PEIX Q1 2017 Earnings
Net sales grew 13% to $386 million in Q1’17 compared to Q1’16 –
– Total gallons sold increased 9% to 226 million in Q1’17 compared to Q1’16 –
– Net loss was $12.9 million and Adjusted EBITDA was negative $1.9 million –
Pacific Ethanol, Inc. (NASDAQ:PEIX), a leading producer and marketer of low-carbon renewable fuels in the United States, reported its financial results for the three months ended March 31, 2017.
Neil Koehler, the company’s president and CEO, stated: “Year-over-year, first quarter net sales and total gallons sold were up 13% and 9%, respectively, reflecting the expanded capacity utilization of our production and marketing assets. Compared to the first quarter of last year our production margins improved, but our quarterly financial performance was negatively impacted by sharply falling ethanol prices, which significantly reduced gross profit in our ethanol marketing business. In addition, the week-long shutdown of our Pekin wet mill for scheduled maintenance reduced production and significantly increased maintenance costs. However, the repairs have since contributed positively to the wet mill’s performance.
“So far in the second quarter, we have seen an improvement in ethanol production margins with increased seasonal demand and a record pace of ethanol exports. As a result, we expect a better operating environment and improved financial performance for the company through 2017,” concluded Koehler.
Financial Results for the Three Months Ended March 31, 2017 Compared to the Three Months Ended March 31, 2016
Net sales were $386.3 million, compared to $342.4 million. The increase was attributable to growth in both production and third party gallons sold, as well as a higher average ethanol sales price per gallon.
Cost of goods sold was $392.1 million, compared to $341.3 million.
Gross loss was $5.8 million, compared to gross profit of $1.1 million. The decrease in gross profit is primarily attributable to the following factors:
- $3.8 million was due to lower gross profit from the company’s third-party marketing business, which was primarily attributable to sharply falling ethanol prices in the first quarter of 2017.
- $4.0 million was primarily associated with the scheduled shutdown of the Pekin, Illinois wet mill facility for routine maintenance and $1.6 million resulted from unanticipated repair and maintenance expenses at the Pekin wet mill incurred over the quarter.
Selling, general and administrative expenses were $5.5 million, compared to $8.3 million. The decrease primarily resulted from a net gain of approximately $3.6 million related to litigation matters settled during the first quarter of 2017, which was partially offset by higher cash and stock compensation expenses.
Operating loss was $11.2 million, compared to $7.2 million.
Net loss available to common stockholders was $12.9 million, or $0.31 per share, compared to a net loss of $13.5 million, or $0.32 per share.
Adjusted EBITDA was negative $1.9 million, compared to positive Adjusted EBITDA of $1.6 million.
Cash and cash equivalents were $73.7 million at March 31, 2017, compared to $68.6 million at December 31, 2016.
First Quarter 2017 Results Conference Call
Management will host a conference call at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time on May 10, 2017. CEO Neil Koehler and CFO Bryon McGregor will deliver prepared remarks followed by a question and answer session.
