Green Plains Reports First Quarter 2022 Financial Results
05/02/2022 - 07:30 AM
Results for the First Quarter of 2022 and Outlook for Remainder of 2022:
First quarter EPS of ($1.16) per diluted share, compared to ($0.17) for the same period in the prior year Adjusted EBITDA of ($27.8) million compared to $15.4 million for the same period in the prior year Consolidated crush margin of ($0.07) per gallon for the first quarter Cash, cash equivalents, restricted cash and marketable securities of $629.2 million with $45.0 million available under a committed credit facility Plant modernization and upgrade programs completed, returning platform to full utilization rate capability 2022 outlook improving based on current forward ethanol crush margins OMAHA, Neb., May 02, 2022 (GLOBE NEWSWIRE) -- Green Plains Inc. (NASDAQ:GPRE) today announced financial results for the first quarter of 2022. Net loss attributable to the company was $61.5 million , or ($1.16) per diluted share compared to a net loss of $6.5 million or ($0.17) per diluted share, for the same period in 2021. Revenues were $781.4 million for the first quarter of 2022 compared with $553.6 million for the same period last year.
“The consolidated crush margin in the first quarter was largely driven by industry overproduction and excess inventories of ethanol, rail shipping delays at our plants as well as forward sales of distillers grains in a rising market,” said Todd Becker, President and Chief Executive Officer. “Our quarter was also impacted by fixed cost absorption as we completed our plant modernization and upgrade programs, and replaced the York bins that collapsed in late November. I am happy to report that all plants can now operate at full run rates and we expect more normalized production going forward.”
“Looking forward to the remainder of 2022, we have seen a significant upward trend in margins across all products,” continued Becker. “Second quarter margins have improved over the past few months, and we have been able to participate in that upturn. As we were open to these higher margins, we have begun to take advantage of this opportunity. The third and fourth quarter margins have also turned positive. With a return to higher run rates, an improving fuel ethanol environment, strong renewable corn oil pricing and ongoing increases in protein economics, we believe we are on track to deliver stronger results going forward as we begin to see the benefit of our modernization and transformation programs across the platform. Low-carbon renewable corn oil continues to be in high demand from the rapidly expanding renewable diesel industry, supporting margin contributions from this valuable low-carbon feedstock.”
The company recently announced that it had achieved technological breakthroughs during the innovation trial at the Wood River biorefinery with both protein concentrations and renewable corn oil yields reaching record highs. The company is focused on building customer acceptance in higher-value markets, expanding and diversifying its customer base for proteins and ingredients and is working with a number of parties on product validation for 60% protein ingredients.
“The economic opportunity resulting from this breakthrough gives us confidence that we are on the right path to expand our margin opportunity over the long-term and we plan to transition our entire high-protein production capacity to 60% concentrations over time,” added Becker. “Our daily protein operations are running consistently at full capacity and rate, and our optimism has been emboldened by the recent successes witnessed at Wood River during our 60% protein trial. We anticipate completing our next three protein builds during the third and fourth quarters, allowing us to have approximately 50% of our platform maximizing our value through the production of innovative, sustainable ingredients once operating at rate.”
“Our financial position remains strong as we ended the first quarter with over $620 million in cash and marketable securities, and expect forward margins to add to that strength as we continue to make progress on our transformation,” concluded Becker. “Our transformation initiatives remain on track, with ongoing substantive customer and partner discussions across protein and ingredients, low-carbon renewable corn oil and clean sugar. We remain focused on execution and achieving additional milestones to deliver on our 2024-25 targets.”
Highlights and Recent Developments
Achieved 60% protein concentration, as fed, over the course of a month-long innovation trial at Green Plains Wood River, reaching as high as 63.1% , using Fluid Quip Technologies’ MSC™ system combined with biological solutions exclusive to Green Plains Produced record-high yields, up to 1.4 pounds per bushel, of low-carbon renewable corn oil, a strategic feedstock to the fast-growing renewable diesel market, during the innovation trial, using Fluid Quip Technologies’ patented processes Published second Sustainability Report providing updates on progress toward emissions, governance and other ESG goals Announced Shenandoah, Iowa, biorefinery as the first location to deploy Fluid Quip Technologies’ Clean Sugar Technology™ at commercial scale Achieved significant commercial progress on diversifying protein sales by expanding the number of customers, and completing first protein ingredient sale to an aquaculture customer in Asia Announced Fluid Quip Technologies’ new patented DCO+™ technology upgrade which will be made widely available to the ethanol industry Results of Operations $14.2) million , or ($0.07) per gallon, for the first quarter of 2022, compared with $18.9 million , or $0.11 per gallon, for the same period in 2021. 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 $227.8 million for the three months ended March 31, 2022, compared with the same period in 2021, 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 $79.2 million and adjusted EBITDA decreased $43.2 million for the three months ended March 31, 2022, compared with the same period last year, primarily due to decreased margins on ethanol production. Interest expense decreased $22.9 million for the three months ended March 31, 2022, compared with the same period in 2021 due to the loss upon extinguishment of convertible notes of $22.1 million recorded during the prior year quarter. Income tax benefit was $1.2 million for the three months ended March 31, 2022, compared with income tax expense of $1.9 million for the same period in 2021.
