Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 10, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Pacific Ethanol, Inc. | |
Entity Central Index Key | 778,164 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,520,805 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 49,262 | $ 62,084 |
Accounts receivable, net | 28,591 | 34,612 |
Inventories | 18,871 | 18,550 |
Prepaid inventory | 8,014 | 11,595 |
Other current assets | 12,926 | 12,710 |
Total current assets | 117,664 | 139,551 |
Property and equipment, net | 160,828 | 155,302 |
Other Assets: | ||
Intangible assets, net | 2,678 | 2,786 |
Other assets | 1,776 | 1,863 |
Total other assets | 4,454 | 4,649 |
Total Assets | 282,946 | 299,502 |
Current Liabilities: | ||
Accounts payable - trade | 20,307 | 13,122 |
Accrued liabilities | 3,305 | 6,203 |
Current portion - capital leases | 1,735 | 4,077 |
Other current liabilities | 593 | 2,045 |
Total current liabilities | 25,940 | 25,447 |
Long-term debt, net of current portion | 25,559 | 34,533 |
Capital leases, net of current portion | 1,707 | 2,055 |
Warrant liabilities at fair value | 1,703 | 1,986 |
Deferred tax liabilities | 17,040 | 17,040 |
Other liabilities | 427 | 459 |
Total Liabilities | $ 72,376 | $ 81,520 |
Commitments and Contingencies | ||
Pacific Ethanol, Inc. Stockholders' Equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; Series A: 1,684,375 shares authorized; no shares issued and outstanding as of June 30, 2015 and December 31, 2014; Series B: 1,580,790 shares authorized; 926,942 shares issued and outstanding as of June 30, 2015 and December 31, 2014; liquidation preference of $18,075 as of June 30, 2015 | $ 1 | $ 1 |
Common stock, $0.001 par value; 300,000,000 shares authorized; 24,694,243 and 24,499,534 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | 25 | 25 |
Additional paid-in capital | 726,873 | 725,813 |
Accumulated deficit | (516,329) | (512,332) |
Total Pacific Ethanol, Inc. Stockholders' Equity | 210,570 | 213,507 |
Noncontrolling interest | 0 | 4,475 |
Total Stockholders' Equity | 210,570 | 217,982 |
Total Liabilities and Stockholders' Equity | 282,946 | 299,502 |
Series A Preferred Stock | ||
Pacific Ethanol, Inc. Stockholders' Equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; Series A: 1,684,375 shares authorized; no shares issued and outstanding as of June 30, 2015 and December 31, 2014; Series B: 1,580,790 shares authorized; 926,942 shares issued and outstanding as of June 30, 2015 and December 31, 2014; liquidation preference of $18,075 as of June 30, 2015 | 0 | 0 |
Series B Preferred Stock | ||
Pacific Ethanol, Inc. Stockholders' Equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; Series A: 1,684,375 shares authorized; no shares issued and outstanding as of June 30, 2015 and December 31, 2014; Series B: 1,580,790 shares authorized; 926,942 shares issued and outstanding as of June 30, 2015 and December 31, 2014; liquidation preference of $18,075 as of June 30, 2015 | $ 1 | $ 1 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Stockholders' Equity: | ||
Preferred stock par value | $ .001 | $ .001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 300,000,000 | 300,000,000 |
Common stock, issued | 24,694,243 | 24,499,534 |
Common stock, outstanding | 24,694,243 | 24,499,534 |
Series A Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 1,684,375 | 1,684,375 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Series B Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 1,580,790 | 1,580,790 |
Preferred stock shares issued | 926,942 | 926,942 |
Preferred stock shares outstanding | 926,942 | 926,942 |
Preferred stock liquidation preference | $ 18,075 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Net sales | $ 227,621 | $ 321,144 | $ 433,797 | $ 575,687 |
Cost of goods sold | 221,367 | 287,568 | 428,530 | 503,566 |
Gross profit | 6,254 | 33,576 | 5,267 | 72,121 |
Selling, general and administrative expenses | 3,993 | 4,315 | 8,898 | 7,985 |
Income (loss) from operations | 2,261 | 29,261 | (3,631) | 64,136 |
Fair value adjustments and warrant inducements | 384 | 485 | 211 | (35,359) |
Interest expense, net | (1,005) | (2,886) | (2,020) | (7,237) |
Loss on extinguishments of debt | 0 | (2,363) | 0 | (2,363) |
Other expense, net | (58) | (335) | (187) | (562) |
Income (loss) before provision for income taxes | 1,582 | 24,162 | (5,627) | 18,615 |
Provision (benefit) for income taxes | 530 | 7,196 | (2,170) | 10,466 |
Consolidated net income (loss) | 1,052 | 16,966 | (3,457) | 8,149 |
Net (income) loss attributed to noncontrolling interest | (42) | (1,394) | 87 | (3,403) |
Net income (loss) attributed to Pacific Ethanol, Inc. | 1,010 | 15,572 | (3,370) | 4,746 |
Preferred stock dividends | (315) | (315) | (627) | (627) |
Income (loss) available to common stockholders | $ 695 | $ 15,257 | $ (3,997) | $ 4,119 |
Net income (loss) per share, basic | $ .03 | $ .77 | $ (.16) | $ .23 |
Net income (loss) per share, diluted | $ .03 | $ .68 | $ (.16) | $ 0.20 |
Weighted-average shares outstanding, basic | 24,268 | 19,903 | 24,589 | 18,053 |
Weighted-average shares outstanding, diluted | 24,837 | 22,276 | 24,589 | 20,514 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Activities: | ||
Consolidated net income (loss) | $ (3,457) | $ 8,149 |
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization of intangibles | 6,748 | 6,438 |
Deferred income taxes | 0 | 2,874 |
Loss on extinguishments of debt | 0 | 2,363 |
Fair value adjustments | (211) | 34,559 |
Amortization of debt discount | 99 | 1,764 |
Amortization of deferred financing fees | 121 | 1,077 |
Non-cash compensation | 915 | 743 |
Derivative instruments | 477 | (517) |
Bad debt expense | 3 | (34) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 6,018 | (7,733) |
Inventories | (321) | (4,194) |
Prepaid expenses and other assets | (1,506) | 3,058 |
Prepaid inventory | 3,581 | (2,499) |
Accounts payable and accrued expenses | (1,100) | 5,282 |
Net cash provided by operating activities | 11,367 | 51,330 |
Investing Activities: | ||
Additions to property and equipment | (12,166) | (6,535) |
Net cash used in investing activities | (12,166) | (6,535) |
Financing Activities: | ||
Proceeds from equity offering | 0 | 26,073 |
Proceeds from exercise of warrants | 368 | 18,240 |
Principal Payments on senior notes | 0 | (13,984) |
Principal payments on related party note | 0 | (750) |
Parent purchases of Plant Owners' debt | 0 | (17,038) |
Net proceeds from (payments on) Kinergy's line of credit | (8,974) | 2,329 |
Principal Payments on Plant Owners' borrowings | 0 | (35,378) |
Payments on capital leases | (2,790) | (2,450) |
Debt issuance costs | 0 | (438) |
Preferred stock dividends paid | (627) | (627) |
Net cash used in financing activities | (12,023) | (24,023) |
Net increase (decrease) in cash and cash equivalents | (12,822) | 20,772 |
