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| 8-K - 8-K - SOUTHWEST IOWA RENEWABLE ENERGY, LLC | sire10-kpressrelease201412.htm |
Southwest Iowa Renewable Energy, LLC Announces Results for Fiscal 2014
Council Bluffs, Iowa ----- December 4, 2014. Southwest Iowa Renewable Energy, LLC (“ SIRE ”) announced its financial results for the twelve months ended September 30, 2014.
Results for Fiscal 2014
As of And For the Twelve Months Ended (000's) | |||
September 30, 2014 | September 30, 2013 | ||
Net Income (Loss) | $48,608 | $(5,479) | |
Operating Income | 65,229 | 3,165 | |
Modified EBITDA | 78,129 | 19,010 | |
Debt Payments, net | $69,112 | $14,804 | |
Total Debt | $56,924 | $124,099 | |
Book Value (Members' Equity) | 100,882 | 41,597 | |
Book Value per basic unit | $7,570 | $3,165 | |
SIRE reported net income of $48.6 million or $3,681 per basic unit for the twelve months ended September 30, 2014, compared to a net loss of $(5.5) million or $(417) per basic unit for the twelve months ended September 30, 2013.
Modified EBITDA was $78.1 million for the twelve months ended September 30, 2014, compared to $19.0 million for the twelve months ended September 30, 2013. This is defined as earnings before interest, income taxes, depreciation, amortization, unrealized hedging gains and losses and loss from debt extinguishment.
SIRE had $9.3 million in cash and cash equivalents and $36.0 million available under revolving loan agreements, for total cash and available borrowings of $45.3 million at September 30, 2014.
Brian Cahill, SIRE's President and CEO stated, "Fiscal 2014 was monumental for SIRE! Our profit was excellent, and as we reported earlier, we completed our bank debt refinancing, paid down over half of our subdebt, and renewed the remainder, all at improved terms."
"During this fiscal year, we continued to see some of the best margins in the history of the company, continuing the trend of the past few quarters. We were able to continue operating at full capacity nearly every day; capitalizing not only on our ability to manage our railcar fleet during the winter storms that caused many delays and slowdowns, but also on our dual-powering, as we utilized our steam line the majority of the second and third quarters, avoiding the higher prices and curtailments for natural gas that others in the industry experienced. We did have a weather problem in June, when heavy rain caused damage to our steam line, taking it out of service through the summer. Fortunately, natural gas prices have returned to a reasonable level and have not affected our profitability."
"Our book value per share is now $7,570 per unit," continued Cahill, "with $3,681 profit per basic unit for Fiscal 2014."
During Fiscal 2014, SIRE sold 115.9 million gallons of ethanol. Cahill commented, "Transportation and the rail situation continue to be a challenge, for us as well as the ethanol industry. We continue to focus on running the plant at full capacity when possible, with a balance of optimizing the yield and profit."
In July, SIRE announced the completion of a $66.0 million Senior Credit Agreement with Farm Credit Services of America and CoBank, with the proceeds used to refinance senior bank debt. The Credit Agreement provides SIRE with a term loan of $30 million and a revolving term loan of $36 million. Interest rate on the Credit Agreement was reduced from 6.0% to LIBOR plus 3.25%.
SIRE also completed a $26.2 million Subordinated Debt refinancing, with the interest rate reduced from LIBOR plus 7.5% to LIBOR plus 6.25%. Prior to completing this offering, SIRE also paid a total of $26.8 million to its subordinated lenders. The Company has given written notice to its subordinated lenders that it would make payment in full on the remaining subordinated debt in December, 2014.
About Southwest Iowa Renewable Energy, LLC:
SIRE is located on 275 acres in Council Bluffs, Iowa, operating a 125 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 Statements of Operations (Dollars in thousands except for per unit amounts) | |||||||
September 30, 2014 | September 30, 2013 | ||||||
Revenues | $ | 319,548 | $ | 350,194 | |||
Cost of Goods Sold | |||||||
Cost of goods sold-non hedging | 240,968 | 341,860 | |||||
Realized & unrealized hedging losses | 8,891 | 1,203 | |||||
249,859 | 343,063 | ||||||
Gross Margin | 69,689 | 7,131 | |||||
General and administrative expenses | 4,460 | 3,966 | |||||
Operating Income | 65,229 | 3,165 | |||||
Other Expense | |||||||
16,621 | 8,644 | ||||||
Net Income (Loss) | $ | 48,608 | $ | (5,479 | ) | ||
Weighted Average Units Outstanding -basic | 13,205 | 13,140 | |||||
Weighted Average Units Outstanding -diluted | 24,625 | 13,140 | |||||
Income (loss) per unit -basic | $ | 3,681.03 | $ | (416.97 | ) | ||
Income (loss) per unit -diluted | $ | 2,080.08 | $ | (416.97 | ) | ||
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, or more meaningful than, 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. The following sets forth the reconciliation of Net Income (Loss) to Modified EBITDA for the periods indicated:
Fiscal 2014 | Fiscal 2013 | ||||||
in 000's (except per unit) | in 000's (except per unit) | ||||||
EBITDA | |||||||
Net Income (Loss) | $ | 48,608 | $ | (5,479 | ) | ||
Interest Expense, Net | 6,697 | 9,356 | |||||
Depreciation | 11,488 | 11,387 | |||||
EBITDA | 66,793 | 15,264 | |||||
Unrealized Hedging loss | 1,208 | 3,746 | |||||
Loss from Debt Extinguishment | 10,128 | — | |||||
Modified EBITDA | $ | 78,129 | $ | 19,010 | |||
Modified EBITDA per unit - basic | $ | 5,862.46 | $ | 1,446.73 | |||
Statistical Information
Fiscal 2014 | Fiscal 2013 | ||||||||||||
Amounts in 000's | % of Revenues | Amounts in 000's | % of Revenues | ||||||||||
Product Revenue Information | |||||||||||||
Denatured and undenatured Ethanol | $ | 245,358 | 76.8 | % | $ | 262,950 | 75.1 | % | |||||
Distiller's Grains | $ | 62,611 | 19.6 | % | $ | 76,109 | 21.7 | % | |||||
Corn Oil | $ | 10,294 | 3.2 | % | $ | 8,853 | 2.5 | % | |||||
Other | $ | 1,285 | 0.4 | % | $ | 2,282 | 0.7 | % | |||||
Condensed Balance Sheets
(Dollars in thousands)
September 30, 2014 | September 30, 2013 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and restricted cash | $ | 9,571 | $ | 12,740 | |||
Accounts receivable | 5,993 | 11,163 | |||||
Inventory | 12,161 | 8,445 | |||||
Other current assets | 2,234 | 1,205 | |||||
Total Current Assets | 29,959 | 33,553 | |||||
Net property and equipment | 134,821 | 143,184 | |||||
Other assets | 2,006 | 1,689 | |||||
Total Assets | $ | 166,786 | $ | 178,426 | |||
Liabilities and Members' Equity | |||||||
Current Liabilities | |||||||
Accounts payable, accrued expenses and derivatives | 8,680 | 12,330 | |||||
Current maturities of notes payable | 6,052 | 123,887 | |||||
Total Current Liabilities | 14,732 | 136,217 | |||||
Total Long Term Liabilities | 51,172 | 612 | |||||
Total Members' Equity | 100,882 | 41,597 | |||||
Total Liabilities and Members' Equity | $ | 166,786 | $ | 178,426 | |||
Contact:
Brett Frevert, CFO
Southwest Iowa Renewable Energy, LLC
712.366.0392