Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |||
Oct. 31, 2013 | Apr. 30, 2013 | Jan. 29, 2014 | Jan. 29, 2014 | |
Class A | Class B | |||
Entity Registrant Name | 'Heron Lake BioEnergy, LLC | ' | ' | ' |
Entity Central Index Key | '0001286964 | ' | ' | ' |
Current Fiscal Year End Date | '--10-31 | ' | ' | ' |
Entity Filer Category | 'Non-accelerated Filer | ' | ' | ' |
Document Type | '10-K | ' | ' | ' |
Document Period End Date | 31-Oct-13 | ' | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' | ' |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | 'FY | ' | ' | ' |
Amendment Flag | 'false | ' | ' | ' |
Entity Common Stock, Shares Outstanding, Class B | ' | ' | 49,812,107 | 15,000,000 |
Entity Well-known Seasoned Issuer | 'No | ' | ' | ' |
Entity Voluntary Filers | 'No | ' | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' | ' |
Entity Public Float | ' | $0 | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Oct. 31, 2013 | Oct. 31, 2012 |
Current Assets | ' | ' |
Cash and equivalents | $543,238 | $653,361 |
Restricted cash | 0 | 65,259 |
Restricted certificates of deposit | 0 | 650,000 |
Accounts receivable | 749,426 | 1,784,761 |
Inventory | 5,604,309 | 3,588,572 |
Prepaid expenses | 952,271 | 796,829 |
Total current assets | 7,849,244 | 7,538,782 |
Property and Equipment | ' | ' |
Land and improvements | 9,111,838 | 9,252,379 |
Plant buildings and equipment | 71,275,334 | 76,155,846 |
Vehicles and other equipment | 611,976 | 645,481 |
Office buildings and equipment | 612,151 | 622,711 |
Construction in progress | 1,394,191 | 645,486 |
Property, plant and equipment, gross | 83,005,490 | 87,321,903 |
Less accumulated depreciation | -31,335,218 | -29,222,617 |
Property, plant and equipment, net | 51,670,272 | 58,099,286 |
Other Assets | ' | ' |
Other intangible assets, net | 218,370 | 256,513 |
Other assets | 1,056,031 | 686,438 |
Total other assets | 1,274,401 | 942,951 |
Total Assets | 60,793,917 | 66,581,019 |
Current Liabilities | ' | ' |
Line of credit | 0 | 480,000 |
Current maturities of long-term debt | 3,371,575 | 42,051,402 |
Trade accounts payable | 1,300,727 | 2,085,882 |
Accrued expenses | 389,608 | 382,953 |
Total current liabilities | 5,061,910 | 45,000,237 |
Long-Term Debt, net of current maturities | 28,181,155 | 4,031,335 |
Commitments and Contingencies | ' | ' |
Members' Equity | ' | ' |
Members' Equity Attributable to Heron Lake BioEnergy, LLC: 64,812,107 and 38,622,107 multiple classes of units issued and outstanding at October 31, 2013 and 2012, respectively | 27,142,275 | 17,344,433 |
Noncontrolling interest | 408,577 | 205,014 |
Total members' equity | 27,550,852 | 17,549,447 |
Total Liabilities and Members' Equity | $60,793,917 | $66,581,019 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) | Oct. 31, 2013 | Oct. 31, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Members' Equity, units issued | 64,812,107 | 38,622,107 |
Members' Equity, units outstanding | 64,812,107 | 38,622,107 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Income Statement [Abstract] | ' | ' | ' |
Revenues | $163,764,144 | $168,659,935 | $164,120,375 |
Cost of Goods Sold | ' | ' | ' |
Cost of goods sold | 155,536,974 | 166,529,283 | 155,571,814 |
Lower of cost or market adjustment | 0 | 0 | 1,591,810 |
Total Cost of Goods Sold | 155,536,974 | 166,529,283 | 157,163,624 |
Gross Profit | 8,227,170 | 2,130,652 | 6,956,751 |
Operating Expenses | -3,214,036 | -3,171,331 | -3,613,465 |
Impairment Charge | 0 | -27,844,579 | 0 |
Settlement Expense | 0 | -900,000 | 0 |
Operating Income (Loss) | 5,013,134 | -29,785,258 | 3,343,286 |
Other Income (Expense) | ' | ' | ' |
Interest income | 17,335 | 10,773 | 37,078 |
Interest expense | -2,789,373 | -2,625,322 | -2,900,470 |
Other income | 26,764 | 47,164 | 63,123 |
Total other expense, net | -2,745,274 | -2,567,385 | -2,800,269 |
Net Income (Loss) | 2,267,860 | -32,352,643 | 543,017 |
Net Income (Loss) Attributable to Noncontrolling Interest | 327,018 | 353,019 | -27,838 |
Net Income (Loss) Attributable to Heron Lake BioEnergy, LLC | $1,940,842 | ($32,705,662) | $570,855 |
Weighted Average Units Outstanding - Basic (in shares) | 44,868,463 | 38,510,066 | 33,391,636 |
Net Income (Loss) Per Unit Attributable to Heron Lake BioEnergy, LLCbBasic (Class A and B) | $0.04 | ($0.85) | $0.02 |
Weighted Average Units Outstanding - Diluted (in shares) | 48,086,445 | 38,510,066 | 33,391,636 |
Net Income (Loss) Per Unit Attributable to Heron Lake BioEnergy, LLCbDiluted (Class A and B) | $0.04 | ($0.85) | $0.02 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Members' Equity (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' |
Balance | $17,549,447 | $49,481,285 | $45,437,268 |
Capital Issuance | 6,922,500 | 707,017 | 3,500,000 |
Conversion of subordinated convertible debt | 934,500 | ' | ' |
Distributions to noncontrolling interest | -123,455 | -121,167 | ' |
Capital issuance for noncontrolling interest | ' | ' | 1,000 |
Costs of raising capital | ' | -165,045 | ' |
Net income (loss) attributable to noncontrolling interest | 327,018 | 353,019 | -27,838 |
Net income (loss) | 1,940,842 | -32,705,662 | 570,855 |
Balance | $27,550,852 | $17,549,447 | $49,481,285 |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Members' Equity (Parenthetical) (USD $) | 12 Months Ended |
Oct. 31, 2013 | |
Class A units | |
Class of Stock [Line Items] | ' |
Capital issuance (in shares) | 8,075,000 |
Conversion of subordinated convertible debt (in shares) | 3,115,000 |
Stock issuance cost per unit | $0.30 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Cash Flow From Operating Activities | ' | ' | ' |
Net income (loss) | $2,267,860 | ($32,352,643) | $543,017 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' | ' |
Depreciation and amortization | 4,282,523 | 5,693,459 | 5,490,240 |
Impairment charge | 0 | 27,844,579 | 0 |
Lower of cost or market adjustment | 0 | 0 | 1,591,810 |
Change in operating assets and liabilities: | ' | ' | ' |
Restricted cash | 0 | 103,697 | 205,212 |
Accounts receivable | 1,035,335 | -406,541 | 3,639,009 |
Inventory | -2,015,737 | 176,044 | 6,857,746 |
Derivative instruments | 0 | 0 | -107,271 |
Prepaid expenses and other | -155,442 | 117,396 | -936,192 |
Accounts payable | -1,390,905 | -727,926 | -993,412 |
Accrued expenses | -65,864 | -50,357 | -454,026 |
Lower of cost or market accrued expense | 0 | 0 | -1,577,856 |
Net cash provided by operating activities | 3,957,770 | 397,708 | 14,258,277 |
Cash Flows from Investing Activities | ' | ' | ' |
Payments for restricted certificates of deposit | 0 | 0 | -250,000 |
Capital expenditures | -917,020 | -1,560,616 | -4,243,171 |
Proceeds from disposal of property and equipment | 3,728,669 | 0 | 0 |
Net cash provided by (used in) investing activities | 2,811,649 | -1,560,616 | -4,493,171 |
Cash Flows from Financing Activities | ' | ' | ' |
Checks written in excess of bank balance | 0 | 0 | -913,492 |
Proceeds from (payments on) line of credit, net | -480,000 | 480,000 | -3,500,000 |
Payments on long-term debt | -19,493,936 | -6,922,038 | -4,219,512 |
Proceeds from note payable | 820,929 | 262,250 | 737,750 |
Issuance of convertible subordinated debt | 5,077,500 | 0 | 0 |
Issuance of member units | 6,922,500 | 707,017 | 3,500,000 |
Deferred financing fees | -390,858 | 0 | 0 |
Release of restricted cash | 715,259 | 257,630 | 336,408 |
Costs of raising capital | 0 | 0 | -90,005 |
Noncontrolling interest investment | 0 | 0 | 1,000 |
Distributions to noncontrolling interest | -50,936 | -109,163 | 0 |
Net cash used in financing activities | -6,879,542 | -5,324,304 | -4,147,851 |
Net Increase (Decrease) in cash and equivalents | -110,123 | -6,487,212 | 5,617,255 |
Cash and EquivalentsbBeginning of period | 653,361 | 7,140,573 | 1,523,318 |
Cash and EquivalentsbEnd of period | 543,238 | 653,361 | 7,140,573 |
Supplemental Disclosure of Cash Flow Information | ' | ' | ' |
Interest expense paid | 2,961,259 | 2,642,087 | 3,377,199 |
Supplemental Disclosure of Non-Cash Activities | ' | ' | ' |
Cost of raising capital offset against member contributions | 0 | 165,045 | 0 |
Capital expenditure included as accounts payable | 605,750 | 0 | 0 |
Capital expenditure financed with note payable | 0 | 1,325,000 | 0 |
Distribution to non-controlling interest in accrued expenses | 72,519 | 12,004 | 0 |
Conversion of subordinated convertible debt to member units | $934,500 | $0 | $0 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |
Oct. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Nature of Business | ||
The Company owns and operates an ethanol plant near Heron Lake, Minnesota with a permitted capacity of approximately 59.2 million gallons. In addition, the Company produces and sells distillers grains with solubles and corn oil as co-products of ethanol production. | ||
The Company entered into an asset purchase agreement dated January 22, 2013, which provided for the sale of substantially all of the Company’s assets to, and the assumption of certain of the Company’s liabilities by, Guardian Energy Heron Lake, LLC (Guardian). On April 4, 2013, the Company terminated the agreement in accordance with its terms. As a result of terminating the purchase agreement and the Company renegotiating their loan agreements with AgStar Financial Services, PCA (“AgStar”), AgStar required certain principal pay downs by July 31, 2013. The Company raised all the required funds to pay down its debt to AgStar, to provide adequate working capital to operate the Company effectively and to meet AgStar’s requirements. | ||
Pursuant to an asset purchase agreement dated January 3, 2013, the Company’s subsidiary, Lakefield Farmers Elevator, LLC, sold substantially all of its assets consisting of the elevator and grain storage facilities in Lakefield, Minnesota and Wilder, Minnesota to FCA Co-op, a Minnesota cooperative, for approximately $3.75 million plus the purchase price for corn and fuel inventory. The sale closed on February 1, 2013. | ||
Principles of Consolidation | ||
The financial statements include the accounts of Heron Lake BioEnergy, LLC and its wholly owned subsidiaries, Lakefield Farmers Elevator, LLC and HLBE Pipeline Company, LLC, collectively, "the Company." HLBE Pipeline Company, LLC owns 73% of Agrinatural Gas, LLC ("Agrinatural"). Given the Company’s control over the operations of Agrinatural and its majority voting interest, the Company consolidates the financial statements of Agrinatural with its consolidated financial statements, with the equity and earnings (loss) attributed to the remaining 27% noncontrolling interest identified separately in the accompanying Consolidated Balance Sheets and Statements of Operations. All significant intercompany balances and transactions are eliminated in consolidation. | ||
Fiscal Reporting Period | ||
The Company's fiscal year end for reporting financial operations is October 31. | ||
Accounting Estimates | ||
Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The Company uses estimates and assumptions in accounting for significant matters including, among others, the analysis of impairment of long-lived assets, contingencies and valuation of forward purchase contract commitments and inventory. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made. Actual results could differ from those estimates. | ||
Noncontrolling Interest | ||
Amounts recorded as noncontrolling interest relate to the net investment by an unrelated party in Agrinatural. Income and losses are allocated to the members of Agrinatural based on their respective percentage of membership units held. Agrinatural will provide natural gas to the plant with a specified price per MMBTU for an initial term of 10 years, with two renewal options for five years periods. | ||
Revenue Recognition | ||
Revenue from sales is recorded when title transfers to the customer, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists, and the sales price is fixed and determinable. The title transfers when the product is loaded into the railcar or truck, the customer takes ownership and assumes risk of loss. | ||
In accordance with the Company's agreements for the marketing and sale of ethanol and related products, marketing fees and commissions due to the marketers are deducted from the gross sales price as earned. These fees and commissions are recorded net of revenues as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products. Shipping costs incurred by the Company in the sale of ethanol are not specifically identifiable and as a result, are recorded based on the net selling price reported to the Company from the marketer. Shipping costs incurred by the Company in the sale of ethanol related products are included in cost of goods sold. | ||
Cash and Equivalents | ||
The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash and equivalents. | ||
The Company maintains its accounts at multiple financial institutions. At times throughout the year, the Company's cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation. The Company does not believe it is exposed to any significant credit risk on cash and equivalents. | ||
Restricted Cash | ||
The Company is periodically required to maintain cash balances at its broker related to derivative instrument positions and as part of a loan agreement. | ||
Restricted Certificates of Deposit | ||
The Company maintains restricted certificates of deposit as part of its grain dealer's license. | ||
Accounts Receivable | ||
Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral. | ||
