Green Plains Reports Fourth Quarter and Full Year

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Posted On: 02/08/2017 6:00:30 PM

Posted By: News Desk 2018

Green Plains Reports Fourth Quarter and Full Year 2016 Financial Results

Results for the Fourth Quarter of 2016

Net income of $18.7 million, or $0.47 per diluted share
Record ethanol production of 334.2 million gallons
EBITDA of $83.5 million

Results for the Full Year of 2016

Net income of $10.7 million, or $0.28 per diluted share
Company produced 1.1 billion gallons, a 21% increase over 2015
EBITDA of $174.4 million

OMAHA, Neb., Feb. 08, 2017 (GLOBE NEWSWIRE) -- Green Plains Inc. (NASDAQ: GPRE ) today announced financial results for the fourth quarter of 2016. Net income attributable to the company was $18.7 million, or $0.47 per diluted share, for the fourth quarter of 2016 compared with net loss of $(3.6) million, or $(0.09) per diluted share, for the same period in 2015. Revenues were $932.1 million for the fourth quarter of 2016 compared with $739.9 million for the same period last year.

“Green Plains finished 2016 on a strong note, generating $74.3 million of segment operating income in the fourth quarter as we successfully integrated the acquisitions of three ethanol plants and Fleischmann’s Vinegar Company into our platform,” said Todd Becker, president and chief executive officer. “Each of our business units performed well during the quarter and the year, delivering strong results by continuing to focus on executing our long term strategy of diversification and achieving scale in all of our businesses.”

With the addition of Fleischmann’s Vinegar Company in the fourth quarter of 2016, Green Plains restructured its operating segments. The four segments include: ethanol production, agribusiness and energy services, food and food ingredients and partnership. Please see segment information below for more detail.

During the fourth quarter, Green Plains produced 334.2 million gallons of ethanol compared with 260.8 million gallons for the same period in 2015. The consolidated ethanol crush margin was $81.6 million, or $0.24 per gallon, for the fourth quarter of 2016 compared with $28.9 million, or $0.11 per gallon, for the same period in 2015. The consolidated ethanol crush margin is the ethanol production segment’s operating income before depreciation and amortization, which includes corn oil production, plus intercompany storage, transportation and other fees, net of related expenses.

Revenues were $3.4 billion for the year ended Dec. 31, 2016, compared with $3.0 billion for the same period in 2015. Net income attributable to the company for the year ended Dec. 31, 2016, was $10.7 million, or $0.28 per diluted share, compared with net income of $7.1 million, or $0.18 per diluted share, for the same period in 2015.

“U.S. ethanol demand was strong in 2016 and we expect that to continue in 2017. In addition, exports were the strongest we have seen in 5 years. U.S. ethanol remains competitively priced and export demand could be even stronger this year,” Becker added. “We expect to see solid infrastructure growth in support of E15 with new locations and more retailers expanding demand for the product. In all, we believe gasoline demand will continue to grow, leading to an improved ethanol margin environment as we approach the beginning of summer driving season in April.

“We invested over $550 million of growth capital in 2016, which we believe positions us to deliver stronger results in the future. We continue to evaluate additional growth opportunities across all of our segments and we look forward to the completion of the Jefferson Energy Terminal joint venture in the second half of this year,” stated Becker.

Full Year Highlights

On Jan. 1, 2016, Green Plains sold the storage and transportation assets of the Hopewell and Hereford ethanol production facilities to Green Plains Partners for $62.3 million.
On June 14, 2016, Green Plains Inc. and Jefferson Gulf Coast Energy Partners, a subsidiary of Fortress Transportation and Infrastructure Investors LLC, announced the formation of a 50/50 joint venture to construct and operate an intermodal export and import fuels terminal at Jefferson’s existing Beaumont, Texas terminal. Green Plains will offer its interest in the joint venture to the partnership once commercial development is complete, which is expected during the second half of 2017.
In Aug. 2016, Green Plains completed a private offering of $170 million aggregate principal amount of 4.125% convertible senior notes that will mature on Sept. 1, 2022. The net proceeds from the offering were used to finance the recent acquisitions.
On Sept. 23, 2016, Green Plains acquired three ethanol plants located in Madison, Ill., Mount Vernon, Ind. and York. Neb. for approximately $235 million in cash plus certain working capital adjustments. Concurrently, the ethanol storage assets were sold to Green Plains Partners LP for $90 million. The plants added 230 million gallons per year of ethanol production capacity.
On Oct. 3, 2016, Green Plains acquired SCI Ingredients Holdings, Inc. and its wholly owned subsidiary, Fleischmann’s Vinegar Company, Inc., for approximately $258 million, financing the transaction with $135 million of debt and the balance with cash on hand. Fleischmann’s Vinegar Company operates as a standalone business.

