Green Plains Reports Second Quarter 2023 Financial Results

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Results for the Second Quarter of 2023 and Future Outlook:

  • EPS of ($0.89) per diluted share, compared to EPS of $0.73 per diluted share for the same period in the prior year

  • Consolidated crush margin of $0.01 per gallon for the second quarter, inclusive of a significant negative earnings impact from Wood River not operating for a majority of the quarter, and additional planned and unplanned downtime, which positions the company for strong last half 2023 operational performance

  • Outlook for the second half of 2023 materially stronger based on current industry margins, strong year-over-year Ultra-High Protein sales with expanding margin structure, recovery of renewable corn oil pricing and the return to full production operating rates

  • Key milestones to achieve 2025 EBITDA outlook remain on track, as well as favorable financial growth for the decarbonization strategy and 60% protein strategy

  • Dedicating up to 20% of Ultra-High Protein production capacity to fulfill successful commercialization of 60% protein concentrations

OMAHA, Neb., August 04, 2023--(BUSINESS WIRE)--Green Plains Inc. (NASDAQ:GPRE) today announced financial results for the second quarter of 2023. Net loss attributable to the company was $52.6 million, or ($0.89) per diluted share, compared to net income attributable to the company of $46.4 million, or $0.73 per diluted share, for the same period in 2022. Revenues were $857.6 million for the second quarter of 2023 compared with $1,012.4 million for the same period last year. EBITDA of ($15.0) million compared to $84.4 million inclusive of a USDA COVID-19 relief payment of $27.7 million for the same period in the prior year.

"The quarter was negatively impacted by unfortunate events that operationally have now been rectified, and our system is once again operating near full capacity in order to take advantage of solid fundamentals for the last half of 2023 across all of our products, when we expect to show the financial capability of the first stage of our transformation," said Todd Becker, President and Chief Executive Officer. "In addition to the significant impact of our Wood River plant being down most of the quarter, which we expect partial insurance recovery in the last half for this event, we experienced planned and unplanned downtime at many of our largest facilities that also negatively impacted the quarter. We acted in the second quarter to prepare our assets for a solid last half of the year where we expect to now be able to avoid fall shutdowns at several of our large locations. In recent weeks, our entire platform has been operating near capacity, with Ultra-High Protein production once again achieving rates above 900 tons per day."

"Fundamentals for our strategy have improved across our platform in all four pillars – protein, oil, sugar and carbon," commented Becker. "Driving demand remains robust, protein margins have expanded, and renewable corn oil prices have improved. With the current margin structure and higher anticipated operational rates, EBITDA for the last half of 2023 is projected to be materially stronger."

"Our protein sales strategy is seeing continued success, and we are in significant late stage negotiations on our first commercial quantities of 60% protein with deliveries of this innovative ingredient expected in the fourth quarter," added Becker. "We also continue to have material negotiations with customers for our clean sugar product suite to be produced in the first quarter of 2024. Renewable corn oil pricing has improved from recent lows, and we are positioned to capitalize on the continued growth in demand for this low-CI feedstock from the renewable diesel market."

"The future we have been talking about since we started on this transformation journey is upon us," concluded Becker. "Our clean sugar facility at Shenandoah and our MSC turnkey project with Tharaldson are both on track to come online in the first quarter of 2024, and we remain focused on execution to deliver on the remaining components of our evolution into the biorefinery platform of the future."

Highlights and Recent Developments

  • Announced technology collaboration with Equilon Enterprises LLC to combine fermentation, mechanical separation and processing, and fiber conversion into one platform

  • Returned to full run rate capabilities across biorefinery platform in July 2023

  • Announced offer to acquire all publicly held common units of Green Plains Partners LP

  • Hosted IRA Teach-in, highlighting opportunities to decarbonize biorefinery platform supported by incentives included in the Inflation Reduction Act

Results of Operations

Green Plains ethanol production segment sold 194.8 million gallons of ethanol during the second quarter of 2023, compared with 231.4 million gallons for the same period in 2022. The consolidated ethanol crush margin was $1.9 million, or $0.01 per gallon, for the second quarter of 2023, compared with $65.3 million, or $0.28 per gallon, for the same period in 2022. The consolidated ethanol crush margin is the ethanol production segment’s operating income before depreciation and amortization, which includes renewable corn oil and Ultra-High Protein, plus intercompany storage, transportation, nonrecurring decommissioning costs, nonethanol operating activities and other fees, net of related expenses.

