Exhibit 99.1
FOR IMMEDIATE RELEASE
| INVESTOR RELATIONS: | MEDIA CONTACT: |
| 916-403-2755 | Joseph Hansen, Pacific Ethanol, Inc. |
| 866-508-4969 | 916-403-2123 |
| | |
| InvestorRelations@pacificethanol.net | jhansen@pacificethanol.net |
PACIFIC ETHANOL, INC. ANNOUNCES ADJUSTMENT TO ITS THIRD QUARTER 2008 FINANCIAL RESULTS
Sacramento, CA, November 17, 2008 – Pacific Ethanol, Inc. (NASDAQ GM: PEIX), the leading West Coast-based marketer and producer of ethanol, today announced an adjustment to its previously reported financial results for the quarter ended September 30, 2008.
The Company previously reported a non-cash asset impairment charge of $26.6 million related to its suspended Imperial Valley ethanol plant construction project, which represented $43.8 million in property and equipment less $17.2 million in construction-related liabilities. The Company increased its impairment charge by $14.3 million to a total of $40.9 million. The increase represents impairment on the gross amount of $43.8 million in property and equipment less estimated future undiscounted cash flows. This increase will result in future non-cash gains to the extent the Company is discharged from its construction-related liabilities.
The Company’s independent registered public accounting firm has completed its review of the Company’s financial statements for the period and the Company expects to file its Form 10-Q for the period on November 17, 2008.
The Company’s updated Consolidated Statements of Operations and Balance Sheets are set forth below.
About Pacific Ethanol, Inc.
Pacific Ethanol is the largest West Coast-based marketer and producer of ethanol. Pacific Ethanol has ethanol plants in Madera and Stockton, California; Boardman, Oregon; and Burley, Idaho. Pacific Ethanol also owns a 42% interest in Front Range Energy, LLC which owns an ethanol plant in Windsor, Colorado. Central to Pacific Ethanol’s growth strategy is its destination business model, whereby each respective ethanol plant achieves lower process and transportation costs by servicing local markets for both fuel and feed. Pacific Ethanol has achieved its goal of 220 million gallons per year of ethanol production capacity in 2008 and has the goal to increase total production capacity to 420 million gallons per year in 2010. In addition, Pacific Ethanol is working to identify and develop other renewable fuel technologies, such as cellulose-based ethanol production and bio-diesel.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. The actual future results of Pacific Ethanol could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, the ability of Pacific Ethanol to obtain additional debt or equity financing, including additional working capital financing, or absent new sources of financing, the ability of Pacific Ethanol to reschedule or restructure its indebtedness; the ability of Pacific Ethanol to successfully capitalize on its internal growth initiatives; the ability of Pacific Ethanol to operate its plants at their planned production capacities; the price of ethanol relative to the price of corn and other production inputs; the price of ethanol relative to the price of gasoline; and the factors contained in the “Risk Factors” section of Pacific Ethanol’s Form 10-K filed with the Securities and Exchange Commission on March 27, 2008 and the “Risk Factors” section of Pacific Ethanol’s Form 10-Q for the quarterly period ended September 30, 2008 to be filed with the Securities and Exchange Commission.
(tables follow)
PACIFIC ETHANOL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | | | | | | | | | | | |
Net sales | | $ | 183,980 | | | $ | 118,118 | | | $ | 543,489 | | | $ | 331,123 | |
| Cost of goods sold | | | 204,265 | | | | 113,359 | | | | 547,673 | | | | 299,902 | |
| Gross profit (loss) | | | (20,285 | ) | | | 4,759 | | | | (4,184 | ) | | | 31,221 | |
| Selling, general and administrative expenses | | | 6,731 | | | | 5,920 | | | | 24,275 | | | | 23,742 | |
| Impairment of asset group | | | 40,900 | | | ─ | | | | 40,900 | | | ─ | |
| Impairment of goodwill | | | | | | | | | 87,047 | | | | |
| Income (loss) from operations | | | (67,916 | ) | | | (1,161 | ) | | | (156,406 | ) | | | 7,479 | |
| Other income (expense), net | | | (2,774 | ) | | | (998 | ) | | | (4,184 | ) | | | 312 | |
| Income (loss) before noncontrolling interest in variable interest entity | | | (70,690 | ) | | | (2,159 | ) | | | (160,590 | ) | | | 7,791 | |