Segment Information
GREEN PLAINS INC. SEGMENT OPERATIONS (unaudited, in thousands) Three Months Ended March 31, 2022 2021 % Var. Revenues: Ethanol production $ 637,553 $ 423,722 50.5 % Agribusiness and energy services 148,712 133,944 11.0 Partnership 19,100 20,406 (6.4 ) Intersegment eliminations (23,930 ) (24,432 ) (2.1 ) $ 781,435 $ 553,640 41.1 % Gross margin: Ethanol production $ (24,007 ) $ 8,197 * % Agribusiness and energy services 14,273 17,870 (20.1 ) Partnership 19,100 20,406 (6.4 ) Intersegment eliminations (440 ) (2,066 ) (78.7 ) $ 8,926 $ 44,407 (79.9 ) % Depreciation and amortization: Ethanol production $ 18,432 $ 18,528 (0.5 ) % Agribusiness and energy services 464 607 (23.6 ) Partnership 898 887 1.2 Corporate activities 605 659 (8.2 ) $ 20,399 $ 20,681 (1.4 ) % Operating income (loss): Ethanol production (1) $ (51,158 ) $ (20,320 ) 151.8 % Agribusiness and energy services 10,408 13,346 (22.0 ) Partnership 11,809 12,871 (8.3 ) Intersegment eliminations (440 ) (2,066 ) (78.7 ) Corporate activities (2) (18,521 ) 27,516 * $ (47,902 ) $ 31,347 * % Adjusted EBITDA: Ethanol production (1) $ (32,726 ) $ (1,789 ) * % Agribusiness and energy services 10,723 13,951 (23.1 ) Partnership 12,882 13,933 (7.5 ) Intersegment eliminations (919 ) (2,066 ) (55.5 ) Corporate activities (2) (17,780 ) 28,214 * EBITDA (27,820 ) 52,243 * Gain on sale of assets, net - (36,893 ) * Proportional share of EBITDA adjustments to equity method investees 45 44 2.3 Adjusted EBITDA $ (27,775 ) $ 15,394 * % (1) Includes an inventory lower of cost or net realizable value adjustment of $13.2 million for the three months ended March 31, 2022. (2) Includes corporate expenses, offset by the gain on sale of assets of $36.9 million for the three months ended March 31, 2021. * Percentage variances not considered meaningful
GREEN PLAINS INC. SELECTED OPERATING DATA (unaudited, in thousands) Three Months Ended March 31, 2022 2021 % Var. Ethanol production Ethanol sold (gallons) 196,348 178,000 10.3 % Distillers grains sold (equivalent dried tons) 516 465 11.0 Corn oil sold (pounds) 59,295 46,563 27.3 Corn consumed (bushels) 68,304 62,505 9.3 Agribusiness and energy services (1) Domestic ethanol sold (gallons) 181,725 178,820 1.6 Export ethanol sold (gallons) 51,260 67,735 (24.3 ) 232,985 246,555 (5.5 ) Partnership Storage and throughput (gallons) 197,247 178,976 10.2 (1) Includes gallons from the ethanol production segment
GREEN PLAINS INC. CONSOLIDATED CRUSH MARGIN (unaudited, in thousands except per gallon amounts) Three Months Ended March 31, Three Months Ended March 31, 2022 2021 2022 2021 ($ per gallon produced) Ethanol production operating loss $ (51,158 ) $ (20,320 ) $ (0.26 ) $ (0.11 ) Depreciation and amortization 18,432 18,528 0.10 0.10 Total adjusted ethanol production (32,726 ) (1,792 ) (0.16 ) (0.01 ) Intercompany fees, net: Storage and logistics (partnership) 12,128 13,246 0.06 0.07 Marketing and agribusiness fees (1) 6,384 7,423 0.03 0.05 Consolidated ethanol crush margin $ (14,214 ) $ 18,877 $ (0.07 ) $ 0.11 (1) For the three months ended March 31, 2022 and 2021, includes certain nonrecurring decommissioning and nonethanol operations costs of $1.9 million and $3.5 million , respectively.
Liquidity and Capital Resources $629.2 million in total cash, cash equivalents, restricted cash and marketable securities, and $45.0 million available under a committed revolving credit facility, which is subject to restrictions and other lending conditions. Total debt outstanding at March 31, 2022 was $903.8 million , including $310.2 million outstanding debt under working capital revolvers and other short-term borrowing arrangements and $58.4 million of non-recourse debt related to Green Plains Partners, net of debt issuance costs.
Conference Call Information https://investor.gpreinc.com/events-presentations .
Non-GAAP Financial Measures
About Green Plains Inc. 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 www.greenplainspartners.com .
