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AMTX,R/S Today-$5 Stock 50c EPS Tomorrow
2 cents eps last quarter should be 5 cent per share eps this quarter
5 cents x 10 shares = 50 cents per share earnings coming out tomorrow
AMTX,2 cents eps last quarter should be 5 cent per share eps this quarter
5 cents x 10 shares = 50 cents per share earnings coming out tomorrow
AMTX 1-for-10 reverse Makes It a $5 Stock Tomorrow And a GREAT Report Coming Tomorrow hopefully uplisting is part of that PR.
This Could Be Real GOOD !!
EPA Sympathetic to Farmers says new RFS rule expected in June
http://www.rfdtv.com/story/25506038/epa-administrator-says-new-rfd-rule-expected-in-june#.U3O9fPldWSo …
Ethanol Price Spike Again ?
http://www.nasdaq.com/markets/ethanol.aspx?timeframe=6m …
Those Pesky Rail Cars
or
did they get the Notice the EPA
would be Raising the proposed 2014 Mandate ?
Presentation AMTX Aemetis
http://www.aemetis.com/wp-content/uploads/2014/05/Aemetis-Corporate-Presentation-2014-05-12.pdf …
Per slide 45: 50+ applications submitted for initial review under the EB-5 program (at $500,000 each).
Balance sheet getting cleaned up in a hurry!
Also Pacific Ethanol Mentioned M&A Again at Wedbush Conference Presentation http://stks.co/s0JqI.
Pacific Ethanol Presentation slide #18 Adjusted NET Income $24,706,000.00
Adjusted NET Income per Share - Diluted = $1.34
Rule62 That's a PE of 2.12 , Can't See it being that way long
http://t.co/pwY3i3NnzL
Presentation AMTX Aemetis
http://www.aemetis.com/wp-content/uploads/2014/05/Aemetis-Corporate-Presentation-2014-05-12.pdf …
$PEIX M&A Mentioned Again at Wedbush Conference Presentation
http://stks.co/s0JqI.
PEIX - PE of 2!
Adjusted EPS per diluted share in Q1 was $1.34. Slide 18 http://stks.co/s0JqI. That's a PE of 2.12!
Courtesy of houtheman
Canergy and CHS are currently in discussion with potential strategic
http://www.canergyus.com/project/
Canergy in conjunction with its strategic partner/investor, CHS, Inc. (CHSCP), is bringing to the Imperial Valley of California a 30 million gallon cellulosic ethanol project. Canergy is a Bio-energy company committed to a clean and healthy environment through the efficient use of innovative conversion technologies while using sustainable non-food energy feedstocks. Canergy, through its partnerships, is currently developing commercial scale cellulosic biofuel projects producing ultra low carbon renewable energy.
Canergy, in cooperation with CHS, is currently in discussions with potential strategic partners in order to further strengthen Canergy’s position in the marketplace.
Nov. Low | May Low -Look Like Duplicates
Nov. Low
http://stockcharts.com/h-sc/ui?s=PEIX&p=D&st=2013-10-15&en=2013-11-27&id=p65377109185 …
May Low
http://stockcharts.com/h-sc/ui?s=PEIX&p=D&st=2014-04-10&en=today&id=p50757822074 …
PEIX RSI 30 Level Bounce,RSI 30 Level Explained
Stock Charts RSI 30 Level & RSI 70 Level Explained
Chart,CCI Reversal,Stochastics Cross Over,RSI Over Sold-Turned Up
http://stockcharts.com/h-sc/ui?s=PEIX&p=D&st=2013-10-16&en=2014-05-12&id=p10869174113 …
Uptrend 389% above the low
http://www.mysmartrend.com/news-briefs/candlestick/pacific-ethanol-shares-climbing-higher-68 …
Register for Wedbush Conference Pacific Ethanol Presentation Tuesday
http://wsw.com/webcast/wedbush27/register.aspx?conf=wedbush27&page=peix&url=http%3A//wsw.com/webcast/wedbush27/PEIX/ …
5 Pacific Ethanol Valuation Models ~ ALL Over $30
1.)
35 Million EBITDA
6 x EBITDA = $42 Fair Value
s/b 600mm market cap
GPRE s/b $36 - $40/share
REX s/b $75/share
-----
2.)
Analyst Estimates Year 2014 ~ $4.15
$4.15 x 10 multiple = $41.50 per share Fair Value
----
3.)
$10M + in Warrants money + $34M Operating Income + $25.1M from 1.7M Offering
$70M/20.01 shares = $3.48 in Cash per share
3.48 x 10 = $34.8 per share Fair Value
----
4.)
Shelf registration SEC requirement market capitalization
700M /20.01 = $34.98 per share Fair Value
SEC Shelf requirement
- Companies wanting to use shelf registration must be classed as a "well-known seasoned investor"
To earn this classification, a firm must either have a $700 million US Dollar (USD) or greater market
capitalization
http://www.finweb.com/investing/overview-of-shelf-registration.html#ixzz2zoxXXbuu
Source: Financial Web website
----
5.)