Accounts receivable are recorded at estimated net realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company's credit terms. Accounts considered uncollectible are written off. The Company's estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any. At October 31, 2013 and 2012, the Company was of the belief that such accounts would be collectable and thus an allowance was not considered necessary. | ||
Inventory | ||
Inventory consists of raw materials, work in process, finished goods, supplies, and other grain inventory. Raw materials are stated at the lower of cost or market on a first-in, first-out (FIFO) basis. Work in process and finished goods, which consists of ethanol, distillers grains and corn oil produced, if any, is stated at the lower of average cost or market. Other grain inventory, which consists of agricultural commodities, is valued at market value (net realizable value). Other grain inventory is readily convertible to cash because of its commodity characteristics, widely available markets and international pricing mechanisms. Other grain inventory is also freely traded, has quoted market prices, may be sold without significant further processing, and has predictable and insignificant disposal costs. | ||
Derivative Instruments | ||
From time to time, the Company enters into derivative transactions to protect gross margins from potentially adverse effects of market and price volatility in future periods. In order to reduce the risks caused by market fluctuations, the Company hedges a portion of its anticipated corn and natural gas purchases, and ethanol sales by entering into options and futures contracts. These contracts are used with the intention to fix the purchase price of anticipated requirements for corn and natural gas in the Company's ethanol production activities and the related sales price of ethanol produced. The fair value of these contracts is based on quoted prices in active exchange-traded or over-the-counter market conditions. | ||
The Company generally does not designate these derivative instruments as hedges for accounting purposes and derivative positions are recorded on the balance sheet at their fair market value, with changes in fair value caused from marking these instruments to market, recognized in current period earnings or losses on a monthly basis. While the Company does not designate the derivative instruments that it enters into as hedging instruments because of the administrative costs associated with the related accounting, the Company believes that the derivative instruments represent an economic hedge. | ||
In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. | ||
The Company evaluates its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as "normal purchases or normal sales." Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Certain corn, ethanol and distillers grains contracts that meet the requirement of normal purchases or sales are documented as normal and exempted from the accounting and reporting requirements, and therefore, are not marked to market in our financial statements. | ||
Other Intangibles | ||
Other intangibles are stated at cost and include road improvements located near the plant in which the Company has a beneficial interest in but does not own the road. The Company amortizes the assets over the economic useful life of 15 years. The Company recorded amortization expense in the amount of approximately $18,000, $32,000 and $37,000 during the years ended October 31, 2013, 2012 and 2011, respectfully. | ||
Property and Equipment | ||
Property and equipment are recorded at cost. Depreciation is provided over an estimated useful life by use of the straight-line deprecation method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Construction in progress is comprised of costs related to the construction of the ethanol plant facilities. Interest is capitalized during the construction period. Depreciable useful lives are as follows: | ||
Land improvements | 15 Years | |
Plant building and equipment | 7 - 40 Years | |
Vehicles and equipment | 5 - 7 Years | |
Office buildings and equipment | 3 - 40 Years | |
The Company recorded depreciation expense in the amount of approximately$4,258,000, $5,661,000 and $5,453,000 during the years ended October 31, 2013, 2012 and 2011, respectively. | ||
Long-Lived Assets | ||
The Company reviews property, plant and equipment and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the assets; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. If circumstances require a long-lived asset to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted basis, impairment is recognized to the extent the carrying value exceeds fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. | ||
The Company's ethanol production facilities have a nameplate capacity of 50 million gallons per year. As of October 31, 2012, the Company recorded an impairment charge of approximately $27,845,000 against long-lived assets. There was no impairment charge recorded in fiscal year 2013 or 2011. In accordance with the Company's policy for evaluating impairment of long-lived assets described above, management had evaluated the recoverability of the facilities based on projected future cash flows from operations over the facilities' estimated useful lives. Management determined that the projected future undiscounted cash flows from operations of these facilities did not exceed their carrying value at October 31, 2012. The Company performed an impairment analysis estimating the discounted cash flows to determine the impairment to record. In determining the projected future discounted cash flows, the Company made significant assumptions concerning the future viability of the ethanol industry, the future price of corn in relation to the future price of ethanol and the overall demand in relation to production and supply capacity. | ||
Deferred Offering Costs | ||
The Company defers the costs incurred to raise equity financing until that financing occurs. At such time that the issuance of new equity occurs, these costs will be netted against the proceeds received. | ||
Debt Financing Costs | ||
Costs associated with the issuance of loans are classified as financing costs. Financing costs are amortized over the term of the related debt by use of the effective interest method. Amortization for the year ended October 31, 2013 was approximately $21,000. | ||
Fair Value of Financial Instruments | ||
The Company follows guidance for accounting for fair value measurements of financial assets and liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the consolidated financial statements on a recurring and nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). | ||
The three levels of the fair value hierarchy are as follows: | ||
•Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | ||
•Level 2 includes: | ||
1.Quoted prices in active markets for similar assets or liabilities. | ||
2.Quoted prices in markets that are observable for the asset or liability either directly or indirectly, for substantially the full term of the asset or liability. | ||
3.Inputs that derived primarily from or corroborated by observable market date by correlation or other means. | ||
•Level 3 inputs are unobservable inputs for the asset or liability. | ||
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. | ||
Except for those assets and liabilities which are required by authoritative accounting guidance to be recorded at fair value in our balance sheets, the Company has elected not to record any other assets or liabilities at fair value. Except for the impairment charge recorded in 2012, no events occurred during the fiscal 2013, 2012, or 2011 that required adjustment to the recognized balances of assets or liabilities, which are recorded at fair value on a nonrecurring basis. | ||
The carrying value of cash and equivalents, restricted cash, restricted certificates of deposit, accounts receivable, accounts payable and accrued liabilities approximates fair value due to the short maturity of these instruments. The fair value of debt has been estimated using discounted cash flow analysis based upon the Company's current incremental borrowing rates for similar types of financing arrangements. The fair value of outstanding debt will fluctuate with changes in applicable interest rates. Fair value will exceed carrying value when the current market interest rate is lower than the interest rate at which the debt was originally issued. The fair value of a company's debt is a measure of its current value under present market conditions. It does not impact the financial statements under current accounting rules. The Company believes the carrying amount of the debt and line of credit approximates the fair value. | ||
As of October 31, 2013, loans with AgStar consist of term loans of approximately $22,557,000 with interest at market rates that are believed to approximate fair value. As of October 31, 2012, due to the defaults under the senior debt loan agreement which triggered an additional 2.0% default interest, the forbearance agreement that anticipated the sale of assets and repayments of term loans, and the underlying collateral of the loans, the Company believes the fair value continues to approximate the carrying value. | ||
Income Taxes | ||
The Company is treated as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, its earnings and losses are included in the income tax returns of the members. Therefore, no provision or liability for federal or state income taxes has been included in these financial statements. Differences between financial statement basis of assets and tax basis of assets is related to capitalization and amortization of organization and start-up costs for tax purposes, whereas these costs are expensed for financial statement purposes. In addition, the Company uses the alternative depreciation system (ADS) for tax depreciation instead of the straight-line method that is used for book depreciation, which also causes temporary differences. The Company's tax year end is December 31. Primarily due to the partnership tax status, the Company does not have any significant tax uncertainties that would require disclosure. The Company recognizes and measures tax benefits when realization of the benefits is uncertain under a two-step approach. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company's tax status as a partnership, the adoption of this guidance had no material impact on the Company's financial condition or results of operations. | ||
The Company files income tax returns in the U.S. federal and Minnesota state jurisdictions. The Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2010. | ||
Net Income (Loss) per Unit | ||
Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members' units outstanding during the period. Diluted net income or loss per unit is computed by dividing net income (loss) by the weighted average number of members' units and members' unit equivalents outstanding during the period. | ||
Environmental Liabilities | ||
The Company's operations are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its location. Accordingly, the Company has adopted policies, practices, and procedures in the areas of pollution control, occupational health, and the production, handling, storage and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability, which could result from such events. Environmental liabilities are recorded when the liability is probable and the costs can be reasonably estimated. |
GOING_CONCERN
GOING CONCERN | 12 Months Ended |
Oct. 31, 2013 | |
GOING CONCERN | ' |
GOING CONCERN | ' |
GOING CONCERN | |
The financial statements have been prepared on a going-concern basis, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company has previously disclosed losses related to operations related to difficult market conditions and operating performance. The Company has had instances of unwaived debt covenant violations and had been operating under forbearance agreements with AgStar Financial Services, PCA (“Agstar”). In addition, the Company’s working capital was at a lower level than desired. These conditions contributed to the long-term debt with Agstar being classified as current in previously filed financial statements. These factors and the continual volatile commodity prices raise substantial doubt about the Company’s ability to continue as a going concern. | |
The Company has continued to make changes to plant operations, including converting from a coal-fired ethanol plant to a natural gas plant in October 2011 and the addition of corn oil separation in February 2012. These changes have improved the operating performance of the plant, and lead to lower operating costs. Additionally, market conditions have improved during the year ended October 31, 2013. The Company raised additional equity of approximately $6.9 million and issued convertible debt of $5.1 million in 2013. As a result, the Company was able to reduce their debt obligations as of October 31, 2013 and is in compliance with their debt covenants as of October 31, 2013. | |
The Company renegotiated its loans with AgStar into a Term Loan and a Revolving Term Loan and entered into a Sixth Amended and Restated Master Loan Agreement with AgStar on May 17, 2013. The Revolving Term Loan will be used by the Company to optimize its cash management. The additional equity raised was used to improve working capital availability by paying down the Revolving Term Loan and meeting the required $5 million payment obligation by July 31, 2013. The Company’s Board of Governors loaned the Company $1.4 million in convertible secured debt, which was used to bring the previous AgStar loans up to date. In addition during 2013, the Company raised an additional $3.7 million, in convertible secured debt as described in Note 9. | |
