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Pacific Ethanol misses by $0.20, beats on revenue
May. 1, 2019 4:09 PM ETPacific Ethanol, Inc. (PEIX)By: Vandana Singh, SA News Editor
Pacific Ethanol (NASDAQ:PEIX): Q1 GAAP EPS of -$0.29 misses by $0.20.
Revenue of $355.8M (-11.1% Y/Y) beats by $2.95M.

https://seekingalpha.com/pr/17496014-pacific-ethanol-reports-first-quarter-2019-results

Pacific Ethanol Reports First Quarter 2019 Results

Wed May 1, 2019 4:05 PM|GlobeNewswire|About: PEIX
SACRAMENTO, Calif., May 01, 2019 (GLOBE NEWSWIRE) -- Pacific Ethanol, Inc. (PEIX), a leading producer and marketer of low-carbon renewable fuels and high-quality alcohol products in the United States, reported its financial results for the three months ended March 31, 2019.

Neil Koehler, Pacific Ethanol’s president and CEO, stated, “The ethanol market is emerging from the bottom of the cycle in late 2018 when crush margins were at historic lows and our first quarter 2019 results reflect these improving market conditions. Our first quarter 2019 net sales were up 6% sequentially to $365 million. Additionally, during the quarter we implemented cost reductions that improved our operating margin. While loss available to common stockholders was $13.2 million, Adjusted EBITDA was positive $1.6 million for the first quarter, representing a significant improvement over the fourth quarter of 2018.

“We are making progress on our strategic initiatives to improve liquidity, reduce our debt and to provide greater financial flexibility to pursue future growth opportunities and increase shareholder value. When looking at the overall ethanol industry, we continue to believe the compelling cost, octane and carbon benefits of ethanol will drive additional demand in 2019 supported by an expected resolution of trade disputes with China and a final rule from the EPA facilitating the year round use of higher ethanol blends.”

Financial Results for the Three Months Ended March 31, 2019 Compared to 2018

Net sales were $355.8 million, compared to $400.0 million.
Total gallons sold of 211.8 million, compared to 232.7 million.
Total production gallons sold of 116.9 million, compared to 140.8 million.
Cost of goods sold was $358.1 million, compared to $396.7 million.
Gross loss was $2.3 million, compared to gross profit of $3.4 million.
Selling, general and administrative expenses were $8.2 million, compared to $9.3 million.
Operating loss was $10.5 million, compared to $6.0 million.
Loss available to common stockholders was $13.2 million, or $0.29 per share, compared to $8.2 million, or $0.19 per share.
Adjusted EBITDA was $1.6 million compared to $5.7 million.
Cash and cash equivalents were $21.8 million at March 31, 2018, compared to $26.6 million at December 31, 2018.
First Quarter 2019 Results Conference Call
Management will host a conference call at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time on May 2, 2019. CEO Neil Koehler and CFO Bryon McGregor will deliver prepared remarks followed by a question and answer session.

The webcast for the call can be accessed from Pacific Ethanol's website at www.pacificethanol.com. Alternatively, you may dial the following number up to ten minutes prior to the scheduled conference call time: [phone]. International callers should dial 00-1 [phone]. The pass code will be 5688084. If you are unable to participate on the live call, the webcast will be archived for replay on Pacific Ethanol's website for one year. In addition, a telephonic replay will be available at 6:00 p.m. Eastern Time on Thursday, May 2, 2019, through 11:59 p.m. Eastern Time on Thursday, May 9, 2019. To access the replay, please dial [phone]. International callers should dial 00-1-[phone]. The pass code will be 5688084.

Use of Non-GAAP Measures
Management believes that certain financial measures not in accordance with generally accepted accounting principles ("GAAP") are useful measures of operations. The company defines Adjusted EBITDA as unaudited net income (loss) attributed to Pacific Ethanol before interest expense, provision (benefit) for income taxes, asset impairments, purchase accounting adjustments, fair value adjustments, and depreciation and amortization expense. A table is provided at the end of this release that provides a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure. Management provides this non-GAAP measure so that investors will have the same financial information that management uses, which may assist investors in properly assessing the company's performance on a period-over-period basis. Adjusted EBITDA is not a measure of financial performance under GAAP and should not be considered as an alternative to net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA has limitations as an analytical tool and you should not consider this measure in isolation or as a substitute for analysis of the company's results as reported under GAAP.