$500M Plant Asset Value of Plant Neil's Valuation at LD micro Conf in dec.
+ $100M Value or NOLs
------------
= $600M
$600M
+$70M Cash
------------------
$670M/20.01M shr. = $33.48 per share Fair Value
Wicked Strong Buy !!
*****
Renewable Fuels ?@EthanolRFA May 8 Kelly Davis:In China,
#ethanol in gas is marked on pumps as E93/E97. The # denotes octane rather than volume content pic.twitter.com/was3W1IZos
Reply Retweet Favorite
Renewable Fuels ?@EthanolRFA 9h
RFA's Kelly Davis visited Jilin, China home to a 175 million gallon per year ethanol plant and toured an integrated rice facility #ethanol
Collapse Reply Retweet Favorite More
Renewable Fuels @EthanolRFA · 8h
RFA's Kelly Davis: The USDA FAS staff has worked very hard to deliver this trade mission and they have done an excellent job. #ethanol
Renewable Fuels @EthanolRFA · May 9
Kelly Davis: Trade mission to China much appreciated. Davis met w/ Huishan Dairy & Haoyue. Both use #DDGS. #Ethanol segment starts Saturday.
RFA’s Kelly Davis: Total # of cars in China now at 140 million. “As we know in the U.S., with cars come traffic.”
pic.twitter.com/4vV8vvi7n1
Renewable Fuels @EthanolRFA · May 7
RFA's Kelly Davis attended @USDA reception in China where US Ambassador & Liaoning governor spoke. Davis: An honor to be in attendance.
Renewable Fuels @EthanolRFA · May 7
RFA’s Kelly Davis is traveling w/ @USDA in China to promote US ag. USDA Under Sec. Michael Scuse and staff, she says, are doing a great job!
Renewable Fuels @EthanolRFA · May 6
Kelly Davis traveled by rail through Dalian, where a sea of skyscrapers makes China’s exploding economy very clear.
pic.twitter.com/m824P03dlz
(Looks Like the RFA Staffer is Kelly Davis)
Pacific Ethanol Presents @ the Wedbush Conference-Webcast-May13,2014
https://finance.yahoo.com/news/pacific-ethanol-present-wedbush-securities-123000236.html …
USDA Ethanol to China trade mission hope to return with good news regarding future agricultural trade opportunities.
USDA Ethanol to China trade mission delegation returning to the U.S. on May 13. They hope to return with good news regarding future agricultural trade opportunities.
http://www.rfdtv.com/story/25476808/usda-trade-mission-to-china-will-include-focus-on-ethanol#.U3AX0vldWSo …
USDA trade mission to China will include focus on ethanol
With Janet Adkison, Washington, D.C. News Bureau Chief - May 9, 2014
WASHINGTON, D.C. (RFD-TV) China is a growing market for U.S. agricultural products.
Recognizing the country’s potential, the U.S. Department of Agriculture will host an agriculture trade mission set to begin next week.
The travel roster includes officials from eight state Departments of Agriculture and representatives from 28 U.S. agri-businesses.
USDA Undersecretary for Farm and Foreign Agricultural Services Michael Scuse will lead the 8-day tour.
“The United States is recognized in China and throughout the world as being a provider of top quality and very safe products, so as incomes improve, the demand for our products improves and as I tell everyone we have the best farmers and ranchers to be found anywhere in the world that grow top quality products,” said Scuse.
This is the USDA’s second Chinese trade mission, which is part of President Barack Obama's Made in Rural America Export and Investment Initiative. One new topic for this trip is ethanol.
“We believe there is a real potential. Currently today, we cannot ship Ethanol to China, so this will be a big first step to take representatives of the industry along with us so that they can communicate with their counterparts in China. We hope that eventually we're going to be able to get our ethanol products into China and help them with some of the issues that they face environmentally,” said Scuse.
The trade delegation will visit three cities before returning to the U.S. on May 13. They hope to return with good news regarding future agricultural trade opportunities.
Chart - CCI Reversal,Stochastics Cross Over,RSI Over Sold
http://stockcharts.com/h-sc/ui?s=PEIX&p=D&b=5&g=0&id=p10869174113 …
Dutch , In Febuary 2012 they Issued 1M 5 Year Warrants
1M and their are 80M shares,"FVA" can hardly dent earnings
They're Keyes Plant Selling Price Average
PEIX sold it for an Average of $2.70 in
Q1
So PEIX 1.5 to 2 cent sellers fee ?
$2.68 x 60MG - probably the same corn cost as PEIX
Ya , they made money here
India Bio Diesel plant is Promising to
I can't Garantee It,but I think the Quarters is Good.
AMTX Reports Next Week,Don't Think Warrants are an Issue
Companies Must Report With In 45 Days of the End
of the Quarter
Today Is the 10th and 40 days have gone by
so report by Thursday
China - If We Are Going to Have News On Exporting to China,
A Good Chance It Happens May 13th
The trade delegation will return to the U.S. on May 13
Pacific Ethanol to Present at the Wedbush Conference May 13
Both Happening in New York City the Same Day.
