Southwest Iowa Renewable Energy Announces Results of Third Quarter

COUNCIL BLUFFS, Iowa, Aug. 14, 2012 /PRNewswire/ -- On August 14, 2012, Southwest Iowa Renewable Energy, LLC ("SIRE") announced its unaudited financial results for the third quarter of fiscal year 2012 ("Fiscal 2012") which ended June 30, 2012.  SIRE reported a net loss of $4,153,049, or $316.09 per unit, compared to a net loss of $1,287,162, or $97.96 per unit, for the same period during the year ended September 30, 2011 ("Fiscal 2011").  For Fiscal 2012 through June 30, 2012, SIRE reported a net income of $855,593 or $65.12 compared to a net loss of $2,357,512 or $179.43 per unit for the same period in Fiscal 2011. The cash flow provided by operations for the first three quarters of Fiscal 2012 was $12,346,881, compared to $12,427,088 for the same period in Fiscal 2011.

(Logo: http://photos.prnewswire.com/prnh/20100806/AQ47222LOGO)

Adjusted EBITDA, which is defined as earnings before interest, income taxes, and depreciation and/or amortization ("EBITDA"), as adjusted for unrealized hedging losses (gains), was $787,024 for the third quarter in Fiscal 2012 and $4,577,670 for the same period in Fiscal 2011.   Adjusted EBITDA for Fiscal 2012 through June 30, 2012 was $11,720,646 and $16,477,891 for the same period in Fiscal 2011.   At June 30, 2012, SIRE had $8,237,313 million in cash and equivalents and $14,625,000 available under committed loan agreements (subject to satisfaction of specified lending conditions and covenants), as well as an additional $6,250,000 available under uncommitted loan agreements.  For reconciliations of Adjusted EBITDA to net income attributable to SIRE, see "Adjusted EBITDA" below.

Brian Cahill, SIRE's General Manager and CEO, stated, "Our third quarter in Fiscal 2012, reflects less than favorable margins resulting from the relative prices of our primary inputs and products during the quarter.   In particular, the key factors during the quarter were increases in the price of our primary input, corn, resulting in part from the current drought conditions in the United States.  Notwithstanding these margins, with our positive cash flow we have continued to make scheduled and excess cash flow payments to our banks, resulting in further principal reduction in overall debt and reduced interest costs.  We have also continued to make modest capital investments that are resulting in incremental productivity improvements in our plant."

About Southwest Iowa Renewable Energy, LLC:

SIRE is an Iowa limited liability company, located in Council Bluffs, Iowa, formed in March, 2005 to construct and operate a 110 million gallon name plate capacity ethanol plant.  SIRE began producing ethanol in February, 2009 and sells its ethanol, modified wet distillers grains with solubles, corn syrup, and corn oil in the continental United States.   SIRE also sells its dried distillers grains with solubles in the continental United States, Mexico and the Pacific Rim.

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements are made in good faith by SIRE  and are identified by including terms such as "may," "will," "should," "expects," "anticipates," "estimates," "plans," or similar language.  In connection with these safe-harbor provisions, SIRE has identified in its Annual Report on Form 10-K for the fiscal year ended September 30, 2011, and in the Company's subsequent filings with the SEC, important factors that could cause actual results to differ materially from those contained in any forward-looking statement made by or on behalf of SIRE, including, without limitation, the risk and nature of SIRE's business and the effects of general economic conditions on SIRE.  SIRE may experience significant fluctuations in future operating results due to a number of economic conditions, including, but not limited to, competition in the ethanol industry, commodity market risks, financial market risks, counter-party risks, and risks associated with changes to federal policy or regulation. The cautionary statements in this press release expressly qualify all of SIRE's forward-looking statements.   The forward-looking statements contained in this press release are included in the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  SIRE further cautions that such factors are not exhaustive or exclusive.  SIRE does not undertake to update any forward-looking statement which may be made from time to time by or on behalf of SIRE unless an update is required by applicable securities laws.