While the Company believes these changes will improve the operating performance of the plant, provide additional working capital, and reduce the effects on our plant of volatility in the industry, it is not yet certain as to whether these efforts and changes will be successful. |
UNCERTAINTIES
UNCERTAINTIES | 12 Months Ended |
Oct. 31, 2013 | |
Risks and Uncertainties [Abstract] | ' |
UNCERTAINTIES | ' |
UNCERTAINTIES | |
The Company has certain risks and uncertainties that it experienced during volatile market conditions. These volatilities can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distillers grains to customers primarily located in the U.S. Corn for the production process is supplied to the plant primarily from local agricultural producers. Ethanol sales average 75%- 85% of total revenues and corn costs average 65%- 85% of cost of goods sold. | |
The Company's operating and financial performance is largely driven by the prices at which it sells ethanol and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, the weather, government policies and programs, unleaded gasoline prices and the petroleum markets as a whole. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, the weather, government policies and programs, and a risk management program used to protect against the price volatility of these commodities. Market fluctuations in the price of and demand for these products may have a significant adverse effect on the Company's operations, profitability and the availability and adequacy of cash flow to meet the Company's working capital requirements. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | |||||||||||||||||||
Oct. 31, 2013 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||||||||||||
The following table provides information on those assets measured at fair value on a nonrecurring basis. | ||||||||||||||||||||
Fair Value | ||||||||||||||||||||
Fair Value as of | Measurement Using | Impairment | ||||||||||||||||||
October 31, 2012 | Level 1 | Level 2 | Level 3 | Charge During 2012 | ||||||||||||||||
Property and Equipment | $ | 58,099,286 | $ | — | $ | — | $ | 58,099,286 | $ | 27,722,183 | ||||||||||
Other Intangible Assets, net | $ | 256,513 | $ | — | $ | — | $ | 256,513 | $ | 122,396 | ||||||||||
The Company's assessment of fair value of long-lived assets is based on various valuation techniques including discounted cash flow models, comparable activity in the market place, and third-party independent appraisals, as considered necessary. There were no impairment charges for the fiscal years ended October 31, 2013 and 2011. An impairment charge of approximately $27,845,000 against long-lived assets in the fiscal year ended October 31, 2012 which included significant assumptions concerning the future viability of the ethanol industry, the future price of corn in relation to the future price of ethanol and the overall demand in relation to production and supply capacity. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Oct. 31, 2013 | |
CONCENTRATIONS | ' |
CONCENTRATIONS | ' |
CONCENTRATIONS | |
The Company sells all of the ethanol and distiller grains produced to one customer under marketing agreements at October 31, 2013 and 2012. At October 31, 2013 and 2012, this customer comprised nearly all of accounts receivable. Prior to the change in marketers in 2011, the Company sold all of its ethanol and distillers grain to two customers. |
INVENTORY
INVENTORY | 12 Months Ended | |||||||
Oct. 31, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
INVENTORY | ' | |||||||
INVENTORY | ||||||||
Inventory consists of the following at October 31: | ||||||||
2013 | 2012 | |||||||
Raw materials | $ | 632,790 | $ | 521,865 | ||||
Work in process | 845,628 | 1,149,214 | ||||||
Finished Goods | 3,324,166 | — | ||||||
Supplies | 801,725 | 922,384 | ||||||
Other grains | — | 995,109 | ||||||
Totals | $ | 5,604,309 | $ | 3,588,572 | ||||
There were no significant losses in fiscal 2013, 2012 or 2011. All insignificant losses were recorded with the lower of cost or market adjustment in the statement of operations. In addition, the Company stored grain inventory for farmers at October 31, 2012. The value of these inventories owned by others was approximately $790,000 based on market prices at October 31, 2012 and is not included in the amounts above. As result of the sale of the grain storage asset, the Company is no longer storing grain for farmers. |
DERIVATIVE_INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended | |||||||||||||
Oct. 31, 2013 | ||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||
DERIVATIVE INSTRUMENTS | ' | |||||||||||||
DERIVATIVE INSTRUMENTS | ||||||||||||||
As of October 31, 2013 and 2012, the Company has no corn, ethanol, or natural gas derivative instruments. Derivatives qualify for treatment as hedges when there is a high correlation between the change in fair value of the derivative instrument and the related change in value of the underlying hedged item and when the Company formally documents, designates, and assesses the effectiveness of transactions that receive hedge accounting initially and on an on-going basis. The Company must designate the hedging instruments based upon the exposure being hedged as a fair value hedge or a cash flow hedge. The Company does not enter into derivative transactions for trading purposes. | ||||||||||||||
The Company enters into corn, ethanol, and natural gas derivatives in order to protect cash flows from fluctuations caused by volatility in commodity prices for periods up to 24 months. These derivatives are put in place to protect gross profit margins from potentially adverse effects of market and price volatility on ethanol sales and corn purchase commitments where the prices are set at a future date. Although these derivative instruments serve the Company's purpose as an economic hedge, they are not designated as effective hedges for accounting purposes. For derivative instruments that are not accounted for as hedges, or for the ineffective portions of qualifying hedges, the change in fair value is recorded through earnings in the period of change. | ||||||||||||||
The following tables provide details regarding the gains and (losses) from the Company's derivative instruments in Consolidated Statements of Operations, none of which are designated as hedging instruments: | ||||||||||||||
Statement of | Twelve Months Ended October 31, | |||||||||||||
Operations location | 2013 | 2012 | 2011 | |||||||||||
Corn contracts | Cost of goods sold | $ | — | $ | 1,088,000 | $ | (432,000 | ) | ||||||
Natural gas contracts | Cost of goods sold | — | (446,000 | ) | — | |||||||||
Ethanol contracts | Revenues | — | — | (24,000 | ) | |||||||||
Totals | $ | — | $ | 642,000 | $ | (456,000 | ) | |||||||
LINES_OF_CREDIT
LINES OF CREDIT | 12 Months Ended |
Oct. 31, 2013 | |
LINE OF CREDIT | ' |
LINES OF CREDIT | ' |
LINES OF CREDIT | |
Agrinatural obtained a line of credit with lending institution in September 2012 which provided up to $600,000 until March 31, 2013. Interest is charged at 5.43%. This line was paid in full in 2013. |
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | |||||||
Oct. 31, 2013 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
LONG-TERM DEBT | ' | |||||||
LONG-TERM DEBT | ||||||||
Long-term debt consists of the following: | ||||||||
October 31, | October 31, | |||||||
2013 | 2012 | |||||||
Term note payable to lending institution, see terms below. | $ | 16,577,641 | $ | 36,627,901 | ||||
Revolving term note payable to lending institution, see terms below. | 5,979,876 | 4,211,163 | ||||||
Assessment payable as part of water treatment agreement, due in semi-annual installments of $189,393 with interest at 6.55%, enforceable by statutory lien, with the final payment due in 2021. The Company made deposits for one years' worth of debt service payments included with other assets that are held on deposit to be applied with the final payments of the assessment. | 2,246,771 | 2,456,372 | ||||||
Assessment payable as part of water treatment agreement, due in semi-annual installments of $25,692 with interest at 0.50%, enforceable by statutory lien, with the final payment due in 2016. | 152,698 | 202,998 | ||||||
Assessment payable as part of water supply agreement, due in monthly installments of $3,942 with interest at 8.73%, enforceable by statutory lien, with the final payment due in 2019. | 205,209 | 235,781 | ||||||
Note payable to electrical provider, with monthly payments of $29,775 including implicit interest of 1.50%, due in December 2012, secured by equipment and restricted cash. | — | 88,578 | ||||||
Note payable to electrical company with monthly payments of $6,250 with a 1% maintenance fee due each October, due September 2017. The electrical company is a member of the Company. | 293,750 | 368,750 | ||||||
Note payable to a lending institution for the construction of the pipeline assets initially due in December 2011, converted in February 2012 to a term loan with a three year repayment period. Interest is at 5.29% and the note is secured by substantially all assets of Agrinatural. | 1,013,132 | 818,884 | ||||||
Note payable to noncontrolling interest member of Agrinatural. Interest is at 5.43%, with a maturity date of October 2014. | 300,000 | — | ||||||
Equipment payable on corn oil separation equipment from a vendor. The Company pays approximately $40,000 per month conditioned upon revenue generated from the corn oil equipment. The monthly payment includes implicit interest of 5.57% until maturity in May 2015 and the note is secured by the equipment. | 640,653 | 1,072,310 | ||||||
Subordinated Convertible Debt, see terms below. | 4,143,000 | — | ||||||
Totals | 31,552,730 | 46,082,737 | ||||||
Less amounts due within one year | 3,371,575 | 42,051,402 | ||||||
Net long-term debt | $ | 28,181,155 | $ | 4,031,335 | ||||
The Company’s loan agreements with AgStar contain certain covenants including minimum working capital amount, minimum tangible net worth amount, and the fixed charge coverage ratio. At October 31, 2012, the Company was out of compliance with certain covenants identified above in the Agstar loan agreements and as a result, the Company reclassified the debt with AgStar to current. For the period of December 2012 through May 2013, the Company did not make their required monthly principal payments. | ||||||||
On December 21, 2012, the Company and AgStar entered into a forbearance agreement whereby the Company agreed to, among other things, sell substantially all plant assets to Guardian. AgStar also began charging a default interest premium on the AgStar loans of an additional 2.0%. Advances on the revolving term note were frozen until the Company entered into an asset sale agreement for substantially all plant assets. The forbearance agreement dated December 21, 2012 was subsequently amended and restated on January 22, 2013, February 12, 2013 and March 29, 2013, in order to permit the Company to close on the transactions contemplated by the asset purchase agreement dated January 22, 2013 between the Company and Guardian. The asset purchase agreement with Guardian was terminated by the Company on April 4, 2013. The forbearance agreement was amended and restated again on April 12, 2013 in order to accommodate certain proposals related to recapitalization and restructuring of the loans. | ||||||||
The forbearance agreement was amended and restated for a fifth time on May 10, 2013 in order to extend the forbearance period relating to the above-described covenant defaults and required monthly principal installment payments to permit the Company additional time to document and implement a written management, governance improvement and capitalization plan. On May 17, 2013, the Company entered into a Sixth Amended and Restated Master Loan Agreement and related loan documents with AgStar to replace and supersede the Fifth Amended and Restated Master Loan Agreement dated as of September 1, 2011, the Fifth Amended and Restated Forbearance Agreement dated May 10, 2013, and related loan documents. Under the Sixth Amended and Restated Master Loan Agreement, AgStar agreed to restructure the Term Loan and the Term Revolving Loan based upon the submission of a loan restructuring proposal and payment of approximately $1.4 million in cash for Term Loan principal payments in arrears and reduction of the Term Revolving Note. | ||||||||
In connection with the forbearance agreement, and the renegotiated loan agreements, the Company made the required monthly principal payments for the period of December 2012 through May 2013. | ||||||||
Term Note Payable | ||||||||
On May 17, 2013, the Company renegotiated its term loan with AgStar in the amount of $17.4 million. The Company must make equal monthly payments of principal and interest on the term loan based on a 10-year amortization, provided the entire principal balance and accrued and unpaid interest on the term loan is due and payable in full on the maturity date of September 1, 2016. In addition, the Company is required to make additional payments annually on debt for up to 25% of the excess cash flow, as defined by the agreement, up to $2 million per year. Through September 1, 2014, the loan bears interest at 5.75% as long as the Company is in compliance with their debt covenants. | ||||||||
On September 1, 2014, the interest term loan will be adjusted to LIBOR plus 3.50% but not less than 5%. The loan agreements are secured by substantially all business assets and are subject to various financial and non-financial covenants that limit distributions and debt and require minimum debt service coverage, net worth, and working capital requirements. | ||||||||