Cash and cash equivalents at beginning of period | 62,084 | 5,151 |
Cash and cash equivalents at end of period | 49,262 | 25,923 |
Supplemental Information: | ||
Interest paid | 1,911 | 4,520 |
Income taxes paid | 0 | 3,215 |
Noncash financing and investing activities: | ||
Reclass of warrant liability to equity upon warrant exercises | 72 | 20,008 |
Reclass of noncontrolling interests to APIC upon acquisitions of ownership positions in PE Op Co. | 560 | 0 |
Accrued payment for ownership positions in PE Op Co. | 3,828 | 0 |
Preferred stock dividends paid in common stock | $ 0 | $ 1,463 |
1. ORGANIZATION AND BASIS OF PR
1. ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
1. ORGANIZATION AND BASIS OF PRESENTATION | Organization and Business The Company is a leading producer and marketer of low-carbon renewable fuels in the United States. The Companys four ethanol plants in the Western United States are located in close proximity to both feed and ethanol customers and thus enjoy unique advantages in efficiency, logistics and product pricing. These plants produce among the lowest-carbon ethanol produced in the United States due to low energy use in production. With the addition of four Midwestern ethanol plants in July 2015 as a result of the Companys acquisition of Aventine, the Company now has a combined ethanol production capacity of 515 million gallons per year, markets, on an annualized basis, over 800 million gallons of ethanol and produces, on an annualized basis, over 1 million tons of co-products such as wet and dry distillers grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, distillers yeast and CO 2 Accounts Receivable and Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivable are charged against the allowance for doubtful accounts once uncollectibility has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Companys success in contacting and negotiating with the customer. If the financial condition of the Companys customers were to deteriorate, resulting in an impairment of ability to make payments, additional allowances may be required. Of the accounts receivable balance, approximately $22,322,000 and $28,475,000 at June 30, 2015 and December 31, 2014, respectively, were used as collateral under Kinergys operating line of credit. The allowance for doubtful accounts was $9,000 and $6,000 as of June 30, 2015 and December 31, 2014, respectively. The Company recorded a bad debt expense of $3,000 for the three and six months ended June 30, 2015 and a bad debt benefit of $34,000 for the six months ended June 30, 2014. The Company did not record a bad debt expense for the three months ended June 30, 2014. The Company does not have any off-balance sheet credit exposure related to its customers. Provision for Income Taxes Recent Accounting Pronouncements In April 2015, the FASB issued new guidance on presentation of debt issuance costs. Historically, entities have presented debt issuance costs as an asset. Under the new guidance, effective for fiscal years beginning after December 31, 2015, debt issuance costs will be reclassified as a deduction to the carrying amount of the related debt balance. The guidance does not change any of the Companys other debt recognition or disclosure. The Company will adopt the guidance beginning March 31, 2016. Basis of Presentation Interim Financial Statements The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates are required as part of determining the fair value of warrants and conversion features, allowance for doubtful accounts, estimated lives of property and equipment and intangibles, long-lived asset impairments, valuation allowances on deferred income taxes and the potential outcome of future tax consequences of events recognized in the Companys financial statements or tax returns. Actual results and outcomes may materially differ from managements estimates and assumptions. |
2. PACIFIC ETHANOL WEST PLANTS
2. PACIFIC ETHANOL WEST PLANTS | 6 Months Ended |
Jun. 30, 2015 | |
Pacific Ethanol West Plants | |
2. PACIFIC ETHANOL WEST PLANTS | As of June 30, 2015, the Company owned 100% of its four ethanol production facilities located in the Western United States through its holding company, PE Op Co., namely, Pacific Ethanol Madera LLC, Pacific Ethanol Columbia, LLC, Pacific Ethanol Stockton LLC and Pacific Ethanol Magic Valley, LLC (collectively, the Pacific Ethanol West Plants) and their holding company, Pacific Ethanol Holding Co. LLC (together with the Pacific Ethanol West Plants, the Plant Owners). The Company concluded that since PE Op Co.s inception, through the point the Company became a 91% owner of PE Op Co. in December 2013, PE Op Co. was a variable interest entity because the other owners of PE Op Co., due to the Companys involvement through its contractual arrangements, at all times lacked the power to direct the activities that most significantly impacted its economic performance. Since December 2013, as a result of owning 91% of PE Op Co., the Company, with its significant majority position, had the ability to make most all decisions on its own, and therefore determined that PE Op Co. was no longer considered a variable interest entity. In May 2015, the Company purchased the remaining 4% ownership interest in PE Op Co. that it did not own, and now as the 100% owner of PE Op Co., continues to consolidate PE Op Co.s financial results under the voting rights model. For the prior periods in which the Company did not wholly-own PE Op Co., it adjusted its consolidated net income (loss) for the income (loss) attributed to PE Op Co.s other owners. The remaining amount after this adjustment resulted in net income (loss) attributed to Pacific Ethanol. Noncontrolling interest decreased from $4,475,000 at December 31, 2014 to $0 at June 30, 2015 due to the Companys purchase of the remaining 4% ownership interest in PE Op Co. for $3,828,000, resulting in a reduction of noncontrolling interest of $4,388,000, and loss attributed to noncontrolling interest of $87,000 for the six months ended June 30, 2015. The Companys acquisition of its ownership interest in PE Op Co. does not impact the Companys rights or obligations under any of its contractual arrangements. Further, creditors of PE Op Co. do not have recourse to Pacific Ethanol, Inc. Since its acquisition, the Company has not provided any additional support to PE Op Co. beyond the terms of its contractual arrangements. |
3. ACQUISITION OF AVENTINE
3. ACQUISITION OF AVENTINE | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
