GPRE

Green Plains, Inc. (GPRE)

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Green Plains Renewable Energy, Inc. (GPRE)

Q1 2013 Earnings Call

May 1, 2013 11:00 AM ET

Executives

Jim Stark – VP, Investor and Media Relations

Todd Becker – President and CEO

Jerry Peters – CFO and Treasurer

Steve Bleyl – EVP, Ethanol Marketing

Analysts

Laurence Alexander – Jefferies & Company

Farha Aslam – Stephens, Inc.

Brett Wong – Piper Jaffray

Patrick Jobin – Credit Suisse

Craig Irwin – Wedbush Securities

Shawn Bitzan – Feltl & Company

Matt Farwell – Imperial Capital

Paul Razmik – Uncommon Equities

Presentation

Operator

Good day everyone and welcome to the Green Plains First Quarter 2013 Conference Call. Today’s call is being recorded. And at this time, I would like to turn the conference over to Mr. Jim Stark. Please go ahead sir.

Jim Stark

Thanks, Mary. Good morning and welcome to our first quarter 2013 earnings conference call. On the call today are Todd Becker, President and CEO, Jerry Peters, our Chief Financial Officer, Jeff Briggs, our Chief Operating Officer, and Steve Bleyl, who heads up our – Executive Vice President of Ethanol Marketing.

We are here to discuss our quarterly financial results and recent developments for Green Plains Renewable Energy. There is a slide presentation for you to follow along with as we go through our comments today.

You can find this presentation on our website, gpreinc.com, on the investor page under the events and presentations link.

Our comments today will contain forward-looking statements which are any statements made that are not historical facts. These forward-looking statements are based on the current expectations of Green Plains management team, and there can be no assurance that such expectations will prove to be correct because forward-looking statements involves risk and uncertainties. Green Plains’ actual results could differ materially from management’s expectations.

Please refer to page 2 of the website presentation in our 10-K and other periodic SEC filings for information about factors that could cause different outcomes.

The information presented today is time sensitive and is accurate only at this time. If any portion of this presentation is rebroadcast, retransmitted, or redistributed at a later date, Green Plains will not be reviewing, or updating this material.

I will now turn the call over to Todd Becker.

Todd Becker

Thanks, Jim. And good morning, everyone. We appreciate you joining our call today. In the first quarter, we continue to execute on our company’s strategies or risk management diversification and operational excellence.

We generated revenues of $765 million and net income of $2.6 million or $0.08 a share. This was a significant improvement over the first quarter of last year with nearly a $24 million positive swing in operating income.

Our non-ethanol segments generated $21.2 million in operating income led by marketing and distribution, and corn oil production.

In our ethanol production segment, we produced 170 million gallons of ethanol in the first quarter which is approximately 92% of our stated operating capacity. Margins started to expand during the last four weeks of the first quarter which positively influenced the end of Q1, but more importantly, allowed us to start locking away Q2 which I will give you more color on later in the call.

Our ethanol yield in the quarter was 2.85 gallons of ethanol per bushel of corn. We have found that running a little slower allows us to extract more starch out of the corn kernel and recapture more ethanol on the back end of the plant as we focus on improving yields.

Corn oil production was 0.64 pounds per bushel in this quarter, a slight improvement from Q1, Q4 yields, up 0.61 pounds and in line with our expectations.

We constantly monitor whether we will run our plants to maximize yields or run them to maximize production volumes. Either way, it shows a flexibility we have within our platform which we have taken advantage over the last 12 months.

We saw a significant improvement in our market and distribution segment for the first quarter. All of our major initiatives within the segment, performed well. We were pleased to see that our BlendStar unit train terminal in Birmingham generated strong results in the quarter as it started quicker than we thought it would and has exceeded our volume expectations even as we work through normal start up processes.

Our railcar redeployment continue to meet our expectations as well. We also realize some benefit in the first quarter from our new initiative of trading physical products to take advantage of our trade and transportation flows. We have ramped up this initiative and have over 10 new merchant businesses in place.

Our marketing and distribution was off to a fast start, we expect Q2 to return to more normal EBIT patterns within the segment and to begin to grow from here, as we hope to see additional growth from our new initiatives.

Q1 operating income is not a new standard for the segment at this point. The agribusiness segment contribute a small operating income as we continue on our initiative to rebuild. I will discuss this more in detail later in the call as well.

Now I’ll turn the call over to Jerry to discuss our liquidity and financials in more detail. But before I do, I think it is important to point out that performance over the last 12 months shows a great opportunity that we have in front of us.

Coming out of the most difficult industry environment we have seen in our history, the company still generated over $90 million in operating EBITDA and over $135 million in overall EBITDA.

Read the rest of this transcript for free on seekingalpha.com