GlobeNewswire Inc | Aug 3, 2020 04:30PM EDT

August 03, 2020

Results for the Second Quarter of 2020:

-- Net loss attributable to the company of $8.2 million, or $(0.24) per diluted share -- Adjusted EBITDA of $17.9 million -- Cash, cash equivalents and restricted cash of $183.6 million; $289.0 million available under working capital facilities -- Industrial high-quality alcohol sales positively impacted the quarter -- Green Plains Cattle Company achieved record results -- Announced USP grade alcohol upgrades for Green Plains York LLC and Green Plains Wood River LLC -- Secured a $75 million project based financing line, which is expected to close during the third quarter to support high protein production expansion and announced Green Plains Wood River LLCs high protein project -- Green Plains Partners refinancing of debt facility completed

OMAHA, Neb., Aug. 03, 2020 (GLOBE NEWSWIRE) -- Green Plains Inc. (NASDAQ:GPRE) today announced financial results for the second quarter of 2020. Net loss attributable to the company was $8.2 million, or $(0.24) per diluted share, for the second quarter of 2020 compared with a net loss of $45.3 million, or $(1.13) per diluted share, for the same period in 2019. Revenues were $418.0 million for the second quarter of 2020 compared with $630.6 million for the same period last year.

Our efforts toward a total transformation of Green Plains continue to make progress as our second quarter saw benefits from all aspects of our plan, said Todd Becker, president and chief executive officer. Our positive second quarter adjusted EBITDA of $17.9 million and positive free cash flow resulted from contributions of our high-quality alcohol production, Project 24 initiatives, high protein production and another record quarter in our cattle business. Overall, our production platform achieved the highest per gallon margin in seven quarters. Our results included a positive contribution from our York, Nebraska biorefinery as we executed on a number of sales into the sanitizer and disinfectant markets. Our proudest and most impactful initiative of the quarter came from our employees who led efforts to get cleaning products containing Yorks high-quality alcohol into local communities through our donation program to help stop the spread of COVID-19.

The Company continued to execute on its Project 24 and protein strategy initiatives during the quarter. In July, Green Plains Fairmont completed its Project 24 upgrade and is starting up operations, which will result in significantly lower operating costs combined with a reduction in its carbon footprint. The Company has now completed over 55% of the originally planned Project 24 initiatives. Green Plains Mount Vernons Project 24 conversion is underway and is expected to be in service during the fourth quarter 2020. Project 24 is expected to be complete by the end of the first quarter 2021, and to drive overall operating expense below $0.24 per gallon as the technology is integrated across the platform.

Our transformation to Green Plains 2.0 is gaining momentum with the startup of Shenandoahs high-protein facility now complete, the announced upgrade to USP grade alcohol at York and Wood River, and continuing innovation and development in novel feed ingredients in coordination with Optimal Aqua, added Becker. As we begin to engage with various partnerships to enhance the quality and nutritional factors of our high protein products in the coming months, our transformation will continue to accelerate. Our balance sheet remains strong, as we ended the quarter with over $183 million in cash, and expect to have ample liquidity and access to project based capital to continue our transformation.

With Green Plains Shenandoahs high-protein system achieving 100% production of quality high protein ingredients to supply our pet and aquaculture customers, we remain confident in deploying this technology across our production platform. For this reason, we chose our Wood River, Nebraska facility to be the second location for implementation of high protein production, commented Becker. We have chosen Fluid Quip Technologies to engineer, design and construct the facility and expect completion late in the second quarter of 2021. The recent approval of a $75 million dollar loan facility to help fund the construction of the second and third high protein production facilities further validates this strategy.

Results of OperationsGreen Plains sold 149.9 million gallons of ethanol during the second quarter of 2020, compared with 224.0 million gallons for the same period in 2019. The adjusted consolidated ethanol crush margin was $13.9 million, or $0.09 per gallon, for the second quarter of 2020, compared with $(19.9) million, or $(0.09) per gallon, for the same period in 2019. The consolidated ethanol crush margin is the ethanol production segments operating income before depreciation and amortization, which includes corn oil and high protein corn meal, plus intercompany storage, transportation and other fees, net of related expenses.

