Pacific Ethanol, Inc. the leading marketer and producer of low-carbon renewable fuels in the Western United States, reported its financial results for the three-months ended March 31, 2012.Neil Koehler, the company's president and CEO, stated: "In the first quarter, we achieved revenue growth of 14% and increased total gallons sold by 36% over the same quarter of last year. While our bottom line was impacted by a compressed margin environment during the quarter, we remain focused on diligently managing our costs, increasing operating efficiencies and co-product revenues, and expanding our business operations to take advantage of extraordinary opportunities in the biofuels industry. In addition, our application for E15 registration has recently been approved by the EPA, enabling us to further benefit from this meaningful regulation. Looking forward, we remain confident that the industry margins will improve with increased demand for ethanol as we move into the summer driving season. We believe we are well positioned for profitable growth as we build our market share in the Western United States."
Financial Results for the Three Months Ended March 31, 2012
Net sales increased 14% to $197.7 million for the first quarter of 2012, compared to $173.1 million for the first quarter of 2011. Total gallons sold were 114.8 million for the first quarter of 2012, an increase of 36% over the 84.6 million gallons sold in the first quarter of 2011. The net sales growth was primarily driven by an increase in third party gallons sold.Gross loss was $7.5 million for the first quarter of 2012, compared to gross profit of $2.6 million in the first quarter of 2011. The decrease in gross profit was attributable to unfavorable margins from the Pacific Ethanol plants. SG&A expenses, including professional fees, were $3.4 million in the first quarter of 2012, compared to $4.2 million for the first quarter of 2011. Operating loss for the first quarter of 2012 was $10.9 million compared to an operating loss of $1.6 million for the same period in 2011, primarily due to additional losses attributable to the Pacific Ethanol plants.
Net loss available to common stockholders for the first quarter of 2012 was $5.3 million, compared to a net loss of $0.3 million for the first quarter of 2011. Adjusted EBITDA was negative $2.5 million for the first quarter of 2012, compared to adjusted EBITDA of positive $1.5 million in the first quarter of 2011.The company's cash balance was $5.0 million at March 31, 2012, compared to a cash balance of $8.9 million at December 31, 2011.Bryon McGregor, the company's CFO, said, "We recently announced that Kinergy has entered into an agreement with Wells Fargo to extend and improve its line of credit facility. We believe this extension demonstrates our lender's confidence in our business plan and improves our liquidity and borrowing costs."
Q1 Results Conference Call
Management will host a conference call at 1:30 p.m. PT/4:30 p.m. ET on May 10, 2012. Neil Koehler, Chief Executive Officer, and Bryon McGregor, Chief Financial Officer, will deliver prepared remarks followed by a question and answer session. The webcast for the call can be accessed from Pacific Ethanol's website at www.pacificethanol.net. Alternatively, you may dial the following number up to ten minutes prior to the scheduled conference call time: (877) 847-6066. International callers should dial 00-1-(970) 315-0267. The pass code will be 77137217#.
If you are unable to participate on the live call, the webcast will be archived for replay on Pacific Ethanol's website for one year. In addition, a telephonic replay will be available at 7:30 p.m. Eastern Time on Thursday, May 10, 2012 through 11:59 p.m. Eastern Time on Wednesday, May 16, 2012. To access the replay, please dial (855) 859-2056. International callers should dial 00-1-(404) 537-3406. The pass code will be 77137217#.
Reconciliation of Adjusted EBITDA to Net Income (Loss)
Management believes that certain financial measures not in accordance with generally accepted accounting principles ("GAAP") are useful measures of operations. The company defines Adjusted EBITDA as unaudited earnings before interest, taxes, depreciation and amortization and fair value adjustments. The table at the end of this release provides a reconciliation of Adjusted EBITDA to net income (loss) attributed to Pacific Ethanol, Inc. Management provides an Adjusted EBITDA measure so that investors will have the same financial information that management uses, which may assist investors in properly assessing the company's performance on a period-over-period basis. Adjusted EBITDA is not a measure of financial performance under GAAP, and should not be considered an alternative to net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of the company's results as reported under GAAP.