Consolidated revenues decreased $154.8 million for the three months ended June 30, 2023, compared with the same period in 2022, primarily due to lower volumes sold on ethanol, distillers grains and renewable corn oil, and lower weighted average selling prices on distillers grains and renewable corn oil, offset by higher weighted average selling prices on ethanol and Ultra-High Protein, and higher volumes for Ultra-High Protein. Revenues were also lower within our agribusiness and energy services segment as a result of decreased trading volumes and margins.

Net loss attributable to Green Plains increased $99.0 million and EBITDA decreased $99.4 million for the three months ended June 30, 2023, compared with the same period last year, primarily due to decreased volumes and margins in our ethanol production segment, lower trading volumes and margins in our agribusiness and energy services segment and the $27.7 million USDA COVID-19 relief grant received in the second quarter of 2022. Interest expense increased $1.9 million for the three months ended June 30, 2023, compared with the same period in 2022, primarily due to reduced capitalized interest as certain projects have been completed. Income tax benefit was $1.0 million for the three months ended June 30, 2023, compared with income tax expense of $2.9 million for the same period in 2022, primarily due to a decrease in the valuation allowance recorded against certain deferred tax assets for the three months ended June 30, 2023.

Segment Information

The company reports the financial and operating performance for the following three operating segments: (1) ethanol production, which includes the production of ethanol, distillers grains, Ultra-High Protein and renewable corn oil, (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading for company-produced and third-party ethanol, distillers grains, Ultra-High Protein, renewable corn oil, grain, natural gas and other commodities and (3) partnership, which includes fuel storage and transportation services. Intercompany fees charged to the ethanol production segment for storage and logistics services, grain procurement and product sales are included in the partnership and agribusiness and energy services segments and eliminated upon consolidation. Third-party costs of grain consumed and revenues from product sales are reported directly in the ethanol production segment.

GREEN PLAINS INC.

SEGMENT OPERATIONS

(unaudited, in thousands)

Three Months Ended
June 30,

Six Months Ended
June 30,

2023

2022

% Var.

2023

2022

% Var.

Revenues

Ethanol production

$

726,739

$

861,166

(15.6)%

$

1,422,233

$

1,498,719

(5.1)%

Agribusiness and energy services

135,823

157,559

(13.8)

278,209

306,271

(9.2)

Partnership

20,523

19,654

4.4

41,298

38,754

6.6

Intersegment eliminations

(25,453

)

(25,985

)

(2.0)

(51,159

)

(49,915

)

2.5

$

857,632

$

1,012,394

(15.3)%

$

1,690,581

$

1,793,829

(5.8)%

Gross margin

Ethanol production

$

(4,207

)

$

56,345

(107.5)%

$

(25,660

)

$

32,338

(179.3)%

Agribusiness and energy services

6,414

13,903

(53.9)

15,520

28,176

(44.9)

Partnership

20,523

19,654

4.4

41,298

38,754

6.6

Intersegment eliminations

(189

)

1,178

(116.0)

(673

)

738

(191.2)

$

22,541

$

91,080

(75.3)%

$

30,485

$

100,006

(69.5)%

Depreciation and amortization

Ethanol production

$

22,425

$

19,114

17.3%

$

45,363

$

37,546

20.8%

Agribusiness and energy services

536

470

14.0

1,349

934

44.4

Partnership

828

823

0.6

1,644

1,721

(4.5)

Corporate activities

837

560

49.5

1,656

1,165

42.1

$

24,626

$

20,967

17.5%

$

50,012

$

41,366

20.9%

Operating income (loss)

Ethanol production (1)

$

(36,370

)

$

27,506

(232.2)%

$

(89,732

)

$

(23,652

)

279.4%

Agribusiness and energy services

2,173

10,281

(78.9)

6,299

20,689

(69.6)

Partnership

11,420

12,104

(5.7)

23,316

23,913

(2.5)

Intersegment eliminations

(189

)

1,178

(116.0)

(673

)

738

(191.2)

Corporate activities

(19,514

)

(17,228

)

13.3

(38,230

)

(35,749

)

6.9

$

(42,480

)

$

33,841

(225.5)%

$

(99,020

)

$

(14,061

)

*

Adjusted EBITDA

Ethanol production (1)

$

(13,749

)

$

74,680

(118.4)%

$

(44,016

)