Consolidated revenues decreased $212.6 million for the three months ended June 30, 2020, compared with the same period in 2019, due primarily to lower production volumes of ethanol, distillers grains and corn oil.

Operating loss decreased $27.3 million for the three months ended June 30, 2020, compared with the same period last year. Interest expense for the three months ended June 30, 2020, decreased $1.6 million compared with the same period in 2019. Income tax benefit was $11.5 million for the three months ended June 30, 2020, compared with $15.3 million for the same period in 2019.

Adjusted EBITDA increased $37.4 million due to equity earnings from our Green Plains Cattle Company joint venture, as well as higher earnings from our ethanol production segment driven by FCC Grade alcohol sales from our York, Neb. location.

In the second quarter, the company filed its preliminary 2019 federal income tax return, as well as a refund claim with the IRS to carry back its 2019 NOL to prior years. As a result, the company recorded an additional income tax benefit of approximately $5.5 million during the second quarter related to the CARES Act in addition to adjustments to certain valuation allowances.

Segment InformationThe company reports the financial and operating performance for the following four operating segments: (1) ethanol production, which includes the production of ethanol, including industrial-grade alcohol, distillers grains and corn oil, (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading for company-produced and third-party ethanol, distillers grains, corn oil, natural gas and other commodities, (3) food and ingredients, which includes food-grade corn oil and (4) partnership, which includes fuel storage and transportation services. Intercompany fees charged to the ethanol production segment for storage and logistics services, grain procurement and product sales are included in the partnership and agribusiness and energy services segments and eliminated upon consolidation. Third-party costs of grain consumed and revenues from product sales are reported directly in the ethanol production segment.

GREEN PLAINS INC.SEGMENT OPERATIONS(unaudited, in thousands) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 % Var. 2020 2019 % Var.Revenues: Ethanol $ 290,542 $ 450,943 (35.6 ) % $ 766,267 $ 721,776 6.2 %productionAgribusinessand energy 130,456 184,968 (29.5 ) 293,645 354,176 (17.1 ) servicesFood and - - * - 1,452 * ingredientsPartnership 20,381 20,825 (2.1 ) 40,652 41,912 (3.0 ) Intersegment (23,390 ) (26,166 ) (10.6 ) (49,706 ) (50,105 ) (0.8 ) eliminations $ 417,989 $ 630,570 (33.7 ) % $ 1,050,858 $ 1,069,211 (1.7 ) %Gross margin: Ethanol $ 6,368 $ (32,409 ) 119.6 % $ (7,057 ) $ (55,063 ) 87.2 %productionAgribusinessand energy 4,688 8,754 (46.4 ) 11,375 18,336 (38.0 ) servicesFood and - (6 ) * - (70 ) * ingredientsPartnership 20,381 20,825 (2.1 ) 40,652 41,912 (3.0 ) Intersegment (4,309 ) (554 ) * (2,201 ) (4,255 ) 48.3 eliminations $ 27,128 $ (3,390 ) * % $ 42,769 $ 860 * %Depreciationand amortization:Ethanol $ 17,184 $ 15,437 11.3 % $ 33,082 $ 30,777 7.5 %productionAgribusinessand energy 556 552 0.7 1,109 1,101 0.7 servicesPartnership 966 771 25.3 1,927 1,756 9.7 Corporate 669 751 (10.9 ) 1,337 1,501 (10.9 ) activities $ 19,375 $ 17,511 10.6 % $ 37,455 $ 35,135 6.6 %Operatingincome (loss):Ethanol $ (18,792 ) $ (53,885 ) (65.1 ) % $ (79,573 ) $ (98,077 ) (18.9 ) %productionAgribusinessand energy 351 4,341 (91.9 ) 2,911 9,645 (69.8 ) servicesFood and - (5 ) * - (70 ) * ingredientsPartnership 12,225 13,156 (7.1 ) 24,655 25,707 (4.1 ) Intersegment (4,283 ) (528 ) * (2,150 ) (4,205 ) (48.9 ) eliminationsCorporate (8,869 ) (9,724 ) (8.8 ) (19,539 ) (18,283 ) 6.9 activities $ (19,368 ) $ (46,645 ) (58.5 ) % $ (73,696 ) $ (85,283 ) (13.6 ) %Adjusted EBITDA:Ethanol $ (1,607 ) $ (38,737 ) 95.9 % $ (45,732 ) $ (67,240 ) 32.0 %productionAgribusinessand energy 1,037 4,899 (78.8 ) 4,165 10,761 (61.3 ) servicesFood and - (5 ) * - (69 ) * ingredientsPartnership 13,366 14,017 (4.6 ) 26,914 27,788 (3.1 ) Intersegment (4,283 ) (528 ) * (2,150 ) (4,205 ) 48.9 eliminationsCorporateactivities ^ 7,381 (8,326 ) 188.7 8,329 (14,705 ) 156.6 (1)EBITDA 15,894 (28,680 ) 155.4 (8,474 ) (47,670 ) 82.2 EBITDAadjustmentsrelated to - 8,911 * - 9,232 * discontinuedoperationsProportionalshare ofEBITDAadjustments 2,041 310 * 4,978 641 * to equitymethodinvesteesNoncashgoodwill - - * 24,091 - * impairmentAdjusted $ 17,935 $ (19,459 ) 192.2 % $ 20,595 $ (37,797 ) 154.5 %EBITDA (1) Includes corporate expenses, offset by earnings from equity methodinvestments of $12.0 million and $19.8 million for the three and six months ended June 30, 2020, respectively. * Percentage variance not considered meaningful.

