Green Plains Inc.
Feb 8, 2017

Green Plains Reports Fourth Quarter and Full Year 2016 Financial Results

Company Reports 8th Consecutive Year of Profitability

Results for the Fourth Quarter of 2016

Results for the Full Year of 2016

OMAHA, Neb., Feb. 08, 2017 (GLOBE NEWSWIRE) -- Green Plains Inc. (NASDAQ:GPRE) today announced financial results for the fourth quarter of 2016. Net income attributable to the company was $18.7 million, or $0.47 per diluted share, for the fourth quarter of 2016 compared with net loss of $(3.6) million, or $(0.09) per diluted share, for the same period in 2015. Revenues were $932.1 million for the fourth quarter of 2016 compared with $739.9 million for the same period last year.

"Green Plains finished 2016 on a strong note, generating $74.3 million of segment operating income in the fourth quarter as we successfully integrated the acquisitions of three ethanol plants and Fleischmann's Vinegar Company into our platform," said Todd Becker, president and chief executive officer. "Each of our business units performed well during the quarter and the year, delivering strong results by continuing to focus on executing our long term strategy of diversification and achieving scale in all of our businesses."

With the addition of Fleischmann's Vinegar Company in the fourth quarter of 2016, Green Plains restructured its operating segments. The four segments include: ethanol production, agribusiness and energy services, food and food ingredients and partnership. Please see segment information below for more detail.

During the fourth quarter, Green Plains produced 334.2 million gallons of ethanol compared with 260.8 million gallons for the same period in 2015. The consolidated ethanol crush margin was $81.6 million, or $0.24 per gallon, for the fourth quarter of 2016 compared with $28.9 million, or $0.11 per gallon, for the same period in 2015. The consolidated ethanol crush margin is the ethanol production segment's operating income before depreciation and amortization, which includes corn oil production, plus intercompany storage, transportation and other fees, net of related expenses.

Revenues were $3.4 billion for the year ended Dec. 31, 2016, compared with $3.0 billion for the same period in 2015. Net income attributable to the company for the year ended Dec. 31, 2016, was $10.7 million, or $0.28 per diluted share, compared with net income of $7.1 million, or $0.18 per diluted share, for the same period in 2015.

"U.S. ethanol demand was strong in 2016 and we expect that to continue in 2017. In addition, exports were the strongest we have seen in 5 years. U.S. ethanol remains competitively priced and export demand could be even stronger this year," Becker added. "We expect to see solid infrastructure growth in support of E15 with new locations and more retailers expanding demand for the product. In all, we believe gasoline demand will continue to grow, leading to an improved ethanol margin environment as we approach the beginning of summer driving season in April.

"We invested over $550 million of growth capital in 2016, which we believe positions us to deliver stronger results in the future. We continue to evaluate additional growth opportunities across all of our segments and we look forward to the completion of the Jefferson Energy Terminal joint venture in the second half of this year," stated Becker.

Full Year Highlights

Results of Operations
Consolidated revenues increased $192.2 million for the three months ended Dec. 31, 2016, compared with the same period in 2015. Revenues were impacted by an increase in ethanol volumes sold and a higher average price realized for ethanol along with an increase in volumes of cattle sold, plus the addition of Fleischmann's Vinegar in the quarter. The increase in revenues were partially offset by lower volumes and average realized prices for grain sold.

Operating income increased $43.3 million for the three months ended Dec. 31, 2016, compared with the same period last year primarily due to increased margins on ethanol production.  Interest expense increased $8.3 million for the three months ended Dec. 31, 2016, compared with the same period last year primarily due to higher average debt outstanding. Income tax expense was $12.2 million for the three months ended Dec. 31, 2016, compared with $4.1 million for the same period in 2015.

Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the fourth quarter of 2016 was $83.5 million compared with $32.5 million for the same period last year.

Segment Information
Management implemented organizational changes during the fourth quarter of 2016 as a result of acquisitions during the year and now reviews financial and operating performance for four operating segments: (1) ethanol production, which includes the production of ethanol, distillers grains and corn oil, (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading, (3) food and food ingredients, which includes the vinegar operations and cattle feedlot operations and (4) partnership, which includes fuel storage and transportation services. Intercompany fees charged to the ethanol production segment for storage and logistics services, grain procurement and product sales are included in the partnership, and agribusiness and energy services segments and eliminated upon consolidation. Third party cost of grain consumed and revenues from product sales are reported directly in the ethanol production segment. Prior periods have been reclassified to conform to the revised segment presentation.