Results of Operations Consolidated revenues increased $192.2 million for the three months ended Dec. 31, 2016, compared with the same period in 2015. Revenues were impacted by an increase in ethanol volumes sold and a higher average price realized for ethanol along with an increase in volumes of cattle sold, plus the addition of Fleischmann’s Vinegar in the quarter. The increase in revenues were partially offset by lower volumes and average realized prices for grain sold.

Operating income increased $43.3 million for the three months ended Dec. 31, 2016, compared with the same period last year primarily due to increased margins on ethanol production. Interest expense increased $8.3 million for the three months ended Dec. 31, 2016, compared with the same period last year primarily due to higher average debt outstanding. Income tax expense was $12.2 million for the three months ended Dec. 31, 2016, compared with $4.1 million for the same period in 2015.

Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the fourth quarter of 2016 was $83.5 million compared with $32.5 million for the same period last year.

Segment Information Management implemented organizational changes during the fourth quarter of 2016 as a result of acquisitions during the year and now reviews financial and operating performance for four operating segments: (1) ethanol production, which includes the production of ethanol, distillers grains and corn oil, (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading, (3) food and food ingredients, which includes the vinegar operations and cattle feedlot operations and (4) partnership, which includes fuel storage and transportation services. Intercompany fees charged to the ethanol production segment for storage and logistics services, grain procurement and product sales are included in the partnership, and agribusiness and energy services segments and eliminated upon consolidation. Third party cost of grain consumed and revenues from product sales are reported directly in the ethanol production segment. Prior periods have been reclassified to conform to the revised segment presentation.

GREEN PLAINS INC.
SEGMENT OPERATIONS
(unaudited, in thousands)

	Three Months Ended December 31,									Twelve Months Ended December 31,
	Three Months Ended December 31,									Twelve Months Ended December 31,
		2016			2015		% Var.				2016			2015		% Var.
Revenues:
Ethanol production	$	704,539		$	522,932		34.7		%	$	2,454,896		$	2,029,359		21.0		%
Agribusiness and energy services		147,606			171,029		(13.7	)			664,113			732,646		(9.4	)
Food and food ingredients		87,257			50,897		71.4				318,181			219,385		45.0
Partnership		28,285			22,686		24.7				103,772			50,937		103.7
Intersegment eliminations		(35,589	)		(27,630	)	28.8				(130,081	)		(66,738	)	94.9
		932,098			739,914		26.0				3,410,881			2,965,589		15.0
Gross margin:
Ethanol production		67,354			17,392		287.3				128,197			123,349		3.9
Agribusiness and energy services		21,124			18,232		15.9				59,368			59,362		-
Food and food ingredients		11,947			653		*				23,785			2,724		*
Partnership		28,285			22,686		24.7				103,772			50,937		103.7
Intersegment eliminations		403			(38	)	*				(320	)		(150	)	113.3
		129,113			58,925		119.1				314,802			236,222		33.3
Operating income (loss):
Ethanol production		35,798			(3,398	)	*				28,125			43,266		(35.0	)
Agribusiness and energy services		13,295			12,142		9.5				34,039			37,253		(8.6	)
Food and food ingredients		6,842			(470	)	*				16,436			(952	)	*
Partnership		17,945			12,185		47.3				60,903			12,990		368.8
Intersegment eliminations		442			-		*				(170	)		-		*
Segment operating income		74,322			20,459		263.3				139,333			92,557		50.5
Corporate activities		(18,252	)		(7,721	)	136.4				(47,645	)		(31,480	)	51.4
	$	56,070		$	12,738		340.2		%	$	91,688		$	61,077		50.1		%

* Percentage variance not considered meaningful.

GREEN PLAINS INC.
OPERATING DATA BY PRODUCT
(unaudited, in thousands)

	Three Months Ended December 31,				Twelve Months Ended December 31,
	Three Months Ended December 31,				Twelve Months Ended December 31,
	2016	2015	% Var.		2016	2015	% Var.
Ethanol production
Ethanol sold (gallons)	334,166	260,767	28.1	%	1,147,630	947,557	21.1	%
Distillers grains sold (tons)	894	703	27.2		3,064	2,540	20.6
Corn oil sold (pounds)	77,370	68,072	13.7		273,901	244,047	12.2
Corn consumed (bushels)	116,783	90,669	28.8		401,065	332,417	20.7

Agribusiness and energy services
Domestic ethanol sold (gallons)	341,833	255,489	33.8		1,244,764	1,016,742	22.4
Export ethanol sold (gallons)	37,266	35,213	5.8		152,141	143,949	5.7
	379,099	290,702	30.4		1,396,905	1,160,691	20.4

Partnership
Storage and throughput (gallons)⁽¹⁾	334,166	248,862	34.3		1,147,630	464,422	*

* Percentage variance not considered meaningful.
(1) Results include volumes under the storage and throughput agreement.

