Aventine Renewable Energy Holdings, Inc. (OTCBB:AVRW) ("Aventine"
or "the Company"), a leading producer of clean renewable energy,
announced today its results for the first quarter ended March 31,
2012.
Revenues for the quarter ended March 31, 2012 were $200.5
million compared to $198.1 million for the same period last
year.
Net loss for the quarter ended March 31, 2012 was $(22.5)
million, or $(2.28) per diluted share, compared to a net loss of
$(19.3) million, or $(2.24) per diluted share, for the same period
last year.
Adjusted EBITDA for the quarter ended March 31, 2012 was $(9.4)
million compared to $2.8 million for the same period last year. A
definition of Adjusted EBITDA and a reconciliation of net loss to
EBITDA and Adjusted EBITDA are provided under 'EBITDA' below.
During the first quarter of 2012, the Company produced 58.2
million gallons of ethanol compared to 61.8 million gallons
produced during the quarter ended March 31, 2011.
The Company marketed and sold 68.3 million gallons of ethanol
during the three months ended March 31, 2012 for an average sales
price of $2.20 per gallon compared to 63.6 million gallons for an
average sales price of $2.38 per gallon during the three months
ended March 31, 2011.
"The downturn in industry wide margins continued throughout the
first quarter as the industry continues to be in an oversupply
situation. The Company sustained its focus on what we can control
and continues to takes steps to improve our cost profile," said
John Castle, Chief Executive Officer.
Mr. Castle added, "The industry has a well-developed seasonal
pattern of margin expansion from early summer through late fall.
With this in mind, the Company is taking steps to ensure all of our
assets are capable of running if the market reflects this
improvement."
First Quarter 2012 Earnings Conference Call
We will hold a conference call at 9 a.m. CDT (10 a.m. Eastern
time) on Thursday, May 10, 2012, to discuss the contents of this
press release. Please dial in to the conference call at (877)
312-5514 (U.S.), or (253) 237-1137 (International), access code:
75661280, approximately 10 minutes prior to the start time. A link
to the broadcast can be found at http://www.aventinerei.com/ in the
Investor Relations section under the "Conference Calls" link. If
you are unable to participate at this time, a replay will be
available through May 14, 2012, on this Website or by dialing (855)
859-2056 (U.S.), or (404) 537-3406 (International), access code:
75661280. Should you need any assistance accessing the call or the
replay, please contact Aventine at (214) 451-6750.
About Aventine
Aventine is a leading producer of ethanol. Through our
production facilities, we market and distribute ethanol to many of
the leading energy companies in the U.S. In addition to producing
ethanol, our facilities also produce several by-products, such as
distillers grain, corn gluten meal and feed, corn germ and grain
distillers dried yeast, which generate revenue and allow us to help
offset a significant portion of our corn costs.
Forward Looking Statements
Certain information included in this press release may be deemed
to be "forward looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. In some cases, you
can identify these statements by forward-looking words such as
"may," "might," "will," "should," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential" or "continue," and
the negatives of these terms and other comparable terminology.
These forward-looking statements, which are subject to known and
unknown risks, uncertainties and assumptions about us, may include
projections of our future financial performance based on our growth
strategies and anticipated trends in our business. These statements
are only predictions based on our current expectations and
projections about future events. There are important factors that
could cause our actual results, level of activity, performance or
achievements to differ materially from the results, level of
activity, performance or achievements expressed or implied by the
forward-looking statements.
