Cover
Cover - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 01, 2022 | Mar. 31, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 30, 2022 | ||
Current Fiscal Year End Date | --09-30 | ||
Document Transition Report | false | ||
Entity File Number | 000-53036 | ||
Entity Registrant Name | CARDINAL ETHANOL, LLC AND SUBSIDIARIES | ||
Entity Incorporation, State or Country Code | IN | ||
Entity Tax Identification Number | 20-2327916 | ||
Entity Address, Address Line One | 1554 N. County Road 600 E. | ||
Entity Address, City or Town | Union City | ||
Entity Address, State or Province | IN | ||
Entity Address, Postal Zip Code | 47390 | ||
City Area Code | 765 | ||
Local Phone Number | 964-3137 | ||
Title of 12(g) Security | Membership Units | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 48,160 | ||
Entity Common Stock, Shares Outstanding | 14,606 | ||
Documents Incorporated by Reference | The information required in Part III of this Annual Report is incorporated herein by reference to the Company's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days of the close of the fiscal year ended September 30, 2022. | ||
Entity Central Index Key | 0001352081 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
No Trading Symbol Flag | true |
Audit Information
Audit Information | 12 Months Ended |
Sep. 30, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Boulay PLLP |
Auditor Location | Minneapolis, Minnesota |
Auditor Firm ID | 542 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 53,937,943 | $ 25,798,906 |
Restricted cash | 9,301,671 | 8,097,041 |
Trade accounts receivable | 12,511,601 | 13,386,410 |
Miscellaneous receivables | 1,114,588 | 404,273 |
Inventories | 23,370,767 | 26,587,032 |
Prepaid and other current assets | 464,498 | 212,261 |
Total current assets | 102,033,729 | 76,439,260 |
Property, Plant, and Equipment | ||
Land and land improvements | 22,522,222 | 22,522,222 |
Plant and equipment | 160,156,395 | 157,028,177 |
Building | 8,913,364 | 8,913,364 |
Office equipment | 948,749 | 922,124 |
Vehicles | 31,928 | 31,928 |
Construction in process | 19,624,102 | 2,424,760 |
Gross Property, Plant and Equipment | 212,196,760 | 191,842,575 |
Less accumulated depreciation | (133,739,702) | (122,442,930) |
Property, Plant, and Equipment, Net | 78,457,058 | 69,399,645 |
Other Assets | ||
Operating lease right of use asset, net | 6,808,992 | 4,840,250 |
Investments | 1,656,049 | 1,259,770 |
Total other assets | 8,465,041 | 6,100,020 |
Total Assets | 188,955,828 | 151,938,925 |
Current Liabilities | ||
Accounts payable | 4,426,732 | 3,564,614 |
Accounts payable - grain | 12,335,894 | 11,942,723 |
Accrued expenses | 3,897,364 | 2,111,295 |
Operating lease liability current | 3,594,335 | 3,132,242 |
Total current liabilities | 27,431,166 | 23,741,046 |
Long-Term Liabilities | ||
Long-term debt | 9,000,000 | 0 |
Operating lease long-term liabilities | 3,217,532 | 1,709,621 |
Liability for railcar rehabilitation costs | 2,036,638 | 1,750,680 |
Total long-term liabilities | 14,254,170 | 3,460,301 |
Commitments and Contingencies | ||
Members’ Equity | ||
Members' contributions net of cost of raising capital, 14,606 units authorized, issued and outstanding | 70,912,213 | 70,912,213 |
Retained earnings | 76,358,279 | 53,825,365 |
Total members' equity | 147,270,492 | 124,737,578 |
Total Liabilities and Members’ Equity | 188,955,828 | 151,938,925 |
Futures and options derivatives | ||
Current Assets | ||
Derivatives | 972,041 | 964,418 |
Current Liabilities | ||
Derivatives | 2,669,433 | 2,331,889 |
Forward purchase/sales derivatives | ||
Current Assets | ||
Derivatives | 360,620 | 988,919 |
Current Liabilities | ||
Derivatives | $ 507,408 | $ 658,283 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Sep. 30, 2022 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Member contributions, units authorized (in shares) | 14,606 | 14,606 |
Member contributions, units issued (in shares) | 14,606 | 14,606 |
Member contributions, units outstanding (in shares) | 14,606 | 14,606 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | |||
Revenues | $ 546,691,371 | $ 404,002,166 | $ 244,718,562 |
Cost of Goods Sold | 460,306,891 | 369,373,828 | 239,426,482 |
Gross Profit | 86,384,480 | 34,628,338 | 5,292,080 |
Operating Expenses | 8,083,150 | 7,179,061 | 6,773,264 |
Operating Income (Loss) | 78,301,330 | 27,449,277 | (1,481,184) |
Other Income (Expense) | |||
Interest income | 6,152 | 0 | 0 |
Interest expense | (36,560) | (133,619) | (180,348) |
Miscellaneous income (expense) | 7,436,663 | (205,780) | 521,099 |
Income (loss) on equity method investment | (3,721) | 0 | 0 |
Total | 7,402,534 | (339,399) | 340,751 |
Net Income (Loss) | $ 85,703,864 | $ 27,109,878 | $ (1,140,433) |
Weight Average Units Outstanding - basic (in shares) | 14,606 | 14,606 | 14,606 |
Weight Average Units Outstanding - diluted (in shares) | 14,606 | 14,606 | 14,606 |
Net Income (Loss) Per Unit - basic (in dollars per shares) | $ 5,868 | $ 1,856 | $ (78) |
Net Income (Loss) Per Unit - diluted (in dollars per shares) | 5,868 | 1,856 | (78) |
Distributions Per Unit (in dollars per share) | $ 4,325 | $ 775 | $ 150 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities | |||
Net income (loss) | $ 85,703,864 | $ 27,109,878 | $ (1,140,433) |
Adjustments to reconcile net income (loss) to net cash provided by operations: | |||
Depreciation and amortization | 11,296,772 | 11,296,401 | 11,251,736 |
Change in fair value of commodity derivative instruments | 807,345 | (125,703) | 258,417 |
Loss of sale of equipment | 0 | 906,785 | 0 |
Forgiveness of Paycheck Protection Program Loan | 0 | (856,665) | 0 |
Non-cash lease expense | 1,262 | 0 | 0 |
Loss on equity method subsidiaries | 3,721 | 0 | 0 |
Change in operating assets and liabilities: | |||
Trade accounts receivables | 874,809 | (4,211,473) | 3,650,048 |
Miscellaneous receivables | (710,315) | 408,787 | 567,589 |
Inventories | 3,216,265 | (9,268,332) | (3,878,892) |
Prepaid and other current assets | (252,237) | (25,500) | (56,297) |
Contract liability | 0 | (15,000) | 15,000 |
Accounts payable | 560,101 | (429,407) | 1,152,561 |
Accounts payable - grain | 393,171 | 6,268,938 | (4,950,493) |
Accrued expenses | 1,798,289 | 791,353 | 158,279 |
Liability for railcar rehabilitation costs | 285,958 | 298,080 | 298,080 |
Due to broker | 0 | 0 | (1,589,324) |
Net cash provided by operating activities | 103,979,005 | 32,148,142 | 5,736,271 |
Cash Flows from Investing Activities | |||
Capital expenditures | 0 | 0 | (14,372) |
Payments for construction in process | (20,064,388) | (3,846,527) | (2,782,080) |
Investment in Cardinal One Carbon Holdings | (400,000) | 0 | 0 |
Net cash used for investing activities | (20,464,388) | (3,846,527) | (2,796,452) |
Cash Flows from Financing Activities | |||
Distributions paid | (63,170,950) | (11,319,650) | (2,190,900) |
Proceeds from revolving credit loan | 26,255,550 | 105,850,279 | 0 |
Payments on revolving credit loan | (26,255,550) | (105,850,279) | 0 |
Proceeds from long-term debt | 9,000,000 | 1,222,417 | 856,665 |
Payments on long-term debt | 0 | (1,222,417) | (6,725,722) |
Net cash used for financing activities | (54,170,950) | (11,319,650) | (8,059,957) |
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 29,343,667 | 16,981,965 | (5,120,138) |
Cash, Cash Equivalents and Restricted Cash – Beginning of Period | 33,895,947 | 16,913,982 | 22,034,120 |
Cash, Cash Equivalents and Restricted Cash – End of Period | 63,239,614 | 33,895,947 | 16,913,982 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | |||
Cash and Cash Equivalents - Balance Sheet | 53,937,943 | 25,798,906 | 12,950,558 |
Restricted Cash - Balance Sheet | 9,301,671 | 8,097,041 | 3,963,424 |
Cash, Cash Equivalents and Restricted Cash | 63,239,614 | 33,895,947 | 16,913,982 |
Supplemental Cash Flow Information | |||
Interest paid | 4,010 | 133,619 | 259,451 |
Supplemental Disclosure of Non-cash Investing and Financing Activities | |||
Construction in process included in accrued expenses and accounts payable | 343,140 | 53,343 | 301,724 |
Construction period interest capitalized in property, plant and equipment | $ 0 | $ 0 | $ 44,927 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Members' Equity - USD ($) | Total | Member Contributions | Retained Earnings |
Beginning balance at Sep. 30, 2019 | $ 112,278,683 | $ 70,912,213 | $ 41,366,470 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Net income (loss) | (1,140,433) | (1,140,433) | |
Members Distributions | (2,190,900) | (2,190,900) | |
Ending balance at Sep. 30, 2020 | 108,947,350 | 70,912,213 | 38,035,137 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Net income (loss) | 27,109,878 | 27,109,878 | |
Members Distributions | (11,319,650) | (11,319,650) | |
Ending balance at Sep. 30, 2021 | 124,737,578 | 70,912,213 | 53,825,365 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Net income (loss) | 85,703,864 | 85,703,864 | |
Members Distributions | (63,170,950) | (63,170,950) | |
Ending balance at Sep. 30, 2022 | $ 147,270,492 | $ 70,912,213 | $ 76,358,279 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Cardinal Ethanol, LLC and Subsidiaries (the “Company”) is an Indiana limited liability company currently producing fuel-grade ethanol, distillers grains, corn oil and carbon dioxide near Union City, Indiana and sells these products throughout the continental United States. During the fiscal years ended September 30, 2022, 2021 and 2020, the Company produced approximately 136,700,000, 136,100,000 and 129,100,000 gallons of ethanol, respectively. In addition, the Company procures, transports, and sells grain commodities through grain operations. Basis of Accounting The Company prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include the operations, assets and liabilities of the Company. In the opinion of the Company's management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to fairly present the accompanying consolidated financial statements. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Cardinal Ethanol, LLC and its wholly owned subsidiaries, Cardinal Ethanol Export Sales, Inc. and Cardinal One Carbon Holdings, LLC (collectively, the Company). Cardinal Ethanol Export Sales, Inc. is an Interest Charge Domestic to International Sales Company ("IC-DISC") designed to take advantage of certain tax incentives for export sales to other countries. Cardinal One Carbon Holdings, LLC was formed to hold the partnership interest for the investigation and pursuit of carbon dioxide capture and sequestration. All inter-company balances and transactions have been eliminated in consolidation. Fiscal Reporting Period The Company has adopted a fiscal year ending September 30 for reporting financial operations and a year ending December 31 for tax return purposes. Reportable Segments Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” establishes the standards for reporting information about segments in consolidated financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available that are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Based on the related business nature and expected financial results criteria set forth in ASC 280, the Company has two reportable operating segments for financial reporting purposes. • Ethanol Division. Based on the nature of the products and production process and the expected financial results, the Company’s operations at its ethanol plant, including the production and sale of ethanol and its co-products, are aggregated into one financial reporting segment. • Trading Division. The Company has a grain loading facility within the Company's single site to buy, hold and sell inventories of agricultural grains, primarily soybeans. The Company performs no additional processing of these grains, unlike the corn inventory the Company holds and uses in ethanol production. The activities of buying, selling and holding of grains other than for ethanol and co-product production comprise this financial reporting segment. Accounting Estimates Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The Ethanol Division uses estimates and assumptions in accounting for the following significant matters, among others: the useful life of fixed assets, inventories, the assumptions used in the analysis of the impairment of long lived assets, railcar rehabilitation costs, and inventory purchase commitments. The Trading Division uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, the valuation of inventory purchase and sale commitment derivatives and inventory at market. Actual results may differ from previously estimated amounts, and such differences may be material to the consolidated financial statements. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made. Actual results could differ materially from those estimates. Cash and Cash Equivalents The Company maintains its accounts primarily at two financial institutions. At times throughout the year, the Company's cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash equivalents represent money market funds or short-term investments with original maturities of three months or less from the date of purchase, except for those amounts that are held in the investment portfolio for long-term investment. Restricted Cash As a part of its commodities hedging activities, the Company is required to maintain cash balances with its commodities trading companies for initial and maintenance margins on a per futures contract basis. Changes in the market value of contracts may increase these requirements. As the futures contracts expire, the margin requirements also expire. Accordingly, the Company records the cash maintained with the traders in the margin accounts as restricted cash. Since this cash is immediately available upon request when there is a margin excess, the Company considers this restricted cash to be a current asset. Trade Accounts Receivable Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral. Accounts receivable are recorded at their estimated net realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company's credit terms. Amounts considered uncollectible are written off. The Company's estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any. At September 30, 2022 and 2021, the Company determined that an allowance for doubtful accounts was not necessary. Inventories Ethanol Division (see Reportable Segments) inventories consist of raw materials, work in process, finished goods and spare parts. Corn is the primary raw material. Finished goods consist of ethanol, dried distiller grains and corn oil. Inventories are stated at the lower of weighted average cost or net realizable value. Net realizable value is the estimated selling prices in the normal course of business, less reasonably predictable selling costs. Trading Division (see Reportable Segments) inventories consist of grain. Soybeans were the only grains held and traded at September 30, 2022 and 2021. These inventories are stated at market value less estimated selling costs, which may include reductions for quality. Property, Plant and Equipment Property, plant, and equipment are stated at cost. Depreciation is provided over estimated useful lives by use of the straight-line depreciation method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Construction in process expenditures will be depreciated using the straight-line method over their estimated useful lives once the assets are placed into service. Minimum years Maximum years Land improvements 15 20 Plant and equipment 5 20 Building 10 40 Office equipment 7 15 Vehicles 5 5 Long-Lived Assets The Company reviews its long-lived assets, such as property, plant and equipment and financing costs, subject to depreciation and amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Management evaluated and determined no impairment write-downs were considered necessary for the fiscal years ending September 30, 2022, 2021, and 2020. Investments Investments consist of the capital stock and patron equities of the Company's distillers grains marketer. The investment is stated at the lower of cost or fair value and adjusted for non cash patronage equities and cash equity redemptions received. Non-cash patronage dividends are recognized when received and included within revenue in the statements of operations. The Company has also created certain subsidiaries to achieve some of its varying business interests that are not directly related to ethanol production or trading of grain. One has been formed as a corporation, while the other has been formed as a limited liability company (LLC) to hold interests in affiliated companies for carbon capture and underground sequestration (CCS). Through its LLC, the company owns a fifty percent interest in a joint venture which is accounted for as an equity method investment as described in detail in Note 16 - Equity Method Investments. Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. The Company's contracts primarily consist of agreements with marketing companies and other customers as described below. The Company's performance obligations consist of the delivery of ethanol, distillers grains, corn oil, soybeans and carbon dioxide to its customers. The consideration the Company receives for these products is fixed based on current observable market prices at the Chicago Mercantile Exchange, generally, and adjusted for local market differentials. The Company's contracts have specific delivery modes, rail or truck, and dates. Revenue is recognized when the Company delivers the products to the mode of transportation specified in the contract, at the transaction price established in the contract, net of commissions, fees, and freight. The Company sells each of the products via different marketing channels as described below. • Ethanol. The Company sells its ethanol via a marketing agreement with Murex, LLC. Murex buys one hundred percent of the Company's ethanol production based on agreements with end users at prices agreed upon mutually among the end user, Murex and the Company. Murex then provides a schedule of deliveries required and an order for each rail car or tankers needed to fulfill their commitment with the end user. These are individual performance obligations of the Company. The marketing agreement calls for control and title to pass when the delivery vehicle is filled. Revenue is recognized then at the price in the agreement with the end user, net of commissions, freight, and insurance. • Distillers grains. The Company engages another third-party marketing company, CHS, Inc. to market one hundred percent of the distillers grains it produces at the plant. The process for selling the distillers grains is like that of ethanol, except that CHS takes title and control once a rail car is released to the railroad or a truck is released from the Company's scales. Prices are agreed upon among the three parties, and CHS provides schedule and orders representing performance obligations. Revenue is recognized net of commissions, freight, and fees. • Distillers corn oil (corn oil). The Company sells its production of corn oil directly to commercial customers. The customer is provided with a delivery schedule and pick up orders representing performance obligations. These are fulfilled when the customer's driver picks up the scheduled load. The price is agreed upon at the time each contract is made, and the Company recognizes revenue at the time of delivery at that price. • Carbon dioxide. The Company sells a portion of the carbon dioxide it produces to a customer that maintains a plant on-site for a set price per ton. Delivery is defined as transference of the gas from our stream to their plant. • Soybeans and other grains. The Company sells soybeans exclusively to commercial mills, processors or grain traders. Contracts are negotiated directly with the parties at prices based on negotiated prices. • Other. The Company engaged in ethanol sales to be processed for sanitizer during the fiscal year ended September 30, 2020 as a result of a direct domestic need from COVID-19. The Company has since discontinued ethanol for sanitizer sales. Cost of Goods Sold Cost of goods sold include corn, trading division grains, natural gas and other components which includes processing ingredients, electricity, railcar lease, railcar maintenance, depreciation of ethanol production fixed assets and wages, salaries and benefits of production personnel. Operating Expenses Operating expenses include wages, salaries and benefits of administrative employees at the plant, insurance, professional fees, depreciation of trading division fixed assets, property taxes and similar costs. Derivative Instruments From time to time the Company enters into derivative transactions to hedge its exposures to commodity price fluctuations. The Company is required to record these derivatives in the balance sheet at fair value. In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in the statement of operations, depending on the item being hedged. Additionally, the Company is required to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from accounting and reporting requirements, and therefore, are not marked to market in our consolidated financial statements. The Company has elected for its Ethanol Division to apply the normal purchase normal sale exemption to all forward commodity contracts. For the Trading Division, the Company has elected not to apply the normal purchase normal sale exemption to its forward purchase and sales contracts and therefore, marks these derivative instruments to market. Fair Value of Financial Instruments The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the consolidated financial statements on a recurring and nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. • Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 inputs are unobservable inputs for the asset or liability used to measure fair values to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The carrying value of cash, restricted cash, trade accounts receivable, miscellaneous receivables, treasury bills, accounts payable (other than those measured as fair value discussed in Note 8), accounts payable-grain, and accrued expenses approximates fair value at September 30, 2022 and 2021 due to the short maturity nature of these instruments. The fair value of derivative instruments, Trading Division inventory, and debt is disclosed in Note 8. Except for those assets and liabilities, which are required by authoritative accounting guidance to be recorded at fair value on our balance sheets, the Company has elected not to record any other assets or liabilities at fair value. No events occurred during the fiscal years ended September 30, 2022, 2021, or 2020 that required adjustment to the recognized balances of assets or liabilities, which are recorded at fair value on a nonrecurring basis. Environmental Liabilities The Company's operations are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its location. Accordingly, the Company has adopted policies, practices and procedures in the areas of pollution control, occupational health, and the production, handling, storage and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability, which could result from such events. Environmental liabilities are recorded when the liability is probable and the costs can be reasonably estimated. No liabilities were recorded at September 30, 2022 or 2021. Net Income (Loss) per Unit Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members' units outstanding during the period. Diluted net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members' units and members' unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, the Company's basic and diluted net income (loss) per unit are the same. Income Taxes Cardinal Ethanol, LLC and Subsidiaries is treated as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, income or losses are included in the income tax returns of the members and partners. Accordingly, no provision or liability for federal or state income taxes has been included in these consolidated financial |
REVENUE
REVENUE | 12 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Revenue Recognition Revenue is recognized at a single point in time when the Company satisfies its performance obligation under the terms of a contract with a customer. Generally, this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration expected, as specified in the contract with a customer, to be received in exchange for transferring goods or providing services. Revenue by Source All revenues from contracts with customers under ASC Topic 606 are recognized at a point in time. The following tables disaggregate revenue by major source: Fiscal Year Ended September 30, 2022 Ethanol Division Trading Division Total Revenues from contracts with customers under ASC Topic 606 Ethanol $ 359,726,018 $ — $ 359,726,018 Distillers' Grains 63,798,998 — 63,798,998 Corn Oil 27,656,525 — 27,656,525 Carbon Dioxide 473,449 — 473,449 Other Revenue 65,825 116,331 182,156 Total revenues from contracts with customers 451,720,815 116,331 451,837,146 Revenues from contracts accounted for as derivatives under ASC Topic 815 (1) Soybeans and other grains — 94,854,225 94,854,225 Total revenues from contracts accounted for as derivatives — 94,854,225 94,854,225 Total Revenues $ 451,720,815 $ 94,970,556 $ 546,691,371 Fiscal Year Ended September 30, 2021 Ethanol Division Trading Division Total Revenues from contracts with customers under ASC Topic 606 Ethanol $ 251,922,325 $ — $251,922,325 Distillers' Grains 57,818,038 — 57,818,038 Corn Oil 17,966,544 — 17,966,544 Carbon Dioxide 484,752 — 484,752 Other Revenue 54,275 121,200 175,475 Total revenues from contracts with customers 328,245,934 121,200 328,367,134 Revenues from contracts accounted for as derivatives under ASC Topic 815 (1) Soybeans and other grains — 75,635,032 75,635,032 Total revenues from contracts accounted for as derivatives — 75,635,032 75,635,032 Total Revenues $ 328,245,934 $ 75,756,232 $ 404,002,166 Fiscal Year Ended September 30, 2020 Ethanol Division Trading Division Total Revenues from contracts with customers under ASC Topic 606 Ethanol $ 157,704,059 $ — $ 157,704,059 Distillers' Grains 41,687,109 — 41,687,109 Corn Oil 9,640,523 — 9,640,523 Carbon Dioxide 493,500 — 493,500 Other Revenue 2,048,527 87,450 2,135,977 Total revenues from contracts with customers 211,573,718 87,450 211,661,168 Revenues from contracts accounted for as derivatives under ASC Topic 815 (1) Soybeans and other grains — 33,057,394 33,057,394 Total revenues from contracts accounted for as derivatives — 33,057,394 33,057,394 Total Revenues $ 211,573,718 $ 33,144,844 $ 244,718,562 (1) Revenues from contracts accounted for as derivatives represent physically settled derivative sales that are outside the scope of ASC Topic 606, Revenue from Contracts with Customers (ASC Topic 606), where the company recognizes revenue when control of the inventory is transferred within the meaning of ASC Topic 606 as required by ASC Topic 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets. Payment Terms The Company has contractual payment terms with each respective marketer that sells ethanol and distillers grains. These terms are generally 7 - 14 days after the week of the transfer of control. The Company has standard payment terms of net 10 days for its sale of corn oil. The Company has standard payments terms due upon delivery for its sale of soybeans. The contractual terms with the carbon dioxide customer calls for an annual settlement. Shipping and Handling Costs Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of goods sold. Accordingly, amounts billed to customers for such costs are included as a component of revenue. Contract Liabilities |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Sep. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | CONCENTRATIONSTwo major customers accounted for approximately 82% and 90% of the outstanding accounts receivable balance at September 30, 2022 and September 30, 2021, respectively. The same two customers, in addition to one customer not included in the receivable concentration, account for approximately 93% of revenue for the year ended September 30, 2022. The same two customers accounted for approximately 81% of revenue for each of the years ended September 30, 2021, and 2020.RISKS AND UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS The Company has certain risks and uncertainties that it experiences during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol, distillers grains and corn oil to customers primarily located in the U.S. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. During the fiscal year ended September 30, 2022, ethanol sales averaged approximately 66% of total revenues and corn costs averaged 67% of total cost of goods sold. The Company's operating and financial performance is largely driven by prices at which the Company sells ethanol, distillers grains and corn oil, and the related cost of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and the unleaded gasoline and petroleum markets, although, since 2005, the prices of ethanol and gasoline began a divergence with ethanol selling for less than gasoline at the wholesale level. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, weather, government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities. Economic conditions for the ethanol industry have been favorable during fiscal year 2022. However, the military invasion of Ukraine by Russia in the second quarter of fiscal year 2022 and sanctions imposed by other countries as a result have created global economic uncertainty and contributed to increased inflation, significant market disruptions and increased volatility in commodity prices such as corn, oil and natural gas. The economic impact of this war and the potential effects on the Company's operating and financial performance is currently unknown. Additionally, there have been economic indicators that the United States could be facing a possible recession which have primarily resulted from interest rate hikes by the Federal Reserve in an attempt to reduce inflation. The Company continues to monitor economic conditions that might affect our profitability. The Company believes that its cash on hand and available debt from its lender will provide sufficient liquidity to meets its anticipated working capital, debt service and other liquidity needs through the next twelve months. If market conditions worsen affecting the Company's ability to profitably operate the plant or if the Company is unable to transport ethanol, it may be forced to further reduce the ethanol production rate or even temporarily shut down ethanol production altogether. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The differences between financial statement basis and tax basis of assets and liabilities at September 30, 2022 and 2021 are as follows: 2022 2021 Financial statement basis of assets $ 188,955,828 $ 151,938,925 Organization and start-up costs 3,160,001 1,976,610 Book to tax depreciation and amortization (48,551,783) (55,156,961) Book to tax derivative instruments (967,461) (964,418) Book to tax operating lease right of use asset (6,808,992) (4,840,250) Capitalized inventory 127,000 154,000 Income tax basis of assets $ 135,914,593 $ 93,107,906 Financial statement basis of liabilities $ 41,685,336 $ 27,201,347 Book to tax derivative instruments (2,664,853) (2,331,889) Book to tax operating lease liability (6,811,869) (4,841,863) Accrued employee benefits (849,646) (713,233) Accrued rail car rehabilitation costs (2,036,638) (1,750,680) Income tax basis of liabilities $ 29,322,330 $ 17,563,682 |