The USDA trade mission to China will include focus on ethanol
according to a USDA PR. last Thursday
Neil M. Koehler Board Member and Director of the Renewable Fuels Association
Bob Dinneen Told me On Twitter an RFA
staff member would be attending.
Bob Dinneen is the President and CEO of the Renewable Fuels Association (RFA), the leading trade association for America’s ethanol industry.
twitter ~ Copy and Past from Bob Dinneen
Bob Dinneen ?@ethanolbob May 5
@misskellyfitz There is an RFA staffer on the USDA China trip to talk DDGs and ethanol.
Neil Koehler Could be In China right Now,there is No Certainty,
But Pacific Ethanol has the Only 2 Available Port Locations
On the West Coast with refineries and Port Access as
Proven by Importing International Sorghum from Argentina.
If The RFS is Considering Exporting to China,Pacific Ethanol's
Facilities are the Way to GO.
(For Logistics Reasons)
1.)Down the Mississippi and Thrue the Panama Canal is
Expensive as Hell and Cost Prohibitive
and
2.)The Wall Street Journal Already Wrote an Article Saying
that the Ethanol Industry was Looking for Coastal Ports
to Ship Internationally from
3.)The HUGE Smog Problem in China Mentioned In
Chen Lins Article
USDA Trade Mission to Create Opportunities for U.S. Agriculture in China
USDA trade mission to China will include focus on ethanol
With Janet Adkison, Washington, D.C. News Bureau Chief - May 9, 2014
Nearly 40 U.S. Companies to Form Business Ties and Joint Ventures
3/22/2012 News Releases
U.S. Companies and Organizations Participating in the China Agricultural Trade Mission:
Renewable Fuels Association - RFA staffer
Abengoa Bioenergy
ACX Pacific Northwest
AgWorld International
Airfresh Seafood
Case New Holland
CHS, Inc.
Commercial Lynks
Cuba Beverage Company
Dragonberry Fruit
Food Export – Midwest
Green Plains Renewable Energy
Growth Energy
Hagie Manufacturing
K&B Seafood, Inc.
KiamichiLink Ranch
Lakeview Energy
LaRocca Vineyards
Marathon Ginseng International
Missouri Rice Council/U.S. Rice Producers Association
National Farmers Union
Northwest Grains International
POET, LLC
( So CROSS Your Fingers and Say a Prayer Every One )
This Could Be a HUGE Win for Us and Our Families in
Stock Price Appreciation and Wealth.
~ Happy Mothers Day Every One !
Valuation ~
$10M + in Warrants money + $34M Operating Income + $25.1M from
1.7M Offering
= $70M War Chest Of Cash Pixie is Holding
1.)
$70M/20.01 shares = $3.48 in Cash per share
3.48 x 10 = $34.8 share price
---------------------------------------------
2.)
Shelf registration SEC requirement market capitalization
700M /20.01 = $34.98 per share
SEC Shelf requirement
- Companies wanting to use shelf registration must be classed as a "well-known seasoned investor".
To earn this classification, a firm must either have a $700 million US Dollar (USD) or greater market capitalization
Source: Financial Web website
------------------------------------------------------
3.)
$500M Asset Value of Plant Neil's Valuation at LD micro Conf in dec.
+ $100M Value or NOLs
------------------------------------
= $600M
$600M
+$70M Cash
------------------
$670M/20.01M shr. = $33.48 share price
---------------------------------------------------------
4.)
$4.15 ~ Analyst est. 2014
X 10 ~ multiple
--------------------
$41.15 price per share
4 Different Valuation Models
All Well Over $30 per share Value
EPS,Asset Value,Cash per share Value and ~
$700M (USD) value or $700M Market Cap SEC requirement
For Shelf Registration
We will be getting multiple expansion Over the Coming months,
and these 5 Investor Conferences Over The next Month Will Help
Starting with the Wedbush conference in New York on May 13th
( next week )
There is a Webcast you Can sign up for in the Press Release on the
Yahoo Pacific Ethanol Summary pg. , to here what the Company has
To say as far as Guidance and Future Prospects as well as How they
Are Doing Now.
.
Allendale Weekly Ethanol Update
http://www.allendale-inc.com/weekly-ethanol-update-28/ …
They Said $2M a piece Corn Oil Extractors
3rd party gallons is an unknown
usually around 65 million 3rd party gallons
Price and Profit Unknown
Unlikely Allies
Brazil, U.S. compete but may cooperate in ethanol exports
By LORI POTTER Hub Staff Writer
“China is gonna be a huge importer of ethanol and already is,”
SMITHFIELD — An ethanol-focused U.S. trade mission to Brazil might sound like a waste of time and travel expenses. The relationship between the world’s top two ethanol producers and exporters would seem to be all about competition for the same markets, not cooperation.
However, the truth is more complex, said Smithfield farmer and Nebraska Corn Board Director Dennis Gengenbach.
“China is gonna be a huge importer of ethanol and already is,” Gengenbach said, and also is a big market for dry distillers grains as livestock feed. Distillers grains are the co-product when corn is processed into ethanol.
He explained why it’s mutually beneficial for the top two ethanol producing countries to build a united front when dealing with Chinese importers.
