Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 05, 2016 | |
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, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 39,617,328 | |
Trading Symbol | PEIX | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 31,673 | $ 52,712 |
Accounts receivable, net (net of allowance for doubtful accounts of $311 and $25, respectively) | 71,946 | 61,346 |
Inventories | 65,928 | 60,820 |
Prepaid inventory | 10,319 | 5,973 |
Income tax receivables | 6,114 | 10,654 |
Derivative Instruments | 13,299 | 2,081 |
Other current assets | 4,055 | 4,356 |
Total current assets | 203,334 | 197,942 |
Property and equipment, net | 454,775 | 464,960 |
Other Assets: | ||
Intangible assets, net | 2,678 | 2,678 |
Other assets | 4,933 | 9,100 |
Total other assets | 7,611 | 11,778 |
Total Assets | 665,720 | 674,680 |
Current Liabilities: | ||
Accounts payable - trade | 23,844 | 30,520 |
Accrued liabilities | 15,156 | 10,072 |
Current portion - capital leases | 4,431 | 4,248 |
Current portion - long-term debt | 0 | 17,003 |
Derivative instruments | 12,166 | 1,848 |
Accrued PE Op Co. purchase | 3,828 | 3,828 |
Other current liabilities | 6,026 | 5,390 |
Total current liabilities | 65,451 | 72,909 |
Long-term debt, net of current portion | 215,041 | 203,861 |
Capital leases, net of current portion | 1,921 | 4,183 |
Warrant liabilities at fair value | 257 | 273 |
Deferred tax liabilities | 1,174 | 1,174 |
Other liabilities | 18,261 | 20,736 |
Total Liabilities | 302,105 | 303,136 |
Commitments and Contingencies (Note 7) | ||
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, 2016 and December 31, 2015; | 1 | 1 |
Common stock, $0.001 par value; 300,000,000 shares authorized; 39,617,328 and 38,974,972 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively | 40 | 39 |
Non-voting common stock, $0.001 par value; 3,553,000 shares authorized; 3,540,132 shares issued and outstanding as of June 30, 2016 and December 31, 2015 | 4 | 4 |
Additional paid-in capital | 903,683 | 902,843 |
Accumulated other comprehensive income | 1,040 | 1,040 |
Accumulated deficit | (541,153) | (532,383) |
Total Stockholders' Equity | 363,615 | 371,544 |
Total Liabilities and Stockholders' Equity | $ 665,720 | $ 674,680 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Accounts receivable, net of allowance | $ 311 | $ 25 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Liquidation preference | $ 18,075 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 39,617,628 | 38,974,972 |
Common stock, shares outstanding | 39,617,628 | 38,974,972 |
Nonvoting Common Stock [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 3,553,000 | 3,553,000 |
Common stock, shares issued | 3,540,132 | 3,540,132 |
Common stock, shares outstanding | 3,540,132 | 3,540,132 |
Series A Preferred Stock [Member] | ||
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 [Member] | ||
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 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 422,860 | $ 227,621 | $ 765,233 | $ 433,797 |
Cost of goods sold | 405,156 | 221,367 | 746,460 | 428,530 |
Gross profit | 17,704 | 6,254 | 18,773 | 5,267 |
Selling, general and administrative expenses | 6,148 | 3,993 | 14,465 | 8,898 |
Income (loss) from operations | 11,556 | 2,261 | 4,308 | (3,631) |
Fair value adjustments and warrant inducements | (24) | 384 | 16 | 211 |
Interest expense, net | (6,536) | (1,005) | (12,769) | (2,020) |
Other income (expense), net | (155) | (58) | 60 | (187) |
Income (loss) before provision for income taxes | 4,841 | 1,582 | (8,385) | (5,627) |
Provision (benefit) for income taxes | (245) | 530 | (245) | (2,170) |
Consolidated net income (loss) | 5,086 | 1,052 | (8,140) | (3,457) |
Net income (loss) attributed to noncontrolling interests | 0 | (42) | 0 | 87 |
Net income (loss) attributed to Pacific Ethanol, Inc. | 5,086 | 1,010 | (8,140) | (3,370) |
Preferred stock dividends | (315) | (315) | (630) | (627) |
Income allocated to participating securities | (71) | (18) | 0 | 0 |
Income (loss) available to common stockholders | $ 4,700 | $ 677 | $ (8,770) | $ (3,997) |
Net income (loss) per share, basic | $ .11 | $ .03 | $ (.21) | $ (.16) |
Net income (loss) per share, diluted | $ 0.11 | $ 0.03 | $ (0.21) | $ (0.16) |
Weighted-average shares outstanding, basic | 42,191,000 | 24,268,000 | 42,121,000 | 24,589,000 |
Weighted-average shares outstanding, diluted | 42,229,000 | 24,837,000 | 42,121,000 | 24,589,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating Activities: | ||
Consolidated net loss | $ (8,140) | $ (3,457) |
Adjustments to reconcile consolidated net loss to net cash provided by operating activities: | ||
Depreciation and amortization of intangibles | 17,670 | 6,748 |
Interest expense added to term debt | 9,451 | 0 |
Fair value adjustments | (16) | (211) |
Amortization of debt discount | 610 | 99 |
Amortization of deferred financing fees | 75 | 121 |
Non-cash compensation | 1,181 | 915 |
Loss (gain) on derivative instruments | (809) | 477 |
Bad debt expense | 286 | 3 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (10,886) | 6,018 |
Inventories | (5,108) | (321) |
Prepaid expenses and other assets | 4,909 | (1,506) |
Prepaid inventory | (4,346) | 3,581 |
Accounts payable and accrued expenses | (3,771) | (1,100) |
Net cash provided by operating activities | 1,106 | 11,367 |
Investing Activities: | ||
Additions to property and equipment | (7,485) | (12,166) |
Proceeds from cash collateralized letters of credit | 4,010 | 0 |
Net cash used in investing activities | (3,475) | (12,166) |
Financing Activities: | ||
Net proceeds from (payments on) Kinergy's line of credit | 1,042 | (8,974) |
Principal payments on borrowings | (17,003) | 0 |
Principal payments on capital leases | (2,079) | (2,790) |
Proceeds from exercise of warrants | 0 | 368 |
Preferred stock dividends paid | (630) | (627) |
Net cash used in financing activities | (18,670) | (12,023) |
Net decrease in cash and cash equivalents | (21,039) | (12,822) |
