Exhibit 99.1
100 22nd Avenue Brookings, SD 57006 (t) 605.696.7200 (f) 605.696.7250 | ||
FOR IMMEDIATE RELEASE
VeraSun Reports Increased Revenues and Earnings for its
First Quarter 2008
Revenues Increased 257% and Earnings Grew by $7.9 million
Financial Highlights
• | Total revenues increased 257% to $516.5 million for Q1 2008 as compared to $144.5 million for Q1 2007 |
• | Net income increased to $7.6 million for Q1 2008 or $0.08 per diluted share compared to a net loss of $0.3 million for Q1 2007 |
• | EBITDA increased to $32.3 million for Q1 2008, or 6.3% of revenue, as compared to $3.8 million, or 2.6% of revenue for Q1 2007 |
• | Cash and cash equivalents of $73.5 million at March 31, 2008 |
Brookings, S.D., May 12, 2008—VeraSun Energy Corporation (NYSE: VSE), one of the nation’s largest ethanol producers, today announced its financial results for the three months ended March 31, 2008. The Company increased revenues by 257% from the first quarter of 2007, to $516.5 million and generated earnings of $0.08 per diluted share. EBITDA for Q1 2008 increased to $32.3 million, or 6.3% of revenues, as compared to $3.8 million, or 2.6% of revenues for Q1 2007.
“VeraSun continues to execute on its long-term growth strategy with significantly higher production, resulting in increased revenues and earnings,” said VeraSun CEO Donald L. Endres. “Our team also successfully commissioned VeraSun’s production facility at Bloomingburg, Ohio during the quarter, adding another 110 million gallons of production capacity.”
VeraSun completed its merger with US BioEnergy effective April 1, giving the company 11 operating facilities with a combined ethanol production capacity in excess of one billion gallons. Five additional facilities are under construction with a combined capacity of 550 million gallons. Upon completion of the new facilities by the end of the year, VeraSun expects to have an annual production capacity of approximately 1.64 billion gallons.
“Demand for ethanol continues to increase with conventional blending expanding throughout the country,” explained Endres. “Ethanol provides an immediate, strategic and economic benefit for refiners and gasoline marketers by providing a high octane, low cost blend component.”
First Quarter 2008 Financial Highlights
Total revenues, which include revenues from the sale of ethanol, distillers grains and VE85®, increased by $372 million, or 257.4% to $516.5 million for the three months ended March 31, 2008, compared to $144.5 million for the three months ended March 31, 2007. The increase in total revenues was primarily the result of a 223.5% increase in ethanol volume sold and an increase in average ethanol prices of $0.20 per gallon, or 10.2%, compared to 2007. For the three months ended March 31, 2008, the company sold 191.7 million gallons of ethanol, which includes 49.5 million gallons of ethanol that were purchased from others and resold to our customers. Ethanol production increased by 82.4 million gallons, or 138.6%, compared with the three months ended March 31, 2007, as a result of the added capacity from the Charles City, Iowa facility in April 2007, the Linden, Indiana facility in August 2007, and the Albion, Nebraska facility in October 2007.
Net sales from ethanol increased $321.6 million, or 256.3%, to $447.1 million for the three months ended March 31, 2008 compared with $125.5 million for the three months ended March 31, 2007. Of the increase, $280.4 million was driven by additional volume of ethanol sold. The increased volume resulted from additional production at Charles City, Linden, and Albion facilities, which came on line since March 31, 2007 and gallons of ethanol that were purchased and resold to our customers. In addition, higher ethanol prices contributed $41.2 million of the increased revenue. The average price of ethanol sold was $2.33 per gallon for the three months ended March 31, 2008, compared to $2.13 per gallon for the three months ended March 31, 2007.
Net sales from distillers grains increased $44.4 million, or 269.6%, to $60.8 million for the three months ended March 31, 2008 compared with $16.4 million for the three months ended March 31, 2007. The impact of increased volume from the additional Charles City, Linden, and Albion capacity was $23.2 million and the impact of higher prices contributed $21.1 million of the increased revenues.
Net sales of VE85®, our branded E85 product, increased $5.5 million, or 285.3%, to $7.4 million for the three months ended March 31, 2008 compared with $1.9 million for the three months ended March 31, 2007, primarily due to an increase in the number of retail outlets selling VE85®.