3. ACQUISITION OF AVENTINE | On December 30, 2014, the Company entered into a definitive merger agreement with Aventine, a Midwest ethanol producer, under which the Company agreed to acquire Aventine through a stock-for-stock merger. The merger agreement was amended effective March 31, 2015 to address certain conditions to closing and other matters. The acquisition closed on July 1, 2015 and the Company issued an aggregate of 17,759,193 shares of common stock and non-voting common stock for 100% of the outstanding shares of common stock of Aventine. The common stock issued as consideration had a fair value of $174.6 million on the acquisition date. The Company believes the Aventine acquisition will result in a number of synergies and strategic advantages. The Company believes the acquisition will spread commodity and basis price risks across diverse markets and products, assisting in its efforts to optimize margin management; improve its hedging opportunities with a greater correlation to the liquid physical and paper markets in Chicago; and increase its flexibility and alternatives in feedstock procurement for its Midwest and Western production facilities. The acquisition also expands the Companys marketing reach into new markets and extends its mix of co-products. The Company believes the acquisition will enable it to have deeper market insight and engagement in major ethanol and feed markets outside the Western United States, thereby improving pricing opportunities; allows the Company to establish access to markets in 48 states for ethanol sales and access many markets with ethanol and co-product sales reaching domestic and international customers; and enable it to use its more diverse mix of co-products to generate strong co-product returns. In addition, the acquisition also increases the Companys combined annual ethanol production capacity to 515 million gallons per year and annualized ethanol marketing volume to over 800 million gallons, including Aventines historical volumes. The following allocation of the preliminary estimated purchase price assumes, with the exception of property and equipment and long-term debt, carrying values approximate fair value. Estimates of uncollectible accounts receivable are not considered material due to the short-term nature and customer collection history. The preliminary property and equipment fair value estimate is based primarily on a high-level review of similar recent market transactions and is subject to change. A final valuation will be more detailed in its analysis including a further review of recent market transactions with comparable assets and a discounted cash flow analysis of each facility based on market conditions and future operational assumptions and capital expenditures plans. Preliminarily, no intangible assets or liabilities have been estimated due to Aventines contracts being materially close to market prices. A final valuation may include either an asset or liability associated with any material out-of-market contract positions. Given that many of these contracts are short-term in nature and duration (less than 6 months), an assessment at this time would likely not be indicative of terms and purchase price allocation at the time the acquisition was closed. The preliminary fair-value determination of long-term debt is based on the current interest rate and financing markets. A final valuation will consider interest rate and financing market factors and may increase or decrease the amount estimated on the long-term debt. Based upon these assumptions, the preliminary purchase price consideration allocation is as follows (in thousands): Cash and equivalents $ 18,800 Accounts receivables 10,100 Other current assets 30,800 Total current assets 59,700 Property and equipment 306,800 Other assets 800 Total assets acquired $ 367,300 Accounts payable, trade $ 19,900 Other current liabilities 9,800 Total current liabilities 29,700 Long-term debt - revolvers 13,700 Long-term debt - term debt 145,600 Other non-current liabilities 41,000 Total liabilities assumed $ 230,000 Net assets acquired $ 137,300 Estimated goodwill $ 37,300 Total purchase price $ 174,600 The actual determination of the purchase price allocation on the closing date will be based on the final net tangible and intangible assets of Aventine on July 1, 2015 based on completion of the valuation of the fair value of such net assets. The Company anticipates that the ultimate purchase price allocation of balance sheet amounts such as current assets and liabilities, property and equipment, intangible assets and long-term assets and liabilities will differ from the preliminary assessment outlined above. Any changes to the initial estimates of the fair value of the acquired assets and assumed liabilities will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill if net assets acquired are less than the purchase price. If net assets acquired exceed the purchase price, the residual amount will result in a bargain purchase gain. The estimated goodwill recognized results from benefits the Company believes it will achieve in both market growth opportunities discussed above and financial and operational synergies discussed below. See Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent Initiatives and Outlook. The following table presents unaudited pro forma financial information assuming the acquisition occurred on January 1, 2014. Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Revenues pro forma $ 390,224 $ 466,599 $ 727,337 $ 838,475 Net income (loss) pro forma $ (9,428 ) $ 26,153 $ (28,768 ) $ 5,022 Diluted net income (loss) per share pro forma $ (0.22 ) $ 0.65 $ (0.68 ) $ 0.13 Diluted weighted-average shares pro forma 42,596 40,035 42,348 38,273 The Company is currently evaluating contingencies associated with the acquisition of Aventine, including its outstanding litigation with the Western Sugar Cooperative relating to a prior surplus sugar contract dispute and its environmental remediation costs. These costs are not included in the above pro forma disclosure as the Company is currently evaluating their fair values. For the three and six months ended June 30, 2015, the Company recorded approximately $0.3 million and $1.2 million, respectively, in costs associated with the Aventine acquisition. These costs are reflected in selling, general and administrative expenses on the Companys consolidated statements of operations. |
4. INVENTORIES
4. INVENTORIES | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
4. INVENTORIES | Inventories consisted primarily of bulk ethanol and unleaded fuel, and are valued at the lower-of-cost-or-market, with cost determined on a first-in, first-out basis. Inventory balances consisted of the following (in thousands): June 30, 2015 December 31, 2014 Finished goods $ 12,508 $ 11,118 Raw materials 1,854 2,695 Work in progress 3,087 3,274 Other 1,422 1,463 Total $ 18,871 $ 18,550 |
5. DERIVATIVES
5. DERIVATIVES | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
