Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Dec. 01, 2019 | |
Document and Entity Information [Abstract] | ||
Aggregate Market Value of Units Held by Non-affiliates | $ 32,683,994 | |
Book Value per Unit Held by Non-affiliates | $ 826 | |
Entity Registrant Name | Lincolnway Energy, LLC | |
Entity Central Index Key | 0001350420 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Address, Address Line One | 59511 W Lincoln Hwy | |
Entity Address, City or Town | Nevada | |
Entity Address, State or Province | IA | |
Entity Address, Postal Zip Code | 50201 | |
City Area Code | 515 | |
Local Phone Number | 232-1010 | |
Entity Tax Identification Number | 20-1118105 | |
Entity File Number | 000-51764 | |
Document Type | 10-K | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 42,049 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | IA | |
Document Annual Report | true | |
Document Transition Report | false | |
Entity Public Float | $ 37,492,143 |
Balance Sheets Statement
Balance Sheets Statement - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 260,858 | $ 668,456 |
Derivative financial instruments (Notes 10 and 11) | 188,694 | 555,127 |
Trade and other accounts receivable (Note 9) | 3,259,768 | 2,786,498 |
Inventories (Note 3) | 6,440,716 | 4,556,703 |
Prepaid expenses and other | 308,184 | 291,036 |
Total current assets | 10,458,220 | 8,857,820 |
PROPERTY AND EQUIPMENT | ||
Land and land improvements | 7,156,465 | 7,148,360 |
Buildings and improvements | 7,548,308 | 6,019,001 |
Plant and process equipment | 86,110,958 | 85,732,218 |
Construction in progress | 6,806,549 | 11,610,970 |
Office furniture and equipment | 455,129 | 478,173 |
Property, plant and equipment gross | 108,077,409 | 110,988,722 |
Accumulated depreciation | (65,685,719) | (62,272,902) |
Property, plant and equipment, net | 42,391,690 | 48,715,820 |
OTHER ASSETS | ||
OTHER ASSETS | 864,082 | 829,832 |
Assets | 53,713,992 | 58,403,472 |
CURRENT LIABILITIES | ||
Accounts payable | 1,794,431 | 2,378,921 |
Accounts payable, related party (Note 8) | 375,394 | 657,133 |
Accrued Loss on Purchase Commitments | 67,591 | 366,168 |
Accrued expenses | 776,385 | 972,167 |
Long-term Debt, Current Maturities | 25,000,000 | 0 |
Line of Credit Facility, Outstanding Balance | 300,000 | 0 |
Total current liabilities | 28,313,801 | 4,374,389 |
NONCURRENT LIABILITIES | ||
Long-term debt, less current maturities (Note 5) | 0 | 15,200,000 |
Deferred revenue | 0 | 296,296 |
Other | 649,799 | 533,589 |
Total noncurrent liabilities | 649,799 | 16,029,885 |
COMMITMENTS AND CONTINGENCY (Notes 7 and 9) | 0 | 0 |
MEMBERS’ EQUITY (Note 2) | ||
Member contributions, 42,049 units issued and outstanding | 38,990,105 | 38,990,105 |
Retained (deficit) | (14,239,713) | (990,907) |
Members' Equity | 24,750,392 | 37,999,198 |
Liabilities and Members' Equity | $ 53,713,992 | $ 58,403,472 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - shares | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
MEMBER'S EQUITY | ||
units issued and outstanding | 42,049 | 42,049 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues (Notes 1 and 9) | $ 97,386,340 | $ 102,050,976 | $ 110,845,184 |
Cost of Goods and Services Sold | 105,075,962 | 102,333,910 | 103,151,272 |
Gross profit (loss) | (7,689,622) | (282,934) | 7,693,912 |
General and administrative expenses | 3,484,570 | 3,236,616 | 3,136,379 |
Bad Debt Expense | 4,385,009 | 0 | 0 |
Operating income (loss) | (15,559,201) | (3,519,550) | 4,557,533 |
Other income (expense): | |||
Interest income | 10,579 | 8,403 | 3,948 |
Interest expense | (800,867) | (19,390) | (57,633) |
Other Income | 3,100,683 | 583,322 | 0 |
Other nonoperating income and expense | 2,310,395 | 572,335 | (53,685) |
Net income (loss) | $ (13,248,806) | $ (2,947,215) | $ 4,503,848 |
Weighted average units outstanding | 42,049 | 42,049 | 42,049 |
Net income (loss) per unit - basic and diluted | $ (315.08) | $ (70.09) | $ 107.11 |
Statements of Members' Equity
Statements of Members' Equity - USD ($) | Total | Member Contributions | Retained Earnings(Deficit) |
Balance at Sep. 30, 2016 | $ 37,493,790 | $ 38,990,105 | $ (1,496,315) |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Net income (loss) | 4,503,848 | 0 | 4,503,848 |
Member distributions | 0 | ||
Balance at Sep. 30, 2017 | 41,997,638 | 38,990,105 | 3,007,533 |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Net income (loss) | (2,947,215) | 0 | (2,947,215) |
Member distributions | (1,051,225) | 0 | (1,051,225) |
Balance at Sep. 30, 2018 | 37,999,198 | 38,990,105 | (990,907) |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Net income (loss) | (13,248,806) | 0 | (13,248,806) |
Member distributions | 0 | ||
Balance at Sep. 30, 2019 | $ 24,750,392 | $ 38,990,105 | $ (14,239,713) |
Statements of Members' Equity (
Statements of Members' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Distribution per unit | $ 0 | $ 25 | $ 0 |
Statement of Cash Flows
Statement of Cash Flows | 12 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Cash | $ 260,858 | $ 668,456 | $ 690,513 |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income (loss) | (13,248,806) | (2,947,215) | 4,503,848 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 5,320,846 | 4,477,811 | 3,902,575 |
Loss on sale or disposal of property and equipment | 232,981 | 43,693 | 17,676 |
Increase (Decrease) in Bad Debt Expense | 4,385,009 | 0 | 0 |
Inventory, Firm Purchase Commitment, Loss | (298,577) | 366,168 | 0 |
Changes in working capital components: | |||
Trade and other accounts receivable | (473,270) | 442,976 | (140,516) |
Inventories | (1,884,013) | 1,128,026 | 41,374 |
Prepaid expenses and other | 64,812 | 108,963 | 57,390 |
Accounts payable | (558,535) | (801,762) | (36,210) |
Accounts payable, related party | (281,739) | 14,407 | (137,577) |
Accrued expenses | (195,782) | (118,268) | 16,905 |
Increase (Decrease) in Deferred Revenue | (296,296) | (148,148) | (148,149) |
Derivative financial instruments | 366,433 | (126,461) | 69,011 |
Net cash provided by operating (used in) activities | (6,866,937) | 2,440,190 | 8,146,327 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of property and equipment | (3,667,661) | (13,611,022) | (8,548,970) |
Proceeds from sale of property and equipment | 27,000 | 0 | 7,588 |
Net cash (used in) investing activities | (3,640,661) | (13,611,022) | (8,541,382) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Member distributions | 0 | 1,051,225 | 0 |
Proceeds from Lines of Credit | 300,000 | 0 | 0 |
Proceeds from long-term borrowings | 68,250,000 | 69,550,000 | 500,000 |
Payments on long-term borrowings | (58,450,000) | (57,350,000) | (27,571) |
Net cash provided by (used in) financing activities | 10,100,000 | 11,148,775 | 472,429 |
Cash, Period Increase (Decrease) | (407,598) | (22,057) | 77,374 |
CASH AND CASH EQUIVALENTS | |||
Beginning | 668,456 | ||
Ending | 260,858 | 668,456 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||
