SIRE reports 'monumental' fiscal year results

By Southwest Iowa Renewable Energy LLC | December 04, 2014

Southwest Iowa Renewable Energy LLC announced its financial results for the twelve months ended Sept. 30. SIRE reported net income of $48.6 million or $3,681 per basic unit for the twelve months ended Sept. 30, compared to a net loss of $5.5 million or $417 per basic unit for the twelve months ended Sept. 30, 2013.

Modified EBITDA was $78.1 million for the twelve months ended Sept. 30, compared to $19.0 million for the twelve months ended Sept. 30, 2013. This is defined as earnings before interest, income taxes, depreciation, amortization, unrealized hedging gains and losses and loss from debt extinguishment.

SIRE had $9.3 million in cash and cash equivalents and $36.0 million available under revolving loan agreements, for total cash and available borrowings of $45.3 million at Sept. 30.

Brian Cahill, SIRE's president and CEO stated, "Fiscal 2014 was monumental for SIRE. Our profit was excellent, and as we reported earlier, we completed our bank debt refinancing, paid down over half of our subdebt, and renewed the remainder, all at improved terms."

"During this fiscal year, we continued to see some of the best margins in the history of the company, continuing the trend of the past few quarters. We were able to continue operating at full capacity nearly every day, capitalizing not only on our ability to manage our railcar fleet during the winter storms that caused many delays and slowdowns, but also on our dual-powering, as we utilized our steam line the majority of the second and third quarters, avoiding the higher prices and curtailments for natural gas that others in the industry experienced. We did have a weather problem in June, when heavy rain caused damage to our steam line, taking it out of service through the summer. Fortunately, natural gas prices have returned to a reasonable level, and have not affected our profitability"

"Our book value per share is now $7,570 per unit," continued Cahill, "with $3,681 profit per basic unit for Fiscal 2014." During Fiscal 2014, SIRE sold 115.9 million gallons of ethanol.

Cahill commented, "Transportation and the rail situation continue to be a challenge, for us as well as the ethanol industry. We continue to focus on running the plant at full capacity when possible, with a balance of optimizing the yield and profit."

In July, SIRE announced the completion of a $66.0 million senior credit agreement with Farm Credit Services of America and CoBank, with the proceeds used to refinance senior bank debt. The credit agreement provides SIRE with a term loan of $30 million and a revolving term loan of $36 million. Interest rate on the credit agreement was reduced from 6.0 percent to LIBOR plus 3.25 percent.

SIRE also completed a $26.2 million Subordinated debt refinancing, with the interest rate reduced from LIBOR plus 7.5 percent to LIBOR plus 6.25 percent. Prior to completing this offering, SIRE also paid a total of $26.8 million to its subordinated lenders. The company has given written notice to its subordinated lenders it would make payment in full on the remaining subordinated debt in December.