$

41,954

(204.9)%

Agribusiness and energy services

2,871

10,750

(73.3)

8,098

21,473

(62.3)

Partnership

12,797

13,123

(2.5)

25,744

26,005

(1.0)

Intersegment eliminations

(189

)

1,657

(111.4)

(673

)

738

(191.2)

Corporate activities

(16,702

)

(15,828

)

5.5

(31,821

)

(33,608

)

(5.3)

EBITDA

(14,972

)

84,382

(117.7)

(42,668

)

56,562

(175.4)

Other income (2)

—

(27,712

)

*

—

(27,712

)

*

Proportional share of EBITDA adjustments to equity method investees

45

45

—

90

90

—

$

(14,927

)

$

56,715

(126.3)%

$

(42,578

)

$

28,940

(247.1)%

(1) Ethanol production includes an inventory lower of cost or net realizable value adjustment of $9.5 million for the three and six months ended June 30, 2023.
(2) Other income for the three and six months ended June 30, 2022 includes a grant received from the USDA related to the Biofuel Producer Program of $27.7 million.

* Percentage variances not considered meaningful

GREEN PLAINS INC.

SELECTED OPERATING DATA

(unaudited, in thousands)

Three Months Ended
June 30,

Six Months Ended
June 30,

2023

2022

% Var.

2023

2022

% Var.

Ethanol production

Ethanol sold (gallons)

194,753

231,413

(15.8)%

401,633

427,761

(6.1)%

Distillers grains sold (equivalent dried tons)

458

576

(20.5)

940

1,080

(13.0)

Ultra-High Protein sold (tons)

44

17

158.8

96

29

231.0

Renewable corn oil sold (pounds)

64,689

72,232

(10.4)

132,700

131,527

0.9

Corn consumed (bushels)

67,336

80,218

(16.1)

138,571

148,522

(6.7)

Agribusiness and energy services (1)

Domestic ethanol sold (gallons)

260,119

231,093

12.6

535,002

412,818

29.6

Export ethanol sold (gallons)

2,019

57,713

(96.5)

4,400

108,973

(96.0)

262,138

288,806

(9.2)

539,402

521,791

3.4

Partnership

Storage and throughput (gallons)

196,159

232,451

(15.6)%

404,231

429,698

(5.9)%

(1) Includes gallons from the ethanol production segment.

GREEN PLAINS INC.

CONSOLIDATED CRUSH MARGIN

(unaudited, in thousands except per gallon amounts)

Three Months Ended
June 30,

Three Months Ended
June 30,

2023

2022

2023

2022

($ per gallon produced)

Ethanol production operating income (loss) (1)

$

(36,370

)

$

27,506

$

(0.19

)

$

0.12

Depreciation and amortization

22,425

19,114

0.12

0.08

Adjusted ethanol production operating income (loss)

(13,945

)

46,620

(0.07

)

0.20

Intercompany fees, net

Storage and logistics (partnership)

9,433

12,130

0.05

0.05

Marketing and agribusiness fees (2) (agribusiness and energy services)

6,445

6,504

0.03

0.03

Consolidated ethanol crush margin

$

1,933

$

65,254

$

0.01

$

0.28

(1) Ethanol production includes an inventory lower of cost or net realizable value adjustment of $9.5 million for the three and six months ended June 30, 2023.

(2) For the three months ended June 30, 2023 and 2022, includes $1.9 million and $0.6 million, respectively, for certain nonrecurring decommissioning costs and nonethanol operating activities.

Liquidity and Capital Resources

As of June 30, 2023, Green Plains had $359.8 million in total cash and cash equivalents, and restricted cash, and $128.0 million available under a committed revolving credit facility, which is subject to restrictions and other lending conditions. Total debt outstanding at June 30, 2023 was $742.5 million, including $247.1 million outstanding debt under working capital revolvers and other short-term borrowing arrangements and $57.1 million of non-recourse debt related to Green Plains Partners, net of debt issuance costs.

Conference Call Information

On August 4, 2023 Green Plains Inc. and Green Plains Partners LP will host a joint conference call at 9 a.m. Eastern time (8 a.m. Central time) to discuss second quarter 2023 operating results for each company. Domestic and international participants can access the live conference by dialing 888.210.4215 and 646.960.0269, respectively, and referencing conference ID 5027523. Participants are advised to call at least 10 minutes prior to the start time. Alternatively, the conference call and presentation will be accessible on Green Plains’ website https://investor.gpreinc.com/events-presentations.

