Results for the Third Quarter of 2021:
-- Net loss attributable to the company of $59.6 million, or ($1.18) per diluted share
-- Adjusted EBITDA of ($14.8) million
-- Consolidated crush margin of $0.01 per gallon for the third quarter and $0.16 per gallon year-to-date
-- Cash, cash equivalents and restricted cash of $720.9 million with $312.6 million available under committed credit facilities
Highlights and Recent Developments
-- Green Plains Wood River LLC's MSC(TM) Ultra-High Protein system is operational, with shipments expected in November
-- Broke ground on 4 MSC(TM) Ultra-High Protein facility, at Green Plains Mount Vernon, and anticipate breaking ground at Obion, Green Plains' 5 MSC(TM) location in the coming weeks
-- Extended sales commitments to our pet food vertical with higher volumes through 2022 with a signed MOU for additional sales through 2023 and expect to expand our customer base near term
-- Announced a turnkey solution for MSC(TM) protein technology, and inaugural project partner, Tharaldson Ethanol, a 175 million gallon facility in Casselton, N.D.
-- Completed offering of 5,462,500 shares of common stock at $32.00 per share
-- Announced governance updates, including appointing a lead independent director, ongoing refreshment of the Board with two new board members, rotating committee chairs and various amendments enhancing the Board's oversight and strengthening shareholder rights
Green Plains Inc. (NASDAQ:GPRE) today announced financial results for the third quarter of 2021. Net loss attributable to the company was $59.6 million, or ($1.18) per diluted share compared to a net loss of $34.5 million or ($1.00) per diluted share, for the same period in 2020. Revenues were $746.8 million for the third quarter of 2021 compared with $424.1 million for the same period last year.
Commenting on the results, Green Plains' President and Chief Executive Officer Todd Becker said,
"The third quarter results of $0.01 per gallon consolidated crush margin were impacted by the near-record physical corn basis levels, accelerated completion of maintenance shutdowns and previously announced MTM timing reversals. Our year-to-date margin averaged $0.16 per gallon, and we anticipate full year to finish strong and above our long-term view of the Green Plains 1.0 platform. While we have experienced volatility between quarters due to the timing of various items, we are pleased to have achieved year-to-date results at or above the market and believe we are on track to deliver improved results into 2022 as we continue to execute on our transformation plan while protecting our balance sheet."
"Today, we are announcing that final commissioning of the Wood River Fluid Quip MSC system is underway and that we expect to begin shipping value-added ingredients as early as November. Besides protein, a major benefit of MSC technology is improved corn oil yields and the facility's results are already exceeding our expectations, providing additional confidence that we will see the expected increase in renewable corn oil production as we deploy MSC technology across our platform. We expect renewable corn oil's financial contribution to remain strong, supported by both higher yields and higher prices. When combined with the return to full run rate capability across our platform after the completion of our Project 24 modernization program, we expect to have the capacity to produce over 330 million pounds of renewable corn oil annually by the end of 2022, and expand further with the deployment of additional MSC systems."
"Our team has made considerable progress on the commercial front. We have signed a multi-year MOU for sales of our Ultra-High Protein ingredients into pet food through 2023, while also increasing sales volumes in 2022. We are finalizing terms with new pet food customers and continue to work alongside our partners on product design and inclusion rates specifically for this vertical. We also continue to negotiate additional multi-year distribution and supply agreements while negotiating and executing commercial agreements in dairy, swine and aquaculture which will start to set baseload volumes for our products as we bring on additional volumes next year. We continue to focus on the unique nutritional requirements of our expanding target markets, differentiating our products from ingredients sold globally today."
"Our Clean Sugar pilot plant is continuing to produce low-carbon sugars for select customers, resulting in ongoing discussions with key commercial counterparties for potential co-location opportunities, providing additional confidence in our plan as we begin evaluating the engineering and site selection for a larger project. We continue to believe this technology could provide industrial quantities of carbohydrate feedstock for manufacturing applications in the growing biochemical, renewable chemicals and synthetic biology industries at more competitive prices with a lower carbon intensity than other technologies available today. We believe this technology can differentiate Green Plains as we use the Fluid Quip IP portfolio to transform our sites into modern day bio-campuses."
"We are particularly excited about the progress we have made in deploying Ultra-High Protein technology and expect completion of four Ultra-High Protein facilities over the next 12 months, further accelerating contributions from our high-protein initiative. We have now repeatedly found success in executing longer protein production runs of 58% and higher, made progress in our clean sugar scale-up and we now see new potential for ethanol to become a vital low-carbon feedstock in transportation and sustainable aviation fuels."
