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Southwest Iowa Renewable Energy, LLC Announces Fiscal Results ended March 31, 2018

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Southwest Iowa Renewable Energy, LLC Announces Fiscal Results ended March 31, 2018

PR Newswire

COUNCIL BLUFFS, Iowa, May 9, 2018 /PRNewswire/ -- Southwest Iowa Renewable Energy, LLC ("SIRE" or the "Company") announced its unaudited financial results for the three and six months ended March 31, 2018.

Southwest Iowa Renewable Energy, LLC (SIRE). (PRNewsFoto/Southwest Iowa Renewable Energy, LLC)

Results for the Second Quarter of Fiscal 2018 (Amounts in $ and 000's, except Book Value per Unit)



Three Months
Ended March
31, 2018

Three Months
Ended March
31, 2017

Six Months
Ended March
31, 2018

Six Months
Ended March
31, 2017


Revenues

53,551


56,073


104,097


108,138



Net Income (Loss)

(835)


2,065


346


7,697



Gross Margin

356


3,489


3,064


10,672



Modified EBITDA

1,983


5,410


6,148


13,606


 


Balance at March 31,
2018


Balance at September 30,
2017

     Total Debt

27,373


19,766

     Book Value (Members' Equity)

105,674


111,991

     Book Value per basic unit

7,929


8,403

SIRE reported net income of $0.3 million or $25.96 per basic unit for the six months ended March 31, 2018, compared to $7.7 million or $577.55 per basic unit for the six months ended March 31, 2017.  SIRE reported net loss of $(0.8) million, or $(62.65) per unit, for the three months ended March 31, 2018, compared to a net income of $2.1 million, or $154.95 per basic unit, for the three months ended March 31, 2017.

SIRE revenue from operations was $104.1 million for the six months ended March 31, 2018, compared to $108.1 million for the six months ended March 31, 2017.  SIRE revenue from operations was $53.6 million for the three months ended March 31, 2018, compared to $56.1 million for the three months ended March 31, 2017.

Modified EBITDA, which is defined as earnings before interest, income taxes, depreciation, amortization, and unrealized hedging gains and losses was $6.1 million for the six months ended March 31, 2018, compared to $13.6 for the six months ended March 31, 2017 and  $2.0 million for the three months ended March 31, 2018, compared to $5.4 million for the three months ended March 31, 2017.

The Company's debt increased $7.7 million at March 31, 2018 compared to September 30, 2017, as our continued paydown of term debt was offset by short term borrowing requirements of $10.9 million.

SIRE's book value was lower at March 31, 2018 by $6.3 million compared to September 30, 2017, due primarily to the $6.7 million paid in member distributions in January  2018.

SIRE had $1.3 million in cash and cash equivalents and $21.0 million available under revolving loan agreements, for a total cash and available borrowings of $22.3 million at March 31, 2018. The cash flow provided by operating activities was $1.5 million compared to $7.5 million for the six months ended March 31, 2018 and 2017, respectively.

Brian Cahill, SIRE's President and CEO stated, "This first half of Fiscal 2018, we saw very tight margins, continuing the trends of the previous quarter.  Corn prices have increased slightly per bushel as compared to Fiscal 2017.   However, ethanol prices in the U.S. have been trending downwards over the past months, but we did see some price improvement in March of 2018. Demand for ethanol has been strong with the lower prices, both in the U.S. and abroad. The industry has continued to adjust and we expect margins to remain positive but are becoming more dependent on continued good export demand. Our distiller grains have also seen increased demand offset by reduced prices in the first half of Fiscal 2018 as compared to 2017, and a shift to a heavier weighting for wet distiller grains.  We also have seen price improvement for distilled grains during the last quarter."

During the second quarter  of Fiscal 2018, SIRE produced 31.9 million gallons of ethanol, compared to 31.1 million gallons during the first quarter of Fiscal 2017.  For the first six months of Fiscal 2018, SIRE produced 63.6 million gallons of ethanol, compared to 61.0 million gallons in the first six months of Fiscal 2017.  Cahill commented - "We continue to evaluate and implement new production technology.  We will continue to focus on running the plant efficiently, increasing our ethanol yield, with a balance of optimizing the yield and profit." 

