Southwest Iowa Renewable Energy, LLC Announces Fiscal Results ended June 30, 2018
COUNCIL BLUFFS, Iowa, Aug. 8, 2018 /PRNewswire/ -- Southwest Iowa Renewable Energy, LLC ("SIRE" or the "Company") announced its unaudited financial results for the three and nine months ended June 30, 2018.
Results for the Third Quarter of Fiscal 2018 (Amounts in $ and 000's, except Book Value per Unit)
Three Months Three Months Nine Months Nine Months
Ended June Ended June Ended June Ended June
30, 2018 30, 2017 30, 2018 30, 2017
-------- -------- -------- --------
Revenues 53,611 54,052 157,708 162,190
Net
Income
(Loss) (3,245) 1,929 (2,899) 9,626
Gross
Profit
(Loss) (1,171) 3,300 1,893 13,972
Modified
EBITDA 242 5,243 6,390 18,848
Balance at September 30,
2017
Balance at June 30,
2018
----
Total
Debt 26,521 19,766
Book
Value
(Members'
Equity) 102,429 111,991
Book
Value
per
basic
unit 7,686 8,403
SIRE reported net loss of $(2.9) million or $(217.53) basic unit for the nine months ended June 30, 2018, compared to $9.6 million net income or $722.29 per basic unit for the nine months ended June 30, 2017. SIRE reported net loss of $(3.2) million, or $(243.49) per unit for the three months ended June 30, 2018, compared to net income of $1.9, or $144.74 per basic unit, for the three months ended June 30, 2017.
SIRE revenue from operations was $157.7 million for the nine months ended June 30, 2018, compared to $162.2 million for the nine months ended June 30, 2017. SIRE revenue from operations was $53.6 million for the three months ended March 31, 2018, compared to $54.1 million for the three months ended March 31, 2017.
Modified EBITDA, which is defined as earnings before interest, income taxes, depreciation, amortization, and unrealized hedging gains and losses was $6.4 million for the nine months ended June 30, 2018, compared to $18.8 million for the nine months ended June 30, 2017.The Modified EBITDA was $0.2 million for the three months ended June 30, 2018, compared to $5.2 million for the three months ended June 30, 2017.
The Company's debt increased $6.8 million at June 30, 2018 compared to September 30, 2017, as our continued paydown of term debt was offset by short term borrowing requirements of $11.7 million.
SIRE's book value was lower at June 30, 2018 by $9.6 million compared to September 30, 2017, due primarily to the $6.7 million paid in member distributions in January 2018.
SIRE had $1.2 million in cash and cash equivalents and $20.2 million available under revolving loan agreements, for total cash and available borrowings of $21.4 million at June 30, 2018. The cash flow provided by operating activities was $4.4 million compared to $11.7 million for the nine months ended June 30, 2018 and 2017, respectively.
Brian Cahill, SIRE's President and CEO stated, "So far during Fiscal 2018, we have seen very tight margins, continuing the trends of the previous quarters. Corn prices have increased per bushel as compared to Fiscal 2017, and the cost has increased over 13% in 2018 to date. However, ethanol prices in the U.S. have been trending upwards over the past months, but still remain below last year's levels. We also underwent a more extended and extensive shutdown period this year, combining capital projects with enhancements to allow better and more consistent throughput in our operations. This resulted in more down time and higher expenses than in previous shutdowns. Demand for ethanol has been strong with the lower prices, both in the U.S. and abroad, as our shipments are up 4% compared to the first nine months of Fiscal 2017. 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 and price improvements in Fiscal 2018 as compared to 2017, and a shift to a heavier weighting for wet distiller grains. We also experienced price improvement for distilled grains during the last quarter."