“If China doesn’t like the price of something, they just cancel a contract and buy somewhere else,” Gengenbach said, which is a problem ethanol producers in both the United States and Brazil have experienced.
USDA trade mission to China will include focus on ethanol
http://www.rfdtv.com/story/25476808/usda-trade-mission-to-china-will-include-focus-on-ethanol#.U21gRfldWSo …
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001019687-14-001742%2Etxt&FilePath=%5C2014%5C05%5C09%5C&CoName=PACIFIC+ETHANOL%2C+INC%2E&FormType=10-Q&RcvdDate=5%2F9%2F2014&pdf= …
10Q filing for the first Quarter Filing :5/9/2014
PIEX 10Q got released,and Warrants that were Exerciced they
did a Prospectus for the Shares
10Q filing for the first Quarter Filing :5/9/2014
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001019687-14-001742%2Etxt&FilePath=%5C2014%5C05%5C09%5C&CoName=PACIFIC+ETHANOL%2C+INC%2E&FormType=10-Q&RcvdDate=5%2F9%2F2014&pdf= …
Post-Effective amendments for registration statement http://y.ahoo.it/FdEf35KR
Pacific Ethanol just filed a prospectus, suggesting it plans to soon issue some securities
http://y.ahoo.it/yJtyuhzR
9-May-2014 PACIFIC ETHANOL, INC. Files SEC form 10-Q, Quarterly Report
Form 10-Q for PACIFIC ETHANOL, INC.
9-May-2014
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis should be read in conjunction with our consolidated financial statements and notes to consolidated financial statements included elsewhere in this report. This report and our consolidated financial statements and notes to consolidated financial statements contain forward-looking statements, which generally include the plans and objectives of management for future operations, including plans and objectives relating to our future economic performance and our current beliefs regarding revenues we might generate and profits we might earn if we are successful in implementing our business and growth strategies. The forward-looking statements and associated risks may include, relate to or be qualified by other important factors, including:
? fluctuations in the market price of ethanol and its co-products;
? fluctuations in the costs of key production input commodities such as corn and natural gas;
? the projected growth or contraction in the ethanol and co-product markets in which we operate;
? our strategies for expanding, maintaining or contracting our presence in these markets;
? our ability to successfully manage and operate third party ethanol production facilities;
? anticipated trends in our financial condition and results of operations; and
? our ability to distinguish ourselves from our current and future competitors.
You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this report, or in the case of a document incorporated by reference, as of the date of that document. We do not undertake to update, revise or correct any forward-looking statements, except as required by law.
Any of the factors described immediately above, or referenced from time to time in our filings with the Securities and Exchange Commission or in the "Risk Factors" section below or of our Annual Report on Form 10-K for the year ended December 31, 2013 could cause our financial results, including our net income or loss or growth in net income or loss to differ materially from prior results, which in turn could, among other things, cause the price of our common stock to fluctuate substantially.
Overview
We are the leading producer and marketer of low-carbon renewable fuels in the Western United States.
We market all the ethanol produced by four ethanol production facilities located in California, Idaho and Oregon, or the Pacific Ethanol Plants, all the ethanol produced by two other ethanol producers in the Western United States and ethanol purchased from other third-party suppliers throughout the United States. We market ethanol through our subsidiary Kinergy Marketing LLC, or Kinergy. We also market ethanol co-products, including wet distillers grains, or WDG, and corn oil, for the Pacific Ethanol Plants.
We have extensive customer relationships throughout the Western United States. Our ethanol customers are integrated oil companies and gasoline marketers who blend ethanol into gasoline. We arrange for transportation, storage and delivery of ethanol purchased by our customers through our agreements with third-party service providers in the Western United States, primarily in California, Arizona, Nevada, Utah, Oregon, Colorado, Idaho and Washington. Our WDG customers are dairies and feedlots located near the Pacific Ethanol Plants. Our corn oil is sold to poultry and biodiesel customers.
We have extensive supplier relationships throughout the Western and Midwestern United States. In some cases, we have marketing agreements with suppliers to market all of the output of their facilities.
We hold a 91% ownership interest in PE Op Co. (formerly, New PE Holdco LLC), the owner of each of the plant holding companies, or the Plant Owners, that collectively own the Pacific Ethanol Plants. We operate and maintain the Pacific Ethanol Plants under the terms of an asset management agreement with PE Op Co. and the Plant Owners, including supplying all goods and materials necessary to operate and maintain each Pacific Ethanol Plant. In operating the Pacific Ethanol Plants, we direct the production process to obtain optimal production yields, lower costs by leveraging our infrastructure, enter into risk management agreements such as insurance policies and manage commodity risk practices.
We market ethanol and its co-products, including WDG and corn oil, produced by the Pacific Ethanol Plants under the terms of separate marketing agreements with the Plant Owners. The marketing agreements provide us with the absolute discretion to solicit, negotiate, administer (including payment collection), enforce and execute ethanol and co-product sales agreements with any third party.