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PACIFIC ETHANOL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)


Three Months Ended
March 31,
2019 2018
Net sales $ 355,803 $ 400,027
Cost of goods sold 358,092 396,665
Gross profit (loss) (2,289 ) 3,362
Selling, general and administrative expenses 8,235 9,315
Loss from operations (10,524 ) (5,953 )
Interest expense, net (4,736 ) (4,505 )
Other income, net 1,099 398
Loss before benefit for income taxes (14,161 ) (10,060 )
Benefit for income taxes — 563
Consolidated net loss (14,161 ) (9,497 )
Net loss attributed to noncontrolling interests 1,271 1,656
Net loss attributed to Pacific Ethanol, Inc. $ (12,890 ) $ (7,841 )
Preferred stock dividends $ (312 ) $ (312 )
Net loss available to common stockholders $ (13,202 ) $ (8,153 )
Net loss per share, basic and diluted $ (0.29 ) $ (0.19 )
Weighted-average shares outstanding, basic and diluted 45,517 42,912


PACIFIC ETHANOL, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except par value)


ASSETS March 31,
2019 December 31,
2018


Current Assets:
Cash and cash equivalents $ 21,751 $ 26,627
Accounts receivable, net 78,402 67,636
Inventories 62,731 57,820
Prepaid inventory 5,140 3,090
Other current assets 8,673 13,631
Total current assets 176,697 168,804
Property and equipment, net 472,735 482,657
Other Assets:
Right of use operating lease assets, net 41,839 —
Intangible asset 2,678 2,678
Other assets 5,072 5,842
Total other assets 49,589 8,520
Total Assets $ 699,021 $ 659,981



PACIFIC ETHANOL, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(unaudited, in thousands, except par value)

LIABILITIES AND STOCKHOLDERS’ EQUITY March 31,
2019 December 31,
2018
Current Liabilities:
Accounts payable – trade $ 50,531 $ 48,176
Accrued liabilities 22,773 23,421
Current portion – operating leases 7,568 —
Current portion – long-term debt 143,148 146,671
Derivative instruments 5,156 6,309
Other current liabilities 6,993 7,282
Total current liabilities 236,169 231,859

Long-term debt, net of current portion 96,433 84,767
Operating leases, net of current portion 33,091 —
Other liabilities 23,969 23,990
Total Liabilities 389,662 340,616


Stockholders’ Equity:
Pacific Ethanol, Inc. Stockholders’ Equity:
Preferred stock, $0.001 par value; 10,000 shares authorized; Series A: no shares issued and outstanding as of
March 31, 2019 and December 31, 2018
Series B: 927 shares issued and outstanding as of
March 31, 2019 and December 31, 2018 1 1
Common stock, $0.001 par value; 300,000 shares authorized; 48,884 and 45,771 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively 49 46
Non-voting common stock, $0.001 par value; 3,553 shares authorized; 1 share issued and outstanding as of March 31, 2019 and December 31, 2018 — —
Additional paid-in capital 936,643 932,179
Accumulated other comprehensive expense (2,459 ) (2,459 )
Accumulated deficit (643,202 ) (630,000 )
Total Pacific Ethanol, Inc. Stockholders’ Equity 291,032 299,767
Noncontrolling interests 18,327 19,598
Total Stockholders’ Equity 309,359 319,365
Total Liabilities and Stockholders’ Equity $ 699,021 $ 659,981


Reconciliation of Adjusted EBITDA to Net Loss

Three Months Ended
March 31,
(in thousands) (unaudited) 2019 2018
Net loss attributed to Pacific Ethanol, Inc. $ (12,890 ) $ (7,841 )
Adjustments:
Interest expense* 4,736 4,404
Benefit for income taxes — (563 )
Depreciation and amortization expense* 9,706 9,654
Total adjustments 14,442 13,495
Adjusted EBITDA $ 1,552 $ 5,654
________________
* Adjusted for noncontrolling interests.



Commodity Price Performance

Three Months Ended
March 31,
(unaudited) 2019 2018
Ethanol production gallons sold (in millions) 116.9 140.8
Ethanol third party gallons sold (in millions) 94.9 91.9
Total ethanol gallons sold (in millions) 211.8 232.7

Total gallons produced (in millions) 122.5 142.1
Ethanol production capacity utilization 82% 94%

Average ethanol sales price per gallon $ 1.53 $ 1.57
Average CBOT ethanol price per gallon $ 1.32 $ 1.42

Corn cost – CBOT equivalent $ 3.73 $ 3.57
Average basis $ 0.38 $ 0.27
Delivered corn cost $ 4.11 $ 3.84

Total co-product tons sold (in thousands) 684.1 798.0
Co-product return % (1) 38.8% 37.1%
________________
(1) Co-product revenue as a percentage of delivered cost of corn.



Company IR Contact: IR Agency Contact: Media Contact:
Pacific Ethanol, Inc. Kirsten Chapman Paul Koehler
916-403-2755 LHA Pacific Ethanol, Inc.
[e-mail] 415-433-3777 916-403-2790
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