SIRE reports strong margins in first quarter fiscal 2015 results

By Southwest Iowa Renewable Energy | February 17, 2015

Southwest Iowa Renewable Energy LLC has announced unaudited financial results for the three months ended Dec. 31.

SIRE reported net income of $9.8 million or $737.45 per unit for the three months ended Dec. 31, compared to a net income of $10.9 million or $826.23 per unit for the three months ended Dec. 31, 2013.

SIRE revenue from operations was $72.5 million in the three months ended Dec. 31, compared to $80.2 million in the the three months ended Dec. 31, 2013.

Modified EBITDA, which is defined as earnings before interest, income taxes, depreciation, amortization, and unrealized hedging gains and losses, and loss from debt extinguishment, was $16.7 million for the three months ended Dec. 31 compared to$15.8 million for the three months ended Dec. 31, 2013.

SIRE had $3.1 million in cash and cash equivalents and $30.8 million available under revolving loan agreements, for a total cash and available borrowings of $33.9 million at December 31, 2014. The cash flow from operations was $17.2 million compared to $15.8 million for the three months ended Dec. 31, 2014 and 2013, respectively.

Brian Cahill, president and CEO of SIRE, stated, "This first quarter of fiscal 2015, we saw some of the best margins in the history of the company, continuing the trends of the previous quarters.  Corn prices have retreated back below $4.00; we averaged $3.82 per bushel during this first quarter of fiscal 2015, which is a nice decrease over this past year's price of $4.42.   However, ethanol margins in the U.S. have been very volatile towards the end of 2014. Demand for ethanol has been strong with the lower prices, both in the U.S. and abroad. The industry has continued to adjust and we expect we will have another good year."

During the first quarter of fiscal 2015, SIRE produced 33.0 million gallons of ethanol, compared to 33.2 million gallons during the first quarter of fiscal 2014.  Cahill commented, "We continue to focus on running the plant at full capacity, with a balance of optimizing the yield and profit."  SIRE recorded a $4.7 million non-cash charge in conjunction with the final payment of subordinated debt, and the related put option issued to ICM.

2015 first quarter highlights include:

- SIRE retired all the remaining outstanding convertible subordinated debt of approximately $27.0 million

- In December 2014, the company entered into new service agreements with Bunge for five years with an additional five year optional extension

- In December 2014, in connection with payment of the subordinated debt owed to ICM, SIRE entered into an agreement with ICM to grant ICM the right to sell to the company their 1000 series C Units and 18 series A Units.

- The company made its first $1.5 million payment to FCSA/CoBank on its senior debt