Revolving Term Note | ||||||||
The Company also obtained a three-year revolving term loan commitment in the amount of $20.5 million, under which AgStar agreed to make periodic advances to the Company up to this original amount until September 1, 2016. Amounts borrowed by the Company under the term revolving loan and repaid or prepaid may be re-borrowed at any time prior to maturity date of the term revolving loan, provided that outstanding advances may not exceed the amount of the term revolving loan commitment. Amounts outstanding on the term revolving loan bear interest at a variable rate equal to the greater of a LIBOR rate plus 3.50% or 5.0%, payable monthly. The Company also pays an unused commitment fee on the unused portion of the term revolving loan commitment at the rate of 0.35% per annum, payable in arrears in quarterly installments during the term of the term revolving loan. Under the terms of the new agreement, the term revolving loan commitment is scheduled to decline by $2.0 million annually, beginning on October 31, 2013 and each anniversary date thereafter. The maturity date of the term revolving loan is September 1, 2016. The Company had a $0.6 million outstanding standby letter of credit at October 31, 2012. No such letter standby letter of credit was held at October 31, 2013. | ||||||||
Subordinated Convertible Debt | ||||||||
On May 17, 2013, the Company’s Board of Governors loaned the Company approximately $1.4 million as part of the subordinated convertible debt offering. An additional $3.7 million was raised as part of a subordinated convertible debt offering during September 2013. The convertible secured debt is subordinated to the AgStar debt. The notes bear interest at 7.25% and are due in October 1, 2018. On October 1, 2014, or immediately prior to the sale of all or effectively all of the Company assets, each note is convertible into Class A stock at a rate of $0.30 per Class A unit. The Company reserves the right to issue Class B units upon conversion if the principal balance of the convertible debt exceeds the authorized Class A units at the conversion date. At the issuance, each debt holder had the option to convert to Class A units. As a result, holders elected to convert $934,500 in September 2013 for 3,115,000 Class A units. | ||||||||
Estimated maturities of long-term debt at October 31, 2013 are as follows: | ||||||||
2014 | $ | 3,371,575 | ||||||
2015 | 2,722,838 | |||||||
2016 | 19,450,337 | |||||||
2017 | 511,602 | |||||||
2018 | 4,509,139 | |||||||
After 2018 | 987,239 | |||||||
Total long-term debt | $ | 31,552,730 | ||||||
MEMBERS_EQUITY
MEMBERS' EQUITY | 12 Months Ended |
Oct. 31, 2013 | |
Equity [Abstract] | ' |
MEMBERS' EQUITY | ' |
MEMBERS' EQUITY | |
Company is authorized to issue 80,000,000 capital units, of which 65,000,000 have been designated Class A units and 15,000,000 have been designated as Class B units. Members of the Company are holders of units who have been admitted as members and who hold at least 2,500 units. Any holder of units who is not a member will not have voting rights. Transferees of units must be approved by our board of governors to become members. Members are entitled to one vote for each unit held. Subject to the Member Control Agreement, all units share equally in the profits and losses and distributions of assets on a per unit basis. | |
At October 31, 2013, there are 49,812,107 Class A units issued and outstanding and 15,000,000 Class B units issued and outstanding. At October 31, 2012, there were 38,622,107 Class A units and -0- Class B units issued and outstanding. | |
In May 2011, Project Viking invested $3.5 million in the Company for 7,000,000 Class B units at a purchase price of $0.50 per unit. These units sold to Project Viking were immediately converted to Class A units. | |
On August 30, 2011, the Company commenced a subscription rights offering to holders of its Class A units who are residents of the State of Minnesota for an aggregate of 16,500,000 Class A units at a purchase price of $0.50 per unit. No eligible Class A unit holder could purchase more than 77.73% of the Units currently held by such unit holder as of August 30, 2011. In addition, purchasers of units were required to deposit $.125 per unit into an escrow account that was to be held to guarantee a portion of the debt of Agrinatural. Amounts collected related to this guarantee were subsequently returned. The offering period expired on October 15, 2011. The Company closed on the offering in November 2011 having sold 1,414,033 Class A units for approximately $707,000. | |
On July 31, 2013, the Company issued 8,075,000 Class A units and 15,000,000 Class B units, at a purchase price of $0.30 per unit, to Project Viking for total proceeds of approximately $6.9 million. | |
On September 18, 2013, the Company issued 3,115,000 Class A units, at a conversion price of $0.30 per unit, to current members upon conversion of subordinated convertible debt of $934,500. |
LEASES
LEASES | 12 Months Ended | |||
Oct. 31, 2013 | ||||
Leases [Abstract] | ' | |||
LEASES | ' | |||
LEASES | ||||
The Company leases equipment, primarily rail cars, under operating leases through 2017. Rent expense for fiscal 2013, 2012, and 2011 was approximately $1.8 million, $2.2 million, and $1.8 million, respectively. | ||||
At October 31, 2013, the Company had the following minimum future lease payments, which at inception had non-cancelable terms of more than one year: | ||||
2014 | $ | 1,294,367 | ||
2015 | 606,636 | |||
2016 | 596,920 | |||
2017 | 346,500 | |||
2018 | — | |||
Total lease commitments | $ | 2,844,423 | ||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||
Oct. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
INCOME TAXES | ' | |||||||
INCOME TAXES | ||||||||
The differences between consolidated financial statement basis and tax basis of assets and liabilities are estimated as follows at October 31: | ||||||||
2013 | 2012 | |||||||
Consolidated financial statement basis of assets | $ | 60,793,917 | $ | 66,581,019 | ||||
Plus: Organization and start-up costs capitalized | 1,406,418 | 1,564,147 | ||||||
Less: Accumulated tax depreciation and amortization greater than financial statement basis | (39,647,694 | ) | (32,928,411 | ) | ||||
Plus: Impairment charge | 27,844,579 | 27,844,579 | ||||||
Income tax basis of assets | $ | 50,397,220 | $ | 63,061,334 | ||||
There were no significant differences between the consolidated financial statement basis of liabilities and the income tax basis of liabilities at October 31, 2013 and 2012. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Oct. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
RELATED PARTY TRANSACTIONS | |
As discussed in Note 10, Project Viking, L.L.C. ("Project Viking") invested $3.5 million in the Company in May 2011 for 7,000,000 Class B units at a purchase price of $0.50 per unit, which were converted to Class A units. | |
On July 31, 2013, Project Viking invested $6.9 million in the Company for 8,075,000 Class A units and 15,000,000 Class B units at a purchase price of $0.30 per unit. | |
In May 2013, Project Viking participated in the initial subordinated convertible debt offering and lent the Company $102,000. | |
On July 31, 2013, Project Viking held a controlling interest in the Company. On July 31, 2013, Project Viking sold its interest to Granite Falls Energy, L.L.C. ("GFE"), which is now considered a related party. GFE operates an ethanol plant in the Midwest. The Company entered into a Management Services Agreement with GFE. Under the Management Services Agreement, GFE agreed to supply its own personnel to act as part-time officers and managers of the Company for the positions of Chief Executive Officer, Chief Financial Officer, and Commodity Risk Manager. The initial term of the Management Services Agreement is three years. | |
The Company agreed to pay GFE $35,000 per month during the first year of the agreement. | |
During years two and three of the agreement, the Company agreed to pay GFE 50% of the total salary, bonuses, and other expenses and costs incurred by GFE for the three management positions. At the expiration of the initial term, the agreement will automatically renew for successive one-year terms unless and until the Company or GFE gives the other party 90-days written notice of termination prior to expiration of the initial term or the start of a renewal term. Total expenses under this agreement were $105,000 for fiscal year 2013. | |
As part of the purchase of Project Viking, GFE obtained the interest in Project Viking's convertible subordinated debt in the amount of $102,000 . In September 2013, the Company completed the convertible subordinated debt offering of $5,077,000 and each subscriber had the option to convert to units at $0.30 per unit conversion price. GFE converted their $102,000 of subordinated debt for 340,000 Class A units. The Company paid approximately $2,000 in interest expense to GFE related to the subordinated convertible debt for the year ended October 31, 2013. | |
The Company purchased approximately $57,451,000 of corn from members in fiscal years 2011 and none in 2013 and 2012. | |
During 2013, the Company borrowed $300,000 from the noncontrolling interest member of Agrinatural. Total interest paid in relation to this note payable amounted to approximately $16,000 during the year ended October 31, 2013. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Oct. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | |
Water Agreements | |
In October 2003, the Company entered into an industrial water supply development and distribution agreement with the City of Heron Lake for 15 years. The Company has the exclusive rights to the first 600 gallons per minute of capacity that is available from the well, and provides for the Company, combined with Minnesota Soybean Processors, to approve any other supply contracts that the City may enter into. In consideration, the Company will pay one half of the City's water well bond payments of $735,000, plus a 5% administrative fee, totaling approximately $594,000, and operating costs, relative to the Company's water usage, plus a 10% profit. These costs will be paid as water usage fees. The Company recorded an assessment of approximately $367,000 with long-term debt as described in Note 9. The Company pays operating and administrative expenses of approximately $12,000 per year. | |
In May 2006, the Company entered into a water treatment agreement with the City of Heron Lake and Jackson County for 30 years. The Company will pay for operating and maintenance costs of the plant in exchange for receiving treated water. In addition, the Company agreed to an assessment for a portion of the capital costs of the water treatment plant. The Company recorded assessments with long-term debt of $500,000 and $3,550,000 in fiscal 2007 and 2006, respectively, as described in Note 9. The Company paid operating and maintenance expenses of approximately $289,000, $349,000, and $287,000 in fiscal 2013, 2012, and 2011, respectively. | |
Marketing Agreements | |
The Company entered into termination agreements with its previous marketers utilized during 2011 and prior to terminate the marketing agreements the Company had with each, with termination dates of August 31, 2011. The Company assumed certain rail car leases with the termination of the ethanol marketing agreement and paid a termination fee of $325,000 over the remaining term of the original contract, which ended September 30, 2012. | |
Effective September 1, 2011, the Company entered into certain marketing, corn supply and corn storage agreements with Gavilon, LLC ("Gavilon") to market the Company's ethanol and distillers' grains products and to supply the Company's ethanol production facility with corn. Gavilon is the exclusive corn supplier and ethanol and distillers' grains marketer for the Company's production facility beginning September 1, 2011 until this agreement is terminated. | |
On August 20, 2013, the Company gave notice to their marketer to terminate the agreements related to corn purchases as well as ethanol sales effective October 31, 2013. As a result of the termination of the agreement, the Company repurchased approximately $1,580,000 of corn inventory from Gavilon on November 1, 2013. | |
During the fourth quarter of fiscal year 2013, the Company entered into a marketing agreement with a new marketer, Eco-energy, for the sale of ethanol. Under this ethanol agreement, Eco-energy will purchase, market and resell 100% of the ethanol produced at the Company's ethanol production facility and the Company will pay Eco-energy a marketing fee based on a percentage of the applicable sale price of the ethanol. The marketing fee was negotiated based on prevailing market-rate conditions for comparable ethanol marketing services. | |
Forward Contracts | |
The Company has natural gas agreements with a minimum commitment of approximately 1.6 million MMBTU per year until October 31, 2014. | |
Legal Proceedings | |
Permit Matters | |
The Company completed the plant conversion from coal to natural gas in November 2011. The Company also completed an amendment to the existing air emissions permit allowing the conversion from coal to natural gas. The Company is now seeking the final amendments to its air emissions permit related to the natural gas conversion pending regulatory approvals in form acceptable to the Company, and may incur additional costs in connection with the permit amendment, as well as improvements to its plant as part of the natural gas conversion and to ensure compliance with its permit and planned amendments. | |
