4 
Total ethanol gallons sold (in millions)   112.8    100.7 
           
Average ethanol sales price per gallon  $2.70   $2.60 
Average CBOT ethanol price per gallon  $2.20   $2.41 
           
Corn cost – CBOT equivalent  $4.48   $7.16 
Average basis  $1.28   $1.19 
Delivered corn cost  $5.76   $8.35 
           
Total co-product tons sold (in thousands)   341.9    300.9 
Co-product return % (1)   34.6%    28.1% 
           

________________

(1) Co-product revenue as a percentage of delivered cost of corn

 

 

####