• Green Plains Reports Second Quarter 2022 Financial Results

    Source: Nasdaq GlobeNewswire / 02 Aug 2022 06:30:21   America/Chicago

    Results for the Second Quarter of 2022:

    • Second quarter net income attributable to Green Plains of $46.4 million and EPS of $0.73 per diluted share, compared to net income attributable to Green Plains of $9.7 million and EPS of $0.20 per diluted share for the same period in the prior year
    • EBITDA of $84.4 million, inclusive of a USDA COVID relief payment of $27.7 million, compared to $50.9 million for the same period in the prior year
    • Consolidated crush margin of $0.28 per gallon for the second quarter
    • Plant utilization rate of 96.9%, demonstrating the ability of our upgraded production platform
    • $604.2 million of cash, cash equivalents, restricted cash and marketable securities; $70.0 million available under a committed credit facility
    • Commissioning of the MSC™ system in Central City, Nebraska, began in July and anticipate commissioning of the systems in Mount Vernon, Indiana, and Obion, Tennessee, to begin in the coming months

    OMAHA, Neb., Aug. 02, 2022 (GLOBE NEWSWIRE) -- Green Plains Inc. (NASDAQ:GPRE) today announced financial results for the second quarter of 2022. Net income attributable to the company was $46.4 million, or $0.73 per diluted share compared to net income of $9.7 million or $0.20 per diluted share, for the same period in 2021. Revenues were $1,012.4 million for the second quarter of 2022 compared with $724.4 million for the same period last year.

    “During the second quarter we achieved strong operating results and generated significant positive free cash flow,” said Todd Becker, President and Chief Executive Officer. “Our modernization and transformation program led to strong plant utilization rates and we also benefitted from non-ethanol contributions such as renewable corn oil and Ultra-High Protein. The results include $27.7 million in COVID relief from the USDA Biofuel Producer Program, offsetting some of the losses experienced in 2020. Even without this payment, our performance was the result of years of planning and execution allowing us to operate at historically high run rates of 97%, which puts us in a strong position to bring additional MSC capacity online in the coming quarters.”

    “Execution of our transformation remains our key focus,” continued Becker. “Our three MSC locations under construction today are anticipated to come online in the third and fourth quarter with Central City currently in the startup and commissioning process. We are excited to have recently broken ground on the largest MSC project to date with our turnkey JV partner, Tharaldson Ethanol, and anticipate this JV to come online in mid-2023.”

    “Customer engagement is growing globally as we send more 50% and 60% corn fermented protein to new and existing domestic and international customers for both ingredient evaluation and commercial use. We anticipate the third quarter to be one of our strongest in new orders, further proving the acceptance of our new plant-based, corn fermented protein products for use in various species and markets,” added Becker. “In addition to direct customer engagement, we are now starting to receive direct follow-on orders in markets where we sent evaluation product over the past year. Lastly, commercialization of our 60% protein product is ongoing and we are realizing continued improvement in operating results from our current production of 50% protein and renewable corn oil yield enhancements.”

    “We are planning to break ground on our first full-scale commercial low-carbon Clean Sugar Technology deployment in Shenandoah, Iowa, during the third quarter and believe we are on track for a 2023 startup,” said Becker. “Customer engagement is extremely high and we have signed our first letter of intent for potential co-location of a food-grade production facility on the rapidly expanding Shenandoah bio-campus and remain in negotiations with several others. We continue to ship product for evaluation from our Innovation Center at York where we have a semi-commercial continuous system producing multiple grades of dextrose and glucose for food and industrial applications. We believe this is a truly disruptive technology that can position Green Plains front and center in the bio-economy.”

    “With the positive results from the quarter, our financial strength continues to be a strategic driver of our ability to execute on our transformation. We have a strong liquidity position with over $600 million cash at the end of the quarter, completed the conversion of our 2024 convertible debt into common stock at the beginning of July, and positioned the company to exit 2022 ready to deliver on the remainder of our Total Transformation Plan. We have been laying out and executing against this plan the past couple of years, and we can clearly see the inflection point of this strategy,” concluded Becker.

