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15.11.2007: Meldung: VeraSun Reports Q3 Results
VeraSun Energy Corporation, one of the nation’s largest ethanol producers, today announced its financial results for the three months ended September 30, 2007. Earnings were $7.8 million or $0.09 per diluted share. EBITDA was $22.4 million or 10.1% of revenues.
“VeraSun had a solid third quarter in 2007 considering the change in market conditions for ethanol,” said Donald L. Endres, Chairman, Chief Executive Officer and President of VeraSun. “We were able to grow our production and revenues, while at the same time controlling our costs as we completed the ASAlliances acquisition and absorbed start-up costs for our biorefineries in Linden and Albion.”
VeraSun completed its acquisition with ASAlliances Biofuels, LLC in August, taking ownership of facilities in Linden, Ind., Albion, Neb., and Bloomingburg, Ohio. The Linden facility began production in August, followed by Albion in October. Bloomingburg is expected to begin operations in the first quarter of 2008. VeraSun has two additional plants under construction in Hartley, Iowa and Welcome, Minn., in addition to a facility under development in Reynolds, Ind.
“We continue to execute on our strategy to be a large-scale, low-cost producer,” said Endres. “We remain optimistic regarding demand for ethanol as discretionary blending continues to expand throughout the country. Last week the Energy Information Administration reported a record level of discretionary ethanol blending. We expect this trend to continue, led by a strong move into the Southeast U.S. as ethanol blending margins are currently exceeding $1 per gallon.”
Third Quarter 2007 Financial Highlights
Total revenues, which include revenue from the sale of ethanol, distillers grains and VE85™, increased by $73.6 million, or 49.7%, to $221.9 million for the three months ended September 30, 2007 from $148.2 million for the three months ended September 30, 2006. The increase in total revenues was primarily the result of an 71.8% increase in ethanol volume sold, partially offset by a decrease in average ethanol prices of $0.40 per gallon, or 17.0%, compared to the three months ended September 30, 2006. Ethanol production increased by 43.4 million gallons, or 77.4%, as a result of the added capacity from bringing the Charles City, Iowa facility on-line in April 2007 and the Linden, Indiana facility on-line in August 2007.
Net sales from ethanol increased $58.0 million, or 44.4%, to $188.5 million for the three months ended September 30, 2007 from $130.5 million for the three months ended September 30, 2006. The impact of increased volume, primarily from the additional Charles City and Linden capacity, was $93.7 million, partially offset by a $35.7 million reduction due to lower prices. The average price of ethanol sold was $1.96 per gallon for the three months ended September 30, 2007 compared to $2.36 per gallon for the three months ended September 30, 2006.
The net loss from derivatives included in net sales was $0.3 million for the three months ended September 30, 2007 compared to a net gain of $0.9 million for the three months ended September 30, 2006.
Net sales from co-products increased $14.3 million, or 101.8%, to $28.4 million for the three months ended September 30, 2007 from $14.1 million for the three months ended September 30, 2006. The impact of increased volume from the additional Charles City and Linden capacity was $10.9 million and the impact of higher prices was $3.5 million.
Net sales of VE85TM, our branded E85 product, increased $1.1 million, or 37.5%, to $3.9 million for the three months ended September 30, 2007 from $2.8 million for the three months ended September 30, 2006, primarily due to an increase in the number of retail outlets selling our product.
Gross profit decreased $36.2 million to $23.4 million for the three months ended September 30, 2007 from $59.6 million for the three months ended September 30, 2006. The decrease in gross profit was primarily due to higher corn costs, partially offset by the effect of an increase in ethanol volume produced in the 2007 period compared to the 2006 period. Also included in cost of sales for the 2007 period were a $0.6 million lower of cost or market write down of ethanol inventory and a $0.6 million impairment for a cancelled biodiesel project. Results for the full year 2007 are also expected to be adversely affected by these relatively higher corn costs.
Net income decreased $24.2 million to $7.8 million for the three months ended September 30, 2007 from $32 million for the three months ended September 30, 2006. The 2007 period included an income tax benefit of $2.4 million compared to $23.4 million of income tax expense in the 2006 period. The effective income tax rate was 19.8% in the 2007 period compared to 42.2% in the 2006 period. The effective tax rate was higher in the 2006 period due to nondeductible expenses associated with our initial public offering. The 2007 effective tax rate declined from our previous estimate of 35% to 19.8% due to a reduction in estimated income for the year caused by current market conditions and an increase in the estimated tax exempt interest income, both in dollars and as a percent of income before income taxes. The tax benefit is the result of a year to date cumulative adjustment resulting in a change in the expected annual tax rate during the quarter from 35% to 19.8%.