On December 16, 2010, the Company entered into a stipulation agreement with the Minnesota Pollution Control Agency ("MPCA") to resolve a notice of violation issued by the MPCA in March 2008 that alleged violations of certain rules, statutes, and permit conditions, including emission violations and reporting violations. Under the stipulation agreement, the Company agreed to pay a civil penalty and complete other corrective actions. On April 12, 2012, the Company received a letter from the MPCA acknowledging that the Company had completed all the corrective action requirements described in the stipulation agreement and the stipulation agreement was therefore terminated effective as of the date of the letter. | |
Coal Contract Termination Dispute and Settlement | |
Following conversion by the Company from coal to natural gas as its primary fuel, the Company and Cloud Peak Energy Logistics LLC, formerly known as Northern Coal Transportation Company ("Cloud Peak"), the Company and Cloud Peak entered into a Confidential Settlement Agreement and Mutual Release ("Settlement Agreement") to resolve all claims related to the coal contract dispute on April 30, 2012. Under the terms of the Settlement Agreement, the Company made a one-time cash payment to Cloud Peak in the amount of $900,000 (the "Settlement Payment"). | |
In general, the parties agreed that the terms and conditions of the Settlement Agreement are confidential, subject to public reporting company obligations and applicable accounting rules and principles. Accordingly, no party (including board members, officers or other representatives of the parties with knowledge of the terms of the Settlement Agreement) is permitted to discuss or otherwise disclose such confidential information, except as required by law or pursuant to such public reporting company obligations and applicable accounting rules and principles. |
QUARTERLY_FINANCIAL_DATA_UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended | |||||||||||||||
Oct. 31, 2013 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) | ' | |||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||
Summary quarterly results are as follows: | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Fiscal year ended October 31, 2013 | ||||||||||||||||
Revenues | $ | 44,121,305 | $ | 35,498,926 | $ | 45,583,441 | 38,560,472 | |||||||||
Gross profit | 920,219 | 698,812 | 4,060,158 | 2,547,981 | ||||||||||||
Operating income (loss) | (95,367 | ) | (192,887 | ) | 3,385,958 | 1,915,430 | ||||||||||
Net income (loss) attributable to Heron Lake BioEnergy, LLC | (920,554 | ) | (998,139 | ) | 2,554,493 | 1,305,042 | ||||||||||
Basic earnings (loss) per unit (Class A and B) | $ | (0.02 | ) | $ | (0.03 | ) | $ | 0.07 | $ | 0.03 | ||||||
Diluted earnings (loss) per unit (Class A and B) | $ | (0.02 | ) | $ | 0.03 | $ | 0.06 | $ | 0.03 | |||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Fiscal year ended October 31, 2012 | ||||||||||||||||
Revenues | $ | 38,861,794 | $ | 41,186,236 | $ | 41,908,904 | $ | 46,703,001 | ||||||||
Gross profit (loss) | 264,570 | 1,102,346 | 1,921,833 | (1,158,097 | ) | |||||||||||
Operating income (loss) | (586,037 | ) | (660,787 | ) | 1,206,927 | (29,745,361 | ) | |||||||||
Net income (loss) attributable to Heron Lake BioEnergy, LLC | (1,312,813 | ) | (1,356,345 | ) | 470,598 | (30,507,102 | ) | |||||||||
Basic and diluted earnings (loss) per unit (Class A and B) | $ | (0.04 | ) | $ | (0.04 | ) | $ | 0.01 | $ | (0.84 | ) | |||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Fiscal year ended October 31, 2011 | ||||||||||||||||
Revenues | $ | 39,199,181 | $ | 38,022,811 | $ | 43,013,930 | $ | 43,884,453 | ||||||||
Gross profit (loss) | 3,226,245 | 1,840,466 | 688,880 | 1,201,160 | ||||||||||||
Operating income (loss) | 2,530,477 | 1,071,699 | (182,475 | ) | (76,415 | ) | ||||||||||
Net income (loss) attributable to Heron Lake BioEnergy, LLC | 1,676,923 | 438,674 | (724,890 | ) | (819,852 | ) | ||||||||||
Basic and diluted earnings (loss) per unit (Class A and B) | $ | 0.06 | $ | 0.01 | $ | (0.02 | ) | $ | (0.02 | ) | ||||||
The above quarterly financial date is unaudited, but in the opinion of management, all adjustments necessary for a fair presentation of the selected data for these periods presented have been included. |
SALE_OF_PLANT_ASSETS
SALE OF PLANT ASSETS | 12 Months Ended |
Oct. 31, 2013 | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | ' |
SALE OF PLANT ASSETS | ' |
SALE OF PLANT ASSETS | |
The Company entered into an asset purchase agreement on January 3, 2013 with FCA Co-op for the sale of the Company's grain storage and handling facilities. The sale closed on February 1, 2013 for approximately $3,750,000. The net proceeds of the sale were used to repay AgStar debt. | |
The Company entered into an asset purchase agreement on January 22, 2013, with Guardian Energy for the sale of the ethanol assets. The purchase price was to be the sum of $55,000,000 plus closing net working capital, less the amount owed on the closing date under assumed debt. On April 4, 2013, the Company terminated the asset purchase agreement dated January 22, 2013 between the Company and Guardian. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |
Oct. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
Nature of Operations | ' | |
Nature of Business | ||
The Company owns and operates an ethanol plant near Heron Lake, Minnesota with a permitted capacity of approximately 59.2 million gallons. In addition, the Company produces and sells distillers grains with solubles and corn oil as co-products of ethanol production. | ||
The Company entered into an asset purchase agreement dated January 22, 2013, which provided for the sale of substantially all of the Company’s assets to, and the assumption of certain of the Company’s liabilities by, Guardian Energy Heron Lake, LLC (Guardian). On April 4, 2013, the Company terminated the agreement in accordance with its terms. As a result of terminating the purchase agreement and the Company renegotiating their loan agreements with AgStar Financial Services, PCA (“AgStar”), AgStar required certain principal pay downs by July 31, 2013. The Company raised all the required funds to pay down its debt to AgStar, to provide adequate working capital to operate the Company effectively and to meet AgStar’s requirements. | ||
Pursuant to an asset purchase agreement dated January 3, 2013, the Company’s subsidiary, Lakefield Farmers Elevator, LLC, sold substantially all of its assets consisting of the elevator and grain storage facilities in Lakefield, Minnesota and Wilder, Minnesota to FCA Co-op, a Minnesota cooperative, for approximately $3.75 million plus the purchase price for corn and fuel inventory. The sale closed on February 1, 2013. | ||
Principles of Consolidation | ' | |
Principles of Consolidation | ||
The financial statements include the accounts of Heron Lake BioEnergy, LLC and its wholly owned subsidiaries, Lakefield Farmers Elevator, LLC and HLBE Pipeline Company, LLC, collectively, "the Company." HLBE Pipeline Company, LLC owns 73% of Agrinatural Gas, LLC ("Agrinatural"). Given the Company’s control over the operations of Agrinatural and its majority voting interest, the Company consolidates the financial statements of Agrinatural with its consolidated financial statements, with the equity and earnings (loss) attributed to the remaining 27% noncontrolling interest identified separately in the accompanying Consolidated Balance Sheets and Statements of Operations. All significant intercompany balances and transactions are eliminated in consolidation. | ||
Fiscal Reporting Period | ' | |
Fiscal Reporting Period | ||
The Company's fiscal year end for reporting financial operations is October 31. | ||
Accounting Estimates | ' | |
Accounting Estimates | ||
Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The Company uses estimates and assumptions in accounting for significant matters including, among others, the analysis of impairment of long-lived assets, contingencies and valuation of forward purchase contract commitments and inventory. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made. Actual results could differ from those estimates. | ||
Noncontrolling Interest | ' | |
Noncontrolling Interest | ||
Amounts recorded as noncontrolling interest relate to the net investment by an unrelated party in Agrinatural. Income and losses are allocated to the members of Agrinatural based on their respective percentage of membership units held. Agrinatural will provide natural gas to the plant with a specified price per MMBTU for an initial term of 10 years, with two renewal options for five years periods. | ||
Revenue Recognition | ' | |
Revenue Recognition | ||
Revenue from sales is recorded when title transfers to the customer, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists, and the sales price is fixed and determinable. The title transfers when the product is loaded into the railcar or truck, the customer takes ownership and assumes risk of loss. | ||
In accordance with the Company's agreements for the marketing and sale of ethanol and related products, marketing fees and commissions due to the marketers are deducted from the gross sales price as earned. These fees and commissions are recorded net of revenues as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products. Shipping costs incurred by the Company in the sale of ethanol are not specifically identifiable and as a result, are recorded based on the net selling price reported to the Company from the marketer. Shipping costs incurred by the Company in the sale of ethanol related products are included in cost of goods sold. | ||
Cash and Equivalents | ' | |
Cash and Equivalents | ||
The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash and equivalents. | ||
The Company maintains its accounts at multiple financial institutions. At times throughout the year, the Company's cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation. The Company does not believe it is exposed to any significant credit risk on cash and equivalents. | ||
Restricted Cash | ' | |
Restricted Cash | ||
The Company is periodically required to maintain cash balances at its broker related to derivative instrument positions and as part of a loan agreement. | ||
Restricted Certificates of Deposit | ' | |
Restricted Certificates of Deposit | ||
The Company maintains restricted certificates of deposit as part of its grain dealer's license. | ||
Accounts Receivable | ' | |
Accounts Receivable | ||
Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral. | ||
Accounts receivable are recorded at estimated net realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company's credit terms. Accounts considered uncollectible are written off. The Company's estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any. At October 31, 2013 and 2012, the Company was of the belief that such accounts would be collectable and thus an allowance was not considered necessary. | ||
Inventory | ' | |
Inventory | ||
Inventory consists of raw materials, work in process, finished goods, supplies, and other grain inventory. Raw materials are stated at the lower of cost or market on a first-in, first-out (FIFO) basis. Work in process and finished goods, which consists of ethanol, distillers grains and corn oil produced, if any, is stated at the lower of average cost or market. Other grain inventory, which consists of agricultural commodities, is valued at market value (net realizable value). Other grain inventory is readily convertible to cash because of its commodity characteristics, widely available markets and international pricing mechanisms. Other grain inventory is also freely traded, has quoted market prices, may be sold without significant further processing, and has predictable and insignificant disposal costs. | ||
Derivative Instruments | ' | |
Derivative Instruments | ||
From time to time, the Company enters into derivative transactions to protect gross margins from potentially adverse effects of market and price volatility in future periods. In order to reduce the risks caused by market fluctuations, the Company hedges a portion of its anticipated corn and natural gas purchases, and ethanol sales by entering into options and futures contracts. These contracts are used with the intention to fix the purchase price of anticipated requirements for corn and natural gas in the Company's ethanol production activities and the related sales price of ethanol produced. The fair value of these contracts is based on quoted prices in active exchange-traded or over-the-counter market conditions. | ||
The Company generally does not designate these derivative instruments as hedges for accounting purposes and derivative positions are recorded on the balance sheet at their fair market value, with changes in fair value caused from marking these instruments to market, recognized in current period earnings or losses on a monthly basis. While the Company does not designate the derivative instruments that it enters into as hedging instruments because of the administrative costs associated with the related accounting, the Company believes that the derivative instruments represent an economic hedge. | ||
In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. | ||
The Company evaluates its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as "normal purchases or normal sales." Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Certain corn, ethanol and distillers grains contracts that meet the requirement of normal purchases or sales are documented as normal and exempted from the accounting and reporting requirements, and therefore, are not marked to market in our financial statements. | ||