    Highlights and Recent Developments

    • Announced aquafeed partnership with Riverence to expand trout and salmon feed production in Idaho
    • Converted the remaining balance of $64.0 million of the 4.00% Convertible Senior Notes due 2024 into common stock
    • Broke ground on MSC™ at Tharaldson Ethanol in Casselton, North Dakota
    • Commencing construction on Clean Sugar Technology™ deployment at Shenandoah, Iowa, biorefinery

    Results of Operations
    Green Plains ethanol production segment sold 231.4 million gallons of ethanol during the second quarter of 2022, compared with 190.9 million gallons for the same period in 2021. The consolidated ethanol crush margin was $65.3 million, or $0.28 per gallon, for the second quarter of 2022, compared with $70.2 million, or $0.37 per gallon, for the same period in 2021. The consolidated ethanol crush margin is the ethanol production segment’s operating income before depreciation and amortization, which includes corn oil and Ultra-High Protein, plus intercompany storage, transportation, nonrecurring decommissioning costs and other fees, net of related expenses.

    Consolidated revenues increased $288.0 million for the three months ended June 30, 2022, compared with the same period in 2021, primarily due to higher prices and higher volumes sold for ethanol, distillers grains and corn oil.

    Net income attributable to Green Plains increased $36.7 million and EBITDA increased $33.5 million for the three months ended June 30, 2022, compared with the same period last year, primarily due to $27.7 million in COVID-19 relief, and higher margins in agribusiness and energy services offset by slightly lower ethanol crush margins. Interest expense decreased $11.3 million for the three months ended June 30, 2022, compared with the same period in 2021 due to a loss on settlement of convertible notes of $9.5 million for the three months ended June 30, 2021. Income tax expense was $2.9 million for the three months ended June 30, 2022, compared with income tax benefit of $4.8 million for the same period in 2021, primarily due to an increase of a valuation allowance against deferred tax assets included in AOCI for the three months ended June 30, 2022, compared to a decrease of the valuation allowance recorded against deferred tax assets included in AOCI during the three months ended June 30, 2021.

    Segment Information
    The company reports the financial and operating performance for the following three operating segments: (1) ethanol production, which includes the production of ethanol, including industrial-grade alcohol, distillers grains, Ultra-High Protein and corn oil, (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading for company-produced and third-party ethanol, distillers grains, corn oil, natural gas and other commodities and (3) 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 costs of grain consumed and revenues from product sales are reported directly in the ethanol production segment.


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

     Three Months Ended
    June 30,    		 Six Months Ended
    June 30,
      2022   2021  % Var.  2022   2021  % Var.
    Revenues:           
    Ethanol production$861,166  $555,273  55.1% $1,498,719  $978,995  53.1%
    Agribusiness and energy services 157,559   173,487  (9.2)  306,271   307,431  (0.4)
    Partnership 19,654   19,701  (0.2)  38,754   40,107  (3.4)
    Intersegment eliminations (25,985)  (24,043) 8.1   (49,915)  (48,475) 3.0 
     $1,012,394  $724,418  39.8% $1,793,829  $1,278,058  40.4%
                
    Gross margin:           
    Ethanol production$56,345  $61,617  (8.6)% $32,338  $69,814  (53.7)%
    Agribusiness and energy services 13,903   3,306  320.5   28,176   21,176  33.1 
    Partnership 19,654   19,701  (0.2)  38,754   40,107  (3.4)
    Intersegment eliminations 1,178   386  205.2   738   (1,680) (143.9)
     $91,080  $85,010  7.1% $100,006  $129,417  (22.7)%
                
    Depreciation and amortization:           
    Ethanol production$19,114  $18,483  3.4% $37,546  $37,011  1.4%
    Agribusiness and energy services 470   595  (21.0)  934   1,202  (22.3)
    Partnership 823   795  3.5   1,721   1,682  2.3 
    Corporate activities 560   659  (15.0)  1,165   1,318  (11.6)
     $20,967  $20,532  2.1% $41,366  $41,213  0.4%
                
    Operating income (loss):           
    Ethanol production$27,506  $33,543  (18.0)% $(23,652) $13,223  (278.9)%
    Agribusiness and energy services 10,281   (851) *  20,689   12,495  65.6 
    Partnership 12,104   11,916  1.6   23,913   24,787  (3.5)
    Intersegment eliminations 1,178   386  205.2   738   (1,680) (143.9)
    Corporate activities (1) (17,228)  (13,961) 23.4   (35,749)  13,555  (363.7)
     $33,841  $31,033  9.0% $(14,061) $62,380  (122.5)%
                