GREEN PLAINS INC.
SEGMENT OPERATIONS
(unaudited, in thousands)
              
 Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  
  2016   2015  % Var.  2016   2015  % Var.
Revenues:             
Ethanol production$  704,539  $  522,932    34.7 % $  2,454,896  $  2,029,359    21.0 %
Agribusiness and energy services   147,606     171,029    (13.7)     664,113     732,646    (9.4) 
Food and food ingredients   87,257     50,897    71.4      318,181     219,385    45.0  
Partnership   28,285     22,686    24.7      103,772     50,937    103.7  
Intersegment eliminations   (35,589)    (27,630)   28.8      (130,081)    (66,738)   94.9  
    932,098     739,914    26.0      3,410,881     2,965,589    15.0  
Gross margin:             
Ethanol production   67,354     17,392    287.3      128,197     123,349    3.9  
Agribusiness and energy services   21,124     18,232    15.9      59,368     59,362    -  
Food and food ingredients   11,947     653   *       23,785     2,724   *   
Partnership   28,285     22,686    24.7      103,772     50,937    103.7  
Intersegment eliminations   403     (38)  *       (320)    (150)   113.3  
    129,113     58,925    119.1      314,802     236,222    33.3  
Operating income (loss):             
Ethanol production   35,798     (3,398)  *       28,125     43,266    (35.0) 
Agribusiness and energy services   13,295     12,142    9.5      34,039     37,253    (8.6) 
Food and food ingredients   6,842     (470)  *       16,436     (952)  *   
Partnership   17,945     12,185    47.3      60,903     12,990    368.8  
Intersegment eliminations   442     -    *       (170)    -     *   
Segment operating income   74,322     20,459    263.3      139,333     92,557    50.5  
Corporate activities   (18,252)    (7,721)   136.4      (47,645)    (31,480)   51.4  
 $  56,070  $  12,738    340.2 % $  91,688  $  61,077    50.1 %
              
* Percentage variance not considered meaningful.          


GREEN PLAINS INC.
OPERATING DATA BY PRODUCT
(unaudited, in thousands)
              
 Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  
 2016 2015 % Var. 2016 2015 % Var.
Ethanol production             
Ethanol sold (gallons)  334,166   260,767   28.1 %  1,147,630   947,557   21.1 %
Distillers grains sold (tons)  894   703   27.2    3,064   2,540   20.6 
Corn oil sold (pounds)  77,370   68,072   13.7    273,901   244,047   12.2 
Corn consumed (bushels)  116,783   90,669   28.8    401,065   332,417   20.7 
              
Agribusiness and energy services             
Domestic ethanol sold (gallons)  341,833   255,489   33.8   1,244,764  1,016,742   22.4 
Export ethanol sold (gallons)  37,266   35,213   5.8    152,141   143,949   5.7 
   379,099   290,702   30.4   1,396,905  1,160,691   20.4 
              
Partnership             
Storage and throughput (gallons)(1)  334,166   248,862   34.3   1,147,630   464,422 * 
              
* Percentage variance not considered meaningful.           
(1) Results include volumes under the storage and throughput agreement.

 

GREEN PLAINS INC.
CONSOLIDATED CRUSH MARGIN
(unaudited, in thousands except per gallon amounts)
        
 Three Months Ended
December 31,
 Three Months Ended
December 31,
  
  2016  2015   2016  2015 
 ($ in thousands) ($ per gallon produced)
        
Ethanol production operating income$  35,798 $  (3,398) $  0.11 $  (0.01)
Depreciation and amortization   22,091    14,397     0.06    0.05 
Total ethanol production   57,889    10,999     0.17    0.04 
        
Intercompany fees, net:       
Storage and logistics (partnership)   17,783    13,112     0.05    0.05 
Marketing and agribusiness fees (agribusiness and energy services)   5,965    4,772     0.02    0.02 
Consolidated crush margin$  81,637 $  28,883  $  0.24 $  0.11 
        


Liquidity and Capital Resources   
On Dec. 31, 2016, Green Plains had $356.2 million in total cash and cash equivalents, and $120.8 million available under revolving credit agreements, some of which are subject to restrictions and other lending conditions. Total debt outstanding was $1,108.9 million, including $291.2 million outstanding under working capital revolvers and other short-term borrowing arrangements for the agribusiness and energy services, and the food and food ingredients segments at Dec. 31, 2016.