Cash paid for interest, including capitalized interest of $304,947, $515,242 and $90,338 | 1,190,553 | 535,402 | 114,603 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | |||
Construction in progress included in accounts payable | 60,973 | 86,928 | 183,000 |
Construction in progress included in accrued expenses | $ 0 | $ 0 | $ 222,809 |
Statement of Cash Flows (Parent
Statement of Cash Flows (Parenthetical) - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Interest Costs Capitalized | $ 304,947 | $ 515,242 | $ 90,338 |
Nature of Business and Signific
Nature of Business and Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2019 | |
Nature of Business and Significant Accounting Policies [Abstract] | |
Business Description and Accounting Policies | 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 pool investors to build 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. A summary of significant accounting policies follows: 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 customers 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 is no allowance for doubtful accounts as of September 30, 2019 and September 30, 2018 . Note receivable: On March 28, 2019, the Company recorded a note receivable totaling $4,080,000 for a component of the construction in progress (the dryer) that failed to meet required specifications. The vendor issued a promissory note to the Company, which is personally guaranteed by principals of the vendor. The full amount of the note receivable plus interest is currently due and payable. During the year ended September 30, 2019, management determined based on communication from the vendor and lack of payment that the note receivable, including interest of $60,809 , should be fully reserved at June 30, 2019. Bad debt expense of $4,385,009 , $0 , and $0 was recorded during the years ended September 30, 2019, 2018, and 2017, respectively. Deferred revenue: Deferred revenue represents fees received under a service agreement in advance of services being performed. The related revenue was deferred and recognized as the services were performed over the 10 year agreement. On December 17, 2018, the Company entered into a settlement agreement in connection with the early termination of the contract. The settlement totaled approximately $3,000,000 and is included in other income and the remaining deferred revenue of approximately $420,000 was recognized during the year ended September 30, 2019. Inventories: Inventories are generally valued at the lower of net realizable value or actual cost using the first-in, first-out method. In the valuation of inventories and purchase commitments, net realizable value is defined as estimated selling price in the ordinary course of business less reasonable predictable costs of completion, disposal and transportation. For the fiscal years ended September 30, 2019 and September 30, 2018 the Company recognized a reserve and resulting loss of approximately $ 76,000 and $ 280,000 , respectively, for a lower of net realizable value or cost inventory adjustment. Property and equipment: Property and equipment is stated at cost. Construction in progress is comprised of costs related to the projects that are not completed. Depreciation is computed using the straight-line method over the following estimated useful lives: Years Land improvements 20 Buildings and improvements 40 Plant and process equipment 5 – 20 Office furniture and equipment 3 – 7 Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. When circumstances or events arise that questions an asset's usefulness, the asset is evaluated for future use and appropriate carrying value. The Company evaluates the carrying value of long-lived tangible assets when events or changes in circumstances indicate that the carrying value may not be recoverable. Such events and circumstances include, but are not limited to, significant decreases in the market value of the asset, adverse changes in the extent or manner in which the asset is being used, significant changes in business climate, or current or projected cash flow losses associated with the use of the assets. The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows from such assets are separately identifiable and are less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. For long-lived assets to be held for use in future operations and for fixed (tangible) assets, fair value is determined primarily using either the projected cash flows discounted at a rate commensurate with the risk involved or an appraisal. For long-lived assets to be disposed of by sale or other than sale, fair value is determined in a similar manner, except that fair values are reduced for disposal costs. 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 counter party 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. Forward contracts with delivery dates with 30 days that can be reasonably estimated are subject to a lower of cost or net realizable value assessment. Revenue recognition: The Company adopted Accounting Standards Update (ASU) 2014-09. Revenue for Contracts with Customers (Topic 606), October 1, 2019, using the modified retrospective method. Topic 606 requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company generally recognized revenue at a point and time. The implementation of the new standard did not result in any changes to the measurement or recognition of revenue for prior periods, however, additional disclosures have been added in accordance with the ASU. The following is a description of principal activities from which we generate revenue. Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. • sales of ethanol • sales of distillers grains • sales of corn oil Shipping costs incurred by the Company in the sale of ethanol, distillers grains and corn oil are not specifically identifiable and as a result, are recorded based on the net selling price. Railcar lease costs incurred by the Company in the sale of its products are included in the cost of goods sold. Revenue from the sale of the Company’s ethanol and distillers grains is recognized at the time title, control and all risks of ownership transfer to the marketing company. This generally occurs upon the loading of the product. For ethanol, title and control passes at the time the product crosses the loading flange in either a railcar or truck. For distillers grain, title and control passes upon the loading into trucks or railcars. Corn oil is marketed internally. Revenue is recognized when title and control of ownership transfers, upon loading. 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. Revenue by product is as follows: (In thousands) 2019 2018 2017 Ethanol $ 75,224 $ 77,709 $ 89,040 Distillers Grain 15,329 16,821 13,875 Other 6,833 7,521 7,930 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. Management has evaluated the Company's material tax positions and determined there were no uncertain tax positions that require adjustment to the financial statements. The Company does not currently anticipate significant changes in its uncertain tax positions over the next twelve months. 