    Adjusted EBITDA:           
    Ethanol production$74,680  $52,052  43.5% $41,954  $50,263  (16.5)%
    Agribusiness and energy services 10,750   (254) *  21,473   13,697  56.8 
    Partnership 13,123   12,880  1.9   26,005   26,813  (3.0)
    Intersegment eliminations 1,657   386  329.3   738   (1,680) (143.9)
    Corporate activities (1) (15,828)  (14,140) 11.9   (33,608)  14,074  (338.8)
    EBITDA 84,382   50,924  65.7   56,562   103,167  (45.2)
    Other income (2) (27,712)  —  *  (27,712)  —  *
    Loss (gain) on sale of assets, net —   3,825  *  —   (33,068) *
    Proportional share of EBITDA adjustments to equity method investees 45   50  (10.0)  90   94  (4.3)
     $56,715  $54,799  3.5% $28,940  $70,193  (58.8)%

    (1) Includes corporate expenses, offset by a loss on sale of assets of $3.8 million and a $33.1 million gain on sale of assets for the three and six months ended June 30, 2021, respectively.
    (2) Other income for the three and six months ended June 30, 2022, includes a grant received from the USDA related to the Biofuel Producer Program of $27.7 million.

    * Percentage variances not considered meaningful


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

     Three Months Ended
    June 30,    		 Six Months Ended
    June 30,
     2022 2021 % Var. 2022 2021 % Var.
                
    Ethanol production           
    Ethanol sold (gallons)231,413 190,913 21.2% 427,761 368,913 16.0%
    Distillers grains sold (equivalent dried tons)593 494 20.0  1,109 967 14.7 
    Corn oil sold (pounds)72,232 54,875 31.6  131,527 101,438 29.7 
    Corn consumed (bushels)80,218 65,424 22.6  148,522 127,020 16.9 
                
    Agribusiness and energy services (1)           
    Domestic ethanol sold (gallons)231,093 228,274 1.2  412,818 407,094 1.4 
    Export ethanol sold (gallons)57,713 20,690 178.9  108,973 88,425 23.2 
     288,806 248,964 16.0  521,791 495,519 5.3 
                
    Partnership           
    Storage and throughput (gallons)232,451 191,842 21.2% 429,698 370,818 15.9%

    (1) Includes gallons from the ethanol production segment

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

     Three Months Ended
    June 30,    		 Three Months Ended
    June 30,
      2022  2021  2022  2021
         ($ per gallon produced)
            
    Ethanol production operating income$27,506 $33,543 $0.12 $0.18
    Depreciation and amortization 19,114  18,483  0.08  0.10
    Total adjusted ethanol production 46,620  52,026  0.20  0.28
            
    Intercompany fees, net:       
    Storage and logistics (partnership) 12,130  11,978  0.05  0.06
    Marketing and agribusiness fees (1) (agribusiness and energy services) 6,504  6,234  0.03  0.03
    Consolidated ethanol crush margin$65,254 $70,238 $0.28 $0.37

    (1) For the three months ended June 30, 2022 and 2021, includes $0.6 million and $1.5 million, respectively, for certain nonrecurring decommissioning and nonethanol operation costs.

    Liquidity and Capital Resources
    On June 30, 2022, Green Plains had $604.2 million in total cash, cash equivalents, restricted cash and marketable securities, and $70.0 million available under a committed revolving credit facility, which is subject to restrictions and other lending conditions. Total debt outstanding at June 30, 2022 was $902.6 million, including $308.4 million outstanding debt under working capital revolvers and other short-term borrowing arrangements and $58.5 million of non-recourse debt related to Green Plains Partners, net of debt issuance costs. Subsequent to the end of the quarter, the remaining balance of $64.0 million of the 4.00% 2024 Convertible Senior Notes was converted into common stock.

    Conference Call Information
    On Aug 2, 2022 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 second quarter 2022 operating results for each company. To participate in the live call, please pre-register here. All registrants will receive dial-in information and a unique PIN. The company advises participants to call at least 10 minutes prior to the start time. Alternatively, the conference call, transcript and presentation will be accessible on Green Plains’ website at https://investor.gpreinc.com/events-presentations.

    Non-GAAP Financial Measures
    Management uses EBITDA, adjusted EBITDA, segment EBITDA and consolidated ethanol crush margins to measure the company’s financial performance and to internally manage its businesses. EBITDA is defined as earnings before interest expense, income tax expense, depreciation and amortization excluding the change in right-of-use assets. Adjusted EBITDA includes adjustments related to our proportional share of EBITDA adjustments of our equity method investees, gains and losses related to the sale of assets, and other income associated with the USDA COVID-19 relief grant. Management believes these measures provide useful information to investors for comparison with peer and other companies. These measures should not be considered alternatives to net income or segment operating income, which are determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP calculations may vary from company to company. Accordingly, the company’s computation of adjusted EBITDA, segment EBITDA and consolidated ethanol crush margins may not be comparable with similarly titled measures of another company.

