Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Lincolnway Energy, LLC | |
Entity Central Index Key | 1,350,420 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 42,049 |
Balance Sheets Statement
Balance Sheets Statement - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 347,986 | $ 1,502,498 |
Cash | 347,986 | 1,502,498 |
Derivative financial instruments (Note 8 and 9) | 1,247,621 | 746,178 |
Trade and other accounts receivable (Note 7) | 5,171,996 | 3,977,264 |
Inventories (Note 3) | 3,932,527 | 3,957,973 |
Prepaid expenses and other | 369,947 | 404,180 |
Total current assets | 11,070,077 | 10,588,093 |
PROPERTY AND EQUIPMENT | ||
Land and land improvements | 6,982,287 | 6,982,287 |
Buildings and improvements | 3,028,537 | 2,978,918 |
Plant and process equipment | 101,224,860 | 93,371,048 |
Office furniture and equipment | 455,629 | 455,736 |
Construction in progress | 2,009,762 | 7,604,320 |
Property, plant and equipment, gross | 113,701,075 | 111,392,309 |
Accumulated depreciation | (78,587,037) | (73,753,905) |
Property, plant and equipment, net | 35,114,038 | 37,638,404 |
OTHER ASSETS | ||
Financing costs, net of amortization of $436,893 and $410,590 | 35,069 | 61,371 |
Other | 815,065 | 777,478 |
Other assets, noncurrent | 850,134 | 838,849 |
Assets | 47,034,249 | 49,065,346 |
CURRENT LIABILITIES | ||
Bank Overdrafts | 0 | 1,656,923 |
Accounts payable | 1,564,654 | 3,096,317 |
Accounts payable, related party (Note 6) | 513,219 | 750,768 |
Current maturities of long-term debt (Note 5) | 27,570 | 54,280 |
Derivative Liability, Current | 1,247,621 | |
Accrued expenses | 1,334,521 | 1,262,355 |
Total current liabilities | 3,439,964 | 6,820,643 |
NONCURRENT LIABILITIES | ||
Long-term debt, less current maturities (Note 5) | 4,500,000 | 27,571 |
Deferred revenue | 629,630 | 740,741 |
Other | 450,000 | 450,000 |
Total noncurrent liabilities | 5,579,630 | 1,218,312 |
MEMBERS' EQUITY | ||
Member contributions, 42,049 units issued and outstanding | 38,990,105 | 38,990,105 |
Retained earnings (deficit) | (975,450) | 2,036,286 |
Members' Equity | 38,014,655 | 41,026,391 |
Liabilities and Equity | $ 47,034,249 | $ 49,065,346 |
Balance Sheets Parenthetical St
Balance Sheets Parenthetical Statement - USD ($) | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2015 | |
OTHER ASSETS | |||
Financing costs, net of amortization of | $ 436,893 | $ 410,590 | |
MEMBER'S EQUITY | |||
Units issued and outstanding | 42,049 | 42,049 |
Statements of Operations Statem
Statements of Operations Statement - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues (Notes 2 and 7) | $ 27,479,673 | $ 29,047,061 | $ 74,343,914 | $ 89,236,048 |
Cost of goods sold (Note 7) | 25,741,335 | 27,783,975 | 75,195,236 | 84,883,514 |
Gross profit (loss) | 1,738,338 | 1,263,086 | (851,322) | 4,352,534 |
General and administrative expenses | 633,917 | 667,769 | 2,109,573 | 2,278,704 |
Operating income (loss) | 1,104,421 | 595,317 | (2,960,895) | 2,073,830 |
Other income (expense): | ||||
Interest income | 668 | 3,754 | 2,981 | 18,988 |
Interest expense | (26,749) | (265) | (53,822) | (25,969) |
Other income (expense) | (26,081) | 3,489 | (50,841) | (6,981) |
Net income (loss) | $ 1,078,340 | $ 598,806 | $ (3,011,736) | $ 2,066,849 |
Weighted average units outstanding | 42,049 | 42,049 | 42,049 | 42,049 |
Net income (loss) per unit - basic and diluted | $ 25.64 | $ 14.24 | $ (71.62) | $ 49.15 |
Statement of Cash Flows Stateme
Statement of Cash Flows Statement - USD ($) | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Cash Flows [Abstract] | |||
Proceeds from Issuance of Long-term Debt | $ 4,500,000 | $ 0 | |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | |||
Construction in progress included in accrued expenses | 0 | $ 15,212 | |
Construction in progress included in accounts payable | 108,428 | 781,573 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW | |||
INFORMATION, cash paid for interest | 41,516 | $ 2,569 | |
CASH AND CASH EQUIVALENTS | |||
Beginning | 1,502,498 | 22,978,388 | |
Ending | 347,986 | 4,435,073 | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from Short-term Debt | 0 | (13,665,925) | |
Payments on long-term borrowings | (54,281) | (53,153) | |
Increase (Decrease) in Book Overdrafts | (1,656,923) | 0 | |
Net cash provided by (used in) financing activities | 2,788,796 | (13,719,078) | |
Net decrease in cash and cash equivalents | (1,154,512) | (18,543,315) | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of property and equipment | (3,438,710) | (11,482,039) | |