Summary Balance Sheets

SOUTHWEST IOWA RENEWABLE ENERGY, LLC

Balance Sheets







ASSETS

June 30, 2012


September 30,
2011


(Unaudited)




Current Assets






Cash and cash equivalents

$

8,237,313


$

11,006,590

Restricted cash


362,382



301,361

Accounts Receivable


325,999



224,176

Accounts receivable, related party


10,110,432



17,642,245

Due from broker


2,052,381



3,428,450

Derivative financial instruments, related party


1,090,706



-

Inventory


12,348,405



11,198,147

Prepaid expenses and other


1,407,079



1,107,354

Total current assets


35,934,697



44,908,323







Property, Plant and Equipment






Land


2,064,090



2,064,090

Plant, Building and Equipment


204,431,928



203,749,761

Office and Other Equipment


750,511



742,360

Total Cost


207,246,529



206,556,211

Accumulated Depreciation


(50,852,792)



(42,293,441)

Net property and equipment


156,393,737



164,262,770







Other Assets






Financing costs, net of amortization of $2,693,184 and $2,341,400


1,509,956



1,538,733

Total Assets

$

193,838,390


$

210,709,826

 

SOUTHWEST IOWA RENEWABLE ENERGY, LLC

Balance Sheets

 













LIABILITIES AND MEMBERS' EQUITY

June 30, 2012


September 30,
2011


(Unaudited)




Current Liabilities






Accounts payable

$

1,741,970


$

2,090,561

Accounts payable, related parties


5,495,449



5,239,128

Derivative financial instruments, related party


-



2,097,075

Derivative financial instruments


1,036,750



2,875,075

Accrued expenses  


2,376,929



2,615,092

Accrued expenses, related parties


2,955,988



3,831,583

Current maturities of notes payable


15,090,684



21,236,780

Total current liabilities


28,697,770



39,985,294







Long Term Liabilities






Notes payable, less current maturities


116,036,306



121,400,805

Other


525,013



600,010

Total long term liabilities


116,561,319



122,000,815







Commitments and Contingencies












Members' Equity






Members' capital, 13,139 Units issued and outstanding


76,474,111



76,474,111

Accumulated (deficit)


(27,894,810)



(27,750,394)

Total members' equity


48,579,301



48,723,717

Total Liabilities and Members' Equity

$

193,838,390


$

210,709,826

 

Financial Results

SOUTHWEST IOWA RENEWABLE ENERGY, LLC

Statements of Operations (Unaudited)

 














Three Months
Ended  June 30,
2012


Three Months
Ended June 30,
2011


Nine Months
Ended June 30,
2012


Nine Months
Ended June 30,
2011

























Revenues

$

79,820,338


$

94,853,474


$

264,896,990


$

236,555,894

Cost of Goods Sold












Cost of goods sold-non hedging


81,065,194



87,611,198



257,677,120



214,589,874

Realized & unrealized hedging (gains)












and losses


(537,629)



5,180,771



(4,274,696)



13,792,563



80,527,565



92,791,969



253,402,424



228,382,437













Gross Margin (Loss)


(707,227)



2,061,505



11,494,566



8,173,457













General and Administrative Expenses


1,048,264



933,741



3,377,965



3,293,090













Operating Income (Loss)


(1,755,491)



1,127,764



8,116,601



4,880,367













Other (Income) Expense












Interest Income


(5,346)



(5,853)



(16,893)



(12,862)

Interest Expense


2,408,809



2,426,329



7,341,800



7,312,267

(Gain) Loss on disposal of fixed assets


-



-



10,503



-

Miscellaneous income


(5,905)



(5,550)



(74,402)



(61,526)

Total


2,397,558



2,414,926



7,261,008



7,237,879













Net Income (Loss)

$

(4,153,049)


$

(1,287,162)