MEMBERS' EQUITY
MEMBERS' EQUITY | 12 Months Ended |
Sep. 30, 2022 | |
Members' Equity [Abstract] | |
MEMBERS' EQUITY | MEMBERS' EQUITY The Company has one class of membership units, which include certain transfer restrictions as specified in the operating agreement and pursuant to applicable tax and securities laws. Income and losses are allocated to all members based upon their respective percentage of units held. Distribution dates and amounts for the fiscal year ended September 30, 2022 are listed in the table below: Date Declared Distribution Declared Per Unit Total Distribution Amount Month Distribution Paid November 16, 2021 $ 650 $ 9,493,900 November 2021 February 15, 2022 1,500 21,909,000 March 2022 May 17, 2022 675 9,859,050 June 2022 August 16, 2022 1,500 21,909,000 August 2022 Totals $ 4,325 $ 63,170,950 In November 2022, the Company declared a distribution of $500 per unit for a total distribution of $7,303,000. Distribution dates and amounts for the fiscal year ended September 30, 2021 are listed in the table below: Date Declared Distribution Declared Per Unit Total Distribution Amount Month Distribution Paid November 17, 2020 $ 100 $ 1,460,600 November 2020 February 9, 2021 150 2,190,900 February 2021 June 15, 2021 200 2,921,200 June 2021 August 17, 2021 325 4,746,950 August 2021 Totals $ 775 $ 11,319,650 Distribution dates and amounts for the fiscal year ended September 30, 2020 are listed in the table below: Date Declared Distribution Declared Per Unit Total Distribution Amount Month Distribution Paid February 18, 2020 $ 150 $ 2,190,900 February 2020 Totals $ 150 $ 2,190,900 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consist of the following as of September 30, 2022 and 2021: September 30, 2022 September 30, 2021 Ethanol Division: Raw materials $ 7,206,914 $ 2,995,914 Work in progress 2,442,453 2,331,419 Finished goods 7,513,988 12,431,375 Spare parts 4,178,807 3,978,193 Ethanol Division Subtotal $ 21,342,162 $ 21,736,901 Trading Division: Grain inventory $ 2,028,605 $ 4,850,131 Trading Division Subtotal 2,028,605 4,850,131 Total Inventories $ 23,370,767 $ 26,587,032 The Company did not have a net realizable value write-down of ethanol inventory for the years ended September 30, 2022 and 2021. The Company had a net realizable write-down of ethanol inventory of approximately $10,000 for the year ended September 30, 2020. In the ordinary course of its ethanol business, the Company enters into forward purchase contracts for its commodity purchases and sales. Certain contracts for the ethanol division that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales. At September 30, 2022, the Company had forward corn purchase contracts at various fixed prices for various delivery periods through March 2024 for approximately 9% of expected production needs for the next 18 months. Given the uncertainty of future ethanol and corn prices, the Company could incur a loss on the outstanding corn purchase contracts in future periods. Management has evaluated these forward contracts and its inventories using the lower of cost or net realizable value evaluation, and has determined that no impairment existed at September 30, 2022 and September 30, 2021. At September 30, 2022, the Company has forward natural gas purchase contracts for 31.0% of expected usage for the next 25 months at various prices for various delivery periods through October 2024. The Company has no forward ethanol sales contracts at fixed prices at September 30, 2022. The Company did have dried distiller grains sales contracts for 21.3% of expected production for the next 3 months through December 2022. The Company had forward corn oil sales contracts for 101.86% of expected production for the next 1 month at various fixed prices for various delivery periods through October 2022. Also, the Company purchased corn from a related party during the year totaling approximately $993,000. At September 30, 2022, the Company had soybean forward purchase contracts at various fixed prices for various delivery periods through December 2023 for 12.9% of its anticipated trading volume of that commodity for the next 15 months. Also, the Company purchased soybeans from a related party during the year totaling approximately $54,000. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company enters into corn, ethanol, natural gas and soybean derivative instruments, which are required to be recorded as either assets or liabilities at fair value in the balance sheet. Derivatives qualify for treatment as hedges when there is a high correlation between the change in fair value of the derivative instrument and the related change in value of the underlying hedged item. The Company must designate the hedging instruments based upon the exposure being hedged as a fair value hedge, a cash flow hedge or a hedge against foreign currency exposure. Commodity Contracts The Company enters into commodity-based derivatives, for corn, ethanol, soybeans, soybean oil, and natural gas in order to protect cash flows from fluctuations caused by volatility in commodity prices and to protect gross profit margins from potentially adverse effects of market and price volatility on commodity based purchase commitments where the prices are set at a future date. These derivatives are not designated as effective hedges for accounting purposes. For derivative instruments that are not accounted for as hedges, or for the ineffective portions of qualifying hedges, the change in fair value is recorded through earnings in the period of change. The changes in the fair market value of ethanol derivative instruments are included as a component of revenue. The changes in the fair market value of corn, natural gas, soybean oil, and soybean derivative instruments are included as a component of cost of goods sold. At September 30, 2022, the Ethanol Division had a net short (selling) position of 10,080,000 bushels of corn under derivative contracts used to hedge its forward corn purchase contracts, corn inventory and ethanol sales. The Ethanol Division had a net short (selling) position of 7,471,740 bushels of corn under derivative contracts as of September 30, 2021. Most of these corn derivatives are traded on the Chicago Board of Trade and are forecasted to settle for various delivery periods through December 2023 as of September 30, 2022. The Ethanol Division had a net short (selling) position of 12,390,000 gallons of ethanol under derivative contracts used to hedge its future ethanol sales as of September 30, 2022. The Ethanol Division had a net long (buying) position of 1,050,000 gallons of ethanol under derivative contracts as of September 30, 2021. These ethanol derivatives are traded on the New York Mercantile Exchange and are forecasted to settle for various delivery periods through March 2023, as of September 30, 2022. The Ethanol Division had no open positions of soybean oil under derivative contracts as of September 30, 2022. At September 30, 2021, the Ethanol Division had a net long (buying) position of 4,020,000 pounds of soybean oil under derivative contracts as of September 30, 2021 with various delivery periods through December 2021. At September 30, 2022, the Trading Division had a net short (selling) position of 1,235,000 bushels of soybeans under derivative contracts used to hedge its forward soybean purchase contracts. These soybean derivatives are traded on the Chicago Board of Trade and are forecasted to settle for various period through November 2023 as of September 30, 2022. The Trading Division had a short (selling) position of 1,768,111 bushels of soybeans under derivative contracts as of September 30, 2021. These derivatives have not been designated as effective hedges for accounting purposes. The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2022: Instrument Balance Sheet Location Assets Liabilities Ethanol futures and options contracts Futures and Options Derivatives $ — $ 841,470 Corn futures and options contracts Futures and Options Derivatives $ — $ 1,827,963 Soybean futures and options contracts Futures and Options Derivatives $ 972,041 $ — Soybean forward purchase and sales contracts Forward Purchase/Sales Derivatives $ 360,620 $ 507,408 As of September 30, 2022, the Company had approximately $9,300,000 of cash collateral (restricted cash) related to ethanol, corn, and soybean derivatives held by three brokers. The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2021: Instrument Balance Sheet Location Assets Liabilities Ethanol futures and options contracts Futures and Options Derivatives $ 150,339 $ — Corn futures and options contracts Futures and Options Derivatives $ — $ 2,331,889 Soybean oil futures and options contracts Futures and Options Derivatives $ 84,474 $ — Soybean futures and options contracts Futures and Options Derivatives $ 729,605 $ — Soybean forward purchase and sales contracts Forward Purchase/Sale Derivatives $ 988,919 $ 658,283 As of September 30, 2021, the Company had approximately $8,100,000 of cash collateral (restricted cash) related to ethanol, corn, soybean oil, and soybean derivatives held by two brokers. The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the fiscal year ended September 30, 2022: Instrument Statement of Operations Location Amount Ethanol Futures and Options Contracts Revenues $ (6,192,448) Corn Futures and Options Contracts Cost of Goods Sold (4,677,214) Natural Gas Futures and Options Contracts Cost of Goods Sold (39,039) Soybean Oil Futures and Options Contracts Cost of Goods Sold 179,637 Soybean Futures and Options Contracts Cost of Goods Sold (3,883,992) Soybean Forward Purchase and Sales Contracts Cost of Goods Sold (621,040) Totals $ (15,234,096) The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the fiscal year ended September 30, 2021: Instrument Statement of Operations Location Amount Ethanol Futures and Options Contracts Revenues $ 1,392,605 Corn Futures and Options Contracts Cost of Goods Sold (18,881,451) Natural Gas Futures and Options Contracts Cost of Goods Sold (836) Soybean Oil Futures and Options Contracts Cost of Goods Sold 1,813,519 Soybean Futures and Options Contracts Cost of Goods Sold (6,518,841) Soybean Forward Purchase and Sales Contracts Cost of Goods Sold (894,717) Totals $ (23,089,721) The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the fiscal year ended September 30, 2020: Instrument Statement of Operations Location Amount Ethanol Futures and Options Contracts Revenues $ (5,484,019) Corn Futures and Options Contracts Cost of Goods Sold 2,196,868 Natural Gas Futures and Options Contracts Cost of Goods Sold — Soybeans Futures and Options Contracts Cost of Goods Sold (279,131) Soybean Forward Purchase and Sales Contracts Cost of Goods Sold 970,344 Totals $ (2,595,938) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2022: Instruments Carrying Amount Fair Value Level 1 Level 2 Level 3 Corn Futures and Options Contracts $ (1,827,963) $ (1,827,963) $ (1,827,963) $ — $ — Ethanol Futures and Options Contracts $ (841,470) $ (841,470) $ (841,470) $ — $ — Soybean Futures and Options Contracts $ 972,041 $ 972,041 $ 972,041 $ — $ — Soybean Forward Purchase Contracts $ (146,788) $ (146,788) $ — $ (146,788) $ — Soybean Inventory $ 2,028,605 $ 2,028,605 $ — $ — $ — Accounts Payable $ (4,379,251) $ (4,379,251) $ — $ (4,379,251) $ — Treasury Bills $ (33,228,697) $ (33,228,697) $ — $ — $ — The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2021: Instruments Carrying Amount Fair Value Level 1 Level 2 Level 3 Corn Futures and Options Contracts $ (2,331,889) $ (2,331,889) $ (1,424,775) $ (907,114) $ — Ethanol Futures and Options Contracts $ 150,339 $ 150,339 $ 150,339 $ — $ — Soybean Oil Futures and Options Contracts $ 84,474 $ 84,474 $ 84,474 $ — $ — Soybean Futures and Options Contracts $ 729,605 $ 729,605 $ 1,066,775 $ (337,170) $ — Soybean Forward Purchase Contracts $ 330,637 $ 330,637 $ — $ 330,637 $ — Soybean Inventory $ 4,850,131 $ 4,850,131 $ — $ 4,850,131 $ — Accounts Payable $ (6,391,350) $ (6,391,350) $ — $ (6,391,350) $ — We determine the fair value of commodity derivative instruments utilizing Level 1 inputs by obtaining 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 Chicago Board of Trade market and New York Mercantile Exchange. We determine the fair value of treasury bill Level 1 inputs by obtaining fair value measurements from an independent pricing service. The fair value measurements consider observable data based on quoted market prices in active markets. We determine the fair value of corn and soybean futures and options Level 2 instruments by model-based techniques in which all significant inputs are observable in the markets noted above. Soybean forward purchase and sale contracts are reported at fair value using Level 2 inputs from current contract prices that are being issued by the Company. Soybean inventory held in the trading division is reported at fair value using Level 2 inputs which are based on purchases and sales transactions that occurred on or near September 30, 2022 and 2021. Accounts payable is generally stated at historical amounts with the exception of approximately $4,379,000 and $6,391,000 at September 30, 2022 and 2021, respectively, related to certain delivered inventory for which the payable fluctuates based on changes in commodity prices. These payables are hybrid financial instruments for which the Company has elected the fair value option. The Company believes the fair value of its long-term debt at September 30, 2022 approximated the carrying value of $9,000,000 and is considered to be a Level 2 input. The Company did not have any long-term debt at September 30, 2021. The fair values and carrying values consider the terms of the related debt and exclude the impacts of discounts and derivative/hedging activity. |
BANK FINANCING
BANK FINANCING | 12 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