Net cash (used in) investing activities | (3,438,710) | (11,482,039) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 4,876,626 | 6,182,045 | |
Changes in working capital components: | |||
Derivative financial instruments | (501,443) | 628,444 | |
Trade and other accounts receivable | (1,194,732) | (1,682,709) | |
Inventories | 25,446 | 219,455 | |
Prepaid expenses and other | (3,354) | (324,397) | |
Accounts payable | (422,001) | 226,706 | |
Accounts payable, related party | (237,549) | (168,903) | |
Accrued expenses and deferred revenue | (35,855) | (489,688) | |
Net cash provided by (used in) operating activities | (504,598) | 6,657,802 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income (loss) | $ (3,011,736) | $ 2,066,849 |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Notes) gal in Millions | 9 Months Ended | |
Jun. 30, 2016USD ($)gal | Sep. 30, 2015USD ($) | |
Accounting Policies [Abstract] | ||
Significant Accounting Policies [Text Block] | Nature of Business and Significant Accounting Policies Principal business activity : Lincolnway Energy, LLC (the "Company"), located in Nevada, Iowa, was formed in May 2004 to build and operate a 50 million gallon annual production dry mill corn-based ethanol plant. The Company began making sales on May 30, 2006 and became operational during the quarter ended June 30, 2006. The Company is directly influenced by commodity markets and the agricultural and energy industries and, accordingly, its results of operations and financial condition may be significantly affected by cyclical market trends and the regulatory, political and economic conditions in these industries. Basis of presentation and other information : The balance sheet as of September 30, 2015 was derived from the Company's audited balance sheet as of that date. The accompanying financial statements as of June 30, 2016 and for the three and nine months ended June 30, 2016 and 2015 are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. These unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto, for the year ended September 30, 2015 contained in the Company's Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire year. Use of estimates : The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and cash equivalents: The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Although the Company maintains its cash accounts in one bank, the Company believes it is not exposed to any significant credit risk on cash and cash equivalents. Trade accounts receivable : Trade accounts receivable are recorded at original invoice amounts less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering the customer's financial condition, credit history and current economic conditions. Receivables are written off when deemed uncollectible. Recoveries of receivables written off are recorded when received. A receivable is considered past due if any portion of the receivable is outstanding more than 90 days. There was no allowance for doubtful account balance as of June 30, 2016 and September 30, 2015 . Inventories: Inventories are stated at the lower of cost or market using the first-in, first-out method. In the valuation of inventories and purchase commitments, market is based on net realizable values. Fair value of financial instruments: The carrying amounts of cash and cash equivalents, derivative financial instruments, trade and other accounts receivable, accounts payable, accrued expenses, settlement payable and long-term debt approximate fair value. These instruments are considered Level 1 measurements under the fair value hierarchy. Derivative financial instruments: The Company periodically enters into derivative contracts to hedge the Company’s exposure to price risk related to forecasted corn needs, forward corn purchase contracts and ethanol sales. The Company does not typically enter into derivative instruments other than for hedging purposes. All the derivative contracts are recognized on the balance sheet at their fair market value. Although the Company believes its derivative positions are economic hedges, none have been designated as a hedge for accounting purposes. Accordingly, any realized or unrealized gain or loss related to corn and natural gas derivatives is recorded in the statement of operations as a component of cost of goods sold. Any realized or unrealized gain or loss related to ethanol derivative instruments is recorded in the statement of operations as a component of revenue. The Company reports all contracts with the same counterparty on a net basis on the balance sheet. Unrealized gains and losses on forward contracts, in which delivery has not occurred, are deemed “normal purchases and normal sales”, and therefore are not marked to market in the Company’s financial statements, but are subject to a lower of cost or market assessment. Revenue recognition: Revenue from the sale of the Company’s ethanol and distillers grains is recognized at the time title and all risks of ownership transfer to the customers. This generally occurs upon the loading of the product. For ethanol, title passes at the time the product crosses the loading flange in either a railcar or truck. For distillers grain, title passes upon the loading into trucks or railcars. Shipping and handling costs incurred by the Company for the sale of distillers grain are included in costs of goods sold. Ethanol revenue is reported free on board (FOB) and all shipping and handling costs are incurred by the ethanol marketer. Commissions for the marketing and sale of ethanol and distiller grains are included in costs of goods sold. Deferred revenue: Deferred revenue represents fees received under a service agreement in advance of services being performed. The related revenue is deferred and recognized as the services are performed over the term of the agreement. Income taxes : The Company is organized as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, the Company’s 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. Earnings per unit : Basic and diluted net income (loss) per unit have been computed on the basis of the weighted average number of units outstanding during each period presented. | |
Principal Business Activity [Policy Text Block] | Principal business activity : Lincolnway Energy, LLC (the "Company"), located in Nevada, Iowa, was formed in May 2004 to build and operate a 50 million gallon annual production dry mill corn-based ethanol plant. The Company began making sales on May 30, 2006 and became operational during the quarter ended June 30, 2006. The Company is directly influenced by commodity markets and the agricultural and energy industries and, accordingly, its results of operations and financial condition may be significantly affected by cyclical market trends and the regulatory, political and economic conditions in these industries. | |
Basis of Accounting, Policy [Policy Text Block] | Basis of presentation and other information : The balance sheet as of September 30, 2015 was derived from the Company's audited balance sheet as of that date. The accompanying financial statements as of June 30, 2016 and for the three and nine months ended June 30, 2016 and 2015 are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. These unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto, for the year ended September 30, 2015 contained in the Company's Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire year. | |
Use of Estimates, Policy [Policy Text Block] | Use of estimates : The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents: The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Although the Company maintains its cash accounts in one bank, the Company believes it is not exposed to any significant credit risk on cash and cash equivalents. | |
Trade and Other Accounts Receivable, Policy [Policy Text Block] | Trade accounts receivable : Trade accounts receivable are recorded at original invoice amounts less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering the customer's financial condition, credit history and current economic conditions. Receivables are written off when deemed uncollectible. Recoveries of receivables written off are recorded when received. A receivable is considered past due if any portion of the receivable is outstanding more than 90 days. There was no allowance for doubtful account balance as of June 30, 2016 and September 30, 2015 . | |
Inventory, Policy [Policy Text Block] | Inventories: Inventories are stated at the lower of cost or market using the first-in, first-out method. In the valuation of inventories and purchase commitments, market is based on net realizable values. | |
Deferred Revenue [Policy Text Block] | Deferred revenue: Deferred revenue represents fees received under a service agreement in advance of services being performed. The related revenue is deferred and recognized as the services are performed over the term of the agreement. | |
Income Tax, Policy [Policy Text Block] | Income taxes : The Company is organized as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, the Company’s 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. | |
Earnings Per Share, Policy [Policy Text Block] | Earnings per unit : Basic and diluted net income (loss) per unit have been computed on the basis of the weighted average number of units outstanding during each period presented. | |