5. DERIVATIVES | The business and activities of the Company expose it to a variety of market risks, including risks related to changes in commodity prices and interest rates. The Company monitors and manages these financial exposures as an integral part of its risk management program. This program recognizes the unpredictability of financial markets and seeks to reduce the potentially adverse effects that market volatility could have on operating results. Commodity Risk Cash Flow Hedges Commodity Risk Non-Designated Hedges The classification and amounts of the Companys recognized gains (losses) for its derivatives not designated as hedging instruments are as follows (in thousands): Realized Gains Three Months Ended June 30, Type of Instrument Statements of Operations Location 2015 2014 Commodity contracts Cost of goods sold $ 264 $ 465 $ 264 $ 465 Unrealized Losses Three Months Ended June 30, Type of Instrument Statements of Operations Location 2015 2014 Commodity contracts Cost of goods sold $ (552 ) $ (17 ) $ (552 ) $ (17 ) Realized Gains Six Months Ended June 30, Type of Instrument Statements of Operations Location 2015 2014 Commodity contracts Cost of goods sold $ 149 $ 549 $ 149 $ 549 Unrealized Losses Six Months Ended June 30, Type of Instrument Statements of Operations Location 2015 2014 Commodity contracts Cost of goods sold $ (626 ) $ (32 ) $ (626 ) $ (32 ) |
6. DEBT
6. DEBT | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
6. DEBT | Long-term borrowings are summarized as follows (in thousands): June 30, 2015 December 31, 2014 Kinergy operating line of credit $ 8,556 $ 17,530 Plant Owners third-party term debt 17,003 17,003 25,559 34,533 Less short-term portion Long-term debt $ 25,559 $ 34,533 Kinergy Operating Line of Credit On July 1, 2015, Kinergy amended its line of credit to reflect the following changes: · Extended the term and maturity date of the credit facility from December 31, 2016 to December 31, 2020; · Increased the maximum credit under the credit facility from $30,000,000 to $75,000,000, with an accordion feature to further increase the maximum credit under the credit facility to up to $100,000,000 in minimum increments of $5,000,000 each, upon Kinergys request, but subject to the consent of the agent and the lenders in their sole discretion. · Increased the inventory loan limit under the credit facility from $12,500,000 to $40,000,000 and increased the letter of credit limit under the credit facility from $5,000,000 to $20,000,000; · Reduced the applicable margin to 1.75% to 2.75% depending on the quarterly average amounts available for borrowing and reduced the unused line fee under the credit facility to an annual rate equal to 0.25% to 0.375% depending on the average daily principal balance during the immediately preceding month; and · Deleted the financial covenant concerning Kinergys earnings before interest, taxes, depreciation and amortization (EBITDA) but retained financial covenants concerning its fixed-charge coverage ratios. Plant Owners Term Debt and Operating Lines of Credit |
7. COMMON STOCK AND WARRANTS
7. COMMON STOCK AND WARRANTS | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
7. COMMON STOCK AND WARRANTS | Warrant Exercises During the three and six months ended June 30, 2014, certain holders exercised warrants and received an aggregate of 1,250,300 and 3,138,000 shares of the Companys common stock upon payment of an aggregate of $6,110,000 and $18,240,000 in cash, respectively. During the three and six months ended June 30, 2014, the Company paid an aggregate of $800,000 in cash to certain warrant holders as an inducement to exercise their warrants and recorded an expense of $800,000. During the three and six months ended June 30, 2014, certain warrant holders exercised warrants on a cashless basis and received 291,000 shares of the Companys common stock. Grants of Stock |
8. COMMITMENTS AND CONTINGENCIE
8. COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
8. COMMITMENTS AND CONTINGENCIES | Sales Commitments Purchase Commitments Litigation General On May 24, 2013, GS CleanTech Corporation (GS CleanTech), filed a suit in the United States District Court for the Eastern District of California, Sacramento Division (Case No.: 2:13-CV-01042-JAM-AC), naming Pacific Ethanol, Inc. as a defendant. On August 29, 2013, the case was transferred to the United States District Court for the Southern District of Indiana and made part of the pre-existing multi-district litigation involving GS CleanTech and multiple defendants. The suit alleged infringement of a patent assigned to GS CleanTech by virtue of certain corn oil separation technology in use at one or more of the ethanol production facilities in which the Company has an interest, including Pacific Ethanol Stockton LLC (PE Stockton), located in Stockton, California. The complaint sought preliminary and permanent injunctions against the Company, prohibiting future infringement on the patent owned by GS CleanTech and damages in an unspecified amount adequate to compensate GS CleanTech for the alleged patent infringement, but in any event no less than a reasonable royalty for the use made of the inventions of the patent, plus attorneys fees. The Company answered the complaint, counterclaimed that the patent claims at issue, as well as the claims in several related patents, are invalid and unenforceable and that the Company is not infringing. Pacific Ethanol, Inc. does not itself use any corn oil separation technology and may seek a dismissal on those grounds. On March 17 and March 18, 2014, GS CleanTech filed suit naming as defendants two Company subsidiaries: PE Stockton and Pacific Ethanol Magic Valley, LLC (PE Magic Valley). The claims were similar to those filed against Pacific Ethanol, Inc. in May 2013. These two cases were transferred to the multi-district litigation division in United States District Court for the Southern District of Indiana, where the case against Pacific Ethanol, Inc. was pending. Although PE Stockton and PE Magic Valley do separate and market corn oil, Pacific Ethanol, Inc., PE Stockton and PE Magic Valley strongly disagree that either of the subsidiaries use corn oil separation technology that infringes the patent owned by GS CleanTech. In a January 16, 2015 decision, the District Court for the Southern District of Indiana ruled in favor of a stipulated motion for partial summary judgment for Pacific Ethanol, Inc., PE Stockton and PE Magic Valley finding that all of the GS Cleantech patents in the suit were invalid and, therefore, not infringed. GS Cleantech has said it will appeal this decision when the remaining claim in the suit has been decided. The only remaining claim alleges that GS Cleantech inequitably conducted itself before the United States Patent Office when obtaining the patents at issue. A trial in the District Court for the Southern District of Indiana on that single issue is expected later in 2015. If the Defendants, including Pacific Ethanol, Inc., PE Stockton and PE Magic Valley, succeed in proving inequitable conduct, then the Court will be asked to determine whether GS Cleantechs behavior makes this an exceptional case. A finding that this is an exceptional case would allow the Court to award to Pacific Ethanol, Inc., PE Stockton and PE Magic Valley the attorneys fees expended to date for defense in this case. It is unknown whether GS Cleantech would appeal such a ruling. The Company did not record a provision for these matters as of June 30, 2015 as Company management intends to vigorously defend these allegations and believes a material adverse ruling against Pacific Ethanol, Inc., PE Stockton and/or PE Magic Valley is not probable. The Company believes that any liability Pacific Ethanol, Inc., PE Stockton and/or PE Magic Valley may incur would not have a material adverse effect on the Companys financial condition or its results of operations. |
