Pacific Ethanol announces leadership succession plan

By Pacific Ethanol Inc. | June 01, 2020

Pacific Ethanol Inc., a leading producer and marketer of low-carbon renewable fuels and high-quality alcohol products in the United States, announced its increased focus on high-quality alcohol production and its leadership succession plan.

  • The board of directors has appointed current Chief Operating Office Mike Kandris, as co-president and co-CEO.
  • Neil Koehler will retire as CEO and president on Sept. 30, 2020 and will be working closely with Kandris during the transition period. Both gentlemen will remain on the board of directors.
  • Management expects to report positive EBITDA for the second quarter and full year of 2020.
  • The company is current with its lenders and has paid $16.0 million in principal on term debt year to date. 

Pacific Ethanol Co-founder and Chairman of the Board Bill Jones said, “Demand for high-quality alcohol, the primary ingredient for hand sanitizers and disinfectants, has grown significantly since the onset of the COVID-19 pandemic. As COO, Mike has been a dynamic leader and was pivotal in implementing operational efficiencies and logistical modifications that increased the volume of high-quality alcohol at our Pekin, Illinois campus. These facilities have been part of our diversification strategy into high-quality alcohol, yeast, and additional high protein products and are performing well. We are confident Mike will advance additional initiatives and drive the next phase of our diversified strategy.”

Kandris said, “Our talented and committed team acted quickly to augment the high-quality production capacity in Pekin. A combination of factors, including lender support and PPP funding, provided us the financial means and time necessary to increase sales and negotiate forward contracts of high-quality alcohol with high contribution margins. As a result, we are forecasting strong financial performance at Pekin, which we expect to translate into positive EBITDA for the company for the second quarter and full year of 2020. We plan to utilize this growing revenue stream and related profitability to resolve our lender issues, reduce Company debt, and strengthen our balance sheet. I appreciate Neil’s guidance during our transition, and I am excited about our future.”

Koehler added, “As we shift our emphasis to high quality alcohol production, this is an appropriate time for a transition. I am excited to work with Mike and the entire Pacific Ethanol team in supporting this new trajectory. I will also continue to advocate for the economic, carbon, octane, and health benefits of ethanol in my role as chairman of the Renewable Fuels Association.” 

Jones concluded, “During his 17 years since co-founding Pacific Ethanol, Neil has provided great leadership, energy, and vision, including fostering our diversification strategy in high value products, geography, technology, and logistics. We are confident Neil will help facilitate a smooth transition. We are very optimistic about Pacific Ethanol’s ability to drive long-term shareholder value.”

Debt Repayment
The company is current with its lenders and has paid $16.0 million in principal on term debt year to date.

On May 26, 2020, the company entered into a note amendment agreement with the holders of its senior secured notes, details of which can be found in a form 8-K filed with the Securities and Exchange Commission today. The company has also agreed to provide its lenders with a restructuring plan no later than June 12, 2020.

Mike Kandris, co-president, co-CEO and director
Serving as a director since 2008, Kandris was named COO in 2013. Previously, for one year, he served as an independent contractor to the company with a primary focus on plant operations. Kandris has over 30 years of general management experience in the transportation and logistics industry. He was formerly president and chief operating officer of Ruan Transportation Management Systems where he had responsibility for all operations, sales, finance, and administrative functions. He also served as president of the Western Division of RTMS, which was heavily involved in the dairy industry.

Kandris served on the executive committee of the American Trucking Association and as a board member for the National Tank Truck Organization. Kandris has a BS degree in business from California State University, Hayward.