Other Intangibles | ' | |
Other Intangibles | ||
Other intangibles are stated at cost and include road improvements located near the plant in which the Company has a beneficial interest in but does not own the road. The Company amortizes the assets over the economic useful life of 15 years. | ||
Property and Equipment | ' | |
Property and Equipment | ||
Property and equipment are recorded at cost. Depreciation is provided over an estimated useful life by use of the straight-line deprecation method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Construction in progress is comprised of costs related to the construction of the ethanol plant facilities. Interest is capitalized during the construction period. Depreciable useful lives are as follows: | ||
Land improvements | 15 Years | |
Plant building and equipment | 7 - 40 Years | |
Vehicles and equipment | 5 - 7 Years | |
Office buildings and equipment | 3 - 40 Years | |
Long-Lived Assets | ' | |
Long-Lived Assets | ||
The Company reviews property, plant and equipment and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the assets; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. If circumstances require a long-lived asset to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted basis, impairment is recognized to the extent the carrying value exceeds fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. | ||
The Company's ethanol production facilities have a nameplate capacity of 50 million gallons per year. As of October 31, 2012, the Company recorded an impairment charge of approximately $27,845,000 against long-lived assets. There was no impairment charge recorded in fiscal year 2013 or 2011. In accordance with the Company's policy for evaluating impairment of long-lived assets described above, management had evaluated the recoverability of the facilities based on projected future cash flows from operations over the facilities' estimated useful lives. Management determined that the projected future undiscounted cash flows from operations of these facilities did not exceed their carrying value at October 31, 2012. The Company performed an impairment analysis estimating the discounted cash flows to determine the impairment to record. In determining the projected future discounted cash flows, the Company made significant assumptions concerning the future viability of the ethanol industry, the future price of corn in relation to the future price of ethanol and the overall demand in relation to production and supply capacity. | ||
Deferred Offering Costs | ' | |
Deferred Offering Costs | ||
The Company defers the costs incurred to raise equity financing until that financing occurs. At such time that the issuance of new equity occurs, these costs will be netted against the proceeds received. | ||
Debt Financing Costs | ' | |
Debt Financing Costs | ||
Costs associated with the issuance of loans are classified as financing costs. Financing costs are amortized over the term of the related debt by use of the effective interest method. Amortization for the year ended October 31, 2013 was approximately $21,000. | ||
Fair Value of Financial Instruments | ' | |
Fair Value of Financial Instruments | ||
The Company follows guidance for accounting for fair value measurements of financial assets and liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the consolidated financial statements on a recurring and nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). | ||
The three levels of the fair value hierarchy are as follows: | ||
•Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | ||
•Level 2 includes: | ||
1.Quoted prices in active markets for similar assets or liabilities. | ||
2.Quoted prices in markets that are observable for the asset or liability either directly or indirectly, for substantially the full term of the asset or liability. | ||
3.Inputs that derived primarily from or corroborated by observable market date by correlation or other means. | ||
•Level 3 inputs are unobservable inputs for the asset or liability. | ||
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. | ||
Except for those assets and liabilities which are required by authoritative accounting guidance to be recorded at fair value in our balance sheets, the Company has elected not to record any other assets or liabilities at fair value. Except for the impairment charge recorded in 2012, no events occurred during the fiscal 2013, 2012, or 2011 that required adjustment to the recognized balances of assets or liabilities, which are recorded at fair value on a nonrecurring basis. | ||
The carrying value of cash and equivalents, restricted cash, restricted certificates of deposit, accounts receivable, accounts payable and accrued liabilities approximates fair value due to the short maturity of these instruments. The fair value of debt has been estimated using discounted cash flow analysis based upon the Company's current incremental borrowing rates for similar types of financing arrangements. The fair value of outstanding debt will fluctuate with changes in applicable interest rates. Fair value will exceed carrying value when the current market interest rate is lower than the interest rate at which the debt was originally issued. The fair value of a company's debt is a measure of its current value under present market conditions. It does not impact the financial statements under current accounting rules. The Company believes the carrying amount of the debt and line of credit approximates the fair value. | ||
As of October 31, 2013, loans with AgStar consist of term loans of approximately $22,557,000 with interest at market rates that are believed to approximate fair value. As of October 31, 2012, due to the defaults under the senior debt loan agreement which triggered an additional 2.0% default interest, the forbearance agreement that anticipated the sale of assets and repayments of term loans, and the underlying collateral of the loans, the Company believes the fair value continues to approximate the carrying value. | ||
Income Taxes | ' | |
Income Taxes | ||
The Company is treated as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, its earnings and losses are included in the income tax returns of the members. Therefore, no provision or liability for federal or state income taxes has been included in these financial statements. Differences between financial statement basis of assets and tax basis of assets is related to capitalization and amortization of organization and start-up costs for tax purposes, whereas these costs are expensed for financial statement purposes. In addition, the Company uses the alternative depreciation system (ADS) for tax depreciation instead of the straight-line method that is used for book depreciation, which also causes temporary differences. The Company's tax year end is December 31. Primarily due to the partnership tax status, the Company does not have any significant tax uncertainties that would require disclosure. The Company recognizes and measures tax benefits when realization of the benefits is uncertain under a two-step approach. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company's tax status as a partnership, the adoption of this guidance had no material impact on the Company's financial condition or results of operations. | ||
The Company files income tax returns in the U.S. federal and Minnesota state jurisdictions. The Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2010. | ||
Net Income (Loss) per Unit | ' | |
Net Income (Loss) per Unit | ||
Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members' units outstanding during the period. Diluted net income or loss per unit is computed by dividing net income (loss) by the weighted average number of members' units and members' unit equivalents outstanding during the period. | ||
Environmental Liabilities | ' | |
Environmental Liabilities | ||
The Company's operations are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its location. Accordingly, the Company has adopted policies, practices, and procedures in the areas of pollution control, occupational health, and the production, handling, storage and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability, which could result from such events. Environmental liabilities are recorded when the liability is probable and the costs can be reasonably estimated. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |
Oct. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
Schedule of depreciable useful lives of property and equipment | ' | |
Depreciable useful lives are as follows: | ||
Land improvements | 15 Years | |
Plant building and equipment | 7 - 40 Years | |
Vehicles and equipment | 5 - 7 Years | |
Office buildings and equipment | 3 - 40 Years |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | |||||||||||||||||||
Oct. 31, 2013 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||
Schedule of fair value of assets measured on a non-recurring basis | ' | |||||||||||||||||||
The following table provides information on those assets measured at fair value on a nonrecurring basis. | ||||||||||||||||||||
Fair Value | ||||||||||||||||||||
Fair Value as of | Measurement Using | Impairment | ||||||||||||||||||
October 31, 2012 | Level 1 | Level 2 | Level 3 | Charge During 2012 | ||||||||||||||||
Property and Equipment | $ | 58,099,286 | $ | — | $ | — | $ | 58,099,286 | $ | 27,722,183 | ||||||||||
Other Intangible Assets, net | $ | 256,513 | $ | — | $ | — | $ | 256,513 | $ | 122,396 | ||||||||||
INVENTORY_Tables
INVENTORY (Tables) | 12 Months Ended | |||||||
Oct. 31, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Schedule of inventory | ' | |||||||
Inventory consists of the following at October 31: | ||||||||
2013 | 2012 | |||||||
Raw materials | $ | 632,790 | $ | 521,865 | ||||
Work in process | 845,628 | 1,149,214 | ||||||
Finished Goods | 3,324,166 | — | ||||||
Supplies | 801,725 | 922,384 | ||||||
Other grains | — | 995,109 | ||||||
Totals | $ | 5,604,309 | $ | 3,588,572 | ||||
DERIVATIVE_INSTRUMENTS_Tables
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended | |||||||||||||
Oct. 31, 2013 | ||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||
Schedule of gains (losses) from derivative instruments included in the Condensed Consolidated Statements of Operations | ' | |||||||||||||
The following tables provide details regarding the gains and (losses) from the Company's derivative instruments in Consolidated Statements of Operations, none of which are designated as hedging instruments: | ||||||||||||||
Statement of | Twelve Months Ended October 31, | |||||||||||||
Operations location | 2013 | 2012 | 2011 | |||||||||||
Corn contracts | Cost of goods sold | $ | — | $ | 1,088,000 | $ | (432,000 | ) | ||||||
Natural gas contracts | Cost of goods sold | — | (446,000 | ) | — | |||||||||
Ethanol contracts | Revenues | — | — | (24,000 | ) | |||||||||
Totals | $ | — | $ | 642,000 | $ | (456,000 | ) | |||||||
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 12 Months Ended | |||||||
Oct. 31, 2013 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Long-term debt | ' | |||||||
Long-term debt consists of the following: | ||||||||
October 31, | October 31, | |||||||
2013 | 2012 | |||||||
Term note payable to lending institution, see terms below. | $ | 16,577,641 | $ | 36,627,901 | ||||
Revolving term note payable to lending institution, see terms below. | 5,979,876 | 4,211,163 | ||||||
Assessment payable as part of water treatment agreement, due in semi-annual installments of $189,393 with interest at 6.55%, enforceable by statutory lien, with the final payment due in 2021. The Company made deposits for one years' worth of debt service payments included with other assets that are held on deposit to be applied with the final payments of the assessment. | 2,246,771 | 2,456,372 | ||||||
Assessment payable as part of water treatment agreement, due in semi-annual installments of $25,692 with interest at 0.50%, enforceable by statutory lien, with the final payment due in 2016. | 152,698 | 202,998 | ||||||
Assessment payable as part of water supply agreement, due in monthly installments of $3,942 with interest at 8.73%, enforceable by statutory lien, with the final payment due in 2019. | 205,209 | 235,781 | ||||||
Note payable to electrical provider, with monthly payments of $29,775 including implicit interest of 1.50%, due in December 2012, secured by equipment and restricted cash. | — | 88,578 | ||||||
Note payable to electrical company with monthly payments of $6,250 with a 1% maintenance fee due each October, due September 2017. The electrical company is a member of the Company. | 293,750 | 368,750 | ||||||
Note payable to a lending institution for the construction of the pipeline assets initially due in December 2011, converted in February 2012 to a term loan with a three year repayment period. Interest is at 5.29% and the note is secured by substantially all assets of Agrinatural. | 1,013,132 | 818,884 | ||||||
Note payable to noncontrolling interest member of Agrinatural. Interest is at 5.43%, with a maturity date of October 2014. | 300,000 | — | ||||||
Equipment payable on corn oil separation equipment from a vendor. The Company pays approximately $40,000 per month conditioned upon revenue generated from the corn oil equipment. The monthly payment includes implicit interest of 5.57% until maturity in May 2015 and the note is secured by the equipment. | 640,653 | 1,072,310 | ||||||
Subordinated Convertible Debt, see terms below. | 4,143,000 | — | ||||||
Totals | 31,552,730 | 46,082,737 | ||||||
Less amounts due within one year | 3,371,575 | 42,051,402 | ||||||