9. FAIR VALUE MEASUREMENTS
9. FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
9. FAIR VALUE MEASUREMENTS | The fair value hierarchy prioritizes the inputs used in valuation techniques into three levels, as follows: · Level 1 Observable inputs unadjusted quoted prices in active markets for identical assets and liabilities; · Level 2 Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data; and · Level 3 Unobservable inputs includes amounts derived from valuation models where one or more significant inputs are unobservable. For fair value measurements using significant unobservable inputs, a description of the inputs and the information used to develop the inputs is required along with a reconciliation of Level 3 values from the prior reporting period. The Company recorded its warrants issued from 2010 through 2013 at fair value and designated them as Level 3 on their issuance dates. Warrants Significant assumptions used and related fair values for the warrants as of June 30, 2015 were as follows: Original Issuance Exercise Price Volatility Risk Free Interest Rate Term (years) Market Discount Warrants Outstanding Fair Value 09/26/2012 $ 8.85 38.7% 0.01% 0.24 27.5% 432,000 $ 527,000 07/3/2012 $ 6.09 48.8% 0.64% 2.01 26.2% 211,000 795,000 12/13/2011 $ 8.43 49.4% 0.46% 1.46 23.0% 138,000 381,000 $ 1,703,000 Significant assumptions used and related fair values for the warrants as of December 31, 2014 were as follows: Original Issuance Exercise Price Volatility Risk Free Interest Rate Term (years) Market Discount Warrants Outstanding Fair Value 09/26/2012 $ 8.85 51.0% 0.19% 0.74 37.0% 473,000 $ 748,000 07/3/2012 $ 6.09 56.1% 0.89% 2.51 32.8% 211,000 811,000 12/13/2011 $ 8.43 54.3% 0.67% 1.95 28.7% 138,000 427,000 $ 1,986,000 The estimated fair value of the warrants is affected by the above underlying inputs. Observable inputs include the values of exercise price, stock price, term and risk-free interest rate. As separate inputs, an increase (decrease) in either the term or risk free interest rate will result in an increase (decrease) in the estimated fair value of the warrant. Unobservable inputs include volatility and market discount. An increase (decrease) in volatility will result in an increase (decrease) in the estimated warrant value and an increase (decrease) in the market discount will result in a decrease (increase) in the estimated warrant fair value. The volatility utilized was a blended average of the Companys historical volatility and implied volatilities derived from a selected peer group. The implied volatility component has remained relatively constant over time given that implied volatility is a forward-looking assumption based on observable trades in public option markets. Should the Companys historical volatility increase (decrease) on a go-forward basis, the resulting value of the warrants would increase (decrease). The market discount, or a discount for lack of marketability, is quantified using a Black-Scholes option pricing model, with a primary model input of assumed holding period restriction. As the assumed holding period increases (decreases), the market discount increases (decreases), conversely impacting the value of the warrant fair value. Other Derivative Instruments The following table summarizes fair value measurements by level at June 30, 2015 (in thousands): Level 1 Level 2 Level 3 Total Assets: Commodity contracts (1) $ 180 $ $ $ 180 Total Assets $ 180 $ $ $ 180 Liabilities: Warrants (2) $ $ $ 1,703 $ 1,703 Commodity contracts (3) 369 369 Total Liabilities $ 369 $ $ 1,703 $ 2,072 __________ (1) Included in other current assets in the consolidated balance sheets. (2) Included in warrant liabilities at fair value in the consolidated balance sheets. (3) Included in accrued liabilities in the consolidated balance sheets. The following table summarizes fair value measurements by level at December 31, 2014 (in thousands): Level 1 Level 2 Level 3 Total Assets: Commodity contracts (1) $ 1,586 $ $ $ 1,586 Total Assets $ 1,586 $ $ $ 1,586 Liabilities: Warrants (2) $ $ $ 1,986 $ 1,986 Commodity contracts (3) 1,149 1,149 Total Liabilities $ 1,149 $ $ 1,986 $ 3,135 __________ (1) Included in other current assets in the consolidated balance sheets. (2) Included in warrant liabilities at fair value in the consolidated balance sheets. (3) Included in accrued liabilities in the consolidated balance sheets. For fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs is required along with a reconciliation of Level 3 values from the prior reporting period. The changes in the Companys fair value of its Level 3 inputs with respect to its warrants were as follows (in thousands): Balance, December 31, 2014 $ 1,986 Exercises of warrants (72 ) Adjustments to fair value for the period (211 ) Balance, June 30, 2015 $ 1,703 |
10. EARNINGS PER SHARE
10. EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
10. EARNINGS PER SHARE | The following tables compute basic and diluted earnings per share (in thousands, except per share data): Three Months Ended June 30, 2015 Income Numerator Shares Denominator Per-Share Amount Net income attributed to Pacific Ethanol $ 1,010 Less: Preferred stock dividends (315 ) Basic income per share: Income available to common stockholders $ 695 24,268 $ 0.03 Add: Warrants 569 Diluted income per share: Income available to common stockholders $ 695 24,837 $ 0.03 Three Months Ended June 30, 2014 Income Numerator Shares Denominator Per-Share Amount Net income attributed to Pacific Ethanol $ 15,572 Less: Preferred stock dividends (315 ) Basic income per share: Income available to common stockholders $ 15,257 19,903 $ 0.77 Add: Warrants 2,373 Diluted income per share: Income available to common stockholders $ 15,257 22,276 $ 0.68 Six Months Ended June 30, 2015 Loss Numerator Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol $ (3,370 ) Less: Preferred stock dividends (627 ) Basic and diluted loss per share: Loss available to common stockholders $ (3,997 ) 24,589 $ (0.16 ) Six Months Ended June 30, 2014 Income Numerator Shares Denominator Per-Share Amount Net income attributed to Pacific Ethanol $ 4,746 Less: Preferred stock dividends (627 ) Basic income per share: Income available to common stockholders $ 4,119 18,053 $ 0.23 Add: Warrants 2,461 Diluted income per share: Income available to common stockholders $ 4,119 20,514 $ 0.20 There were an aggregate of 669,000 and 1,180,000 potentially dilutive weighted-average shares from the Companys warrants and shares of Series B Cumulative Convertible Preferred Stock outstanding for the three and six months ended June 30, 2015, respectively. These convertible securities were not considered in calculating diluted net income (loss) per share for the six months ended June 30, 2015, as their effect would have been anti-dilutive. |