Cash and cash equivalents at beginning of period | 52,712 | 62,084 |
Cash and cash equivalents at end of period | 31,673 | 49,262 |
Supplemental Information: | ||
Interest paid | 2,595 | 1,911 |
Income tax refunds received | 4,784 | 0 |
Noncash financing and investing activities | ||
Reclass of warrant liability to equity upon warrant exercises | 0 | 72 |
Reclass of noncontrolling interests to APIC upon acquisitions of ownership positions in PE Op Co. | 0 | 560 |
Accrued payment for ownership positions in PE Op Co. | $ 0 | $ 3,828 |
1. Organization and Basis of Pr
1. Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Business The Companys acquisition of Aventine Renewable Energy Holdings, Inc. (now, Pacific Ethanol Central, LLC, a Delaware limited liability company, Aventine) was consummated on July 1, 2015, and as a result, the Companys accompanying consolidated financial statements include the results of Aventine only as of and for the three and six months ended June 30, 2016. 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 (together with their respective holding companies, the Pacific Ethanol West Plants) 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 over 800 million gallons of ethanol, on an annualized basis, and produces over one 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 $63,330,000 and $42,049,000 at June 30, 2016 and December 31, 2015, respectively, were used as collateral under Kinergys operating line of credit. The allowance for doubtful accounts was $311,000 and $25,000 as of June 30, 2016 and December 31, 2015, respectively. The Company recorded a bad debt expense of $30,000 and $286,000 for the three and six months ended June 30, 2016, respectively, and a bad debt expense of $3,000 for the three and six months ended June 30, 2015. The Company does not have any off-balance sheet credit exposure related to its customers. Provision for Income Taxes Financial Instruments Reclassifications Recent Accounting Pronouncements In May 2014, the FASB issued new guidance on the recognition of revenue. The guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard was originally effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, but has been further deferred one year. The Companys adoption begins with the first fiscal quarter of fiscal year 2018. In March and April 2016, the FASB issued further revenue recognition guidance amending principal vs. agent considerations whether an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The Company is currently evaluating the impact of the adoption of this accounting standard update on its consolidated results of operations and financial condition. In September 2015, the FASB issued new guidance on simplifying the accounting for measurement-period adjustments. Under the new guidance, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The guidance also requires acquirers to present separately on the face of the statement of operations or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The guidance is effective for fiscal years beginning after December 31, 2015, applied prospectively. Early adoption is permitted. The Company will adopt the guidance as to future acquisitions. In April 2016, the FASB issued new guidance to reduce the complexity of certain aspects of accounting for employee share-based payment transactions. Currently, accruals of compensation costs are based on an estimated forfeiture rate. The new guidance allows an entity to make an entity-wide accounting policy election to either continue using an estimate of forfeitures or account for forfeitures only when they occur. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the impact of the guidance on its consolidated results of operations and financial condition. 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 have been 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. On January 1, 2016, the Company adopted this guidance for all periods presented on the consolidated balance sheets. The impact of the adoption was a reclassification of other assets to long-term debt, net of current portion of $386,000 and $462,000 as of June 30, 2016 and December 31, 2015, respectively. Basis of Presentation Interim Financial Statements Use of Estimates |
2. Segments
2. Segments | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segments | The Company reports its financial and operating performance in two segments: (1) ethanol production, which includes the production and sale of ethanol and co-products, with all eight of the Companys production facilities aggregated, and (2) marketing and distribution, which includes marketing and merchant trading for Company-produced ethanol and co-products and third-party ethanol. The following tables set forth certain financial data for the Companys operating segments (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Net Sales Ethanol Production: Net sales to external customers $ 271,630 $ 108,960 $ 500,871 $ 207,957 Intersegment net sales 260 85 523 85 Total production segment sales 271,890 109,045 501,394 208,042 Marketing and distribution: Net sales to external customers 151,230 118,661 264,362 225,840 Intersegment net sales 2,091 836 3,843 1,571 Total marketing and distribution net sales 153,321 119,497 268,205 227,411 Intersegment eliminations (2,351 ) (921 ) (4,366 ) (1,656 ) Net sales as reported $ 422,860 $ 227,621 $ 765,233 $ 433,797 Cost of goods sold: Ethanol production $ 260,237 $ 105,623 $ 496,246 $ 207,160 Marketing and distribution 149,521 118,522 258,819 226,581 Intersegment eliminations (4,602 ) (2,778 ) (8,605 ) (5,211 ) Cost of goods sold as reported $ 405,156 $ 221,367 $ 746,460 $ 428,530 Income (loss) before provision for income taxes: Ethanol production $ 794 $ 1,013 $ (16,330 ) $ (4,199 ) Marketing and distribution 2,209 (516 ) 6,178 (2,131 ) Corporate activities 1,838 1,085 1,767 703 $ 4,841 $ 1,582 $ (8,385 ) $ (5,627 ) Depreciation and amortization: Ethanol production $ 8,793 $ 3,206 $ 17,209 $ 6,390 Marketing and distribution 15 3 142 Corporate activities 225 119 458 216 $ 9,018 $ 3,340 $ 17,670 $ 6,748 Interest expense: Ethanol production $ 6,180 $ 922 $ 12,080 $ 1,844 Marketing and distribution 356 83 689 176 Corporate activities $ 6,536 $ 1,005 $ 12,769 $ 2,020 The following table sets forth the Companys total assets by operating segment (in thousands): June 30, 2016 December 31, 2015 Total assets: Ethanol production $ 523,652 $ 536,013 Marketing and distribution 130,689 107,069 Corporate assets 11,379 31,598 $ 665,720 $ 674,680 |