"Across our four strategic areas of growth - value-added ingredients, renewable corn oil, clean sugar and carbon capture and sequestration - we are executing against key milestones. Our transformation continues to progress, and I remain optimistic we can achieve our long-term goals in the pursuit of our low-carbon strategy, not only in clean fuels but also in low-carbon feed ingredients for use around the world and we believe Green Plains will be a leader in this area."
Results of Operations
Green Plains sold 181.2 million gallons of ethanol during the third quarter of 2021, compared with 189.2 million gallons for the same period in 2020. The consolidated ethanol crush margin was $1.1 million, or $0.01 per gallon, for the third quarter of 2021, compared with $15.8 million, or $0.08 per gallon, for the same period in 2020. The consolidated ethanol crush margin is the ethanol production segment's operating income before depreciation and amortization, which includes corn oil and Ultra-High Protein, plus intercompany storage, transportation, nonrecurring decommissioning costs and other fees, net of related expenses.
Consolidated revenues increased $322.7 million for the three months ended September 30, 2021, compared with the same period in 2020, primarily due to higher prices for ethanol, distillers grains and corn oil and increased trading revenues within our agribusiness and energy services segment.
Operating loss increased $30.5 million and adjusted EBITDA decreased $21.5 million for the three months ended September 30, 2021, compared with the same period last year, primarily due to decreased margins on ethanol production. Interest expense decreased $0.7 million for the three months ended September 30, 2021, compared with the same period in 2020. Income tax expense was $7,000 for the three months ended September 30, 2021, compared with $7.3 million for the same period in 2020, primarily due to the recording of a valuation allowance against tax NOLs arising during the three months ended September 30, 2020.
The company reports the financial and operating performance for the following four operating segments: (1) ethanol production, which includes the production of ethanol, including industrial-grade alcohol, distillers grains, Ultra-High Protein and corn oil, (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading for company-produced and third-party ethanol, distillers grains, corn oil, natural gas and other commodities, (3) food and ingredients, which includes food-grade corn oil 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 costs of grain consumed and revenues from product sales are reported directly in the ethanol production segment.
GREEN PLAINS INC. SEGMENT OPERATIONS (unaudited, in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 % Var. 2021 2020 % Var. Revenues: Ethanol production $ 588,349 $ 332,978 76.7 % $ 1,567,344 $ 1,099,245 42.6 % Agribusiness and energy services 162,774 95,428 70.6 470,205 359,108 30.9 Partnership 19,251 21,382 (10.0 ) 59,358 62,034 (4.3 ) Intersegment eliminations (23,583 ) (25,726 ) (8.3 ) (72,058 ) (75,432 ) (4.5 ) $ 746,791 $ 424,062 76.1 % $ 2,024,849 $ 1,444,955 40.1 % Gross margin: Ethanol production $ (9,505 ) $ 2,816 * % $ 60,309 $ (4,241 ) * % Agribusiness and energy services 8,347 8,401 (0.6 ) 29,523 19,776 49.3 Partnership 19,251 21,382 (10.0 ) 59,358 62,034 (4.3 ) Intersegment eliminations (1,481 ) (2,470 ) (40.0 ) (3,161 ) (4,671 ) (32.3 ) $ 16,612 $ 30,129 (44.9 ) % $ 146,029 $ 72,898 100.3 % Depreciation and amortization: Ethanol production $ 25,644 $ 17,493 46.6 % $ 62,655 $ 50,575 23.9 % Agribusiness and energy services 870 655 32.8 2,072 1,764 17.5 Partnership 1,089 940 15.9 2,771 2,867 (3.3 ) Corporate activities 677 665 1.8 1,995 2,002 (0.3 ) $ 28,280 $ 19,753 43.2 % $ 69,493 $ 57,208 21.5 % Operating income (loss): Ethanol production $ (44,192 ) $ (21,351 ) 107.0 % $ (30,969 ) $ (100,924 ) (69.3 ) % Agribusiness and energy services 3,225 4,296 (24.9 ) 15,720 7,207 118.1 Partnership 12,417 12,986 (4.4 ) 37,204 37,641 (1.2 ) Intersegment eliminations (1,481 ) (2,447 ) (39.5 ) (3,161 ) (4,597 ) (31.2 ) Corporate activities (14,644 ) (7,689 ) 90.5 (1,089 ) (27,228 ) (96.0 ) $ (44,675 ) $ (14,205 ) * % $ 17,705 $ (87,901 ) * % Adjusted EBITDA: Ethanol production $ (18,524 ) $ (3,856 ) * % $ 31,739 $ (49,588 ) 164.0 % Agribusiness and energy services 3,818 4,950 (22.9 ) 17,515 9,115 92.2 Partnership 13,679 14,082 (2.9 ) 40,492 40,996 (1.2 ) Intersegment eliminations (1,480 ) (2,447 ) (39.5 ) (3,160 ) (4,597 ) (31.3 ) Corporate activities (14,129 ) (6,022 ) 134.6 (55 ) 2,307 (102.4 ) EBITDA (16,636 ) 6,707 * 86,531 (1,767 ) * Loss (gain) on sale of assets, net 1,823 (2,000 ) * (31,245 ) (2,000 ) * Proportional share of EBITDA adjustments to equity method investees 45 2,071 (97.8 ) 139 7,049 (98.0 ) Noncash goodwill impairment - - * - 24,091 * Adjusted EBITDA $ (14,768 ) $ 6,778 * % $ 55,425 $ 27,373 102.5 % (1) Operating loss for ethanol production includes a goodwill impairment charge of $24.1 million for the nine months ended September 30, 2020. (2) Corporate activities for the three and nine months ended September 30, 2021 include a $1.8 million loss on sale of assets and a $31.2 million gain on sale of assets, respectively, as well as a gain on sale of assets of $2.0 million for both the three and nine months ended September 30, 2020. (3) Includes corporate expenses, offset by the loss on sale of assets of $1.8 million and the gain on sale of assets of $31.2 million for the three and nine months ended September 30, 2021, respectively, and earnings from equity method investments of $0.6 million and $20.4 million for the three and nine months ended September 30, 2020, respectively, as well as a gain on sale of assets of $2.0 million for both the three and nine months ended September 30, 2020. * Percentage variances not considered meaningful
GREEN PLAINS INC. SELECTED OPERATING DATA (unaudited, in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 % Var. 2021 2020 % Var. Ethanol production Ethanol sold (gallons) 181,214 189,202 (4.2 ) % 550,127 579,540 (5.1 ) % Distillers grains sold (equivalent dried tons) 492 479 2.7 1,459 1,504 (3.0 ) Corn oil sold (pounds) 55,397 50,953 8.7 156,835 153,001 2.5 Corn consumed (bushels) 62,524 65,284 (4.2 ) 189,544 201,075 (5.7 ) Agribusiness and energy services Domestic ethanol sold (gallons) 213,348 189,716 12.5 620,442 578,049 7.3 Export ethanol sold (gallons) 23,721 26,190 (9.4 ) 112,146 161,802 (30.7 ) 237,069 215,906 9.8 732,588 739,851 (1.0 ) Partnership Storage and throughput (gallons) 182,240 189,641 (3.9 ) 553,058 581,326 (4.9 )
GREEN PLAINS INC. CONSOLIDATED CRUSH MARGIN (unaudited, in thousands except per gallon amounts) Three Months Ended Three Months Ended September 30, September 30, 2021 2020 2021 2020 ($ per gallon produced) Ethanol production operating loss $ (44,192 ) $ (21,351 ) $ (0.24 ) $ (0.11 ) Depreciation and amortization 25,644 17,493 0.14 0.09 Total adjusted ethanol production (18,548 ) (3,858 ) (0.10 ) (0.02 ) Intercompany fees, net: Storage and logistics (partnership) 12,775 13,185 0.07 0.07 Marketing and agribusiness fees 6,846 6,444 0.04 0.03 (agribusiness and energy services) Consolidated ethanol crush margin $ 1,073 $ 15,771 $ 0.01 $ 0.08 (1) For the three months ended September 30, 2021 and 2020, includes $2.5 million and $2.3 million, respectively, for certain nonrecurring decommissioning and nonethanol operations costs.
Liquidity and Capital Resources
On September 30, 2021, Green Plains had $720.9 million in total cash, cash equivalents and restricted cash, and $312.6 million available under committed credit facilities, which are subject to restrictions and other lending conditions. Total debt outstanding at September 30, 2021 was $711.4 million, including $162.5 million outstanding debt under working capital revolvers and other short-term borrowing arrangements and $59.6 million of non-recourse debt related to Green Plains Partners, net of debt issuance costs.
Conference Call Information
On November 4, 2021, 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 2021 operating results for each company. Domestic and international participants can access the conference call by dialing 877.711.2374 and 281.542.4862, respectively, and referencing conference ID 2049686. The company advises participants to call at least 10 minutes prior to the start time. Alternatively, the conference call, transcript and presentation will be accessible on Green Plains' website at https://investor.gpreinc.com/events-presentations.
