Exhibit 99.1
Press Release
COUNCIL BLUFFS, IOWA-- May 11, 2010-- On May 11, 2010, Southwest Iowa Renewable Energy, LLC ("SIRE") announced its financial results for the second fiscal quarter ending March 31, 2010. SIRE reported a net loss of $742,851, or $56.54 per unit, compared to a net loss of $4,368,165, or $332.46 per unit, during the same period in 2009. Revenues totaled $51,977,147 for SIRE's second fiscal quarter compared to $11,925,655 for the same period in 2009. For the three months ended March 31, 2010, 83% of revenues were earned from the sale of denatured ethanol with the remaining 17% of revenues earned from the sale of dry distiller's grains. In the prior three month period ending December 31, 2009, 85% of revenues were earned from the sal e of denatured ethanol and 15% via sale of dry distiller's grains.
Cash and cash equivalents increased from $7,455,084 on September 30, 2009 to $8,186,923 on March 31, 2010. Similarly, inventory increased from $4,913,675 on September 30, 2009 to $11,918,270 as of March 31, 2010. The increase of cash and cash equivalents and inventory, as well the build up of other current assets, resulted in a current ratio improvement from 0.97 to 1.07 for the three months ending on March 31, 2010. As of March 31, 2010, SIRE has $9.25 million available on its committed lines of credit as compared to $7.72 million as of September 30, 2009.
Brian Cahill, SIRE’s General Manager and CEO stated: “With the quarter ending March 31, 2010, we have concluded our first full year of operations and are looking forward to increasing our ethanol production to the 115 million gallon per year level. As one element of increasing production capacity, we are looking forward to completion of an upgraded water clarifier unit in late June. With ethanol margins compressing during our second quarter ending in March, we continued our focus on our risk management strategy to counteract the compression. We also expect passage of the proposed E15 waiver, if adopted this year, would have a positive effect on ethanol demand for the rest of 2010.”
Subsequent to the end of the quarter, SIRE filed a registration statement with the Securities and Exchange Commission on April 14, 2010 to register up to $10,000,000 in subordinated convertible notes. The proceeds of the offering will be used to pay off existing outstanding debt.
About Southwest Iowa Renewable Energy, LLC:
SIRE is an Iowa limited liability company, located in Council Bluffs, Iowa, formed in March, 2005 to construct and operate a 110 million gallon capacity ethanol plant. SIRE began producing ethanol in February, 2009 and sells its ethanol, modified wet distillers grains with solubles, and corn syrup in the continental United States. SIRE also sells its dried distillers grains with solubles in the continental United States, Mexico, and the Pacific Rim.
This press release contains certain historical and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “1995 Act”). Such statements are made in good faith by SIRE pursuant to the safe-harbor provisions of the 1995 Act, and are identified as including terms such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,” “plans,” or similar language. 0;In connection with these safe-harbor provisions, SIRE has identified in its Annual Report to Unitholders for the fiscal year ended September 30, 2009, important factors that could cause actual results to differ materially from those contained in any forward-looking statement made by or on behalf of SIRE, including, without limitation, the high risk nature of SIRE’s operations, the effects of general economic conditions on SIRE and the ability to obtain future funding, any failure to achieve annual objectives, changes in prevailing market interest rates, and contractions in the markets for ethanol. SIRE further cautions that such factors are not exhaustive or exclusive. SIRE does not undertake to update any forward-looking statement which may be made from time to time by or on behalf of SIRE.