Allowance for Doubtful Accounts Receivable | $ | $ 0 | $ 0 |
Annual ethanol production | gal | 50 | |
Number of days outstanding for a past due trade receivables | 90 days |
Revenue
Revenue | 9 Months Ended |
Jun. 30, 2016 | |
Revenue by product [Abstract] | |
Revenue | Revenues Components of revenues are as follows: Three Months Ended Nine Months Ended June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 Ethanol, net of hedging gain (loss) $ 21,458,476 $ 21,618,704 57,752,939 69,752,824 Distillers Grains 4,534,953 6,315,359 12,726,044 16,817,942 Other 1,486,244 1,112,998 3,864,931 2,665,282 Total $ 27,479,673 $ 29,047,061 $ 74,343,914 $ 89,236,048 |
Inventories
Inventories | 9 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following: June 30, September 30, Raw materials, including corn, chemicals and supplies $ 2,778,989 $ 3,017,637 Work in process 770,701 662,769 Ethanol and distillers grains 382,837 277,567 Total $ 3,932,527 $ 3,957,973 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Jun. 30, 2016 | |
Long-term Debt, Unclassified [Abstract] | |
Long-Term Debt | Long-Term Debt The Company has a revolving term loan, with a bank, available for up to $11,000,000 . The Company will pay interest on the unpaid balance at a variable interest rate (adjusted on a weekly basis) based upon the one-month LIBOR index rate plus 3.15% . The Company will also pay a commitment fee on the average daily unused portion of the loan at the rate of .50% per annum, payable monthly. The loan is secured by substantially all assets of the Company and subject to certain financial and nonfinancial covenants as defined in the master loan agreement. The term of the loan will expire, and the Company must pay all unpaid principal amounts outstanding under the revolving term loan, on November 1, 2020. There was $4,500,000 and $0 outstanding borrowings on the revolving term loan at June 30, 2016 and September 30, 2015 . |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Purchase Commitment, Excluding Long-term Commitment [Table Text Block] | Corn Commitment as of: June 30, 2016 Corn Forward Purchase Commitment Basis Corn Commitment (Bushels) Commitment Through Amount Due Related Parties $6,445,077 1,737,351 March 2017 $513,219 |
Schedule of Related Party Transactions [Table Text Block] | Corn Purchased: Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Nine Months Ended June 30, 2016 Nine Months Ended June 30, 2015 Related Parties $12,266,960 $ 11,962,430 $35,469,145 $ 35,895,893 |
Related-Party Transactions | Related-Party Transactions The Company had the following related-party activity with members as of June 30, 2016 and during the three and nine months ended June 30, 2016 and 2015. Corn Commitment as of: June 30, 2016 Corn Forward Purchase Commitment Basis Corn Commitment (Bushels) Commitment Through Amount Due Related Parties $6,445,077 1,737,351 March 2017 $513,219 Corn Purchased: Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Nine Months Ended June 30, 2016 Nine Months Ended June 30, 2015 Related Parties $12,266,960 $ 11,962,430 $35,469,145 $ 35,895,893 |
Commitments and Major Customer
Commitments and Major Customer | 9 Months Ended |
Jun. 30, 2016 | |
Commitments and Major Customer [Abstract] | |
Commitments and Major Customer | Commitments and Major Customers On January 1, 2013, the Company entered into an agreement with an unrelated entity for marketing, selling and distributing all of the ethanol produced by the Company. Revenues with this entity were $21,555,893 and $57,777,246 , respectively, for the three and nine months ended June 30, 2016 . Revenues with this entity were $21,672,068 and $69,461,557 , respectively, for the three and nine months ended June 30, 2015 . Trade accounts receivable of $4,012,969 were due from this entity as of June 30, 2016 . As of June 30, 2016 , the Company had ethanol unpriced sales commitments with this entity of approximately 16.3 million gallons through December 2016. The Company entered into an agreement on January 1, 2014 with an unrelated entity for marketing, selling and distributing all of the distillers grains produced by the Company. Revenues with this entity were $4,772,988 and $13,469,206 , respectively, for the three and nine months ended June 30, 2016 . Revenues with this entity were $6,315,359 and $16,817,942 , respectively, for the three and nine months ended June 30, 2015 . Trade accounts receivable of $645,630 were due from this entity as of June 30, 2016 . The Company had