Net long-term debt | $ | 28,181,155 | $ | 4,031,335 | ||||
Schedule of estimated maturities of long-term debt | ' | |||||||
Estimated maturities of long-term debt at October 31, 2013 are as follows: | ||||||||
2014 | $ | 3,371,575 | ||||||
2015 | 2,722,838 | |||||||
2016 | 19,450,337 | |||||||
2017 | 511,602 | |||||||
2018 | 4,509,139 | |||||||
After 2018 | 987,239 | |||||||
Total long-term debt | $ | 31,552,730 | ||||||
LEASES_Tables
LEASES (Tables) | 12 Months Ended | |||
Oct. 31, 2013 | ||||
Leases [Abstract] | ' | |||
Schedule of minimum future lease payments | ' | |||
At October 31, 2013, the Company had the following minimum future lease payments, which at inception had non-cancelable terms of more than one year: | ||||
2014 | $ | 1,294,367 | ||
2015 | 606,636 | |||
2016 | 596,920 | |||
2017 | 346,500 | |||
2018 | — | |||
Total lease commitments | $ | 2,844,423 | ||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||
Oct. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Schedule of differences between consolidated financial statement basis and tax basis of assets and liabilities | ' | |||||||
The differences between consolidated financial statement basis and tax basis of assets and liabilities are estimated as follows at October 31: | ||||||||
2013 | 2012 | |||||||
Consolidated financial statement basis of assets | $ | 60,793,917 | $ | 66,581,019 | ||||
Plus: Organization and start-up costs capitalized | 1,406,418 | 1,564,147 | ||||||
Less: Accumulated tax depreciation and amortization greater than financial statement basis | (39,647,694 | ) | (32,928,411 | ) | ||||
Plus: Impairment charge | 27,844,579 | 27,844,579 | ||||||
Income tax basis of assets | $ | 50,397,220 | $ | 63,061,334 | ||||
QUARTERLY_FINANCIAL_DATA_UNAUD1
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended | |||||||||||||||
Oct. 31, 2013 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||||
Summary of quarterly results | ' | |||||||||||||||
Summary quarterly results are as follows: | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Fiscal year ended October 31, 2013 | ||||||||||||||||
Revenues | $ | 44,121,305 | $ | 35,498,926 | $ | 45,583,441 | 38,560,472 | |||||||||
Gross profit | 920,219 | 698,812 | 4,060,158 | 2,547,981 | ||||||||||||
Operating income (loss) | (95,367 | ) | (192,887 | ) | 3,385,958 | 1,915,430 | ||||||||||
Net income (loss) attributable to Heron Lake BioEnergy, LLC | (920,554 | ) | (998,139 | ) | 2,554,493 | 1,305,042 | ||||||||||
Basic earnings (loss) per unit (Class A and B) | $ | (0.02 | ) | $ | (0.03 | ) | $ | 0.07 | $ | 0.03 | ||||||
Diluted earnings (loss) per unit (Class A and B) | $ | (0.02 | ) | $ | 0.03 | $ | 0.06 | $ | 0.03 | |||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Fiscal year ended October 31, 2012 | ||||||||||||||||
Revenues | $ | 38,861,794 | $ | 41,186,236 | $ | 41,908,904 | $ | 46,703,001 | ||||||||
Gross profit (loss) | 264,570 | 1,102,346 | 1,921,833 | (1,158,097 | ) | |||||||||||
Operating income (loss) | (586,037 | ) | (660,787 | ) | 1,206,927 | (29,745,361 | ) | |||||||||
Net income (loss) attributable to Heron Lake BioEnergy, LLC | (1,312,813 | ) | (1,356,345 | ) | 470,598 | (30,507,102 | ) | |||||||||
Basic and diluted earnings (loss) per unit (Class A and B) | $ | (0.04 | ) | $ | (0.04 | ) | $ | 0.01 | $ | (0.84 | ) | |||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Fiscal year ended October 31, 2011 | ||||||||||||||||
Revenues | $ | 39,199,181 | $ | 38,022,811 | $ | 43,013,930 | $ | 43,884,453 | ||||||||
Gross profit (loss) | 3,226,245 | 1,840,466 | 688,880 | 1,201,160 | ||||||||||||
Operating income (loss) | 2,530,477 | 1,071,699 | (182,475 | ) | (76,415 | ) | ||||||||||
Net income (loss) attributable to Heron Lake BioEnergy, LLC | 1,676,923 | 438,674 | (724,890 | ) | (819,852 | ) | ||||||||||
Basic and diluted earnings (loss) per unit (Class A and B) | $ | 0.06 | $ | 0.01 | $ | (0.02 | ) | $ | (0.02 | ) | ||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | |||||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | Oct. 31, 2013 | Oct. 31, 2013 | Feb. 02, 2013 | |
option | HLBE Pipeline Company, LLC | Agrinatural | Grain storage and handling facilities | |||
gal | FCA Co-op | |||||
Accounting Policies [Abstract] | ' | ' | ' | ' | ' | ' |
Operating capacity of Ethanol plant owned and operated | 59,200,000 | ' | ' | ' | ' | ' |
Summary of significant accounting policies | ' | ' | ' | ' | ' | ' |
Price on which sale was closed | ' | ' | ' | ' | ' | $3,750,000 |
Percentage of Agrinatural Gas, LLC owned by HLBE Pipeline Company, LLC | ' | ' | ' | 73.00% | ' | ' |
Remaining percentage in Agrinatural Gas, LLC included as noncontrolling interest (as a percent) | ' | ' | ' | ' | 27.00% | ' |
Initial term of providing natural gas to the plant | '10 years | ' | ' | ' | ' | ' |
Number of renewal options | 2 | ' | ' | ' | ' | ' |
Term of renewed contract | '5 years | ' | ' | ' | ' | ' |
Other Intangibles | ' | ' | ' | ' | ' | ' |
Economic useful life of other intangibles | '15 years | ' | ' | ' | ' | ' |
Amortization of Intangible Assets | 18,000 | 32,000 | 37,000 | ' | ' | ' |
Amortization of financing costs | $21,000 | ' | ' | ' | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
gal | |||
Property and equipment | ' | ' | ' |
Depreciation | $4,258,000 | $5,661,000 | $5,453,000 |
Long-Lived Assets | ' | ' | ' |
Nameplate Capacity | 50,000,000 | ' | ' |
Impairment charge | $0 | $27,844,579 | $0 |
Land improvements | ' | ' | ' |
Property and equipment | ' | ' | ' |
Depreciable useful life | '15 years | ' | ' |
Plant building and equipment | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Depreciable useful life | '7 years | ' | ' |
Plant building and equipment | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Depreciable useful life | '40 years | ' | ' |
Vehicles and equipment | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Depreciable useful life | '5 years | ' | ' |
Vehicles and equipment | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Depreciable useful life | '7 years | ' | ' |
Office buildings and equipment | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Depreciable useful life | '3 years | ' | ' |
Office buildings and equipment | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Depreciable useful life | '40 years | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Oct. 31, 2013 |
Fair Value of Financial Instruments | ' |
Long-term debt | 22,557 |
Revolving term note payable to lending institution | ' |
Fair Value of Financial Instruments | ' |
Accrued default interest rate (as a percent) | 2.00% |
GOING_CONCERN_Details
GOING CONCERN (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2013 | Jul. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | Sep. 30, 2013 | |
GOING CONCERN | ' | ' | ' | ' | ' | ' |
Gross proceeds | $6,900,000 | $6,900,000 | $6,922,500 | $707,017 | $3,500,000 | ' |
Issuance of convertible subordinated debt | ' | ' | 5,077,500 | 0 | 0 | ' |
Debt Instrument, Date of First Required Payment | ' | ' | 31-Jul-13 | ' | ' | ' |
Convertible subordinated debt | ' | ' | 4,143,000 | 0 | ' | 5,077,000 |
Director | ' | ' | ' | ' | ' | ' |
GOING CONCERN | ' | ' | ' | ' | ' | ' |
Convertible subordinated debt | ' | ' | 1,400,000 | ' | ' | ' |
Revolving term note payable to lending institution | ' | ' | ' | ' | ' | ' |
GOING CONCERN | ' | ' | ' | ' | ' | ' |
Debt Instrument, Periodic Payment, Principal | ' | ' | 5,000,000 | ' | ' | ' |
Members | ' | ' | ' | ' | ' | ' |
GOING CONCERN | ' | ' | ' | ' | ' | ' |
Convertible subordinated debt | ' | ' | $3,700,000 | ' | ' | $3,700,000 |
UNCERTAINTIES_Details
UNCERTAINTIES (Details) | 12 Months Ended |
Oct. 31, 2013 | |
Total revenues | Ethanol | Minimum | ' |
UNCERTAINTIES | ' |
Average percentage of total sales or cost of goods sold | 75.00% |
Total revenues | Ethanol | Maximum | ' |
UNCERTAINTIES | ' |
Average percentage of total sales or cost of goods sold | 85.00% |
Cost of goods sold | Corn | Minimum | ' |
UNCERTAINTIES | ' |
Average percentage of total sales or cost of goods sold | 65.00% |
Cost of goods sold | Corn | Maximum | ' |
UNCERTAINTIES | ' |
Average percentage of total sales or cost of goods sold | 85.00% |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Fair value measurements | ' | ' | ' |
Other intangible assets, net | $218,370 | $256,513 | ' |
Impairment Charge | 0 | 27,844,579 | 0 |
Property and Equipment | ' | ' | ' |
Fair value measurements | ' | ' | ' |
Impairment Charge | ' | 27,722,183 | ' |
Other Intangible Assets, net | ' | ' | ' |
Fair value measurements | ' | ' | ' |
Impairment Charge | ' | 122,396 | ' |
Nonrecurring basis | Fair Value | Property and Equipment | ' | ' | ' |
Fair value measurements | ' | ' | ' |
Property and Equipment | ' | 58,099,286 | ' |
Nonrecurring basis | Fair Value | Other Intangible Assets, net | ' | ' | ' |
Fair value measurements | ' | ' | ' |
Other intangible assets, net | ' | 256,513 | ' |
Nonrecurring basis | Level 3 | Property and Equipment | ' | ' | ' |
Fair value measurements | ' | ' | ' |
Property and Equipment | ' | 58,099,286 | ' |
Nonrecurring basis | Level 3 | Other Intangible Assets, net | ' | ' | ' |
Fair value measurements | ' | ' | ' |
Other intangible assets, net | ' | $256,513 | ' |
CONCENTRATIONS_Details
CONCENTRATIONS (Details) | 12 Months Ended | |
Oct. 31, 2013 | Oct. 31, 2011 | |
customer | customer | |
CONCENTRATIONS | ' | ' |
Number of customers to whom all of the ethanol and dry distiller grains sold | 1 | ' |
Number Of Major Customers Prior To Change In Marketers | 2 | 2 |
INVENTORY_Details
INVENTORY (Details) (USD $) | Oct. 31, 2013 | Oct. 31, 2012 |
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $632,790 | $521,865 |
Work in process | 845,628 | 1,149,214 |
Finished Goods | 3,324,166 | 0 |
Supplies | 801,725 | 922,384 |
Other grains | 0 | 995,109 |
Totals | 5,604,309 | 3,588,572 |
Value of inventories owned by others | ' | $790,000 |
DERIVATIVE_INSTRUMENTS_Details
DERIVATIVE INSTRUMENTS (Details) (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Derivative Instruments | ' | ' | ' |
Gains and (losses) from derivative instruments | $0 | $642,000 | ($456,000) |
Derivatives not designated as hedging instruments | Commodity prices | ' | ' | ' |
Derivative Instruments | ' | ' | ' |
Maximum term of corn, ethanol and natural gas derivatives entered to protect cash flows (in months) | '24 months | ' | ' |
Derivatives not designated as hedging instruments | Corn contracts | ' | ' | ' |
Derivative Instruments | ' | ' | ' |
Gains and (losses) from derivative instruments | 0 | 1,088,000 | -432,000 |
Derivatives not designated as hedging instruments | Natural gas contracts | ' | ' | ' |
Derivative Instruments | ' | ' | ' |
Gains and (losses) from derivative instruments | 0 | -446,000 | ' |
Derivatives not designated as hedging instruments | Ethanol contracts | ' | ' | ' |
Derivative Instruments | ' | ' | ' |
Gains and (losses) from derivative instruments | ' | $0 | ($24,000) |
LINES_OF_CREDIT_Details
LINES OF CREDIT (Details) (USD $) | 17-May-13 | Oct. 31, 2013 | Sep. 30, 2012 |
Line of credit | Line of credit | ||
Agrinatural | Agrinatural | ||
LINE OF CREDIT | ' | ' | ' |
Maximum borrowing capacity of line of credit | ' | ' | $600,000 |
Interest charged (as a percent) | 7.25% | 5.43% | ' |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||||||||||||||
17-May-13 | Sep. 30, 2013 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | Oct. 31, 2013 | 17-May-13 | Oct. 31, 2013 | Sep. 30, 2013 | 17-May-13 | Oct. 31, 2013 | Oct. 31, 2012 | 17-May-13 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2012 | Sep. 18, 2013 | Sep. 30, 2013 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | 17-May-13 | |
Agstar | Director | Members | Members | Term note payable to lending institution | Term note payable to lending institution | Term note payable to lending institution | Term note payable to lending institution | Revolving term note payable to lending institution | Revolving term note payable to lending institution | Revolving term note payable to lending institution | Assessments payable as part of water treatment agreement, with interest at 6.55%, due in 2021 | Assessments payable as part of water treatment agreement, with interest at 6.55%, due in 2021 | Assessments payable as part of water treatment agreement, with interest at 0.50%, due in 2016 | Assessments payable as part of water treatment agreement, with interest at 0.50%, due in 2016 | Assessments payable as part of water supply agreement, with interest at 8.73%, due in 2019 | Assessments payable as part of water supply agreement, with interest at 8.73%, due in 2019 | Note payable to electrical provider, due in December 2012 | Note payable to electrical provider, due in December 2012 | Note payable to electrical company, due September 2017 | Note payable to electrical company, due September 2017 | Construction note payable | Construction note payable | Equipment note, second | Equipment note, second | Class A units | Class A units | Agrinatural | Agrinatural | Beginning September 2014 | Beginning October 2014 | ||||||
Maximum | Minimum | Note payable to noncontrolling interest, due October 2014 | Note payable to noncontrolling interest, due October 2014 | Term note payable to lending institution | Class A units | |||||||||||||||||||||||||||||||
Minimum | ||||||||||||||||||||||||||||||||||||
Debt financing | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt | ' | ' | $31,552,730 | $46,082,737 | ' | ' | ' | ' | ' | ' | $16,577,641 | $36,627,901 | ' | $5,979,876 | $4,211,163 | ' | $2,246,771 | $2,456,372 | $152,698 | $202,998 | $205,209 | $235,781 | $0 | $88,578 | $293,750 | $368,750 | $1,013,132 | $818,884 | $640,653 | $1,072,310 | ' | ' | $300,000 | $0 | ' | ' |