3. Inventories
3. Inventories | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted primarily of bulk ethanol, corn, co-products, Low-Carbon Fuel Standard (LCFS) credits and unleaded fuel, and are valued at the lower-of-cost-or-net realizable value, with cost determined on a first-in, first-out basis. Included in inventory is a $1.5 million valuation adjustment as of June 30, 2016. Inventory balances consisted of the following (in thousands): June 30, 2016 December 31, 2015 Finished goods $ 35,543 $ 31,153 LCFS credits 12,830 6,957 Raw materials 8,678 9,891 Work in progress 7,235 11,121 Other 1,642 1,698 Total $ 65,928 $ 60,820 |
4. Derivatives
4. Derivatives | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | The business and activities of the Company expose it to a variety of market risks, including risks related to changes in commodity prices. 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 Non Designated Derivative Instruments As of June 30, 2016 Assets Liabilities Type of Instrument Balance Sheet Location Fair Balance Sheet Location Fair Commodity contracts Derivative instruments $ 13,299 Derivative instruments $ 12,166 $ 13,299 $ 12,166 As of December 31, 2015 Assets Liabilities Type of Instrument Balance Sheet Location Fair Balance Sheet Location Fair Commodity contracts Derivative instruments $ 2,081 Derivative instruments $ 1,848 $ 2,081 $ 1,848 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 (Losses) Three Months Ended June 30, Type of Instrument Statements of Operations Location 2016 2015 Commodity contracts Cost of goods sold $ (999 ) $ 264 $ (999 ) $ 264 Unrealized Gains (Losses) Three Months Ended June 30, Type of Instrument Statements of Operations Location 2016 2015 Commodity contracts Cost of goods sold $ 1,227 $ (552 ) $ 1,227 $ (552 ) Realized Gains (Losses) Six Months Ended June 30, Type of Instrument Statements of Operations Location 2016 2015 Commodity contracts Cost of goods sold $ (91 ) $ 149 $ (91 ) $ 149 Unrealized Gains (Losses) Six Months Ended June 30, Type of Instrument Statements of Operations Location 2016 2015 Commodity contracts Cost of goods sold $ 900 $ (626 ) $ 900 $ (626 ) |
5. Debt
5. Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Long-term borrowings are summarized as follows (in thousands): June 30, 2016 December 31, 2015 Kinergy operating line of credit $ 62,045 $ 61,003 Plant term debt 155,070 162,622 217,115 223,625 Less unamortized discount (1,688 ) (2,299 ) Less unamortized debt financing costs (386 ) (462 ) Less short-term portion (17,003 ) Long-term debt $ 215,041 $ 203,861 Kinergy Operating Line of Credit Plant Term Debt For the three and six months ended June 30, 2016, the Pacific Ethanol Central Plants elected to defer interest payments on their term debt in the aggregate amount of $5,665,000 and $9,451,000, which was added to the outstanding term debt balance. At June 30, 2016, there were approximately $135.2 million of net assets of the Companys subsidiaries that were not available to be transferred to the parent company in the form of dividends, loans or advances due to restrictions contained in the credit facilities of these subsidiaries. |
6. Common Stock and Warrants
6. Common Stock and Warrants | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Common Stock and Warrants | Stock Incentive Plan Warrant Exercises Grants of Stock |
7. Commitments and Contingencie
7. Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Sales Commitments Purchase Commitments Litigation General Pacific Ethanol, Inc., through a subsidiary acquired in its acquisition of Aventine, became involved in a pending lawsuit with Western Sugar Cooperative (Western Sugar) that pre-dated the Aventine acquisition. On February 27, 2015, Western Sugar filed a complaint in the United States District Court for the District of Colorado (Case No. 1:15-cv-00415) naming Aventine Renewable Energy, Inc. (ARE, Inc.), one of Aventines subsidiaries, as defendant. Western Sugar amended its complaint on April 21, 2015. ARE, Inc. purchased surplus sugar through a United States Department of Agriculture program. Western Sugar was one of the entities that warehoused this sugar for ARE, Inc. The suit alleges that ARE, Inc. breached its contract with Western Sugar by failing to pay certain penalty rates for the storage of its sugar or alternatively failing to pay a premium rate for storage. Western Sugar alleges that the penalty rates apply because ARE, Inc. failed to take timely delivery or otherwise cause timely shipment of the sugar. Western Sugar claims expectation damages in the amount of approximately $8.6 million. ARE, Inc. filed answers to Western Sugars complaint and amended complaint generally denying Western Sugars allegations and asserting various defenses. The discovery phase of the case has just concluded, and the Company has filed a motion for summary judgment, seeking a determination that Western Sugars claims fail as a matter of law. The Company has evaluated the above case as well as other pending cases. The Company currently has recorded $3.3 million as a litigation contingency liability with respect to these cases for amounts that are probable and estimable. |
8. Pension and Retirement Benef
