Southwest Iowa Renewable Energy, LLC Announces Financial Results for Q1 Fiscal 2018
COUNCIL BLUFFS, Iowa, Feb. 8, 2018 /PRNewswire/ -- Southwest Iowa Renewable Energy, LLC ("SIRE" or the "Company") announced its unaudited financial results for the three months ended December 31, 2017.
Results for the First Quarter of Fiscal 2018 (Amounts in $ and 000's, except Book Value per Unit)
Three Months Ended Three Months Ended
December 31, 2017 December 31, 2016
----------------- -----------------
Net Income 1,181 5,632
Gross Margin 2,708 7,183
Modified EBITDA 4,165 8,197
Total Debt 12,534 20,566
Book Value (Members' Equity) 106,508 108,709
Book Value per basic unit * 7,992 8,157
* net of distributions
SIRE reported net income of $1.2 million, or $88.62 per unit, for the three months ended December 31, 2017, compared to a net income of $5.6 million, or $422.60 per unit, for the three months ended December 31, 2016.
SIRE revenue from operations was $50.5 million for the three months ended December 31, 2017, compared to $52.1 million for the three months ended December 31, 2016.
Modified EBITDA, which is defined as earnings before interest, income taxes, depreciation, amortization, and unrealized hedging gains and losses was $4.2 million for the three months ended December 31, 2017, compared to $8.2 million for the three months ended December 31, 2016.
The Company's debt continues to shrink, as we were able to reduce our total debt outstanding by $8.0 million dollars compared to December 31, 2016. This reduction included a $1.5 million prepayment of our term loan for March 2018.
SIRE's book value was lower at December 31, 2017 by $2.2 million compared to December 31, 2016. However, the book value is net of $11.2 million paid in member distributions in February 2017, and accrued at December 31, 2017 for payment in January 2018. The aggregate amount of distributions made to our members totaled $840 per unit.
SIRE had $2.5 million in cash and cash equivalents and $36.0 million available under revolving loan agreements, for a total cash and available borrowings of $38.5 million at December 31, 2017. The cash flow provided by operating activities was $8.5 million compared to $9.9 million for the three months ended December 31, 2017 and 2016, respectively.
Brian Cahill, SIRE's President and CEO stated, "this first quarter of Fiscal 2018, we saw very tight margins, continuing the trends of the previous quarter. Corn prices are down slightly per bushel as compared to the first quarter of Fiscal 2017. However, ethanol prices in the U.S. have been trending downwards over the past twelve months. Demand for ethanol has been strong with the lower prices, both in the U.S. and abroad. The industry has continued to adjust and we expect margins to remain positive but are becoming more dependent on continued good export demand. Our distiller grains have also seen increased demand offset by reduced prices, and a shift to a heavier weighting of wet distiller grains."
During the first quarter of Fiscal 2018, SIRE produced 31.7 million gallons of ethanol, compared to 29.9 million gallons during the first quarter of Fiscal 2017. Cahill commented - "we continue to evaluate and implement new production technology. We will continue to focus on running the plant efficiently, increasing our ethanol yield, with a balance of optimizing the yield and profit."
About Southwest Iowa Renewable Energy, LLC:
SIRE is located on 275 acres in Council Bluffs, Iowa, operating a 140 million gallon per year ethanol plant. SIRE began producing ethanol in February, 2009 and sells its ethanol, distillers grains, corn syrup, and corn oil in the continental United States, Mexico and the Pacific Rim.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "1995 Act"). Such statements are made in good faith by SIRE and are identified as including terms such as "may," "will," "should," "expects," "anticipates," "estimates," "plans," or similar language. In connection with these safe-harbor provisions, SIRE has identified in its Annual Report on Form 10-K , important factors that could cause actual results to differ materially from those contained in any forward-looking statement made by or on behalf of SIRE, including, without limitation, the risk and nature of SIRE's business, and the effects of general economic conditions on SIRE. The forward-looking statements contained in this Press Release are included in the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. SIRE further cautions that such factors are not exhaustive or exclusive. SIRE does not undertake to update any forward-looking statement which may be made from time to time by or on behalf of SIRE.
Financial Results
SOUTHWEST IOWA RENEWABLE ENERGY, LLC
Summary Statements of Operations
Unaudited
(Dollars in thousands, except per unit data)
For the three months ended December 31,
---------------------------------------
2017 2016
---- ----
Revenues $50,546 $52,065
Cost of Goods Sold 47,838 44,882
------ ------
Gross Margin 2,708 7,183
General and
administrative
expenses 1,378 1,262
Interest and other
(income) expense,
net 149 289
Net Income $1,181 $5,632
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Weighted Average
Units
Outstanding,
Basic 13,327 13,327
------ ------
Weighted Average
Units
Outstanding,
Diluted 14,386 14,442
------ ------
Net Income per
unit, Basic $88.62 $422.60
------ -------
Net Income per
unit, Diluted $82.09 $389.97
------ -------
Modified EBITDA
Management uses Modified EBITDA, a non-GAAP measure, to measure the Company's financial performance and to internally manage its business. Management believes that Modified EBITDA provides useful information to investors as a measure of comparison with peer and other companies. Modified EBITDA should not be considered an alternative to net income or cash flow as determined in accordance with generally accepted accounting principles. Modified EBITDA calculations may vary from company to company. Accordingly, our computation of Modified EBITDA may not be comparable with a similarly-titled measure of another company.
Modified EBITDA, which is defined as earnings before interest, income taxes, depreciation, amortization, unrealized hedging gains and losses, and other significant noncash expenses was $4.2 million for the three months ended December 31, 2017 , compared to $8.2 million for the three months ended December 31, 2016. The following sets forth the reconciliation of Net Income to Modified EBITDA for the periods indicated:
For the three months ended
December 31, 2017 December 31, 2016
Unaudited Unaudited
in 000's in 000's
-------- --------
Net Income $1,181 $5,632
Interest
expense,
net 230 289
Depreciation 3,217 3,000
----- -----
EBITDA 4,628 8,921
Unrealized
Hedging
(Gain) (463) (724)
Modified
EBITDA $4,165 $8,197
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Statistical Information
-----------------------
Three Months Ended Three Months Ended
December 31, 2017 December 31, 2016
Amounts % of Amounts % of
in 000's Revenues in 000's Revenues
-------- -------- -------- --------
Product Revenue
Information
Denatured and
undenatured
Ethanol $39,720 78.6% $41,611 79.9%
Distiller's
Grains $8,030 15.9% $7,939 15.2%
Corn Oil $2,559 5.1% $2,279 4.4%
Other $237 0.4% $236 0.5%
Summary Balance Sheets
----------------------
(Dollars in thousands)
December 31, 2017 September 30, 2017
----------------- ------------------
(unaudited)
ASSETS
------
Current Assets
Cash & cash
equivalents $2,489 $1,487
Accounts receivable 11,601 13,295
Inventory 13,176 13,214
Other current assets 1,204 464
----- ---
Total current assets 28,470 28,460
Net property, plant
and equipment 115,237 118,226
Other assets 2,101 2,143
----- -----
Total Assets $145,808 $148,829
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LIABILITIES AND MEMBERS' EQUITY
-------------------------------
Current Liabilities
Accounts payable,
derivative
financial
instruments and
accrued expenses 21,250 11,574
Current maturities
of notes payable 5,043 6,538
----- -----
Total current
liabilities 26,293 18,112
Total long term
liabilities 13,007 18,726
Total members'
equity 106,508 111,991
------- -------
Total Liabilities
and Members' Equity 145,808 148,829
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SOURCE Southwest Iowa Renewable Energy, LLC