GREEN PLAINS INC.SELECTED OPERATING DATA(unaudited, in thousands) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 % Var. 2020 2019 % Var.Ethanol productionEthanol sold 149,872 224,023 ) % 390,338 379,063 3.0 %(gallons) (33.1Distillersgrains sold 383 586 ) 1,025 984 4.2 (equivalent (34.6dried tons)Corn oil sold 39,496 53,040 (25.5 ) 102,048 88,023 15.9 (pounds)Corn consumed 51,908 77,963 (33.4 ) 135,791 132,004 2.9 (bushels) Agribusinessand energy servicesDomestic ethanol sold 145,853 255,149 (42.8 ) 355,436 394,648 (9.9 ) (gallons)Export ethanol sold 68,789 74,843 (8.1 ) 168,509 162,431 3.7 (gallons) 214,642 329,992 ) 523,945 557,079 (5.9 ) (35.0Partnership Storage and throughput 150,047 225,140 (33.4 ) 391,685 380,832 2.8 (gallons)

GREEN PLAINS INC.CONSOLIDATED CRUSH MARGIN(unaudited, in thousands except per gallon amounts) Three Months Ended Three Months Ended June 30, June 30, 2020 2019 2020 2019 ($ per gallon produced) Ethanolproduction $ ) $ ) $ ) $ )operating (18,792 (53,885 (0.13 (0.24lossDepreciationand 17,184 15,437 0.12 0.07 amortizationTotaladjusted (1,608 ) ) ) )ethanol (38,448 (0.01 (0.17production Intercompany fees, net:Storage andlogistics 12,290 12,920 0.08 0.06 (partnership)Marketing andagribusinessfees 3,221 5,583 0.02 0.02 (agribusinessand energyservices)Consolidated ethanol crush $ 13,903 $ (19,945 ) $ 0.09 $ (0.09 )margin

Liquidity and Capital ResourcesOn June 30, 2020, Green Plains had $183.6 million in total cash, cash equivalents and restricted cash, and $289.0 million available under committed working capital revolving credit agreements, which are subject to restrictions and other lending conditions. Total debt outstanding at June 30, 2020, was $509.3 million, including $131.4 million outstanding debt under working capital revolvers and other short-term borrowing arrangements and $126.9 million of debt related to Green Plains Partners, net of debt issuance costs.