| Noncontrolling interest in variable interest entity | | | 1,523 | | | | (2,683 | ) | | | 47,939 | | | | (7,502 | ) |
| Net income (loss) before provision for income taxes | | | (69,167 | ) | | | (4,842 | ) | | | (112,651 | ) | | | 289 | |
| Provision for income taxes | | ─ | | | ─ | | | ─ | | | ─ | |
| Net income (loss) | | $ | (69,167 | ) | | $ | (4,842 | ) | | $ | (112,651 | ) | | $ | 289 | |
| Preferred stock dividends | | $ | (807 | ) | | $ | (1,050 | ) | | $ | (3,296 | ) | | $ | (3,150 | ) |
Deemed dividend on preferred stock | | $ | ─ | | | $ | ─ | | | $ | (761 | ) | | $ | ─ | |
| Loss available to common stockholders | | $ | (69,974 | ) | | $ | (5,892 | ) | | $ | (116,708 | ) | | $ | (2,861 | ) |
| | | | | | | | | | | | | | | | | |
| Net loss per share, basic | | $ | (1.23 | ) | | $ | (0.15 | ) | | $ | (2.44 | ) | | $ | (0.07 | ) |
| | | | | | | | | | | | | | | | | |
| Net loss per share, diluted | | $ | (1.23 | ) | | $ | (0.15 | ) | | $ | (2.44 | ) | | $ | (0.07 | ) |
| Weighted-average shares outstanding, basic and diluted | | | 56,717 | | | | 39,928 | | | | 47,791 | | | | 39,833 | |
PACIFIC ETHANOL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
| | | September 30, | | | December 31, | |
| ASSETS | | | | | | |
| | | (unaudited) | | | | * | |
| Current Assets: | | | | | | | |
| Cash and cash equivalents | | $ | 13,979 | | | $ | 5,707 | |
| Investments in marketable securities | | | 7,452 | | | | 19,353 | |
| Accounts receivable, net | | | 30,837 | | | | 28,034 | |
| Restricted cash | | | 12,152 | | | | 780 | |
| Inventories | | | 33,279 | | | | 18,540 | |
| Prepaid expenses | | | 1,828 | | | | 1,498 | |
| Prepaid inventory | | | 2,403 | | | | 3,038 | |
| Derivative instruments | | | 195 | | | | 1,613 | |
| Other current assets | | | 3,884 | | | | 3,630 | |
| Total current assets | | | 106,009 | | | | 82,193 | |
| Property and equipment, net | | | 537,833 | | | | 468,704 | |
| Other Assets: | | | | | | | | |
| Goodwill | | | -- | | | | 88,168 | |
| Intangible assets, net | | | 5,766 | | | | 6,324 | |
| Other assets | | | 9,689 | | | | 6,211 | |
| Total other assets | | | 15,455 | | | | 100,703 | |
| Total Assets | | $ | 659,297 | | | $ | 651,600 | |
* Amounts derived from the audited financial statements for the year ended December 31, 2007.
PACIFIC ETHANOL, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(in thousands, except par value)
| | | September 30, | | | December 31, | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
| | | (unaudited) | | | | * | |
| Current Liabilities: | | | | | | | |
| Accounts payable – trade | | $ | 21,613 | | | $ | 22,641 | |
| Accrued liabilities | | | 14,248 | | | | 8,526 | |
| Accounts payable and accrued liabilities – construction-related | | | 34,308 | | | | 55,203 | |
| Contract retentions | | | 948 | | | | 5,358 | |
| Other liabilities – related parties | | | 212 | | | | 900 | |
| Current portion – notes payable | | | 46,407 | | | | 11,098 | |
| Short-term note payable | | | 1,500 | | | | 6,000 | |
| Derivative instruments | | | 10,350 | | | | 10,353 | |
| Total current liabilities | | | 129,586 | | | | 120,079 | |
| | | | | | | | | |
| Notes payable, net of current portion | | | 234,537 | | | | 151,188 | |
| Other liabilities | | | 3,493 | | | | 1,965 | |
| Total Liabilities | | | 367,616 | | | | 273,232 | |
| Commitments and Contingencies | | | | | | | | |
| Noncontrolling interest in variable interest entity | | | 47,936 | | | | 96,082 | |
| Stockholders’ Equity: | | | | | | | | |
| Preferred stock, $0.001 par value; 10,000 shares authorized; | | | | | | | | |
| Series A: 0 and 5,316 shares issued and outstanding as of September 30, 2008 and December 31, 2007, respectively | | | | | | | | |
Series B: 2,346 and 0 shares issued and outstanding as of September 30, 2008 and December 31, 2007, respectively | | | 2 | | | | 5 | |
| Common stock, $0.001 par value; 100,000 shares authorized; 57,779 and 40,606 shares issued and outstanding as of September 30, 2008 and December 31, 2007, respectively | | | 58 | | | | 41 | |
| Additional paid-in capital | | | 478,231 | | | | 402,932 | |
| Accumulated other comprehensive income (loss) | | | 471 | | | | (2,383 | ) |
| Accumulated deficit | | | (235,017 | ) | | | (118,309 | ) |
| Total stockholders’ equity | | | 243,745 | | | | 282,286 | |
| Total Liabilities and Stockholders’ Equity | | $ | 659,297 | | | $ | 651,600 | |
* Amounts derived from the audited financial statements for the year ended December 31, 2007.
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