8. Pension and Retirement Benefit Plans | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension and Retirement Benefit Plans | The Company, through its acquisition of Aventine, has assumed a defined benefit pension plan (the Pension Plan) and a health care and life insurance plan (the Postretirement Plan). The Pension Plan is noncontributory, and covers unionized employees at the Companys Pekin, Illinois facility, who fulfill minimum age and service requirements. Benefits are based on a prescribed formula based upon the employees years of service. The Pension Plan, part of a collective bargaining agreement, covers only Union employees hired after November 1, 2010. The Company uses a December 31 measurement date for its Pension Plan. The Companys funding policy is to make the minimum annual contributions that are required by applicable regulations. As of December 31, 2015, the Pension Plans accumulated projected benefit obligation was $16.6 million, with a fair value of plan assets of $12.6 million. The underfunded amount of $4.0 million is recorded on the Companys consolidated balance sheet in other noncurrent liabilities. For the three months ended June 30, 2016, the Pension Plans net periodic expense was $29,000, comprised of $172,000 in interest cost and $56,000 in service cost, partially offset by $199,000 of expected return on plan assets. For the six months ended June 30, 2016, the Pension Plans net periodic expense was $58,000, comprised of $344,000 in interest cost and $112,000 in service cost, partially offset by $398,000 of expected return on plan assets. The Postretirement Plan provides postretirement medical benefits and life insurance to certain grandfathered unionized employees. Employees hired after December 31, 2000 are not eligible to participate in the Postretirement Plan. The Postretirement Plan is contributory, with contributions required at the same rate as active employees. Benefit eligibility under the plan reduces at age 65 from a defined benefit to a defined collar cap based upon years of service. As of December 31, 2015, the Postretirement Plans accumulated projected benefit obligation was $3.6 million and is recorded on the Companys consolidated balance sheet in other noncurrent liabilities. The Companys funding policy is to make the minimum annual contributions that are required by applicable regulations. For the three months ended June 30, 2016, the Postretirement Plans net periodic expense was $47,000, comprised of $35,000 of interest cost and $12,000 of service cost. For the six months ended June 30, 2016, the Postretirement Plans net periodic expense was $94,000, comprised of $70,000 of interest cost and $24,000 of service cost. |
9. Fair Value Measurements
9. Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
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 records its warrants, issued from 2010 through 2013, at fair value using Level 3 inputs. Warrants Significant assumptions used and related fair values for the warrants as of June 30, 2016 were as follows: Original Issuance Exercise Price Volatility Risk Free Interest Rate Term (years) Market Discount Warrants Outstanding Fair Value 07/3/2012 $ 6.09 50.7% 0.45% 1.01 19.8% 211,000 $ 194,000 12/13/2011 $ 8.43 51.9% 0.36% 0.45 13.8% 138,000 63,000 $ 257,000 Significant assumptions used and related fair values for the warrants as of December 31, 2015 were as follows: Original Issuance Exercise Price Volatility Risk Free Interest Rate Term (years) Market Discount Warrants Outstanding Fair Value 07/3/2012 $ 6.09 49.1% 0.86% 1.51 22.9% 211,000 $ 200,000 12/13/2011 $ 8.43 48.4% 0.65% 0.95 18.3% 138,000 73,000 $ 273,000 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 recurring fair value measurements by level at June 30, 2016 (in thousands): Fair Value Level 1 Level 2 Level 3 Assets: Derivative financial instruments (1) $ 13,299 $ 13,299 $ $ $ 13,299 $ 13,299 $ $ Liabilities: Warrants (3) $ (257 ) $ $ $ (257 ) Derivative financial instruments (4) (12,166 ) (12,166 ) $ (12,423 ) $ (12,166 ) $ $ (257 ) The following table summarizes recurring fair value measurements by level at December 31, 2015 (in thousands): Fair Value Level 1 Level 2 Level 3 Assets: Derivative financial instruments (1) $ 2,081 $ 2,081 $ $ Defined benefit plan assets (2) (pooled separate accounts): Large U.S. Equity 3,662 3,662 Small/Mid U.S. Equity 1,099 1,099 International Equity 1,525 1,525 Fixed Income 6,281 6,281 $ 14,648 $ 2,081 $ 12,567 $ Liabilities: Warrants (3) $ (273 ) $ $ $ (273 ) Derivative financial instruments (4) (1,848 ) (1,848 ) $ (2,121 ) $ (1,848 ) $ $ (273 ) __________ (1) Included in derivative instruments in the consolidated balance sheets. (2) Fair values of plan assets are determined annually and therefore are not included as of June 30, 2016. For further descriptions of these assets see the Companys Form 10-K for the year ended December 31, 2015. (3) Included in warrant liabilities at fair value in the consolidated balance sheets. (4) Included in derivative instruments 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, 2015 $ 273 Adjustments to fair value for the period (16 ) Balance, June 30, 2016 $ 257 |
10. Earnings Per Share
10. Earnings Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | The following tables compute basic and diluted earnings per share (in thousands, except per share data): Three Months Ended June 30, 2016 Income Shares Per-Share Net income attributed to Pacific Ethanol $ 5,086 Less: Preferred stock dividends (315 ) Less: Income allocated to participating securities (71 ) Basic income per share: Income available to common stockholders $ 4,700 42,191 $ 0.11 Add: Options 38 Diluted income per share: Income available to common stockholders $ 4,700 42,229 $ 0.11 Three Months Ended June 30, 2015 Income Shares Per-Share Net income attributed to Pacific Ethanol $ 1,010 Less: Preferred stock dividends (315 ) Less: Income allocated to participating securities (18 ) Basic income per share: Income available to common stockholders $ 677 24,268 $ 0.03 Add: Options 569 Diluted income per share: Income available to common stockholders $ 677 24,837 $ 0.03 Six Months Ended June 30, 2016 Loss Shares Per-Share Net loss attributed to Pacific Ethanol $ (8,140 ) Less: Preferred stock dividends (630 ) Basic and diluted loss per share: Loss available to common stockholders $ (8,770 ) 42,121 $ (0.21 ) Six Months Ended June 30, 2015 Loss Shares Per-Share 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 ) There were an aggregate of 1,692,000 and 1,621,000 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, 2016, respectively. These convertible securities were not considered in calculating diluted net income (loss) per share for the six months ended June 30, 2016, as their effect would have been anti-dilutive. |