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. Fair value of financial instruments: The carrying amounts of cash and cash equivalents, derivative financial instruments, trade and other accounts receivable, accounts payable and accrued expenses approximate fair value. These instruments are considered Level 1 measurements under the fair value hierarchy. Long term debt approximates fair value and commensurates with the market as the agreement was recently amended in the current year. The inputs for long term debt are considered a Level 3. Recently Issued Accounting Pronouncements: In February 2016, FASB issued ASU No. 2016-2 "Leases" ("ASU 2016-02)". ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. The Company will not implement ASU 2016-02 until October 2019, when fiscal year 2020 starts. The Company is evaluating the impact of the new standard on the financial statements, but expects that upon adoption of this accounting standard, right of use and lease obligations recognized on the balance sheet will be approximately $7.0 million . |
Inventories
Inventories | 12 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following as of September 30 : 2019 2018 Raw materials, including corn, chemicals, parts and supplies $ 4,902,526 $ 3,297,104 Work in process 900,459 794,844 Ethanol and distillers grain 637,731 464,755 Total $ 6,440,716 $ 4,556,703 |
Revolving Credit Loan
Revolving Credit Loan | 12 Months Ended |
Sep. 30, 2019 | |
Revolving Credit Loan [Abstract] | |
Revolving Line of Credit. [Text Block] | Revolving Credit Loan The Company entered into a Revolving Credit Promissory Note dated June 23, 2019 which provides for loans not to exceed $4,000,000 at any time outstanding through January 1, 2020, subject to annual renewal. Interest will accrue at a variable interest rate (adjusting on a weekly basis) based upon the one-month LIBOR index rate plus 3.75% ( 5.79% as of September 30, 2019). The Lender has indicated that it intends to extend the maturity of this note to March, 2020. On December 23, 2019 our lender issued a letter to the Company deferring action until February 15, 2020 on the debt covenants and anticipated covenant violations. The Company will also pay a commitment fee on the average daily unused portion of the loan at the rate of .25% 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. There was an outstanding balance of $300,000 and $0 on the revolving credit loan as of September 30, 2019 and September 30, 2018, respectively. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Sep. 30, 2019 | |
Long-term Debt, Current and Noncurrent [Abstract] | |
Long-term Debt | Long-Term Debt The Company has a revolving term loan, with a bank, available for up to $25,000,000 . Available borrowings will be reduced by $5,000,000 each year starting October 20, 2020 until October 1, 2024. 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 3.75% ( 5.79% as of September 30, 2019). 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. At September 30, 2019 and 2018 the outstanding balance on the revolving term loan was $ 25,000,000 and $ 15,200,000 , respectively. Aggregate maturities of long term debt as of September 30, 2019 are presented as current due to the noncompliance with financial covenants. In connection with the revolving term loan, the Company entered into an Amended and Restated Letter of Credit Promissory Note. The maximum amount of the letter of credit commitment is $1,518,450 . As of September 30, 2019, the outstanding amount payable by the Company under the Restated Letter of Credit Note was $1,518,450 . The payment of distributions is also subject to the Company's compliance with the various covenants and requirements of the Company's credit and loan agreements, and it is possible that those covenants and requirements will at times prevent the Company from paying a distribution to its members if the Company fails to meet certain financial metrics or is in default under the provisions of the credit and loan agreements. At September 30, 2019 the Company failed its financial covenants as noted in Note 6 and distributions are not allowed. |
Going concern (Notes)
Going concern (Notes) | 12 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Substantial Doubt about Going Concern [Text Block] | Liquidity and Going Concern Analysis The Company has experienced an extended period of depressed margins which has resulted in a significant decrease in working capital and cash over the past several months. In September 2018, the Company was able to obtain covenant waivers from its lender related to covenant compliance and to modify future covenant requirements to allow the Company to remain in compliance until the margin environment improved. The margin environment did not improve in the ensuing months. As a result, the Company entered into an additional line of credit and amended its covenants in June 2019. The Company remains in noncompliance with its covenants. These factors have raised substantial doubt as to the Company's ability to continue as a going concern for the next 12 months. Management believed these factors to be significant due to a lack of liquidity and uncertainty regarding the Company's ability to meet its financial obligations without additional financing or an equity infusion. Based on this evaluation, the Company has determined covenant compliance over the next 12 month period is not reasonably possible and, as a result, has presented all debt as current on its balance sheet as of September 30, 2019. The Company believes it will be able to work with the bank on future covenant waivers if needed, or get additional equity or financing, however, these results cannot be assured. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | Lease Commitments The Company leases various rail cars and office equipment under operating lease agreements with the following future minimum commitments as of September 30, 2019. Years ending September 30: 2020 $ 2,031,990 2021 1,853,440 2022 1,581,044 2023 1,286,169 2024 982,275 Thereafter 513,450 Total $8,248,368 Rent expense under the above operating leases totaled approximately $2,102,000 , $2,156,000 and $2,264,000 for the years ended September 30, 2019 , 2018 and 2017 respectively. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related-Party Transactions The Company had the following related-party activity with members as of or during the year ending September 30: 2019 2018 2017 Member A Corn purchased for fiscal year $ 8,626,906 $ 17,960,954 $ 14,002,381 Corn forward purchase commitment $ — $ 6,647 $ 898,563 Basis corn commitment - bushels 80,000 400,000 200,000 Miscellaneous purchases $ 1,617 $ 2,579 $ 3,054 Amount due at fiscal year end $ 2,707 $ 65,387 $ 184,382 Member B Corn purchased for fiscal year $ 12,527,197 $ 11,818,241 $ 10,572,044 Corn forward purchase commitment $ 376,000 $ 14,103 $ 400,750 Basis corn commitment - bushels — 150,000 — Amount due at fiscal year end $ 52,486 $ 98,179 $ 97,350 Member C Corn purchased for fiscal year $ 14,400,120 $ 5,146,781 $ 6,942,708 Corn forward purchase commitment $ 22,080 $ 34,366 $ — Basis corn commitment - bushels — 205,000 — Amount due at fiscal year end $ 37,652 $ 234,238 $ — Other Members Corn purchased for fiscal year $ 9,070,359 $ 7,614,288 $ 10,432,740 Corn forward purchase commitment $ 1,822,111 $ 1,761,514 $ 1,224,837 Amount due at fiscal year end $ 132,737 $ 259,329 $ 360,994 |