The Pacific Ethanol Plants are comprised of the four facilities described immediately below and have an aggregate annual production capacity of up to 200 million gallons. We commenced production at our Madera, California facility on April 30, 2014 and expect to reach full capacity in the second quarter of 2014.
Estimated
Annual Current
Capacity Operating
Facility Name Facility Location (gallons) Status
Magic Valley Burley, ID 60,000,000 Operating
Columbia Boardman, OR 40,000,000 Operating
Stockton Stockton, CA 60,000,000 Operating
Madera Madera, CA 40,000,000 Operating
We earn fees as follows under our asset management and other agreements with PE Op Co. and the Plant Owners:
? ethanol marketing fees of approximately 1% of the net sales price, but not less than $0.015 per gallon and not more than $0.0225 per gallon;
? corn procurement and handling fees of $0.045 per bushel;
? WDG, syrup and corn oil fees of 5% of the third-party purchase price, excluding freight, but not less than $2.00 per ton and not more than $3.50 per ton; and
? asset management fees of $75,000 per month for each operating facility and $40,000 per month for each idled facility.
We intend to advance our position as the leading producer and marketer of low-carbon renewable fuels in the Western United States, in part by expanding production at our Madera, California facility to its full production capacity, expanding our relationships with customers and third-party ethanol producers to market higher volumes of ethanol and by expanding the market for ethanol by continuing to work with state governments to encourage the adoption of policies and standards that promote ethanol as a fuel additive and transportation fuel. Further, we may seek to provide management services for other third-party ethanol production facilities in the Western United States.
Recent Developments and Outlook
Our ownership interest in the Pacific Ethanol Plants is now at 91%. Although current production margins have contracted since their peak near the end of the first quarter, the Pacific Ethanol Plants are currently operating profitably and contributing positively to our overall financial position. We expect a balanced supply and demand for ethanol over the coming months, in part due to the continued rebuilding of inventories and stronger demand for exports from the United States, and ethanol blend rates at least at current levels through the balance of 2014. We also expect our co-product returns as a percentage of our cost of corn to continue around current levels during the coming months.
Ethanol prices in the Western United States have typically been $0.20 per gallon higher than in the Midwest due to the freight costs of delivering ethanol from Midwest production facilities. From October 2013 through April 2014, however, ethanol prices in the Western United States have averaged $0.40 per gallon higher than ethanol prices in the Midwest due to rail logistics challenges and weather conditions which constrained the flow of ethanol and co-products from the Midwest to the markets in which we operate.
From 2010 through 2013, we issued in various financing transactions warrants to purchase shares of our common stock. The warrants were initially recorded at their fair values, which are adjusted quarterly, generally resulting in non-cash expenses or income if the market price of our common stock increases or decreases, respectively, during the period. Due to the substantial increase in the market price of our common stock in the first quarter of 2014 and because the exercise prices of these warrants were, as of March 31, 2014, well below the market price of our common stock, the fair values of the warrants and the related non-cash expenses were significantly higher in the first quarter of 2014 than in prior quarterly periods, which resulted in an unusually large non-cash expense for the quarter. These fair value adjustments will continue in future periods until all of our warrants are exercised or expire. These adjustments will generally reduce our net income or increase our net loss if the market price of our common stock increases on a quarter over quarter basis. Conversely, the adjustments will generally increase our net income or reduce our net loss if the market price of our common stock declines on a quarter over quarter basis.
We began producing and selling corn oil at our Magic Valley and Stockton facilities in June 2013 and October 2013, respectively, allowing us to diversify our revenue and providing immediate incremental gross profit. We are currently producing corn oil in meaningful amounts at both facilities and have, as one of our 2014 objectives, the implementation of corn oil production technology at the remaining two Pacific Ethanol Plants.
We continue to focus on increasing operating efficiencies and improving yields at the Pacific Ethanol Plants. To this end, we installed yield-enhancing CellunatorsTMtechnology at our Stockton facility, allowing us to increase yields by increasing available starch for conversion. This technology also may allow us to produce cellulosic corn ethanol.
The regulatory environment continues to support the long-term demand for renewable fuels. California's Low-Carbon Fuel Standard requires refiners to reduce the carbon intensity of their fuels by 10% between 2011 and 2020, which we believe is an aggressive requirement that will necessitate a significant amount of low-carbon fuel to displace gasoline in the California fuel supply. We continue to reduce energy use at the Pacific Ethanol Plants to lower the carbon intensity of our ethanol. We believe that we have a significant advantage in the marketplace because we produce among the lowest-carbon ethanol commercially produced in the United States which enables us to capture a premium for ethanol we produce.
We also continue to diversify our feedstock by using a blend of corn, sorghum and beet sugar, which reduces feedstock costs and reduces the carbon output of ethanol we produce. Using beet sugar as feedstock, we were able to reduce our material costs by approximately $1.4 million during the quarter. We expect to continue to use beet sugar throughout 2014 at levels approximating 15% of total feedstock at our Magic Valley and Columbia facilities. The United States Department of Agriculture anticipates a record 2013-2014 corn crop, but we are uncertain how the new crop will affect our ethanol production and intend to operate the Pacific Ethanol Plants with flexibility in anticipation of the new crop.