Convertible subordinated debt | ' | 5,077,000 | 4,143,000 | 0 | ' | ' | 1,400,000 | 3,700,000 | 3,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less amounts due on demand or within one year | ' | ' | 3,371,575 | 42,051,402 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net long term debt | ' | ' | 28,181,155 | 4,031,335 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Semi-annual payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 189,393 | ' | 25,692 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | 7.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.55% | ' | 0.50% | ' | 8.73% | ' | ' | ' | ' | ' | 5.29% | ' | 5.57% | ' | ' | ' | 5.43% | ' | ' | ' |
Implicit interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maintenance fee (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of worth of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Monthly payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,942 | ' | 29,775 | ' | 6,250 | ' | ' | ' | 40,000 | ' | ' | ' | ' | ' | ' | ' |
Term of debt instrument | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding amount of standby letter of credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued default interest rate (as a percent) | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial amount of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,400,000 | ' | ' | ' | 20,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization period for equal monthly payments of principal and interest on debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of the excess cash flow for which additional annual payments required | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional payments to be made per year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual reduction in maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'LIBOR | ' |
Spread over interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | ' |
Variable interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' |
Unused commitment fee per annum on the unused portion of debt (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.35% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible debt maturity date | 1-Oct-18 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible rate of class A unit | ' | $0.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.30 |
Conversion of subordinated convertible debt to member units | ' | 934,500 | 934,500 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 934,500 | ' | ' | ' | ' | ' |
Converted class A units (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,115,000 | ' | ' | ' | ' |
Estimated maturities of long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | ' | ' | 3,371,575 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | ' | ' | 2,722,838 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | ' | ' | 19,450,337 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | ' | ' | 511,602 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | ' | ' | 4,509,139 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
After 2018 | ' | ' | $987,239 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
MEMBERS_EQUITY_Details
MEMBERS' EQUITY (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||||
Jul. 31, 2013 | Sep. 30, 2013 | Jul. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | 31-May-13 | 31-May-11 | Jul. 31, 2013 | Sep. 18, 2013 | Aug. 30, 2011 | Sep. 18, 2013 | Jul. 31, 2013 | Nov. 30, 2011 | Oct. 31, 2013 | Oct. 31, 2012 | Jul. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2011 | Oct. 31, 2012 | 31-May-11 | |
vote_per_share | Project Viking | Project Viking | Project Viking | Class A units | Class A units | Class A units | Class A units | Class A units | Class A units | Class A units | Class B units | Class B units | Class B units | Class B units | Class B units | ||||||
Project Viking | |||||||||||||||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Members' Equity, units outstanding | ' | ' | ' | 64,812,107 | 38,622,107 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 49,812,107 | 38,622,107 | ' | 15,000,000 | ' | 0 | ' |
Units authorized (in shares) | ' | ' | ' | 80,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 65,000,000 | ' | ' | 15,000,000 | ' | ' | ' |
Minimum number of units held by members of the company (in shares) | ' | ' | ' | 2,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of votes per unit | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds | $6,900,000 | ' | $6,900,000 | $6,922,500 | $707,017 | $3,500,000 | ' | $3,500,000 | ' | ' | ' | ' | ' | $707,000 | ' | ' | ' | ' | ' | ' | ' |
Capital issuance (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,075,000 | 1,414,033 | ' | 15,000,000 | 7,000,000 | ' | 7,000,000 |
Class A units Authorized (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price per unit (in dollars per unit) | ' | ' | ' | ' | ' | ' | ' | ' | $0.30 | ' | $0.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum percentage of the units currently held that may be purchased by Class A unit holder | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 77.73% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deposit into an escrow account required (in dollars per unit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of units sold (in shares) | ' | ' | ' | 64,812,107 | 38,622,107 | ' | ' | ' | ' | 3,115,000 | ' | 3,115,000 | 8,075,000 | 1,414,033 | 49,812,107 | 38,622,107 | 15,000,000 | 15,000,000 | ' | 0 | ' |
Stock issuance cost per unit | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.30 | ' | ' | $0.30 | ' | $0.30 | $0.50 | $0.30 | $0.30 | $0.50 | ' | $0.50 |
Conversion of subordinated convertible debt to member units | ' | $934,500 | ' | $934,500 | $0 | $0 | $102,000 | ' | ' | ' | ' | $934,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
LEASES_Details
LEASES (Details) (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Leases [Abstract] | ' | ' | ' |
Rent expense | $1,800,000 | $2,200,000 | $1,800,000 |
Minimum non-cancelable lease term at inception (in years) | '1 year | ' | ' |
Minimum future lease payments | ' | ' | ' |
2014 | 1,294,367 | ' | ' |
2015 | 606,636 | ' | ' |
2016 | 596,920 | ' | ' |
2017 | 346,500 | ' | ' |
2018 | 0 | ' | ' |
Total lease commitments | $2,844,423 | ' | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | |
Oct. 31, 2013 | Oct. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Consolidated financial statement basis of assets | $60,793,917 | $66,581,019 |
Plus: Organization and start-up costs capitalized | 1,406,418 | 1,564,147 |
Less: Accumulated tax depreciation and amortization greater than financial statement basis | -39,647,694 | -32,928,411 |
Plus: Impairment charge | 27,844,579 | 27,844,579 |
Income tax basis of assets | $50,397,220 | $63,061,334 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||
Jul. 31, 2013 | Sep. 30, 2013 | Jul. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | 31-May-13 | 31-May-11 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | 31-May-11 | Sep. 30, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | Jul. 31, 2013 | |
Project Viking | Project Viking | Project Viking | Project Viking | Project Viking | Project Viking | Principal Owner [Member] | Majority Shareholder [Member] | Agrinatural Gas [Member] | Convertible Subordinated Debt [Member] | Granite Falls Energy LLC [Member] | |||||||
Class A units | Class B units | Class B units | Class A units | Majority Shareholder [Member] | Project Viking | ||||||||||||
RELATED PARTY TRANSACTIONS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds | $6,900,000 | ' | $6,900,000 | $6,922,500 | $707,017 | $3,500,000 | ' | $3,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class A units Authorized (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,075,000 | 15,000,000 | 7,000,000 | ' | ' | ' | ' | ' |
Purchase price per unit (in dollars per unit) | ' | ' | ' | ' | ' | ' | ' | ' | $0.30 | ' | ' | $0.50 | ' | ' | ' | ' | ' |
Conversion of subordinated convertible debt to member units | ' | 934,500 | ' | 934,500 | 0 | 0 | 102,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Management Services Agreement, Term | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Management Fee, Amount Paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,000 | ' | ' | ' |
Management Services Agreement, Percentage of Applicable Compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' |
Management Services Agreement | ' | ' | ' | 105,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible Subordinated Debt, Transferred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 102,000 |
Convertible subordinated debt | ' | 5,077,000 | ' | 4,143,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible rate of class A unit | ' | $0.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of Stock, Amount Converted | ' | 102,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of Stock, Shares Converted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 340,000 | ' | ' | ' | ' |
Interest Expense, Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,000 | 2,000 | ' |
Amount of corn purchased from members | ' | ' | ' | 0 | 0 | 57,451,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt | ' | ' | ' | $31,552,730 | $46,082,737 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $300,000 | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 1 Months Ended | 12 Months Ended | 13 Months Ended | 3 Months Ended | 0 Months Ended | ||||||
Oct. 31, 2003 | Oct. 31, 2003 | 31-May-06 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | Oct. 31, 2007 | Oct. 31, 2006 | Sep. 30, 2012 | Oct. 31, 2013 | Nov. 02, 2013 | |
Water supply development and distribution agreement | Water supply development and distribution agreement | Water treatment agreement | Water treatment agreement | Water treatment agreement | Water treatment agreement | Water treatment agreement | Water treatment agreement | Ethanol marketing agreement | Marketing, corn supply and corn storage agreements | Subsequent event | |
gal | Assessments payable | Assessments payable | Assessments payable | ||||||||
COMMITMENTS AND CONTINGENCIES | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of agreement | '15 years | ' | '30 years | ' | ' | ' | ' | ' | ' | ' | ' |
Initial volume per minute of capacity that is available from the well for which the entity has exclusive rights (in gallons) | 600 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
City's water well bond payments | $735,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Administrative fee to be paid as water usage fees (as a percent) | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Administrative fee to be paid as water usage fees | 594,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of profit to be paid as water usage fees | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt | ' | 367,000 | ' | ' | ' | ' | 500,000 | 3,550,000 | ' | ' | ' |
Operating and administrative/maintenance expenses paid | 12,000 | ' | ' | 289,000 | 349,000 | 287,000 | ' | ' | ' | ' | ' |
Termination fee | ' | ' | ' | ' | ' | ' | ' | ' | 325,000 | ' | ' |
Inventory Purchase | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,580,000 |
Percentage of ethanol and distillers grains products produced by the entity to be purchased, marketed and resold by Gavilon | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
COMMITMENTS AND CONTINGENCIES | ' | ' | ' |
Settlement payment | $0 | $900,000 | $0 |
Natural gas agreements | ' | ' | ' |
COMMITMENTS AND CONTINGENCIES | ' | ' | ' |
Long-term Purchase Commitment, Minimum Quantity Required | 1,600,000 | ' | ' |
QUARTERLY_FINANCIAL_DATA_UNAUD2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
Oct. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Jan. 31, 2013 | Oct. 31, 2012 | Jul. 31, 2012 | Apr. 30, 2012 | Jan. 31, 2012 | Oct. 31, 2011 | Jul. 31, 2011 | Apr. 30, 2011 | Jan. 31, 2011 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $38,560,472 | $45,583,441 | $35,498,926 | $44,121,305 | $46,703,001 | $41,908,904 | $41,186,236 | $38,861,794 | $43,884,453 | $43,013,930 | $38,022,811 | $39,199,181 | $163,764,144 | $168,659,935 | $164,120,375 |
Gross profit (loss) | 2,547,981 | 4,060,158 | 698,812 | 920,219 | -1,158,097 | 1,921,833 | 1,102,346 | 264,570 | 1,201,160 | 688,880 | 1,840,466 | 3,226,245 | 8,227,170 | 2,130,652 | 6,956,751 |
Operating income (loss) | 1,915,430 | 3,385,958 | -192,887 | -95,367 | -29,745,361 | 1,206,927 | -660,787 | -586,037 | -76,415 | -182,475 | 1,071,699 | 2,530,477 | 5,013,134 | -29,785,258 | 3,343,286 |
Net income (loss) attributable to Heron Lake BioEnergy, LLC | $1,305,042 | $2,554,493 | ($998,139) | ($920,554) | ($30,507,102) | $470,598 | ($1,356,345) | ($1,312,813) | ($819,852) | ($724,890) | $438,674 | $1,676,923 | $2,267,860 | ($32,352,643) | $543,017 |
Basic earnings (loss) per unit (Class A and B) | $0.03 | $0.07 | ($0.03) | ($0.02) | ' | ' | ' | ' | ' | ' | ' | ' | $0.04 | ($0.85) | $0.02 |
Diluted earnings (loss) per unit (Class A and B) | $0.03 | $0.06 | $0.03 | ($0.02) | ' | ' | ' | ' | ' | ' | ' | ' | $0.04 | ($0.85) | $0.02 |
Basic and diluted earnings (loss) per unit (Class A and B) | ' | ' | ' | ' | ($0.84) | $0.01 | ($0.04) | ($0.04) | ($0.02) | ($0.02) | $0.01 | $0.06 | ' | ' | ' |
SALE_OF_PLANT_ASSETS_Details
SALE OF PLANT ASSETS (Details) (USD $) | Feb. 02, 2013 | Jan. 22, 2013 |
Grain storage and handling facilities | Ethanol plant assets | |
FCA Co-op | Guardian Energy Heron Lake, LLC | |
Sale of plant assets | ' | ' |
Price on which sale was closed | $3,750,000 | ' |
Fixed purchase price of plant assets | ' | $55,000,000 |