Non-GAAP Financial Measures

Management uses EBITDA, adjusted EBITDA, segment EBITDA and consolidated ethanol crush margins to measure the company’s financial performance and to internally manage its businesses. EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization excluding the change in right-of-use assets. Adjusted EBITDA includes adjustments related to our proportional share of EBITDA adjustments of our equity method investees, gains and losses related to the sale of assets, and other income associated with the USDA COVID-19 relief grant. Management believes these measures provide useful information to investors for comparison with peer and other companies. These measures should not be considered alternatives to net income or segment operating income, which are determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP calculations may vary from company to company. Accordingly, the company’s computation of adjusted EBITDA, segment EBITDA and consolidated ethanol crush margins may not be comparable with similarly titled measures of another company.

About Green Plains Inc.

Green Plains Inc. (NASDAQ:GPRE) is a leading biorefining company focused on the development and utilization of fermentation, agricultural and biological technologies in the processing of annually renewable crops into sustainable value-added ingredients. This includes the production of cleaner low carbon biofuels, renewable feedstocks for advanced biofuels and high purity alcohols for use in cleaners and disinfectants. Green Plains is an innovative producer of Ultra-High Protein and novel ingredients for animal and aquaculture diets to help satisfy a growing global appetite for sustainable protein. The Company also owns a 48.8% limited partner interest and a 2.0% general partner interest in Green Plains Partners LP. For more information, visit www.gpreinc.com.

About Green Plains Partners LP

Green Plains Partners LP (NASDAQ:GPP) is a fee-based Delaware limited partnership formed by Green Plains Inc. to provide fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage terminals, transportation assets and other related assets and businesses. For more information about Green Plains Partners, visit www.greenplainspartners.com.

Forward-Looking Statements

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements reflect management’s current views, which are subject to risks and uncertainties including, but not limited to, anticipated financial and operating results, plans and objectives that are not historical in nature. These statements may be identified by words such as "believe," "expect," "may," "should," "will" and similar expressions. Factors that could cause actual results to differ materially from those expressed or implied include: competition in the industries in which Green Plains operates; commodity market risks, financial market risks; counterparty risks; risks associated with changes to federal policy or regulation, including changes to tax laws; risks related to closing and achieving anticipated results from acquisitions and disposals. Other factors can include risks associated with Green Plains’ ability to realize higher margins anticipated from the company’s high protein feed initiative or to achieve anticipated benefits from its plant upgrade and modernization program, disruption caused by health epidemics, such as the COVID-19 outbreak, and other risks discussed in Green Plains’ reports filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. Green Plains assumes no obligation to update any such forward-looking statements, except as required by law.

GREEN PLAINS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

June 30,
2023

December 31,
2022

(unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

312,858

$

444,661

Restricted cash

46,926

55,615

Accounts receivable, net

132,336

108,610

Income taxes receivable

1,299

1,286

Inventories

257,651

278,950

Other current assets

65,248

39,628

Total current assets

816,318

928,750

Property and equipment, net

1,024,561

1,029,327

Operating lease right-of-use assets

85,332

73,244

Other assets

96,585

91,810

Total assets

$

2,022,796

$

2,123,131

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

105,094

$

234,301

Accrued and other liabilities

50,215

44,443

Derivative financial instruments

85,030

47,941

Operating lease current liabilities

24,505

20,721

Short-term notes payable and other borrowings

247,112

137,678

Current maturities of long-term debt

1,835

1,838

Total current liabilities

513,791

486,922

Long-term debt

493,571

495,243

Operating lease long-term liabilities

64,098

55,515

Other liabilities

25,484

24,385

Total liabilities

1,096,944

1,062,065

Stockholders' equity

Total Green Plains stockholders' equity

777,948

910,031

Noncontrolling interests

147,904

151,035

Total stockholders' equity

925,852

1,061,066

Total liabilities and stockholders' equity

$

2,022,796

$

2,123,131

GREEN PLAINS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands except per share amounts)

Three Months Ended
June 30,

Six Months Ended
June 30,

2023

2022

2023

2022

Revenues

$

857,632

$

1,012,394

$

1,690,581

$

1,793,829

Costs and expenses

Cost of goods sold (excluding depreciation and amortization expenses reflected below)

