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Pacific Ethanol reports net sales grow by 180 percent
By Holly Jessen | August 08, 2011

Pacific Ethanol Inc.’s second quarter results show record-breaking improvement. Net sales were at $214.6 million — an all-time high for the company and a 180 percent increase when compared to the same time period in 2010. “In the second quarter of 2011, Pacific Ethanol achieved the highest revenues and gallons sold in our company’s history,” said Neil Koehler, the company’s president and CEO. “We have recorded our eighth consecutive quarter of growth in gallons sold, delivering a compound annual growth rate of 70 percent.”

Gross profit for Pacific Ethanol was at $1.3 million in the second quarter. During the same time period last year the company had a gross loss of $2.7 million.

It’s a big improvement for the company, which has 20 percent ownership in New PE Holdco LLC, the owner of four ethanol plants, three of which are now in operation. One idled 60 MMgy plant in Stockton, Calif., started grinding corn again the end of 2010 and two other facilities, a 40 MMgy plant in Boardman, Ore. and a 60 MMgy plant in Burley, Idaho, were never idled. All three plants are operating at or near capacity, Koehler said.

The company hopes to restart the fourth plant, a 40 MMgy facility located in Madera, Calif., soon. If margins continue to hold at the current rate it would make a “compelling case” to do that, Koehler said. “We would like to see that plant open up as soon as possible,” he said. “It could be later this year it could be later than that. But it is something that we are very focused on and market signals today are very helpful in that direction.”

During the company’s recent conference call on its financial results, Bryon McGregor, chief financial officer, pointed to improvements within the last year. Last year at this time the company had $2 million in cash, about $20 million negative in working capital and was in default on significant amounts of corporate debt. At the June 30 end of the company’s second quarter Pacific Ethanol had $10 million in cash, working capital in excess of $34 million and was in compliance with all of its debt obligations. “We feel very confident in the state of our business,” he said. “Our balance sheet is stronger than it has been in years and we have net sales of nearly one billion dollars on an annualized basis.” He added that while the company is pleased with its progress, its work is not done and it will continue to work to maximize shareholder value.

Besides the fact that the Stockton plant was up and running again, increased net sales can be attributed to financial strength in Pacific Ethanol’s subsidiary, Kinergy Marketing LLC. The business, which markets ethanol from the three Pacific Ethanol plants as well as third-party production facilities, experienced a 67 percent increase in average sales price per gallon and a 49 percent increase in third-party gallons sold. “Looking ahead, we may seek to provide management services for other third-party ethanol production facilities which would enhance the value of our asset management business and generate an additional source of recurring revenue,” Koehler said.

http://www.ethanolproducer.com/articles/8039/pacific-ethanol-reports-net-sales-grow-by-180-percent