Green Plains Inc.
Oct 31, 2016

Green Plains Reports Third Quarter 2016 Financial Results

OMAHA, Neb., Oct. 31, 2016 (GLOBE NEWSWIRE) -- Green Plains Inc. (NASDAQ:GPRE) today announced financial results for the third quarter of 2016. Net income attributable to the company was $7.9 million, or $0.20 per diluted share, for the third quarter of 2016 compared with net income of $6.2 million, or $0.16 per diluted share, for the same period in 2015. Revenues were $841.9 million for the third quarter of 2016 compared with $742.8 million for the same period last year.

"We generated $42 million of segment operating income for the third quarter of 2016, which is our best performance since the end of 2014. Based on current markets, we expect a stronger fourth quarter," said Todd Becker, president and chief executive officer. "We have grown significantly over the last year as we have increased our ethanol production capacity organically and through acquisitions by nearly 50 percent to approximately 1.5 billion gallons per year, and acquired Fleischmann's Vinegar Company. We continue to focus on our core competencies as we efficiently integrate these acquisitions and aggressively grow our platform to create long-term shareholder value."

During the third quarter, Green Plains produced 292.2 million gallons of ethanol compared with 215.6 million gallons for the same period in 2015. The consolidated ethanol crush margin was $52.6 million, or $0.18 per gallon, for the third quarter of 2016 compared with $34.9 million, or $0.16 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 $2.5 billion for the nine-month period ended Sept. 30, 2016, compared with $2.2 billion for the same period in 2015. Net loss for the nine-month period ended Sept. 30, 2016, was $(8.0) million, or $(0.21) per diluted share, compared with net income of $10.7 million, or $0.27 per diluted share, for the same period in 2015.

"We experienced a stable ethanol margin environment in the third quarter as we continued to see strong ethanol demand worldwide driven by increasing consumption of gasoline and broader appetites for an efficient source of octane," added Becker. "As we continue to expand and diversify our operations, we expect to immediately benefit from the recently acquired businesses."

Recent Highlights

Results of Operations
Consolidated revenues increased $99.1 million for the three months ended Sept. 30, 2016, compared with the same period in 2015. Revenues from ethanol, corn oil and cattle sales increased $82.7 million, $20.9 million and $13.1 million, respectively, while revenues from grain decreased $17.1 million. Ethanol and cattle revenues were affected by increased volumes sold, partially offset by lower average realized prices. Corn oil revenues were impacted by increased volumes sold. Grain revenues were impacted by both lower volumes sold and lower average realized prices.

Operating income increased $11.0 million for the three months ended Sept. 30, 2016, compared with the same period last year primarily due to increased margins on ethanol production and cattle. Interest expense increased $1.6 million for the three months ended Sept. 30, 2016, compared with the same period last year primarily due to higher average debt outstanding. Income tax expense was $5.1 million for the three months ended Sept. 30, 2016, compared with income tax benefit of $0.6 million for the same period in 2015.

Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the third quarter of 2016 was $49.1 million compared with $36.3 million for the same period last year.

GREEN PLAINS INC.
SEGMENT OPERATIONS
(unaudited, in thousands)
               
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
   
   2016   2015  % Var.  2016   2015  % Var.
Revenues:              
Ethanol production $532,441  $389,917   36.6 % $1,471,757  $1,286,519   14.4 %
Agribusiness  443,330   310,190   42.9    1,300,862   974,883   33.4  
Marketing and distribution  735,983   670,327   9.8    2,173,826   1,980,360   9.8  
Partnership  26,205   21,410   22.4    75,487   28,251   *  
Intersegment eliminations  (896,107)  (649,047)  38.1    (2,543,149)  (2,044,338)  24.4  
   841,852   742,797   13.3    2,478,783   2,225,675   11.4  
Gross margin:              
Ethanol production  38,216   24,569   55.5    61,037   101,924   (40.1) 
Agribusiness  8,748   2,195   298.5    22,651   11,904   90.3  
Marketing and distribution  9,660   13,393   (27.9)   26,023   30,033   (13.4) 
Partnership  26,205   21,410   22.4    75,487   28,251   *  
Intersegment eliminations  140   1,882   (92.6)   490   5,184   (90.5) 
   82,969   63,449   30.8    185,688   177,296   4.7  
Operating income (loss):              
Ethanol production  15,311   5,528   177.0    (7,385)  43,139   (117.1) 
Agribusiness  6,251   365   *    15,039   5,833   157.8  
Marketing and distribution  5,252   9,406   (44.2)   13,908   17,446   (20.3) 
Partnership  15,084   11,030   36.8    42,958   416   *  
Intersegment eliminations  141   1,882   (92.5)   491   5,264   (90.7) 
Segment operating income  42,039   28,211   49.0    65,011   72,098   (9.8) 
Corporate activities  (11,184)  (8,378)  33.5    (29,393)  (23,759)  23.7  
  $30,855  $19,833   55.6 % $35,618  $48,339   (26.3)%
               