Corn costs increased $154.0 million to $238.6 million for the three months ended March 31, 2008 compared with $84.6 million for the three months ended March 31, 2007. Corn costs were $1.68 per manufactured gallon sold for the three months ending March 31, 2008, compared with $1.43 per gallon produced for the same period in 2007.
The increase in total corn costs for the three months ended March 31, 2008 was driven by $100.3 million of increased corn purchases resulting from additional production from our Charles City, Linden, and Albion facilities and $50.2 million of the increased corn costs resulted from higher corn prices per bushel.
Net income increased to $7.6 million for the three months ended March 31, 2008 from a net loss of $0.3 million for the three months ended March 31, 2007.
About VeraSun Energy Corporation
VeraSun Energy Corporation (NYSE: VSE), headquartered in Brookings, S.D., is a leading producer of renewable fuel. Founded in 2001, the company has more than one billion gallons of annual ethanol production capacity through 11 operating facilities. Six additional facilities are currently either under construction or development with a combined capacity of 660 million gallons. Upon completion of the new facilities, VeraSun Energy will have an annual production capacity of approximately 1.64 billion gallons. The company announced it started construction at its Aurora facility to extract oil from dried distillers grains for use in biodiesel production.
VeraSun markets E85, a blend of 85 percent ethanol and 15 percent gasoline for use in Flexible Fuel Vehicles (FFVs), directly to fuel retailers under the brand VE85®. For more information, please visit VeraSun Energy’s websites at www.verasun.com or www.VE85.com.
Forward-Looking Statements
We have included or incorporated by reference in this document financial estimates and other forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These estimates and statements are based upon the current beliefs and expectations of the management of VeraSun, are subject to risks and uncertainties outside of our control, and actual results might differ materially from these estimates and statements. VeraSun is not under any obligation, and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise.
Some of the factors that may cause actual results, developments and business decisions to differ materially from those described in any forward-looking statements include the volatility and uncertainty of corn, natural gas, ethanol and unleaded gasoline prices; the results of our merger with US BioEnergy; our ability to develop an oil extraction business; the results of our recently acquired facilities; the results of our hedging transactions and other risk mitigation strategies; operational disruptions at our facilities; our ability to implement our expansion strategy as planned or at all; our ability to locate and integrate potential future acquisitions; development of infrastructure related to the sale and distribution of ethanol; excess production capacity in our industry; our ability to compete effectively in our industry; changes in or elimination of governmental laws, tariffs, trade or other controls or enforcement practices; environmental, health and safety laws, regulations and liabilities; our reliance on key management personnel; future technological advances; limitations and restrictions contained in the instruments and agreements governing our indebtedness; our ability to raise additional capital and secure additional financing; and costs of construction and equipment, as more fully described in the “Risk Factors” sections of our annual report on Form 10-K for the year ended December 31, 2007 and our quarterly report on Form 10-Q for the quarter ended March 31, 2008.
Investor Contact:
Patty Dickerson
VeraSun Energy Corporation
605-696-7236
pdickerson@verasun.com
Media Contact:
Mike Lockrem
VeraSun Energy Corporation
605-696-7527
mlockrem@verasun.com
VERASUN ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended March 31, | ||||||||||||||||
2008 | 2007 | |||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
(dollars in thousands) | ||||||||||||||||
Total revenues | $ | 516,474 | 100.0 | % | $ | 144,510 | 100.0 | % | ||||||||
Cost of goods sold | 481,356 | 93.2 | 135,266 | 93.6 | ||||||||||||
Gross profit | 35,118 | 6.8 | 9,244 | 6.4 | ||||||||||||
Start up expenses | 2,111 | 0.4 | 1,365 | 1.0 | ||||||||||||
