Pacific Ethanol reports record net sales in 2015 results

By Erin Voegele | March 10, 2016

Pacific Ethanol Inc. has released fourth quarter financial results, reporting net sales of $378.8 million for the three-month period, up 47 percent when compared with the same quarter of the prior year.

Gross profit for the quarter was $9.5 million, down from $18.4 million during the same period of 2014. Net loss available to common stockholders was $1.1 million, or 3 cents per diluted share, compared to a net income of $11.9 million, or 48 cents per diluted share, for fourth quarter of 2014.

Adjusted net income for the fourth quarter was $700,000, or 2 cents per diluted share, compared $9.7 million, or 39 cents per diluted share, for the same period of 2014. Adjusted EBITDA was $11 million, down from $16.3 million for the fourth quarter of the previous year.

For the full year, net sales were a record $1.2 billion, compared to $1.1 billion in 2014. Gross profit for 2015 fell to $7.4 million, from $108.5 million in 2014. Operating loss for last year was $18 million, compared to an operating income of $91.4 million in 2014.

Net loss available to common stockholders was $20.1 million for the full year, or 60 cents per diluted share, compared to a net income available to common stockholders of $19.4 million, or 86 cents per diluted share, for 2014.

Adjusted net loss was $11 million, or 33 cents per diluted share, for 2015, compared to adjusted net income of $59.3 million, or $2.62 per diluted share, the previous year. Adjusted EBITDA was $16.2 million last year, down from $95 million in 2014.

 “In 2015, we made significant progress in positioning the company for long-term growth. We completed our acquisition of Aventine in July, more than doubling our production capacity,” said Neil Koehler, president and CEO of Pacific Ethanol. “Our expanded footprint is demonstrating operating benefits. The diversification of geography, technology, feedstocks and products strengthens our performance across margin cycles and provides a strong platform for growth.

“Looking ahead, we remain focused on improving our performance through further lowering production costs, expanding sales of higher value ethanol and coproducts and reducing the carbon intensity of our ethanol,” Koehler continued.

“In the first quarter of 2016, we are moderating production levels to match supply and demand. While the demand for ethanol continues to grow, current industry ethanol inventories remain high,” he said. “We are confident that the fundamentals of ethanol as a valuable source of octane and carbon reductions will support continued growth in demand and improved production margins.”

During an investor call, Koehler noted that the company’s four Western ethanol plants are now completely debt-free. He also indicated the company committed $26 million to capital improvements last year. Moving into 2016, he said Pacific Ethanol is focusing on projects that improve plant performance and reduce carbon emissions. “We believe these projects represent the highest near-term potential value to the company,” Koehler added.

According to Koehler, Pacific Ethanol’s Stockton, California, facility began production of cellulosic ethanol in December. The company is currently awaiting approval from the U.S. EPA to generate D3 cellulosic RINs for plant’s cellulosic output, which is expected to reach 1 million gallons per year. Pacific Ethanol is also adding a cogeneration technology at the Stockton plant that will convert process waste gas and natural gas into electricity and steam.

Regarding current market conditions, Koehler noted Pacific Ethanol is continuing efforts to moderate production levels to match supply with demand. The company is currently running its production assets at approximately 85 percent capacity. Increased demand due to the summer driving season and continued strong exports is expected to create a better supply and demand balance later this year.