BANK FINANCING | BANK FINANCING The Company has a loan agreement consisting of two loans, the Declining Revolving Loan (Declining Loan) and the Revolving Credit Loan in exchange for liens on all property (real and personal, tangible and intangible) which include, among other things, a mortgage on the property, a security interest on commodity trading accounts and assignment of material contracts. The loan agreement assigns an interest rate based on the U.S. prime rate published daily in the Wall Street Journal to each of the individual loans. The interest rate on each of the loans changes daily. Declining Loan The maximum availability of the Declining Loan was formerly $5,000,000 and such amount was to be available for working capital purposes. However, the maximum availability of the Declining Loan was increased from $5,000,000 to $36,000,000 in order to provide financing to fund the construction and installation of a high protein feed system at the plant. The interest rate on the Declining Loan is currently based on the prime rate minus five basis points (.05%) subject to a floor of 2.85%. The interest rate on the Declining Loan at September 30, 2022 and 2021 was 6.20% and 3.10%, respectively. The Company is required to make monthly interest payments on the Declining Loan during the draw period. The principal balance of the Declining Loan is expected to be converted to term debt on or before February 1, 2024, to be repaid in 60 equal monthly installments based on a ten year amortization period. In addition, the Company will be required to make mandatory annual prepayments on the term debt within 120 days following the end of each fiscal year beginning with the fiscal year ended September 30, 2024. The annual prepayment will be in the amount of the lesser of 40% of excess cash flow (as defined in the agreement) or $7,200,000, up to an aggregate prepayment amount of $18,000,000. The Company had borrowings outstanding of $9,000,000 on the Declining Loan at September 30, 2022 and no borrowings outstanding at September 30, 2021. Revolving Credit Loan The Revolving Credit Loan has a limit of $20,000,000 supported by a borrowing base made up of the Company's corn, ethanol, dried distillers grain, corn oil and soybean inventories reduced by accounts payable associated with those inventories having a priority. It is also supported by the eligible accounts receivable and commodity trading account excess margin funds. The interest rate on the Revolving Credit Loan is the prime rate minus twenty-five basis points (.25%) and is subject to a floor of 2.75%. The interest rate at September 30, 2022 and 2021 was 6.00% and 3.00%, respectively. There were no borrowings outstanding on the Revolving Credit Loan at September 30, 2022 and September 30, 2021. The Revolving Credit Loan is set to mature on February 28, 2023. These loans are subject to protective covenants, which require the Company to maintain various financial ratios. The covenants include a working capital requirement of $15,000,000, and a capital expenditures covenant that allows the Company $5,000,000 of expenditures per year without prior approval. The cost of the high protein feed system is excluded from the capital expenditures calculation until the principal balance of the Declining Loan converts to term debt. There is also a requirement to maintain a minimum fixed charge coverage ratio of no less than 1.15:1.0 measured quarterly. A debt service charge coverage ratio of no less than 1.25:1.0 in lieu of the fixed charge coverage ratio will apply for any reporting period that working capital is equal to or more than $23,000,000. Long-term debt, as discussed above, consists of the amount drawn on the Declining Note of $9,000,000 at September 30, 2022 with no amounts due within one year. The estimated maturities of long-term debt at September 30, 2022 are as follows: October 1 2023 to September 30, 2024 — October 1 2024 to September 30, 2025 1,219,364 October 1 2025 to September 30, 2026 1,651,220 October 1 2026 to September 30, 2027 1,756,553 October 1 2027 to September 30, 2028 1,868,610 Thereafter 2,504,253 Total long-term debt $ 9,000,000 |
LEASES
LEASES | 12 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases rail cars for its facility to transport ethanol and dried distillers grains to its end customers. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, unless an implicit rate is readily determinable, as the discount rate for each lease in determining the present value of lease payments. At September 30, 2022, the Company’s weighted average discount rate was 5%. Operating lease expense is recognized on a straight-line basis over the lease term. The Company determines if an arrangement is a lease or contains a lease at inception. The Company’s leases have remaining lease terms of approximately 1 year to 2.5 years, which may include options to extend the lease when it is reasonably certain the Company will exercise those options. At September 30, 2022, the weighted average remaining lease term was 2 years. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms or material restrictive covenants. The Company does not have any material finance lease obligations nor sublease agreements. The following table summarizes the remaining maturities of the Company’s operating lease liabilities at September 30, 2022: For the Fiscal Year Ending September 30, 2023 $ 3,842,130 2024 2,863,180 2025 444,380 Totals 7,149,690 Amount representing interest (337,823) Lease liabilities $ 6,811,867 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Marketing Agreement The Company entered into an agreement with an unrelated company for the purpose of marketing and selling all the distillers grains the Company is expected to produce. The buyer agrees to remit a fixed percentage rate of the actual selling price to the Company for distillers dried grain solubles and wet distiller grains. The agreement may be terminated by either party at its unqualified option, by providing written notice of not less than 120 days to the other party. The Company entered into an agreement with an unrelated company to sell all of the ethanol the Company produces at the plant. The Company agrees to pay a commission of a fixed percent of the net purchase price for marketing and distribution. In July 2009, the initial term of the agreement was extended to eight years and the commission increased in exchange for reducing the payment terms from 14 days to 7 days after shipment. In November 2012, the Company amended this agreement to extend the initial term of the agreement to eleven years, expiring in 2019, in exchange for capping the commissions at $1,750,000 per year. Effective November 18, 2018, the two companies amended the marketing agreement. The amendment added a renewal term to the initial agreement that extended the contract until November 30, 2022. It provided for the payment of the commission to Murex to be calculated on each net gallon of ethanol taken under the agreement. It modified how the cost of rail car shipments are charged to the Company, moving from a per gallon fee to requiring that the marketer provide a minimum 225 rail cars to the Company on a per car per month lease basis as described in Note 10. Finally, it reduced the delivery to payment period. On September 14, 2022, the Company executed an amendment to extend the term until December 31, 2024, subject to automatic renewals thereafter for one-year periods unless either party gives notice of non-renewal at least 90 days prior to the end of the current term. The agreement may also be terminated due to the insolvency or intentional misconduct of either party or upon the default of one of the parties as set forth in the agreement. In addition, the amendment added a provision that allows the Company to terminate the agreement on 90 days prior written notice upon a "Material Change in Control". Upon termination of the agreement for any reason, the Company may be obligated to continue to deliver ethanol for a period of time to cover certain contractual commitments for which the Company gave prior written approval. The amendment also provides for certain adjustments to the purchase price for sales made to the marketer for its own account or for sales of exported ethanol. If this adjusted price can not be finalized at time of payment, the parties may agree upon a provisional price which shall be trued up later. The amendment will be effective on December 1, 2022. Rail Car Rehabilitation Costs The Company leases 180 hopper rail cars under a multi-year agreement which ends in November 2023. Under the agreement, the Company is required to pay to rehabilitate each car for "damage" that is considered to be other than normal wear and tear upon turn in of the car(s) at the termination of the lease. Company management has estimated total costs to rehabilitate the cars at September 30, 2022, to be approximately $2,037,000. During the year ended September 30, 2022, the Company has recorded an expense in cost of goods totaling $317,000. The Company accrues the estimated cost of railcar damages over the term of the lease. Utility Agreement The Company entered into a natural gas services contract with an initial term of ten years and automatic renewals for up to three consecutive one year periods. Under the contract, the Company agrees to pay a fixed transportation charge per therm delivered for the first five years. For the remaining contract term, the fixed transportation charge will be increased by the compounded inflation rate (as determined by the Consumer Price Index). The contract commenced in November 2008 when plant operations began. The Company has a commitment to buy electricity from a utility. The Company pays the utility company monthly pursuant to their standard rates. Development Agreement In September 2007, the Company entered into a development agreement with Randolph County Redevelopment Commission (“the Commission”) to promote economic development in the area. Under the terms of this agreement, beginning in January 2008 through December 2028, the money the Company pays toward property tax expense is allocated to an expense and an acquisition account. The funds in the acquisition account can be used by the Commission to purchase equipment, at the Company's direction, for the plant. The Company does not have title to or control over the funds in the acquisition account, no amounts have been recorded in the balance sheet relating to this account. During the years ended September 30, 2022 and 2021, no amounts were refunded to the Company and used to offset costs of capital expenditures. Carbon Dioxide Agreement In March 2010, the Company entered into an agreement with an unrelated party to sell the raw carbon dioxide gas produced as a byproduct at the Company's ethanol production facility. As part of the agreement, the unrelated company leased a portion of the Company's property to construct a carbon dioxide liquefaction plant. The Company agreed to supply raw carbon dioxide to the plant at a rate sufficient for production of 150 tons of liquid carbon dioxide per day and receive a price of $5.00 per ton of liquid carbon dioxide shipped, with price incentives for increased production levels specified in the contract. The Company is to be paid for a minimum of 40,000 tons each year or approximately $200,000 annually. In November 2011, the Company amended this agreement to allow for an expansion of the carbon dioxide liquefaction plant. Under the amendment, the Company was paid for a new minimum of 98,700 tons each year or $493,500 annually. On November 26, 2019, the Company sent written notice of termination of the agreement which was to be effective on June 1, 2020. However, due to disruptions related to COVID-19, the Company agreed to rescind the termination and extend the agreement one year to June 1, 2021. In June 2021, the Company amended the agreement, to increase the price to $7.00 per ton subject to an annual 2% price increase. However, in the event of a take or pay shortfall, the price paid for the shortfall per ton is reduced by $1.00. The amendment also allows the Company to do anything it wishes with carbon dioxide gas it produces in excess of the quantity it is obligated to sell provided that if the Company sells to others in direct competition then the annual take or pay obligation shall be reduced accordingly and the agreement may be terminated. The initial term of the agreement continues until May 31, 2026, with automatic one-year renewal periods thereafter unless terminated by either party by providing at least six months written notice prior to the expiration of the term. In addition, after the three year anniversary of the effective date, the Company has certain rights to terminate upon the occurrence of a "Change of Control Event" or if the Company decides to sequester its carbon dioxide. High Protein System Installation Agreement On January 20, 2022, the Company contracted with ICM, Inc. to install a system to produce high protein feed which is expected to cost approximately $50,000,000 including recent change orders, and be funded from operations and from our current credit facilities as amended. This project is expected to be completed by Fall of 2023. Legal Proceedings and Contingencies In February 2010, a lawsuit against the Company was filed by an unrelated party claiming the Company's operation of the oil separation system is a patent infringement. In connection with the lawsuit, in February 2010, the agreement for the construction and installation of the tricanter oil separation system was amended. In this amendment the manufacturer and installer of the tricanter oil separation system indemnifies the Company against all claims of infringement of patents, copyrights or other intellectual property rights from the Company's purchase and use of the tricanter oil system and agrees to defend the Company in the lawsuit filed at no expense to the Company. On October 23, 2014, the court granted summary judgment finding that all of the patents claimed were invalid and that the Company had not infringed. In addition, on September 15, 2016, the United States District Court granted summary judgment finding that the patents were invalid due to inequitable conduct before the US Patent and Trademark Office by the inventors and their attorneys. The rulings have since been affirmed on appeal and on February 22, 2021 the U.S. Supreme Court declined to review the decision. On March 3, 2022, the United States District Court ruled on attorney fees to be awarded to the defendants. A supplemental award of attorney fees was issued on August 10, 2022. The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. While the ultimate outcome of these matters is not presently determinable, it is in the opinion of management that the resolution of outstanding claims will not have a material adverse effect on the financial position or results of operations of the Company. Due to the uncertainties in the settlement process, it is at least reasonably possible that management's view of outcomes will change in the near term. Insurance Recovery |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN | EMPLOYEE BENEFIT PLANThe Company has a defined contribution plan available to all of its qualified employees. Effective January 2022, the Company contributes 100% of employee contributions up to 5% of the eligible wages of each employee. The plan is a safe harbor plan where the Company match is guaranteed prior to the beginning of the year. Employees are eligible after six months of service. The Company contributed approximately $147,000, $121,000 and $103,000 to the defined contribution plan during the years ended September 30, 2022, 2021 and 2020, respectively. |
RISKS AND UNCERTAINTIES IMPACTI
RISKS AND UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS | 12 Months Ended |
Sep. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
RISKS AND UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS | CONCENTRATIONSTwo major customers accounted for approximately 82% and 90% of the outstanding accounts receivable balance at September 30, 2022 and September 30, 2021, respectively. The same two customers, in addition to one customer not included in the receivable concentration, account for approximately 93% of revenue for the year ended September 30, 2022. The same two customers accounted for approximately 81% of revenue for each of the years ended September 30, 2021, and 2020.RISKS AND UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS The Company has certain risks and uncertainties that it experiences during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol, distillers grains and corn oil to customers primarily located in the U.S. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. During the fiscal year ended September 30, 2022, ethanol sales averaged approximately 66% of total revenues and corn costs averaged 67% of total cost of goods sold. The Company's operating and financial performance is largely driven by prices at which the Company sells ethanol, distillers grains and corn oil, and the related cost of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and the unleaded gasoline and petroleum markets, although, since 2005, the prices of ethanol and gasoline began a divergence with ethanol selling for less than gasoline at the wholesale level. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, weather, government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities. Economic conditions for the ethanol industry have been favorable during fiscal year 2022. However, the military invasion of Ukraine by Russia in the second quarter of fiscal year 2022 and sanctions imposed by other countries as a result have created global economic uncertainty and contributed to increased inflation, significant market disruptions and increased volatility in commodity prices such as corn, oil and natural gas. The economic impact of this war and the potential effects on the Company's operating and financial performance is currently unknown. Additionally, there have been economic indicators that the United States could be facing a possible recession which have primarily resulted from interest rate hikes by the Federal Reserve in an attempt to reduce inflation. The Company continues to monitor economic conditions that might affect our profitability. The Company believes that its cash on hand and available debt from its lender will provide sufficient liquidity to meets its anticipated working capital, debt service and other liquidity needs through the next twelve months. If market conditions worsen affecting the Company's ability to profitably operate the plant or if the Company is unable to transport ethanol, it may be forced to further reduce the ethanol production rate or even temporarily shut down ethanol production altogether. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS The Company has two reportable operating segments. Segment reporting is intended to give financial statement users a better view of how the Company manages and evaluates its businesses. The accounting policies for each segment are the same as those described in the summary of significant accounting policies. Segment income or loss does not include any allocation of shared-service costs. Segment assets are those that are directly used in or identified with segment operations. Inter-segment balances and transactions have been eliminated. The following tables summarize financial information by segment and provide a reconciliation of segment revenue, gross profit, grain inventories, operating income, and total assets: Fiscal Year Ended September 30, 2022 September 30, 2021 September 30, 2020 Revenue: Ethanol division $ 451,720,815 $ 328,245,934 $ 211,573,718 Trading division 94,970,556 75,756,232 33,144,844 Total Revenue $ 546,691,371 $ 404,002,166 $ 244,718,562 Fiscal Year Ended September 30, 2022 September 30, 2021 September 30, 2020 Gross Profit: Ethanol division $ 82,638,679 $ 32,646,809 $ 3,562,929 Trading division 3,745,801 1,981,529 1,729,151 Total Gross Profit $ 86,384,480 $ 34,628,338 $ 5,292,080 Fiscal Year Ended September 30, 2022 September 30, 2021 September 30, 2020 Operating Income (Loss): Ethanol division $ 75,824,501 $ 26,736,720 $ (1,941,363) Trading division 2,476,829 712,557 460,179 Total Operating Income (Loss) $ 78,301,330 $ 27,449,277 $ (1,481,184) September 30, 2022 September 30, 2021 Grain Inventories: Ethanol division $ 7,206,914 $ 2,995,914 Trading division 2,028,605 4,850,131 Total Grain Inventories $ 9,235,519 $ 7,846,045 September 30, 2022 September 30, 2021 Total Assets: Ethanol division $ 188,059,041 $ 142,760,396 Trading division 900,652 8,793,484 Total Assets $ 188,955,828 $ 151,938,925 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Sep. 30, 2022 | |
Quarterly Financial Data [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) Summary quarterly results are as follows: First Second Third Fourth Fiscal year ended September 30, 2022 Revenues $ 150,256,949 $ 133,972,682 $ 133,261,052 $ 129,200,688 Gross profit 34,918,608 10,151,570 28,653,656 12,660,646 Operating income 32,783,235 8,103,233 26,732,866 10,681,996 Net income 32,395,164 8,429,214 34,173,727 10,705,759 Basic and diluted earnings per unit $ 2,218 $ 577 $ 2,340 $ 733 First Second Third Fourth Fiscal year ended September 30, 2021 Revenues $ 93,239,981 $ 97,911,947 $ 117,272,974 $ 95,577,264 Gross profit 529,355 8,762,330 9,607,941 15,728,712 Operating income (loss) (1,283,302) 6,925,219 7,849,027 13,958,333 Net income (loss) (1,055,854) 6,865,441 7,745,750 13,554,542 Basic and diluted earnings (loss) per unit $ (72) $ 470 $ 530 $ 928 First Second Third Fourth Fiscal year ended September 30, 2020 Revenues $ 63,736,851 $ 67,278,692 $ 51,252,061 $ 62,450,958 Gross profit (loss) 2,988,044 (4,221,538) 1,657,936 4,867,638 Operating income (loss) 1,293,302 (6,147,899) 67,815 3,305,598 Net income (loss) 1,638,760 (6,200,182) 35,096 3,385,893 Basic and diluted earnings (loss) per unit $ 112 $ (424) $ 2 $ 232 The above quarterly financial data is unaudited, but in the opinion of management, all adjustments necessary for a fair presentation of the selected data for these periods presented have been included. |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 12 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | EQUITY METHOD INVESTMENTS The Company, through its wholly owned subsidiary, Cardinal One Carbon Holdings, LLC, owns a fifty percent interest in a limited partnership. That partnership was formed as a joint venture with another unrelated investor to investigate and pursue carbon dioxide capture and underground sequestration. The Company accounts for this investment using joint venture accounting and, therefore, under the equity method. Cardinal One Carbon Holdings, LLC was formed on June 22, 2022 to hold the partnership interest in the limited partnership and began its administrative operations on September 1, 2022. The Company's policy related to investments in both common stock and in-substance common stock that give the Company the ability to exercise significant influence over the operating and financial polices of an entity in which it invests even though the Company holds 50% or less of the common stock or in-substance common stock (or both common and in-substance common stock) is to account for such investment under the equity method. The Company considers its financial position and results of operations in evaluating the extent of disclosures of the financial position and results of operations of an entity in which the Company invests. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The Company prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include the operations, assets and liabilities of the Company. In the opinion of the Company's management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to fairly present the accompanying consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Cardinal Ethanol, LLC and its wholly owned subsidiaries, Cardinal Ethanol Export Sales, Inc. and Cardinal One Carbon Holdings, LLC (collectively, the Company). Cardinal Ethanol Export Sales, Inc. is an Interest Charge Domestic to International Sales Company ("IC-DISC") designed to take advantage of certain tax incentives for export sales to other countries. Cardinal One Carbon Holdings, LLC was formed to hold the partnership interest for the investigation and pursuit of carbon dioxide capture and sequestration. All inter-company balances and transactions have been eliminated in consolidation. |
Fiscal Reporting Period | Fiscal Reporting Period The Company has adopted a fiscal year ending September 30 for reporting financial operations and a year ending December 31 for tax return purposes. |
Reportable Segments | Reportable Segments Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” establishes the standards for reporting information about segments in consolidated financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available that are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Based on the related business nature and expected financial results criteria set forth in ASC 280, the Company has two reportable operating segments for financial reporting purposes. • Ethanol Division. Based on the nature of the products and production process and the expected financial results, the Company’s operations at its ethanol plant, including the production and sale of ethanol and its co-products, are aggregated into one financial reporting segment. • Trading Division. The Company has a grain loading facility within the Company's single site to buy, hold and sell inventories of agricultural grains, primarily soybeans. The Company performs no additional processing of these grains, unlike the corn inventory the Company holds and uses in ethanol production. The activities of buying, selling and holding of grains other than for ethanol and co-product production comprise this financial reporting segment. |
Accounting Estimates | Accounting Estimates Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The Ethanol Division uses estimates and assumptions in accounting for the following significant matters, among others: the useful life of fixed assets, inventories, the assumptions used in the analysis of the impairment of long lived assets, railcar rehabilitation costs, and inventory purchase commitments. The Trading Division uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, the valuation of inventory purchase and sale commitment derivatives and inventory at market. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents The Company maintains its accounts primarily at two financial institutions. At times throughout the year, the Company's cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash equivalents represent money market funds or short-term investments with original maturities of three months or less from the date of purchase, except for those amounts that are held in the investment portfolio for long-term investment. Restricted Cash As a part of its commodities hedging activities, the Company is required to maintain cash balances with its commodities trading companies for initial and maintenance margins on a per futures contract basis. Changes in the market value of contracts may increase these requirements. As the futures contracts expire, the margin requirements also expire. Accordingly, the Company records the cash maintained with the traders in the margin accounts as restricted cash. Since this cash is immediately available upon request when there is a margin excess, the Company considers this restricted cash to be a current asset. |
Trade Accounts Receivables | Trade Accounts ReceivableCredit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral. Accounts receivable are recorded at their estimated net realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company's credit terms. Amounts considered uncollectible are written off. The Company's estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any. |
Inventories | Inventories Ethanol Division (see Reportable Segments) inventories consist of raw materials, work in process, finished goods and spare parts. Corn is the primary raw material. Finished goods consist of ethanol, dried distiller grains and corn oil. Inventories are stated at the lower of weighted average cost or net realizable value. Net realizable value is the estimated selling prices in the normal course of business, less reasonably predictable selling costs. Trading Division (see Reportable Segments) inventories consist of grain. Soybeans were the only grains held and traded at September 30, 2022 and 2021. These inventories are stated at market value less estimated selling costs, which may include reductions for quality. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant, and equipment are stated at cost. Depreciation is provided over estimated useful lives by use of the straight-line depreciation method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Construction in process expenditures will be depreciated using the straight-line method over their estimated useful lives once the assets are placed into service. Minimum years Maximum years Land improvements 15 20 Plant and equipment 5 20 Building 10 40 Office equipment 7 15 Vehicles 5 5 |
Long-Lived Assets | Long-Lived AssetsThe Company reviews its long-lived assets, such as property, plant and equipment and financing costs, subject to depreciation and amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. |
Investments | Investments Investments consist of the capital stock and patron equities of the Company's distillers grains marketer. The investment is stated at the lower of cost or fair value and adjusted for non cash patronage equities and cash equity redemptions received. Non-cash patronage dividends are recognized when received and included within revenue in the statements of operations. The Company has also created certain subsidiaries to achieve some of its varying business interests that are not directly related to ethanol production or trading of grain. One has been formed as a corporation, while the other has been formed as a limited liability company (LLC) to hold interests in affiliated companies for carbon capture and underground sequestration (CCS). Through its LLC, the company owns a fifty percent interest in a joint venture which is accounted for as an equity method investment as described in detail in Note 16 - Equity Method Investments. |
Revenue Recognition | Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. The Company's contracts primarily consist of agreements with marketing companies and other customers as described below. The Company's performance obligations consist of the delivery of ethanol, distillers grains, corn oil, soybeans and carbon dioxide to its customers. The consideration the Company receives for these products is fixed based on current observable market prices at the Chicago Mercantile Exchange, generally, and adjusted for local market differentials. The Company's contracts have specific delivery modes, rail or truck, and dates. Revenue is recognized when the Company delivers the products to the mode of transportation specified in the contract, at the transaction price established in the contract, net of commissions, fees, and freight. The Company sells each of the products via different marketing channels as described below. • Ethanol. The Company sells its ethanol via a marketing agreement with Murex, LLC. Murex buys one hundred percent of the Company's ethanol production based on agreements with end users at prices agreed upon mutually among the end user, Murex and the Company. Murex then provides a schedule of deliveries required and an order for each rail car or tankers needed to fulfill their commitment with the end user. These are individual performance obligations of the Company. The marketing agreement calls for control and title to pass when the delivery vehicle is filled. Revenue is recognized then at the price in the agreement with the end user, net of commissions, freight, and insurance. • Distillers grains. The Company engages another third-party marketing company, CHS, Inc. to market one hundred percent of the distillers grains it produces at the plant. The process for selling the distillers grains is like that of ethanol, except that CHS takes title and control once a rail car is released to the railroad or a truck is released from the Company's scales. Prices are agreed upon among the three parties, and CHS provides schedule and orders representing performance obligations. Revenue is recognized net of commissions, freight, and fees. • Distillers corn oil (corn oil). The Company sells its production of corn oil directly to commercial customers. The customer is provided with a delivery schedule and pick up orders representing performance obligations. These are fulfilled when the customer's driver picks up the scheduled load. The price is agreed upon at the time each contract is made, and the Company recognizes revenue at the time of delivery at that price. • Carbon dioxide. The Company sells a portion of the carbon dioxide it produces to a customer that maintains a plant on-site for a set price per ton. Delivery is defined as transference of the gas from our stream to their plant. • Soybeans and other grains. The Company sells soybeans exclusively to commercial mills, processors or grain traders. Contracts are negotiated directly with the parties at prices based on negotiated prices. • Other. The Company engaged in ethanol sales to be processed for sanitizer during the fiscal year ended September 30, 2020 as a result of a direct domestic need from COVID-19. The Company has since discontinued ethanol for sanitizer sales. Revenue Recognition Revenue is recognized at a single point in time when the Company satisfies its performance obligation under the terms of a contract with a customer. Generally, this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration expected, as specified in the contract with a customer, to be received in exchange for transferring goods or providing services. Shipping and Handling Costs Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of goods sold. Accordingly, amounts billed to customers for such costs are included as a component of revenue. Contract Liabilities |
Cost of Goods Sold | Cost of Goods SoldCost of goods sold include corn, trading division grains, natural gas and other components which includes processing ingredients, electricity, railcar lease, railcar maintenance, depreciation of ethanol production fixed assets and wages, salaries and benefits of production personnel. |
Operating Expenses | Operating Expenses Operating expenses include wages, salaries and benefits of administrative employees at the plant, insurance, professional fees, depreciation of trading division fixed assets, property taxes and similar costs. |
Derivative Instruments | Derivative Instruments From time to time the Company enters into derivative transactions to hedge its exposures to commodity price fluctuations. The Company is required to record these derivatives in the balance sheet at fair value. In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in the statement of operations, depending on the item being hedged. Additionally, the Company is required to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from accounting and reporting requirements, and therefore, are not marked to market in our consolidated financial statements. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the consolidated financial statements on a recurring and nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. • Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 inputs are unobservable inputs for the asset or liability used to measure fair values to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The carrying value of cash, restricted cash, trade accounts receivable, miscellaneous receivables, treasury bills, accounts payable (other than those measured as fair value discussed in Note 8), accounts payable-grain, and accrued expenses approximates fair value at September 30, 2022 and 2021 due to the short maturity nature of these instruments. The fair value of derivative instruments, Trading Division inventory, and debt is disclosed in Note 8. Except for those assets and liabilities, which are required by authoritative accounting guidance to be recorded at fair value on our balance sheets, the Company has elected not to record any other assets or liabilities at fair value. No events occurred during the fiscal years ended September 30, 2022, 2021, or 2020 that required adjustment to the recognized balances of assets or liabilities, which are recorded at fair value on a nonrecurring basis. |
Environmental Liabilities | Environmental LiabilitiesThe Company's operations are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its location. Accordingly, the Company has adopted policies, practices and procedures in the areas of pollution control, occupational health, and the production, handling, storage and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability, which could result from such events. Environmental liabilities are recorded when the liability is probable and the costs can be reasonably estimated. |
Net Income (Loss) per Unit | Net Income (Loss) per Unit Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members' units outstanding during the period. Diluted net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members' units and members' unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, the Company's basic and diluted net income (loss) per unit are the same. |
Income Taxes | Income Taxes Cardinal Ethanol, LLC and Subsidiaries is treated as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, income or losses are included in the income tax returns of the members and partners. Accordingly, no provision or liability for federal or state income taxes has been included in these consolidated financial |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | Minimum years Maximum years Land improvements 15 20 Plant and equipment 5 20 Building 10 40 Office equipment 7 15 Vehicles 5 5 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | The following tables disaggregate revenue by major source: Fiscal Year Ended September 30, 2022 Ethanol Division Trading Division Total Revenues from contracts with customers under ASC Topic 606 Ethanol $ 359,726,018 $ — $ 359,726,018 Distillers' Grains 63,798,998 — 63,798,998 Corn Oil 27,656,525 — 27,656,525 Carbon Dioxide 473,449 — 473,449 Other Revenue 65,825 116,331 182,156 Total revenues from contracts with customers 451,720,815 116,331 451,837,146 Revenues from contracts accounted for as derivatives under ASC Topic 815 (1) Soybeans and other grains — 94,854,225 94,854,225 Total revenues from contracts accounted for as derivatives — 94,854,225 94,854,225 Total Revenues $ 451,720,815 $ 94,970,556 $ 546,691,371 Fiscal Year Ended September 30, 2021 Ethanol Division Trading Division Total Revenues from contracts with customers under ASC Topic 606 Ethanol $ 251,922,325 $ — $251,922,325 Distillers' Grains 57,818,038 — 57,818,038 Corn Oil 17,966,544 — 17,966,544 Carbon Dioxide 484,752 — 484,752 Other Revenue 54,275 121,200 175,475 Total revenues from contracts with customers 328,245,934 121,200 328,367,134 Revenues from contracts accounted for as derivatives under ASC Topic 815 (1) Soybeans and other grains — 75,635,032 75,635,032 Total revenues from contracts accounted for as derivatives — 75,635,032 75,635,032 Total Revenues $ 328,245,934 $ 75,756,232 $ 404,002,166 Fiscal Year Ended September 30, 2020 Ethanol Division Trading Division Total Revenues from contracts with customers under ASC Topic 606 Ethanol $ 157,704,059 $ — $ 157,704,059 Distillers' Grains 41,687,109 — 41,687,109 Corn Oil 9,640,523 — 9,640,523 Carbon Dioxide 493,500 — 493,500 Other Revenue 2,048,527 87,450 2,135,977 Total revenues from contracts with customers 211,573,718 87,450 211,661,168 Revenues from contracts accounted for as derivatives under ASC Topic 815 (1) Soybeans and other grains — 33,057,394 33,057,394 Total revenues from contracts accounted for as derivatives — 33,057,394 33,057,394 Total Revenues $ 211,573,718 $ 33,144,844 $ 244,718,562 (1) Revenues from contracts accounted for as derivatives represent physically settled derivative sales that are outside the scope of ASC Topic 606, Revenue from Contracts with Customers (ASC Topic 606), where the company recognizes revenue when control of the inventory is transferred within the meaning of ASC Topic 606 as required by ASC Topic 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax | The differences between financial statement basis and tax basis of assets and liabilities at September 30, 2022 and 2021 are as follows: 2022 2021 Financial statement basis of assets $ 188,955,828 $ 151,938,925 Organization and start-up costs 3,160,001 1,976,610 Book to tax depreciation and amortization (48,551,783) (55,156,961) Book to tax derivative instruments (967,461) (964,418) Book to tax operating lease right of use asset (6,808,992) (4,840,250) Capitalized inventory 127,000 154,000 Income tax basis of assets $ 135,914,593 $ 93,107,906 Financial statement basis of liabilities $ 41,685,336 $ 27,201,347 Book to tax derivative instruments (2,664,853) (2,331,889) Book to tax operating lease liability (6,811,869) (4,841,863) Accrued employee benefits (849,646) (713,233) Accrued rail car rehabilitation costs (2,036,638) (1,750,680) Income tax basis of liabilities $ 29,322,330 $ 17,563,682 |
MEMBERS' EQUITY (Tables)
MEMBERS' EQUITY (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Members' Equity [Abstract] | |
Distributions Made to Limited Liability Company (LLC) Member, by Distribution | Distribution dates and amounts for the fiscal year ended September 30, 2022 are listed in the table below: Date Declared Distribution Declared Per Unit Total Distribution Amount Month Distribution Paid November 16, 2021 $ 650 $ 9,493,900 November 2021 February 15, 2022 1,500 21,909,000 March 2022 May 17, 2022 675 9,859,050 June 2022 August 16, 2022 1,500 21,909,000 August 2022 Totals $ 4,325 $ 63,170,950 In November 2022, the Company declared a distribution of $500 per unit for a total distribution of $7,303,000. Distribution dates and amounts for the fiscal year ended September 30, 2021 are listed in the table below: Date Declared Distribution Declared Per Unit Total Distribution Amount Month Distribution Paid November 17, 2020 $ 100 $ 1,460,600 November 2020 February 9, 2021 150 2,190,900 February 2021 June 15, 2021 200 2,921,200 June 2021 August 17, 2021 325 4,746,950 August 2021 Totals $ 775 $ 11,319,650 Distribution dates and amounts for the fiscal year ended September 30, 2020 are listed in the table below: Date Declared Distribution Declared Per Unit Total Distribution Amount Month Distribution Paid February 18, 2020 $ 150 $ 2,190,900 February 2020 Totals $ 150 $ 2,190,900 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of the following as of September 30, 2022 and 2021: September 30, 2022 September 30, 2021 Ethanol Division: Raw materials $ 7,206,914 $ 2,995,914 Work in progress 2,442,453 2,331,419 Finished goods 7,513,988 12,431,375 Spare parts 4,178,807 3,978,193 Ethanol Division Subtotal $ 21,342,162 $ 21,736,901 Trading Division: Grain inventory $ 2,028,605 $ 4,850,131 Trading Division Subtotal 2,028,605 4,850,131 Total Inventories $ 23,370,767 $ 26,587,032 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location | The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2022: Instrument Balance Sheet Location Assets Liabilities Ethanol futures and options contracts Futures and Options Derivatives $ — $ 841,470 Corn futures and options contracts Futures and Options Derivatives $ — $ 1,827,963 Soybean futures and options contracts Futures and Options Derivatives $ 972,041 $ — Soybean forward purchase and sales contracts Forward Purchase/Sales Derivatives $ 360,620 $ 507,408 Instrument Balance Sheet Location Assets Liabilities Ethanol futures and options contracts Futures and Options Derivatives $ 150,339 $ — Corn futures and options contracts Futures and Options Derivatives $ — $ 2,331,889 Soybean oil futures and options contracts Futures and Options Derivatives $ 84,474 $ — Soybean futures and options contracts Futures and Options Derivatives $ 729,605 $ — Soybean forward purchase and sales contracts Forward Purchase/Sale Derivatives $ 988,919 $ 658,283 |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the fiscal year ended September 30, 2022: Instrument Statement of Operations Location Amount Ethanol Futures and Options Contracts Revenues $ (6,192,448) Corn Futures and Options Contracts Cost of Goods Sold (4,677,214) Natural Gas Futures and Options Contracts Cost of Goods Sold (39,039) Soybean Oil Futures and Options Contracts Cost of Goods Sold 179,637 Soybean Futures and Options Contracts Cost of Goods Sold (3,883,992) Soybean Forward Purchase and Sales Contracts Cost of Goods Sold (621,040) Totals $ (15,234,096) The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the fiscal year ended September 30, 2021: Instrument Statement of Operations Location Amount Ethanol Futures and Options Contracts Revenues $ 1,392,605 Corn Futures and Options Contracts Cost of Goods Sold (18,881,451) Natural Gas Futures and Options Contracts Cost of Goods Sold (836) Soybean Oil Futures and Options Contracts Cost of Goods Sold 1,813,519 Soybean Futures and Options Contracts Cost of Goods Sold (6,518,841) Soybean Forward Purchase and Sales Contracts Cost of Goods Sold (894,717) Totals $ (23,089,721) The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the fiscal year ended September 30, 2020: Instrument Statement of Operations Location Amount Ethanol Futures and Options Contracts Revenues $ (5,484,019) Corn Futures and Options Contracts Cost of Goods Sold 2,196,868 Natural Gas Futures and Options Contracts Cost of Goods Sold — Soybeans Futures and Options Contracts Cost of Goods Sold (279,131) Soybean Forward Purchase and Sales Contracts Cost of Goods Sold 970,344 Totals $ (2,595,938) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2022: Instruments Carrying Amount Fair Value Level 1 Level 2 Level 3 Corn Futures and Options Contracts $ (1,827,963) $ (1,827,963) $ (1,827,963) $ — $ — Ethanol Futures and Options Contracts $ (841,470) $ (841,470) $ (841,470) $ — $ — Soybean Futures and Options Contracts $ 972,041 $ 972,041 $ 972,041 $ — $ — Soybean Forward Purchase Contracts $ (146,788) $ (146,788) $ — $ (146,788) $ — Soybean Inventory $ 2,028,605 $ 2,028,605 $ — $ — $ — Accounts Payable $ (4,379,251) $ (4,379,251) $ — $ (4,379,251) $ — Treasury Bills $ (33,228,697) $ (33,228,697) $ — $ — $ — The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2021: Instruments Carrying Amount Fair Value Level 1 Level 2 Level 3 Corn Futures and Options Contracts $ (2,331,889) $ (2,331,889) $ (1,424,775) $ (907,114) $ — Ethanol Futures and Options Contracts $ 150,339 $ 150,339 $ 150,339 $ — $ — Soybean Oil Futures and Options Contracts $ 84,474 $ 84,474 $ 84,474 $ — $ — Soybean Futures and Options Contracts $ 729,605 $ 729,605 $ 1,066,775 $ (337,170) $ — Soybean Forward Purchase Contracts $ 330,637 $ 330,637 $ — $ 330,637 $ — Soybean Inventory $ 4,850,131 $ 4,850,131 $ — $ 4,850,131 $ — Accounts Payable $ (6,391,350) $ (6,391,350) $ — $ (6,391,350) $ — |
BANK FINANCING (Tables)