Conference Call Information
On Feb. 9, 2017, Green Plains Inc. and Green Plains Partners LP will host a joint conference call at 11 a.m. Eastern time (10 a.m. Central time) to discuss fourth quarter 2016 financial and operating results for each company. Domestic and international participants can access the conference call by dialing 888.778.9065 and 913.312.0719, respectively. Participants are advised to call at least 10 minutes prior to the start time. Alternatively, the conference call and presentation can be accessed on Green Plains' website at http://investor.gpreinc.com/events.cfm. A transcript of the conference call will also be made available on the company's website as soon as practicable.

Non-GAAP Financial Measures
Management uses earnings before interest, income taxes, depreciation and amortization, or EBITDA, and consolidated ethanol crush margin to measure the company's financial performance and to internally manage its businesses. Management believes these measures provide useful information to investors for comparison with peer and other companies. These measures should not be considered an alternative to net income or segment operating income, which are determined in accordance with generally accepted accounting principles. EBITDA calculations may vary from company to company. Accordingly, the company's computation of EBITDA may not be comparable with a similarly-titled measure of another company.

About Green Plains Inc.
Green Plains Inc. (NASDAQ:GPRE) is a diversified commodity-processing business with operations related to ethanol, distillers grains and corn oil production; grain handling and storage; a cattle feedlot; and commodity marketing and distribution services. The company is the second largest consolidated owner of ethanol production facilities in the world, with 17 dry mill plants, producing nearly 1.5 billion gallons of ethanol at full capacity. Green Plains, through its wholly owned subsidiary Fleischmann's Vinegar Company, provides specialized ingredient solutions for leading food and feed manufacturers. Green Plains owns a 62.5% limited partner interest and a 2.0% general partner interest in Green Plains Partners. For more information about Green Plains, visit www.gpreinc.com.

About Green Plains Partners LP
Green Plains Partners LP (NASDAQ:GPP) is a fee-based Delaware limited partnership formed by Green Plains Inc. to provide fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage tanks, terminals, transportation assets and other related assets and businesses. For more information about Green Plains Partners, visit www.greenplainspartners.com.

Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include words such as "anticipates," "believes," "estimates," "expects," "goal," "intends," "plans," "potential," "predicts," "should," "will," and other words with similar meanings in connection with future operating or financial performance. Such statements are based on management's current expectations, which are subject to various factors, risks and uncertainties that may cause actual results, outcomes, timing and performance to differ materially from those expressed or implied. Green Plains may experience significant fluctuations in future operating results due to a number of economic conditions, including competition in the industries in which Green Plains operates; commodity market risks, including those resulting from current weather conditions; financial market risks; counterparty risks; risks associated with changes to federal policy or regulation; risks related to closing and achieving anticipated results from acquisitions; risks associated with the joint venture to commercialize algae production and growth potential of the algal biomass industry; risks associated with the recent acquisitions of three ethanol plants and Fleischmann's Vinegar; and other risks detailed in Green Plains' reports filed with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended Dec. 31, 2015, and subsequent filings with the SEC. Green Plains is not obligated nor intends to update its forward-looking statements at any time unless it is required by applicable securities laws. Unpredictable or unknown factors not discussed in this release could also have material adverse effects on forward-looking statements.


Consolidated Financial Results
 
GREEN PLAINS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
    
 December 31,
2016
 December 31,
2015
  
ASSETS   
Current assets   
Cash and cash equivalents$  304,211 $  384,867
Restricted cash   51,979    27,018
Accounts receivable, net   147,495    96,150
Inventories   422,181    353,957
Other current assets   74,710    50,585
Total current assets   1,000,576    912,577
Property and equipment, net   1,178,706    922,070
Other assets   327,210    83,273
Total assets$  2,506,492 $  1,917,920
    
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities   
Accounts payable$  192,275 $  166,963
Accrued and other liabilities   67,473    32,026
Short-term notes payable and other borrowings   291,223    226,928
Current maturities of long-term debt   35,059    4,507
Other current liabilities   8,916    8,245
Current liabilities   594,946    438,669
Long-term debt   782,610    432,139
Other liabilities   149,745    88,203
Total liabilities   1,527,301    959,011
    