1. Organization and Basis of 16
1. Organization and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Organization and Business | Organization and Business The Companys acquisition of Aventine Renewable Energy Holdings, Inc. (now, Pacific Ethanol Central, LLC, a Delaware limited liability company, Aventine) was consummated on July 1, 2015, and as a result, the Companys accompanying consolidated financial statements include the results of Aventine only as of and for the three and six months ended June 30, 2016. 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 (together with their respective holding companies, the Pacific Ethanol West Plants) 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 over 800 million gallons of ethanol, on an annualized basis, and produces over one 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 $63,330,000 and $42,049,000 at June 30, 2016 and December 31, 2015, respectively, were used as collateral under Kinergys operating line of credit. The allowance for doubtful accounts was $311,000 and $25,000 as of June 30, 2016 and December 31, 2015, respectively. The Company recorded a bad debt expense of $30,000 and $286,000 for the three and six months ended June 30, 2016, respectively, and a bad debt expense of $3,000 for the three and six months ended June 30, 2015. The Company does not have any off-balance sheet credit exposure related to its customers. |
Provision for Income Taxes | Provision for Income Taxes |
Financial Instruments | Financial Instruments |
Reclassifications | Reclassifications |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued new guidance on the recognition of revenue. The guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard was originally effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, but has been further deferred one year. The Companys adoption begins with the first fiscal quarter of fiscal year 2018. In March and April 2016, the FASB issued further revenue recognition guidance amending principal vs. agent considerations whether an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The Company is currently evaluating the impact of the adoption of this accounting standard update on its consolidated results of operations and financial condition. In September 2015, the FASB issued new guidance on simplifying the accounting for measurement-period adjustments. Under the new guidance, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The guidance also requires acquirers to present separately on the face of the statement of operations or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The guidance is effective for fiscal years beginning after December 31, 2015, applied prospectively. Early adoption is permitted. The Company will adopt the guidance as to future acquisitions. In April 2016, the FASB issued new guidance to reduce the complexity of certain aspects of accounting for employee share-based payment transactions. Currently, accruals of compensation costs are based on an estimated forfeiture rate. The new guidance allows an entity to make an entity-wide accounting policy election to either continue using an estimate of forfeitures or account for forfeitures only when they occur. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the impact of the guidance on its consolidated results of operations and financial condition. 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 have been 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. On January 1, 2016, the Company adopted this guidance for all periods presented on the consolidated balance sheets. The impact of the adoption was a reclassification of other assets to long-term debt, net of current portion of $386,000 and $462,000 as of June 30, 2016 and December 31, 2015, respectively. |
Basis of Presentation-Interim Financial Statements | Basis of Presentation Interim Financial Statements |
Use of Estimates | Use of Estimates |
2. Segments (Tables)
2. Segments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Financial Date for Operating Segments | Three Months Ended Six Months Ended 2016 2015 2016 2015 Net Sales Ethanol Production: Net sales to external customers $ 271,630 $ 108,960 $ 500,871 $ 207,957 Intersegment net sales 260 85 523 85 Total production segment sales 271,890 109,045 501,394 208,042 Marketing and distribution: Net sales to external customers 151,230 118,661 264,362 225,840 Intersegment net sales 2,091 836 3,843 1,571 Total marketing and distribution net sales 153,321 119,497 268,205 227,411 Intersegment eliminations (2,351 ) (921 ) (4,366 ) (1,656 ) Net sales as reported $ 422,860 $ 227,621 $ 765,233 $ 433,797 Cost of goods sold: Ethanol production $ 260,237 $ 105,623 $ 496,246 $ 207,160 Marketing and distribution 149,521 118,522 258,819 226,581 Intersegment eliminations (4,602 ) (2,778 ) (8,605 ) (5,211 ) Cost of goods sold as reported $ 405,156 $ 221,367 $ 746,460 $ 428,530 Income (loss) before provision for income taxes: Ethanol production $ 794 $ 1,013 $ (16,330 ) $ (4,199 ) Marketing and distribution 2,209 (516 ) 6,178 (2,131 ) Corporate activities 1,838 1,085 1,767 703 $ 4,841 $ 1,582 $ (8,385 ) $ (5,627 ) Depreciation and amortization: Ethanol production $ 8,793 $ 3,206 $ 17,209 $ 6,390 Marketing and distribution 15 3 142 Corporate activities 225 119 458 216 $ 9,018 $ 3,340 $ 17,670 $ 6,748 Interest expense: Ethanol production $ 6,180 $ 922 $ 12,080 $ 1,844 Marketing and distribution 356 83 689 176 Corporate activities $ 6,536 $ 1,005 $ 12,769 $ 2,020 |
Schedule of Assets by Operating Segments | June 30, 2016 December 31, 2015 Total assets: Ethanol production $ 523,652 $ 536,013 Marketing and distribution 130,689 107,069 Corporate assets 11,379 31,598 $ 665,720 $ 674,680 |
