Market Overview

Green Plains Partners Reports Second Quarter 2018 Financial Results

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  • Net income of $13.7 million, or $0.42 per common unit
  • Quarterly cash distribution of $0.475 per unit
  • Adjusted EBITDA of $16.9 million and distributable cash flow of $15.0 million
  • Distribution coverage ratio of 0.97x, LTM distribution coverage ratio of 1.03x

OMAHA, Neb., Aug. 01, 2018 (GLOBE NEWSWIRE) -- Green Plains Partners LP (NASDAQ:GPP) today announced financial and operating results for the second quarter of 2018. Net income was $13.7 million, or $0.42 per common unit, for the second quarter of 2018 compared with $13.1 million, or $0.40 per common unit, for the same period in 2017. The partnership reported adjusted EBITDA of $16.9 million and distributable cash flow of $15.0 million for the second quarter of 2018, compared with adjusted EBITDA of $16.7 million and distributable cash flow of $15.3 million for the same period in 2017. Distribution coverage was 0.97x for the three months ended June 30, 2018.

"We expect our quarterly coverage ratio to improve, as Green Plains Inc. has indicated the plants will increase production in the last half of the year," said Todd Becker, president and chief executive officer of Green Plains Partners. "Due to regulatory obstacles, there was no assurance that DKGP Energy Terminals could complete the recently announced acquisition of the two AMID terminals. We believe it is in the best interest of our unitholders to focus on other business opportunities, including the acquisition of Green Plains' interest in the JGP Energy Partners Beaumont terminal, and no longer pursue this transaction."

Second Quarter Highlights and Recent Developments

  • On Feb. 16, 2018, the partnership and Delek Logistics Partners LP formed DKGP Energy Terminals LLC, a 50/50 joint venture, to acquire and manage light products terminal assets in Texas and Arkansas. DKGP has since decided not to pursue the acquisition due to regulatory obstacles.
     
  • On July 16, 2018, Green Plains Inc. appointed Martin Salinas, Jr. as an independent director of Green Plains Partners' general partner, Green Plains Holdings LLC. He is the partnership's third independent board member and will also serve as a member of the board's audit and conflicts committees.
     
  • On July 19, 2018, the board of directors of the partnership's general partner declared a quarterly cash distribution of $0.475 per unit, or approximately $15.5 million, for the second quarter of 2018. The distribution is payable on Aug. 10, 2018, to unitholders of record at the close of business on Aug. 3, 2018.             

Results of Operations
Consolidated revenues increased $0.8 million for the three months ended June 30, 2018, compared with the same period for 2017. Revenues generated from storage and throughput increased $1.3 million primarily due to higher production volumes at Green Plains' ethanol plants. Trucking and other revenue increased $0.6 million primarily due to the partnership's truck fleet expansion. These increases were partially offset by a reduction in rail transportation services revenue, which decreased $1.1 million due to lower average rates charged for the railcar volumetric capacity provided.

Operations and maintenance expenses decreased $0.4 million for the three months ended June 30, 2018, compared with the same period for 2017, primarily due to lower railcar lease expense of $1.1 million, partially offset by increased wages, fuel and other expenses of $0.4 million as a result of the partnership's truck fleet expansion, repairs and maintenance expense of $0.2 million and expenses allocated by Green Plains under the secondment agreement of $0.1 million.

General and administrative expenses increased $0.1 million for the three months ended June 30, 2018, compared with the same period for 2017, primarily due to transaction costs related to the formation of the DKGP joint venture and associated membership purchase agreement to acquire AMID Refined Products. Interest expense increased $0.5 million due to costs associated with increasing the partnership's revolving credit facility and higher interest rates.

During the second quarter of 2018, Green Plains Inc. continued to run several of its ethanol plants below capacity due to scheduled downtime and continued oversupply of domestic ethanol. Green Plains' average utilization rate was approximately 80% of capacity, resulting in ethanol production of 296.3 million gallons compared with the contracted minimum volume commitment of 296.6 million gallons per quarter. Total storage and throughput for the second quarter of 2018 was 314.3 million gallons, which included an incremental 18.1 million gallons related to customer inventory, transload volumes and minimum volume commitment deficiency.

                       
GREEN PLAINS PARTNERS LP
SELECTED OPERATING DATA
(unaudited, in million gallons)
                       
  Three Months Ended   Six Months Ended
  June 30,   June 30,
  2018   2017   % Var.   2018   2017   % Var.
Product volumes                      
Storage and throughput  314.3    284.5    10.5 %    612.6    605.6    1.2 %
                       
Terminal services:                      
Affiliate  36.5    42.5    (14.1 )    66.1    91.4    (27.7 )
Non-affiliate  30.5    35.0    (12.9 )    62.6    60.5    3.5  
   67.0    77.5    (13.5 )    128.7    151.9    (15.3 )
                       
Railcar capacity billed (daily average)  98.6    91.4    7.9      98.9    90.3    9.5  
                           

Liquidity and Capital Resources
Total liquidity as of June 30, 2018, was $106.4 million, including $0.3 million in cash and cash equivalents, and $106.1 million available under the partnership's revolving credit facility. The balance outstanding on the partnership's revolving credit facility was $128.9 million as of June 30, 2018.