GREEN PLAINS INC.
CONSOLIDATED CRUSH MARGIN
(unaudited, in thousands except per gallon amounts)

	Three Months Ended December 31,					Three Months Ended December 31,
	Three Months Ended December 31,					Three Months Ended December 31,
		2016		2015			2016		2015
	($ in thousands)					($ per gallon produced)

Ethanol production operating income	$	35,798	$	(3,398	)	$	0.11	$	(0.01	)
Depreciation and amortization		22,091		14,397			0.06		0.05
Total ethanol production		57,889		10,999			0.17		0.04

Intercompany fees, net:
Storage and logistics (partnership)		17,783		13,112			0.05		0.05
Marketing and agribusiness fees (agribusiness and energy services)		5,965		4,772			0.02		0.02
Consolidated crush margin	$	81,637	$	28,883		$	0.24	$	0.11

Liquidity and Capital Resources On Dec. 31, 2016, Green Plains had $356.2 million in total cash and cash equivalents, and $120.8 million available under revolving credit agreements, some of which are subject to restrictions and other lending conditions. Total debt outstanding was $1,108.9 million, including $291.2 million outstanding under working capital revolvers and other short-term borrowing arrangements for the agribusiness and energy services, and the food and food ingredients segments at Dec. 31, 2016.

Conference Call Information On Feb. 9, 2017, Green Plains Inc. and Green Plains Partners LP will host a joint conference call at 11 a.m. Eastern time (10 a.m. Central time) to discuss fourth quarter 2016 financial and operating results for each company. Domestic and international participants can access the conference call by dialing 888.778.9065 and 913.312.0719, respectively. Participants are advised to call at least 10 minutes prior to the start time. Alternatively, the conference call and presentation can be accessed on Green Plains’ website at http://investor.gpreinc.com/events.cfm . A transcript of the conference call will also be made available on the company’s website as soon as practicable.

Non-GAAP Financial Measures Management uses earnings before interest, income taxes, depreciation and amortization, or EBITDA, and consolidated ethanol crush margin to measure the company’s financial performance and to internally manage its businesses. Management believes these measures provide useful information to investors for comparison with peer and other companies. These measures should not be considered an alternative to net income or segment operating income, which are determined in accordance with generally accepted accounting principles. EBITDA calculations may vary from company to company. Accordingly, the company’s computation of EBITDA may not be comparable with a similarly-titled measure of another company.

About Green Plains Inc. Green Plains Inc. (NASDAQ: GPRE ) is a diversified commodity-processing business with operations related to ethanol, distillers grains and corn oil production; grain handling and storage; a cattle feedlot; and commodity marketing and distribution services. The company is the second largest consolidated owner of ethanol production facilities in the world, with 17 dry mill plants, producing nearly 1.5 billion gallons of ethanol at full capacity. Green Plains, through its wholly owned subsidiary Fleischmann’s Vinegar Company, provides specialized ingredient solutions for leading food and feed manufacturers. 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 .

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 .

Forward-Looking Statements This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include words such as “anticipates,” “believes,” “estimates,” “expects,” “goal,” “intends,” “plans,” “potential,” “predicts,” “should,” “will,” and other words with similar meanings in connection with future operating or financial performance. Such statements are based on management’s current expectations, which are subject to various factors, risks and uncertainties that may cause actual results, outcomes, timing and performance to differ materially from those expressed or implied. Green Plains may experience significant fluctuations in future operating results due to a number of economic conditions, including competition in the industries in which Green Plains operates; commodity market risks, including those resulting from current weather conditions; financial market risks; counterparty risks; risks associated with changes to federal policy or regulation; risks related to closing and achieving anticipated results from acquisitions; risks associated with the joint venture to commercialize algae production and growth potential of the algal biomass industry; risks associated with the recent acquisitions of three ethanol plants and Fleischmann’s Vinegar; and other risks detailed in Green Plains’ reports filed with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended Dec. 31, 2015, and subsequent filings with the SEC. Green Plains is not obligated nor intends to update its forward-looking statements at any time unless it is required by applicable securities laws. Unpredictable or unknown factors not discussed in this release could also have material adverse effects on forward-looking statements.