Forward-Looking Statements
Consolidated Financial Results
GREEN PLAINS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) March 31, 2022 December 31, 2021 (unaudited) ASSETS Current assets Cash and cash equivalents $ 509,195 $ 426,220 Restricted cash 95,070 134,739 Marketable securities 24,942 124,859 Accounts receivable, net 142,041 119,961 Income tax receivable 646 911 Inventories 313,950 267,838 Other current assets 76,762 43,221 Total current assets 1,162,606 1,117,749 Property and equipment, net 940,912 893,517 Operating lease right-of-use assets 64,376 64,042 Other assets 84,607 84,447 Total assets $ 2,252,501 $ 2,159,755 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 106,308 $ 146,063 Accrued and other liabilities 46,979 56,980 Derivative financial instruments 64,620 43,244 Current operating lease liabilities 16,859 16,814 Short-term notes payable and other borrowings 310,190 173,418 Current maturities of long-term debt 35,701 35,285 Total current liabilities 580,657 471,804 Long-term debt 557,937 514,006 Long-term operating lease liabilities 50,233 49,795 Other liabilities 21,067 22,131 Total liabilities 1,209,894 1,057,736 Stockholders' equity Total Green Plains stockholders' equity 890,525 950,500 Noncontrolling interests 152,082 151,519 Total stockholders' equity 1,042,607 1,102,019 Total liabilities and stockholders' equity $ 2,252,501 $ 2,159,755
GREEN PLAINS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands except per share amounts) Three Months Ended March 31, 2022 2021 % Var. Revenues Product $ 776,690 $ 551,980 40.7 % Services 4,745 1,660 * Total revenues 781,435 553,640 41.1 Costs and expenses Cost of goods sold (excluding depreciation and amortization expenses reflected below) 772,509 509,233 51.7 Operations and maintenance 5,566 5,754 (3.3 ) Selling, general and administrative 30,863 23,518 31.2 Gain on sale of assets, net - (36,893 ) * Depreciation and amortization 20,399 20,681 (1.4 ) Total costs and expenses 829,337 522,293 58.8 Operating income (loss) (47,902 ) 31,347 * Other income (expense) Interest income 71 30 * Interest expense (8,806 ) (31,679 ) (72.2 ) Other, net 411 10 * Total other expense (8,324 ) (31,639 ) (73.7 ) Loss before income taxes and income (loss) from equity method investees (56,226 ) (292 ) * Income tax benefit (expense) 1,153 (1,862 ) * Income (loss) from equity method investees (799 ) 175 * Net loss (55,872 ) (1,979 ) * Net income attributable to noncontrolling interests 5,602 4,566 22.7 Net loss attributable to Green Plains $ (61,474 ) $ (6,545 ) * % Earnings per share: Net loss attributable to Green Plains - basic and diluted $ (1.16 ) $ (0.17 ) Weighted average shares outstanding: Basic and diluted 52,887 37,695 * Percentage variances not considered meaningful
GREEN PLAINS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) Three Months Ended March 31, 2022 2021 Cash flows from operating activities: Net loss $ (55,872 ) $ (1,979 ) Noncash operating adjustments: Depreciation and amortization 20,399 20,681 Gain on sale of assets, net - (36,303 ) Loss on extinguishment of debt - 22,100 Other 2,859 5,257 Net change in working capital (129,926 ) (46,737 ) Net cash used in operating activities (162,540 ) (36,981 ) Cash flows from investing activities: Purchases of property and equipment, net (61,984 ) (31,524 ) Proceeds from the sale of assets - 73,846 Proceeds from the sale of marketable securities 99,917 - Net cash provided by investing activities 37,933 42,322 Cash flows from financing activities: Net proceeds - long-term debt 43,823 219,165 Net proceeds (payments) - short-term borrowings 135,472 (4,680 ) Proceeds from issuance of common stock - 191,134 Other (11,382 ) (31,344 ) Net cash provided by financing activities 167,913 374,275 Net change in cash, cash equivalents and restricted cash 43,306 379,616 Cash, cash equivalents and restricted cash, beginning of period 560,959 274,810 Cash, cash equivalents and restricted cash, end of period $ 604,265 $ 654,426 Reconciliation of total cash, cash equivalents and restricted cash: Cash and cash equivalents $ 509,195 $ 446,833 Restricted cash 95,070 207,593 Total cash, cash equivalents and restricted cash $ 604,265 $ 654,426
GREEN PLAINS INC. RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES (unaudited, in thousands) Three Months Ended March 31, 2022 2021 Net loss $ (55,872 ) $ (1,979 ) Interest expense (1) 8,806 31,679 Income tax expense (benefit) (1,153 ) 1,862 Depreciation and amortization (2) 20,399 20,681 EBITDA (27,820 ) 52,243 Gain on sale of assets, net - (36,893 ) Proportional share of EBITDA adjustments to equity method investees 45 44 Adjusted EBITDA $ (27,775 ) $ 15,394 (1) Interest expense for the three months ended March 31, 2021 includes a loss upon extinguishment of convertible notes of $22.1 million . (2) Excludes amortization of operating lease right-of-use assets and amortization of debt issuance costs.