Conference Call Information
Green Plains Partners LP and Green Plains Inc. will host a joint conference call today, at 11 a.m. Eastern time (10 a.m. Central time), to discuss second quarter 2018 financial and 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 6849088. Participants are advised to call at least 10 minutes prior to the start time. Alternatively, the conference call, transcript and presentation will be accessible on Green Plains Partners' website at http://ir.greenplainspartners.com.

Non-GAAP Financial Measures
Adjusted EBITDA and distributable cash flow are supplemental financial measures used to assess the partnership's financial performance. Management believes adjusted EBITDA and distributable cash flow provide investors useful information in assessing the partnership's financial condition and results of operations. Adjusted EBITDA is defined as earnings before interest expense, income tax expense, depreciation and amortization, plus adjustments for transaction costs related to acquisitions or financings, minimum volume commitment deficiency payments, unit-based compensation expense, net gains or losses on asset sales and the partnership's proportional share of EBITDA adjustments of equity method investees. Distributable cash flow is defined as adjusted EBITDA less interest paid or payable, income taxes paid or payable, maintenance capital expenditures and the partnership's proportionate share of distributable cash flow adjustments of equity method investees. Adjusted EBITDA and distributable cash flow are not presented in accordance with generally accepted accounting principles (GAAP) and therefore should not be considered in isolation or as alternatives to net income or any other measure of financial performance presented in accordance with GAAP to analyze the partnership's results.

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.

About Green Plains Inc.
Green Plains Inc. (NASDAQ:GPRE) is a diversified commodity-processing business with operations related to ethanol production, grain handling and storage, cattle feeding, food ingredients, and commodity marketing and logistics services. The company is one of the leading producers of ethanol in the world and, through its adjacent businesses, is focused on the production of high-protein feed ingredients and export growth opportunities. 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.

Forward-Looking Statements
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 are discussed in Green Plains Partners' 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 Partners assumes no obligation to update any such forward-looking statements, except as required by law.

Consolidated Financial Results          
           
GREEN PLAINS PARTNERS LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
           
  June 30,   December 31,
  2018    2017 
ASSETS (unaudited)      
Current assets          
Cash and cash equivalents $  268     $  502  
Accounts receivable, including from affiliates    20,201        19,974  
Other current assets    1,059        1,158  
Total current assets    21,528        21,634  
Property and equipment, net    47,241        48,305  
Other assets    23,422        22,329  
Total assets $ 92,191     $ 92,268  
           
LIABILITIES AND PARTNERS' CAPITAL          
Current liabilities          
Accounts payable, including to affiliates $  9,864     $  7,960  
Other current liabilities    7,650        8,098  
Total current liabilities    17,514        16,058  
Long-term debt    136,900        134,875  
Other liabilities    4,209        4,181  
Total liabilities    158,623        155,114  
           
Partners' capital    (66,432 )      (62,846 )
Total liabilities and partners' capital $ 92,191     $ 92,268  
               



                               
GREEN PLAINS PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except per unit amounts)
                               
  Three Months Ended   Six Months Ended
  June 30,   June 30,
  2018     2017     % Var.   2018     2017     % Var.
Revenues                              
Affiliate $ 24,220     $ 23,514     3.0 %   $ 48,477     $ 49,271     (1.6 )%
Non-affiliate   1,620       1,551     4.4       3,248       3,023     7.4  
Total revenues   25,840       25,065     3.1       51,725       52,294     (1.1 )
Operating expenses                              
Operations and maintenance (excluding
 depreciation and amortization reflected below)
  7,893       8,284     (4.7 )     16,303       16,815     (3.0 )
General and administrative   1,179       1,124     4.9       2,580       2,336     10.4  
Depreciation and amortization   1,105       1,247     (11.4 )     2,286       2,501     (8.6 )
Total operating expenses   10,177       10,655     (4.5 )     21,169       21,652     (2.2 )
Operating income   15,663       14,410     8.7       30,556       30,642     (0.3 )
Other income (expense)                              
Interest income   20       21     (4.8 )     40       41     (2.4 )
Interest expense   (1,811 )     (1,301 )   39.2       (3,382 )     (2,529 )   33.7  
Other   -       -     -       75       -     *  
Total other expense   (1,791 )     (1,280 )   39.9       (3,267 )     (2,488 )   31.3  
Income before income taxes and loss from equity
 method investees
  13,872       13,130     5.7       27,289       28,154     (3.1 )
Income tax expense   (33 )     (45 )   (26.7 )     (65 )     (92 )   (29.3 )
Loss from equity method investees   (117 )     -     *       (130 )     -     *  
Net income $ 13,722     $ 13,085     4.9 %   $ 27,094     $ 28,062     (3.4 )%
                               