3. Inventories (Tables)
3. Inventories (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | June 30, 2016 December 31, 2015 Finished goods $ 35,543 $ 31,153 LCFS credits 12,830 6,957 Raw materials 8,678 9,891 Work in progress 7,235 11,121 Other 1,642 1,698 Total $ 65,928 $ 60,820 |
4. Derivatives (Tables)
4. Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivatives Not Designated as Hedging Instruments | As of June 30, 2016 Assets Liabilities Type of Instrument Balance Sheet Location Fair Balance Sheet Location Fair Commodity contracts Derivative instruments $ 13,299 Derivative instruments $ 12,166 $ 13,299 $ 12,166 As of December 31, 2015 Assets Liabilities Type of Instrument Balance Sheet Location Fair Balance Sheet Location Fair Commodity contracts Derivative instruments $ 2,081 Derivative instruments $ 1,848 $ 2,081 $ 1,848 |
Schedule of Recognized Gains (Losses) for Derivatives | Realized Gains (Losses) Three Months Ended June 30, Type of Instrument Statements of Operations Location 2016 2015 Commodity contracts Cost of goods sold $ (999 ) $ 264 $ (999 ) $ 264 Unrealized Gains (Losses) Three Months Ended June 30, Type of Instrument Statements of Operations Location 2016 2015 Commodity contracts Cost of goods sold $ 1,227 $ (552 ) $ 1,227 $ (552 ) Realized Gains (Losses) Six Months Ended June 30, Type of Instrument Statements of Operations Location 2016 2015 Commodity contracts Cost of goods sold $ (91 ) $ 149 $ (91 ) $ 149 Unrealized Gains (Losses) Six Months Ended June 30, Type of Instrument Statements of Operations Location 2016 2015 Commodity contracts Cost of goods sold $ 900 $ (626 ) $ 900 $ (626 ) |
5. Debt (Tables)
5. Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | June 30, 2016 December 31, 2015 Kinergy operating line of credit $ 62,045 $ 61,003 Plant term debt 155,070 162,622 217,115 223,625 Less unamortized discount (1,688 ) (2,299 ) Less unamortized debt financing costs (386 ) (462 ) Less short-term portion (17,003 ) Long-term debt $ 215,041 $ 203,861 |
9. Fair Value Measurements (Tab
9. Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Significant Assumptions Used and Related Fair Values for Warrants | Significant assumptions used and related fair values for the warrants as of June 30, 2016 were as follows: Original Issuance Exercise Price Volatility Risk Free Interest Rate Term (years) Market Discount Warrants Outstanding Fair Value 07/3/2012 $ 6.09 50.7% 0.45% 1.01 19.8% 211,000 $ 194,000 12/13/2011 $ 8.43 51.9% 0.36% 0.45 13.8% 138,000 63,000 $ 257,000 Significant assumptions used and related fair values for the warrants as of December 31, 2015 were as follows: Original Issuance Exercise Price Volatility Risk Free Interest Rate Term (years) Market Discount Warrants Outstanding Fair Value 07/3/2012 $ 6.09 49.1% 0.86% 1.51 22.9% 211,000 $ 200,000 12/13/2011 $ 8.43 48.4% 0.65% 0.95 18.3% 138,000 73,000 $ 273,000 |
Summary of Recurring Fair Value Measurements by Level | The following table summarizes recurring fair value measurements by level at June 30, 2016 (in thousands): Fair Value Level 1 Level 2 Level 3 Assets: Derivative financial instruments (1) $ 13,299 $ 13,299 $ $ $ 13,299 $ 13,299 $ $ Liabilities: Warrants (3) $ (257 ) $ $ $ (257 ) Derivative financial instruments (4) (12,166 ) (12,166 ) $ (12,423 ) $ (12,166 ) $ $ (257 ) The following table summarizes recurring fair value measurements by level at December 31, 2015 (in thousands): Fair Value Level 1 Level 2 Level 3 Assets: Derivative financial instruments (1) $ 2,081 $ 2,081 $ $ Defined benefit plan assets (2) (pooled separate accounts): Large U.S. Equity 3,662 3,662 Small/Mid U.S. Equity 1,099 1,099 International Equity 1,525 1,525 Fixed Income 6,281 6,281 $ 14,648 $ 2,081 $ 12,567 $ Liabilities: Warrants (3) $ (273 ) $ $ $ (273 ) Derivative financial instruments (4) (1,848 ) (1,848 ) $ (2,121 ) $ (1,848 ) $ $ (273 ) |
Schedule of Fair Value of Level 3 Inputs to Warrants | Balance, December 31, 2015 $ 273 Adjustments to fair value for the period (16 ) Balance, June 30, 2016 $ 257 |
10. Earnings Per Share (Tables)
10. Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | Three Months Ended June 30, 2016 Income Shares Per-Share Net income attributed to Pacific Ethanol $ 5,086 Less: Preferred stock dividends (315 ) Less: Income allocated to participating securities (71 ) Basic income per share: Income available to common stockholders $ 4,700 42,191 $ 0.11 Add: Options 38 Diluted income per share: Income available to common stockholders $ 4,700 42,229 $ 0.11 Three Months Ended June 30, 2015 Income Shares Per-Share Net income attributed to Pacific Ethanol $ 1,010 Less: Preferred stock dividends (315 ) Less: Income allocated to participating securities (18 ) Basic income per share: Income available to common stockholders $ 677 24,268 $ 0.03 Add: Options 569 Diluted income per share: Income available to common stockholders $ 677 24,837 $ 0.03 Six Months Ended June 30, 2016 Loss Shares Per-Share Net loss attributed to Pacific Ethanol $ (8,140 ) Less: Preferred stock dividends (630 ) Basic and diluted loss per share: Loss available to common stockholders $ (8,770 ) 42,121 $ (0.21 ) Six Months Ended June 30, 2015 Loss Shares Per-Share 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 ) |
1. Organization and Basis of 23
1. Organization and Basis of Presentation (Details Narrative) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($)EthanolPlants | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)EthanolPlants | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Ethanol production capacity per year | 515 million gallons per year | ||||
Ethanol market capacity per year | over 800 million gallons of ethanol, and produces, on an annualized basis | ||||
Other products produced per year | over one 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 CO2. | ||||
Accounts receivable used as collateral | $ 63,330,000 | $ 63,330,000 | $ 42,029,000 | ||