* Percentage variance not considered meaningful.
               


 
GREEN PLAINS INC.
OPERATING DATA BY PRODUCT
(unaudited, in thousands)
                       
  Three Months Ended
September 30,
   Nine Months Ended
September 30,
     
  2016  2015  % Var.   2016  2015  % Var.
Ethanol production                      
Ethanol sold (gallons) 292,238  215,561  35.6 %   813,464  686,791  18.4 %
Distillers grains sold (tons) 790  577  36.8     2,170  1,837  18.1  
Corn oil sold (pounds) 72,176  55,918  29.1     196,530  175,975  11.7  
Corn consumed (bushels) 102,113  75,538  35.2     284,282  241,720  17.6  
                       
Agribusiness                      
Grain sold (bushels) 112,754  63,171  78.5
     320,612  206,554
  55.2
  
                       
Marketing and distribution                      
Ethanol sold (gallons) 335,980  294,348  14.1     1,017,806  869,989  17.0  
                       
Partnership                      
Storage and throughput (gallons) 292,238  215,561  35.6     813,464  215,561  *  
                       
* Percentage variance not considered meaningful.
                       


 
 GREEN PLAINS INC.
CONSOLIDATED CRUSH MARGIN
(unaudited, in thousands except per gallon amounts)
         
  Three Months Ended
September 30,
 Three Months Ended
September 30,
   
   2016   2015   2016   2015 
  ($ in thousands) ($ per gallon produced)
         
Ethanol production operating income $15,311  $5,528  $0.05  $0.03 
Depreciation and amortization  15,725   13,887   0.06   0.06 
Total ethanol production  31,036   19,415   0.11   0.09 
         
Intercompany fees, net:        
Storage and logistics (partnership)  15,675   11,852   0.05   0.05 
Marketing and agribusiness fees  5,885   3,622   0.02   0.02 
Consolidated crush margin $52,596  $34,889  $0.18  $0.16 
         

Liquidity and Capital Resources
On Sept. 30, 2016, Green Plains had $441.6 million in cash and cash equivalents, and $168.9 million available under revolving credit agreements, some of which are subject to restrictions and other lending conditions. Total debt outstanding was $923.5 million, including $229.1 million outstanding under working capital revolvers and other short-term borrowing arrangements for the marketing and distribution, and agribusiness segments at Sept. 30, 2016.

Conference Call Information
On Nov. 1, 2016, 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 third quarter 2016 financial and operating results for each company. Domestic and international participants can access the conference call by dialing 888.765.5576 and 913.312.0837, 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 Abengoa BioEnergy 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
(in thousands)
     
 September 30,
2016
  December 31,
2015
   
 (unaudited)   
ASSETS    
Current assets    
Cash and cash equivalents$407,359   $384,867 
Restricted cash 34,219    27,018 
Accounts receivable, net 132,574    96,150 
Inventories 324,287    353,957 
Other current assets 54,583    50,585 
Total current assets 953,022    912,577 
Property and equipment, net 1,139,592    922,070 
Other assets 84,344    83,273 
Total assets$2,176,958   $1,917,920 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities    
Accounts payable$129,317   $166,963 
Accrued and other liabilities 46,373    32,026 
Short-term notes payable and other borrowings 229,086    226,928 
Current maturities of long-term debt 13,244    4,507 
Other current liabilities 24,927    8,245 
Current liabilities 442,947    438,669 
Long-term debt 681,182    432,139 
Other liabilities 87,290    88,203 
Total liabilities 1,211,419    959,011 
     