    About Green Plains Inc.
    Green Plains Inc. (NASDAQ:GPRE) is a leading biorefining company focused on the development and utilization of fermentation, agricultural and biological technologies in the processing of annually renewable crops into sustainable value-added ingredients. This includes the production of cleaner low carbon biofuels, renewable feedstocks for advanced biofuels and high purity alcohols for use in cleaners and disinfectants. Green Plains is an innovative producer of Ultra-High Protein and novel ingredients for animal and aquaculture diets to help satisfy a growing global appetite for sustainable protein. The Company also owns a 48.9% limited partner interest and a 2.0% general partner interest in Green Plains Partners LP. For more information, 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 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 includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements reflect management’s current views, which are subject to risks and uncertainties including, but not limited to, anticipated financial and operating results, plans and objectives that are not historical in nature. These statements may be identified by words such as “believe,” “expect,” “may,” “should,” “will” and similar expressions. Factors that could cause actual results to differ materially from those expressed or implied include: disruption caused by health epidemics, such as the coronavirus outbreak, competition in the industries in which Green Plains operates; commodity market risks, financial market risks; counterparty risks; risks associated with changes to federal policy or regulation, including changes to tax laws; risks related to closing and achieving anticipated results from acquisitions and disposals. Other factors can include risks associated with Green Plains’ ability to realize higher margins anticipated from the company’s high protein feed initiative or to achieve anticipated savings from Project 24 and other risks discussed in Green Plains’ reports filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. Green Plains assumes no obligation to update any such forward-looking statements, except as required by law.


    Consolidated Financial Results

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

     June 30,
    2022    		 December 31,
    2021
     (unaudited)  
    ASSETS
    Current assets   
    Cash and cash equivalents$508,151 $426,220
    Restricted cash 71,128  134,739
    Marketable securities 24,966  124,859
    Accounts receivable, net 158,363  119,961
    Income taxes receivable 1,067  911
    Inventories 315,040  267,838
    Other current assets 80,981  43,221
    Total current assets 1,159,696  1,117,749
    Property and equipment, net 980,917  893,517
    Operating lease right-of-use assets 66,681  64,042
    Other assets 88,714  84,447
    Total assets$2,296,008 $2,159,755
        
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities   
    Accounts payable$127,163 $146,063
    Accrued and other liabilities 45,115  56,980
    Derivative financial instruments 49,959  43,244
    Operating lease current liabilities 17,768  16,814
    Short-term notes payable and other borrowings 308,405  173,418
    Current maturities of long-term debt 99,164  35,285
    Total current liabilities 647,574  471,804
    Long-term debt 495,027  514,006
    Operating lease long-term liabilities 51,996  49,795
    Other liabilities 19,682  22,131
    Total liabilities 1,214,279  1,057,736
        
    Stockholders' equity   
    Total Green Plains stockholders' equity 931,173  950,500
    Noncontrolling interests 150,556  151,519
    Total stockholders' equity 1,081,729  1,102,019
    Total liabilities and stockholders' equity$2,296,008 $2,159,755


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

     Three Months Ended
    June 30,    		 Six Months Ended
    June 30,
      2022   2021  % Var.  2022   2021  % Var.
    Revenues           
    Product revenues$1,009,935  $721,786  39.9% $1,786,625  $1,273,766  40.3%
    Service revenues 2,459   2,632  (6.6)  7,204   4,292  67.8 
    Total revenues 1,012,394   724,418  39.8   1,793,829   1,278,058  40.4 
                
    Costs and expenses           
    Cost of goods sold (excluding depreciation and amortization expenses reflected below) 921,314   639,408  44.1   1,693,823   1,148,641  47.5 
    Operations and maintenance expenses 6,159   6,237  (1.3)  11,725   11,991  (2.2)
    Selling, general and administrative expenses 30,113   23,383  28.8   60,976   46,901  30.0 
    Loss (gain) on sale of assets, net —   3,825  *  —   (33,068) *
    Depreciation and amortization expenses 20,967   20,532  2.1   41,366   41,213  0.4 
    Total costs and expenses 978,553   693,385  41.1   1,807,890   1,215,678  48.7 
    Operating income (loss) 33,841   31,033  9.0   (14,061)  62,380  (122.5)
                