Consolidated Financial Results

GREEN PLAINS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)

	December 31, 2016		December 31, 2015
	December 31, 2016		December 31, 2015
ASSETS
Current assets
Cash and cash equivalents	$	304,211	$	384,867
Restricted cash		51,979		27,018
Accounts receivable, net		147,495		96,150
Inventories		422,181		353,957
Other current assets		74,710		50,585
Total current assets		1,000,576		912,577
Property and equipment, net		1,178,706		922,070
Other assets		327,210		83,273
Total assets	$	2,506,492	$	1,917,920

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	192,275	$	166,963
Accrued and other liabilities		67,473		32,026
Short-term notes payable and other borrowings		291,223		226,928
Current maturities of long-term debt		35,059		4,507
Other current liabilities		8,916		8,245
Current liabilities		594,946		438,669
Long-term debt		782,610		432,139
Other liabilities		149,745		88,203
Total liabilities		1,527,301		959,011

Stockholders’ equity
Total Green Plains stockholders’ equity		862,507		797,830
Noncontrolling interests		116,684		161,079
Total liabilities and stockholders’ equity	$	2,506,492	$	1,917,920

GREEN PLAINS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except per share amounts)

	Three Months Ended December 31,									Twelve Months Ended December 31,
	Three Months Ended December 31,									Twelve Months Ended December 31,
		2016			2015		% Var.				2016			2015		% Var.
Revenues
Product	$	929,838		$	737,882		26.0		%	$	3,402,579		$	2,957,201		15.1		%
Service		2,260			2,032		11.2				8,302			8,388		(1.0	)
Total revenues		932,098			739,914		26.0				3,410,881			2,965,589		15.0
Costs and expenses
Cost of goods sold		802,985			680,989		17.9				3,096,079			2,729,367		13.4
Operations and maintenance		8,498			7,750		9.7				34,211			29,601		15.6
General and administrative		36,451			21,121		72.6				104,677			79,594		31.5
Depreciation and amortization		28,094			17,316		62.2				84,226			65,950		27.7
Total costs and expenses		876,028			727,176		20.5				3,319,193			2,904,512		14.3
Operating income		56,070			12,738		340.2				91,688			61,077		50.1
Other income (expense)
Interest income		278			462		(39.8	)			1,541			1,211		27.3
Interest expense		(18,735	)		(10,448	)	79.3				(51,851	)		(40,366	)	28.5
Other, net		(976	)		2,027		(148.1	)			(3,027	)		(457	)	562.4
Total other expense		(19,433	)		(7,959	)	144.2				(53,337	)		(39,612	)	34.6
Income before income taxes		36,637			4,779		666.6				38,351			21,465		78.7
Income tax expense		12,199			4,066		200.0				7,860			6,237		26.0
Net income		24,438			713		*				30,491			15,228		100.2
Net income attributable to noncontrolling interests		5,756			4,302		33.8				19,828			8,164		142.9
Net income (loss) attributable to Green Plains	$	18,682		$	(3,589	)	*		%	$	10,663		$	7,064		50.9		%

Earnings per share:
Net income (loss) attributable to Green Plains - basic	$	0.49		$	(0.09	)				$	0.28		$	0.19
Net income (loss) attributable to Green Plains - diluted	$	0.47		$	(0.09	)				$	0.28		$	0.18

Weighted average shares outstanding:
Basic		38,367			37,890						38,318			37,947
Diluted		39,845			37,890						38,573			39,028

* Percentage variance not considered meaningful.

GREEN PLAINS INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands)

	Twelve Months Ended December 31,
	Twelve Months Ended December 31,
		2016			2015
Cash flows from operating activities:
Net income	$	30,491		$	15,228
Noncash operating adjustments:
Depreciation and amortization		84,226			65,950
Deferred income taxes		4,910			(27,513	)
Other		21,828			14,480
Net change in working capital		(58,468	)		(57,919	)
Net cash provided by operating activities		82,987			10,226

Cash flows from investing activities:
Purchases of property and equipment		(58,171	)		(63,418	)
Acquisition of businesses, net of cash acquired		(508,143	)		(116,796	)
Proceeds on disposal of assets, net		58			68
Investments in unconsolidated subsidiaries		(6,342	)		(3,055	)
Net cash used by investing activities		(572,598	)		(183,201	)

Cash flows from financing activities:
Net proceeds (payments) - long-term debt		417,197			(17,410	)
Net proceeds (payments) - short-term borrowings		63,978			17,911
Other		(72,220	)		131,831
Net cash provided by financing activities		408,955			132,332

Net change in cash and cash equivalents		(80,656	)		(40,643	)
Cash and cash equivalents, beginning of period		384,867			425,510
Cash and cash equivalents, end of period	$	304,211		$	384,867

GREEN PLAINS INC.
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands)

	Three Months Ended December 31,				Twelve Months Ended December 31,
	Three Months Ended December 31,				Twelve Months Ended December 31,
		2016		2015		2016		2015
Net income	$	24,438	$	713	$	30,491	$	15,228
Interest expense		18,735		10,448		51,851		40,366
Income taxes		12,199		4,066		7,860		6,237
Depreciation and amortization		28,094		17,316		84,226		65,950
EBITDA	$	83,466	$	32,543	$	174,428	$	127,781

Jim Stark Vice President - Investor and Media Relations Green Plains Inc. (402) 884-8700

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