Allowance for doubtful accounts | 311,000 | 311,000 | $ 25,000 | ||
Bad debt expense | 30,000 | $ 3,000 | 286,000 | $ 3,000 | |
Benefit for income taxes | $ 245,000 | $ (530,000) | $ 245,000 | $ 2,170,000 | |
Pacific Ethanol Central Plants [Member] | |||||
Number of ethanol plants | EthanolPlants | 4 | 4 | |||
Pacific Ethanol West Plants [Member] | |||||
Number of ethanol plants | EthanolPlants | 4 | 4 |
2. Segments - Schedule of Finan
2. Segments - Schedule of Financial Date for Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Net Sales | $ 422,860 | $ 227,621 | $ 765,233 | $ 433,797 |
Cost of goods sold | 405,156 | 221,367 | 746,460 | 428,530 |
Income (loss) before provision for income taxes | 4,841 | 1,582 | (8,385) | (5,627) |
Depreciation and amortization | 9,018 | 3,340 | 17,670 | 6,748 |
Interest expense | 6,536 | 1,005 | 12,769 | 2,020 |
Intersubsegment Eliminations [Member] | ||||
Net Sales | (2,351) | (621) | (4,366) | (1,656) |
Cost of goods sold | (4,602) | (2,778) | (8,605) | (5,211) |
Ethanol Production [Member] | ||||
Net Sales | 271,890 | 109,045 | 501,394 | 208,042 |
Cost of goods sold | 260,237 | 105,623 | 496,246 | 207,160 |
Income (loss) before provision for income taxes | 794 | 1,013 | (16,330) | (4,199) |
Depreciation and amortization | 8,793 | 3,206 | 17,209 | 6,390 |
Interest expense | 6,180 | 922 | 12,080 | 1,844 |
Ethanol Production [Member] | External Customers [Member] | ||||
Net Sales | 271,630 | 108,960 | 500,871 | 207,957 |
Ethanol Production [Member] | Intersegment Net Sales [Member] | ||||
Net Sales | 260 | 85 | 523 | 85 |
Marketing and Distribution [Member] | ||||
Net Sales | 153,321 | 119,497 | 268,205 | 227,411 |
Cost of goods sold | 149,521 | 118,522 | 258,819 | 226,581 |
Income (loss) before provision for income taxes | 2,209 | (516) | 6,178 | (2,131) |
Depreciation and amortization | 0 | 15 | 3 | 142 |
Interest expense | 356 | 83 | 689 | 176 |
Marketing and Distribution [Member] | External Customers [Member] | ||||
Net Sales | 151,230 | 118,661 | 264,362 | 225,840 |
Marketing and Distribution [Member] | Intersegment Net Sales [Member] | ||||
Net Sales | 2,091 | 836 | 3,843 | 1,571 |
Corporate Activities [Member] | ||||
Income (loss) before provision for income taxes | 1,838 | 1,085 | 1,767 | 703 |
Depreciation and amortization | 225 | 119 | 458 | 216 |
Interest expense | $ 0 | $ 0 | $ 0 | $ 0 |
2. Segments - Schedule of Asset
2. Segments - Schedule of Assets by Operating Segments (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Assets | $ 665,720 | $ 674,680 |
Ethanol Production [Member] | ||
Assets | 523,652 | 536,013 |
Marketing and Distribution [Member] | ||
Assets | 130,689 | 107,069 |
Corporate Activities [Member] | ||
Assets | $ 11,379 | $ 31,598 |
2. Segments (Details Narrative)
2. Segments (Details Narrative) | 6 Months Ended |
Jun. 30, 2016Segments | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
3. Inventories - Schedule of In
3. Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 35,543 | $ 31,153 |
LCFS credits | 12,830 | 6,957 |
Raw materials | 8,678 | 9,891 |
Work in progress | 7,235 | 11,121 |
Other | 1,642 | 1,698 |
Total | $ 65,928 | $ 60,820 |
3. Inventories (Details Narrati
3. Inventories (Details Narrative) $ in Thousands | Jun. 30, 2016USD ($) |
Inventory Disclosure [Abstract] | |
Inventory valuation adjustment | $ 1,500 |
4. Derivatives - Schedule of De
4. Derivatives - Schedule of Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Commodity contracts - Derivative assets | $ 13,299 | $ 2,081 |
Commodity contracts - Derivative liabilities | 12,166 | 1,848 |
Commodity Contracts [Member] | Non Designated Derivative Instruments [Member] | ||
Commodity contracts - Derivative assets | 13,299 | 2,081 |
Commodity contracts - Derivative liabilities | $ 12,166 | $ 1,848 |
4. Derivatives - Schedule of Re
4. Derivatives - Schedule of Recognized Gains (Losses) for Derivatives (Details) - Commodity Contracts [Member] - Non Designated Derivative Instruments [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Realized Gains (Losses) | $ (999) | $ 264 | $ (91) | $ 149 |
Unrealized Gains (Losses) | $ 1,227 | $ (552) | $ 900 | $ (626) |
5. Debt - Schedule of Long Term
5. Debt - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
Kinergy operating line of credit | $ 62,045 | $ 61,003 |
Plant term debt | 155,070 | 162,622 |
Total debt | 217,115 | 223,625 |
Less unamortized discount | (1,688) | (2,299) |
Less unamortized debt financing costs | (386) | (462) |
Less short-term portion | 0 | (17,003) |
Long-term debt | $ 215,041 | $ 203,861 |
5. Debt (Details Narrative)
5. Debt (Details Narrative) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($) | |
Asset unavailable for transfer due to loan restrictions | $ 135,200 | $ 135,200 |
Kinergy Marketing LLC [Member] | ||
Available borrowing base | 12,955 | 12,955 |
Pacific Ethanol Central Plants [Member] | ||
Deferred interest payments added to debt balance | $ 5,665 | $ 9,451 |
6. Common Stock and Warrants (D
6. Common Stock and Warrants (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Stock issued upon exercise of warrants | 20,000 | 42,000 | ||
Proceeds from warrant exercises | $ 177 | $ 0 | $ 368 | |
Warrants exercised | 0 | 0 | ||
Non-employee members of the Board of Directors [Member] | ||||
Restricted stock granted | 95,000 | |||
Grant date fair value per share | $ 5.44 | |||
Executive officers and other employees [Member] | ||||
Restricted stock granted | 253,000 | |||
Grant date fair value per share | $ 5.44 | |||
2016 Stock Incentive Plan [Member] | ||||
Shares authorized for issuance | 1,150,000 | 1,150,000 |
7. Commitments and Contingenc34
7. Commitments and Contingencies (Details Narrative) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Ethanol Purchase Contracts [Member] | |
Indexed-price purchase contracts | 19,802,000 gallons |
Fixed-price purchase contracts value | $ 17,655 |
Ethanol Purchase Contracts [Member] | Suppliers [Member] | |
Fixed-price purchase contracts value | 30,691 |
Western Sugar [Member] | |
Litigation contingency liability | $ 3,300 |
Ethanol Sales Contracts [Member] | |
Open ethanol indexed-price sales contracts | 261,372,000 gallons |
Open fixed-price sales contracts valued | $ 10,501 |
Co-products Sales Contracts [Member] | |
Open ethanol indexed-price sales contracts | 10,300 tons |
Open fixed-price sales contracts valued | $ 38,845 |
8. Pension and Retirement Ben35
8. Pension and Retirement Benefit Plans (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Pension Plan [Member] | |||
Accumulated projected benefit obligation | $ 16,600 | ||
Fair value of plan assets | 12,600 | ||
Underfunded amount | 4,000 | ||
Net periodic expense | $ 29 | $ 58 | |
Interest cost | 172 | 344 | |
Service cost | 56 | 112 | |
Partially offset expected return on plan assets | 199 | 398 | |
Postretirement Plan [Member] | |||
Accumulated projected benefit obligation | $ 3,600 | ||
Net periodic expense | 47 | 94 | |
Interest cost | 35 | 70 | |
Service cost | $ 12 | $ 24 |
9. Fair Value Measurements - Sc
9. Fair Value Measurements - Schedule of Significant Assumptions Used and Related Fair Values for Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Fair value | $ 257 | $ 273 |
Original issuance 7/3/2012 [Member] | ||
Exercise price | $ 6.09 | $ 6.09 |
Volatility | 50.70% | 49.10% |
Risk free interest rate | 0.45% | 0.86% |
Term (years) | 1 year 4 days | 1 year 6 months 4 days |
Market Discount | 19.80% | 22.90% |
Warrants Outstanding | 211,000 | 211,000 |
Fair value | $ 194 | $ 200 |
Original Issuance 12/13/2011 [Member] | ||
Exercise price | $ 8.43 | $ 8.43 |
Volatility | 52.19% | 48.40% |
Risk free interest rate | 0.36% | 0.65% |
Term (years) | 5 months 12 days | 11 months 12 days |
Market Discount | 13.80% | 18.30% |
Warrants Outstanding | 138,000 | 138,000 |
Fair value | $ 63 | $ 73 |
9. Fair Value Measurements - Su
9. Fair Value Measurements - Summary of Recurring Fair Value Measurements by Level (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 13,299,000 | $ 14,648,000 |
Liabilities | (12,523,000) | (2,121,000) |
Derivative Financial Instrument [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 13,299,000 | 2,081,000 |
Liabilities | (12,166,000) | (1,848,000) |
Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | (257,000) | (273,000) |
Defined Benefit Plan Assets Large U.S. Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 3,662,000 | |
Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,099,000 | |
Defined Benefit Plan Assets International Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,525,000 | |
Defined Benefit Plan Assets Fixed Income [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 6,281,000 | |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 13,299,000 | 2,081,000 |
Liabilities | (12,166,000) | (1,848,000) |
Level 1 [Member] | Derivative Financial Instrument [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 13,299,000 | 2,081,000 |
Liabilities | (12,166,000) | (1,848,000) |
Level 1 [Member] | Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Level 1 [Member] | Defined Benefit Plan Assets Large U.S. Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 1 [Member] | Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 1 [Member] | Defined Benefit Plan Assets International Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 1 [Member] | Defined Benefit Plan Assets Fixed Income [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 12,567,000 |
Liabilities | 0 | |
Level 2 [Member] | Derivative Financial Instrument [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Level 2 [Member] | Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Level 2 [Member] | Defined Benefit Plan Assets Large U.S. Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 3,662,000 | |
Level 2 [Member] | Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,099,000 | |
Level 2 [Member] | Defined Benefit Plan Assets International Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,525,000 | |
Level 2 [Member] | Defined Benefit Plan Assets Fixed Income [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 6,281,000 | |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Liabilities | (257,000) | (273,000) |
Level 3 [Member] | Derivative Financial Instrument [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Level 3 [Member] | Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | $ (257,000) | (273,000) |
Level 3 [Member] | Defined Benefit Plan Assets Large U.S. Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 3 [Member] | Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 3 [Member] | Defined Benefit Plan Assets International Equity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 3 [Member] | Defined Benefit Plan Assets Fixed Income [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 0 |
9. Fair Value Measurements - 38
9. Fair Value Measurements - Schedule of Fair Value of Level 3 Inputs to Warrants (Details) - Level 3 [Member] - Warrants [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning Balance | $ 273 |
Adjustments to fair value for the period | (16) |
Ending Balance | $ 257 |
10. Earnings Per Share - Schedu
10. Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net loss attributed to Pacific Ethanol, Inc. | $ 5,086 | $ 1,010 | $ (8,140) | $ (3,370) |
Less: Preferred stock dividends | (315) | (315) | (630) | (627) |
Less: Income allocated to participating securities | (71) | (18) | 0 | 0 |
Net loss attributed to common stockholders | $ 4,700 | $ 677 | $ (8,770) | $ (3,997) |
Shares basic | 42,191,000 | 24,268,000 | 42,121,000 | 24,589,000 |
Add: Options | 38,000 | 569,000 | ||
Shares diluted | 42,229,000 | 24,837,000 | 42,121,000 | 24,589,000 |
Per share amount, basic | $ .11 | $ .03 | $ (.21) | $ (.16) |
Per share amount, diluted | $ 0.11 | $ 0.03 | $ (0.21) | $ (0.16) |
10. Earnings Per Share (Details
10. Earnings Per Share (Details Narrative) - shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||
Potentially dilutive weighted-average shares from convertible securities outstanding | 1,692,000 | 1,621,000 |