About VeraSun Energy Corporation
VeraSun Energy Corporation (NYSE: VSE), headquartered in Brookings, SD, is a leading producer of renewable fuel. The company has 560 million gallons per year (MMGY) of production capacity through five operating ethanol production facilities in Aurora, SD, Fort Dodge, IA, Charles City, IA, Linden, IN and Albion, NE. Four facilities are currently either under construction or development in Hartley, IA, Welcome, MN, Reynolds, IN, and Bloomingburg, OH. Upon completion of the new facilities, VeraSun will have an annual production capacity of approximately one billion gallons. The Company also has plans to extract oil from dried distillers grains, a co-product of the ethanol process, for use in biodiesel production.
The Company markets E85, a blend of 85 percent ethanol and 15 percent gasoline for use in Flexible Fuel Vehicles (FFVs), directly to fuel retailers under the brand VE85™. VeraSun now has approximately 150 VE85™ retail locations under contract in over a dozen states and Washington, D.C. For more information, please visit VeraSun’s websites at www.verasun.com or www.VE85.com.
Certain statements in this release, and other written or oral statements made by or on behalf of us, are “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management’s expectations, anticipations, beliefs, plans, targets, estimates, or projections and similar expressions relating to the future, are forward-looking statements within the meaning of these laws. These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements are not guarantees of our future performance and are subject to risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by any forward-looking statements. We disclaim any duty to update any forward-looking statements. Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by any forward-looking statements include the volatility and uncertainty of corn, natural gas, ethanol and unleaded gasoline prices; our ability to develop an oil extraction business; the results of our recently acquired facilities; the results of our hedging transactions and other risk mitigation strategies; operational disruptions at our facilities; our ability to implement our expansion strategy as planned or at all; our ability to locate and integrate potential future acquisitions; development of infrastructure related to the sale and distribution of ethanol; our limited operating history; excess production capacity in our industry; our ability to compete effectively in our industry; our ability to implement a marketing and sales network for our ethanol; changes in or elimination of governmental laws, tariffs, trade or other controls or enforcement practices; environmental, health and safety laws, regulations and liabilities; our reliance on key management personnel; future technological advances; limitations and restrictions contained in the instruments and agreements governing our indebtedness; our ability to raise additional capital and secure additional financing; and costs of construction and equipment, as more fully described in the "Risk Factors" section of our quarterly report on Form 10-Q for the three months ended September 30, 2007.
Contact
Investor Contact:
Patty Dickerson
VeraSun Energy Corporation
605-696-7236
[email protected]
“VeraSun had a solid third quarter in 2007 considering the change in market conditions for ethanol,” said Donald L. Endres, Chairman, Chief Executive Officer and President of VeraSun. “We were able to grow our production and revenues, while at the same time controlling our costs as we completed the ASAlliances acquisition and absorbed start-up costs for our biorefineries in Linden and Albion.”
VeraSun completed its acquisition with ASAlliances Biofuels, LLC in August, taking ownership of facilities in Linden, Ind., Albion, Neb., and Bloomingburg, Ohio. The Linden facility began production in August, followed by Albion in October. Bloomingburg is expected to begin operations in the first quarter of 2008. VeraSun has two additional plants under construction in Hartley, Iowa and Welcome, Minn., in addition to a facility under development in Reynolds, Ind.
“We continue to execute on our strategy to be a large-scale, low-cost producer,” said Endres. “We remain optimistic regarding demand for ethanol as discretionary blending continues to expand throughout the country. Last week the Energy Information Administration reported a record level of discretionary ethanol blending. We expect this trend to continue, led by a strong move into the Southeast U.S. as ethanol blending margins are currently exceeding $1 per gallon.”
Third Quarter 2007 Financial Highlights
Total revenues, which include revenue from the sale of ethanol, distillers grains and VE85™, increased by $73.6 million, or 49.7%, to $221.9 million for the three months ended September 30, 2007 from $148.2 million for the three months ended September 30, 2006. The increase in total revenues was primarily the result of an 71.8% increase in ethanol volume sold, partially offset by a decrease in average ethanol prices of $0.40 per gallon, or 17.0%, compared to the three months ended September 30, 2006. Ethanol production increased by 43.4 million gallons, or 77.4%, as a result of the added capacity from bringing the Charles City, Iowa facility on-line in April 2007 and the Linden, Indiana facility on-line in August 2007.
Net sales from ethanol increased $58.0 million, or 44.4%, to $188.5 million for the three months ended September 30, 2007 from $130.5 million for the three months ended September 30, 2006. The impact of increased volume, primarily from the additional Charles City and Linden capacity, was $93.7 million, partially offset by a $35.7 million reduction due to lower prices. The average price of ethanol sold was $1.96 per gallon for the three months ended September 30, 2007 compared to $2.36 per gallon for the three months ended September 30, 2006.