Conference Call InformationOn August 4, 2020, Green Plains Inc. and Green Plains Partners LP will host a joint conference call at 11 a.m. Eastern time (10 a.m. Central time) to discuss second quarter 2020 financial and operating results for each company. Domestic and international participants can access the conference call by dialing 877.711.2374 and 281.542.4862, respectively, and referencing conference ID 3141408. The company advises participants to call at least 10 minutes prior to the start time. Alternatively, the conference call, transcript and presentation will be accessible on Green Plains website at http://investor.gpreinc.com/events.cfm.

Non-GAAP Financial MeasuresManagement uses adjusted EBITDA, segment EBITDA and consolidated ethanol crush margins to measure the companys financial performance and to internally manage its businesses. EBITDA is defined as earnings before interest expense, income tax expense, depreciation and amortization excluding the change in right-of-use assets. Adjusted EBITDA includes adjustments related to operational results of Green Plains Cattle prior to its disposition which are recorded as discontinued operations, and our proportional share of EBITDA adjustments of our equity method investees and noncash goodwill impairment. Management believes these measures provide useful information to investors for comparison with peer and other companies. These measures should not be considered alternatives to net income or segment operating income, which are determined in accordance with generally accepted accounting principles (GAAP). These non-GAAP calculations may vary from company to company. Accordingly, the companys computation of adjusted EBITDA, segment EBITDA and consolidated ethanol crush margins may not be comparable with similarly titled measures of another company.

About Green Plains Inc.Green Plains Inc. (NASDAQ:GPRE) is a diversified commodity-processing business with operations that include corn processing, grain handling and storage and commodity marketing and logistics services. The company is one of the leading corn processors in the world and, through its adjacent businesses, is focused on the production of sustainable biofuels and sustainable high-protein and novel feed ingredients. Green Plains owns a 50% interest in Green Plains Cattle Company LLC and owns a 49.0% limited partner interest and a 2.0% general partner interest in Green Plains Partners LP. For more information about Green Plains, visit www.gpreinc.com.

About Green Plains Partners LPGreen Plains Partners LP (NASDAQ:GPP) is a fee-based Delaware limited partnership formed by Green Plains Inc. to provide fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage terminals, transportation assets and other related assets and businesses. For more information about Green Plains Partners, visit www.greenplainspartners.com.

Forward-Looking StatementsThis news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements reflect managements current views, which are subject to risks and uncertainties including, but not limited to, anticipated financial and operating results, plans and objectives that are not historical in nature. These statements may be identified by words such as believe, expect, may, should, will and similar expressions. Factors that could cause actual results to differ materially from those expressed or implied include: disruption caused by health epidemics, such as the coronavirus outbreak, competition in the industries in which Green Plains operates; commodity market risks, financial market risks; counterparty risks; risks associated with changes to federal policy or regulation, including changes to tax laws; risks related to closing and achieving anticipated results from acquisitions and disposals. Other factors can include risks associated with Green Plains ability to realize higher margins anticipated from the companys high protein feed initiative or to achieve anticipated savings from Project 24 and other risks discussed in Green Plains reports filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. Green Plains assumes no obligation to update any such forward-looking statements, except as required by law.