Non-GAAP Financial Measures
Management uses adjusted EBITDA, segment EBITDA and consolidated ethanol crush margins to measure the company's financial performance and to internally manage its businesses. EBITDA is defined as earnings before interest expense, income tax expense, depreciation and amortization excluding the change in right-of-use assets. Adjusted EBITDA includes adjustments related to our proportional share of EBITDA adjustments of our equity method investees, gains and losses related to the sale of assets, and noncash goodwill impairment. Management believes these measures provide useful information to investors for comparison with peer and other companies. These measures should not be considered alternatives to net income or segment operating income, which are determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP calculations may vary from company to company. Accordingly, the company's computation of adjusted EBITDA, segment EBITDA and consolidated ethanol crush margins may not be comparable with similarly titled measures of another company.
About Green Plains Inc.
Green Plains Inc. (NASDAQ:GPRE) is a leading biorefining company focused on the development and utilization of fermentation, agricultural and biological technologies in the processing of annually renewable crops into sustainable value-added ingredients. This includes the production of cleaner low carbon biofuels, renewable feedstocks for advanced biofuels and high purity alcohols for use in cleaners and disinfectants. Green Plains is an innovative producer of Ultra-High Protein and novel ingredients for animal and aquaculture diets to help satisfy a growing global appetite for sustainable protein. The Company also owns a 48.9% limited partner interest and a 2.0% general partner interest in Green Plains Partners LP. For more information, 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 terminals, transportation assets and other related assets and businesses. For more information about Green Plains Partners, visit www.greenplainspartners.com.
This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements reflect management's current views, which are subject to risks and uncertainties including, but not limited to, anticipated financial and operating results, plans and objectives that are not historical in nature. These statements may be identified by words such as "believe," "expect," "may," "should," "will" and similar expressions. Factors that could cause actual results to differ materially from those expressed or implied include: disruption caused by health epidemics, such as the coronavirus outbreak, competition in the industries in which Green Plains operates; commodity market risks, financial market risks; counterparty risks; risks associated with changes to federal policy or regulation, including changes to tax laws; risks related to closing and achieving anticipated results from acquisitions and disposals. Other factors can include risks associated with Green Plains' ability to realize higher margins anticipated from the company's high protein feed initiative or to achieve anticipated savings from Project 24 and other risks discussed in Green Plains' reports filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. Green Plains assumes no obligation to update any such forward-looking statements, except as required by law.
Consolidated Financial Results
GREEN PLAINS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, 2021 2020 (unaudited) ASSETS Current assets Cash and cash equivalents $ 589,822 $ 233,860 Restricted cash 131,073 40,950 Accounts receivable, net 90,271 55,568 Income tax receivable 1,732 661 Inventories 243,207 269,491 Other current assets 61,421 41,823 Total current assets 1,117,526 642,353 Property and equipment, net 842,141 801,690 Operating lease right-of-use assets 66,971 61,883 Other assets 86,566 72,991 Total assets $ 2,113,204 $ 1,578,917 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 112,459 $ 140,058 Accrued and other liabilities 42,731 38,471 Derivative financial instruments 35,401 20,265 Current operating lease liabilities 16,766 14,902 Short-term notes payable and other borrowings 162,470 140,808 Current maturities of long-term debt 34,477 98,052 Total current liabilities 404,304 452,556 Long-term debt 514,434 287,299 Long-term operating lease liabilities 53,050 49,549 Other liabilities 23,798 12,849 Total liabilities 995,586 802,253 Stockholders' equity Total Green Plains stockholders' equity 971,429 646,852 Noncontrolling interests 146,189 129,812 Total liabilities and stockholders' equity $ 2,113,204 $ 1,578,917