The net loss from derivatives included in net sales was $0.3 million for the three months ended September 30, 2007 compared to a net gain of $0.9 million for the three months ended September 30, 2006.
Net sales from co-products increased $14.3 million, or 101.8%, to $28.4 million for the three months ended September 30, 2007 from $14.1 million for the three months ended September 30, 2006. The impact of increased volume from the additional Charles City and Linden capacity was $10.9 million and the impact of higher prices was $3.5 million.
Net sales of VE85TM, our branded E85 product, increased $1.1 million, or 37.5%, to $3.9 million for the three months ended September 30, 2007 from $2.8 million for the three months ended September 30, 2006, primarily due to an increase in the number of retail outlets selling our product.
Gross profit decreased $36.2 million to $23.4 million for the three months ended September 30, 2007 from $59.6 million for the three months ended September 30, 2006. The decrease in gross profit was primarily due to higher corn costs, partially offset by the effect of an increase in ethanol volume produced in the 2007 period compared to the 2006 period. Also included in cost of sales for the 2007 period were a $0.6 million lower of cost or market write down of ethanol inventory and a $0.6 million impairment for a cancelled biodiesel project. Results for the full year 2007 are also expected to be adversely affected by these relatively higher corn costs.
Net income decreased $24.2 million to $7.8 million for the three months ended September 30, 2007 from $32 million for the three months ended September 30, 2006. The 2007 period included an income tax benefit of $2.4 million compared to $23.4 million of income tax expense in the 2006 period. The effective income tax rate was 19.8% in the 2007 period compared to 42.2% in the 2006 period. The effective tax rate was higher in the 2006 period due to nondeductible expenses associated with our initial public offering. The 2007 effective tax rate declined from our previous estimate of 35% to 19.8% due to a reduction in estimated income for the year caused by current market conditions and an increase in the estimated tax exempt interest income, both in dollars and as a percent of income before income taxes. The tax benefit is the result of a year to date cumulative adjustment resulting in a change in the expected annual tax rate during the quarter from 35% to 19.8%.
About VeraSun Energy Corporation
VeraSun Energy Corporation (NYSE: VSE), headquartered in Brookings, SD, is a leading producer of renewable fuel. The company has 560 million gallons per year (MMGY) of production capacity through five operating ethanol production facilities in Aurora, SD, Fort Dodge, IA, Charles City, IA, Linden, IN and Albion, NE. Four facilities are currently either under construction or development in Hartley, IA, Welcome, MN, Reynolds, IN, and Bloomingburg, OH. Upon completion of the new facilities, VeraSun will have an annual production capacity of approximately one billion gallons. The Company also has plans to extract oil from dried distillers grains, a co-product of the ethanol process, for use in biodiesel production.
The Company markets E85, a blend of 85 percent ethanol and 15 percent gasoline for use in Flexible Fuel Vehicles (FFVs), directly to fuel retailers under the brand VE85™. VeraSun now has approximately 150 VE85™ retail locations under contract in over a dozen states and Washington, D.C. For more information, please visit VeraSun’s websites at www.verasun.com or www.VE85.com.
Certain statements in this release, and other written or oral statements made by or on behalf of us, are “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management’s expectations, anticipations, beliefs, plans, targets, estimates, or projections and similar expressions relating to the future, are forward-looking statements within the meaning of these laws. These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements are not guarantees of our future performance and are subject to risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by any forward-looking statements. We disclaim any duty to update any forward-looking statements. Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by any forward-looking statements include the volatility and uncertainty of corn, natural gas, ethanol and unleaded gasoline prices; our ability to develop an oil extraction business; the results of our recently acquired facilities; the results of our hedging transactions and other risk mitigation strategies; operational disruptions at our facilities; our ability to implement our expansion strategy as planned or at all; our ability to locate and integrate potential future acquisitions; development of infrastructure related to the sale and distribution of ethanol; our limited operating history; excess production capacity in our industry; our ability to compete effectively in our industry; our ability to implement a marketing and sales network for our ethanol; changes in or elimination of governmental laws, tariffs, trade or other controls or enforcement practices; environmental, health and safety laws, regulations and liabilities; our reliance on key management personnel; future technological advances; limitations and restrictions contained in the instruments and agreements governing our indebtedness; our ability to raise additional capital and secure additional financing; and costs of construction and equipment, as more fully described in the "Risk Factors" section of our quarterly report on Form 10-Q for the three months ended September 30, 2007.
Contact
Investor Contact:
Patty Dickerson
VeraSun Energy Corporation
605-696-7236
[email protected]