BANK FINANCING (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | The estimated maturities of long-term debt at September 30, 2022 are as follows: October 1 2023 to September 30, 2024 — October 1 2024 to September 30, 2025 1,219,364 October 1 2025 to September 30, 2026 1,651,220 October 1 2026 to September 30, 2027 1,756,553 October 1 2027 to September 30, 2028 1,868,610 Thereafter 2,504,253 Total long-term debt $ 9,000,000 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Remaining Maturities | The following table summarizes the remaining maturities of the Company’s operating lease liabilities at September 30, 2022: For the Fiscal Year Ending September 30, 2023 $ 3,842,130 2024 2,863,180 2025 444,380 Totals 7,149,690 Amount representing interest (337,823) Lease liabilities $ 6,811,867 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables summarize financial information by segment and provide a reconciliation of segment revenue, gross profit, grain inventories, operating income, and total assets: Fiscal Year Ended September 30, 2022 September 30, 2021 September 30, 2020 Revenue: Ethanol division $ 451,720,815 $ 328,245,934 $ 211,573,718 Trading division 94,970,556 75,756,232 33,144,844 Total Revenue $ 546,691,371 $ 404,002,166 $ 244,718,562 Fiscal Year Ended September 30, 2022 September 30, 2021 September 30, 2020 Gross Profit: Ethanol division $ 82,638,679 $ 32,646,809 $ 3,562,929 Trading division 3,745,801 1,981,529 1,729,151 Total Gross Profit $ 86,384,480 $ 34,628,338 $ 5,292,080 Fiscal Year Ended September 30, 2022 September 30, 2021 September 30, 2020 Operating Income (Loss): Ethanol division $ 75,824,501 $ 26,736,720 $ (1,941,363) Trading division 2,476,829 712,557 460,179 Total Operating Income (Loss) $ 78,301,330 $ 27,449,277 $ (1,481,184) September 30, 2022 September 30, 2021 Grain Inventories: Ethanol division $ 7,206,914 $ 2,995,914 Trading division 2,028,605 4,850,131 Total Grain Inventories $ 9,235,519 $ 7,846,045 September 30, 2022 September 30, 2021 Total Assets: Ethanol division $ 188,059,041 $ 142,760,396 Trading division 900,652 8,793,484 Total Assets $ 188,955,828 $ 151,938,925 |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Quarterly Financial Data [Abstract] | |
Schedule of Quarterly Financial Information | Summary quarterly results are as follows: First Second Third Fourth Fiscal year ended September 30, 2022 Revenues $ 150,256,949 $ 133,972,682 $ 133,261,052 $ 129,200,688 Gross profit 34,918,608 10,151,570 28,653,656 12,660,646 Operating income 32,783,235 8,103,233 26,732,866 10,681,996 Net income 32,395,164 8,429,214 34,173,727 10,705,759 Basic and diluted earnings per unit $ 2,218 $ 577 $ 2,340 $ 733 First Second Third Fourth Fiscal year ended September 30, 2021 Revenues $ 93,239,981 $ 97,911,947 $ 117,272,974 $ 95,577,264 Gross profit 529,355 8,762,330 9,607,941 15,728,712 Operating income (loss) (1,283,302) 6,925,219 7,849,027 13,958,333 Net income (loss) (1,055,854) 6,865,441 7,745,750 13,554,542 Basic and diluted earnings (loss) per unit $ (72) $ 470 $ 530 $ 928 First Second Third Fourth Fiscal year ended September 30, 2020 Revenues $ 63,736,851 $ 67,278,692 $ 51,252,061 $ 62,450,958 Gross profit (loss) 2,988,044 (4,221,538) 1,657,936 4,867,638 Operating income (loss) 1,293,302 (6,147,899) 67,815 3,305,598 Net income (loss) 1,638,760 (6,200,182) 35,096 3,385,893 Basic and diluted earnings (loss) per unit $ 112 $ (424) $ 2 $ 232 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of Business (Details) gal in Thousands | 12 Months Ended | ||
Sep. 30, 2022 segment gal | Sep. 30, 2021 gal | Sep. 30, 2020 gal | |
Product Information [Line Items] | |||
Number of reportable segments | 2 | ||
Number of operating segments | 2 | ||
Ethanol | |||
Product Information [Line Items] | |||
Annual production (in gallons) | gal | 136,700 | 136,100 | 129,100 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Impairment write-downs | $ 0 | $ 0 | $ 0 |
Minimum | Land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 15 years | ||
Minimum | Plant and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 5 years | ||
Minimum | Building | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 10 years | ||
Minimum | Office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 7 years | ||
Minimum | Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 5 years | ||
Maximum | Land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 20 years | ||
Maximum | Plant and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 20 years | ||
Maximum | Building | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 40 years | ||
Maximum | Office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 15 years | ||
Maximum | Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Environmental Liabilities (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
Environmental liability | $ 0 | $ 0 |
REVENUE - Revenue by Source (De
REVENUE - Revenue by Source (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | $ 451,837,146 | $ 328,367,134 | $ 211,661,168 | ||||||||||||
Revenues from contracts accounted for as derivatives | 94,854,225 | 75,635,032 | 33,057,394 | ||||||||||||
Total Revenues | $ 129,200,688 | $ 133,261,052 | $ 133,972,682 | $ 150,256,949 | $ 95,577,264 | $ 117,272,974 | $ 97,911,947 | $ 93,239,981 | $ 62,450,958 | $ 51,252,061 | $ 67,278,692 | $ 63,736,851 | 546,691,371 | 404,002,166 | 244,718,562 |
Ethanol | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 359,726,018 | 251,922,325 | 157,704,059 | ||||||||||||
Distillers' Grains | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 63,798,998 | 57,818,038 | 41,687,109 | ||||||||||||
Corn Oil | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 27,656,525 | 17,966,544 | 9,640,523 | ||||||||||||
Carbon Dioxide | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 473,449 | 484,752 | 493,500 | ||||||||||||
Other Revenue | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 182,156 | 175,475 | 2,135,977 | ||||||||||||
Soybeans and other grains | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues from contracts accounted for as derivatives | 94,854,225 | 75,635,032 | 33,057,394 | ||||||||||||
Ethanol Division | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 451,720,815 | 328,245,934 | 211,573,718 | ||||||||||||
Revenues from contracts accounted for as derivatives | 0 | 0 | 0 | ||||||||||||
Total Revenues | 451,720,815 | 328,245,934 | 211,573,718 | ||||||||||||
Ethanol Division | Ethanol | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 359,726,018 | 251,922,325 | 157,704,059 | ||||||||||||
Ethanol Division | Distillers' Grains | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 63,798,998 | 57,818,038 | 41,687,109 | ||||||||||||
Ethanol Division | Corn Oil | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 27,656,525 | 17,966,544 | 9,640,523 | ||||||||||||
Ethanol Division | Carbon Dioxide | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 473,449 | 484,752 | 493,500 | ||||||||||||
Ethanol Division | Other Revenue | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 65,825 | 54,275 | 2,048,527 | ||||||||||||
Ethanol Division | Soybeans and other grains | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues from contracts accounted for as derivatives | 0 | 0 | 0 | ||||||||||||
Trading Division | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 116,331 | 121,200 | 87,450 | ||||||||||||
Revenues from contracts accounted for as derivatives | 94,854,225 | 75,635,032 | 33,057,394 | ||||||||||||
Total Revenues | 94,970,556 | 75,756,232 | 33,144,844 | ||||||||||||
Trading Division | Ethanol | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 0 | 0 | 0 | ||||||||||||
Trading Division | Distillers' Grains | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 0 | 0 | 0 | ||||||||||||
Trading Division | Corn Oil | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 0 | 0 | 0 | ||||||||||||
Trading Division | Carbon Dioxide | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 0 | 0 | 0 | ||||||||||||
Trading Division | Other Revenue | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenue from contract with customer | 116,331 | 121,200 | 87,450 | ||||||||||||
Trading Division | Soybeans and other grains | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues from contracts accounted for as derivatives | $ 94,854,225 | $ 75,635,032 | $ 33,057,394 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) | 12 Months Ended |
Sep. 30, 2022 | |
Ethanol and Distillers' Grains | Minimum | |
Disaggregation of Revenue [Line Items] | |
Revenue from contract with customer, payment terms | 7 days |
Ethanol and Distillers' Grains | Maximum | |
Disaggregation of Revenue [Line Items] | |
Revenue from contract with customer, payment terms | 14 days |
Corn Oil | |
Disaggregation of Revenue [Line Items] | |
Revenue from contract with customer, payment terms | 10 days |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - Customer Concentration Risk | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accounts Receivable | Two Major Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk | 82% | 90% | |
Revenue Benchmark | Two Major Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk | 81% | 81% | |
Revenue Benchmark | Three Major Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk | 93% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Income Tax Disclosure [Abstract] | ||
Financial statement basis of assets | $ 188,955,828 | $ 151,938,925 |
Organization and start-up costs | 3,160,001 | 1,976,610 |
Book to tax depreciation and amortization | (48,551,783) | (55,156,961) |
Book to tax derivative instruments | (967,461) | (964,418) |
Book to tax operating lease right of use asset | (6,808,992) | (4,840,250) |
Capitalized inventory | 127,000 | 154,000 |
Income tax basis of assets | 135,914,593 | 93,107,906 |
Financial statement basis of liabilities | 41,685,336 | 27,201,347 |
Book to tax derivative instruments | (2,664,853) | (2,331,889) |
Book to tax operating lease liability | (6,811,869) | (4,841,863) |
Accrued employee benefits | (849,646) | (713,233) |
Accrued rail car rehabilitation costs | (2,036,638) | (1,750,680) |
Income tax basis of liabilities | $ 29,322,330 | $ 17,563,682 |
MEMBERS' EQUITY (Details)
MEMBERS' EQUITY (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||||
Nov. 30, 2022 | Aug. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Nov. 30, 2021 | Aug. 31, 2021 | Jun. 30, 2021 | Feb. 28, 2021 | Nov. 30, 2020 | Feb. 29, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | |||||||||||||
Distributions Declared Per Unit (in dollars per share) | $ 4,325 | $ 775 | $ 150 | ||||||||||
Cash Distribution | |||||||||||||
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | |||||||||||||
Distributions Declared Per Unit (in dollars per share) | $ 1,500 | $ 675 | $ 1,500 | $ 650 | $ 325 | $ 200 | $ 150 | $ 100 | $ 150 | $ 4,325 | $ 775 | $ 150 | |
Total Distribution Amount | $ 21,909,000 | $ 9,859,050 | $ 21,909,000 | $ 9,493,900 | $ 4,746,950 | $ 2,921,200 | $ 2,190,900 | $ 1,460,600 | $ 2,190,900 | $ 63,170,950 | $ 11,319,650 | $ 2,190,900 | |
Cash Distribution | Subsequent Event | |||||||||||||
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | |||||||||||||
Distributions Declared Per Unit (in dollars per share) | $ 500 | ||||||||||||
Total Distribution Amount | $ 7,303,000 |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventory (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Inventory [Line Items] | ||
Raw materials | $ 9,235,519 | $ 7,846,045 |
Total | 23,370,767 | 26,587,032 |
Ethanol Division: | ||
Inventory [Line Items] | ||
Raw materials | 7,206,914 | 2,995,914 |
Work in progress | 2,442,453 | 2,331,419 |
Finished goods | 7,513,988 | 12,431,375 |
Spare parts | 4,178,807 | 3,978,193 |
Total | 21,342,162 | 21,736,901 |
Trading Division: | ||
Inventory [Line Items] | ||
Raw materials | 2,028,605 | 4,850,131 |
Total | $ 2,028,605 | $ 4,850,131 |
INVENTORIES - Narrative (Detail
INVENTORIES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Ethanol Division: | |||
Inventory [Line Items] | |||
Inventory written down | $ 0 | $ 0 | $ 10,000 |
Related party purchase | $ 993,000 | ||
Ethanol Division: | Corn | |||
Inventory [Line Items] | |||
Expected production need | 9% | ||
Number of months of coverage | 18 months | ||
Ethanol Division: | Natural Gas | |||
Inventory [Line Items] | |||
Expected production need | 31% | ||
Number of months of coverage | 25 months | ||
Ethanol Division: | Distillers' Grains | |||
Inventory [Line Items] | |||
Expected production need | 21.30% | ||
Number of months of coverage | 3 months | ||
Ethanol Division: | Corn Oil | |||
Inventory [Line Items] | |||
Expected production need | 101.86% | ||
Number of months of coverage | 1 month | ||
Trading Division: | |||
Inventory [Line Items] | |||
Related party purchase | $ 54,000 | ||
Trading Division: | Soybeans | |||
Inventory [Line Items] | |||
Expected production need | 12.90% | ||
Number of months of coverage | 15 months |
DERIVATIVE INSTRUMENTS - Narrat
DERIVATIVE INSTRUMENTS - Narrative (Details) | 12 Months Ended | |
Sep. 30, 2022 USD ($) broker bu gal | Sep. 30, 2021 USD ($) broker T bu gal | |
Derivative [Line Items] | ||
Cash collateral | $ | $ 9,300,000 | $ 8,100,000 |
Number of brokers, cash collateral | broker | 3 | 2 |
Ethanol Division: | Corn | Short | Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume (in bushels or gallons) | bu | 10,080,000 | 7,471,740 |
Ethanol Division: | Ethanol | Short | Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume (in bushels or gallons) | gal | 12,390,000 | |
Ethanol Division: | Ethanol | Long | Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume (in bushels or gallons) | gal | 1,050,000 | |
Trading Division: | Soybean Oil | Long | Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, mass (in tons) | T | 4,020,000 | |
Trading Division: | Soybean | Short | Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, nonmonetary notional amount, volume (in bushels or gallons) | bu | 1,235,000 | 1,768,111 |
DERIVATIVE INSTRUMENTS - Balanc
DERIVATIVE INSTRUMENTS - Balance Sheet (Details) - Not Designated as Hedging Instrument - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Future | Futures and Options Derivatives | Ethanol | ||
Derivatives, Fair Value [Line Items] | ||
Assets | $ 0 | $ 150,339 |
Liabilities | 841,470 | 0 |
Future | Futures and Options Derivatives | Corn | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 1,827,963 | 2,331,889 |
Future | Futures and Options Derivatives | Soybean oil | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 84,474 | |
Liabilities | 0 | |
Future | Futures and Options Derivatives | Soybean | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 972,041 | 729,605 |
Liabilities | 0 | 0 |
Forward Contracts | Forward Purchase/Sales Derivatives | Soybean | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 360,620 | 988,919 |
Liabilities | $ 507,408 | $ 658,283 |
DERIVATIVE INSTRUMENTS - Income
DERIVATIVE INSTRUMENTS - Income Statement (Details) - Not Designated as Hedging Instrument - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in income | $ (15,234,096) | $ (23,089,721) | $ (2,595,938) |
Future | Ethanol | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in income | $ (6,192,448) | $ 1,392,605 | $ (5,484,019) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenues | Revenues | Revenues |
Future | Corn | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in income | $ (4,677,214) | $ (18,881,451) | $ 2,196,868 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of Goods Sold | Cost of Goods Sold | Cost of Goods Sold |
Future | Natural Gas | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in income | $ (39,039) | $ (836) | $ 0 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of Goods Sold | Cost of Goods Sold | Cost of Goods Sold |
