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COUNCIL BLUFFS, Iowa, Jan. 30, 2012 /PRNewswire/ -- On January 30, 2012, Southwest Iowa Renewable Energy, LLC ("") announced its unaudited financial results for the first fiscal quarter of fiscal year 2012 ended December 31, 2011. SIRE reported a net income of $8,995,321, or $684.63 per unit, compared to a net loss of $396,318, or $30.61 per unit, for the same period in 2011. The cash flow provided by (used in) operations for the first fiscal quarter of 2012 was $7,141,342, compared to ($4,474,497) for the same period in 2011.
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Adjusted EBITDA, which is defined as earnings before interest, income taxes, and depreciation and/or amortization, or EBITDA, as adjusted for unrealized hedging losses (gains), was $9,920,644 for the first quarter in fiscal 2012 and $3,701,123 for the same period in fiscal 2011. At December 31, 2011, SIRE had $7,353,932 million in cash and equivalents and $18,750,000 available under committed loan agreements (subject to satisfaction of specified lending conditions and covenants), as well as an additional $6,250,000 available under uncommitted loan agreements. For reconciliations of Adjusted EBITDA to net income attributable to SIRE, see "Adjusted EBITDA" below.
Brian Cahill, SIRE's General Manager and CEO, stated, "Our first quarter in fiscal year 2012, with approximately $9 million in net income, reflects favorable margins resulting from the relative prices of our primary inputs and products during the quarter. Our positive net income for the quarter also reflects the results of significant strides in process improvement, liquidity and debt reduction made during the previous fiscal year. The continuing net debt reduction of approximately $10.5 million during the first quarter of fiscal 2012 will help position us for continuing improvements in liquidity in fiscal 2012."
The Volumetric Ethanol Excise Tax Credit (""), which provided fuel blenders with a tax credit to blend ethanol with gasoline, expired on December 31, 2011. The loss of VEETC, the volatility of prices of our inputs, coupled with the current competitive dynamics of the fuels market, are expected to result in less favorable margins in the next three quarters of the year, primarily due to the price of ethanol.
SIRE is an Iowa limited liability company, located in Council Bluffs, Iowa, formed in March, 2005 to construct and operate a 110 million gallon name plate capacity ethanol plant. SIRE began producing ethanol in February, 2009 and sells its ethanol, modified wet distillers grains with solubles, corn syrup, and corn oil in the continental United States. SIRE also sells its dried distillers grains with solubles in the continental United States, Mexico and the Pacific Rim.
Summary Balance Sheets
SOUTHWEST IOWA RENEWABLE ENERGY, LLC
Balance Sheets
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December 31, September 30,
ASSETS 2011 2011
------ ------------- --------------
(Unaudited)
Current Assets
Cash and cash equivalents $7,353,932 $11,006,590
Restricted cash 301,741 301,361
Accounts receivable 318,728 224,176
Accounts receivable,
related party 16,460,473 17,642,245
Due from broker 1,626,070 3,428,450
Inventory 12,447,055 11,198,147
Derivative financial
instruments, related
party 7,282 0
Prepaid expenses and other 1,504,243 1,107,354
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Total current assets 40,019,524 44,908,323
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Property, Plant, and
Equipment
Land 2,064,090 2,064,090
Plant, Building and
Equipment 203,965,704 203,749,761
Office and Other Equipment 742,360 742,360
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Total Cost 206,772,154 206,556,211
Accumulated Depreciation (45,147,143) (42,293,441)
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Net property and equipment 161,625,011 164,262,770
Other Assets
Financing costs, net of
amortization of
$2,446,577 and $2,341,400 1,672,472 1,538,733
Total other assets 1,672,472 1,538,733
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Total Assets $203,317,007 $210,709,826
September
LIABILITIES AND MEMBERS' EQUITY December 31, 30,
------------------------------- ------------ ----------
2011 2011
---- ----
(Unaudited)
Current Liabilities
Accounts payable $1,578,703 $2,090,561
Accounts payable, related parties 4,053,367 5,239,128
Derivative financial instruments,
related party 0 2,097,075
Derivative financial instruments 576,688 2,875,075
Accrued expenses 2,285,432 2,615,092
Accrued expenses, related parties 4,432,606 3,831,583
Current maturities of notes
payable 12,897,698 21,236,780
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Total current liabilities 25,824,494 39,985,294
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Long Term Liabilities
Notes payable, less current
maturities 119,198,464 121,400,805
Other 575,011 600,010
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Total long term liabilities 119,773,475 122,000,815
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Commitments and Contingencies
Members' Equity
Members' capital, 13,139 Units
issued and outstanding 76,474,111 76,474,111
Accumulated (deficit) (18,755,073) (27,750,394)
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Total members' equity 57,719,038 48,723,717
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Total Liabilities and Members'
Equity $203,317,007 $210,709,826
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Financial Results
Statements of Operations (Unaudited)
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Three Months Three Months
Ended Ended
December 31, December 31,
2011 2010
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Revenues $95,196,683 $62,265,743
Cost of Goods Sold
Cost of goods sold-
non hedging 85,816,377 58,144,413
Realized & unrealized
hedging (gains) and
losses (3,390,641) 887,819
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Cost of Goods Sold 82,425,736 59,032,232
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Gross Margin 12,770,947 3,233,511
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General and
Administrative
Expenses 1,312,817 1,200,888
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Operating Income 11,458,130 2,032,623
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Other (Income)
Expense
Interest income (4,717) (3,972)
Interest expense 2,474,364 2,439,563
Miscellaneous income (6,838) (6,650)
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Total 2,462,809 2,428,941
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Net Income (Loss) $8,995,321 $(396,318)
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Weighted Average
Units
Outstanding-Basic &
Diluted 13,139 13,139
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Net income (loss) per
unit-basic & diluted $684.63 $(30.16)
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Management uses Adjusted EBITDA, a non-GAAP measure, to measure the SIRE's financial performance and to internally manage its business. Management believes that adjusted EBITDA provides useful information to investors as a measure of comparison with peer and other companies. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or cash flow as determined in accordance with generally accepted accounting principles. Adjusted EBITDA calculations may vary from company to company. Accordingly, our computation of Adjusted EBITDA may not be comparable with a similarly-titled measure of another company.
The following sets forth the reconciliation of Net Loss to Adjusted EBITDA (unaudited) for the periods indicated:
Three Months Three Months
Ended Ended
December 31, December 31,
2011 2010
Amounts Amounts
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Net income
(loss) $8,995,321 $(396,318)
Interest Expense 2,474,364 2,435,591
Depreciation 2,853,703 4,849,211
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EBITDA $14,323,388 $6,888,484
Change in
Unrealized
hedging (gains)
losses (4,402,744) (3,187,361)
Adjusted EBITDA $9,920,644 $3,701,123
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Adjusted EBITDA
per unit $755.05 $281.69
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Statistical Information
Three Months Ended December Three Months Ended December
31, 2011 31, 2010
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(Unaudited) (Unaudited)
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Gallons/ Gallons/ Gallons/ Gallons/
Tons Sold % of Tons Tons Sold % of Tons
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Average Average
Revenues Price Revenues Price
-------- -------- -------- --------
Statistical
Revenue
Information
Denatured Ethanol 30,873,285 81% $2.48 26,333,450 82.4% $1.93
Dry Distiller's
Grains 70,376 17% $197.64 80,360 18% $133.17
Corn Oil 2,805 2% $824.29 - 0% $ -
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