    Other income (expense)           
    Interest income 806   441  82.8   877   471  86.2 
    Interest expense (7,800)  (19,058) (59.1)  (16,606)  (50,737) (67.3)
    Other, net 28,165   (1,250) *  28,576   (1,240) *
    Total other income (expense) 21,171   (19,867) (206.6)  12,847   (51,506) (124.9)
    Income (loss) before income taxes and income (loss) from equity method investees 55,012   11,166  392.7   (1,214)  10,874  (111.2)
    Income tax benefit (expense) (2,895)  4,783  (160.5)  (1,742)  2,921  (159.6)
    Income (loss) from equity method investees 603   168  258.9   (196)  343  (157.1)
    Net income (loss) 52,720   16,117  227.1   (3,152)  14,138  (122.3)
    Net income attributable to noncontrolling interests 6,322   6,374  (0.8)  11,924   10,940  9.0 
    Net income (loss) attributable to Green Plains$46,398  $9,743  376.2% $(15,076) $3,198  *
                
    Earnings per share:           
    Net income (loss) attributable to Green Plains - basic$0.87  $0.21    $(0.28) $0.08   
    Net income (loss) attributable to Green Plains - diluted$0.73  $0.20    $(0.28)  0.07   
                
    Weighted average shares outstanding:           
    Basic 53,033   45,425     52,960   41,581   
    Diluted 66,895   58,171     52,960   42,675   


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

     Six Months Ended
    June 30,
      2022   2021 
    Cash flows from operating activities:   
    Net income (loss)$(3,152) $14,138 
    Noncash operating adjustments:   
    Depreciation and amortization 41,366   41,213 
    Gain on sale of assets, net —   (31,757)
    Loss on extinguishment of debt —   31,636 
    Other 9,513   3,386 
    Net change in working capital (154,368)  (88,828)
    Net cash used in operating activities (106,641)  (30,212)
        
    Cash flows from investing activities:   
    Purchases of property and equipment, net (128,283)  (59,899)
    Proceeds from the sale of assets —   73,846 
    Proceeds from the sale of marketable securities 99,917   — 
    Other investing activities (6,976)  (4,000)
    Net cash provided by (used in) investing activities (35,342)  9,947 
        
    Cash flows from financing activities:   
    Net proceeds - long term debt 43,796   219,142 
    Net proceeds (payments) - short-term borrowings 135,494   (16,033)
    Proceeds from issuance of common stock —   191,134 
    Other (18,987)  (33,415)
    Net cash provided by financing activities 160,303   360,828 
        
    Net change in cash, cash equivalents and restricted cash 18,320   340,563 
    Cash, cash equivalents and restricted cash, beginning of period 560,959   274,810 
    Cash, cash equivalents and restricted cash, end of period$579,279  $615,373 
        
        
    Reconciliation of total cash, cash equivalents and restricted cash:   
    Cash and cash equivalents$508,151  $496,932 
    Restricted cash 71,128   118,441 
    Total cash, cash equivalents and restricted cash$579,279  $615,373 


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

     Three Months Ended
    June 30,    		 Six Months Ended
    June 30,
      2022   2021   2022   2021 
    Net income (loss)$52,720  $16,117  $(3,152) $14,138 
    Interest expense (1) 7,800   19,058   16,606   50,737 
    Income tax expense (benefit) 2,895   (4,783)  1,742   (2,921)
    Depreciation and amortization (2) 20,967   20,532   41,366   41,213 
    EBITDA 84,382   50,924   56,562   103,167 
    Other income (3) (27,712)  —   (27,712)  — 
    Loss (gain) on sale of assets, net —   3,825   —   (33,068)
    Proportional share of EBITDA adjustments to equity method investees 45   50   90   94 
    Adjusted EBITDA$56,715  $54,799  $28,940  $70,193 

    (1) Interest expense for the three and six months ended June 30, 2021 includes losses on settlement of convertible notes of $9.5 million and $31.6 million, respectively.
    (2) Excludes amortization of operating lease right-of-use assets and amortization of debt issuance costs.
    (3) Other income for the three and six months ended June 30, 2022, includes a grant received from the USDA related to the Biofuel Producer Program of $27.7 million.


    Green Plains Inc. Contacts
    Investors: Phil Boggs | Executive Vice President, Investor Relations | 402.884.8700 | phil.boggs@gpreinc.com
    Media: Lisa Gibson | Communications Manager | 402.952.4971 | lisa.gibson@gpreinc.com

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