Stockholders' equity   
Total Green Plains stockholders' equity   862,507    797,830
Noncontrolling interests   116,684    161,079
Total liabilities and stockholders' equity$  2,506,492 $  1,917,920
    



GREEN PLAINS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except per share amounts)
              
 Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  
  2016   2015  % Var.  2016   2015  % Var.
Revenues             
Product$  929,838  $  737,882    26.0 % $  3,402,579  $  2,957,201    15.1 %
Service   2,260     2,032    11.2      8,302     8,388    (1.0) 
Total revenues   932,098     739,914    26.0      3,410,881     2,965,589    15.0  
Costs and expenses             
Cost of goods sold   802,985     680,989    17.9      3,096,079     2,729,367    13.4  
Operations and maintenance   8,498     7,750    9.7      34,211     29,601    15.6  
General and administrative   36,451     21,121    72.6      104,677     79,594    31.5  
Depreciation and amortization   28,094     17,316    62.2      84,226     65,950    27.7  
Total costs and expenses   876,028     727,176    20.5      3,319,193     2,904,512    14.3  
    Operating income   56,070     12,738    340.2      91,688     61,077    50.1  
Other income (expense)             
Interest income   278     462    (39.8)     1,541     1,211    27.3  
Interest expense   (18,735)    (10,448)   79.3      (51,851)    (40,366)   28.5  
Other, net   (976)    2,027    (148.1)     (3,027)    (457)   562.4  
Total other expense   (19,433)    (7,959)   144.2      (53,337)    (39,612)   34.6  
Income before income taxes   36,637     4,779    666.6      38,351     21,465    78.7  
Income tax expense   12,199     4,066    200.0      7,860     6,237    26.0  
Net income   24,438     713   *       30,491     15,228    100.2  
Net income attributable to noncontrolling interests   5,756     4,302    33.8      19,828     8,164    142.9  
Net income (loss) attributable to Green Plains$  18,682  $  (3,589)  *   % $  10,663  $  7,064    50.9 %
              
Earnings per share:             
Net income (loss) attributable to Green Plains - basic$  0.49  $  (0.09)    $  0.28  $  0.19    
Net income (loss) attributable to Green Plains - diluted$  0.47  $   (0.09)    $  0.28  $  0.18    
              
Weighted average shares outstanding:             
Basic   38,367     37,890        38,318     37,947    
Diluted   39,845     37,890        38,573     39,028    
              
* Percentage variance not considered meaningful.            
              


GREEN PLAINS INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands)
    
 Twelve Months Ended
December 31,
 
  2016   2015 
Cash flows from operating activities:   
Net income$  30,491  $  15,228 
Noncash operating adjustments:   
Depreciation and amortization   84,226     65,950 
Deferred income taxes   4,910     (27,513)
Other   21,828     14,480 
Net change in working capital   (58,468)    (57,919)
    Net cash provided by operating activities   82,987     10,226 
    
Cash flows from investing activities:   
Purchases of property and equipment   (58,171)    (63,418)
Acquisition of businesses, net of cash acquired   (508,143)    (116,796)
Proceeds on disposal of assets, net   58     68 
Investments in unconsolidated subsidiaries   (6,342)    (3,055)
    Net cash used by investing activities   (572,598)    (183,201)
    
Cash flows from financing activities:   
Net proceeds (payments) - long-term debt   417,197     (17,410)
Net proceeds (payments) - short-term borrowings   63,978     17,911 
Other   (72,220)    131,831 
    Net cash provided by financing activities   408,955     132,332 
    
Net change in cash and cash equivalents   (80,656)    (40,643)
Cash and cash equivalents, beginning of period   384,867     425,510 
Cash and cash equivalents, end of period$  304,211  $  384,867 
    


GREEN PLAINS INC.
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands)
        
 Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  
  2016  2015  2016  2015
Net income$  24,438 $  713 $  30,491 $  15,228
Interest expense   18,735    10,448    51,851    40,366
Income taxes   12,199    4,066    7,860    6,237
Depreciation and amortization   28,094    17,316    84,226    65,950
EBITDA$  83,466 $  32,543 $  174,428 $  127,781
        
Jim Stark
Vice President - Investor and Media Relations
Green Plains Inc. 
(402) 884-8700