Some of the factors that may cause Aventine's actual results,
developments and business decisions to differ materially from those
contemplated by such forward looking statements include our ability
to obtain and maintain normal terms with vendors and service
providers, our estimates of allowed general unsecured claims,
unliquidated and contingent claims and estimations of future
distributions of securities and allocations of securities among
various categories of claim holders, our ability to maintain
contracts that are critical to our operations, our ability to
attract and retain customers, our ability to fund and execute our
business plan and any ethanol plant expansion or completion
projects, our ability to receive or renew permits to construct or
commence operations of our proposed capacity additions in a timely
manner, or at all, laws, tariffs, trade or other controls or
enforcement practices applicable to our operations, changes in
weather and general economic conditions, overcapacity within the
ethanol, biodiesel and petroleum refining industries, availability
and costs of products and raw materials, particularly corn, coal
and natural gas and the subsequent impact on margins, our ability
to raise additional capital and secure additional financing, our
ability to service our debt or comply with our debt covenants, our
ability to attract, motivate and retain key employees, liability
resulting from actual or potential future litigation or the outcome
of any litigation with respect to our auction rate securities or
otherwise, and plant shutdowns or disruptions.
Aventine Renewable
Energy Holdings, Inc. and Subsidiaries |
Condensed Consolidated
Statements of Operations |
(Unaudited) |
|
|
|
|
Three Months
Ended |
Three Months
Ended |
|
March 31, |
March 31, |
|
2012 |
2011 |
|
(In thousands, except per share
amounts) |
|
Net sales |
$ 200,515 |
$ 198,104 |
Cost of goods sold |
(209,472) |
(192,736) |
Gross profit (loss) |
(8,957) |
5,368 |
Selling, general and administrative
expenses |
(6,687) |
(9,417) |
Other expenses |
(700) |
(1,196) |
Operating loss |
(16,344) |
(5,245) |
Interest income |
8 |
21 |
Interest expense |
(6,428) |
(5,322) |
Gain (loss) on derivative transactions,
net |
(89) |
890 |
Loss on available-for-sale securities |
(85) |
-- |
Loss on early retirement of debt |
-- |
(9,399) |
Other non-operating income
(expense) |
153 |
(18) |
Loss before income taxes |
(22,785) |
(19,073) |
Income tax benefit (expense) |
286 |
(188) |
Net loss |
$ (22,499) |
$ (19,261) |
|
|
|
Loss per common share – basic |
$ (2.28) |
$ (2.24) |
Basic weighted-average number of shares |
9,888 |
8,593 |
|
|
|
Loss per common share – diluted |
$ (2.28) |
$ (2.24) |
Diluted weighted-average number of common
and common equivalent shares |
9,888 |
8,593 |
Financial Information
The Company's financial information comparing its results during
the quarter ended March 31, 2012 to the quarter ended March 31,
2011 can be read in its Quarterly Report on Form 10-Q, filed with
the Securities and Exchange Commission on May 9, 2012.
First Quarter 2012 Significant Events
In mid-February 2012, we temporarily brought down the Mt. Vernon
facility in order to perform needed maintenance. Margins at
Mt. Vernon have been under pressure due to strong corn basis in
that region which could not be passed on to our
customers. When margins return, we will be prepared to bring
this plant back on line and continue its progress to full rate.
On March 19, 2012, we entered into a separation agreement (the
"Separation Agreement") with Ben Borgen ("Mr. Borgen"), Senior Vice
President, Commodity Risk Management, pursuant to which Mr. Borgen
resigned from all positions held with us and our
affiliates. Under the terms of the Separation Agreement, Mr.
Borgen received, among other things, (i) a termination payment of
$700,000, which was paid to Mr. Borgen within thirty (30) days
following his departure and (ii) 22,596 shares of our common stock,
which were delivered to Mr. Borgen within thirty (30) days
following his departure. In addition, Mr. Borgen will receive
26,666 shares of our common stock in respect of his
previously-vested restricted stock units, which will be settled six
(6) months following his departure. Mr. Borgen has previously
vested in 42,750 stock options, which remained exercisable for
thirty (30) days following his departure. Mr. Borgen's
unvested stock options and all hybrid equity units, whether vested
or unvested, have terminated.
EBITDA
We have included EBITDA and Adjusted EBITDA primarily as
performance measures because management uses them as key measures
of our performance. EBITDA is defined as earnings (which include
gains or losses on derivative transactions) before interest
expense, interest income, income tax expense, depreciation and
amortization. EBITDA is not a measure of financial performance
under accounting principles generally accepted in the U.S. ("GAAP")
and should not be considered an alternative to net earnings or any
other measure of performance under GAAP. EBITDA has its limitations
as an analytical tool, and you should not consider it in isolation
or as a substitute for analysis of our results as reported under
GAAP. For example, EBITDA includes non-recurring loss items which
are reflected in the statement of operations.
In order to emphasize the effects of certain income and loss
items in our financial statements, we also report a second
computation referred to as Adjusted EBITDA, which adjusts EBITDA
for certain items. Adjusted EBITDA for the Company is adjusted for
(i) separation payments to former senior staff, (ii) stock-based
compensation expense, (iii) loss on early retirement of debt and
(iv) loss on available for sale securities. Previously presented
calculations have been modified to reflect the current definition
of Adjusted EBITDA.
Management believes EBITDA and Adjusted EBITDA are meaningful
supplemental measures of operating performance and highlight trends
in our core business that may not otherwise be apparent when
relying solely on GAAP financial measures. We also believe
that securities analysts, investors, and other interested parties
frequently use EBITDA in the evaluation of companies, many of which
present EBITDA when reporting their results. Additionally,
management provides an Adjusted EBITDA measure so that investors
will have the same financial information that management uses with
the belief that it will assist investors in properly assessing the
Company's performance on a year-over-year and quarter-over-quarter
basis. Our management and external users of our financial
statements, such as investors, commercial banks, research analysts,
and others, use EBITDA and Adjusted EBITDA to assess:
- the financial performance of our assets without regard to
financing methods, capital structure or historical cost basis;
- our operating performance and return on capital as compared to
those of other companies in our industry, without regard to
financing or capital structure; and
- the feasibility of acquisitions and capital expenditure
projects and the overall rate on alternative investment
opportunities.
Reconciliation of
Income (Loss) to EBITDA and Adjusted EBITDA |
|
|
|
|
|
|
|
Three Months
Ended |
Three Months
Ended |
|
March 31, |
March 31, |
|
2012 |
2011 |
|
(In millions) |
Statement of Operations
Data: |
|
|
Net loss |
$ (22.5) |
$ (19.3) |
Interest Expense (a) |
6.4 |
5.3 |
Income tax (benefit) expense |
(0.3) |
0.2 |
Depreciation |
5.9 |
5.1 |
Amortization |
0.2 |
0.4 |
EBITDA |
$ (10.3) |
$ (8.3) |
|
|
|
Separation payments to former senior
staff |
$ 1.0 |
$ -- |
Stock-based compensation |
(0.2) |
1.7 |
Loss on early retirement of debt |
-- |
9.4 |
Loss on available for sale securities |
0.1 |
-- |
Adjusted EBITDA |
$ (9.4) |
$ 2.8 |
|
|
|
|
|
|
(a) Interest capitalized during
construction was $0.6 million for the three months ended March 31,
2012 and $1.9 million for the three months ended March 31,
2011. |
|
Aventine Renewable
Energy Holdings, Inc. and Subsidiaries |
Condensed Consolidated
Balance Sheets |
(Unaudited) |
|
|
|
|
|
|
|
March 31, |
December 31, |
|
2012 |
2011 |
Assets |
(In thousands) |
Current assets: |
|
|
Cash and cash equivalents |
$ 20,214 |
$ 36,105 |
Short-term investments |
106 |
191 |
Accounts receivable, net of allowance for
doubtful accounts of $119 in 2012 and |
15,799 |
16,578 |
$174 in 2011 |
|
|
Inventories |
35,885 |
43,297 |
Income taxes receivable |
245 |
4 |
Prepaid expenses and other current
assets |
7,098 |
7,732 |
Total current assets |
79,347 |
103,907 |
|
|
|
Property, plant and equipment, net |
291,577 |
295,599 |
Other assets |
13,982 |
14,732 |
Total assets |
$ 384,906 |
$ 414,238 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Current liabilities: |
|
|
Current maturities of long-term
debt |
$ 2,284 |
$ 2,283 |
Current obligations under capital
leases |
307 |
348 |
Accounts payable |
11,563 |
14,266 |
Accrued liabilities |
4,066 |
3,621 |
Other current liabilities |
8,752 |
12,817 |
Total current liabilities |
26,972 |
33,335 |
|
|
|
Long-term debt |
213,823 |
214,051 |
Deferred tax liabilities |
2,078 |
2,078 |
Other long-term liabilities |
6,046 |
6,093 |
Total liabilities |
248,919 |
255,557 |
|
|
|
Stockholders' equity: |
|
|
Common stock, par value $0.001 per share
(15,000,000 shares authorized; 8,346,271 shares outstanding, net of
74,841 shares held in treasury at both March 31, 2012
and December 31, 2011) |
8 |
8 |
Preferred stock (5,000,000 shares authorized;
no shares issued or outstanding) |
-- |
-- |
Additional paid-in capital |
231,493 |
231,744 |
Accumulated deficit |
(91,353) |
(68,854) |
Accumulated other comprehensive
loss |
(4,161) |
(4,217) |
Total stockholders' equity |
135,987 |
158,681 |
Total liabilities and stockholders'
equity |
$ 384,906 |
$ 414,238 |
|
Aventine Renewable
Energy Holdings, Inc. and Subsidiaries |
Condensed
Consolidated Statements of Cash Flows |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Three Months
Ended |
|
March 31, |
March 31, |
|
2012 |
2011 |
|
(In thousands) |
Operating Activities |
|
|
Net loss |
$ (22,499) |
$ (19,261) |
Adjustments to reconcile net loss to net cash
used in operating activities: |
|
|
Loss on early retirement of
debt |
-- |
9,399 |
Depreciation and
amortization |
7,141 |
5,809 |
Stock-based compensation
expense |
(251) |
1,702 |
Unrealized/realized loss on
available-for-sale securities |
85 |
-- |
Loss on renewable
identification numbers |
22 |
-- |
Changes in operating assets and
liabilities: |
|
|
Accounts receivable, net |
779 |
(5,920) |
Income tax receivable |
(241) |
42 |
Inventories |
7,413 |
(7,020) |
Prepaid expenses and other
current assets |
634 |
3,596 |
Other assets |
-- |
(947) |
Accounts payable |
(2,703) |
(6,022) |
Other liabilities |
(3,638) |
869 |
Net cash used in operating activities |
(13,258) |
(17,753) |
|
|
|
Investing Activities |
|
|
Additions to property, plant and equipment,
net |
(1,948) |
(7,892) |
Net cash used in investing activities |
(1,948) |
(7,892) |
|
|
|
Financing Activities |
|
|
Repayment of senior secured notes |
-- |
(155,000) |
Repayment of term loan |
(563) |
(500) |
Restricted cash |
-- |
165,750 |
Penalty on early retirement of debt |
-- |
(7,750) |
Payments on capital lease obligations |
(70) |
(554) |
Payments on mortgage note |
(8) |
(8) |
Debt issuance costs |
(44) |
-- |
Proceeds from warrants exercised |
-- |
5 |
Net cash (used in) provided by financing
activities |
(685) |
1,943 |
Net decrease in cash and equivalents |
(15,891) |
(23,702) |
Cash and equivalents at beginning of the
period |
36,105 |
34,533 |
Cash and equivalents at end of the
period |
$ 20,214 |
$ 10,831 |
Liquidity and Capital Resources
The following table sets forth selected information concerning
our financial condition:
|
March 31, 2012 |
December 31,
2011 |
|
(In millions, except current
ratio) |
Cash and cash equivalents |
$20.2 |
$36.1 |
Net working capital |
$52.4 |
$70.6 |
Availability under revolver |
$16.4 |
$20.1 |
Total debt |
$216.1 |
$216.3 |
Current ratio |
2.94 |
3.12 |
CONTACT: Calvin Stewart, Chief Financial Officer
(214) 451-6766
Calvin.Stewart@aventinerei.com
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