11. SUBSEQUENT EVENTS
11. SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
11. SUBSEQUENT EVENTS | Acquisition of Aventine Kinergy Operating Line of Credit · Extended the term and maturity date of the credit facility from December 31, 2016 to December 31, 2020; · Increased the maximum credit under the credit facility from $30,000,000 to $75,000,000, with an accordion feature to further increase the maximum credit under the credit facility to up to $100,000,000 in minimum increments of $5,000,000 each, upon Kinergys request, but subject to the consent of the agent and the lenders in their sole discretion. · Increased the inventory loan limit under the credit facility from $12,500,000 to $40,000,000 and increased the letter of credit limit under the credit facility from $5,000,000 to $20,000,000; · Reduced the applicable margin to 1.75% to 2.75% depending on the quarterly average amounts available for borrowing and reduced the unused line fee under the credit facility to an annual rate equal to 0.25% to 0.375% depending on the average daily principal balance during the immediately preceding month; and · Deleted the financial covenant concerning Kinergys EBITDA but retained financial covenants concerning its fixed-charge coverage ratios. Aurora Coop Settlement |
1. ORGANIZATION AND BASIS OF 17
1. ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Organization and Business | Organization and Business The Company is a leading producer and marketer of low-carbon renewable fuels in the United States. The Companys four ethanol plants in the Western United States are located in close proximity to both feed and ethanol customers and thus enjoy unique advantages in efficiency, logistics and product pricing. These plants produce among the lowest-carbon ethanol produced in the United States due to low energy use in production. With the addition of four Midwestern ethanol plants in July 2015 as a result of the Companys acquisition of Aventine, the Company now has a combined ethanol production capacity of 515 million gallons per year, markets, on an annualized basis, over 800 million gallons of ethanol and produces, on an annualized basis, over 1 million tons of co-products such as wet and dry distillers grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, distillers yeast and CO 2 |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivable are charged against the allowance for doubtful accounts once uncollectibility has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Companys success in contacting and negotiating with the customer. If the financial condition of the Companys customers were to deteriorate, resulting in an impairment of ability to make payments, additional allowances may be required. Of the accounts receivable balance, approximately $22,322,000 and $28,475,000 at June 30, 2015 and December 31, 2014, respectively, were used as collateral under Kinergys operating line of credit. The allowance for doubtful accounts was $9,000 and $6,000 as of June 30, 2015 and December 31, 2014, respectively. The Company recorded a bad debt expense of $3,000 for the three and six months ended June 30, 2015 and a bad debt benefit of $34,000 for the six months ended June 30, 2014. The Company did not record a bad debt expense for the three months ended June 30, 2014. The Company does not have any off-balance sheet credit exposure related to its customers. |
Provision for Income Taxes | Provision for Income Taxes |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In April 2015, the FASB issued new guidance on presentation of debt issuance costs. Historically, entities have presented debt issuance costs as an asset. Under the new guidance, effective for fiscal years beginning after December 31, 2015, debt issuance costs will be reclassified as a deduction to the carrying amount of the related debt balance. The guidance does not change any of the Companys other debt recognition or disclosure. The Company will adopt the guidance beginning March 31, 2016. |
Basis of Presentation-Interim Financial Statements | Basis of Presentation Interim Financial Statements The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates are required as part of determining the fair value of warrants and conversion features, allowance for doubtful accounts, estimated lives of property and equipment and intangibles, long-lived asset impairments, valuation allowances on deferred income taxes and the potential outcome of future tax consequences of events recognized in the Companys financial statements or tax returns. Actual results and outcomes may materially differ from managements estimates and assumptions. |
3. ACQUISITION OF AVENTINE (Tab
3. ACQUISITION OF AVENTINE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisition purchase price consideration | Cash and equivalents $ 18,800 Accounts receivables 10,100 Other current assets 30,800 Total current assets 59,700 Property and equipment 306,800 Other assets 800 Total assets acquired $ 367,300 Accounts payable, trade $ 19,900 Other current liabilities 9,800 Total current liabilities 29,700 Long-term debt - revolvers 13,700 Long-term debt - term debt 145,600 Other non-current liabilities 41,000 Total liabilities assumed $ 230,000 Net assets acquired $ 137,300 Estimated goodwill $ 37,300 Total purchase price $ 174,600 |
Unaudited pro forma information on acquisition | Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Revenues pro forma $ 390,224 $ 466,599 $ 727,337 $ 838,475 Net income (loss) pro forma $ (9,428 ) $ 26,153 $ (28,768 ) $ 5,022 Diluted net income (loss) per share pro forma $ (0.22 ) $ 0.65 $ (0.68 ) $ 0.13 Diluted weighted-average shares pro forma 42,596 40,035 42,348 38,273 |
4. INVENTORIES (Tables)
4. INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | June 30, 2015 December 31, 2014 Finished goods $ 12,508 $ 11,118 Raw materials 1,854 2,695 Work in progress 3,087 3,274 Other 1,422 1,463 Total $ 18,871 $ 18,550 |
