Pacific Ethanol, Inc., a leading producer and marketer of low-carbon renewable fuels and high-quality alcohol products in the United States, reported its financial results for the three months ended March 31, 2020.
“We are encouraged by recent positive trends in the fuel market, which we expect will accelerate as states begin to relax stay at home directives,” says Neil Koehler, Pacific Ethanol’s president and CEO. “Government orders related to the fight of COVID-19 decimated fuel demand and significantly impacted our first quarter 2020 results. As an essential business, we are thankful to our employees for their commitment to safely and efficiently produce and deliver low carbon renewable fuel, high quality alcohol and high protein feed to our customers in a time of need.
“Due to the lower demand and negative margin environment, we idled over 60% of our production capacity. Based on increasing demand and improving margins, we are gradually increasing production to meet market demand in ways and in areas where it makes economic sense. For years, our facilities in Pekin, IL have supplied high quality alcohol products that meet the FDA’s stringent purity standards. In response to new demand for sanitizers and disinfectants, we have successfully increased our production and sales of high-quality alcohol.
“Our diversification strategy in high value products, geography, technology, and logistics, has served us well during this crisis. As the market normalizes, we expect to benefit from the compelling cost, octane, carbon and health benefits of ethanol and the related long-term demand,” concluded Koehler.
Financial Results for the Three Months Ended March 31, 2020 Compared to 2019
- Net sales were $311.4 million, compared to $355.8 million.
- Total gallons sold of 184.9 million, compared to 211.8 million.
- Total production gallons sold of 116.5 million, compared to 122.5 million.
- Cost of goods sold was $324.3 million, compared to $358.1 million.
- Gross loss was $12.9 million, compared to a gross loss of $2.3 million.
- Selling, general and administrative expenses were $10.2 million, compared to $8.2 million.
- Operating loss was $23.1 million, compared to $10.5 million.
- Loss available to common stockholders was $25.4 million, or $0.47 per share, compared to $13.2 million, or $0.29 per share.
- Adjusted EBITDA was negative $12.3 million, compared to positive $1.6 million.
- Cash and cash equivalents were $26.8 million at March 31, 2020 compared to $19.0 million at December 31, 2019.
Subsequent to quarter end, in April, Pacific Ethanol, Inc. received $20.2 million in cash, before fees, and $16.5 million in promissory notes from the sale of its 74% ownership interest in Pacific Aurora, LLC to Aurora Cooperative Elevator Company for a total valuation of $52.8 million. Approximately $14.5 million of the cash proceeds was used to make principal payments on the company’s term debt.