Stockholders' equity    
Total Green Plains stockholders' equity 849,833    797,830 
Noncontrolling interests 115,706    161,079 
Total liabilities and stockholders' equity$2,176,958   $1,917,920 
     


GREEN PLAINS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except per share amounts)
               
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
   
   2016   2015  % Var.  2016   2015  % Var.
Revenues              
Product $839,786  $740,634   13.4 % $2,472,741  $2,219,319   11.4 %
Service  2,066   2,163   (4.5)   6,042   6,356   (4.9) 
Total revenues  841,852   742,797   13.3    2,478,783   2,225,675   11.4  
Costs and expenses              
Cost of goods sold  758,883   679,348   11.7    2,293,095   2,048,379   11.9  
Operations and maintenance  8,564   7,715   11.0    25,713   21,850   17.7  
General and administrative  24,264   19,280   25.9    68,225   58,473   16.7  
Depreciation and amortization  19,286   16,621   16.0    56,132   48,634   15.4  
Total costs and expenses  810,997   722,964   12.2    2,443,165   2,177,336   12.2  
Operating income  30,855   19,833   55.6    35,618   48,339   (26.3) 
Other income (expense)              
Interest income  484   319   51.7    1,263   749   68.5  
Interest expense  (11,819)  (10,196)  15.9    (33,117)  (29,918)  10.7  
Other, net  (1,553)  (519)  199.2    (2,050)  (2,484)  (17.5) 
Total other expense  (12,888)  (10,396)  24.0    (33,904)  (31,653)  7.1  
Income before income taxes  17,967   9,437   90.4    1,714   16,686   (89.7) 
Income tax expense (benefit)  5,083   (604)  *    (4,339)  2,171   *  
Net income  12,884   10,041   28.3    6,053   14,515   (58.3) 
Net income attributable to noncontrolling interests  4,956   3,862   28.3    14,072   3,862   264.4  
Net income (loss) attributable to Green Plains $7,928  $6,179   28.3 % $(8,019) $10,653   (175.3)%
               
Earnings per share:              
Net income (loss) attributable to Green Plains - basic $0.21  $0.16     $(0.21) $0.28    
Net income (loss) attributable to Green Plains - diluted $0.20  $0.16     $(0.21) $0.27    
               
Weighted average shares outstanding:              
Basic  38,282   38,066      38,301   37,966    
Diluted  39,136   38,556      38,301   39,266    
               
* Percentage variance not considered meaningful.            


GREEN PLAINS INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands)
     
  Nine Months Ended
September 30,
  
   2016   2015 
Cash flows from operating activities:    
Net income $6,053  $14,515 
Noncash operating adjustments:    
Depreciation and amortization  56,132   48,634 
Deferred income taxes  (16,413)  (39,645)
Other  14,549   11,745 
Net change in working capital  660   (42,729)
Net cash provided (used) by operating activities  60,981   (7,480)
     
Cash flows from investing activities:    
Purchases of property and equipment  (35,658)  (44,464)
Acquisition of businesses, net of cash acquired  (252,488)  - 
Investments in unconsolidated subsidiaries  (1,388)  (3,309)
Net cash used by investing activities  (289,534)  (47,773)
     
Cash flows from financing activities:    
Net proceeds (payments) - long-term debt  296,422   (16,419)
Net proceeds (payments) - short-term borrowings  1,843   (9,285)
Other  (47,220)  151,310 
Net cash provided by financing activities  251,045   125,606 
     
Net change in cash and cash equivalents  22,492   70,353 
Cash and cash equivalents, beginning of period  384,867   425,510 
Cash and cash equivalents, end of period $407,359  $495,863 
     


GREEN PLAINS INC.
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands)
            
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    
   2016    2015    2016    2015 
Net income $12,884   $10,041   $6,053   $14,515 
Interest expense  11,819    10,196    33,117    29,918 
Income taxes  5,083    (604)   (4,339)   2,171 
Depreciation and amortization  19,286    16,621    56,132    48,634 
EBITDA $49,072   $36,254   $90,963   $95,238 
            

 

Contact: Jim Stark, Vice President - Investor and Media Relations, Green Plains Inc. (402) 884-8700