Green Plains(US:GPRE)2024-10-31 18:47Ethanol Production and Utilization - In Q3 2024, the company maintained an average utilization rate of approximately 96.8%, resulting in ethanol production of 220.2 million gallons, compared to 223.4 million gallons in Q3 2023[174]. - Domestic ethanol production averaged 1.07 million barrels per day in Q3 2024, a 3.1% increase from 1.04 million barrels per day in Q3 2023[176]. - U.S. domestic ethanol ending stocks increased by approximately 1.6 million barrels, or 7.2%, to 23.5 million barrels as of September 30, 2024[176]. - Domestic ethanol exports through August 31, 2024, were approximately 1,240 million gallons, up from 921 million gallons for the same period in 2023[177]. - Ethanol production segment revenues from external customers decreased by 27.2% to $563.564 million in Q3 2024 compared to $774.321 million in Q3 2023[195]. - Ethanol production segment revenues decreased by $210.9 million for Q3 2024 compared to Q3 2023, primarily due to lower selling prices of ethanol, distillers grains, and renewable corn oil[207]. Financial Performance - Overall revenues, including intersegment activity, declined by 26.0% to $666.499 million in Q3 2024 from $900.610 million in Q3 2023[195]. - The company reported a 27.6% decrease in total segment revenues for the nine months ended September 30, 2024, totaling $1.595741 billion compared to $2.202182 billion for the same period in 2023[195]. - Consolidated revenues decreased by $234.0 million for the three months ended September 30, 2024, primarily due to lower average selling prices and volumes sold in the ethanol production segment[205]. - For the nine months ended September 30, 2024, consolidated revenues decreased by $708.6 million compared to the same period in 2023, mainly due to lower selling prices of ethanol and distillers grains[212]. - Net income increased by $22.3 million for the three months ended September 30, 2024, primarily due to a gain on the sale of assets and higher margins in the ethanol production segment[206]. - Adjusted EBITDA increased by $10.4 million primarily due to higher margins in the ethanol production segment[206]. Capital Expenditures and Investments - Capital expenditures for the nine months ended September 30, 2024, were approximately $67.8 million, with an expected additional $110 million for carbon capture projects in 2024 and 2025[224]. - The company has contracted future purchases of grain, distillers grains, and natural gas valued at approximately $187.8 million as of September 30, 2024[239]. - Future commitments for storage and transportation are valued at approximately $26.3 million as of September 30, 2024[239]. Debt and Financial Obligations - The outstanding principal balance on the 2.25% convertible senior notes was $230.0 million as of September 30, 2024[229]. - The company anticipates maintaining compliance with debt covenants for the next twelve months based on current forecasts[228]. - Total senior secured revolving commitments amount to $350.0 million, with an accordion feature allowing an increase of up to $100.0 million, maturing in March 2027[234]. - As of September 30, 2024, the outstanding principal balance on the facility was $109.0 million with an interest rate of 8.11%[234]. - The company had $559.8 million in total debt as of September 30, 2024, with $123.1 million bearing variable interest rates[243]. Operational Highlights - The company produced approximately 430 thousand tons of Ultra-High Protein annually, utilizing FQT MSC™ technology at five biorefineries[164]. - The company is collaborating on carbon capture projects at seven biorefineries, with completion anticipated in the second half of 2025[168]. - The company has a grain storage capacity of approximately 20.2 million bushels in its agribusiness and energy services segment[163]. - The company expects to begin shipments from its first commercial scale FQT CST™ facility in Q4 2024, producing low carbon-intensity glucose and dextrose corn syrups[165]. Market and Regulatory Environment - The EPA finalized Renewable Volume Obligations (RVOs) for 2023 at 15.25 billion gallons, and 15 billion gallons for both 2024 and 2025[182]. - The IRA introduced a Clean Fuel Production Credit of $0.02 per gallon for fuels below a 50 CI threshold, effective from 2025 to 2027[181]. - The EPA proposed a modest increase in biomass-based diesel volumes, setting them at 2.82 billion gallons for 2023, 3.04 billion for 2024, and 3.35 billion for 2025[182]. - The One-Pound Waiver allows E15 to be sold year-round, with the exception of California, marking the sixth consecutive year of such sales[185]. - The USDA announced $50 million in initial awards for biofuel infrastructure, part of a $500 million funding initiative[186]. Shareholder Value and Strategic Initiatives - The company initiated a strategic review process in February 2024 to explore opportunities for enhancing long-term shareholder value[172]. - The company has a share repurchase program authorized for up to $200.0 million, with $92.8 million spent to repurchase 7.4 million shares since inception[226]. Miscellaneous - Interest expense was $10.1 million for the three months ended September 30, 2024, compared to $9.6 million for the same period in 2023, due to higher loan fees[206]. - The gross margin for ethanol production increased by 12.4% to $66,313 for the three months ended September 30, 2024, compared to $58,973 in 2023[197]. - Operating income for ethanol production increased by 47.3% to $35,240 for the three months ended September 30, 2024, compared to $23,931 in 2023[199]. - The cost of goods sold decreased by 29.0% to $580,626 for the three months ended September 30, 2024, compared to $818,008 in 2023[196]. - The company reported a depreciation and amortization expense of $26,070 for the three months ended September 30, 2024, an increase of 9.1% from $23,899 in 2023[198]. - The agribusiness and energy services segment reported a gross margin decrease of 25.3% to $11,796 for the three months ended September 30, 2024, compared to $15,789 in 2023[197]. - The company recognized a $30.7 million pretax gain on the sale of assets for the three months ended September 30, 2024[199]. - Net cash used in operating activities was $3.0 million for the nine months ended September 30, 2024, a significant improvement from $55.4 million in the same period of 2023[222]. - Revenues for the three months ended September 30, 2024, included net gains of $16.1 million from derivative financial instruments, while cost of goods sold included net losses of $4.2 million[246]. - Estimated total volume requirements for ethanol for the next 12 months is 903,000 gallons, with a 10% price change estimated to impact revenue by $98,304[248]. - A 10% increase in interest rates would affect the company's interest cost by approximately $1.2 million per year[243]. - The company has no off-balance sheet arrangements[241].