distillers grain sales commitments with this entity of approximately 10,650 tons, for a total sales commitment of approximately $1.6 million through August 2016. As of June 30, 2016 , the Company had purchased commitments for corn forward contracts with various unrelated parties, totaling approximately $4.5 million. These contracts mature at various dates through June 2017. In fiscal 2013, the Company entered into an agreement with an unrelated party for the transportation of natural gas to the Company's ethanol plant. Under the agreement, the Company is committed to future monthly usage fees totaling approximately $3.6 million over the 10 year term which commenced in November 2014. On June 30, 2016, the Company also assigned an irrevocable standby letter of credit to the counter-party to stand as security for the Company's obligation under the agreement which is currently at approximately $2.5 million The letter of credit will be reducing over time as the Company makes payment under the agreement. As of June 30, 2016 , the Company had purchased commitments for natural gas forward contracts with an unrelated party for a total commitment of $799,980 . These contracts mature at various dates through March 2017. On August 19, 2015, the Company entered into an agreement with an unrelated party for the construction of a grain bin. The purchase price is approximately $1 million. Approximately $.9 million has been paid. The remaining balance of approximately $.1 million will be paid as invoiced over the course of the completion of the project in fiscal year 2016. |
Risk Management
Risk Management | 9 Months Ended |
Jun. 30, 2016 | |
Risk Management [Abstract] | |
Risk Management | Risk Management The Company's activities expose it to a variety of market risks, including the effects of changes in commodity prices. These financial exposures are monitored and managed by the Company as an integral part of its overall risk management program. The Company's risk management program focuses on the unpredictability of commodity markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results. The Company maintains a risk management strategy that uses derivative instruments to minimize significant, unanticipated earnings fluctuations caused by market fluctuations. The Company's specific goal is to protect the Company from large moves in its commodity costs. To reduce price risk caused by market fluctuations, the Company generally follows a policy of using exchange-traded futures and options contracts to minimize its net position of merchandisable agricultural commodity inventories and forward purchase and sale contracts. Exchange traded futures and options contracts are designated as non-hedge derivatives and are valued at market price with changes in market price recorded in operating income through cost of goods sold for corn derivatives and through revenue for ethanol derivatives. The Company treats all contracts with the same counterparty on a net basis on the balance sheet. Derivatives not designated as hedging instruments are as follows: June 30, 2016 September 30, 2015 Derivative assets - corn contracts $ 1,540,331 $ 435,525 Derivative assets - ethanol contracts 5,250 — Derivative liabilities - corn contracts (77,822 ) (76,075 ) Derivative liabilities - ethanol contracts (131,862 ) (110,250 ) Derivative liabilities - natural gas contracts — (1,880 ) Cash held by (due to) broker (88,276 ) 498,858 Total $ 1,247,621 $ 746,178 The effects on operating income from derivative activities is as follows: Three Months Ended Nine Months Ended June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 Gains (losses) in revenues due to derivatives related to ethanol sales: Realized gain (loss) $ (78,288 ) $ 134,858 $ (7,945 ) $ 863,936 Unrealized gain (loss) (19,129 ) (188,223 ) (16,362 ) (572,670 ) Total effect on revenues (97,417 ) (53,365 ) (24,307 ) 291,266 Gains (losses) in cost of goods sold due to derivatives related to corn costs: Realized gain (loss) (291,288 ) 277,255 742,156 1,576,211 Unrealized gain (loss) 1,281,778 (1,213,675 ) 1,103,059 (1,508,800 ) Total effect on corn cost 990,490 (936,420 ) 1,845,215 67,411 Gains (losses) in cost of goods sold due to derivatives related to natural gas costs: Realized gain (loss) (53,840 ) 6,550 70,960 63,360 Unrealized gain (loss) 48,750 16,310 1,880 (4,610 ) Total effect on natural gas cost (5,090 ) 22,860 72,840 58,750 Total effect on cost of goods sold $ 985,400 $ (913,560 ) $ 1,918,055 $ 126,161 Total gain (loss) due to derivative activities $ 887,983 $ (966,925 ) $ 1,893,748 $ 417,427 Unrealized gains and losses on forward contracts, in which delivery has not occurred, are deemed “normal purchases and normal sales”, and therefore are not marked to market in the Company's financial statements but are subject to a lower of cost or market assessment. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2016 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1 - Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2 - Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3 - Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. A description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company's financial assets and financial liabilities carried at fair value. Derivative financial instruments : Commodity futures and exchange-traded commodity options contracts are reported at fair value utilizing Level 1 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the CME and NYMEX markets. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the over-the-counter markets. The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2016 and September 30, 2015 , segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: June 30, 2016 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 1,545,581 $ 1,545,581 $ — $ — Liabilities, derivative financial instruments $ (209,684 ) $ (209,684 ) $ — $ — September 30, 2015 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 435,525 $ 435,525 $ — $ — Liabilities, derivative financial instruments $ (188,205 ) $ (188,205 ) $ — $ — |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Revenue by product [Abstract] | |
Revenue from External Customers by Products and Services | Components of revenues are as follows: Three Months Ended Nine Months Ended June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 Ethanol, net of hedging gain (loss) $ 21,458,476 $ 21,618,704 57,752,939 69,752,824 Distillers Grains 4,534,953 6,315,359 12,726,044 16,817,942 Other 1,486,244 1,112,998 3,864,931 2,665,282 Total $ 27,479,673 $ 29,047,061 $ 74,343,914 $ 89,236,048 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consist of the following: June 30, September 30, Raw materials, including corn, chemicals and supplies $ 2,778,989 $ 3,017,637 Work in process 770,701 662,769 Ethanol and distillers grains 382,837 277,567 Total $ 3,932,527 $ 3,957,973 |
Risk Management (Tables)
Risk Management (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Risk Management [Abstract] | |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | Derivatives not designated as hedging instruments are as follows: June 30, 2016 September 30, 2015 Derivative assets - corn contracts $ 1,540,331 $ 435,525 Derivative assets - ethanol contracts 5,250 — Derivative liabilities - corn contracts (77,822 ) (76,075 ) Derivative liabilities - ethanol contracts (131,862 ) (110,250 ) Derivative liabilities - natural gas contracts — (1,880 ) Cash held by (due to) broker (88,276 ) 498,858 Total $ 1,247,621 $ 746,178 |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The effects on operating income from derivative activities is as follows: Three Months Ended Nine Months Ended June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 Gains (losses) in revenues due to derivatives related to ethanol sales: Realized gain (loss) $ (78,288 ) $ 134,858 $ (7,945 ) $ 863,936 Unrealized gain (loss) (19,129 ) (188,223 ) (16,362 ) (572,670 ) Total effect on revenues (97,417 ) (53,365 ) (24,307 ) 291,266 Gains (losses) in cost of goods sold due to derivatives related to corn costs: Realized gain (loss) (291,288 ) 277,255 742,156 1,576,211 Unrealized gain (loss) 1,281,778 (1,213,675 ) 1,103,059 (1,508,800 ) Total effect on corn cost 990,490 (936,420 ) 1,845,215 67,411 Gains (losses) in cost of goods sold due to derivatives related to natural gas costs: Realized gain (loss) (53,840 ) 6,550 70,960 63,360 Unrealized gain (loss) 48,750 16,310 1,880 (4,610 ) Total effect on natural gas cost (5,090 ) 22,860 72,840 58,750 Total effect on cost of goods sold $ 985,400 $ (913,560 ) $ 1,918,055 $ 126,161 Total gain (loss) due to derivative activities $ 887,983 $ (966,925 ) $ 1,893,748 $ 417,427 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Fair Value Measurements [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2016 and September 30, 2015 , segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: June 30, 2016 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 1,545,581 $ 1,545,581 $ — $ — Liabilities, derivative financial instruments $ (209,684 ) $ (209,684 ) $ — $ — September 30, 2015 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 435,525 $ 435,525 $ — $ — Liabilities, derivative financial instruments $ (188,205 ) $ (188,205 ) $ — $ — |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Details) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Accounting Policies [Abstract] | ||