Future | Soybean Oil | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in income | $ 179,637 | $ 1,813,519 | |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of Goods Sold | Cost of Goods Sold | |
Future | Soybean | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in income | $ (3,883,992) | $ (6,518,841) | $ (279,131) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of Goods Sold | Cost of Goods Sold | Cost of Goods Sold |
Forward Contracts | Soybean | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in income | $ (621,040) | $ (894,717) | $ 970,344 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of Goods Sold | Cost of Goods Sold | Cost of Goods Sold |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts Payable | $ (4,379,251) | $ (6,391,350) |
Fair Value, Recurring | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts Payable | (4,379,251) | (6,391,350) |
Fair Value, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts Payable | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts Payable | (4,379,251) | (6,391,350) |
Fair Value, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts Payable | 0 | 0 |
Soybean | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 2,028,605 | 4,850,131 |
Soybean | Fair Value, Recurring | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 2,028,605 | 4,850,131 |
Soybean | Fair Value, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | 0 |
Soybean | Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | 4,850,131 |
Soybean | Fair Value, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | 0 |
Future | Corn | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | (1,827,963) | (2,331,889) |
Future | Corn | Fair Value, Recurring | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | (1,827,963) | (2,331,889) |
Future | Corn | Fair Value, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | (1,827,963) | (1,424,775) |
Future | Corn | Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | (907,114) |
Future | Corn | Fair Value, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | 0 |
Future | Ethanol | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | (841,470) | 150,339 |
Future | Ethanol | Fair Value, Recurring | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | (841,470) | 150,339 |
Future | Ethanol | Fair Value, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | (841,470) | 150,339 |
Future | Ethanol | Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | 0 |
Future | Ethanol | Fair Value, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | 0 |
Future | Soybean | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 972,041 | |
Future | Soybean | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 972,041 | 729,605 |
Future | Soybean | Fair Value, Recurring | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 972,041 | 729,605 |
Future | Soybean | Fair Value, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 1,066,775 | |
Future | Soybean | Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | (337,170) |
Future | Soybean | Fair Value, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | 0 |
Future | Soybean Oil | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 84,474 | |
Future | Soybean Oil | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 84,474 | |
Future | Soybean Oil | Fair Value, Recurring | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 84,474 | |
Future | Soybean Oil | Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | |
Future | Soybean Oil | Fair Value, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | |
Forward Contracts | Soybean | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | (146,788) | 330,637 |
Forward Contracts | Soybean | Fair Value, Recurring | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | (146,788) | 330,637 |
Forward Contracts | Soybean | Fair Value, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | 0 |
Forward Contracts | Soybean | Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | (146,788) | 330,637 |
Forward Contracts | Soybean | Fair Value, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | $ 0 |
US Treasury Bill Securities | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | (33,228,697) | |
US Treasury Bill Securities | Fair Value, Recurring | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | (33,228,697) | |
US Treasury Bill Securities | Fair Value, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | |
US Treasury Bill Securities | Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | 0 | |
US Treasury Bill Securities | Fair Value, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair value, net | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Level 2 | Long-term Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 9,000,000 | $ 0 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts Payable | 4,379,251 | 6,391,350 |
Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts Payable | 4,379,251 | 6,391,350 |
Reported Value Measurement | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts Payable | $ 4,379,251 | $ 6,391,350 |
BANK FINANCING (Details)
BANK FINANCING (Details) | 12 Months Ended | |||
Sep. 30, 2022 USD ($) segment monthlyInstallment | Feb. 28, 2022 USD ($) | Feb. 27, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||
Number of loans | segment | 2 | |||
Long-term debt | $ 9,000,000 | |||
Long-term debt due within one year | 0 | |||
Revolving Credit Loan | ||||
Debt Instrument [Line Items] | ||||
Covenant, working capital | $ 23,000,000 | |||
Revolving Credit Facility | Declining Loan | ||||
Debt Instrument [Line Items] | ||||
Maximum availability | $ 36,000,000 | $ 5,000,000 | ||
Floor interest rate (as a percent) | 2.85% | |||
Interest rate (as a percent) | 6.20% | 3.10% | ||
Repaid equal monthly installments | monthlyInstallment | 60 | |||
Debt term | 10 years | |||
Mandatory annual prepayments term | 120 days | |||
Annual prepayment percentage | 40% | |||
Annual prepayment | $ 7,200,000 | |||
Aggregate prepayment amount | 18,000,000 | |||
Borrowings outstanding | 9,000,000 | $ 0 | ||
Revolving Credit Facility | Revolving Credit Loan | ||||
Debt Instrument [Line Items] | ||||
Maximum availability | $ 20,000,000 | |||
Floor interest rate (as a percent) | 2.75% | |||
Interest rate (as a percent) | 6% | 3% | ||
Borrowings outstanding | $ 0 | $ 0 | ||
Covenant, working capital | 15,000,000 | |||
Covenant, maximum capital expenditures per year without prior approval | $ 5,000,000 | |||
Covenant, minimum fixed charge coverage ratio | 1.15 | |||
Covenant, minimum debt service charge ratio | 1.25 | |||
Revolving Credit Facility | Prime Rate | Declining Loan | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 0.05% | |||
Revolving Credit Facility | Prime Rate | Revolving Credit Loan | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 0.25% |
BANK FINANCING - Schedule of Ma
BANK FINANCING - Schedule of Maturities of Long-Term Debt (Details) | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
October 1 2023 to September 30, 2024 | $ 0 |
October 1 2024 to September 30, 2025 | 1,219,364 |
October 1 2025 to September 30, 2026 | 1,651,220 |
October 1 2026 to September 30, 2027 | 1,756,553 |
October 1 2027 to September 30, 2028 | 1,868,610 |
Thereafter | 2,504,253 |
Total long-term debt | $ 9,000,000 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Leased Assets [Line Items] | ||
Operating lease weighted average discount rate | 5% | |
Operating lease weighted average remaining lease term | 2 years | |
Operating lease cost | $ 3,851,000 | |
Revenue | Ethanol Division: | ||
Operating Leased Assets [Line Items] | ||
Operating lease cost | $ 2,209,000 | |
Cost of Goods Sold | Ethanol Division: | ||
Operating Leased Assets [Line Items] | ||
Operating lease cost | $ 918,000 | |
Minimum | ||
Operating Leased Assets [Line Items] | ||
Remaining lease term | 1 year | |
Maximum | ||
Operating Leased Assets [Line Items] | ||
Remaining lease term | 2 years 6 months |
LEASES - Schedule of Remaining
LEASES - Schedule of Remaining Maturities (Details) | Sep. 30, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 3,842,130 |
2024 | 2,863,180 |
2025 | 444,380 |
Totals | 7,149,690 |
Amount representing interest | (337,823) |
Lease liabilities | $ 6,811,867 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Long-Term Purchase Commitments (Details) | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2009 | Nov. 30, 2012 | Jul. 31, 2009 | Sep. 30, 2022 USD ($) hopper_rail_car tank_car period | Sep. 30, 2021 USD ($) | Sep. 30, 2020 USD ($) | |
Loss Contingencies [Line Items] | ||||||
Marketing agreement, termination period | 120 days | |||||
Marketing agreement, extended contract term | 11 years | 8 years | ||||
Marketing agreement, payment terms | 14 days | 7 days | ||||
Number of tank cars leased | tank_car | 225 | |||||
Number of hopper cars leased | hopper_rail_car | 180 | |||||
Cost of goods sold | $ 460,306,891 | $ 369,373,828 | $ 239,426,482 | |||
Utility agreement, initial contract term | 10 years | |||||
Utility agreement, renewal contract period | 1 year | |||||
Utility agreement, fixed transportation charge period | 5 years | |||||
Development agreement refund | $ 0 | $ 0 | ||||
Rail Car Rehabilitation Cost Liability | ||||||
Loss Contingencies [Line Items] | ||||||
Estimated rehabilitation costs | 2,037,000 | |||||
Cost of goods sold | 317,000 | |||||
Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Marketing agreement, commissions | $ 1,750,000 | |||||
Utility agreement, number of consecutive renewal periods | period | 3 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Carbon Dioxide Agreement (Details) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 $ / T | Nov. 30, 2011 USD ($) T | Mar. 31, 2010 USD ($) $ / T T | Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Supply commitment, weight of liquid carbon dioxide (in tons) | T | 150 | |||
Supply commitment, price per unit (in dollars per ton) | 5 | |||
Supply commitment, minimum amount committed, weight (in tons) | T | 98,700 | 40,000 | ||
Supply commitment, amount | $ | $ 493,500 | $ 200,000 | ||
Supply commitment, term extension (in year) | 1 year | |||
Supply commitment, increase price per unit (in dollars per ton) | 7 | |||
Supply commitment, annual price increase percentage (in percent) | 2% | |||
Supply commitment, shortfall price paid (in dollars per ton) | 1 | |||
Supply commitment, renewal period (in year) | 1 year | |||
Supply commitment, written notice period prior to expiration term | 6 months | |||
Supply commitment, certain rights terminated period | 3 years |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - High Protein System Installation Agreement (Details) | Jan. 20, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Equipment purchase and installation agreement accrual | $ 50,000,000 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Legal Proceedings and Contingencies (Details) | 12 Months Ended |
Sep. 30, 2021 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Insurance proceeds | $ 556,000 |
EMPLOYEE BENEFIT PLAN (Details)
EMPLOYEE BENEFIT PLAN (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution, percent | 100% | ||
Employee annual contributions, percent | 5% | ||
Service requirement for employee eligibility | 6 months | ||
Defined contribution plan cost | $ 147 | $ 121 | $ 103 |
RISKS AND UNCERTAINTIES IMPAC_2
RISKS AND UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 23, 2022 | Sep. 30, 2022 | |
Concentration Risk [Line Items] | ||
Award received | $ 7,652 | |
Product Concentration Risk | Ethanol | Revenue, Product and Service Benchmark | ||
Concentration Risk [Line Items] | ||
Concentration risk | 66% | |
Product Concentration Risk | Corn | Cost of Goods and Service, Product and Service Benchmark | ||
Concentration Risk [Line Items] | ||
Concentration risk | 67% |
BUSINESS SEGMENTS - Narrative (
BUSINESS SEGMENTS - Narrative (Details) | 12 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Number of operating segments | 2 |
BUSINESS SEGMENTS - Schedule of
BUSINESS SEGMENTS - Schedule of Business Segments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | |||||||||||||||
Revenue | $ 129,200,688 | $ 133,261,052 | $ 133,972,682 | $ 150,256,949 | $ 95,577,264 | $ 117,272,974 | $ 97,911,947 | $ 93,239,981 | $ 62,450,958 | $ 51,252,061 | $ 67,278,692 | $ 63,736,851 | $ 546,691,371 | $ 404,002,166 | $ 244,718,562 |
Gross Profit | 12,660,646 | 28,653,656 | 10,151,570 | 34,918,608 | 15,728,712 | 9,607,941 | 8,762,330 | 529,355 | 4,867,638 | 1,657,936 | (4,221,538) | 2,988,044 | 86,384,480 | 34,628,338 | 5,292,080 |
Operating Income (Loss) | 10,681,996 | $ 26,732,866 | $ 8,103,233 | $ 32,783,235 | 13,958,333 | $ 7,849,027 | $ 6,925,219 | $ (1,283,302) | $ 3,305,598 | $ 67,815 | $ (6,147,899) | $ 1,293,302 | 78,301,330 | 27,449,277 | (1,481,184) |
Grain Inventories | 9,235,519 | 7,846,045 | 9,235,519 | 7,846,045 | |||||||||||
Total Assets | 188,955,828 | 151,938,925 | 188,955,828 | 151,938,925 | |||||||||||
Ethanol division | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Revenue | 451,720,815 | 328,245,934 | 211,573,718 | ||||||||||||
Gross Profit | 82,638,679 | 32,646,809 | 3,562,929 | ||||||||||||
Operating Income (Loss) | 75,824,501 | 26,736,720 | (1,941,363) | ||||||||||||
Grain Inventories | 7,206,914 | 2,995,914 | 7,206,914 | 2,995,914 | |||||||||||
Total Assets | 188,059,041 | 142,760,396 | 188,059,041 | 142,760,396 | |||||||||||
Trading division | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Revenue | 94,970,556 | 75,756,232 | 33,144,844 | ||||||||||||
Gross Profit | 3,745,801 | 1,981,529 | 1,729,151 | ||||||||||||
Operating Income (Loss) | 2,476,829 | 712,557 | $ 460,179 | ||||||||||||
Grain Inventories | 2,028,605 | 4,850,131 | 2,028,605 | 4,850,131 | |||||||||||
Total Assets | $ 900,652 | $ 8,793,484 | $ 900,652 | $ 8,793,484 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Quarterly Financial Data [Abstract] | |||||||||||||||
Revenues | $ 129,200,688 | $ 133,261,052 | $ 133,972,682 | $ 150,256,949 | $ 95,577,264 | $ 117,272,974 | $ 97,911,947 | $ 93,239,981 | $ 62,450,958 | $ 51,252,061 | $ 67,278,692 | $ 63,736,851 | $ 546,691,371 | $ 404,002,166 | $ 244,718,562 |
Gross profit | 12,660,646 | 28,653,656 | 10,151,570 | 34,918,608 | 15,728,712 | 9,607,941 | 8,762,330 | 529,355 | 4,867,638 | 1,657,936 | (4,221,538) | 2,988,044 | 86,384,480 | 34,628,338 | 5,292,080 |
Operating income (loss) | 10,681,996 | 26,732,866 | 8,103,233 | 32,783,235 | 13,958,333 | 7,849,027 | 6,925,219 | (1,283,302) | 3,305,598 | 67,815 | (6,147,899) | 1,293,302 | 78,301,330 | 27,449,277 | (1,481,184) |
Net income (loss) | $ 10,705,759 | $ 34,173,727 | $ 8,429,214 | $ 32,395,164 | $ 13,554,542 | $ 7,745,750 | $ 6,865,441 | $ (1,055,854) | $ 3,385,893 | $ 35,096 | $ (6,200,182) | $ 1,638,760 | $ 85,703,864 | $ 27,109,878 | $ (1,140,433) |
Basic earnings (loss) per unit (in dollars per shares) | $ 733 | $ 2,340 | $ 577 | $ 2,218 | $ 928 | $ 530 | $ 470 | $ (72) | $ 232 | $ 2 | $ (424) | $ 112 | $ 5,868 | $ 1,856 | $ (78) |
Diluted earnings (loss) per unit (in dollars per shares) | $ 733 | $ 2,340 | $ 577 | $ 2,218 | $ 928 | $ 530 | $ 470 | $ (72) | $ 232 | $ 2 | $ (424) | $ 112 | $ 5,868 | $ 1,856 | $ (78) |
EQUITY METHOD INVESTMENTS (Deta
EQUITY METHOD INVESTMENTS (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of Equity Method Investments [Line Items] | |||
Loss on equity method investment | $ 3,721 | $ 0 | $ 0 |
Limited Partnership | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment, ownership percentage | 50% | ||
Investment | $ 396,279 | ||
Loss on equity method investment | $ 3,721 |