835,091

921,314

1,660,096

1,693,823

Operations and maintenance expenses

7,070

6,159

14,323

11,725

Selling, general and administrative expenses

33,325

30,113

65,170

60,976

Depreciation and amortization expenses

24,626

20,967

50,012

41,366

Total costs and expenses

900,112

978,553

1,789,601

1,807,890

Operating income (loss)

(42,480

)

33,841

(99,020

)

(14,061

)

Other income (expense)

Interest income

2,771

806

5,936

877

Interest expense

(9,741

)

(7,800

)

(19,479

)

(16,606

)

(161

)

28,165

28

28,576

Total other income (expense)

(7,131

)

21,171

(13,515

)

12,847

Income (loss) before income taxes and income (loss) from equity method investees

(49,611

)

55,012

(112,535

)

(1,214

)

Income tax benefit (expense)

1,019

(2,895

)

(2,410

)

(1,742

)

Income (loss) from equity method investees

272

603

376

(196

)

Net income (loss)

(48,320

)

52,720

(114,569

)

(3,152

)

Net income attributable to noncontrolling interests

4,284

6,322

8,359

11,924

Net income (loss) attributable to Green Plains

$

(52,604

)

$

46,398

$

(122,928

)

$

(15,076

)

Earnings per share

Net income (loss) attributable to Green Plains - basic

$

(0.89

)

$

0.87

$

(2.09

)

$

(0.28

)

Net income (loss) attributable to Green Plains - diluted

$

(0.89

)

$

0.73

$

(2.09

)

$

(0.28

)

Weighted average shares outstanding

Basic

58,874

53,033

58,714

52,960

Diluted

58,874

66,895

58,714

52,960

GREEN PLAINS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

Six Months Ended
June 30,

2023

2022

Cash flows from operating activities

Net loss

$

(114,569

)

$

(3,152

)

Noncash operating adjustments

Depreciation and amortization

50,012

41,366

Inventory lower of cost or net realizable value adjustment

9,545

—

Other

11,429

9,513

Net change in working capital

(124,850

)

(154,368

)

Net cash used in operating activities

(168,433

)

(106,641

)

Cash flows from investing activities

Purchases of property and equipment, net

(48,902

)

(128,283

)

Proceeds from the sale of marketable securities

—

99,917

Investment in equity method investees

(8,696

)

(6,976

)

Net cash used in investing activities

(57,598

)

(35,342

)

Cash flows from financing activities

Net proceeds - long term debt

(2,420

)

43,796

Net proceeds - short-term borrowings

108,715

135,494

Other

(20,756

)

(18,987

)

Net cash provided by financing activities

85,539

160,303

Net change in cash and cash equivalents, and restricted cash

(140,492

)

18,320

Cash and cash equivalents, and restricted cash, beginning of period

500,276

560,959

Cash and cash equivalents, and restricted cash, end of period

$

359,784

$

579,279

Reconciliation of total cash and cash equivalents, and restricted cash

Cash and cash equivalents

$

312,858

$

508,151

Restricted cash

46,926

71,128

Total cash and cash equivalents, and restricted cash

$

359,784

$

579,279

GREEN PLAINS INC.

RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES

(unaudited, in thousands)

Three Months Ended
June 30,

Six Months Ended
June 30,

2023

2022

2023

2022

Net loss

$

(48,320

)

$

52,720

$

(114,569

)

$

(3,152

)

Interest expense

9,741

7,800

19,479

16,606

Income tax expense (benefit)

(1,019

)

2,895

2,410

1,742

Depreciation and amortization (1)

24,626

20,967

50,012

41,366

EBITDA

(14,972

)

84,382

(42,668

)

56,562

Other income (2)

—

(27,712

)

—

(27,712

)

Proportional share of EBITDA adjustments to equity method investees

45

45

90

90

Adjusted EBITDA

$

(14,927

)

$

56,715

$

(42,578

)

$

28,940

(1) Excludes amortization of operating lease right-of-use assets and amortization of debt issuance costs.

(2) Other income for the three and six months ended June 30, 2022 includes a grant received from the USDA related to the Biofuel Producer Program of $27.7 million.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230804860724/en/

Contacts

Green Plains Inc. Contacts
Investors: Phil Boggs | Executive Vice President, Investor Relations | 402.884.8700 | phil.boggs@gpreinc.com
Media: Lisa Gibson | Communications Manager | 402.952.4971 | lisa.gibson@gpreinc.com

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