GREEN PLAINS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 % Var. 2021 2020 % Var. Revenues Product $ 745,240 $ 423,027 76.2 % $ 2,019,006 $ 1,441,248 40.1 % Services 1,551 1,035 49.9 5,843 3,707 57.6 Total revenues 746,791 424,062 76.1 2,024,849 1,444,955 40.1 Costs and expenses Cost of goods sold (excluding depreciation and amortization expenses reflected below) 730,179 393,933 85.4 1,878,820 1,372,057 36.9 Operations and maintenance 5,162 6,647 (22.3 ) 17,153 19,410 (11.6 ) Selling, general and administrative 26,022 19,934 30.5 72,923 62,090 17.4 Loss (gain) on sale of assets, net 1,823 (2,000 ) * (31,245 ) (2,000 ) * Goodwill impairment - - * - 24,091 * Depreciation and amortization 28,280 19,753 43.2 69,493 57,208 21.5 Total costs and expenses 791,466 438,267 80.6 2,007,144 1,532,856 30.9 Operating income (loss) (44,675 ) (14,205 ) * 17,705 (87,901 ) * Other income (expense) Interest income 25 3 * 496 643 (22.9 ) Interest expense (9,488 ) (10,169 ) (6.7 ) (60,225 ) (29,536 ) 103.9 Other, net (440 ) 12 * (1,680 ) 862 * Total other expense (9,903 ) (10,154 ) (2.5 ) (61,409 ) (28,031 ) 119.1 Loss before income taxes and income from equity method investees (54,578 ) (24,359 ) 124.1 (43,704 ) (115,932 ) (62.3 ) Income tax benefit (expense) (7 ) (7,280 ) (99.9 ) 2,914 48,461 (94.0 ) Income from equity method investees, net of income taxes 174 906 (80.8 ) 517 20,917 (97.5 ) Net loss (54,411 ) (30,733 ) 77.0 (40,273 ) (46,554 ) (13.5 ) Net income attributable to noncontrolling interests 5,211 3,753 38.8 16,151 12,591 28.3 Net loss attributable to Green Plains $ (59,622 ) $ (34,486 ) 72.9 % $ (56,424 ) $ (59,145 ) (4.6 ) % Earnings per share: Net loss attributable to Green Plains - basic and diluted $ (1.18 ) $ (1.00 ) $ (1.27 ) $ (1.71 ) Weighted average shares outstanding: Basic and diluted 50,482 34,629 44,581 34,632 * Percentage variances not considered meaningful
GREEN PLAINS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) Nine Months Ended September 30, 2021 2020 Cash flows from operating activities: Net loss $ (40,273 ) $ (46,554 ) Noncash operating adjustments: Depreciation and amortization 69,493 57,208 Gain on sale of assets, net (31,245 ) (1,405 ) Loss on extinguishment of debt 32,645 - Goodwill impairment - 24,091 Deferred income taxes (3,008 ) (10,569 ) Other 11,619 28,828 Net change in working capital (67,103 ) 24,849 Net cash provided by (used in) operating activities (27,872 ) 76,448 Cash flows from investing activities: Purchases of property and equipment, net (123,687 ) (85,376 ) Proceeds from the sale of assets 87,217 - Other investing activities (7,000 ) (4,098 ) Net cash used in investing activities (43,470 ) (89,474 ) Cash flows from financing activities: Net proceeds - long-term debt 178,995 67 Net proceeds (payments) - short-term borrowings 17,863 (49,705 ) Proceeds from issuance of common stock 356,011 - Payment for repurchase of common stock - (11,479 ) Other (35,442 ) (13,469 ) Net cash provided by (used in) financing activities 517,427 (74,586 ) Net change in cash, cash equivalents and restricted cash 446,085 (87,612 ) Cash, cash equivalents and restricted cash, beginning of period 274,810 269,896 Cash, cash equivalents and restricted cash, end of period $ 720,895 $ 182,284 Reconciliation of total cash, cash equivalents and restricted cash: Cash and cash equivalents $ 589,822 $ 150,407 Restricted cash 131,073 31,877 Total cash, cash equivalents and restricted cash $ 720,895 $ 182,284
GREEN PLAINS INC. RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES (unaudited, in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Net loss $ (54,411 ) $ (30,733 ) $ (40,273 ) $ (46,554 ) Interest expense 9,488 10,169 60,225 29,536 Income tax expense (benefit), net of equity method income tax expense 7 7,518 (2,914 ) (41,957 ) Depreciation and amortization 28,280 19,753 69,493 57,208 EBITDA (16,636 ) 6,707 86,531 (1,767 ) Loss (gain) on sale of assets, net 1,823 (2,000 ) (31,245 ) (2,000 ) Proportional share of EBITDA adjustments to equity method investees 45 2,071 139 7,049 Noncash goodwill impairment - - - 24,091 Adjusted EBITDA $ (14,768 ) $ 6,778 $ 55,425 $ 27,373 (1) Interest expense for the nine months ended September 30, 2021 includes a loss upon extinguishment of convertible notes of $22.1 million and a loss on settlement of convertible notes of $9.5 million. (2) Excludes amortization of operating lease right-of-use assets and amortization of debt issuance costs.
Green Plains Inc. Contacts Investors: Phil Boggs | Executive Vice President, Investor Relations | 402.884.8700 | email@example.com Media: Lisa Gibson | Communications Manager | 402.952.4971 | firstname.lastname@example.org