Our strategic goals for 2014 include further improving operating efficiencies at the Pacific Ethanol Plants; continuing to diversify our revenue and feedstock, including through the implementation of corn oil production technology at two Pacific Ethanol Plants; and continuing to increase the value of our produced ethanol by further reducing its carbon intensity, all of which are directed at supporting sustained profitable growth.
Critical Accounting Policies
The preparation of our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, requires us to make judgments and estimates that may have a significant impact upon the portrayal of our financial condition and results of operations. We believe that of our significant accounting policies, the following require estimates and assumptions that require complex, subjective judgments by management that can materially impact the portrayal of our financial condition and results of operations: revenue recognition; warrants carried at fair value and conversion features; impairment of long-lived and intangible assets; and allowance for doubtful accounts. These significant accounting principles are more fully described in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies" in our Annual Report on Form 10-K for the year ended December 31, 2013.
Results of Operations
The following selected financial information should be read in conjunction with our consolidated financial statements and notes to our consolidated financial statements included elsewhere in this report, and the other sections of "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in this report.
Certain performance metrics that we believe are important indicators of our results of operations include:
Three Months Ended
March 31, Percentage
2014 2013 Variance
Production gallons sold (in millions) 39.8 35.3 12.7%
Third party gallons sold (in millions) 73.0 65.4 11.6%
Total gallons sold (in millions) 112.8 100.7 12.0%
Average sales price per gallon $ 2.70 $ 2.60 3.8%
Corn cost per bushel-CBOT equivalent $ 4.48 $ 7.16 (37.4% )
Average basis(1) 1.28 1.19 7.6%
Delivered cost of corn $ 5.76 $ 8.35 (31.0% )
Co-product revenues as % of delivered
cost of corn(2) 34.6% 28.1% 23.1%
Average CBOT ethanol price per gallon $ 2.20 $ 2.41 (8.7% )
Average CBOT corn price per bushel $ 4.52 $ 7.16 (36.9% )
________________
(1) Corn basis represents the difference between the immediate cash price of delivered corn and the future price of corn for Chicago delivery.
(2) Co-product revenues as a percentage of delivered cost of corn shows our yield based on sales of co-products, including WDG and corn oil, generated from ethanol we produced.
Net Sales, Cost of Goods Sold and Gross Profit
The following table presents our net sales, cost of goods sold and gross profit
in dollars and gross profit as a percentage of net sales (in thousands, except
percentages):
Three Months Ended
March 31, Variance in
2014 2013 Dollars Percent
Net sales $ 254,543 $ 225,459 $ 29,084 12.9%
Cost of goods sold 215,998 224,613 (8,615 ) (3.8% )
Gross profit $ 38,545 $ 846 $ 37,699 NM
Percentage of net sales 15.1% 0.3%
Net Sales
The increase in our net sales for the three months ended March 31, 2014 as compared to the same period in 2013 was due to increases in our total gallons sold and our average sales price per gallon.
Total volume of ethanol gallons sold increased by 12.1 million gallons, or 12.0%, to 112.8 million gallons for the three months ended March 31, 2014 as compared to 100.7 million gallons for the same period in 2013. We increased both production and third party gallons sold for the three months ended March 31, 2014 as compared to the same period in 2013. The increases in our production gallons and third party gallons sold are primarily due to increased production rates at the Pacific Ethanol Plants and third party supplier plants, respectively. We and our third party suppliers increased production rates due to higher industry-wide corn crush margins resulting from lower corn costs and higher ethanol prices due to tighter ethanol supply relative to demand.
Our average sales price per gallon increased 3.8% to $2.70 for the three months ended March 31, 2014 from an average sales price per gallon of $2.60 for the same period in 2013. The average Chicago Board of Trade, or CBOT, ethanol price per gallon decreased 8.7% to $2.20 for the three months ended March 31, 2014 from an average CBOT ethanol price per gallon of $2.41 for the same period in 2013. This disparity between our ethanol sales price per gallon and the CBOT average reflects both the additional basis costs for West Coast delivery of ethanol as well as the premiums we receive by selling lower carbon intensity ethanol in the Western United States. Ethanol prices in the Western United States were also higher than ethanol prices in the Midwest due to rail logistics challenges and weather conditions which constrained the flow of ethanol and co-products from the Midwest to the markets in which we operate.
Cost of Goods Sold and Gross Profit
Our gross profit improved significantly to a gross profit of $38.5 million for the three months ended March 31, 2014 from a gross profit of $0.8 million for the same period in 2013. Our gross margin also increased significantly to 15.1% for the three months ended March 31, 2014 from 0.3% for the same period in 2013. Our gross profit and gross margin increased primarily due to significantly improved crush and commodity margins realized at the Pacific Ethanol Plants, predominantly related to lower corn costs and tighter ethanol supply relative to demand as well as higher ethanol prices in the Western United States due to rail logistics challenges and weather conditions which constrained the flow of ethanol and co-products from the Midwest to the markets in which we operate. Crush and commodity margins reflect ethanol and co-product sales prices relative to ethanol production inputs such as corn and natural gas.