During the third quarter of Fiscal 2018, SIRE produced 29.9 gallons of ethanol, compared to 30.0 gallons during the third quarter of Fiscal 2017. For the first nine months of Fiscal 2018, SIRE produced 93.5 million gallons of ethanol, compared to 90.9 million gallons in the first nine months 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)
Three Months Ended June 30, Nine Months Ended June 30,
2018 2017 2018 2017
---- ---- ---- ----
Revenues $53,611 $54,052 $157,708 $162,190
Cost of Goods Sold 54,782 50,752 155,815 148,218
------ ------ ------- -------
Gross Profit (Loss) (1,171) 3,300 1,893 13,972
General and
administrative
expenses 1,809 1,070 4,243 3,663
Interest and other
(income) expense, net 265 301 549 683
Net Income (Loss) $(3,245) $1,929 $(2,899) $9,626
======= ====== ======= ======
Weighted Average Units
Outstanding, Basic 13,327 13,327 13,327 13,327
------ ------ ------ ------
Weighted Average Units
Outstanding, Diluted 13,327 14,384 13,327 14,423
------ ------ ------ ------
Net Income (Loss) per
unit, Basic $(243.49) $144.74 $(217.53) $722.29
-------- ------- -------- -------
Net Income (Loss) per
unit, Diluted $(243.49) $134.11 $(217.53) $667.41
-------- ------- -------- -------
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 $6.4 million for the nine months ended June 30, 2018, compared to the $18.8 million for the nine months ended June 30, 2017 and $0.2 million for the three months ended June 30, 2018, compared to $5.2 million for the three months ended June 30, 2017. The following sets forth the reconciliation of Net Income to Modified EBITDA for the periods indicated:
For the three months ended For the nine months ended
June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017
Unaudited Unaudited Unaudited Unaudited
in 000's in 000's in 000"s in 000's
-------- -------- -------- --------
Net Income (Loss) $(3,245) $1,929 $(2,899) $9,626
Interest expense,
net 299 291 771 862
Depreciation 2,535 3,015 8,753 9,020
----- ----- ----- -----
EBITDA (411) 5,235 6,625 19,508
Unrealized
Hedging (Gain) 653 8 (235) (660)
Modified EBITDA $242 $5,243 $6,390 $18,848
==== ====== ====== =======
Statistical Information
Three Months Ended Three Months Ended
June 30, 2018 June 30, 2017
------------- -------------
Amounts % of Amounts % of
in 000's Revenues in 000's Revenues
-------- -------- -------- --------
Product Revenue
Information
Denatured and
Undenatured
Ethanol $42,124 78.6% $44,260 81.9%
Distiller's Grains $9,017 16.8% $6,972 12.9%
Corn Oil $2,109 3.9% $2,597 4.8%
Other $361 0.7% $223 0.4%
Nine Months Ended Nine Months Ended
June 30, 2018 June 30, 2017
Amounts % of Amounts % of
in 000's Revenues in 000's Revenues
-------- -------- -------- --------
Product Revenue
Information
Denatured and
Undenatured
Ethanol $124,863 79.2% $130,789 80.6%
Distiller's Grains $25,130 15.9% $23,371 14.4%
Corn Oil $6,822 4.3% $7,309 4.5%
Other $893 0.6% $721 0.5%
Summary Balance Sheets
(Dollars in thousands)
June 30, 2018 September 30, 2017
------------- ------------------
(unaudited)
ASSETS
------
Current Assets
Cash & cash equivalents $1,207 $1,487
Accounts receivable 14,584 13,295
Inventory 13,547 13,214
Other current assets 902 464
--- ---
Total current assets 30,240 28,460
Net property, plant and
equipment 113,729 118,226
Other assets 2,102 2,143
----- -----
Total Assets $146,071 $148,829
======== ========
LIABILITIES AND MEMBERS'
EQUITY
------------------------
Current Liabilities
Accounts payable,
derivative financial
instruments and accrued
expenses 11,569 11,574
Current maturities of
notes payable 6,554 6,538
----- -----
Total current liabilities 18,123 18,112
Total long term
liabilities 25,519 18,726
Total members' equity 102,429 111,991
------- -------
Total Liabilities and
Members' Equity 146,071 148,829
======= =======
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SOURCE Southwest Iowa Renewable Energy, LLC