Consolidated Financial Results

GREEN PLAINS INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands) June 30, December 31, 2020 2019 (unaudited) ASSETS Current assets Cash and cash equivalents $ 163,362 $ 245,977Restricted cash 20,234 23,919Accounts receivable, net 67,185 107,183Income tax receivable 57,714 6,216Inventories 173,121 252,992Other current assets 34,439 31,626Total current assets 516,055 667,913Property and equipment, net 850,369 827,271Operating lease right-of-use assets 50,408 52,476Investment in equity method investees 113,763 68,998Other assets 40,480 81,560Total assets $ 1,571,075 $ 1,698,218 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 93,566 $ 156,693Accrued and other liabilities 32,231 39,384Derivative financial instruments 15,459 8,721Current operating lease liabilities 14,684 16,626Short-term notes payable and other borrowings 131,425 187,812Current maturities of long-term debt 36,647 132,555Total current liabilities 324,012 541,791Long-term debt 341,219 243,990Long-term operating lease liabilities 38,865 38,314Other liabilities 9,709 8,837Total liabilities 713,805 832,932 Stockholders' equity Total Green Plains stockholders' equity 741,779 751,905Noncontrolling interests 115,491 113,381Total liabilities and stockholders' equity $ 1,571,075 $ 1,698,218

GREEN PLAINS INC.CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited, in thousands except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 % Var. 2020 2019 % Var.Revenues Product $ 416,605 $ 628,878 (33.8 ) % $ 1,048,186 $ 1,065,214 (1.6 ) %Services 1,384 1,692 (18.2 ) 2,672 3,997 (33.1 ) Total revenues 417,989 630,570 (33.7 ) 1,050,858 1,069,211 (1.7 ) Costs and expensesCost of goodssold(excludingdepreciationand 390,861 633,960 (38.3 ) 1,008,089 1,068,351 (5.6 ) amortizationexpensesreflectedbelow)Operations and 6,603 6,234 5.9 12,763 13,098 (2.6 ) maintenanceSelling,general and 20,518 19,510 5.2 42,156 37,910 11.2 administrativeGoodwill - - * 24,091 - * impairmentDepreciationand 19,375 17,511 10.6 37,455 35,135 6.6 amortizationTotal costs 437,357 677,215 (35.4 ) 1,124,554 1,154,494 (2.6 ) and expensesOperating lossfrom (19,368 ) (46,645 ) (58.5 ) (73,696 ) (85,283 ) (13.6 ) continuingoperationsOther income (expense)Interest 47 860 (94.5 ) 640 2,046 (68.7 ) incomeInterest (9,670 ) (11,249 ) (14.0 ) (19,367 ) (20,980 ) (7.7 ) expenseOther, net 14 (370 ) (103.8 ) 850 542 56.8 Total other (9,609 ) (10,759 ) (10.7 ) (17,877 ) (18,392 ) (2.8 ) expenseLoss fromcontinuingoperationsbefore incometaxes and (28,977 ) (57,404 ) (49.5 ) (91,573 ) (103,675 ) (11.7 ) income (loss)from equitymethodinvesteesIncome tax 11,458 15,322 (25.2 ) 55,741 28,265 97.2 benefitIncome (loss)from equitymethod 12,045 (36 ) * 20,011 (110 ) * investees, netof incometaxesNet loss fromcontinuingoperations (5,474 ) (42,118 ) (87.0 ) (15,821 ) (75,520 ) (79.1 ) includingnoncontrollinginterestNet income(loss) fromdiscontinued - 1,939 * - (2,530 ) * operations,net of incometaxesNet loss (5,474 ) (40,179 ) (86.4 ) (15,821 ) (78,050 ) (79.7 ) Net incomeattributableto 2,740 5,163 (46.9 ) 8,838 10,091 (12.4 ) noncontrollinginterestsNet lossattributable $ (8,214 ) $ (45,342 ) (81.9 ) % $ (24,659 ) $ (88,141 ) (72.0 ) %to GreenPlains Earnings pershare - basic and dilutedNet loss fromcontinuing $ (0.24 ) $ (1.18 ) $ (0.71 ) $ (2.13 ) operationsNet income(loss) from - 0.05 - (0.06 ) discontinuedoperationsNet lossattributable $ (0.24 ) $ (1.13 ) $ (0.71 ) $ (2.19 ) to GreenPlains Weightedaverage shares outstanding:Basic 34,603 40,081 34,634 40,200 Diluted 34,603 40,081 34,634 40,200

* Percentage variance not considered meaningful.