Selling, General and Administrative Expenses
The following table presents our selling, general and administrative expenses,
or SG&A, in dollars and as a percentage of net sales (in thousands, except
percentages):
Three Months Ended
March 31, Variance in
2014 2013 Dollars Percent
Selling, general and
administrative expenses $ 3,670 $ 4,005 $ (335 ) (8.4% )
Percentage of net sales 1.4% 1.8%
Our SG&A decreased in both absolute dollars and as a percentage of net sales for the three months ended March 31, 2014 as compared to the same period in 2013. The $0.3 million period over period decrease in SG&A is primarily due to the following factors:
? a decrease in professional fees of $0.3 million due to non-capitalized expenses incurred for the three months ended March 31, 2013 associated with the issuance of our senior unsecured notes in January 2013;
? a decrease in bad debt expense of $0.2 million due to recoveries of bad debt in the current quarter; and
? a decrease in noncash compensation expenses of $0.3 million due to fewer restricted stock awards to our employees and members of our board of directors for the period.
These decreases were partially offset by an increase in payroll-related costs of $0.4 million due to higher compensation resulting from our continued profitable results and related general annual pay increases.
Fair Value Adjustments
The following table presents our fair value adjustments in dollars and as a
percentage of net sales (in thousands, except percentages):
Three Months Ended
March 31, Variance in
2014 2013 Dollars Percent
Fair value adjustments $ 35,844 $ 692 $ 35,152 NM
Percentage of net sales 14.1% 0.3%
We issued certain warrants in various financing transactions from 2010 through 2013. These warrants were initially recorded at fair value and are adjusted quarterly. As a result of quarterly adjustments to their fair values, we recorded an expense of $35.8 million and $0.7 million for the three months ended March 31, 2014 and 2013, respectively. This change in fair value is primarily due to the increased number of warrants issued in the three months ended March 31, 2013 and the substantial increase in the market price of our common stock from December 31, 2013 to March 31, 2014 and because the exercise prices of these warrants were, as of March 31, 2014, well below the market price of our common stock. At December 31, 2013, the market price of our common stock was $5.09 per share and our outstanding warrants had a weighted-average exercise price of $7.27 per share. At March 31, 2014, the market price of our common stock had increased to $15.58 per share, and our outstanding warrants were in-the-money and had significant intrinsic value.
These fair value adjustments will continue in future periods until all of our warrants are exercised or expire. These adjustments will generally reduce our net income or increase our net loss if the market price of our common stock increases on a quarter over quarter basis. Conversely, the adjustments will generally increase our net income or reduce our net loss if the market price of our common stock declines on a quarter over quarter basis.
Interest Expense, net
The following table presents our interest expense, net in dollars and as a
percentage of net sales (in thousands, except percentages):
Three Months Ended
March 31, Variance in
2014 2013 Dollars Percent
Interest expense, net $ 4,351 $ 3,481 $ 870 25.0%
Percentage of net sales 1.7% 1.5%
Interest expense, net increased $0.9 million to $4.4 million for the three months ended March 31, 2014 from $3.5 million for the same period in 2013. The $0.9 million increase in interest expense, net is primarily due to increased amortization of debt discount due to our early retirement of a significant amount of our senior unsecured notes. We used the proceeds from exercises during the quarter of certain of our outstanding warrants to retire the senior unsecured notes earlier than originally projected.
Gain on Extinguishment of Debt
The following table presents our gain on extinguishment of debt, net in dollars
and as a percentage of net sales (in thousands, except percentages):
Three Months Ended
March 31, Variance in
2014 2013 Dollars Percent
Gain on extinguishment of debt $ - $ 817 $ (817 ) NM
Percentage of net sales -% 0.4%
In March 2013, we extinguished certain PE Op Co. debt by paying $0.8 million in cash less than the amount of the debt, and as such, recorded a gain on extinguishment of debt in an equivalent amount.
Other Expense, net
The following table presents our other expense, net in dollars and as a
percentage of net sales (in thousands, except percentages):
Three Months Ended
March 31, Variance in
2014 2013 Dollars Percent
Other expense, net $ 227 $ 87 $ 140 160.9%
Percentage of net sales 0.1% 0.0%
Other expense, net increased by $0.1 million to $0.2 million for the three months ended March 31, 2014 from $0.1 million for the same period in 2013. The $0.1 million increase in other expense, net is primarily due to an increase in bank fees.
Provision for Income Taxes
The following table presents our provision for income taxes in dollars and as a
percentage of net sales (in thousands, except percentages):
Three Months Ended
March 31, Variance in
2014 2013 Dollars Percent
Provision for income taxes $ 3,270 $ - $ 3,270 NM
Percentage of net sales 1.3% -%
For the three months ended March 31, 2014, although we incurred a net loss for the period, we generated income subject to income tax as a result of the nontax-deductible nature of our fair value adjustments. We did, however apply our net operating loss carryforwards to our potential taxable income and as a result, we recorded a deferred provision for income taxes of $11.3 million, eliminating any need for a current tax provision or liability. Further, we reversed $8.0 million of our valuation allowance against our net tax assets, resulting in a benefit to our provision for income taxes. Our remaining net operating loss carryforwards may be limited on an annual basis for the remainder of the year.