Commitments and Major Customer
Commitments and Major Customer and Subsequent Event | 12 Months Ended |
Sep. 30, 2019 | |
Commitments and Major Customer [Abstract] | |
Commitments and Major Customer and Subsequent Event | Commitments and Major Customers The Company has an agreement with an unrelated entity for marketing, selling and distributing all of the ethanol produced by the Company. Revenues with this customer were $75,202,882 , $77,735,847 , and $89,200,642 for the years ended September 30, 2019, 2018 and 2017, respectively. Trade accounts receivable of $2,447,104 and $1,741,269 was due from the customer as of September 30, 2019 and 2018 , respectively. As of September 30, 2019 , the Company has ethanol sales commitments with the unrelated entity of 7,450,000 unpriced gallons through December 2019. The Company also has an agreement with an unrelated entity for marketing, selling and distributing the distillers grains. Revenues with this customer, including both distillers grains and corn oil, were $15,329,043 , $16,932,753 and $14,760,656 for the years ended September 30, 2019 , 2018 and 2017 , respectively. Trade accounts receivable of $541,164 and $262,325 was due from the customer as of September 30, 2019 and 2018 , respectively. The Company has distillers grain sales commitments with the unrelated entity of approximately 2,085 tons for a total sales commitment of approximately $268,985 less marketing fees. As of September 30, 2019 , the Company had purchase commitments for corn cash forward contracts with various unrelated parties, totaling approximately $4,476,099 , representing 1,155,835 bushels. These contracts mature at various dates through June 2020. The Company had basis contract purchase commitments with unrelated parties totaling 80,000 bushels through November 2019. The Company has an agreement with an unrelated party for the transportation of natural gas to the Company's ethanol plant. Under the agreement, the Company committed to future monthly fees totaling approximately $3.6 million over the 10 year term, commencing November 2014. On June 2, 2016, the Company assigned an irrevocable standby letter of credit to the counter-party to stand as security for the Company's obligation under the agreement. The letter of credit will be reduced over time as the Company makes payments under the agreement. On July 3, 2017, in conjunction with the amended revolving credit loan agreement, the Company amended the letter of credit and extended the maturity to May 2021. At September 30, 2019, the remaining commitment was approximately $1.5 million . As of September 30, 2019, the Company had purchase commitments for natural gas forward contracts with an unrelated party for a total commitment of approximately $549,599 . The Company had purchase commitments for natural gas basis contracts with an unrelated party totaling 357,593 |
Risk Management
Risk Management | 12 Months Ended |
Sep. 30, 2019 | |
Risk Management [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure | 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 the 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 purchases and sales 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 and natural gas derivatives and through revenue for ethanol derivatives. Derivatives not designated as hedging instruments as of September 30 are as follows: 2019 2018 Derivative assets - corn contracts $ 531,875 $ 819,613 Derivative assets - ethanol contracts — 2,640 Derivative liabilities - corn contracts (93,650 ) (813 ) Cash (due to) broker (249,531 ) (266,313 ) Total $ 188,694 $ 555,127 The effects on operating income from derivative activities for the years ending September 30, are as follows: 2019 2018 2017 Gains (losses) in revenue due to derivatives related to ethanol sales: Realized gain (loss) $ 21,525 $ (26,649 ) $ (288,138 ) Unrealized gain — — 127,923 Total effect on revenues 21,525 (26,649 ) (160,215 ) Gains (losses) in cost of goods sold due to derivatives related to corn costs: Realized gain 1,014,033 1,332,317 1,849,319 Unrealized gain (loss) (359,450 ) 325,878 (554,925 ) Total effect on corn costs 654,583 1,658,195 1,294,394 Gains (losses) in cost of goods sold due to derivatives related to natural gas costs: Realized gain 13,660 65,769 27,950 Unrealized gain (loss) 3,460 3,940 (14,290 ) Total effect on natural gas costs 17,120 69,709 13,660 Total effect on cost of goods sold $ 671,703 $ 1,727,904 $ 1,308,054 Total gain to operating income due to derivative activities $ 693,228 $ 1,701,255 $ 1,147,839 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [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 September 30, 2019 and 2018 , segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: 2019 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 531,875 $ 531,875 $ — $ — Liabilities, derivative financial instruments $ 93,650 $ 93,650 $ — $ — 2018 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 822,253 $ 822,253 $ — $ — Liabilities, derivative financial instruments $ 813 $ 813 $ — $ — |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan The Company adopted a 401(k) plan covering substantially all employees. The Company provides matching contributions of 50% for up to 6% of employee compensation. Company contributions and plan expenses for the years ended September 30, 2019 , 2018 and 2017 totaled $54,670 , $58,112 and $68,442 , respectively. |
Quarterly Financial Data (Notes
Quarterly Financial Data (Notes) | 12 Months Ended |
Sep. 30, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information [Text Block] | Quarterly Financial Data (Unaudited) The following table presents summarized quarterly financial data for the years ended September 30, 2019 and 2018. 12/31/2018 3/31/2019 6/30/2019 9/30/2019 Revenue $20,371,692 $24,333,321 $26,488,313 $26,193,014 Gross (loss) (3,923,425 ) (571,870 ) (1,649,179 ) (1,545,148 ) Operating (loss) (4,784,408 ) (1,455,824 ) (7,062,296 ) (2,256,673 ) Net (loss) (1,836,126 ) (1,430,642 ) (7,394,842 ) (2,587,196 ) Basic & diluted (loss) per unit (43.67 ) (34.03 ) (175.87 ) (61.53 ) 12/31/2017 3/31/2018 6/30/2018 9/30/2018 Revenue $22,470,128 $26,788,654 $27,100,886 $25,691,308 Gross profit (loss) (307,195 ) 293,334 867,856 (1,136,929 ) Operating income (loss) (1,252,954 ) (490,425 ) 132,137 (1,908,308 ) Net income (loss) (947,021 ) (393,169 ) 322,504 (1,929,529 ) Basic & diluted earnings (loss) per unit (22.52 ) (9.35 ) 7.67 (45.89 ) |
Nature of Business and Signif_2
Nature of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2019 | |
Nature of Business and Significant Accounting Policies [Abstract] | |
Note receivable [Policy Text Block] | Note receivable: On March 28, 2019, the Company recorded a note receivable totaling $4,080,000 for a component of the construction in progress (the dryer) that failed to meet required specifications. The vendor issued a promissory note to the Company, which is personally guaranteed by principals of the vendor. The full amount of the note receivable plus interest is currently due and payable. During the year ended September 30, 2019, management determined based on communication from the vendor and lack of payment that the note receivable, including interest of $60,809 , should be fully reserved at June 30, 2019. Bad debt expense of $4,385,009 , $0 , and $0 |
Nature of Operations [Text Block] | Principal business activity : Lincolnway Energy, LLC (the "Company"), located in Nevada, Iowa, was formed in May 2004 to pool investors to build 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. |
Use of estimates | 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 | 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: 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 customers 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 is no allowance for doubtful accounts as of September 30, 2019 and September 30, 2018 . |
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 was deferred and recognized as the services were performed over the 10 year agreement. On December 17, 2018, the Company entered into a settlement agreement in connection with the early termination of the contract. The settlement totaled approximately $3,000,000 and is included in other income and the remaining deferred revenue of approximately $420,000 was recognized during the year ended September 30, 2019. |
Inventories | Inventories: Inventories are generally valued at the lower of net realizable value or actual cost using the first-in, first-out method. In the valuation of inventories and purchase commitments, net realizable value is defined as estimated selling price in the ordinary course of business less reasonable predictable costs of completion, disposal and transportation. For the fiscal years ended September 30, 2019 and September 30, 2018 the Company recognized a reserve and resulting loss of approximately $ 76,000 and $ 280,000 , respectively, for a lower of net realizable value or cost inventory adjustment. |
Property and equipment | Property and equipment: Property and equipment is stated at cost. Construction in progress is comprised of costs related to the projects that are not completed. Depreciation is computed using the straight-line method over the following estimated useful lives: Years Land improvements 20 Buildings and improvements 40 Plant and process equipment 5 – 20 Office furniture and equipment 3 – 7 Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. When circumstances or events arise that questions an asset's usefulness, the asset is evaluated for future use and appropriate carrying value. The Company evaluates the carrying value of long-lived tangible assets when events or changes in circumstances indicate that the carrying value may not be recoverable. Such events and circumstances include, but are not limited to, significant decreases in the market value of the asset, adverse changes in the extent or manner in which the asset is being used, significant changes in business climate, or current or projected cash flow losses associated with the use of the assets. The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows from such assets are separately identifiable and are less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. For long-lived assets to be held for use in future operations and for fixed (tangible) assets, fair value is determined primarily using either the projected cash flows discounted at a rate commensurate with the risk involved or an appraisal. For long-lived assets to be disposed of by sale or other than sale, fair value is determined in a similar manner, except that fair values are reduced for disposal costs. |
Derivative financial instruments | Derivative financial instruments: |
Revenue recognition | Revenue recognition: The Company adopted Accounting Standards Update (ASU) 2014-09. Revenue for Contracts with Customers (Topic 606), October 1, 2019, using the modified retrospective method. Topic 606 requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company generally recognized revenue at a point and time. The implementation of the new standard did not result in any changes to the measurement or recognition of revenue for prior periods, however, additional disclosures have been added in accordance with the ASU. The following is a description of principal activities from which we generate revenue. Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. • sales of ethanol • sales of distillers grains • sales of corn oil Shipping costs incurred by the Company in the sale of ethanol, distillers grains and corn oil are not specifically identifiable and as a result, are recorded based on the net selling price. Railcar lease costs incurred by the Company in the sale of its products are included in the cost of goods sold. Revenue from the sale of the Company’s ethanol and distillers grains is recognized at the time title, control and all risks of ownership transfer to the marketing company. This generally occurs upon the loading of the product. For ethanol, title and control passes at the time the product crosses the loading flange in either a railcar or truck. For distillers grain, title and control passes upon the loading into trucks or railcars. Corn oil is marketed internally. Revenue is recognized when title and control of ownership transfers, upon loading. 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. Revenue by product is as follows: (In thousands) 2019 2018 2017 Ethanol $ 75,224 $ 77,709 $ 89,040 Distillers Grain 15,329 16,821 13,875 Other 6,833 7,521 7,930 |
Income taxes | 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. Management has evaluated the Company's material tax positions and determined there were no uncertain tax positions that require adjustment to the financial statements. The Company does not currently anticipate significant changes in its uncertain tax positions over the next twelve months. |
Earnings per unit | 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. |
Fair value of financial instruments | Fair value of financial instruments: The carrying amounts of cash and cash equivalents, derivative financial instruments, trade and other accounts receivable, accounts payable and accrued expenses approximate fair value. These instruments are considered Level 1 measurements under the fair value hierarchy. Long term debt approximates fair value and commensurates with the market as the agreement was recently amended in the current year. The inputs for long term debt are considered a Level 3. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements: In February 2016, FASB issued ASU No. 2016-2 "Leases" ("ASU 2016-02)". ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. The Company will not implement ASU 2016-02 until October 2019, when fiscal year 2020 starts. The Company is evaluating the impact of the new standard on the financial statements, but expects that upon adoption of this accounting standard, right of use and lease obligations recognized on the balance sheet will be approximately $7.0 million . |
Nature of Business and Signif_3
Nature of Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Nature of Business and Significant Accounting Policies [Abstract] | |
Schedule of Property and Equipment, Estimated Useful Lives | Depreciation is computed using the straight-line method over the following estimated useful lives: Years Land improvements 20 Buildings and improvements 40 Plant and process equipment 5 – 20 Office furniture and equipment 3 – 7 |
Schedule of Revenue by Product | Revenue by product is as follows: (In thousands) 2019 2018 2017 Ethanol $ 75,224 $ 77,709 $ 89,040 Distillers Grain 15,329 16,821 13,875 Other 6,833 7,521 7,930 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consist of the following as of September 30 : 2019 2018 Raw materials, including corn, chemicals, parts and supplies $ 4,902,526 $ 3,297,104 Work in process 900,459 794,844 Ethanol and distillers grain 637,731 464,755 Total $ 6,440,716 $ 4,556,703 |
Lease Commitments Lease Commitm
Lease Commitments Lease Commitments (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The Company leases various rail cars and office equipment under operating lease agreements with the following future minimum commitments as of September 30, 2019. Years ending September 30: 2020 $ 2,031,990 2021 1,853,440 2022 1,581,044 2023 1,286,169 2024 982,275 Thereafter 513,450 Total $8,248,368 |
Related-Party Transactions Rela
Related-Party Transactions Related Party Transaction (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Transactions [Table Text Block] | The Company had the following related-party activity with members as of or during the year ending September 30: 2019 2018 2017 Member A Corn purchased for fiscal year $ 8,626,906 $ 17,960,954 $ 14,002,381 Corn forward purchase commitment $ — $ 6,647 $ 898,563 Basis corn commitment - bushels 80,000 400,000 200,000 Miscellaneous purchases $ 1,617 $ 2,579 $ 3,054 Amount due at fiscal year end $ 2,707 $ 65,387 $ 184,382 Member B Corn purchased for fiscal year $ 12,527,197 $ 11,818,241 $ 10,572,044 Corn forward purchase commitment $ 376,000 $ 14,103 $ 400,750 Basis corn commitment - bushels — 150,000 — Amount due at fiscal year end $ 52,486 $ 98,179 $ 97,350 Member C Corn purchased for fiscal year $ 14,400,120 $ 5,146,781 $ 6,942,708 Corn forward purchase commitment $ 22,080 $ 34,366 $ — Basis corn commitment - bushels — 205,000 — Amount due at fiscal year end $ 37,652 $ 234,238 $ — Other Members Corn purchased for fiscal year $ 9,070,359 $ 7,614,288 $ 10,432,740 Corn forward purchase commitment $ 1,822,111 $ 1,761,514 $ 1,224,837 Amount due at fiscal year end $ 132,737 $ 259,329 $ 360,994 |
Risk Management (Tables)
Risk Management (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
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 as of September 30 are as follows: 2019 2018 Derivative assets - corn contracts $ 531,875 $ 819,613 Derivative assets - ethanol contracts — 2,640 Derivative liabilities - corn contracts (93,650 ) (813 ) Cash (due to) broker (249,531 ) (266,313 ) Total $ 188,694 $ 555,127 |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The effects on operating income from derivative activities for the years ending September 30, are as follows: 2019 2018 2017 Gains (losses) in revenue due to derivatives related to ethanol sales: Realized gain (loss) $ 21,525 $ (26,649 ) $ (288,138 ) Unrealized gain — — 127,923 Total effect on revenues 21,525 (26,649 ) (160,215 ) Gains (losses) in cost of goods sold due to derivatives related to corn costs: Realized gain 1,014,033 1,332,317 1,849,319 Unrealized gain (loss) (359,450 ) 325,878 (554,925 ) Total effect on corn costs 654,583 1,658,195 1,294,394 Gains (losses) in cost of goods sold due to derivatives related to natural gas costs: Realized gain 13,660 65,769 27,950 Unrealized gain (loss) 3,460 3,940 (14,290 ) Total effect on natural gas costs 17,120 69,709 13,660 Total effect on cost of goods sold $ 671,703 $ 1,727,904 $ 1,308,054 Total gain to operating income due to derivative activities $ 693,228 $ 1,701,255 $ 1,147,839 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and 2018 , segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: 2019 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 531,875 $ 531,875 $ — $ — Liabilities, derivative financial instruments $ 93,650 $ 93,650 $ — $ — 2018 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 822,253 $ 822,253 $ — $ — Liabilities, derivative financial instruments $ 813 $ 813 $ — $ — |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information [Table Text Block] | The following table presents summarized quarterly financial data for the years ended September 30, 2019 and 2018. 12/31/2018 3/31/2019 6/30/2019 9/30/2019 Revenue $20,371,692 $24,333,321 $26,488,313 $26,193,014 Gross (loss) (3,923,425 ) (571,870 ) (1,649,179 ) (1,545,148 ) Operating (loss) (4,784,408 ) (1,455,824 ) (7,062,296 ) (2,256,673 ) Net (loss) (1,836,126 ) (1,430,642 ) (7,394,842 ) (2,587,196 ) Basic & diluted (loss) per unit (43.67 ) (34.03 ) (175.87 ) (61.53 ) 12/31/2017 3/31/2018 6/30/2018 9/30/2018 Revenue $22,470,128 $26,788,654 $27,100,886 $25,691,308 Gross profit (loss) (307,195 ) 293,334 867,856 (1,136,929 ) Operating income (loss) (1,252,954 ) (490,425 ) 132,137 (1,908,308 ) Net income (loss) (947,021 ) (393,169 ) 322,504 (1,929,529 ) Basic & diluted earnings (loss) per unit (22.52 ) (9.35 ) 7.67 (45.89 ) |
Nature of Business and Signif_4
Nature of Business and Significant Accounting Policies Textuals (Details) gal in Millions | 12 Months Ended | ||
Sep. 30, 2019USD ($)gal | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Product Information [Line Items] | |||
Annual ethanol production | gal | 50 | ||
Accounts Receivable, Allowance for Credit Loss | $ 0 | $ 0 | |
Number of Days Due for a Past Due Trade Accounts Receivable | 90 days | ||
Convertible Note Receivable Guarantee | $ 4,080,000 | ||
Interest Income Reserve | 60,809 | ||
Bad Debt Expense | 4,385,009 | 0 | $ 0 |
services contract termination settlement | 3,000,000 | ||
Deferred Revenue, Revenue Recognized | 420,000 | ||
Inventory Write-down | 76,000 | $ 280,000 | |
Operating Lease, Right-of-Use Asset | $ 7,000,000 |
Nature of Business and Signif_5
Nature of Business and Significant Accounting Policies Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Securities Sold under Agreements to Repurchase | $ 0 | $ 0 |
Number of Days Due for a Past Due Trade Accounts Receivable | 90 days | |
Land improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 20 years | |
Buildings and improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 40 years | |
Plant and process equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years | |
Plant and process equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 20 years | |
Office furniture and equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 3 years | |
Office furniture and equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 7 years |
Nature of Business and Signif_6
Nature of Business and Significant Accounting Policies Revenue by Product (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue from External Customer [Line Items] | |||||||||||
Revenues (Notes 1 and 9) | $ 26,193,014 | $ 26,488,313 | $ 24,333,321 | $ 20,371,692 | $ 25,691,308 | $ 27,100,886 | $ 26,788,654 | $ 22,470,128 | $ 97,386,340 | $ 102,050,976 | $ 110,845,184 |
Ethanol [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenues (Notes 1 and 9) | 75,224,000 | 77,709,000 | 89,040,000 | ||||||||
Distiller's Grain [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenues (Notes 1 and 9) | 15,329,000 | 16,821,000 | 13,875,000 | ||||||||
Other Products [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenues (Notes 1 and 9) | $ 6,833,000 | $ 7,521,000 | $ 7,930,000 |
Members' Equity (Details)
Members' Equity (Details) | 12 Months Ended |
Sep. 30, 2019shares | |
Members' Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Members' Equity The Company has one class of membership units with 90,000 units authorized. Income and losses are allocated to all members based on their pro rata ownership interest. All unit transfers are effective the last day of the month. Units may be issued or transferred only to persons eligible to be members of the Company and only in compliance with the provisions of the Company's operating agreement and unit assignment policy. The Company is organized as an Iowa limited liability company. Members' liability is limited as specified in the Company's operating agreement and pursuant to the Iowa Limited Liability Company Act. The duration of the Company shall be perpetual unless dissolved as provided in the operating agreement. |
Capital Unit [Line Items] | |
Capital Units, Authorized | 90,000 |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials, including corn, coal, chemicals and supplies | $ 4,902,526 | $ 3,297,104 |
Work in process | 900,459 | 794,844 |
Ethanol and distillers grain | 637,731 | 464,755 |
Inventory total | $ 6,440,716 | $ 4,556,703 |
Revolving Credit Loan (Details)
Revolving Credit Loan (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Line of Credit Facility [Line Items] | ||
Description of variable rate basis | LIBOR | |
Basis spread on variable rate | 3.75% | |
Line of Credit Facility, Interest Rate During Period | 5.79% | |
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | 0.50% |
Line of Credit Facility, Outstanding Balance | $ 300,000 | $ 0 |
Revolving Term Loan, Maximum Borrowing Capacity | $ 4,000,000 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | 12 Months Ended | ||||||
Sep. 30, 2019 | Sep. 30, 2018 | Oct. 20, 2024 | Oct. 20, 2023 | Oct. 20, 2022 | Oct. 20, 2021 | Oct. 20, 2020 | |
Debt Instrument [Line Items] | |||||||
Revolving Term Loan, Maximum Borrowing Capacity | $ 25,000,000 | ||||||
Description of variable rate basis | LIBOR | ||||||
Basis spread on variable rate | 3.75% | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 5.79% | ||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | 0.50% | |||||
Revolving Term Loan, Outstanding Balance | $ 25,000,000 | $ 15,200,000 | |||||
Letter of Credit, Maximum Amount | 1,518,450 | ||||||
Letters of Credit Outstanding, Amount | $ 1,518,450 | ||||||
Subsequent Event [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving Term Loan, Debt reduction | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | |||
Revolving Term Loan, Outstanding Balance | $ 5,000,000 |
Lease Commitments (Details)
Lease Commitments (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Leased Assets [Line Items] | |||
Operating leases, rent expense | $ 2,102,000 | $ 2,156,000 | $ 2,264,000 |
Lease Commitments Fufutre Opera
Lease Commitments Fufutre Operating Lease Commitments (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Leases [Abstract] | |||
2014 | $ 2,031,990 | ||
2015 | 1,853,440 | ||
2016 | 1,581,044 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 1,286,169 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 982,275 | ||
Operating Leases, Future Minimum Payments, Due Thereafter | 513,450 | ||
Total minimum lease payments, operating leases | 8,248,368 | ||
Operating Leases, Rent Expense, Net | $ 2,102,000 | $ 2,156,000 | $ 2,264,000 |
Related-Party Transactions (Det
Related-Party Transactions (Details) | 12 Months Ended | ||
Sep. 30, 2019USD ($)bu | Sep. 30, 2018USD ($)bu | Sep. 30, 2017USD ($)bu | |
Key Coop [Member] | |||
Related Party Transaction [Line Items] | |||
Purchases from related party | $ 8,626,906 | $ 17,960,954 | $ 14,002,381 |
Purchase commitment, remaining minimum amount committed | $ 0 | $ 6,647 | $ 898,563 |
Corn basis forward contract | bu | 80,000 | 400,000 | 200,000 |
Miscellaneous purchases | $ 1,617 | $ 2,579 | $ 3,054 |
Accounts payable, related parties, current | 2,707 | 65,387 | 184,382 |
Heartland [Member] | |||
Related Party Transaction [Line Items] | |||
Purchases from related party | 12,527,197 | 11,818,241 | 10,572,044 |
Purchase commitment, remaining minimum amount committed | $ 376,000 | $ 14,103 | $ 400,750 |
Corn basis forward contract | bu | 0 | 150,000 | 0 |
Accounts payable, related parties, current | $ 52,486 | $ 98,179 | $ 97,350 |
Mid Iowa Cooperative [Member] | |||
Related Party Transaction [Line Items] | |||
Purchases from related party | 14,400,120 | 5,146,781 | 6,942,708 |
Purchase commitment, remaining minimum amount committed | $ 22,080 | $ 34,366 | $ 0 |
Corn basis forward contract | bu | 0 | 205,000 | 0 |
Accounts payable, related parties, current | $ 37,652 | $ 234,238 | $ 0 |
Other Members [Member] | |||
Related Party Transaction [Line Items] | |||
Purchases from related party | 9,070,359 | 7,614,288 | 10,432,740 |
Purchase commitment, remaining minimum amount committed | 1,822,111 | 1,761,514 | 1,224,837 |
Accounts payable, related parties, current | $ 132,737 | $ 259,329 | $ 360,994 |
Commitments and Major Custome_2
Commitments and Major Customer and Subsequent Event (Details) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019USD ($)gal | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2019USD ($)Tgal | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Revenue, Major Customer [Line Items] | |||||||||||
Revenues | $ 26,193,014 | $ 26,488,313 | $ 24,333,321 | $ 20,371,692 | $ 25,691,308 | $ 27,100,886 | $ 26,788,654 | $ 22,470,128 | $ 97,386,340 | $ 102,050,976 | $ 110,845,184 |
Distiller's Grain Customer Two [Member] | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Revenues | 15,329,043 | 16,932,753 | 14,760,656 | ||||||||
Distillers grains receivable | 541,164 | 262,325 | $ 541,164 | 262,325 | |||||||
Supply Commitment, Future Sales Commitment, tons | T | 2,085 | ||||||||||
Sales Commitments (in Dollars) | $ 268,985 | ||||||||||
Ethanol Customer One [Member] | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Revenues | 75,224,000 | 77,709,000 | 89,040,000 | ||||||||
Ethanol Customer One [Member] | Ethanol Customer Two [Member] | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Revenues | 75,202,882 | 77,735,847 | |||||||||
Ethanol receivable | $ 2,447,104 | $ 1,741,269 | $ 2,447,104 | $ 1,741,269 | |||||||
Sales commitments (in gallons or tons) | gal | 7,450,000 | 7,450,000 | |||||||||
Ethanol Customer One [Member] | Ethanol Customer One [Member] | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Revenues | $ 89,200,642 |
Commitments and Major Custome_3
Commitments and Major Customer and Subsequent Event Purchase Committments (Details) | 12 Months Ended | |
Sep. 30, 2019USD ($)MMBTUbu | Sep. 30, 2018USD ($)bu | |
Corn [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Purchase Commitment, Remaining Minimum Amount Committed | $ 4,476,099 | |
Purchase Commitment, Remaining Minimum Amount Committed, Bushels | bu | 1,155,835 | |
Purchase Commitment, Remaining Minimum Amount Committed, Basis Bushels | bu | 80,000 | |
Natural Gas [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Purchase Commitment, Remaining Minimum Amount Committed | $ 1,500,000 | |
Purchase Obligation | 3,600,000 | |
Purchase Commitment, Transportation Fees | $ 549,599 | |
Long-term Purchase Commitment, Minimum Energy Volume Required | MMBTU | 357,593 |
Risk Management (Details)
Risk Management (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Trading Activity, Gains and Losses, Net [Line Items] | |||
Derivative assets - corn contracts | $ 531,875 | $ 822,253 | |
Total | 188,694 | 555,127 | |
Trading Activity, Gains and Losses, Net | 693,228 | 1,701,255 | $ 1,147,839 |
Cost of Goods and Service Benchmark [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Trading Activity, Gains and Losses, Net | 671,703 | 1,727,904 | 1,308,054 |
Not Designated as Hedging Instrument [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Derivative liabilities - corn contracts | (93,650) | (813) | |
Receivables from Brokers-Dealers and Clearing Organizations | (249,531) | (266,313) | |
Total | 188,694 | 555,127 | |
Corn [Member] | Cost of Goods and Service Benchmark [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Trading Activity, Gains and Losses, Net | 654,583 | 1,658,195 | 1,294,394 |
Corn [Member] | Gain (Loss) on Settlement of Derivative Instrument [Member] | Cost of Goods and Service Benchmark [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Trading Activity, Gains and Losses, Net | 1,014,033 | 1,332,317 | 1,849,319 |
Corn [Member] | Unrealized Gain (Loss or Write-down) [Member] | Cost of Goods and Service Benchmark [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Trading Activity, Gains and Losses, Net | (359,450) | 325,878 | (554,925) |
Corn [Member] | Not Designated as Hedging Instrument [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Derivative assets - corn contracts | 531,875 | 819,613 | |
Ethanol [Member] | Sales [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Trading Activity, Gains and Losses, Net | 21,525 | (26,649) | (160,215) |
Ethanol [Member] | Gain (Loss) on Settlement of Derivative Instrument [Member] | Sales [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Trading Activity, Gains and Losses, Net | 21,525 | (26,649) | (288,138) |
Ethanol [Member] | Unrealized Gain (Loss or Write-down) [Member] | Sales [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Trading Activity, Gains and Losses, Net | 0 | 0 | 127,923 |
Ethanol [Member] | Not Designated as Hedging Instrument [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Derivative assets - corn contracts | 0 | 2,640 | |
Natural Gas [Member] | Cost of Goods and Service Benchmark [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Trading Activity, Gains and Losses, Net | 17,120 | 69,709 | 13,660 |
Natural Gas [Member] | Gain (Loss) on Settlement of Derivative Instrument [Member] | Cost of Goods and Service Benchmark [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Trading Activity, Gains and Losses, Net | 13,660 | 65,769 | 27,950 |
Natural Gas [Member] | Unrealized Gain (Loss or Write-down) [Member] | Cost of Goods and Service Benchmark [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Trading Activity, Gains and Losses, Net | $ 3,460 | $ 3,940 | $ (14,290) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets - corn contracts | $ 531,875 | $ 822,253 |
Liabilities, derivative financial instruments | 93,650 | 813 |
Fair Value, Recurring [Member] | Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets - corn contracts | 531,875 | 822,253 |
Liabilities, derivative financial instruments | 93,650 | 813 |
Fair Value, Recurring [Member] | Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets - corn contracts | 0 | 0 |
Liabilities, derivative financial instruments | 0 | 0 |
Fair Value, Recurring [Member] | Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets - corn contracts | 0 | 0 |
Liabilities, derivative financial instruments | $ 0 | $ 0 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Contribution Plan [Abstract] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 50.00% | ||
Defined contribution plan, maximum annual contribution per employee, percent | 6.00% | ||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 54,670 | $ 58,112 | $ 68,442 |
Quarterly Financial Data (Detai
Quarterly Financial Data (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues (Notes 1 and 9) | $ 26,193,014 | $ 26,488,313 | $ 24,333,321 | $ 20,371,692 | $ 25,691,308 | $ 27,100,886 | $ 26,788,654 | $ 22,470,128 | $ 97,386,340 | $ 102,050,976 | $ 110,845,184 |
Gross Profit | (1,545,148) | (1,649,179) | (571,870) | (3,923,425) | (1,136,929) | 867,856 | 293,334 | (307,195) | (7,689,622) | (282,934) | 7,693,912 |
Operating Income (Loss) | (2,256,673) | (7,062,296) | (1,455,824) | (4,784,408) | (1,908,308) | 132,137 | (490,425) | (1,252,954) | (15,559,201) | (3,519,550) | 4,557,533 |
Net Income (Loss) Attributable to Parent | $ (2,587,196) | $ (7,394,842) | $ (1,430,642) | $ (1,836,126) | $ (1,929,529) | $ 322,504 | $ (393,169) | $ (947,021) | $ (13,248,806) | $ (2,947,215) | $ 4,503,848 |
Net income (loss) per unit - basic and diluted | $ (61.53) | $ (175.87) | $ (34.03) | $ (43.67) | $ (45.89) | $ 7.67 | $ (9.35) | $ (22.52) | $ (315.08) | $ (70.09) | $ 107.11 |
subsequent events (Details)
subsequent events (Details) - $ / shares | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Subsequent Event [Line Items] | |||
Distribution per unit | $ 0 | $ 25 | $ 0 |
Uncategorized Items - lwe930201
Label | Element | Value |
Cash | us-gaap_Cash | $ 613,139 |