Allowance for Doubtful Accounts Receivable | $ 0 | $ 0 |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenue from External Customer [Line Items] | ||||
Revenues (Notes 2 and 7) | $ 27,479,673 | $ 29,047,061 | $ 74,343,914 | $ 89,236,048 |
Ethanol [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues (Notes 2 and 7) | 21,458,476 | 21,618,704 | 57,752,939 | 69,752,824 |
Distillers' Grains [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues (Notes 2 and 7) | 4,534,953 | 6,315,359 | 12,726,044 | 16,817,942 |
Other Products [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues (Notes 2 and 7) | $ 1,486,244 | $ 1,112,998 | $ 3,864,931 | $ 2,665,282 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials, including corn, chemicals and supplies | $ 2,778,989 | $ 3,017,637 |
Work in process | 770,701 | 662,769 |
Ethanol and distillers grains | 382,837 | 277,567 |
Total | $ 3,932,527 | $ 3,957,973 |
Revolving Credit Loan (Details)
Revolving Credit Loan (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Sep. 30, 2015 | |
Line of Credit Facility [Line Items] | ||
Revolving Credit Loan | Revolving Credit Loan The Company has a monitored revolving credit loan, with a bank, for up to $8,500,000 . The Company will pay interest monthly on the unpaid balance at a variable rate (adjusted on a weekly basis) based upon the one-month LIBOR index rate plus 2.9% . The Company will also pay a commitment fee on the average daily unused portion of the loan at the rate of .20% per annum, payable monthly. The term of the loan will expire, and the Company must pay all unpaid principal amounts outstanding under the loan on July 1, 2017. The loan is secured by substantially all assets of the Company and subject to certain financial and nonfinancial covenants as defined in the master loan agreement. There was no outstanding balance on the revolving credit loan as of June 30, 2016 and September 30, 2015 . | |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 | |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, description of variable rate basis | LIBOR | |
Debt instrument, basis spread on variable rate | 2.90% | |
Line of credit facility, unused capacity, commitment fee percentage | 0.20% | |
Revolving credit loan | $ 8,500,000 | $ 0 |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Sep. 30, 2015 | |
Debt Instrument [Line Items] | ||
Less current maturities | $ (27,570) | $ (54,280) |
Line of Credit Facility, Fair Value of Amount Outstanding | 0 | |
Long-term Debt [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 11,000,000 | |
Debt Instrument, Description of Variable Rate Basis | LIBOR | |
Debt instrument, basis spread on variable rate | 3.15% | |
Line of credit facility, unused capacity, commitment fee percentage | 0.50% | |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 4,500,000 | $ 0 |
Related-Party Transactions (Det
Related-Party Transactions (Details) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2016USD ($)bu | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)bu | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | |
Related Party Transaction [Line Items] | |||||
Supply Commitment, quantity, unpriced contracts | bu | 16,300,000 | 16,300,000 | |||
Interest paid | $ 41,516 | $ 2,569 | |||
Corn [Member] | Key Coop [Member] | |||||
Related Party Transaction [Line Items] | |||||
Supplies Purchased, Materials for Production | $ 12,266,960 | $ 11,962,430 | $ 35,469,145 | $ 35,895,893 | |
Purchase Commitment, Minimum Amount Committed, Forward Contracts | $ 6,445,077 | $ 6,445,077 | |||
Supply Commitment, quantity, unpriced contracts | bu | 1,737,351 | 1,737,351 | |||
Purchase Commitment, Remaining Minimum Amount Committed | $ 513,219 | $ 513,219 |
Commitments and Major Customer
Commitments and Major Customer (Details) bu in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2016USD ($)Tbu | Mar. 31, 2016USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Jun. 30, 2016USD ($)Tbu | Jun. 30, 2015USD ($) | |
Revenue, Major Customer [Line Items] | ||||||
Revenues (Notes 2 and 7) | $ 27,479,673 | $ 29,047,061 | $ 74,343,914 | $ 89,236,048 | ||
Supply Commitment, quantity, unpriced contracts | bu | 16.3 | 16.3 | ||||
Ethanol [Member] | ||||||
Revenue, Major Customer [Line Items] | ||||||
Ethanol receivable | $ 4,012,969 | $ 4,012,969 | ||||
Entity-wide, major customer, unrelated party, amount | $ 21,555,893 | $ 57,777,246 | 21,672,068 | 69,461,557 | ||