GREEN PLAINS INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited, in thousands) Six Months Ended June 30, 2020 2019 Cash flows from operating activities: Loss from continuing operations including $ (15,821 ) $ (75,520 )noncontrolling interestLoss from discontinued operations, net of - (2,530 )income taxesNet loss (15,821 ) (78,050 )Noncash operating adjustments: Depreciation and amortization 37,455 35,135 Goodwill impairment 24,091 - Deferred income taxes (18,132 ) (27,543 )Other 8,235 15,937 Net change in working capital 30,109 11,447 Net cash provided by (used in) operating 65,937 (43,074 )activities - continuing operationsNet cash provided by operating activities - 10,865 - discontinued operationsNet cash provided by (used in) operating 65,937 (32,209 )activities Cash flows from investing activities: Purchases of property and equipment, net (63,881 ) (20,016 )Proceeds from the sale of assets, net - 3,155 Other investing activities (4,098 ) - Net cash used in investing activities - (67,979 ) (16,861 )continuing operationsNet cash used in investing activities - - (3,451 )discontinued operationsNet cash used in investing activities (67,979 ) (20,312 ) Cash flows from financing activities: Net proceeds (payments) - long-term debt 2,684 102,575 Net payments - short-term borrowings (64,090 ) (33,699 )Payment for repurchase of common stock (11,479 ) (39,870 )Other (11,373 ) (20,979 )Net cash provided by (used in) financing (84,258 ) 8,027 activities - continuing operationsNet cash used in financing activities - - (39,793 )discontinued operationsNet cash used in financing activities (84,258 ) (31,766 ) Net change in cash, cash equivalents and (86,300 ) (84,287 )restricted cashCash, cash equivalents and restricted 269,896 283,284 cash, beginning of periodDiscontinued operations cash activity included above:Add: Cash balance included in currentassets of discontinued operations at - 34,911 beginning of periodLess: Cash balance included in currentassets of discontinued operations at end - (2 )of periodCash, cash equivalents and restricted $ 183,596 $ 233,906 cash, end of period Continued on following page

GREEN PLAINS INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited, in thousands) Continued from previous page Six Months Ended June 30, 2020 2019 Reconciliation of total cash, cash equivalents and restricted cash:Cash and cash equivalents $ 163,362 $ 193,280 Restricted cash 20,234 40,628 Discontinued operations cash activity included above:Less: Cash balance included in currentassets of discontinued operations at end of - (2 )periodTotal cash, cash equivalents and restricted $ 183,596 $ 233,906 cash

GREEN PLAINS INC.RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES(unaudited, in thousands) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net loss fromcontinuingoperations $ (5,474 ) $ ) $ ) $ )including (42,118 (15,821 (75,520noncontrollinginterestInterest 9,670 11,249 19,367 20,980 expenseIncome taxbenefit, net of equity (7,677 ) (15,322 ) (49,475 ) (28,265 )method incometax expenseDepreciationand 19,375 17,511 37,455 35,135 amortization^(1)EBITDA 15,894 ) (8,474 ) ) (28,680 (47,670EBITDAadjustmentsrelated to - 8,911 - 9,232 discontinuedoperationsProportionalshare ofEBITDA 2,041 310 4,978 641 adjustments toequity methodinvesteesNoncashgoodwill - - 24,091 - impairmentAdjusted $ 17,935 $ ) $ 20,595 $ )EBITDA (19,459 (37,797

(1) Excludes the change in operating lease right-of-use assets and amortization of debt issuance costs.

Green Plains Inc. ContactsInvestors: Phil Boggs | Senior Vice President - Investor Relations andTreasurer | 402.884.8700 | phil.boggs@gpreinc.comMedia: Leighton Eusebio | Manager - Public Relations | 402.952.4971 |leighton.eusebio@gpreinc.com