Selling, general and administrative expenses | 11,365 | 2.2 | 10,169 | 7.0 | ||||||||||||
Operating income | 21,642 | 4.2 | (2,290 | ) | (1.6 | ) | ||||||||||
Other income (expense), net | (9,398 | ) | (1.8 | ) | 1,795 | 1.2 | ||||||||||
Income before income taxes | 12,244 | 2.4 | (495 | ) | (0.4 | ) | ||||||||||
Income tax provision | 4,671 | 0.9 | (183 | ) | (0.1 | ) | ||||||||||
Net income | $ | 7,573 | 1.5 | % | (312 | ) | (0.3 | )% | ||||||||
Per Share Data: | ||||||||||||||||
Income per common share—basic | $ | 0.08 | $ | — | ||||||||||||
Basic weighted average number of common shares | 92,646,695 | 75,708,911 | ||||||||||||||
Income per common share—diluted | $ | 0.08 | $ | — | ||||||||||||
Diluted weighted average number of common and common equivalent shares | 95,116,353 | 75,708,911 |
The following table sets forth other key data for the periods presented (dollars in thousands, except per unit data)
Three Months Ended March 31, | |||||||
2008 | 2007 | ||||||
(unaudited) | |||||||
Other financial data: | |||||||
Net cash flows provided by (used in) operating activities | $ | (3,321 | ) | $ | 19,765 | ||
Other non-GAAP financial performance data: | |||||||
EBITDA | $ | 32,345 | $ | 3,791 | |||
Operating data: | |||||||
Ethanol sold—produced (gallons) (1) | 142,189,494 | 59,249,075 | |||||
Ethanol sold—purchase/resale (gallons) | 49,454,595 | — | |||||
Distillers grains sold (tons) | 445.0 | 184.6 | |||||
Average gross price of ethanol sold per gallon | $ | 2.33 | $ | 2.13 | |||
Average corn cost per bushel | 4.73 | 4.05 | |||||
Average natural gas cost per MMBTU | 8.51 | 8.21 | |||||
Average dry distillers grains gross price per ton | 136.53 | 89.06 |
The following table reconciles our EBITDA to net income for the periods presented (dollars in thousands):
Three Months Ended March 31, | |||||||
2008 | 2007 | ||||||
(unaudited) | (unaudited) | ||||||
Net income | $ | 7,573 | $ | (312 | ) | ||
Depreciation and amortization | 9,288 | 2,534 | |||||
Interest expense | 10,813 | 1,752 | |||||
Income tax provision | 4,671 | (183 | ) | ||||
EBITDA | $ | 32,345 | $ | 3,791 | |||
VERASUN ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
Three Months Ended March 31, | ||||||||
2008 | 2007 | |||||||
(dollars in thousands) | ||||||||
Cash Flows from Operating Activities | ||||||||
Net income (loss) | $ | 7,573 | $ | (312 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation | 8,889 | 2,534 | ||||||
Deferred income taxes | 4,684 | 252 | ||||||
Change in derivative financial instruments | (3,272 | ) | 6,851 | |||||
Stock-based compensation expense | 1,869 | 1,469 | ||||||
Amortization | 1,027 | 285 | ||||||
Gain on disposal of equipment | (262 | ) | (82 | ) | ||||
Excess tax benefits from share-based payment arrangements | — | (2,908 | ) | |||||
Accretion of deferred revenue | (24 | ) | (24 | ) | ||||
Change in other long-term liabilities | 763 | — | ||||||
Changes in current assets and liabilities | ||||||||
Trade receivables | (15,572 | ) | 6,406 | |||||
Inventories | (43,633 | ) | (7,570 | ) | ||||
Prepaid expenses | (10,319 | ) | (1,030 | ) | ||||
Accounts payable | 26,102 | 6,698 | ||||||
Accrued expenses | 18,854 | 7,196 | ||||||
Net cash provided by (used in) operating activities | (3,321 | ) | 19,765 | |||||
Cash Flows from Investing Activities | ||||||||
Purchases of property and equipment | (103,179 | ) | (56,757 | ) | ||||
Proceeds from the sale of short-term investments | 40,175 | 142,360 | ||||||
Payments for other long-term assets | (2,434 | ) | (50 | ) | ||||
Proceeds from sales of property and equipment | 1,300 | 1 | ||||||
Purchases of short-term investments | — | (149,715 | ) | |||||
Net cash used in investing activities | (64,138 | ) | (64,161 | ) | ||||
Cash Flows from Financing Activities | ||||||||
Proceeds from long-term debt | 34,055 | — | ||||||
Net proceeds from the issuance of stock options and warrants | 72 | — | ||||||
Excess tax benefits from share-based payment arrangements | — | 2,908 | ||||||
Principal payments on long-term debt | (4,121 | ) | — | |||||
Net proceeds from the issuance of shares of common stock | — | 3,923 | ||||||
Debt issuance costs paid | — | (5 | ) | |||||
Net cash provided by financing activities | 30,006 | 6,826 | ||||||
Net decrease in cash and cash equivalents | (37,453 | ) | (37,570 | ) | ||||
Cash and Cash Equivalents | ||||||||
Beginning of period | 110,942 | 250,149 | ||||||
Ending of period | $ | 73,489 | $ | 212,579 | ||||