Distillers' Grains [Member] | ||||||
Revenue, Major Customer [Line Items] | ||||||
Supply Commitment, Remaining Minimum Amount Committed | 0 | 0 | ||||
Entity-wide, major customer, unrelated party, amount | 4,772,988 | $ 13,469,206 | 6,315,359 | $ 16,817,942 | ||
Distillers grains receivable | $ 645,630 | $ 645,630 | ||||
Supply Commitment, quantity, Priced Contracts | T | 10,650 | 10,650 | ||||
Corn [Member] | ||||||
Revenue, Major Customer [Line Items] | ||||||
Long-term Purchase Commitment, Amount | $ 0 | |||||
Financial Standby Letter of Credit [Member] | ||||||
Revenue, Major Customer [Line Items] | ||||||
Guarantor Obligations, Current Carrying Value | $ 2.5 | $ 2.5 |
Commitments and Major Custome25
Commitments and Major Customer Purchase committments (Details) - USD ($) | 6 Months Ended | 9 Months Ended |
Mar. 31, 2016 | Jun. 30, 2016 | |
Long-term Purchase Commitment [Line Items] | ||
Purchase Commitment, Transportation Fees | $ 3,600,000 | |
Long-term Purchase Commitment, Period | 10 years | |
Corn [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Long-term Purchase Commitment, Amount | $ 0 | |
Natural Gas [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Long-term Purchase Commitment, Amount | 799,980 | |
Grain Bins [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Property, Plant and Equipment, Additions | 1,000,000 | |
Property, Plant, and Equipment. Additions, New Construction, Principal Paid | 900,000 | |
Property, Plant, and Equipment, Additions, New Construction, Remaining Principal Balance | 100,000 | |
Financial Standby Letter of Credit [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Guarantor Obligations, Current Carrying Value | $ 2.5 |
Risk Management (Details)
Risk Management (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2015 | |
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Unrealized Gain (Loss) on Derivatives | $ 48,750 | $ 16,310 | $ 1,880 | $ (4,610) | |
Cash held by (due to) broker | (88,276) | (88,276) | $ 498,858 | ||
Trading Activity, Gains and Losses, Net | 887,983 | (966,925) | 1,893,748 | 417,427 | |
Derivative Liability, Current | 1,247,621 | 1,247,621 | |||
Cost of Goods, Total [Member] | |||||
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Trading Activity, Gains and Losses, Net | 985,400 | (913,560) | 1,918,055 | 126,161 | |
Corn [Member] | |||||
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Derivative assets - corn contracts | 1,540,331 | 1,540,331 | 435,525 | ||
Derivative liabilities - corn contracts | (77,822) | (77,822) | (76,075) | ||
Corn [Member] | Cost of Goods, Total [Member] | |||||
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Gain (Loss) on Sale of Derivatives | (291,288) | 277,255 | 742,156 | 1,576,211 | |
Unrealized Gain (Loss) on Derivatives | 1,281,778 | (1,213,675) | 1,103,059 | (1,508,800) | |
Trading Activity, Gains and Losses, Net | 990,490 | (936,420) | 1,845,215 | 67,411 | |
Ethanol [Member] | |||||
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Derivative assets - corn contracts | 5,250 | 5,250 | 0 | ||
Derivative liabilities - corn contracts | (131,862) | (131,862) | (110,250) | ||
Ethanol [Member] | Sales [Member] | |||||
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Gain (Loss) on Sale of Derivatives | (78,288) | 134,858 | (7,945) | 863,936 | |
Unrealized Gain (Loss) on Derivatives | (19,129) | (188,223) | (16,362) | (572,670) | |
Trading Activity, Gains and Losses, Net | (97,417) | (53,365) | (24,307) | 291,266 | |
Natural Gas [Member] | |||||
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Derivative liabilities - corn contracts | 0 | 0 | $ (1,880) | ||
Natural Gas [Member] | Cost of Goods, Total [Member] | |||||
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Gain (Loss) on Sale of Derivatives | (53,840) | 6,550 | 70,960 | 63,360 | |
Trading Activity, Gains and Losses, Net | $ (5,090) | $ 22,860 | $ 72,840 | $ 58,750 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, derivative financial instruments | $ 1,545,581 | $ 435,525 |
Assets, derivative financial instruments | 209,684 | 188,205 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, derivative financial instruments | 1,545,581 | 435,525 |
Assets, derivative financial instruments | 209,684 | 188,205 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, derivative financial instruments | 0 | 0 |
Assets, derivative financial instruments | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, derivative financial instruments | 0 | 0 |
Assets, derivative financial instruments | $ 0 | $ 0 |