5. DERIVATIVES (Tables)
5. DERIVATIVES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives not designated as hedging instruments | Realized Gains Three Months Ended June 30, Type of Instrument Statements of Operations Location 2015 2014 Commodity contracts Cost of goods sold $ 264 $ 465 $ 264 $ 465 Unrealized Losses Three Months Ended June 30, Type of Instrument Statements of Operations Location 2015 2014 Commodity contracts Cost of goods sold $ (552 ) $ (17 ) $ (552 ) $ (17 ) Realized Gains Six Months Ended June 30, Type of Instrument Statements of Operations Location 2015 2014 Commodity contracts Cost of goods sold $ 149 $ 549 $ 149 $ 549 Unrealized Losses Six Months Ended June 30, Type of Instrument Statements of Operations Location 2015 2014 Commodity contracts Cost of goods sold $ (626 ) $ (32 ) $ (626 ) $ (32 ) |
6. DEBT (Tables)
6. DEBT (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long Term Debt | June 30, 2015 December 31, 2014 Kinergy operating line of credit $ 8,556 $ 17,530 Plant Owners third-party term debt 17,003 17,003 25,559 34,533 Less short-term portion Long-term debt $ 25,559 $ 34,533 |
9. FAIR VALUE MEASUREMENTS (Tab
9. FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Assumptions used and related fair value for conversion feature | Significant assumptions used and related fair values for the warrants as of June 30, 2015 were as follows: Original Issuance Exercise Price Volatility Risk Free Interest Rate Term (years) Market Discount Warrants Outstanding Fair Value 09/26/2012 $ 8.85 38.7% 0.01% 0.24 27.5% 432,000 $ 527,000 07/3/2012 $ 6.09 48.8% 0.64% 2.01 26.2% 211,000 795,000 12/13/2011 $ 8.43 49.4% 0.46% 1.46 23.0% 138,000 381,000 $ 1,703,000 Significant assumptions used and related fair values for the warrants as of December 31, 2014 were as follows: Original Issuance Exercise Price Volatility Risk Free Interest Rate Term (years) Market Discount Warrants Outstanding Fair Value 09/26/2012 $ 8.85 51.0% 0.19% 0.74 37.0% 473,000 $ 748,000 07/3/2012 $ 6.09 56.1% 0.89% 2.51 32.8% 211,000 811,000 12/13/2011 $ 8.43 54.3% 0.67% 1.95 28.7% 138,000 427,000 $ 1,986,000 |
Summary of fair value measurements by level | The following table summarizes fair value measurements by level at June 30, 2015 (in thousands): Level 1 Level 2 Level 3 Total Assets: Commodity contracts (1) $ 180 $ $ $ 180 Total Assets $ 180 $ $ $ 180 Liabilities: Warrants (2) $ $ $ 1,703 $ 1,703 Commodity contracts (3) 369 369 Total Liabilities $ 369 $ $ 1,703 $ 2,072 __________ (1) Included in other current assets in the consolidated balance sheets. (2) Included in warrant liabilities at fair value in the consolidated balance sheets. (3) Included in accrued liabilities in the consolidated balance sheets. The following table summarizes fair value measurements by level at December 31, 2014 (in thousands): Level 1 Level 2 Level 3 Total Assets: Commodity contracts (1) $ 1,586 $ $ $ 1,586 Total Assets $ 1,586 $ $ $ 1,586 Liabilities: Warrants (2) $ $ $ 1,986 $ 1,986 Commodity contracts (3) 1,149 1,149 Total Liabilities $ 1,149 $ $ 1,986 $ 3,135 __________ (1) Included in other current assets in the consolidated balance sheets. (2) Included in warrant liabilities at fair value in the consolidated balance sheets. (3) Included in accrued liabilities in the consolidated balance sheets. |
Changes in fair value of Level 3 inputs | The changes in the Companys fair value of its Level 3 inputs with respect to its warrants were as follows (in thousands): Balance, December 31, 2014 $ 1,986 Exercises of warrants (72 ) Adjustments to fair value for the period (211 ) Balance, June 30, 2015 $ 1,703 |
10. EARNINGS PER SHARE (Tables)
10. EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | Three Months Ended June 30, 2015 Income Numerator Shares Denominator Per-Share Amount Net income attributed to Pacific Ethanol $ 1,010 Less: Preferred stock dividends (315 ) Basic income per share: Income available to common stockholders $ 695 24,268 $ 0.03 Add: Warrants 569 Diluted income per share: Income available to common stockholders $ 695 24,837 $ 0.03 Three Months Ended June 30, 2014 Income Numerator Shares Denominator Per-Share Amount Net income attributed to Pacific Ethanol $ 15,572 Less: Preferred stock dividends (315 ) Basic income per share: Income available to common stockholders $ 15,257 19,903 $ 0.77 Add: Warrants 2,373 Diluted income per share: Income available to common stockholders $ 15,257 22,276 $ 0.68 Six Months Ended June 30, 2015 Loss Numerator Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol $ (3,370 ) Less: Preferred stock dividends (627 ) Basic and diluted loss per share: Loss available to common stockholders $ (3,997 ) 24,589 $ (0.16 ) Six Months Ended June 30, 2014 Income Numerator Shares Denominator Per-Share Amount Net income attributed to Pacific Ethanol $ 4,746 Less: Preferred stock dividends (627 ) Basic income per share: Income available to common stockholders $ 4,119 18,053 $ 0.23 Add: Warrants 2,461 Diluted income per share: Income available to common stockholders $ 4,119 20,514 $ 0.20 |
1. ORGANIZATION AND BASIS OF 24
1. ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accounts receivable used as collateral | $ 22,322 | $ 28,475 | |
Allowance for doubtful accounts | 9 | $ 6 | |
Bad debt recovery (expense) | (3) | $ 34 | |
Gross provision for income taxes | $ 10,500 | ||
Effective tax rates | 38.60% | 56.20% |
2. PACIFIC ETHANOL WEST PLANTS
2. PACIFIC ETHANOL WEST PLANTS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Accrued payment for ownership positions in PE Op Co. | $ 3,828 | $ 0 | |||
Loss attributed to noncontrolling interest | $ 42 | $ 1,394 | (87) | $ 3,403 | |
PE Op Co | |||||
Noncontrolling interest | $ 0 | 0 | $ 4,475 | ||
Accrued payment for ownership positions in PE Op Co. | 3,828 | ||||
Reduction of noncontrolling interest | $ 4,388 |
3. ACQUISITION OF AVENTINE (Det
3. ACQUISITION OF AVENTINE (Details - Purchase allocation) - Jun. 30, 2015 - Aventine - USD ($) $ in Thousands | Total |
Cash and equivalents | $ 18,800 |
Accounts receivables | 10,100 |
Other current assets | 30,800 |
Total current assets | 59,700 |
Property and equipment | 306,800 |
Other assets | 800 |
Total assets acquired | 367,300 |
Accounts payable, trade | 19,900 |
Other current liabilities | 9,800 |
Total current liabilities | 29,700 |
Long-term debt - revolvers | 13,700 |
Long-term debt - term debt | 145,600 |
Other non-current liabilities | 41,000 |
Total liabilities assumed | 230,000 |
Net assets acquired | 137,300 |
Estimated goodwill | 37,300 |
Total purchase price | $ 174,600 |
3. ACQUISITION OF AVENTINE (D27
3. ACQUISITION OF AVENTINE (Details - Pro forma) - Aventine - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues - pro forma | $ 390,224 | $ 466,599 | $ 727,337 | $ 838,475 |
Net income (loss) - pro forma | $ (9,428) | $ 26,153 | $ (28,768) | $ 5,022 |