Net income attributable to partners' ownership interests:                              
General partner $ 275     $ 262     5.0 %   $ 542     $ 561     (3.4 )%
Limited partners – common unitholders   6,730       6,416     4.9       13,289       13,759     (3.4 )
Limited partners – subordinated unitholders   6,717       6,407     4.8       13,263       13,742     (3.5 )
                               
Earnings per limited partner unit (basic and diluted):                              
Common units $ 0.42     $ 0.40     5.0 %   $ 0.83     $ 0.86     (3.5 )%
Subordinated units $ 0.42     $ 0.40     5.0 %   $ 0.83     $ 0.86     (3.5 )%
                               
Weighted average limited partner units outstanding
 (basic and diluted):
                             
Common units   15,922       15,910           15,922       15,910      
Subordinated units   15,890       15,890           15,890       15,890      
                               
Supplemental Revenues Data:                              
Storage and throughput $ 15,575     $ 14,225     9.5 %   $ 30,217     $ 30,279     (0.2 )%
Terminal services   2,890       2,916     (0.9 )     5,581       6,028     (7.4 )
Railcar transportation services   6,155       7,255     (15.2 )     13,624       14,785     (7.9 )
Trucking and other   1,220       669     82.4       2,303       1,202     91.6  
Total revenues $ 25,840     $ 25,065     3.1 %   $ 51,725     $ 52,294     (1.1 )%
                               
* Percentage variance not considered meaningful.                              
                               


           
GREEN PLAINS PARTNERS LP
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands)
           
  Six Months Ended
  June 30,
  2018
  2017
Cash flows from operating activities:          
Net income $  27,094     $  28,062  
Noncash operating adjustments:          
Depreciation and amortization    2,286        2,501  
Other    691        509  
Net change in working capital    1,188        1,707  
Net cash provided by operating activities    31,259        32,779  
           
Cash flows from investing activities:          
Purchases of property and equipment, net    (1,220 )      (1,131 )
Contributions to equity method investees    (1,288 )      -  
Net cash used in investing activities    (2,508 )      (1,131 )
           
Cash flows from financing activities:          
Payments of distributions    (30,800 )      (28,231 )
Net proceeds (payments) - revolving credit facility    2,000        (1,100 )
Payments of loan fees    (185 )      -  
Net cash used in financing activities    (28,985 )      (29,331 )
           
Net change in cash and cash equivalents    (234 )      2,317  
Cash and cash equivalents, beginning of period    502        622  
Cash and cash equivalents, end of period $  268     $  2,939  
               


                             
GREEN PLAINS PARTNERS LP
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands except ratios)
                             
  Three Months Ended   Six Months Ended   LTM Ended
  June 30,   June 30,   June 30,
  2018     2017     2018     2017     2018  
Net income $  13,722     $  13,085     $  27,094     $  28,062     $  57,899  
Interest expense    1,811        1,301        3,382        2,529        6,255  
Income tax expense    33        45        65        92        82  
Depreciation and amortization    1,105        1,247        2,286        2,501        4,896  
Minimum volume commitment adjustments (1)    -        1,010        747        1,010        (263 )
Transaction costs    147        -        282        -        282  
Unit-based compensation expense    60        60        120        119        220  
Adjusted EBITDA    16,878        16,748        33,976        34,313        69,371  
Interest paid or payable    (1,811 )      (1,301 )      (3,382 )      (2,529 )      (6,255 )
Income taxes paid or payable    (32 )      (45 )      (64 )      (92 )      (61 )
Maintenance capital expenditures    -        (58 )      (15 )      (164 )      (35 )
Distributable cash flow $  15,035     $  15,344     $  30,515     $  31,528     $  63,020  
Distributions declared (2) $  15,503     $  14,608     $  30,996     $  28,886     $  61,234  
Coverage ratio   0.97 x     1.05 x     0.98 x     1.09 x     1.03 x
                             
(1)  Adjustments related to the storage and throughput quarterly minimum volume commitments.
(2)  Represents distributions declared for the applicable period and paid in the subsequent quarter.
 

Contact: Jim Stark | Vice President, Investor & Media Relations | 402.884.8700 | jim.stark@gpreinc.com

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