The following are condensed statements of operations for SIRE:
Three Months Ended March 31, 2010 (Unaudited) | Three Months Ended March 31, 2009 (Unaudited) | |||||||
| Revenues | $ | 51,977,147 | $ | 11,925,655 | ||||
| Cost of Goods Sold | 49,372,349 | 14,340,434 | ||||||
| Gross Margin | 2,604,798 | (2,414,779 | ) | |||||
| Selling, General, and Administrative Expenses | 1,358,410 | 1,299,356 | ||||||
| Operating Income (Loss) | 1,246,388 | (3,714,135 | ) | |||||
| Other Income (Expense) | ||||||||
Realized and unrealized losses on derivative financial instruments Interest income | 13,220 | -19,246 | ||||||
| Grant revenue | - | 49,252 | ||||||
| Interest expense | (2,113,260 | ) | (728,468 | ) | ||||
| Miscellaneous income | 110,801 | 5,940 | ||||||
| Total | (1,989,239 | ) | (654,030 | ) | ||||
| Net (Loss) | $ | (742,851 | ) | $ | (4,368,165 | ) | ||
| Weighted Average Units | ||||||||
| Outstanding—Basic & Diluted | 13,139 | 13,139 | ||||||
| Net (loss) per unit –basic & diluted | $ | (56.54 | ) | $ | (332.46 | ) | ||
The following table shows SIRE's results of operations stated as a percentage of revenue:
Three Months Ended March 31, 2010 (Unaudited)(1) | ||||||||||||||||||||
| Amounts | % of Revenues | Gallons | ||||||||||||||||||
| Income Statement Data | ||||||||||||||||||||
| Revenues | $ | 51,977,147 | 100 | % | $ | 1.89 | ||||||||||||||
| Cost of Goods Sold | 49,372,349 | 95 | % | 1.80 | ||||||||||||||||
| Gross Margin | 2,604,798 | 5 | % | 0.09 | ||||||||||||||||
| Selling, General and Administrative Expenses | 1,358,410 | 2 | % | 0.05 | ||||||||||||||||
| Other (Expense) | (1,989,239 | ) | (4 | %) | (0.07 | ) | ||||||||||||||
| Net Loss | $ | (742,851 | ) | (1 | %) | $ | (0.03 | ) | ||||||||||||
Below are condensed balance sheets:
| SOUTHWEST IOWA RENEWABLE ENERGY, LLC | ||||||||
| Balance Sheets | ||||||||
| ASSETS | March 31, 2010 | September 30, 2009 | ||||||
| (Unaudited) | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 8,186,923 | $ | 7,455,084 | ||||
| Accounts receivable | 143,996 | 1,831,722 | ||||||
| Accounts receivable, related party | 16,219,977 | 12,396,172 | ||||||
| Due from broker | 2,748,162 | 2,108,267 | ||||||
| Inventory | 11,918,270 | 4,913,675 | ||||||
| Derivative financial instruments | 1,750,912 | 263,688 | ||||||
| Prepaid expenses and other | 1,084,162 | 439,431 | ||||||
| Total current assets | 42,052,402 | 29,408,039 | ||||||
| Property, Plant, and Equipment | ||||||||
| Land | 2,064,090 | 2,064,090 | ||||||
| Plant, Building and Equipment | 198,393,532 | 197,435,327 | ||||||
| Office and Other Equipment | 703,969 | 680,145 | ||||||
| Total Cost | 201,161,591 | 200,179,562 | ||||||
| Accumulated Depreciation | (19,135,774 | ) | (9,600,217 | ) | ||||
| Net property and equipment | 182,025,817 | 190,579,345 | ||||||
| Other Assets | ||||||||
| Financing costs | 2,171,728 | 2,382,317 | ||||||
| Total Assets | $ | 226,249,947 | 222,369,701 | |||||
| LIABILITIES AND MEMBERS’ EQUITY | March 31, 2010 | September 30, 2009 | ||||||
| (Unaudited) | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 2,117,469 | $ | 1,351,156 | ||||
| Accounts payable, related parties | 6,212,962 | 4,297,990 | ||||||
| Retainage payable, related parties | 272,770 | 697,770 | ||||||
| Accrued expenses | 2,498,443 | 1,704,014 | ||||||
| Accrued expenses, related parties | 4,039,435 | 4,023,231 | ||||||
| Current maturities of notes payable | 24,256,411 | 18,215,803 | ||||||
| Total current liabilities | 39,397,490 | $ | 30,289,964 | |||||
Long Term Liabilities | ||||||||
Notes payable, less current maturities | 128,018,176 | 130,897,350 | ||||||
| Other | 750,004 | 800,002 | ||||||
| Total long term liabilities | 128,768,180 | 131,697,352 | ||||||
Commitments and Contingencies | ||||||||
| Members’ Equity | ||||||||
| Members’ capital | 76,474,111 | 76,474,111 | ||||||
| Accumulated (deficit) | (18,389,834 | ) | (16,091,726 | ) | ||||
| Total members’ equity | 58,084,277 | 60,382,385 | ||||||
| Total Liabilities and Members’ Equity | $ | 226,249,947 | 222,369,701 | |||||
Contact:
Karen Kroymann, Controller
Southwest Iowa Renewable Energy, LLC
712.366.0392