Diluted net income (loss) per share - pro forma | $ (0.22) | $ 0.65 | $ (0.68) | $ 0.13 |
Diluted weighted-average shares - pro forma | 42,596,000 | 40,035,000 | 42,348,000 | 38,273,000 |
3. ACQUISITION OF AVENTINE (D28
3. ACQUISITION OF AVENTINE (Details Narrative) - Jun. 30, 2015 - USD ($) $ in Thousands | Total | Total |
Aventine | ||
Costs associated with acquisition | $ 300 | $ 1,200 |
4. INVENTORIES (Details)
4. INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory balances | ||
Finished goods | $ 12,508 | $ 11,118 |
Raw materials | 1,854 | 2,695 |
Work in progress | 3,087 | 3,274 |
Other | 1,422 | 1,463 |
Total | $ 18,871 | $ 18,550 |
5. DERIVATIVES (Details)
5. DERIVATIVES (Details) - Commodity contracts [Member] - Non Designated Derivative Instruments [Member] - Cost of goods sold [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Realized Gains (Losses) | $ 264 | $ 465 | $ 149 | $ 549 |
Unrealized Gains (Losses) | $ (552) | $ (17) | $ (626) | $ (32) |
6. DEBT (Details - Long term bo
6. DEBT (Details - Long term borrowings) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Long-term borrowings are summarized as follows | ||
Total debt | $ 25,559 | $ 34,533 |
Less short-term portion | 0 | 0 |
Long-term debt | 25,559 | 34,533 |
Line of Credit [Member] | Kinergy [Member] | ||
Long-term borrowings are summarized as follows | ||
Line of credit | 8,556 | 17,530 |
Line of Credit [Member] | Plant Owners | ||
Long-term borrowings are summarized as follows | ||
Line of credit | $ 17,003 | $ 17,003 |
6. DEBT (Details Narrative)
6. DEBT (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2015 | Jun. 30, 2015 | |
Kinergy [Member] | ||
Line of credit balance | $ 8,556 | |
Maximum borrowing base | 30,000 | |
Maturity date | Dec. 31, 2016 | |
Plant Owners | ||
Line of credit balance | 17,003 | |
Maximum borrowing base | $ 19,473 |
7. COMMON STOCK AND WARRANTS (D
7. COMMON STOCK AND WARRANTS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Stockholders' Equity Note [Abstract] | ||||
Warrants exercised, shares received | 20,000 | 1,250,300 | 42,000 | 3,138,000 |
Warrants exercised, cash received | $ 177 | $ 6,110 | $ 368 | $ 18,240 |
Cash inducements paid | $ 800 | |||
Warrants exercised on a cashless basis | 291,000 |
8. COMMITMENTS AND CONTINGENC34
8. COMMITMENTS AND CONTINGENCIES (Details Narrative) - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total |
Ethanol [Member] | |
Purchase commitments | $ 3,735 |
Indexed-price purchase contracts | 29,552,000 gallons |
Ethanol contracts | |
Sales commitments | $ 2,653 |
Indexed-price contracts to sell | 180,395,000 gallons |
Co-Products [Member] | |
Sales commitments | $ 2,020 |
Indexed-price contracts to sell | 61,000 tons |
9. FAIR VALUE MEASUREMENTS (Det
9. FAIR VALUE MEASUREMENTS (Details-Significant Assumptions and Fair Value) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Significant assumptions used in the valuations | ||
Fair value (in dollars) | $ 1,703 | $ 1,986 |
Original Issuance 09/26/2012 | ||
Significant assumptions used in the valuations | ||
Exercise price | $ 8.85 | $ 8.85 |
Volatility | 38.70% | 51.00% |
Risk free interest rate | 0.01% | 0.19% |
Term (years) | 2 months 26 days | 8 months 26 days |
Discount for Marketability restrictions | 27.50% | 37.00% |
Warrants Outstanding | 432,000 | 473,000 |
Fair value (in dollars) | $ 527 | $ 748 |
Original issuance 7/3/2012 | ||
Significant assumptions used in the valuations | ||
Exercise price | $ 6.09 | $ 6.09 |
Volatility | 48.80% | 56.10% |
Risk free interest rate | 0.64% | 0.89% |
Term (years) | 2 years 4 days | 2 years 6 months 4 days |
Discount for Marketability restrictions | 26.20% | 32.80% |
Warrants Outstanding | 211,000 | 211,000 |
Fair value (in dollars) | $ 795 | $ 811 |
Original issuance 12/13/2011 | ||
Significant assumptions used in the valuations | ||
Exercise price | $ 8.43 | $ 8.43 |
Volatility | 49.40% | 54.30% |
Risk free interest rate | 0.46% | 0.67% |
Term (years) | 1 year 5 months 16 days | 1 year 11 months 12 days |
Discount for Marketability restrictions | 23.00% | 28.70% |
Warrants Outstanding | 138,000 | 138,000 |
Fair value (in dollars) | $ 381 | $ 427 |
9. FAIR VALUE MEASUREMENTS (D36
9. FAIR VALUE MEASUREMENTS (Details-Fair value measurements) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Assets: | ||
Assets | $ 180 | $ 1,586 |
Liabilities: | ||
Liabilities | 2,072 | 3,135 |
Commodity contracts [Member] | ||
Assets: | ||
Assets | 180 | 1,586 |
Liabilities: | ||
Liabilities | 369 | 1,149 |
Warrants [Member] | ||
Liabilities: | ||
Liabilities | 1,703 | 1,986 |
Level 1 [Member] | ||
Assets: | ||
Assets | 180 | 1,586 |
Liabilities: | ||
Liabilities | 369 | 1,149 |
Level 1 [Member] | Commodity contracts [Member] | ||
Assets: | ||
Assets | 180 | 1,586 |
Liabilities: | ||
Liabilities | 369 | 1,149 |
Level 1 [Member] | Warrants [Member] | ||
Liabilities: | ||
Liabilities | 0 | 0 |
Level 2 [Member] | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Level 2 [Member] | Commodity contracts [Member] | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Level 2 [Member] | Warrants [Member] | ||
Liabilities: | ||
Liabilities | 0 | 0 |
Level 3 [Member] | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 1,703 | 1,986 |
Level 3 [Member] | Commodity contracts [Member] | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Level 3 [Member] | Warrants [Member] | ||
Liabilities: | ||
Liabilities | $ 1,703 | $ 1,986 |
9. FAIR VALUE MEASUREMENTS (D37
9. FAIR VALUE MEASUREMENTS (Details-Level 3) - Level 3 [Member] - Warrants [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning Balance | $ 1,986 |
Exercises of warrants | (72) |
Adjustments to fair value for the period | (211) |
Ending Balance | $ 1,703 |
10. EARNINGS PER SHARE (Details
10. EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Loss Numerator | ||||
Net income (loss) attributed to Pacific Ethanol, Inc. | $ 1,010 | $ 15,572 | $ (3,370) | $ 4,746 |
Less: Preferred stock dividends | (315) | (315) | (627) | (627) |
Basic income (loss) per share: | ||||
Income (loss) available to common stockholders | $ 695 | $ 15,257 | $ (3,997) | $ 4,119 |
Shares available to common stockholders | 24,268 | 19,903 | 24,589 | 18,053 |
Add: Warrants | 569 | 2,373 | 0 | 2,461 |
Diluted shares available to common stockholders | 24,837 | 22,276 | 24,589 | 20,514 |
Income available to common stockholders, per share basic | $ .03 | $ .77 | $ (.16) | $ .23 |
Income available to common stockholders, per share diluted | $ .03 | $ .68 | $ (.16) | $ 0.20 |
10. EARNINGS PER SHARE (Detai39
10. EARNINGS PER SHARE (Details Narrative) - Jun. 30, 2015 - shares | Total | Total |
Dilutive securities | ||
Potentially dilutive weighted-average shares from convertible securities not considered in calculation of diluted shares | 669,000 | 1,180,000 |