Green Plains(US:GPRE)2023-05-04 20:14Production and Utilization - In Q1 2023, the company maintained an average utilization rate of approximately 87.5%, resulting in ethanol production of 206.7 million gallons, compared to 196.3 million gallons in Q1 2022, reflecting a 5.4% increase in production [159]. - The company operates eleven ethanol plants capable of processing approximately 330 million bushels of corn per year, producing around 958 million gallons of ethanol, 2.4 million tons of distillers grains, and 310 million pounds of renewable corn oil [159]. - Ethanol sold increased by 5.4% to 206,880 thousand gallons for the three months ended March 31, 2023, compared to 196,348 thousand gallons in 2022 [190]. Market and Demand - Domestic ethanol production averaged 1.01 million barrels per day in Q1 2023, a 1.0% decrease from 1.02 million barrels per day in Q1 2022, while gasoline demand remained stable at 8.6 million barrels per day [161]. - U.S. domestic ethanol ending stocks decreased by approximately 1.4 million barrels, or 5.3%, to 25.1 million barrels as of March 31, 2023 [161]. - The EPA has proposed Renewable Volume Obligations (RVOs) for 2023, 2024, and 2025, setting implied conventional ethanol levels at 15.25 billion gallons for each year [167]. Financial Performance - Consolidated revenues increased by $51.5 million for the three months ended March 31, 2023, compared to the same period in 2022, primarily due to higher volumes sold of ethanol, distillers grains, and renewable corn oil [186]. - Ethanol production segment revenues from external customers were $695,494, representing a 9.1% increase from $637,553 in the same period last year [180]. - Adjusted EBITDA increased by $0.1 million for the three months ended March 31, 2023 [187]. Costs and Margins - The cost of goods sold for ethanol production increased by 8.4% to $716,947 from $661,560 [181]. - The gross margin for ethanol production was negative $21,453, an improvement from negative $24,007, reflecting a 10.6% decrease [181]. - Operating loss for ethanol production was $53,362, a 4.3% increase from the loss of $51,158 in the previous year [181]. Capital and Debt Management - As of March 31, 2023, Green Plains had $709.6 million in total debt, with $271.6 million bearing variable interest rates [231]. - The company issued $125.0 million of junior secured mezzanine notes due 2026, with an interest rate of 11.75% [217]. - The company has total revolving commitments of $350.0 million with an accordion feature allowing for an increase of up to $100.0 million [220]. Strategic Initiatives - The company is producing Ultra-High Protein at five locations and deploying FQT MSC™ technology at additional sites to meet growing global demand for protein feed ingredients [160]. - The partnership's assets include 27 ethanol storage facilities and approximately 2,300 leased railcars, enhancing the company's logistics capabilities [159]. - The company has a share repurchase program authorized for up to $200.0 million, with no shares repurchased during the first quarter of 2023 [205]. Government and Regulatory Impact - The Inflation Reduction Act of 2022 includes a Clean Fuel Production Credit of $1.00 per gallon, which could impact the company's fuel ethanol depending on GHG reduction levels [165]. - The company received $27.7 million in funds from the USDA as part of COVID-19 relief measures [172]. Cash Flow and Operating Activities - Net cash used in operating activities was $117.0 million for the three months ended March 31, 2023, an improvement from $162.5 million in the same period in 2022 [200]. - Capital expenditures were approximately $32.6 million during the three months ended March 31, 2023, primarily for expansion projects [202].