$

855,593


$

(2,357,512)













Weighted Average Units Outstanding












- Basic & Diluted


13,139



13,139



13,139



13,139

Net income (loss) per unit












- basic & diluted

$

(316.09)


$

(97.96)


$

65.12


$

(179.43)

 

Adjusted EBITDA

Management uses Adjusted EBITDA, a non-GAAP measure, to measure the SIRE's financial performance and to internally manage its business.   Management believes that adjusted EBITDA provides useful information to investors as a measure of comparison with peer and other companies.   Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or cash flow as determined in accordance with generally accepted accounting principles.  Adjusted EBITDA calculations may vary from company to company.  Accordingly, our computation of Adjusted EBITDA may not be comparable with a similarly-titled measure of another company.

The following sets forth the reconciliation of Net Loss to Adjusted EBITDA (unaudited) for the periods indicated:                                                                                                             









Three Months Ended



Three Months Ended



June 30, 2012



June 30, 2011

Net loss

$

(4,153,049)


$

(1,287,162)

Interest Expense, net


2,403,463



2,420,476

Depreciation


2,859,105



2,717,789

EBITDA


1,109,519



3,851,103

Unrealized hedging (gains) losses


(322,495)



726,567

Adjusted EBITDA

$

787,024


$

4,577,670

Adjusted EBITDA per unit

$

59.90


$

348.40









Nine Months Ended



Nine Months Ended



June 30, 2012



June 30, 2011







Net Income (Loss)

$

855,593


$

(2,357,512)

Interest Expense, net


7,324,907



7,299,405

Depreciation


8,566,253



10,809,431

EBITDA


16,746,753



15,751,324

Unrealized hedging (gains) losses


(5,026,107)



726,567

Adjusted EBITDA

$

11,720,646


$

16,477,891

Adjusted EBITDA per unit

$

892.05


$

1,254.12

                                                                                                         

 

Statistical Information












Three Months Ended June 30, 2012 (Unaudited)


Three Months Ended June 30, 2011 (Unaudited)












Statistical
 Revenue
Information

Gallons / Tons
Sold

% of
Revenues


Gallons / Tons
Average Price


Statistical
Revenue
Information

Gallons /
Tons Sold

% of
Revenues


Gallons / Tons
Average Price

Denatured
Ethanol

28,735,866

74%


$                 2.07


Denatured
Ethanol

30,703,782

82%


$                  2.53

Dried Distiller's
Grains

71,827

19%


$             209.92


Dried Distiller's
Grains

70,926

15%


$              194.74

Corn Oil

3,580

3%


$             773.37


Corn Oil

2,230

2%


$              907.64

Wet Distiller's
Grains

26,870

3%


$                89.59


Wet Distiller's
Grains

10,988

1%


$                69.32

Syrup

5,329

0%


$                65.88


Syrup

13,212

0%


$                12.44























Nine Months Ended June 30, 2012 (Unaudited)


Nine Months Ended June 30, 2011 (Unaudited)












Statistical
Revenue
Information

Gallons / Tons
Sold

% of
Revenues


Gallons / Tons
Average Price


Statistical
Revenue
Information

Gallons /
Tons Sold

% of
Revenues


Gallons / Tons
Average Price

Denatured
Ethanol

92,351,685

77%


$                   2.22


Denatured
Ethanol

85,766,206

81%


$                  2.24

Dried Distiller's
Grains

221,657

17%


$               200.63


Dried Distiller's
Grains

227,968

18%


$              166.69

Corn Oil

9,818

3%


$               758.12


Corn Oil

3,958

1%


$              892.95

Wet Distiller's
Grains

78,410

3%


$                 86.68


Wet Distiller's
Grains

16,461

0%


$                68.25

Syrup

23,817

0%


$                 50.21


Syrup

27,400

0%


$                13.71

                 

SOURCE Southwest Iowa Renewable Energy, LLC




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