About Southwest Iowa Renewable Energy, LLC:

SIRE is located on 275 acres in Council Bluffs, Iowa, operating a 140 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
Summary Statements of Operations
Unaudited
(Dollars in thousands, except per unit data)









For the three months ended March 31,

For the six months ended    March 31,


2018


2017

2018


2017

Revenues

$53,551


$56,073

$104,097


$108,138

Cost of Goods Sold

53,195


52,584

101,033


97,466

Gross Margin

356


3,489

3,064


10,672








General and administrative expenses

1,056


1,331

2,434


2,593

Interest and other (income) expense, net

135


93

284


382

Net Income (Loss)

$(835)


$2,065

$346


$7,697








Weighted Average Units Outstanding, Basic

13,327


13,327

13,327


13,327

Weighted Average Units Outstanding, Diluted

13,327


14,442

14,354


14,442

Net Income (Loss) per unit, Basic

$(62.65)


$154.95

$25.96


$577.55

Net Income (Loss) per unit, Diluted

$(62.65)


$142.99

$24.10


$532.96

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 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.

Modified EBITDA, which is defined as earnings before interest, income taxes, depreciation, amortization, unrealized hedging gains and losses, and other significant noncash expenses was $6.1 million for the six months ended March 31, 2018, compared to the $13.6 million for the six months ended March 31, 2017 and $2.0 million for the three months ended March 31, 2018, compared to $5.4 million for the three months ended March 31, 2017. The following sets forth the reconciliation of Net Income to Modified EBITDA for the periods indicated:


For the three months ended

For the six months


March 31,
2018


March 31,
2017

March 31,
2018


March 31,
2017


Unaudited


Unaudited

Unaudited


Unaudited


in 000's


in 000's

in 000"s


in 000's








Net Income (loss)

$

(835)



$

2,065


$

346



$

7,697


Interest expense, net

242



283


472



571


Depreciation

3,001



3,006


6,218



6,006


EBITDA

2,408



5,354


7,036



14,274









Unrealized Hedging (Gain)

(425)



56


(888)



(668)









Modified EBITDA

$

1,983



$

5,410


$

6,148



$

13,606


 

Statistical Information



Three Months Ended
March 31, 2018


Three Months Ended
March 31, 2017


Amounts
in 000's


% of
Revenues


Amounts
in 000's


% of
Revenues

Product Revenue Information








Denatured and Undenatured Ethanol

$

43,018



80.3

%


$

44,918



80.1

%

Distiller's Grains

$

8,083



15.1

%


$

8,460



15.1

%

Corn Oil

$

2,155



4.0

%


$

2,433



4.3

%

Other

$

295



0.6

%


$

262



0.5

%

 


Six Months Ended
March 31, 2018


Six Months Ended
March 31, 2017


Amounts
in 000's


% of
Revenues


Amounts
in 000's


% of
Revenues

Product Revenue Information








Denatured and Undenatured Ethanol

$

82,739



79.5

%


$

86,529



80.0

%

Distiller's Grains

$

16,113



15.5

%


$

16,399



15.2

%

Corn Oil

$

4,713



4.5

%


$

4,712



4.3

%

Other

$

532



0.5

%


$

498



0.5

%

 

Summary Balance Sheets

(Dollars in thousands)



March 31, 2018


September 30, 2017


(unaudited)



ASSETS




Current Assets




Cash & cash equivalents

$

1,275



$

1,487


Accounts receivable

12,945



13,295


Inventory

13,176



13,214


Other current assets

1,531



464


Total current assets

28,927



28,460


Net property, plant and equipment

114,655



118,226


Other assets

2,107



2,143


Total Assets

$

145,689



$

148,829






LIABILITIES AND MEMBERS' EQUITY




Current Liabilities




Accounts payable, derivative financial instruments and accrued expenses

7,108



11,574


Current maturities of notes payable

6,549



6,538


Total current liabilities

13,657



18,112


Total long term liabilities

26,358



18,726


Total members' equity

105,674



111,991


Total Liabilities and Members' Equity

145,689



148,829


 

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SOURCE Southwest Iowa Renewable Energy, LLC

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