Net (Income) Loss Attributed to Noncontrolling Interest
The following table presents the portion of our net (income) loss attributed to
noncontrolling interest in dollars and as a percentage of net sales (in
thousands, except percentages):
Three Months Ended
March 31, Variance in
2014 2013 Dollars Percent
Net (income) loss
attributed to
noncontrolling interest $ (2,009 ) $ 1,148 $ (3,157 ) NM
Percentage of net sales (0.8% ) 0.5%
Net (income) loss attributed to noncontrolling interest relates to our consolidated treatment of PE Op Co., of which we are a 91% owner. For the three months ended March 31, 2014 and 2013, we consolidated the entire income statement of PE Op Co. However, because we owned only 91% and 83% of PE Op Co. for the three months ended March 31, 2014 and 2013, respectively, we reduced our consolidated net income (loss) for the noncontrolling interest, which was the ownership interest that we did not own.
Net Loss Attributed to Pacific Ethanol, Inc.
The following table presents our net loss attributed to Pacific Ethanol, Inc. in
dollars and as a percentage of net sales (in thousands, except percentages):
Three Months Ended
March 31, Variance in
2014 2013 Dollars Percent
Net loss attributed to
Pacific Ethanol, Inc. $ 10,826 $ 5,454 $ 5,372 98.5%
Percentage of net sales 4.3% 2.4%
Warrants Exercised and shares Produced for them
Prospectus
http://y.ahoo.it/FdEf35KR
http://y.ahoo.it/yJtyuhzR
EPA ADMINISTRATOR PROVIDES UPDATE ON RFS PROPOSAL
http://www.agrimarketing.com/s/88875
She says they know "that re-look was not appreciated" by the agriculture community and others, but that's why they are considering the comments received on the proposal very carefully. "I think you will see those comments reflected in the final rule," she concluded.
Corn Heads for Biggest Drop in Week on Rising Inventories
http://www.bloomberg.com/news/2014-05-09/wheat-extends-drop-before-usda-report-on-global-supply-outlook.html …
Vick - Historically the last 3 times "Sell SAR"
the Line of dots currently above at $15.25 hits
the Candle On the Chart.
It's a Good Time to Sell Trading shares and take a
little profit.
Then If it does go down to fill the Gap the rest of the Way, We
have Cash. If it doesn't - We have Profit.
stockcharts.com/h-sc/ui?s=PEIX&p=D&b=5&g=0&id=p54484634423 …
Just an Observation
London (Platts)Brazil's 2014-15 average ethanol prices poised to rise: report
London (Platts)--8May2014/533 pm EDT/2133 GMT
A leading Brazilian ethanol trader is forecasting an 8% rise in the average domestic price of the biofuel during the 2014-15 marketing year (April-March) as burgeoning domestic consumption is likely to more than offset tumbling export demand, newspaper Valor reported Thursday.
SCA Trading, a Sao Paulo-based company representing over 60 ethanol millers, predicts the average hydrous ethanol price in Brazil's center-south region will reach Reais 1.31/liter (59 cents/liter) in the current season, up from an average of Reais 1.21/liter in the previous one, Valor said.
While industry group Unica predicts a timid 1.2% year-on-year rise in Brazil's 2014-15 center-south ethanol production, domestic fuel consumption continues to grow at a fast pace. Hydrous ethanol sales in first-quarter 2014 jumped 18.9% to 2.9 billion liters, according to figures from regulator ANP, that Valor cited. This follows a 9.8% year-on-year increase in 2013 sales.
Hydrous ethanol is a stand-alone biofuel suitable for over half of Brazil's light vehicle fleet.
Meanwhile, the trading company anticipates a 34% contraction in 2014-15 exports compared with the previous marketing year to 1.7 billion liters.
It attributed the lower overseas sales forecast to weaker demand from buyers in the US, where weaker domestic prices and a possible downward revision to 2014 biofuel blending targets could weigh on demand.
The US government is likely to finalize 2014 biofuels targets by June.
A SCA Trading executive that Valor quoted said current domestic prices mean higher remuneration for millers against export deals, making overseas business unattractive.
In Q1, Brazil exported 336 million liters of ethanol, down 47% from the same period of 2013, Valor said. It also saw a 48.5% year-on-year plunge in revenues from these sales to $215 million, Valor said.
But export volume in April soared 34.3% to 137.4 million liters from a temporary spike in US prices, pushing remuneration up 33.5% from the previous year to $96 million, according to Valor.
Chart for Ethanol Futures http://www.nasdaq.com/markets/ethanol.aspx?timeframe=6m …
Ethanol Vs Corn
http://www.barchart.com/chart.php?sym=ZKM14&style=technical&template=&p=DO&d=X&im=&sd=&ed=&size=M&log=0&t=BAR&v=2&g=1&pct=1&evnt=1&late=1&o1=ZCK14&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump …