Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2019 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | PACIFIC ETHANOL, INC. |
Entity Central Index Key | 0000778164 |
Amendment Flag | false |
Document Type | S-1 |
Document Period End Date | Sep. 30, 2019 |
Entity Filer Category | Non-accelerated Filer |
Entity Ex Transition Period | false |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Incorporation State Country Code | DE |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current Assets: | ||||
Cash and cash equivalents | $ 18,921 | $ 26,627 | [1] | $ 49,489 |
Accounts receivable, net (net of allowance for doubtful accounts of $39 and $12, respectively) | 69,297 | 67,636 | [1] | 80,344 |
Inventories | 62,509 | 57,820 | [1] | 61,550 |
Prepaid inventory | 3,191 | 3,090 | [1] | 3,281 |
Income tax receivables | 612 | 743 | ||
Derivative instruments | 2,790 | 1,765 | [1] | 998 |
Other current assets | 5,228 | 11,866 | [1] | 6,841 |
Total current assets | 161,936 | 168,804 | [1] | 203,246 |
Property and equipment, net | 442,810 | 482,657 | [1] | 508,352 |
Other Assets: | ||||
Right of use operating lease assets, net | 38,791 | [1] | ||
Intangible assets | 2,678 | 2,678 | [1] | 2,678 |
Other assets | 6,645 | 5,842 | [1] | 6,020 |
Total other assets | 48,114 | 8,520 | [1] | 8,698 |
Total Assets | 652,860 | 659,981 | [1] | 720,296 |
Current Liabilities: | ||||
Accounts payable - trade | 47,068 | 48,176 | [1] | 39,738 |
Accrued liabilities | 18,614 | 23,421 | [1] | 21,673 |
Current portion - capital leases | 45 | 592 | ||
Current portion - operating leases | 6,925 | [1] | ||
Current portion - long-term debt | 144,543 | 146,671 | [1] | 20,000 |
Derivative instruments | 3,619 | 6,309 | [1] | 2,307 |
Other current liabilities | 7,662 | 7,282 | [1] | 6,396 |
Total current liabilities | 228,431 | 231,859 | [1] | 90,706 |
Long-term debt, net of current portion | 98,673 | 84,767 | [1] | 221,091 |
Operating leases, net of current portion | 30,323 | [1] | ||
Assessment financing | 9,342 | 9,342 | [1] | 7,714 |
Capital leases, net of current portion | 78 | 123 | ||
Other liabilities | 13,576 | 14,648 | [1] | 16,962 |
Total Liabilities | 380,345 | 340,616 | [1] | 336,596 |
Commitments and Contingencies (Note 7) | ||||
Stockholders' Equity: | ||||
Common stock, $0.001 par value; 300,000 shares authorized; 49,783 and 45,771 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 50 | 46 | [1] | 44 |
Non-voting common stock, $0.001 par value; 3,553 shares authorized; 1 share issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | [1] | |||
Additional paid-in capital | 937,795 | 932,179 | [1] | 927,090 |
Accumulated other comprehensive loss | (2,459) | (2,459) | [1] | (2,234) |
Accumulated deficit | (678,808) | (630,000) | [1] | (568,462) |
Total Pacific Ethanol, Inc. Stockholders' Equity | 256,579 | 299,767 | [1] | 356,439 |
Noncontrolling interests | 15,936 | 19,598 | [1] | 27,261 |
Total Stockholders' Equity | 272,515 | 319,365 | [1] | 383,700 |
Total Liabilities and Stockholders' Equity | 652,860 | 659,981 | [1] | 720,296 |
Series A Preferred Stock [Member] | ||||
Stockholders' Equity: | ||||
Preferred stock, value | ||||
Series B Preferred Stock [Member] | ||||
Stockholders' Equity: | ||||
Preferred stock, value | $ 1 | $ 1 | [1] | $ 1 |
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts receivable, net of allowance | $ 39 | $ 12 | $ 19 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000 | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per shares) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, authorized | 300,000 | 300,000,000 | 300,000,000 |
Common stock, issued | 49,783 | 45,771,422 | 43,984,975 |
Common stock, outstanding | 49,783 | 45,771,422 | 43,984,975 |
Series A Preferred Stock [Member] | |||
Preferred stock, authorized | 1,684 | 1,684,375 | 1,684,375 |
Preferred stock, issued | |||
Preferred stock, outstanding | |||
Series B Preferred Stock [Member] | |||
Preferred stock, authorized | 1,581 | 1,580,790 | 1,580,790 |
Preferred stock, issued | 927 | 926,942 | 926,942 |
Preferred stock, outstanding | 927 | 926,942 | 926,942 |
Liquidation preference | $ 18,075 | ||
Nonvoting Common Stock [Member] | |||
Common stock, par value (in dollars per shares) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, authorized | 3,553 | 3,553,000 | 3,553,000 |
Common stock, issued | 1 | 896 | 896 |
Common stock, outstanding | 1 | 896 | 896 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||||||
Net sales | $ 365,160 | $ 370,407 | $ 1,067,264 | $ 1,180,956 | $ 1,515,371 | $ 1,632,255 | $ 1,624,758 |
Cost of goods sold | 379,976 | 366,639 | 1,080,398 | 1,175,099 | 1,530,535 | 1,626,324 | 1,570,400 |
Gross profit (loss) | (14,816) | 3,768 | (13,134) | 5,857 | (15,164) | 5,931 | 54,358 |
Selling, general and administrative expenses | 8,687 | 8,970 | 23,630 | 27,183 | 36,373 | 31,516 | 30,849 |
Loss from operations | (23,503) | (5,202) | (36,764) | (21,326) | (51,537) | (25,585) | 23,509 |
Fair value adjustments | 473 | (557) | |||||
Interest expense, net | (5,163) | (4,193) | (15,014) | (12,875) | (17,132) | (12,938) | (22,406) |
Other income (expense), net | (407) | 91 | 254 | 233 | 171 | (345) | (1) |
Loss before benefit for income taxes | (29,073) | (9,304) | (51,524) | (33,968) | (68,498) | (38,395) | 545 |
Benefit for income taxes | 563 | (562) | (321) | (981) | |||
Consolidated net loss | (29,073) | (9,304) | (51,524) | (33,405) | (67,936) | (38,074) | 1,526 |
Net loss attributed to noncontrolling interests | 1,747 | 1,790 | 3,662 | 5,142 | 7,663 | 3,110 | (107) |
Net loss attributed to Pacific Ethanol, Inc. | (27,326) | (7,514) | (47,862) | (28,263) | (60,273) | (34,964) | 1,419 |
Preferred stock dividends | (319) | (319) | (946) | (946) | (1,265) | (1,265) | (1,269) |
Income allocated to participating securities | (2) | ||||||
Net loss available to common stockholders | $ (27,645) | $ (7,833) | $ (48,808) | $ (29,209) | $ (61,538) | $ (36,229) | $ 148 |
Net loss per share, basic and diluted (in dollars per share) | $ (0.58) | $ (0.18) | $ (1.04) | $ (0.68) | $ (1.42) | $ (0.85) | $ 0 |
Weighted-average shares outstanding, basic | 43,376 | 42,745 | 42,182 | ||||
Weighted-average shares outstanding, diluted | 43,376 | 42,745 | 42,251 | ||||
Weighted-average shares outstanding, basic and diluted | 47,777 | 43,299 | 47,030 | 43,171 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Consolidated net income (loss) | $ (67,936) | $ (38,074) | $ 1,526 |
Other comprehensive income (expense) - net gain (loss) arising during the period on defined benefit pension plans | (225) | 386 | (3,660) |
Total comprehensive loss | (68,161) | (37,688) | (2,134) |
Comprehensive (income) loss attributed to noncontrolling interests | 7,663 | 3,110 | (107) |
Comprehensive loss attributed to Pacific Ethanol, Inc. | $ (60,498) | $ (34,578) | $ (2,241) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Operating Activities: | |||||||
Consolidated net loss | $ (51,524) | $ (33,405) | $ (67,936) | $ (38,074) | $ 1,526 | ||
Adjustments to reconcile consolidated net income (loss) to cash provided by operating activities: | |||||||
Depreciation and amortization of intangibles | 35,944 | 30,635 | 35,441 | ||||
Deferred income taxes | (563) | 27 | 169 | (1,122) | |||
Amortization of debt discount | 539 | 539 | 720 | 636 | 2,322 | ||
Amortization of deferred financing fees | 566 | 754 | 900 | 503 | 137 | ||
Non-cash compensation | 2,103 | 2,579 | 3,438 | 3,828 | 2,616 | ||
(Gain) loss on derivative instruments | (1,565) | 4,362 | |||||
Bad debt expense | 27 | 44 | 45 | 5 | 306 | ||
Depreciation | 40,849 | 38,651 | 35,441 | ||||
Fair value adjustments | (473) | 557 | |||||
Inventory valuation | (350) | 2,678 | |||||
Change in fair value on commodity derivative instruments | 6,714 | 2,077 | 1,984 | ||||
Interest expense added to plant term debt | 9,451 | ||||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (370) | 12,656 | 12,663 | 17,562 | (25,235) | ||
Inventories | (4,689) | 6,784 | 4,080 | 5,070 | 750 | ||
Prepaid expenses and other assets | 5,836 | (2,454) | (3,880) | 2,677 | 3,189 | ||
Prepaid inventory | (101) | 1,839 | 191 | 6,738 | (3,973) | ||
Operating leases | (7,646) | ||||||
Accounts payable and accrued expenses | (6,323) | 2,307 | 4,105 | (5,538) | 9,279 | ||
Net cash provided by (used in) operating activities | (27,203) | 26,077 | 1,566 | 36,509 | 37,228 | ||
Investing Activities: | |||||||
Additions to property and equipment | (2,144) | (10,874) | (15,154) | (20,866) | (19,171) | ||
Purchase of ICP, net of cash acquired | (29,574) | ||||||
Proceeds from cash collateralized letters of credit | 4,574 | ||||||
Net cash used in investing activities | (2,144) | (10,874) | (15,154) | (50,440) | (14,597) | ||
Financing Activities: | |||||||
Net proceeds from Kinergy's line of credit | 22,629 | 9,880 | 7,578 | (385) | (11,141) | ||
Proceeds from issuance of common stock | 3,670 | 2,057 | |||||
Proceeds from CoGen contract amendment | 8,036 | ||||||
Proceeds from assessment financing | 728 | 2,043 | 5,618 | 2,096 | |||
Principal payments on borrowings | (11,748) | (17,500) | |||||
Payments on capital leases | (761) | (772) | (626) | (7,089) | |||
Preferred stock dividends paid | (946) | (946) | (1,265) | (1,265) | (1,269) | ||
Proceeds from warrant and option exercises | 1,202 | 1,164 | |||||
Payments on assessment financing | (415) | ||||||
Proceeds from plant term and revolving credit agreements | 42,000 | 97,000 | |||||
Proceeds from parent notes | 13,530 | 53,350 | |||||
Payments on plant borrowings | (16,500) | (59,927) | (172,073) | ||||
Payments on senior notes | (2,000) | ||||||
Sale of noncontrolling interests | 30,000 | ||||||
Debt issuance costs | (986) | (1,960) | |||||
Net cash provided by (used in) financing activities | 21,641 | (8,599) | (9,274) | (839) | (9,922) | ||
Net change in cash and cash equivalents | (7,706) | 6,604 | (22,862) | (14,770) | 12,709 | ||
Cash and cash equivalents at beginning of period | 26,627 | [1] | 49,489 | 49,489 | 64,259 | 51,550 | |
Cash and cash equivalents at end of period | 18,921 | 56,093 | 26,627 | [1] | 49,489 | 64,259 | |
Supplemental Cash Flow Information: | |||||||
Interest paid | 13,877 | 11,299 | 15,147 | 11,133 | 11,168 | ||
Income tax refunds received | 743 | 743 | 5,614 | 4,784 | |||
Noncash financing and investing activities: | |||||||
Initial right of use assets and liabilities recorded under ASC 842 | $ 43,753 | ||||||
Capital leases added to plant and equipment | 180 | ||||||
Reclass of warrant liability to equity upon exercises | 178 | 179 | |||||
Contribution of property and equipment for noncontrolling interest (see Note 2) | 16,500 | ||||||
Debt issued in ICP acquisition (see Note 2) | $ 46,927 | ||||||
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accum. Other Comprehensive Income (Loss) [Member] | Non-Controlling Interests [Member] | Total | |
Balance at Beginning at Dec. 31, 2015 | $ 1 | $ 43 | $ 902,843 | $ (532,383) | $ 1,040 | $ 371,544 | ||
Balance at Beginning (in shares) at Dec. 31, 2015 | 927 | 42,515 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax | $ 1 | 2,281 | 2,282 | |||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax (in shares) | 659 | |||||||
Pension plan adjustment | (3,660) | (3,660) | ||||||
Warrant and option exercises | 1,338 | 1,338 | ||||||
Warrant and option exercises (in shares) | 138 | |||||||
Sale of Pacific Aurora interests to ACEC | 10,475 | $ 19,525 | 30,000 | |||||
ACEC contribution to form Pacific Aurora | 5,761 | 10,739 | 16,500 | |||||
Preferred stock dividends | (1,269) | (1,269) | ||||||
Net income (loss) | 1,419 | 107 | 1,526 | |||||
Balance at End at Dec. 31, 2016 | $ 1 | $ 44 | 922,698 | (532,233) | (2,620) | 30,371 | 418,261 | |
Balance at End (in shares) at Dec. 31, 2016 | 927 | 43,312 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax | 3,014 | 3,014 | ||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax (in shares) | 473 | |||||||
Pension plan adjustment | 386 | 386 | ||||||
Warrant and option exercises | 1,378 | 1,378 | ||||||
Warrant and option exercises (in shares) | 201 | |||||||
Preferred stock dividends | (1,265) | (1,265) | ||||||
Net income (loss) | (34,964) | (3,110) | (38,074) | |||||
Balance at End at Dec. 31, 2017 | $ 1 | $ 44 | 927,090 | (568,462) | (2,234) | 27,261 | 383,700 | |
Balance at End (in shares) at Dec. 31, 2017 | 927 | 43,986 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax | 735 | 735 | ||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax (in shares) | (31) | |||||||
Preferred stock dividends | (312) | (312) | ||||||
Net income (loss) | (7,841) | (1,656) | (9,497) | |||||
Balance at End at Mar. 31, 2018 | $ 1 | $ 44 | 927,825 | (576,615) | (2,234) | 25,605 | 374,626 | |
Balance at End (in shares) at Mar. 31, 2018 | 927 | 43,955 | ||||||
Balance at Beginning at Dec. 31, 2017 | $ 1 | $ 44 | 927,090 | (568,462) | (2,234) | 27,261 | 383,700 | |
Balance at Beginning (in shares) at Dec. 31, 2017 | 927 | 43,986 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred stock dividends | (946) | |||||||
Net income (loss) | (33,405) | |||||||
Balance at End at Sep. 30, 2018 | $ 1 | $ 45 | 929,262 | (597,671) | (2,234) | 22,119 | 351,522 | |
Balance at End (in shares) at Sep. 30, 2018 | 927 | 44,947 | ||||||
Balance at Beginning at Dec. 31, 2017 | $ 1 | $ 44 | 927,090 | (568,462) | (2,234) | 27,261 | 383,700 | |
Balance at Beginning (in shares) at Dec. 31, 2017 | 927 | 43,986 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax | $ 1 | 3,033 | 3,034 | |||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax (in shares) | 947 | |||||||
Issuances of common stock | $ 1 | 2,056 | 2,057 | |||||
Issuances of common stock (in shares) | 838 | |||||||
Pension plan adjustment | (225) | (225) | ||||||
Preferred stock dividends | (1,265) | (1,265) | ||||||
Net income (loss) | (60,273) | (7,663) | (67,936) | |||||
Balance at End at Dec. 31, 2018 | $ 1 | $ 46 | 932,179 | (630,000) | (2,459) | 19,598 | 319,365 | [1] |
Balance at End (in shares) at Dec. 31, 2018 | 927 | 45,771 | ||||||
Balance at Beginning at Mar. 31, 2018 | $ 1 | $ 44 | 927,825 | (576,615) | (2,234) | 25,605 | 374,626 | |
Balance at Beginning (in shares) at Mar. 31, 2018 | 927 | 43,955 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax | $ 1 | 553 | 554 | |||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax (in shares) | 1,006 | |||||||
Preferred stock dividends | (315) | (315) | ||||||
Net income (loss) | (12,908) | (1,696) | (14,604) | |||||
Balance at End at Jun. 30, 2018 | $ 1 | $ 45 | 928,378 | (589,838) | (2,234) | 23,909 | 360,261 | |
Balance at End (in shares) at Jun. 30, 2018 | 927 | 44,961 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax | 884 | 884 | ||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax (in shares) | (14) | |||||||
Preferred stock dividends | (319) | (319) | ||||||
Net income (loss) | (7,514) | (1,790) | (9,304) | |||||
Balance at End at Sep. 30, 2018 | $ 1 | $ 45 | 929,262 | (597,671) | (2,234) | 22,119 | 351,522 | |
Balance at End (in shares) at Sep. 30, 2018 | 927 | 44,947 | ||||||
Balance at Beginning at Dec. 31, 2018 | $ 1 | $ 46 | 932,179 | (630,000) | (2,459) | 19,598 | 319,365 | [1] |
Balance at Beginning (in shares) at Dec. 31, 2018 | 927 | 45,771 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax | 797 | 797 | ||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax (in shares) | (24) | |||||||
Issuances of common stock | $ 3 | 3,667 | 3,670 | |||||
Issuances of common stock (in shares) | 3,137 | |||||||
Preferred stock dividends | (312) | (312) | ||||||
Net income (loss) | (12,890) | (1,271) | (14,161) | |||||
Balance at End at Mar. 31, 2019 | $ 1 | $ 49 | 936,643 | (643,202) | (2,459) | 18,327 | 309,359 | |
Balance at End (in shares) at Mar. 31, 2019 | 927 | 48,884 | ||||||
Balance at Beginning at Dec. 31, 2018 | $ 1 | $ 46 | 932,179 | (630,000) | (2,459) | 19,598 | 319,365 | [1] |
Balance at Beginning (in shares) at Dec. 31, 2018 | 927 | 45,771 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred stock dividends | (946) | |||||||
Net income (loss) | (51,524) | |||||||
Balance at End at Sep. 30, 2019 | $ 1 | $ 50 | 937,795 | (678,808) | (2,459) | 15,936 | 272,515 | |
Balance at End (in shares) at Sep. 30, 2019 | 927 | 49,784 | ||||||
Balance at Beginning at Mar. 31, 2019 | $ 1 | $ 49 | 936,643 | (643,202) | (2,459) | 18,327 | 309,359 | |
Balance at Beginning (in shares) at Mar. 31, 2019 | 927 | 48,884 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax | $ 1 | 565 | 566 | |||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax (in shares) | 954 | |||||||
Preferred stock dividends | (315) | (315) | ||||||
Net income (loss) | (7,646) | (644) | (8,290) | |||||
Balance at End at Jun. 30, 2019 | $ 1 | $ 50 | 937,208 | (651,163) | (2,459) | 17,683 | 301,320 | |
Balance at End (in shares) at Jun. 30, 2019 | 927 | 49,838 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax | 587 | 587 | ||||||
Stock-based compensation expense – restricted stock issued to employees and directors, net of cancellations and tax (in shares) | (54) | |||||||
Preferred stock dividends | (319) | (319) | ||||||
Net income (loss) | (27,326) | (1,747) | (29,073) | |||||
Balance at End at Sep. 30, 2019 | $ 1 | $ 50 | $ 937,795 | $ (678,808) | $ (2,459) | $ 15,936 | $ 272,515 | |
Balance at End (in shares) at Sep. 30, 2019 | 927 | 49,784 | ||||||
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION. | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. | 1. ORGANIZATION Organization and Business The Company is a leading producer and marketer of low-carbon renewable fuels in the United States. The Company's 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. The Company's five ethanol plants in the Midwest (together with their respective holding companies, the "Pacific Ethanol Central Plants") are located in the heart of the Corn Belt, benefit from low-cost and abundant feedstock production and allow for access to many additional domestic markets. In addition, the Company's ability to load unit trains from these facilities in the Midwest allows for greater access to international markets. The Company has a combined production capacity of 605 million gallons per year, markets, on an annualized basis, nearly 1.0 billion gallons of ethanol and specialty alcohols, and produces, on an annualized basis, nearly 3.0 million tons of co-products on a dry matter basis, such as wet and dry distillers grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, dried yeast and CO 2 As of September 30, 2019, all but one of the Company's production facilities, specifically, the Company's Aurora East facility, were operating. As market conditions change, the Company may increase, decrease or idle production at one or more operating facilities or resume operations at any idled facility. Basis of Presentation – Interim Financial Statements Liquidity In implementing these strategic initiatives, the Company, as of September 30, 2019, had the following available liquidity and capital resources to achieve its objectives: ● Cash of $18.9 million and excess availability under Kinergy's line of credit of $2.2 million; and ● Nine ethanol production facilities with an aggregate of 605 million gallons of annual production capacity, of which plant assets representing 355 million gallons of capacity are either unencumbered, or their entire sales proceeds would be used to repay the Company's senior secured notes. The Company has engaged a financial advisor to help market certain of these assets. The Company will likely not have sufficient cash to make its short-term scheduled debt payments, and is working on extensions with its lenders. While the lenders are secured by certain plant assets, the Company believes it has other unencumbered assets that may be used to satisfy the lenders. The Company continues working on a comprehensive long-term solution with its lenders to increase liquidity and extend the maturity dates of its debt. The Company believes that its strategic initiatives, if implemented timely and on suitable terms, will provide sufficient liquidity to meet its anticipated working capital, debt service and other liquidity needs through at least the next twelve months. 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 Company's success in contacting and negotiating with the customer. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of ability to make payments, additional allowances may be required. Of the accounts receivable balance, approximately $61,743,000 and $54,820,000 at September 30, 2019 and December 31, 2018, respectively, were used as collateral under Kinergy's operating line of credit. The allowance for doubtful accounts was $39,000 and $12,000 as of September 30, 2019 and December 31, 2018, respectively. The Company recorded a bad debt expense of $0 and a bad debt recovery of $1,000 for the three months ended September 30, 2019 and 2018, respectively. The Company recorded a bad debt expense of $27,000 and $44,000 for the nine months ended September 30, 2019 and 2018, respectively. Financial Instruments Recent Accounting Pronouncements Estimates and Assumptions | 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES . Organization and Business The Company's acquisition of Illinois Corn Processing, LLC ("ICP") was consummated on July 3, 2017, and as a result, the Company's consolidated financial statements include the results of ICP only since that date. On December 15, 2016, the Company and Aurora Cooperative Elevator Company, a Nebraska cooperative corporation ("ACEC"), closed a transaction under a contribution agreement under which the Company contributed its Aurora, Nebraska ethanol facilities and ACEC contributed its Aurora grain elevator and related grain handling assets to Pacific Aurora, LLC ("Pacific Aurora") in exchange for equity interests in Pacific Aurora. On December 15, 2016, concurrently with the closing under the contribution agreement, the Company sold a portion of its equity interest in Pacific Aurora to ACEC. As a result, the Company owns 73.93% of Pacific Aurora and ACEC owns 26.07% of Pacific Aurora. Further, the Company has consolidated 100% of the results of Pacific Aurora and recorded ACEC's 26.07% equity interest as noncontrolling interests in the accompanying financial statements for the years ended December 31, 2018 and 2017 and for the period December 15, 2016 through December 31, 2016. The Company is a leading producer and marketer of low-carbon renewable fuels in the United States. The Company's 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. The Company's five ethanol plants in the Midwest (together with their respective holding companies, the "Pacific Ethanol Central Plants") are located in the heart of the Corn Belt, benefit from low-cost and abundant feedstock production and allow for access to many additional domestic markets. In addition, the Company's ability to load unit trains from these facilities in the Midwest allows for greater access to international markets. The Company has a combined production capacity of 605 million gallons per year, markets, on an annualized basis, nearly 1.0 billion gallons of ethanol and specialty alcohols, and produces, on an annualized basis, over 3.0 million tons of co-products on a dry matter basis, such as wet and dry distillers grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, dried yeast and CO 2 As of December 31, 2018, all but one of the Company's production facilities, specifically, the Company's Aurora East facility, were operating. As market conditions change, the Company may increase, decrease or idle production at one or more operating facilities or resume operations at any idled facility. Basis of Presentation Liquidity In implementing its strategic realignment plan, the Company, as of December 31, 2018, had the following available liquidity and capital resources to achieve its objectives: ● Cash of $26.6 million and excess availability under Kinergy's line of credit of $10.2 million; ● Nine ethanol production facilities with an aggregate 605 million gallons of annual production capacity, of which plant assets representing 355 million gallons of capacity are either unencumbered, or their entire sales proceeds would be used to repay the senior secured notes. The Company has engaged an independent third party to help facilitate the marketing of certain of these assets; and ● In excess of $20 million of equity available under the Company's shelf registration statement, including under its at-the-market equity program. These funds would first be required to repay the Company's senior secured notes. The Company also will continue working with its lenders and stakeholders to pursue other options to increase liquidity, obtain waivers or forbearance of debt covenant violations, and extend the maturity date of its debt. The Company believes that its strategic realignment will provide sufficient liquidity to meet its anticipated working capital, debt service and other liquidity needs through the next twelve months, or March 18, 2020. Segments Segment Reporting Cash and Cash Equivalents 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 Company's success in contacting and negotiating with the customer. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of ability to make payments, additional allowances may be required. Of the accounts receivable balance, approximately $54,820,000 and $64,501,000 at December 31, 2018 and 2017, respectively, were used as collateral under Kinergy's operating line of credit. The allowance for doubtful accounts was $12,000 and $19,000 as of December 31, 2018 and 2017, respectively. The Company recorded a bad debt expense of $45,000, $5,000 and $306,000 for the years ended December 31, 2018, 2017 and 2016, respectively. The Company does not have any off-balance sheet credit exposure related to its customers. Concentration Risks The Company sells fuel-grade ethanol to gasoline refining and distribution companies. The Company sold ethanol to customers representing 10% or more of the Company's total net sales, as follows. Years Ended December 31, 2018 2017 2016 Customer A 14 % 16 % 17 % Customer B 11 % 11 % 12 % The Company had accounts receivable due from these customers totaling $13,405,000 and $17,792,000, representing 20% and 24% of total accounts receivable, as of December 31, 2018 and 2017, respectively. The Company purchases corn, its largest cost component in producing ethanol, from its suppliers. The Company purchased corn from suppliers representing 10% or more of the Company's total corn purchases, as follows: Years Ended December 31, 2018 2017 2016 Supplier A 17 % 14 % 13 % Supplier B 14 % 13 % 4 % Supplier C 11 % 9 % 13 % Supplier D 10 % 10 % 8 % Approximately 35% of the Company's employees are covered by a collective bargaining agreement. Inventories December 31, 2018 2017 Finished goods $ 35,778 $ 35,652 Work in progress 6,855 8,807 Raw materials 7,233 7,601 Low-carbon and RIN credits 6,130 7,952 Other 1,824 1,538 Total $ 57,820 $ 61,550 Property and Equipment Buildings 40 years Facilities and plant equipment 10 – 25 years Other equipment, vehicles and furniture 5 – 10 years The cost of normal maintenance and repairs is charged to operations as incurred. Significant capital expenditures that increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the asset. The cost of property and equipment sold, or otherwise disposed of, and the related accumulated depreciation or amortization are removed from the accounts, and any resulting gains or losses are reflected in current operations. Intangible Asset Derivative Instruments and Hedging Activities Revenue Recognition The provisions of ASC 606 include a five-step process by which an entity will determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which an entity expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies the performance obligation. Effective January 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all of its contracts. Following the adoption of ASC 606, the Company continues to recognize revenue at a point-in-time when control of goods transfers to the customer. The timing of recognition is consistent with the Company's previous revenue recognition accounting policy under which the Company recognized revenue when title and risk of loss pass to the customer and collectability was reasonably assured. In addition, ASC 606 did not impact the Company's presentation of revenue on a gross or net basis. The Company recognizes revenue primarily from sales of ethanol and its related co-products. The Company has nine ethanol production facilities from which it produces and sells ethanol to its customers through Kinergy. Kinergy enters into sales contracts with ethanol customers under exclusive intercompany ethanol sales agreements with each of the Company's nine ethanol plants. Kinergy also acts as a principal when it purchases third party ethanol which it resells to its customers. Finally, Kinergy has exclusive sales agreements with other third-party owned ethanol plants under which it sells their ethanol production for a fee plus the costs to deliver the ethanol to Kinergy's customers. These sales are referred to as third-party agent sales. Revenue from these third-party agent sales is recorded on a net basis, with Kinergy recognizing its predetermined fees and any associated delivery costs. The Company has nine ethanol production facilities from which it produces and sells co-products to its customers through PAP. PAP enters into sales contracts with co-product customers under exclusive intercompany co-product sales agreements with each of the Company's nine ethanol plants. The Company recognizes revenue from sales of ethanol and co-products at the point in time when the customer obtains control of such products, which typically occurs upon delivery depending on the terms of the underlying contracts. In some instances, the Company enters into contracts with customers that contain multiple performance obligations to deliver volumes of ethanol or co-products over a contractual period of less than 12 months. The Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices and recognizes the related revenue as control of each individual product is transferred to the customer in satisfaction of the corresponding performance obligations. When the Company is the agent, the supplier controls the products before they are transferred to the customer because the supplier is primarily responsible for fulfilling the promise to provide the product, has inventory risk before the product has been transferred to a customer and has discretion in establishing the price for the product. When the Company is the principal, the Company controls the products before they are transferred to the customer because the Company is primarily responsible for fulfilling the promise to provide the products, has inventory risk before the product has been transferred to a customer and has discretion in establishing the price for the product. See Note 4 for the Company's revenue by type of contracts. Shipping and Handling Costs Selling Costs Stock-Based Compensation Impairment of Long-Lived Assets Deferred Financing Costs Provision for Income Taxes The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. An uncertain tax position is considered effectively settled on completion of an examination by a taxing authority if certain other conditions are satisfied. Should the Company incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of interest expense and other income (expense), net, respectively. Deferred tax assets and liabilities are classified as noncurrent in the Company's consolidated balance sheets. The Company files a consolidated federal income tax return. This return includes all wholly-owned subsidiaries as well as the Company's pro-rata share of taxable income from pass-through entities in which the Company owns less than 100%. State tax returns are filed on a consolidated, combined or separate basis depending on the applicable laws relating to the Company and its subsidiaries. Income (Loss) Per Share The following tables compute basic and diluted earnings per share (in thousands, except per share data): Year Ended December 31, 2018 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol $ (60,273 ) Less: Preferred stock dividends (1,265 ) Basic and diluted loss per share: Loss available to common stockholders $ (61,538 ) 43,376 $ (1.42 ) Year Ended December 31, 2017 Loss Shares Denominator Per-Share Net loss attributed to Pacific Ethanol $ (34,964 ) Less: Preferred stock dividends (1,265 ) Basic and diluted loss per share: Loss available to common stockholders $ (36,229 ) 42,745 $ (0.85 ) Year Ended December 31, 2016 Income Shares Denominator Per-Share Amount Net income attributed to Pacific Ethanol $ 1,419 Less: Preferred stock dividends (1,269 ) Less: Income allocated to participating securities (2 ) Basic income per share: Income available to common stockholders $ 148 42,182 $ 0.00 Add: Options — 69 Diluted income per share: Income available to common stockholders $ 148 42,251 $ 0.00 There were an aggregate of 635,000, 719,000 and 704,000 potentially dilutive shares from convertible securities outstanding as of December 31, 2018, 2017 and 2016, respectively. These convertible securities were not considered in calculating diluted income (loss) per common share for the years ended December 31, 2018, 2017 and 2016 as their effect would be anti-dilutive. Financial Instruments Employment-related Benefits Estimates and Assumptions Subsequent Events Reclassifications Recent Accounting Pronouncements Leases (Topic 842): Targeted Improvements In May 2014, the FASB issued new guidance on the recognition of revenue under ASC 606. See Note 1 " – Revenue Recognition" above. |
PACIFIC ETHANOL PLANTS.
PACIFIC ETHANOL PLANTS. | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
PACIFIC ETHANOL PLANTS. | 2. PACIFIC ETHANOL PLANTS. Illinois Corn Processing On July 3, 2017, the Company purchased 100% of the equity interests of ICP from ICP’s owners, Illinois Corn Processing Holdings Inc. (“ICPH”) and MGPI Processing, Inc. (together with ICPH, the “Sellers”). At the closing, ICP became an indirect wholly-owned subsidiary of the Company. Upon closing, the Company (i) paid to the Sellers $30.0 million in cash, and (ii) issued to the Sellers secured promissory notes in the aggregate principal amount of approximately $46.9 million (the “Seller Notes”). The Seller Notes were secured by a first priority lien on ICP’s assets and a pledge of the membership interests of ICP. ICP is a 90 million gallon per year fuel and industrial alcohol manufacturing, storage and distribution facility adjacent to the Company’s facility in Pekin, Illinois and is located on the Illinois River. ICP produces fuel-grade ethanol, beverage and industrial-grade alcohol, dry distillers grain and corn oil. The facility has direct access to end-markets via barge, rail and truck, and expands the Company’s domestic and international distribution channels. ICP is reflected in the results of the Company’s production segment. Upon closing, the Company recognized the following allocation of the purchase price at fair values. No intangible assets or liabilities were recognized. The Company’s purchase price consideration allocation is as follows (in thousands): Cash and equivalents $ 426 Accounts receivable 11,636 Inventories 9,227 Other current assets 1,560 Total current assets 22,849 Property and equipment 61,128 Other assets 328 Total assets acquired $ 84,305 Accounts payable, trade $ 5,683 Other current liabilities 1,486 Total current liabilities 7,169 Other non-current liabilities 209 Total liabilities assumed $ 7,378 Net assets acquired $ 76,927 Estimated goodwill $ — Total purchase price $ 76,927 The contractual amount due on the accounts receivable acquired was $11.6 million, all of which was expected to be collectible. The following table presents unaudited pro forma combined financial information assuming the acquisition of ICP occurred on January 1, 2016 (in thousands, except per share data): Years Ended December 31, 2017 2016 Net sales – pro forma $ 1,710,317 $ 1,802,159 Consolidated net income (loss) – pro forma $ (42,589 ) $ 8,329 Diluted net income (loss) per share – pro forma $ (0.95 ) $ 0.16 Diluted weighted-average shares – pro forma 42,745 42,251 For the years ended December 31, 2018 and 2017, ICP contributed $163.1 million and $75.9 million in net sales and $6.5 million and $3.7 million in pre-tax income, respectively. Pacific Aurora On December 15, 2016, PE Central closed on an agreement with ACEC under which (i) PE Central contributed to Pacific Aurora 100% of the equity interests of its wholly-owned subsidiaries, Pacific Ethanol Aurora East, LLC (“AE”) and Pacific Ethanol Aurora West, LLC (“AW”), which owned the Company’s Aurora East and Aurora West ethanol plants, respectively, in exchange for an 88.15% ownership interest in Pacific Aurora, and (ii) ACEC contributed to Pacific Aurora its grain elevator adjacent to the Aurora East and Aurora West properties and related grain handling assets, including the outer rail loop and the real property on which they are located, in exchange for an 11.85% ownership interest in Pacific Aurora. On December 15, 2016, concurrent with the closing of the contribution transaction, PE Central sold a 14.22% ownership interest in Pacific Aurora to ACEC for $30.0 million in cash. Following the closing of these transactions, PE Central owned 73.93% of Pacific Aurora and ACEC owned 26.07% of Pacific Aurora. The Company has consolidated 100% of the results of Pacific Aurora and recorded the amount attributed to ACEC as noncontrolling interests under the voting rights model. Since the Company had control of AE and AW prior to forming Pacific Aurora, there was no gain or loss recorded on the contribution and ultimate sale of a portion of the Company’s interests in Pacific Aurora. ACEC contributed $16.5 million in assets at fair market value and paid $30.0 million in cash for its additional ownership interests. A noncontrolling interest was recognized to reflect ACEC’s proportional ownership interest multiplied by the book value of Pacific Aurora’s net assets. As a result, the Company recorded $16.2 million as additional paid-in capital attributed to the difference between Pacific Aurora’s book value and the contribution and sale. The carrying values and classification of assets and liabilities of Pacific Aurora as of December 31, 2016 were as follows (in thousands): Cash and equivalents $ 1,453 Accounts receivable 16,804 Inventories 3,837 Other current assets 77 Total current assets 22,171 Property and equipment 115,759 Other assets 1,387 Total assets $ 139,317 Accounts payable and accrued liabilities $ 20,152 Other current liabilities 2,045 Long-term debt outstanding, net 621 Total liabilities $ 22,818 |
INVENTORIES.
INVENTORIES. | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES. | 3. INVENTORIES. Inventories consisted primarily of bulk ethanol, specialty alcohols, corn, co-products, low-carbon and Renewable Identification Number ("RIN") 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. Inventory is net of a $0 and $2,328,000 valuation adjustment as of September 30, 2019 and December 31, 2018, respectively. Inventory balances consisted of the following (in thousands): September 30, December 31, Finished goods $ 41,034 $ 35,778 Work in progress 8,207 6,855 Raw materials 7,236 7,233 Low-carbon and RIN credits 4,150 6,130 Other 1,882 1,824 Total $ 62,509 $ 57,820 |
INTERCOMPANY AGREEMENTS.
INTERCOMPANY AGREEMENTS. | 12 Months Ended |
Dec. 31, 2018 | |
Intercompany Agreements [Abstract] | |
INTERCOMPANY AGREEMENTS. | 3. INTERCOMPANY AGREEMENTS. The Company, directly or through one of its subsidiaries, has entered into the following management and marketing agreements: Affiliate Management Agreement The AMAs have an initial term of one year and automatic successive one year renewal periods. Pacific Ethanol may terminate the AMA, and any subsidiary may terminate the AMA, at any time by providing at least 90 days prior notice of such termination. Pacific Ethanol recorded revenues of approximately $12,048,000, $11,904,000 and $12,968,000 related to the AMAs in place for the years ended December 31, 2018, 2017 and 2016, respectively. These amounts have been eliminated upon consolidation. Ethanol Marketing Agreements Kinergy recorded revenues of approximately $8,773,000, $8,464,000 and $8,029,000 related to the ethanol marketing agreements for the years ended December 31, 2018, 2017 and 2016, respectively. These amounts have been eliminated upon consolidation. Corn Procurement and Handling Agreements Under these agreements, PAP receives a fee of $0.045 per bushel of corn delivered to each facility as consideration for its procurement and handling services, payable monthly. Effective December 15, 2016, this fee is $0.03 per bushel of corn. Each corn procurement and handling agreement had an initial term of one year and successive one year renewal periods at the option of the individual plant. PAP recorded revenues of approximately $4,531,000, $4,245,000 and $4,386,000 related to the corn procurement and handling agreements for the years ended December 31, 2018, 2017 and 2016, respectively. These amounts have been eliminated upon consolidation. Effective December 15, 2016, each Pacific Aurora facility entered into a new grain procurement agreement with ACEC. Under this agreement, ACEC receives a fee of $0.03 per bushel of corn delivered to each facility as consideration for its procurement and handling services, payable monthly. The grain procurement agreement has an initial term of one year and successive one year renewal periods at the option of the individual plant. Pacific Aurora recorded expenses of approximately $1,381,000, $1,488,000 and $107,000 for the years ended December 31, 2018, 2017 and the period from December 15, 2016 to December 31, 2016, respectively. These amounts have not been eliminated upon consolidation as they are with a related but unconsolidated third-party. Distillers Grains Marketing Agreements PAP recorded revenues of approximately $6,572,000, $6,020,000 and $6,047,000 related to the distillers grains marketing agreements for the years ended December 31, 2018, 2017 and 2016, respectively. These amounts have been eliminated upon consolidation. |
SEGMENTS.
SEGMENTS. | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Segment Reporting [Abstract] | ||
SEGMENTS. | 2. SEGMENTS. The Company reports its financial and operating performance in two segments: (1) ethanol production, which includes the production and sale of ethanol, specialty alcohols and co-products, with all of the Company's production facilities aggregated, and (2) marketing and distribution, which includes marketing and merchant trading for Company-produced ethanol, specialty alcohols and co-products and third-party ethanol. The following tables set forth certain financial data for the Company's operating segments (in thousands): Three Months Ended Nine Months Ended Net Sales 2019 2018 2019 2018 Production, recorded as gross: Ethanol/alcohol sales $ 212,897 $ 216,788 $ 586,680 $ 670,304 Co-product sales 65,693 73,259 199,177 226,307 Intersegment sales 403 518 1,187 1,531 Total production sales 278,993 290,565 787,044 898,142 Marketing and distribution: Ethanol/alcohol sales, gross $ 86,124 $ 79,877 $ 280,032 $ 282,940 Ethanol/alcohol sales, net 446 483 1,375 1,405 Intersegment sales 2,079 2,201 5,839 6,757 Total marketing and distribution sales 88,649 82,561 287,246 291,102 Intersegment eliminations (2,482 ) (2,719 ) (7,026 ) (8,288 ) Net sales as reported $ 365,160 $ 370,407 $ 1,067,264 $ 1,180,956 Cost of goods sold: Production $ 294,888 $ 295,574 $ 810,670 $ 914,638 Marketing and distribution 87,976 73,784 277,545 268,917 Intersegment eliminations (2,888 ) (2,719 ) (7,817 ) (8,456 ) Cost of goods sold as reported $ 379,976 $ 366,639 $ 1,080,398 $ 1,175,099 Income (loss) before benefit for income taxes: Production $ (25,999 ) $ (15,571 ) $ (50,682 ) $ (45,355 ) Marketing and distribution (998 ) 7,416 4,991 18,095 Corporate activities (2,076 ) (1,149 ) (5,833 ) (6,708 ) $ (29,073 ) $ (9,304 ) $ (51,524 ) $ (33,968 ) Depreciation and amortization: Production $ 11,833 $ 10,040 $ 35,390 $ 30,017 Corporate activities 195 177 554 618 $ 12,028 $ 10,217 $ 35,944 $ 30,635 Interest expense: Production $ 1,969 $ 1,692 $ 5,724 $ 5,416 Marketing and distribution 929 344 2,291 1,042 Corporate activities 2,265 2,157 6,999 6,417 $ 5,163 $ 4,193 $ 15,014 $ 12,875 The following table sets forth the Company's total assets by operating segment (in thousands): Total assets: September 30, December 31, Production $ 527,950 $ 532,790 Marketing and distribution 108,960 112,984 Corporate assets 15,950 14,117 $ 652,860 $ 659,891 | 4. SEGMENTS. The Company reports its financial and operating performance in two segments: (1) ethanol production, which includes the production and sale of ethanol, specialty alcohols and co-products, with all of the Company's production facilities aggregated, and (2) marketing and distribution, which includes marketing and merchant trading for Company-produced ethanol, specialty alcohols and co-products, and third-party ethanol. Income before provision for income taxes includes management fees charged by Pacific Ethanol to the segment. The production segment incurred $10,248,000, $9,744,000 and $9,968,000 in management fees for the years ended December 31, 2018, 2017 and 2016, respectively. The marketing and distribution segment incurred $2,160,000, $2,160,000 and $3,000,000 in management fees for the years ended December 31, 2018, 2017 and 2016, respectively. Corporate activities include selling, general and administrative expenses, consisting primarily of corporate employee compensation, professional fees and overhead costs not directly related to a specific operating segment. During the normal course of business, the segments do business with each other. The preponderance of this activity occurs when the Company's marketing segment markets ethanol produced by the production segment for a marketing fee, as discussed in Note 3. These intersegment activities are considered arms'-length transactions. Consequently, although these transactions impact segment performance, they do not impact the Company's consolidated results since all revenues and corresponding costs are eliminated in consolidation. Capital expenditures are substantially all incurred at the Company's production segment. The following tables set forth certain financial data for the Company's operating segments (in thousands): Years Ended December 31, 2018 2017 2016 Net Sales Production, recorded as gross: Ethanol/alcohol sales $ 859,815 $ 845,692 $ 797,363 Co-product sales 296,686 257,031 248,444 Intersegment sales 1,995 1,898 1,169 Total production sales 1,158,496 1,104,621 1,046,976 Marketing and distribution: Ethanol/alcohol sales, gross $ 357,011 $ 527,869 $ 577,347 Ethanol/alcohol sales, net 1,859 1,663 1,604 Intersegment sales 8,773 8,464 8,029 Total marketing and distribution sales 367,643 537,996 586,980 Intersegment eliminations (10,768 ) (10,362 ) (9,198 ) Net sales as reported $ 1,515,371 $ 1,632,255 $ 1,624,758 Cost of goods sold Production $ 1,197,507 $ 1,101,651 $ 1,003,679 Marketing and distribution 343,991 535,033 575,920 Intersegment eliminations (10,963 ) (10,360 ) (9,199 ) Cost of goods sold as reported $ 1,530,535 $ 1,626,324 $ 1,570,400 Income (loss) before benefit for income taxes Production $ (77,833 ) $ (27,457 ) $ (6,879 ) Marketing and distribution 18,191 (2,463 ) 4,517 Corporate activities (8,856 ) (8,475 ) 2,907 $ (68,498 ) $ (38,395 ) $ 545 Depreciation: Production $ 40,099 $ 37,637 $ 34,528 Corporate activities 750 1,014 913 $ 40,849 $ 38,651 $ 35,441 Interest expense Production $ 7,116 $ 5,887 $ 20,794 Marketing and distribution 1,388 1,271 1,404 Corporate activities 8,628 5,780 208 $ 17,132 $ 12,938 $ 22,406 The following table sets forth the Company's total assets by operating segment (in thousands): December 31, 2018 December 31, 2017 Total assets Production $ 532,790 $ 583,696 Marketing and distribution 112,984 127,242 Corporate assets 14,117 9,358 $ 659,891 $ 720,296 |
PROPERTY AND EQUIPMENT.
PROPERTY AND EQUIPMENT. | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT. | 5. PROPERTY AND EQUIPMENT. Property and equipment consisted of the following (in thousands): December 31, 2018 2017 Facilities and plant equipment $ 621,909 $ 601,156 Land 8,970 8,970 Other equipment, vehicles and furniture 11,812 10,189 Construction in progress 30,312 38,041 673,003 658,356 Accumulated depreciation (190,346 ) (150,004 ) $ 482,657 $ 508,352 Depreciation expense was $40,849,000, $38,651,000 and $35,441,000 for the years ended December 31, 2018, 2017 and 2016, respectively. For the year ended December 31, 2018, 2017 and 2016, the Company capitalized interest of $1,170,000, $822,000 and $1,307,000, respectively, related to its capital investment activities. |
INTANGIBLE ASSET.
INTANGIBLE ASSET. | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS. | 6. INTANGIBLE ASSET. The Company recorded a tradename valued at $2,678,000 in 2006 as part of its acquisition of Kinergy. The Company determined that the Kinergy tradename has an indefinite life and, therefore, rather than being amortized, will be tested annually for impairment. The Company did not record any impairment of the Kinergy tradename for the years ended December 31, 2018, 2017 and 2016. |
DERIVATIVES.
DERIVATIVES. | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
DERIVATIVES. | 4. 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 September 30, 2019 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 2,400 Commodity contracts Derivative instruments $ 2,790 Derivative instruments $ 3,619 As of December 31, 2018 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 8,479 Commodity contracts Derivative instruments $ 1,765 Derivative instruments $ 6,309 The classification and amounts of the Company's recognized gains (losses) for its derivatives not designated as hedging instruments are as follows (in thousands): Realized Gains Three Months Ended Type of Instrument Statements of Operations Location 2019 2018 Commodity contracts Cost of goods sold $ 2,262 $ 916 Unrealized Losses Three Months Ended Type of Instrument Statements of Operations Location 2019 2018 Commodity contracts Cost of goods sold $ (5,582 ) $ (1,907 ) Realized Losses Nine Months Ended Type of Instrument Statements of Operations Location 2019 2018 Commodity contracts Cost of goods sold $ (2,150 ) $ (1,241 ) Unrealized Gains (Losses) Nine Months Ended Type of Instrument Statements of Operations Location 2019 2018 Commodity contracts Cost of goods sold $ 3,715 $ (3,121 ) | 7. 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 December 31, 2018 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 8,479 Commodity contracts Derivative assets $ 1,765 Derivative liabilities $ 6,309 As of December 31, 2017 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 3,813 Commodity contracts Derivative assets $ 998 Derivative liabilities $ 2,307 The above amounts represent the gross balances of the contracts, however, the Company does have a right of offset with each of its derivative brokers. The classification and amounts of the Company's recognized gains (losses) for its derivatives not designated as hedging instruments are as follows (in thousands): Realized Gains (Losses) For the Years Ended December 31, Type of Instrument Statements of Operations Location 2018 2017 2016 Commodity contracts Cost of goods sold $ (3,479 ) $ (4,165 ) $ 1,386 $ (3,479 ) $ (4,165 ) $ 1,386 Unrealized Gains (Losses) For the Years Ended December 31, Type of Instrument Statements of Operations Location 2018 2017 2016 Commodity contracts Cost of goods sold $ (3,235 ) $ 2,088 $ (3,370 ) $ (3,235 ) $ 2,088 $ (3,370 ) |
LEASES.
LEASES. | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
LEASES. | 5. LEASES. As discussed in Note 1, on January 1, 2019, the Company adopted the provisions of ASC 842 using the prospective transition approach, which applies the provisions of ASC 842 upon adoption, with no change to prior periods. This adoption resulted in the Company recognizing initial right of use assets and lease liabilities of $43,753,000. The adoption did not have a significant impact on the Company's consolidated statements of operations. Upon the initial adoption of ASC 842, the Company elected the following practical expedients allowable under the guidance: not to reassess whether any expired or existing contracts are or contain leases; not to reassess the lease classification for any expired or existing leases; not to reassess initial direct costs for any existing leases; not to separately identify lease and nonlease components; and not to evaluate historical land easements. Additionally, the Company elected the short-term lease exemption policy, applying the requirements of ASC 842 to only long-term (greater than 1 year) leases. The Company leases railcar equipment, office equipment and land for certain of its facilities. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, unless an implicit rate is readily determinable, as the discount rate for each lease in determining the present value of lease payments. For the three and nine months ended September 30, 2019, the Company's weighted average discount rate was 6.01%. Operating lease expense is recognized on a straight-line basis over the lease term. The Company determines if an arrangement is a lease or contains a lease at inception. The Company's leases have remaining lease terms of approximately 1 year to 57 years, which may include options to extend the lease when it is reasonably certain the Company will exercise those options. For the three and nine months ended September 30, 2019, the weighted average remaining lease terms of equipment and land-related leases were 2.66 years and 13.43 years, respectively. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms or material restrictive covenants. The Company does not have any material finance lease obligations nor sublease agreements. The following table summarizes the remaining maturities of the Company's operating lease liabilities, assuming all land lease extensions are taken, as of September 30, 2019 (in thousands): Year Ended: Equipment Land Related 2019 $ 2,220 $ 262 2020 7,349 1,054 2021 4,364 1,077 2022 4,140 1,100 2023 3,500 1,013 2024-43 10,181 34,931 $ 31,754 $ 39,437 For the three and nine months ended September 30, 2019, the Company recorded operating lease costs of $2,157,000 and $6,490,000 in cost of goods sold, respectively, and $119,000 and $354,000 in selling, general and administrative expenses, respectively, in the Company's statements of operations. |
DEBT.
DEBT. | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
DEBT. | 6. DEBT. Long-term borrowings are summarized as follows (in thousands): September 30, December 31, Kinergy line of credit $ 79,685 $ 57,057 Pekin term loan 39,500 43,000 Pekin revolving loan 32,000 32,000 ICP term loan 12,000 16,500 ICP revolving loan 18,000 18,000 Parent notes payable 63,200 66,948 244,385 233,505 Less unamortized debt discount (150 ) (690 ) Less unamortized debt financing costs (1,019 ) (1,377 ) Less short-term portion (144,543 ) (146,671 ) Long-term debt $ 98,673 $ 84,767 Kinergy Operating Line of Credit Pekin Term Loan On March 21, 2019, PE Pekin amended its term and revolving credit facilities by agreeing to increase the interest rate under the facilities by 125 basis points to an annual rate equal to the 30-day LIBOR plus 5.00%. PE Pekin and its lender also agreed that it is required to maintain working capital of not less than $15,000,000 from March 21, 2019 through July15, 2019 and working capital of not less than $30,000,000 from July 15, 2019 and continuing at all times thereafter. On July 15, 2019, PE Pekin and its lender agreed to a further amendment extending the aforementioned July 15, 2019 dates to November 15, 2019. As of the filing of this prospectus, the Company believes PE Pekin is in compliance with its working capital requirement. Under these amendments, the lenders also agreed to temporarily waive financial covenant violations, working capital maintenance violations and intercompany accounts receivable collections violations that occurred with respect to PE Pekin's credit agreement. In addition, the lenders agreed to defer scheduled principal payments, including further deferral of principal payments in the amount of $3,500,000 each due on February 20, 2019 and May 20, 2019. On August 6, 2019, the Company paid its $3,500,000 principal payment scheduled for August 20, 2019. The waivers and principal deferrals expire on November 15, 2019, or earlier in the case of an event of default, at which time the waivers will become permanent if Pacific Ethanol Central, LLC ("PE Central"), PE Pekin's parent, has made a contribution to PE Pekin in an amount equal to $30,000,000, minus the then-existing amount of PE Pekin's working capital, plus the amount of any accounts receivable owed by PE Central to PE Pekin, plus $12,000,000 (the "PE Central Contribution Amount"). In addition, if the PE Central Contribution Amount is timely received, the lenders agreed to waive PE Pekin's debt service coverage ratio financial covenant for the year ended December 31, 2019. If the PE Central Contribution Amount is not timely made, then the temporary waivers will automatically expire. PE Pekin is also required to pay by November 15, 2019 the aggregate amount of $10,500,000 representing all deferred and unpaid scheduled principal payments and all additional scheduled principal payments for the remainder of 2019. ICP Credit Facilities Restrictions | 8. DEBT. Long-term borrowings are summarized as follows (in thousands): December 31, 2018 December 31, 2017 Kinergy line of credit $ 57,057 $ 49,477 Pekin term loan 43,000 53,500 Pekin revolving loan 32,000 32,000 ICP term loan 16,500 22,500 ICP revolving loan 18,000 18,000 Pacific Aurora line of credit — — Parent notes payable 66,948 68,948 233,505 244,425 Less unamortized debt discount (690 ) (1,409 ) Less unamortized debt financing costs (1,377 ) (1,925 ) Less short-term portion (146,671 ) (20,000 ) Long-term debt $ 84,767 $ 221,091 Kinergy Line of Credit The credit facility also includes the accounts receivable of PAP as additional collateral. Payments that may be made by PAP to the Company as reimbursement for management and other services provided by the Company to PAP are limited under the terms of the credit facility to $500,000 per fiscal quarter. If Kinergy and PAP's monthly excess borrowing availability falls below certain thresholds, they are collectively required to maintain a fixed-charge coverage ratio (calculated as a twelve-month rolling EBITDA divided by the sum of interest expense, capital expenditures, principal payments of indebtedness, indebtedness from capital leases and taxes paid during such twelve-month rolling period) of at least 2.0 and are prohibited from incurring certain additional indebtedness (other than specific intercompany indebtedness). Kinergy and PAP's obligations under the credit facility are secured by a first-priority security interest in all of their assets in favor of the lender. Pacific Ethanol has guaranteed all of Kinergy's obligations under the line of credit. As of December 31, 2018, Kinergy had unused availability under the credit facility of $10,200,000. Pekin Credit Facilities st st On August 7, 2017, Pekin amended its term and revolving credit facilities by agreeing to increase the interest rate under the facilities by 25 basis points to an annual rate equal to the 30-day LIBOR plus 4.00%. Pekin and its lender also agreed that Pekin is required to maintain working capital of not less than $17.5 million from August 31, 2017 through December 31, 2017 and working capital of not less than $20.0 million from January 1, 2018 and continuing at all times thereafter. In addition, the required Debt Service Coverage Ratio was reduced to 0.15 to 1.00 for the fiscal year ending December 31, 2017. For the month ended January 31, 2018, Pekin was not in compliance with its working capital requirement due to larger than anticipated repair and maintenance related expenses to replace faulty equipment. Pekin has received a waiver from its lender for this noncompliance. Further, the lender decreased Pekin's working capital covenant requirement to $13.0 million for the month ended February 28, 2018, excluding the $3.5 million principal payment due in May 2018 from the calculation. On March 30, 2018, Pekin amended its term loan facility by reducing the amount of working capital it is required to maintain to not less than $13.0 million from March 31, 2018 through November 30, 2018 and not less than $16.0 million from December 1, 2018 and continuing at all times thereafter. In addition, a principal payment in the amount of $3.5 million due for May 2018 was deferred until the maturity date of the term loan. The Company experienced certain covenant violations under its Pekin term and revolving credit facilities at December 31, 2018. In February 2019, the Company reached an agreement with its lender to forbear until March 11, 2019 and to defer a $3.5 million principal payment until that date. As of the filing of the Form 10-K, the forbearance and deferral have not been extended, the covenant violations have not been waived and the $3.5 million principal payment is due and has not been paid; however, the Company continues to work with its lender in this regard. ICP Credit Facilities Under the terms of the credit facilities, ICP is required to maintain working capital of not less than $8.0 million. In addition, ICP is required to maintain an annual debt service coverage ratio of not less than 1.50 to 1.00 beginning for the year ending December 31, 2018. As of December 31, 2018 and the filing of this report, the Company believes ICP is in compliance with its working capital requirement. Pacific Aurora Line of Credit Pacific Ethanol, Inc. Notes Payable The Notes mature on December 15, 2019 (the "Maturity Date"). Interest on the Notes accrues at a rate equal to (i) the greater of 1% and the three-month LIBOR, plus 7.0% from the closing through December 14, 2017, (ii) the greater of 1% and LIBOR, plus 9% between December 15, 2017 and December 14, 2018, and (iii) the greater of 1% and LIBOR plus 11% between December 15, 2018 and the Maturity Date. The interest rate increases by an additional 2% per annum above the interest rate otherwise applicable upon the occurrence and during the continuance of an event of default until such event of default has been cured. Interest is payable in cash on the 15th calendar day of each March, June, September and December. Pacific Ethanol is required to pay all outstanding principal and any accrued and unpaid interest on the Notes on the Maturity Date. Pacific Ethanol may, at its option, prepay the outstanding principal amount of the Notes at any time without premium or penalty. The Notes contain a variety of events of default. The payments due under the Notes rank senior to all other indebtedness of Pacific Ethanol, other than permitted senior indebtedness. The Notes contain a variety of obligations on the part of Pacific Ethanol not to engage in certain activities, including that (i) Pacific Ethanol and certain of its subsidiaries will not incur other indebtedness, except for certain permitted indebtedness, (ii) Pacific Ethanol and certain of its subsidiaries will not redeem, repurchase or pay any dividend or distribution on their respective capital stock without the prior consent of the holders of the Notes holding 66-2/3% of the aggregate principal amount of the Notes, other than certain permitted distributions, (iii) Pacific Ethanol and certain of its subsidiaries will not sell, lease, assign, transfer or otherwise dispose of any assets of Pacific Ethanol or any such subsidiary, except for certain permitted dispositions (including the sales of inventory or receivables in the ordinary course of business), and (iv) Pacific Ethanol and certain of its subsidiaries will not issue any capital stock or membership interests for any purpose other than to pay down a portion of all of the amounts owed under the Notes and in connection with Pacific Ethanol's stock incentive plans. The Notes are secured by a first-priority security interest in the equity interest held by Pacific Ethanol in its wholly-owned subsidiary, PE Op. Co., which indirectly owns the Company's plants located on the West Coast. During the year ended December 31, 2018, the Company made voluntary principal prepayments of $2,000,000 from the proceeds of certain equity issuances. Pacific Ethanol West Plants' Term Debt Maturities of Long-term Debt December 31: 2019 $ 86,260 2020 20,000 2021 19,500 2022 107,745 2023 — $ 233,505 |
PENSION AND RETIREMENT BENEFIT
PENSION AND RETIREMENT BENEFIT PLANS. | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | ||
PENSION AND RETIREMENT BENEFIT PLANS. | 8. PENSION AND RETIREMENT BENEFIT PLANS. The Company sponsors a defined benefit pension plan (the "Retirement Plan") and a health care and life insurance plan (the "Postretirement Plan"). The Company assumed the Retirement Plan and the Postretirement Plan as part of its acquisition of PE Central on July 1, 2015. The Retirement Plan is noncontributory, and covers only "grandfathered" unionized employees at the Company's Pekin, Illinois facility who fulfill minimum age and service requirements. Benefits are based on a prescribed formula based upon the employee's years of service. The Retirement Plan, which is part of a collective bargaining agreement, covers only union employees hired prior to November 1, 2010. The Company uses a December 31 measurement date for its Retirement Plan. The Company's funding policy is to make the minimum annual contribution required by applicable regulations. As of December 31, 2018, the Retirement Plan's accumulated projected benefit obligation was $18,690,000, with a fair value of plan assets of $13,257,000. The underfunded amount of $5,433,000 is recorded on the Company's consolidated balance sheet in other liabilities. The Company's net periodic Retirement Plan costs are as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Interest cost $ 190 $ 174 $ 570 $ 522 Service cost 94 106 282 318 Expected return on plan assets (190 ) (204 ) (570 ) (612 ) Net periodic expense $ 94 $ 76 $ 282 $ 228 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 dollar cap based upon years of service. As of December 31, 2018, the Postretirement Plan's accumulated projected benefit obligation was $5,711,000 and is recorded on the Company's consolidated balance sheet in other liabilities. The Company's funding policy is to make the minimum annual contribution required by applicable regulations. The Company's net periodic Postretirement Plan costs are as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Interest cost $ 55 $ 46 $ 165 $ 138 Service cost 17 2 51 6 Amortization of loss 30 33 90 99 Net periodic expense $ 102 $ 81 $ 306 $ 243 | 9. PENSION PLANS. Retirement Plan Information related to the Retirement Plan as of and for the years ended December 31, 2018, 2017 and 2016 is presented below (dollars in thousands): 2018 2017 2016 Changes in plan assets: Fair value of plan assets, beginning $ 13,958 $ 12,423 $ 12,567 Actual gains (losses) (946 ) 1,722 523 Benefits paid (667 ) (665 ) (667 ) Company contributions 912 478 — Participant contributions — — — Fair value of plan assets, ending $ 13,257 $ 13,958 $ 12,423 Less: projected accumulated benefit obligation $ 18,690 $ 19,658 $ 18,455 Funded status, (underfunded)/overfunded $ (5,433 ) $ (5,700 ) $ (6,032 ) Amounts recognized in the consolidated balance sheets: Other liabilities $ (5,433 ) $ (5,700 ) $ (6,032 ) Accumulated other comprehensive loss (income) $ 1,069 $ 726 $ 1,047 Components of net periodic benefit costs are as follows: Service cost $ 424 $ 391 $ 223 Interest cost 694 750 686 Expected return on plan assets (816 ) (674 ) (794 ) Net periodic benefit cost $ 302 $ 467 $ 115 Loss (gain) recognized in other comprehensive income (expense) $ 343 $ (321 ) $ 1,932 Assumptions used in computation benefit obligations: Discount rate 4.15 % 3.60 % 4.15 % Expected long-term return on plan assets 6.25 % 6.00 % 6.75 % Rate of compensation increase — — — The Company expects to make contributions in the year ending December 31, 2019 of approximately $0.6 million. Net periodic benefit cost for 2019 is estimated at approximately $0.4 million. The following table summarizes the expected benefit payments for the Company's Retirement Plan for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter (in thousands): December 31: 2019 $ 760 2020 790 2021 800 2022 840 2023 890 2024-28 5,100 $ 9,180 See Note 15 for discussion of the Retirement Plan's fair value disclosures. Historical and future expected returns of multiple asset classes were analyzed to develop a risk-free real rate of return and risk premiums for each asset class. The overall rate for each asset class was developed by combining a long-term inflation component, the risk-free real rate of return, and the associated risk premium. A weighted average rate was developed based on those overall rates and the target asset allocation of the plan. The Company's pension committee is responsible for overseeing the investment of pension plan assets. The pension committee is responsible for determining and monitoring the appropriate asset allocations and for selecting or replacing investment managers, trustees, and custodians. The pension plan's current investment target allocations are 50% equities and 50% debt. The pension committee reviews the actual asset allocation in light of these targets periodically and rebalances investments as necessary. The pension committee also evaluates the performance of investment managers as compared to the performance of specified benchmarks and peers and monitors the investment managers to ensure adherence to their stated investment style and to the plan's investment guidelines. Postretirement Plan Information related to the Postretirement Plan as of December 31, 2018 and 2017 is presented below (dollars in thousands): 2018 2017 Amounts at the end of the year: Accumulated/projected benefit obligation $ 5,711 $ 5,565 Fair value of plan assets — — Funded status, (underfunded)/overfunded $ (5,711 ) $ (5,565 ) Amounts recognized in the consolidated balance sheets: Accrued liabilities $ (320 ) $ (240 ) Other liabilities $ (5,392 ) $ (5,325 ) Accumulated other comprehensive loss $ 1,390 $ 1,508 Information related to the Postretirement Plan for the years ended December 31, 2018, 2017 and 2016 is presented below (dollars in thousands): Years Ended December 31, 2018 2017 2016 Amounts recognized in the plan for the year: Company contributions $ 137 $ 157 $ 163 Participant contributions $ 14 $ 22 $ 22 Benefits paid $ (152 ) $ (179 ) $ (184 ) Components of net periodic benefit costs are as follows: Service cost $ 84 $ 84 $ 48 Interest cost 182 198 139 Amortization of prior service costs 131 134 — Net periodic benefit cost $ 397 $ 416 $ 187 Loss (gain) recognized in other comprehensive income $ (118 ) $ (65 ) $ 1,728 Discount rate used in computation of benefit obligations 3.35 % 3.80 % 3.95 % The Company does not expect to recognize any amortization of net actuarial loss during the year ended December 31, 2019. The following table summarizes the expected benefit payments for the Company's Post-Retirement Plan for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter (in thousands): December 31: 2019 $ 320 2020 320 2021 370 2022 360 2023 390 2024-28 2,350 $ 4,110 For purposes of determining the cost and obligation for pre-Medicare postretirement medical benefits, 6.75% and 7.00% annual rates of increases in the per capita cost of covered benefits (i.e., health care trend rate) was assumed for the plan in 2018 and 2017, respectively, adjusting to a rate of 4.50% in 2026. Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. |
INCOME TAXES.
INCOME TAXES. | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES. | 10. INCOME TAXES. The Company recorded a provision (benefit) for income taxes as follows (in thousands): Years Ended December 31, 2018 2017 2016 Current provision (benefit) $ (589 ) $ (490 ) $ 141 Deferred provision (benefit) 27 169 (1,122 ) Total $ (562 ) $ (321 ) $ (981 ) A reconciliation of the differences between the United States statutory federal income tax rate and the effective tax rate as provided in the consolidated statements of operations is as follows: Years Ended December 31, 2018 2017 2016 Statutory rate 21.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 5.4 4.0 6.4 Change in valuation allowance (20.3 ) (34.5 ) (298.8 ) Impact of Federal tax rate change on deferred taxes — (28.4 ) — Impact of Federal tax rate change on valuation allowance — 29.4 — Fair value adjustments and warrant inducements — 0.4 37.2 Noncontrolling interest (3.0 ) (3.2 ) — Stock compensation — (0.1 ) 58.8 Non-deductible items (0.7 ) (0.2 ) 8.9 Other (1.6 ) (1.6 ) (27.5 ) Effective rate 0.8 % 0.8 % (180.0 )% Deferred income taxes are provided using the asset and liability method to reflect temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities using presently enacted tax rates and laws. The components of deferred income taxes included in the consolidated balance sheets were as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 48,082 $ 40,989 R&D, energy and AMT credits 4,247 1,797 Disallowed interest 3,769 — Railcar contracts 650 1,415 Stock-based compensation 782 738 Allowance for doubtful accounts and other assets 643 637 Derivatives 1,214 267 Pension liability 2,941 2,939 Other 2,134 2,097 Total deferred tax assets 64,462 50,879 Deferred tax liabilities: Property and equipment (23,013 ) (25,194 ) Intangibles (749 ) (749 ) Other (363 ) (521 ) Total deferred tax liabilities (24,125 ) (26,464 ) Valuation allowance (40,588 ) (24,639 ) Net deferred tax liabilities, included in other liabilities $ (251 ) $ (224 ) A portion of the Company's net operating loss carryforwards will be subject to provisions of the tax law that limit the use of losses incurred by a company prior to the date certain ownership changes occur. Due to the limitation, a significant portion of these net operating loss carryforwards will expire regardless of whether the Company generates future taxable income. After reducing these net operating loss carryforwards for the amount which will expire due to this limitation, the Company had remaining federal net operating loss carryforwards of approximately $183,212,000 and state net operating loss carryforwards of approximately $166,032,000 at December 31, 2018. These net operating loss carryforwards expire as follows (in thousands): Tax Years Federal State 2019–2023 $ — $ — 2024–2028 12,256 20,217 2029–2033 98,360 49,947 2034 and after 40,955 95,868 Non-expiring NOLs 31,641 — Total NOLs $ 183,212 $ 166,032 Certain of these net operating losses are not immediately available, but become available to be utilized in each of the years ended December 31, as follows (in thousands): Year Federal State 2019 $ 94,739 $ 108,956 2020 6,374 5,345 2021 6,308 5,318 2022 6,308 5,318 2023 6,308 5,318 To the extent amounts are not utilized in any year, they may be carried forward to the next year until expiration. These amounts may change if there are future additional limitations on their utilization. In assessing whether the deferred tax assets are realizable, a more likely than not standard is applied. If it is determined that it is more likely than not that deferred tax assets will not be realized, a valuation allowance must be established against the deferred tax assets. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the associated temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance was established in the amount of $40,588,000, $24,639,000 and $12,683,000 at December 31, 2018, 2017 and 2016, respectively, based on the Company's assessment of the future realizability of certain deferred tax assets. The valuation allowance on deferred tax assets is related to future deductible temporary differences and net operating loss carryforwards for which the Company has concluded it is more likely than not that these items will not be realized in the ordinary course of operations. For the year ended December 31, 2018, the Company recorded an increase in the valuation allowance of $15,949,000. This increase was primarily the offsetting impact of an increase in deferred tax assets associated with additional net operating losses in 2018. For the year ended December 31, 2017, the Company recorded an increase in the valuation allowance of $11,956,000. This increase was primarily the offsetting impact of a decrease in deferred tax liabilities associated with property and equipment, as a result of the finalization of the deferred tax attributes of Pacific Aurora, which was subject to the sale of a noncontrolling interest in 2016. For the year ended December 31, 2016, the Company recorded a decrease in the valuation allowance of $27,155,000, including approximately $13,500,000 related to finalizing certain aspects of the deferred tax attributes of the Company's acquisition of PE Central in 2015, and approximately $11,500,000 related to the sale of the noncontrolling interest in Pacific Aurora. At December 31, 2018 and 2017, the Company accrued $235,000 in tax uncertainties related to a refund claim. There was no accrued interest or penalties relating to tax uncertainties at December 31, 2016. The Tax Cuts and Jobs Act ("TCJA") was enacted on December 22, 2017. The Company recognized the income tax effects of the TCJA in its 2017 financial statements in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes Amounts recorded where accounting was complete principally related to the reduction in the U.S. corporate income tax rate to 21%. This resulted in the Company reporting an income tax benefit of $321,000 as the deferred tax liabilities associated with indefinite lived intangible assets were remeasured at the new 21% rate. This rate reduction decreased gross deferred assets by approximately $10,170,000 and valuation allowance by $10,545,000. Absent this deferred tax liability, the Company is in a net deferred tax asset position that is offset by a full valuation allowance, resulting in a net tax effect of zero. For the year ended December 31, 2018, provisions of Internal Revenue Code Section 163(j), as amended by the TCJA, became effective which now limit the deductibility of interest expense to 30% of adjusted taxable income. The Company recorded a related deferred asset of $3,749.000 at December 31, 2018 which has been fully offset by a valuation allowance. Another significant provision of the TCJA is a limitation of net operating losses generated after fiscal year 2017 with no ability to carryback. The Company is subject to income tax in the United States federal jurisdiction and various state jurisdictions and has identified its federal tax return and tax returns in state jurisdictions below as "major" tax filings. These jurisdictions, along with the years still open to audit under the applicable statutes of limitation, are as follows: Jurisdiction Tax Years Federal 2015 – 2017 Arizona 2015 – 2017 California 2014 – 2017 Colorado 2014 – 2017 Idaho 2015 – 2017 Illinois 2014 – 2017 Indiana 2015 – 2017 Iowa 2015 – 2017 Kansas 2015 – 2017 Minnesota 2015 – 2017 Missouri 2015 – 2017 Nebraska 2015 – 2017 Oklahoma 2015 – 2017 Oregon 2015 – 2017 Texas 2014 – 2017 However, because the Company had net operating losses and credits carried forward in several of the jurisdictions, including the United States federal and California jurisdictions, certain items attributable to closed tax years are still subject to adjustment by applicable taxing authorities through an adjustment to tax attributes carried forward to open years. |
PREFERRED STOCK.
PREFERRED STOCK. | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
PREFERRED STOCK. | 11. PREFERRED STOCK. The Company has 6,734,835 undesignated shares of authorized and unissued preferred stock, which may be designated and issued in the future on the authority of the Company’s Board of Directors. As of December 31, 2018, the Company had the following designated preferred stock: Series A Preferred Stock Upon any issuance, the Series A Preferred Stock would rank senior in liquidation and dividend preferences to the Company’s common stock. Holders of Series A Preferred Stock would be entitled to quarterly cumulative dividends payable in arrears in cash in an amount equal to 5% per annum of the purchase price per share of the Series A Preferred Stock. The holders of the Series A Preferred Stock would have conversion rights initially equivalent to two shares of common stock for each share of Series A Preferred Stock, subject to customary antidilution adjustments. Certain specified issuances will not result in antidilution adjustments. The shares of Series A Preferred Stock would also be subject to forced conversion upon the occurrence of a transaction that would result in an internal rate of return to the holders of the Series A Preferred Stock of 25% or more. Accrued but unpaid dividends on the Series A Preferred Stock are to be paid in cash upon any conversion of the Series A Preferred Stock. The holders of Series A Preferred Stock would have a liquidation preference over the holders of the Company’s common stock equivalent to the purchase price per share of the Series A Preferred Stock plus any accrued and unpaid dividends on the Series A Preferred Stock. A liquidation would be deemed to occur upon the happening of customary events, including transfer of all or substantially all of the Company’s capital stock or assets or a merger, consolidation, share exchange, reorganization or other transaction or series of related transactions, unless holders of 66 2/3% of the Series A Preferred Stock vote affirmatively in favor of or otherwise consent to such transaction. Series B Preferred Stock The Series B Preferred Stock ranks senior in liquidation and dividend preferences to the Company’s common stock. Holders of Series B Preferred Stock are entitled to quarterly cumulative dividends payable in arrears in cash in an amount equal to 7.00% per annum of the purchase price per share of the Series B Preferred Stock; however, subject to the provisions of the Letter Agreement described below, such dividends may, at the option of the Company, be paid in additional shares of Series B Preferred Stock based initially on the liquidation value of the Series B Preferred Stock. In addition to the quarterly cumulative dividends, holders of the Series B Preferred Stock are entitled to participate in any common stock dividends declared by the Company to its common stockholders. The holders of Series B Preferred Stock have a liquidation preference over the holders of the Company’s common stock initially equivalent to $19.50 per share of the Series B Preferred Stock plus any accrued and unpaid dividends on the Series B Preferred Stock. A liquidation will be deemed to occur upon the happening of customary events, including the transfer of all or substantially all of the capital stock or assets of the Company or a merger, consolidation, share exchange, reorganization or other transaction or series of related transaction, unless holders of 66 2/3% of the Series B Preferred Stock vote affirmatively in favor of or otherwise consent that such transaction shall not be treated as a liquidation. The Company believes that such liquidation events are within its control and therefore has classified the Series B Preferred Stock in stockholders’ equity . As of December 31, 2018, the Series B Preferred Stock was convertible into 634,641 shares of the Company’s common stock. The conversion ratio is subject to customary antidilution adjustments. In addition, antidilution adjustments are to occur in the event that the Company issues equity securities, including derivative securities convertible into equity securities (on an as-converted or as-exercised basis), at a price less than the conversion price then in effect. The shares of Series B Preferred Stock are also subject to forced conversion upon the occurrence of a transaction that would result in an internal rate of return to the holders of the Series B Preferred Stock of 25% or more. The forced conversion is to be based upon the conversion ratio as last adjusted. Accrued but unpaid dividends on the Series B Preferred Stock are to be paid in cash upon any conversion of the Series B Preferred Stock. The holders of Series B Preferred Stock vote together as a single class with the holders of the Company’s common stock on all actions to be taken by the Company’s stockholders. Each share of Series B Preferred Stock entitles the holder to approximately 0.03 votes per share on all matters to be voted on by the stockholders of the Company. Notwithstanding the foregoing, the holders of Series B Preferred Stock are afforded numerous customary protective provisions with respect to certain actions that may only be approved by holders of a majority of the shares of Series B Preferred Stock. In 2008, the Company entered into Letter Agreements with Lyles United LLC (“Lyles United”) and other purchasers under which the Company expressly waived its rights under the Certificate of Designations relating to the Series B Preferred Stock to make dividend payments in additional shares of Series B Preferred Stock in lieu of cash dividend payments without the prior written consent of Lyles United and the other purchasers. Registration Rights Agreement The Company accrued and paid in cash preferred stock dividends of $1,265,000, $1,265,000 and $1,269,000 for the years ended December 31, 2018, 2017 and 2016, respectively. |
COMMON STOCK AND WARRANTS.
COMMON STOCK AND WARRANTS. | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
COMMON STOCK AND WARRANTS. | 12. COMMON STOCK AND WARRANTS. The following table summarizes warrant activity for the years ended December 31, 2018, 2017 and 2016 (number of shares in thousands): Number of Price per Weighted Balance at December 31, 2015 382 $6.09 – $735.00 $ 70.87 Warrants exercised (138 ) $8.43 $ 8.43 Balance at December 31, 2016 244 $6.09 – $735.00 $ 106.72 Warrants exercised (191 ) $6.09 $ 6.09 Warrants expired (49 ) $6.09 – $735.00 $ 444.00 Balance at December 31, 2017 4 $735.00 $ 735.00 Warrants expired (4 ) $735.00 $ 735.00 Balance at December 31, 2018 — $— $ — July 2012 Public Offering Accounting for Warrants Nonvoting Common Stock At-the-Market Program |
STOCK-BASED COMPENSATION.
STOCK-BASED COMPENSATION. | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION. | 13. STOCK-BASED COMPENSATION. The Company has two equity incentive compensation plans: a 2006 Stock Incentive Plan and a 2016 Stock Incentive Plan. 2006 Stock Incentive Plan 2016 Stock Incentive Plan Stock Options Years Ended December 31, 2018 2017 Number Weighted Average Exercise Price Number Weighted Average Outstanding at beginning of year 230 $ 4.18 240 $ 4.18 Exercised/cancelled (1 ) 12.90 (10 ) 3.74 Outstanding at end of year 229 $ 4.15 230 $ 4.18 Options exercisable at end of year 229 $ 4.15 230 $ 4.18 Stock options outstanding as of December 31, 2018 were as follows (number of shares in thousands): Options Outstanding Options Exercisable Range of Number Outstanding Weighted Average Remaining Contractual Weighted Average Number Exercisable Weighted Average $ 3.74 219 4.47 $ 3.74 219 $ 3.74 $ 12.90 10 2.59 $ 12.90 10 $ 12.90 The intrinsic value of options outstanding were none and $84,000 at December 31, 2018 and 2017, respectively. The intrinsic value of options exercised in 2017 was approximately $30,000. Restricted Stock Number of Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2015 463 $ 10.00 Issued 742 $ 5.24 Vested (250 ) $ 9.01 Canceled (25 ) $ 6.24 Unvested at December 31, 2016 930 $ 6.57 Issued 664 $ 6.65 Vested (480 ) $ 7.30 Canceled (37 ) $ 6.08 Unvested at December 31, 2017 1,077 $ 6.31 Issued 1,175 $ 3.07 Vested (540 ) $ 7.69 Canceled (77 ) $ 7.14 Unvested at December 31, 2018 1,635 $ 3.49 The fair value of the common stock at vesting aggregated $1,629,000, $3,210,000 and $1,142,000 for the years ended December 31, 2018, 2017 and 2016, respectively. Stock-based compensation expense related to employee and non-employee restricted stock and option grants recognized in selling, general and administrative expenses, were as follows (in thousands): Years Ended December 31, 2018 2017 2016 Employees $ 2,905 $ 3,303 $ 2,173 Non-employees 533 525 443 Total stock-based compensation expense $ 3,438 $ 3,828 $ 2,616 Employee grants typically have a three year vesting schedule, while the non-employee grants have a one year vesting schedule. At December 31, 2018, the total compensation expense related to unvested awards which had not been recognized was $3,648,000 and the associated weighted-average period over which the compensation expense attributable to those unvested awards will be recognized was approximately 1.63 years. |
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES. | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES. | 7. COMMITMENTS AND CONTINGENCIES. Sales Commitments Purchase Commitments Litigation – General | 14. COMMITMENTS AND CONTINGENCIES. Commitments Leases – Years Ended December 31, Capital Leases Operating Leases 2019 $ 45 $ 10,207 2020 45 8,423 2021 33 5,441 2022 — 5,233 2023 — 4,511 Thereafter — 8,413 Total minimum payments 123 $ 42,228 Obligations due within one year (45 ) Long-term obligations under capital leases $ 78 Total rent expense during the years ended December 31, 2018, 2017 and 2016 was $12,436,000, $16,572,000 and $16,253,000, respectively. Sales Commitments Purchase Commitments Assessment Financing . Contingencies Litigation The Company assumed certain legal matters which were ongoing at July 1, 2015, the date of the Company's acquisition of PE Central. Among them were lawsuits between Aventine Renewable Energy, Inc. (now known as Pacific Ethanol Pekin, LLC, or "PE Pekin") and Glacial Lakes Energy, Aberdeen Energy and Redfield Energy, together, the "Defendants," in which PE Pekin sought damages for breach of termination agreements that wound down ethanol marketing arrangements between PE Pekin and each of the Defendants. In February and March 2017, the Company and the Defendants entered into settlement agreements and the Defendants paid in cash to the Company $3.9 million in final resolution of these matters. The Company did not assign any value to the claims against the Defendants in its accounting for the PE Central acquisition as of July 1, 2015. The Company recorded a gain, net of legal fees, of $3.6 million upon receipt of the cash settlement and recognized the gain as a reduction to selling, general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2017. Pacific Ethanol, Inc., through a subsidiary acquired in its acquisition of PE Central, became involved in a pending lawsuit with Western Sugar Cooperative ("Western Sugar") that pre-dated the 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 PE Central's subsidiary as defendant. The PE Central subsidiary purchased surplus sugar through a United States Department of Agriculture program. Western Sugar was one of the entities that warehoused this sugar for the PE Central subsidiary. The suit alleged that the PE Central subsidiary 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 alleged that the penalty rates applied because the PE Central subsidiary failed to take timely delivery or otherwise cause timely shipment of the sugar. Western Sugar claimed "expectation damages" in the amount of approximately $8.6 million. On December 29, 2016, Western Sugar and the PE Central subsidiary entered into a settlement pursuant to which the PE Central subsidiary paid $1.7 million and Western Sugar filed a Stipulation of Dismissal with prejudice. As a result, the Company reduced its litigation reserve of $2.8 million and recognized the recovery of $1.1 million as a reduction to selling, general and administrative expenses for the year ended December 31, 2016. 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. A trial in the District Court for the Southern District of Indiana was conducted in October 2015 on the inequitable conduct issue as well as whether GS CleanTech's behavior during prosecution of the patents rendered this an "exceptional case" which would allow the District Court to award the Defendants reimbursement of their attorneys' fees expended for defense of the case. On September 15, 2016, the District Court issued an Order finding that GS CleanTech, the inventors and GS CleanTech's counsel committed inequitable conduct in the prosecution of the GS CleanTech patents before the United States Patent and Trademark Office. As a result, the District Court issued a Final Judgment on September 15, 2016 dismissing with prejudice all of GS CleanTech's cases against the Defendants, including Pacific Ethanol, Inc., PE Stockton and PE Magic Valley. The District Court's ruling of inequitable conduct results in the unenforceability of the GS CleanTech patents against third parties, and also enables the Defendants to pursue reimbursement of their costs and attorneys' fees from GS CleanTech and its counsel. GS CleanTech subsequently appealed the District Court's finding that all of the GS CleanTech patents were invalid and its finding that the inventors and GS CleanTech's counsel committed inequitable conduct. The appeal is still pending before the Court of Appeals for the Federal Circuit. The Company has evaluated the above cases as well as other pending cases. The Company currently has not recorded a litigation contingency liability with respect to these cases. |
FAIR VALUE MEASUREMENTS.
FAIR VALUE MEASUREMENTS. | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||
FAIR VALUE MEASUREMENTS. | 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. Pooled separate accounts Other Derivative Instruments The following table summarizes recurring fair value measurements by level at September 30, 2019 (in thousands): Fair Value Level 1 Level 2 Level 3 Assets: Derivative financial instruments(1) $ 2,790 $ 2,790 $ — $ — $ 2,790 $ 2,790 $ — $ — Liabilities: Derivative financial instruments(1) $ (3,619 ) $ (3,619 ) $ — $ — $ (3,619 ) $ (3,619 ) $ — $ — The following table summarizes recurring fair value measurements by level at December 31, 2018 (in thousands): Benefit Plan Percentage Fair Value Level 1 Level 2 Level 3 Allocation Assets: Derivative financial instruments(1) $ 1,765 $ 1,765 $ — $ — Defined benefit plan assets (pooled separate accounts): Large U.S. Equity(2) 3,621 — 3,621 — 27 % Small/Mid U.S. Equity(3) 1,844 — 1,844 — 14 % International Equity(4) 2,106 — 2,106 — 16 % Fixed Income(5) 5,686 — 5,686 — 43 % $ 15,022 $ 1,765 $ 13,257 $ — Liabilities: Derivative financial instruments $ (6,309 ) $ (6,309 ) $ — $ — (1) Included in derivative instruments in the consolidated balance sheets. (2) This category includes investments in funds comprised of equity securities of large U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (3) This category includes investments in funds comprised of equity securities of small- and medium-sized U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (4) This category includes investments in funds comprised of equity securities of foreign companies including emerging markets. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (5) This category includes investments in funds comprised of U.S. and foreign investment-grade fixed income securities, high-yield fixed income securities that are rated below investment-grade, U.S. treasury securities, mortgage-backed securities, and other asset-backed securities. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. | 15. 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. Pooled separate accounts Other Derivative Instruments The following table summarizes recurring fair value measurements by level at December 31, 2018 (in thousands): Benefit Plan Fair Percentage Value Level 1 Level 2 Level 3 Allocation Assets: Derivative financial instruments $ 1,765 $ 1,765 $ — $ — Defined benefit plan assets(1) (pooled separate accounts): Large U.S. Equity(2) 3,621 — 3,621 — 27 % Small/Mid U.S. Equity(3) 1,844 — 1,844 — 14 % International Equity(4) 2,106 — 2,106 — 16 % Fixed Income(5) 5,686 — 5,686 — 43 % $ 15,022 $ 1,765 $ 13,257 $ — Liabilities: Derivative financial instruments $ (6,309 ) $ (6,309 ) $ — $ — The following table summarizes recurring fair value measurements by level at December 31, 2017 (in thousands): Benefit Plan Fair Percentage Value Level 1 Level 2 Level 3 Allocation Assets: Derivative financial instruments $ 998 $ 998 $ — $ — Defined benefit plan assets(1) (pooled separate accounts): Large U.S. Equity(2) 3,748 — 3,748 — 27 % Small/Mid U.S. Equity(3) 2,018 — 2,018 — 14 % International Equity(4) 2,528 — 2,528 — 18 % Fixed Income(5) 5,664 — 5,664 — 41 % $ 14,956 $ 998 $ 13,958 $ — Liabilities: Derivative financial instruments $ (2,307 ) $ (2,307 ) $ — $ — (1) See Note 9 for accounting discussion. (2) This category includes investments in funds comprised of equity securities of large U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (3) This category includes investments in funds comprised of equity securities of small- and medium-sized U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (4) This category includes investments in funds comprised of equity securities of foreign companies including emerging markets. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (5) This category includes investments in funds comprised of U.S. and foreign investment-grade fixed income securities, high-yield fixed income securities that are rated below investment-grade, U.S. treasury securities, mortgage-backed securities, and other asset-backed securities. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. |
EARNINGS PER SHARE.
EARNINGS PER SHARE. | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE. | 10. EARNINGS PER SHARE. The following tables compute basic and diluted earnings per share (in thousands, except per share data): Three Months Ended Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (27,326 ) Less: Preferred stock dividends (319 ) Basic and diluted loss per share: Loss available to common stockholders $ (27,645 ) 47,777 $ (0.58 ) Three Months Ended Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (7,514 ) Less: Preferred stock dividends (319 ) Basic and diluted loss per share: Loss available to common stockholders $ (7,833 ) 43,299 $ (0.18 ) Nine Months Ended Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (47,862 ) Less: Preferred stock dividends (946 ) Basic and diluted loss per share: Loss available to common stockholders $ (48,808 ) 47,030 $ (1.04 ) Nine Months Ended Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (28,263 ) Less: Preferred stock dividends (946 ) Basic and diluted loss per share: Loss available to common stockholders $ (29,209 ) 43,171 $ (0.68 ) There were an aggregate of 635,000 potentially dilutive weighted-average shares from convertible securities outstanding for the three and nine months ended September 30, 2019. There were an aggregate of 425,000 and 635,000 potentially dilutive weighted-average shares from convertible securities outstanding for the three and nine months ended September 30, 2018, respectively. These convertible securities were not considered in calculating diluted net loss per share, as their effect would have been anti-dilutive. |
PARENT COMPANY FINANCIALS.
PARENT COMPANY FINANCIALS. | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | ||
PARENT COMPANY FINANCIALS. | 11. PARENT COMPANY FINANCIALS. Restricted Net Assets Parent company financial statements for the periods covered in this prospectus are set forth below (in thousands): September 30, December 31, Current Assets: Cash and cash equivalents $ 5,658 $ 6,759 Receivables from subsidiaries 12,270 17,156 Other current assets 1,183 1,659 Total current assets 19,111 25,574 Property and equipment, net 308 522 Other Assets: Investments in subsidiaries 249,641 286,666 Pacific Ethanol West plant receivable 55,750 58,766 Right of use operating lease assets, net 3,318 — Other assets 1,529 1,437 Total other assets 310,238 346,869 Total Assets $ 329,657 $ 372,965 Current Liabilities: Accounts payable and accrued liabilities $ 2,437 $ 2,469 Accrued PE Op Co. purchase 3,829 3,829 Current portion of long-term debt 62,866 66,255 Other current liabilities 587 385 Total current liabilities 69,719 72,938 Operating leases, net of current portion 3,108 — Deferred tax liabilities 251 251 Other liabilities — 9 Total Liabilities 73,078 73,198 Stockholders' Equity: Preferred stock 1 1 Common and non-voting common stock 50 46 Additional paid-in capital 937,795 932,179 Accumulated other comprehensive loss (2,459 ) (2,459 ) Accumulated deficit (678,808 ) (630,000 ) Total Pacific Ethanol, Inc. stockholders' equity 256,579 299,767 Total Liabilities and Stockholders' Equity $ 329,657 $ 372,965 Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Management fees from subsidiaries $ 3,330 $ 3,330 $ 9,660 $ 9,738 Selling, general and administrative expenses 3,827 3,181 11,374 13,069 Income (loss) from operations (497 ) 149 (1,714 ) (3,331 ) Interest income 1,145 1,185 3,486 3,518 Interest expense (2,276 ) (2,171 ) (7,039 ) (6,458 ) Other expense (4 ) (4 ) (86 ) — Loss before benefit for income taxes (1,632 ) (841 ) (5,353 ) (6,271 ) Benefit for income taxes — — — 563 Loss before benefit for income taxes (1,632 ) (841 ) (5,353 ) (5,708 ) Equity in losses of subsidiaries (25,694 ) (6,673 ) (42,509 ) (22,555 ) Consolidated net loss $ (27,326 ) $ (7,514 ) $ (47,862 ) $ (28,263 ) For the Nine Months Ended September 30, 2019 2018 Operating Activities: Net loss $ (47,862 ) $ (28,263 ) Adjustments to reconcile net loss to cash used in operating activities: Equity in losses of subsidiaries 42,509 22,555 Depreciation 227 481 Deferred income taxes — 563 Amortization of debt discounts 539 357 Changes in operating assets and liabilities: Accounts receivables (114 ) (5,062 ) Other assets 173 2,489 Accounts payable and accrued expenses 1,950 5 Accounts payable with subsidiaries (502 ) (622 ) Net cash used in operating activities $ (3,080 ) $ (7,497 ) Investing Activities: Dividend from subsidiaries $ — $ 10,000 Contributions to subsidiaries — (5,000 ) Additions to property and equipment (13 ) (6 ) Net cash provided by (used in) investing activities $ (13 ) $ 4,994 Financing Activities: Proceeds from issuances of common stock $ 3,670 $ — Proceeds from Pacific Ethanol West 3,016 — Payments on senior notes (3,748 ) — Preferred stock dividend payments (946 ) (946 ) Net cash provided by (used in) financing activities $ 1,992 $ (946 ) Net decrease in cash and cash equivalents (1,101 ) (3,449 ) Cash and cash equivalents at beginning of period 6,759 5,314 Cash and cash equivalents at end of period $ 5,658 $ 1,865 | 16. PARENT COMPANY FINANCIALS. Restricted Net Assets Parent company financial statements for the periods covered in this report are set forth below. December 31, 2018 2017 ASSETS Current Assets: Cash and cash equivalents $ 6,759 $ 5,314 Receivables from subsidiaries 17,156 3,138 Other current assets 1,659 1,631 Total current assets 25,574 10,083 Property and equipment, net 522 1,071 Other Assets: Investments in subsidiaries 286,666 359,680 Pacific Ethanol West plant receivable 58,766 58,766 Other assets 1,437 1,565 Total other assets 346,869 420,011 Total Assets $ 372,965 $ 431,165 Current Liabilities: Accounts payable and accrued liabilities $ 2,469 $ 2,218 Payable to subsidiaries — 625 Accrued PE Op Co. purchase 3,829 3,828 Current portion of long-term debt 66,255 — Other current liabilities 385 245 Total current liabilities 72,938 6,916 Long-term debt, net — 67,530 Deferred tax liabilities 251 224 Other liabilities 9 56 Total Liabilities 73,198 74,726 Stockholders' Equity: Preferred stock 1 1 Common and non-voting common stock 46 44 Additional paid-in capital 932,179 927,090 Accumulated other comprehensive loss (2,459 ) (2,234 ) Accumulated deficit (630,000 ) (568,462 ) Total Pacific Ethanol, Inc. stockholders' equity 299,767 356,439 Total Liabilities and Stockholders' Equity $ 372,965 $ 431,165 Years Ended December 31, 2018 2017 2016 Management fees from subsidiaries $ 12,408 $ 11,904 $ 12,968 Selling, general and administrative expenses 16,795 18,185 14,491 Loss from operations (4,387 ) (6,281 ) (1,523 ) Fair value adjustments — 473 (557 ) Interest income 4,703 4,793 5,964 Interest expense (8,678 ) (5,829 ) (240 ) Other income (expense), net (74 ) (95 ) 1,931 Income (loss) before provision (benefit) for income taxes (8,436 ) (6,939 ) 5,575 Provision (benefit) for income taxes (562 ) (321 ) (981 ) Income (loss) before equity in earnings of subsidiaries (7,874 ) (6,618 ) 6,556 Equity in losses of subsidiaries (52,399 ) (28,346 ) (5,137 ) Consolidated net income (loss) $ (60,273 ) $ (34,964 ) $ 1,419 For the Years Ended December 31, 2018 2017 2016 Operating Activities: Net income (loss) $ (60,273 ) $ (34,964 ) $ 1,419 Adjustments to reconcile net income (loss) to cash provided by operating activities: Equity in losses of subsidiaries 52,399 28,346 5,137 Dividends from subsidiaries 25,000 3,500 — Depreciation 567 830 727 Fair value adjustments — (473 ) 557 Deferred income taxes 27 169 (1,122 ) Amortization of debt discounts 720 636 10 Changes in operating assets and liabilities: Accounts receivables (9,018 ) 4,065 7,302 Other assets 100 4,356 4,647 Accounts payable and accrued expenses 740 3,859 (3,741 ) Accounts payable with subsidiaries 2,409 (943 ) (9,385 ) Net cash provided by operating activities $ 12,671 $ 9,381 $ 5,551 Investing Activities: Additions to property and equipment $ (18 ) $ (468 ) $ (465 ) Investments in subsidiaries (10,000 ) (28,126 ) (50,886 ) Purchase of PE OP Co. debt — — (17,003 ) Net cash used in investing activities $ (10,018 ) $ (28,594 ) $ (68,354 ) Financing Activities: Proceeds from issuances of senior notes $ — $ 13,530 $ 53,350 Proceeds from issuance of common stock 2,057 — — Proceeds from warrant stock option exercises — 1,202 1,164 Payments on senior notes (2,000 ) — — Preferred stock dividend payments (1,265 ) (1,265 ) (1,269 ) Net cash provided by (used in) financing activities $ (1,208 ) $ 13,467 $ 53,245 Net increase (decrease) in cash and cash equivalents 1,445 (5,746 ) (9,558 ) Cash and cash equivalents at beginning of period 5,314 11,060 20,618 Cash and cash equivalents at end of period $ 6,759 $ 5,314 $ 11,060 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED). | 17. QUARTERLY FINANCIAL DATA (UNAUDITED). The Company's quarterly results of operations for the years ended December 31, 2018 and 2017 are as follows (in thousands). First Second Third Fourth December 31, 2018: Net sales $ 400,027 $ 410,522 $ 370,407 $ 334,415 Gross profit (loss) $ 3,362 $ (1,273 ) $ 3,768 $ (21,021 ) Loss from operations $ (5,953 ) $ (10,171 ) $ (5,202 ) $ (30,211 ) Net loss attributed to Pacific Ethanol, Inc. $ (7,841 ) $ (12,908 ) $ (7,514 ) $ (32,010 ) Preferred stock dividends $ (312 ) $ (315 ) $ (319 ) $ (319 ) Net loss available to common stockholders $ (8,153 ) $ (13,223 ) $ (7,833 ) $ (32,329 ) Basic and diluted loss per common share $ (0.19 ) $ (0.31 ) $ (0.18 ) $ (0.74 ) December 31, 2017: Net sales $ 386,340 $ 405,202 $ 445,442 $ 395,271 Gross profit (loss) $ (5,773 ) $ 1,653 $ 12,065 $ (2,014 ) Income (loss) from operations $ (11,223 ) $ (7,109 ) $ 3,345 $ (10,598 ) Net loss attributed to Pacific Ethanol, Inc. $ (12,636 ) $ (8,841 ) $ (202 ) $ (13,285 ) Preferred stock dividends $ (312 ) $ (315 ) $ (319 ) $ (319 ) Net loss available to common stockholders $ (12,948 ) $ (9,156 ) $ (521 ) $ (13,604 ) Basic and diluted loss per common share $ (0.31 ) $ (0.22 ) $ (0.01 ) $ (0.32 ) |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION. (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [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 Company's 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. The Company's five ethanol plants in the Midwest (together with their respective holding companies, the "Pacific Ethanol Central Plants") are located in the heart of the Corn Belt, benefit from low-cost and abundant feedstock production and allow for access to many additional domestic markets. In addition, the Company's ability to load unit trains from these facilities in the Midwest allows for greater access to international markets. The Company has a combined production capacity of 605 million gallons per year, markets, on an annualized basis, nearly 1.0 billion gallons of ethanol and specialty alcohols, and produces, on an annualized basis, nearly 3.0 million tons of co-products on a dry matter basis, such as wet and dry distillers grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, dried yeast and CO 2 As of September 30, 2019, all but one of the Company's production facilities, specifically, the Company's Aurora East facility, were operating. As market conditions change, the Company may increase, decrease or idle production at one or more operating facilities or resume operations at any idled facility. | Organization and Business The Company’s acquisition of Illinois Corn Processing, LLC (“ICP”) was consummated on July 3, 2017, and as a result, the Company’s consolidated financial statements include the results of ICP only since that date. On December 15, 2016, the Company and Aurora Cooperative Elevator Company, a Nebraska cooperative corporation (“ACEC”), closed a transaction under a contribution agreement under which the Company contributed its Aurora, Nebraska ethanol facilities and ACEC contributed its Aurora grain elevator and related grain handling assets to Pacific Aurora, LLC (“Pacific Aurora”) in exchange for equity interests in Pacific Aurora. On December 15, 2016, concurrently with the closing under the contribution agreement, the Company sold a portion of its equity interest in Pacific Aurora to ACEC. As a result, the Company owns 73.93% of Pacific Aurora and ACEC owns 26.07% of Pacific Aurora. Further, the Company has consolidated 100% of the results of Pacific Aurora and recorded ACEC’s 26.07% equity interest as noncontrolling interests in the accompanying financial statements for the years ended December 31, 2018 and 2017 and for the period December 15, 2016 through December 31, 2016. The Company is a leading producer and marketer of low-carbon renewable fuels in the United States. The Company’s 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. The Company’s five ethanol plants in the Midwest (together with their respective holding companies, the “Pacific Ethanol Central Plants”) are located in the heart of the Corn Belt, benefit from low-cost and abundant feedstock production and allow for access to many additional domestic markets. In addition, the Company’s ability to load unit trains from these facilities in the Midwest allows for greater access to international markets. The Company has a combined production capacity of 605 million gallons per year, markets, on an annualized basis, nearly 1.0 billion gallons of ethanol and specialty alcohols, and produces, on an annualized basis, over 3.0 million tons of co-products on a dry matter basis, such as wet and dry distillers grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, dried yeast and CO 2 As of December 31, 2018, all but one of the Company’s production facilities, specifically, the Company’s Aurora East facility, were operating. As market conditions change, the Company may increase, decrease or idle production at one or more operating facilities or resume operations at any idled facility. |
Basis of Presentation | Basis of Presentation – Interim Financial Statements | Basis of Presentation |
Liquidity | Liquidity In implementing these strategic initiatives, the Company, as of September 30, 2019, had the following available liquidity and capital resources to achieve its objectives: ● Cash of $18.9 million and excess availability under Kinergy's line of credit of $2.2 million; and ● Nine ethanol production facilities with an aggregate of 605 million gallons of annual production capacity, of which plant assets representing 355 million gallons of capacity are either unencumbered, or their entire sales proceeds would be used to repay the Company's senior secured notes. The Company has engaged a financial advisor to help market certain of these assets. The Company will likely not have sufficient cash to make its short-term scheduled debt payments, and is working on extensions with its lenders. While the lenders are secured by certain plant assets, the Company believes it has other unencumbered assets that may be used to satisfy the lenders. The Company continues working on a comprehensive long-term solution with its lenders to increase liquidity and extend the maturity dates of its debt. The Company believes that its strategic initiatives, if implemented timely and on suitable terms, will provide sufficient liquidity to meet its anticipated working capital, debt service and other liquidity needs through at least the next twelve months. | Liquidity In implementing its strategic realignment plan, the Company, as of December 31, 2018, had the following available liquidity and capital resources to achieve its objectives: ● Cash of $26.6 million and excess availability under Kinergy’s line of credit of $10.2 million; ● Nine ethanol production facilities with an aggregate 605 million gallons of annual production capacity, of which plant assets representing 355 million gallons of capacity are either unencumbered, or their entire sales proceeds would be used to repay the senior secured notes. The Company has engaged an independent third party to help facilitate the marketing of certain of these assets; and ● In excess of $20 million of equity available under the Company’s shelf registration statement, including under its at-the-market equity program. These funds would first be required to repay the Company’s senior secured notes. The Company also will continue working with its lenders and stakeholders to pursue other options to increase liquidity, obtain waivers or forbearance of debt covenant violations, and extend the maturity date of its debt. The Company believes that its strategic realignment will provide sufficient liquidity to meet its anticipated working capital, debt service and other liquidity needs through the next twelve months, or March 18, 2020. |
Segments | Segments Segment Reporting | |
Cash and Cash Equivalents | Cash and Cash Equivalents | |
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 Company's success in contacting and negotiating with the customer. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of ability to make payments, additional allowances may be required. Of the accounts receivable balance, approximately $61,743,000 and $54,820,000 at September 30, 2019 and December 31, 2018, respectively, were used as collateral under Kinergy's operating line of credit. The allowance for doubtful accounts was $39,000 and $12,000 as of September 30, 2019 and December 31, 2018, respectively. The Company recorded a bad debt expense of $0 and a bad debt recovery of $1,000 for the three months ended September 30, 2019 and 2018, respectively. The Company recorded a bad debt expense of $27,000 and $44,000 for the nine months ended September 30, 2019 and 2018, respectively. | 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 Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of ability to make payments, additional allowances may be required. Of the accounts receivable balance, approximately $54,820,000 and $64,501,000 at December 31, 2018 and 2017, respectively, were used as collateral under Kinergy’s operating line of credit. The allowance for doubtful accounts was $12,000 and $19,000 as of December 31, 2018 and 2017, respectively. The Company recorded a bad debt expense of $45,000, $5,000 and $306,000 for the years ended December 31, 2018, 2017 and 2016, respectively. The Company does not have any off-balance sheet credit exposure related to its customers. |
Concentration Risks | Concentration Risks The Company sells fuel-grade ethanol to gasoline refining and distribution companies. The Company sold ethanol to customers representing 10% or more of the Company’s total net sales, as follows. Years Ended December 31, 2018 2017 2016 Customer A 14 % 16 % 17 % Customer B 11 % 11 % 12 % The Company had accounts receivable due from these customers totaling $13,405,000 and $17,792,000, representing 20% and 24% of total accounts receivable, as of December 31, 2018 and 2017, respectively. The Company purchases corn, its largest cost component in producing ethanol, from its suppliers. The Company purchased corn from suppliers representing 10% or more of the Company’s total corn purchases, as follows: Years Ended December 31, 2018 2017 2016 Supplier A 17 % 14 % 13 % Supplier B 14 % 13 % 4 % Supplier C 11 % 9 % 13 % Supplier D 10 % 10 % 8 % Approximately 35% of the Company’s employees are covered by a collective bargaining agreement. | |
Inventories | Inventories December 31, 2018 2017 Finished goods $ 35,778 $ 35,652 Work in progress 6,855 8,807 Raw materials 7,233 7,601 Low-carbon and RIN credits 6,130 7,952 Other 1,824 1,538 Total $ 57,820 $ 61,550 | |
Property and Equipment | Property and Equipment Buildings 40 years Facilities and plant equipment 10 – 25 years Other equipment, vehicles and furniture 5 – 10 years The cost of normal maintenance and repairs is charged to operations as incurred. Significant capital expenditures that increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the asset. The cost of property and equipment sold, or otherwise disposed of, and the related accumulated depreciation or amortization are removed from the accounts, and any resulting gains or losses are reflected in current operations. | |
Intangible Assets | Intangible Asset | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities | |
Revenue Recognition | Revenue Recognition The provisions of ASC 606 include a five-step process by which an entity will determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which an entity expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies the performance obligation. Effective January 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all of its contracts. Following the adoption of ASC 606, the Company continues to recognize revenue at a point-in-time when control of goods transfers to the customer. The timing of recognition is consistent with the Company’s previous revenue recognition accounting policy under which the Company recognized revenue when title and risk of loss pass to the customer and collectability was reasonably assured. In addition, ASC 606 did not impact the Company’s presentation of revenue on a gross or net basis. The Company recognizes revenue primarily from sales of ethanol and its related co-products. The Company has nine ethanol production facilities from which it produces and sells ethanol to its customers through Kinergy. Kinergy enters into sales contracts with ethanol customers under exclusive intercompany ethanol sales agreements with each of the Company’s nine ethanol plants. Kinergy also acts as a principal when it purchases third party ethanol which it resells to its customers. Finally, Kinergy has exclusive sales agreements with other third-party owned ethanol plants under which it sells their ethanol production for a fee plus the costs to deliver the ethanol to Kinergy’s customers. These sales are referred to as third-party agent sales. Revenue from these third-party agent sales is recorded on a net basis, with Kinergy recognizing its predetermined fees and any associated delivery costs. The Company has nine ethanol production facilities from which it produces and sells co-products to its customers through PAP. PAP enters into sales contracts with co-product customers under exclusive intercompany co-product sales agreements with each of the Company’s nine ethanol plants. The Company recognizes revenue from sales of ethanol and co-products at the point in time when the customer obtains control of such products, which typically occurs upon delivery depending on the terms of the underlying contracts. In some instances, the Company enters into contracts with customers that contain multiple performance obligations to deliver volumes of ethanol or co-products over a contractual period of less than 12 months. The Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices and recognizes the related revenue as control of each individual product is transferred to the customer in satisfaction of the corresponding performance obligations. When the Company is the agent, the supplier controls the products before they are transferred to the customer because the supplier is primarily responsible for fulfilling the promise to provide the product, has inventory risk before the product has been transferred to a customer and has discretion in establishing the price for the product. When the Company is the principal, the Company controls the products before they are transferred to the customer because the Company is primarily responsible for fulfilling the promise to provide the products, has inventory risk before the product has been transferred to a customer and has discretion in establishing the price for the product. See Note 4 for the Company’s revenue by type of contracts. | |
Shipping and Handling Costs | Shipping and Handling Costs | |
Selling Costs | Selling Costs | |
Stock-Based Compensation | Stock-Based Compensation | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | |
Deferred Financing Costs | Deferred Financing Costs | |
Provision for Income Taxes | Provision for Income Taxes The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. An uncertain tax position is considered effectively settled on completion of an examination by a taxing authority if certain other conditions are satisfied. Should the Company incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of interest expense and other income (expense), net, respectively. Deferred tax assets and liabilities are classified as noncurrent in the Company’s consolidated balance sheets. The Company files a consolidated federal income tax return. This return includes all wholly-owned subsidiaries as well as the Company’s pro-rata share of taxable income from pass-through entities in which the Company owns less than 100%. State tax returns are filed on a consolidated, combined or separate basis depending on the applicable laws relating to the Company and its subsidiaries. | |
Income (Loss) Per Share | Income (Loss) Per Share The following tables compute basic and diluted earnings per share (in thousands, except per share data): Year Ended December 31, 2018 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol $ (60,273 ) Less: Preferred stock dividends (1,265 ) Basic and diluted loss per share: Loss available to common stockholders $ (61,538 ) 43,376 $ (1.42 ) Year Ended December 31, 2017 Loss Numerator Shares Denominator Per-Share Net loss attributed to Pacific Ethanol $ (34,964 ) Less: Preferred stock dividends (1,265 ) Basic and diluted loss per share: Loss available to common stockholders $ (36,229 ) 42,745 $ (0.85 ) Year Ended December 31, 2016 Income Shares Denominator Per-Share Amount Net income attributed to Pacific Ethanol $ 1,419 Less: Preferred stock dividends (1,269 ) Less: Income allocated to participating securities (2 ) Basic income per share: Income available to common stockholders $ 148 42,182 $ 0.00 Add: Options — 69 Diluted income per share: Income available to common stockholders $ 148 42,251 $ 0.00 There were an aggregate of 635,000, 719,000 and 704,000 potentially dilutive shares from convertible securities outstanding as of December 31, 2018, 2017 and 2016, respectively. These convertible securities were not considered in calculating diluted income (loss) per common share for the years ended December 31, 2018, 2017 and 2016 as their effect would be anti-dilutive. | |
Financial Instruments | Financial Instruments | Financial Instruments |
Employment-related Benefits | Employment-related Benefits | |
Estimates and Assumptions | Estimates and Assumptions | Estimates and Assumptions |
Subsequent Events | Subsequent Events | |
Reclassifications | Reclassifications | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements | Recent Accounting Pronouncements Leases (Topic 842): Targeted Improvements In May 2014, the FASB issued new guidance on the recognition of revenue under ASC 606. See Note 1 “ – Revenue Recognition” above. |
ORGANIZATION AND SIGNIFICANT AC
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of concentrations of credit risk major customers | Years Ended December 31, 2018 2017 2016 Customer A 14 % 16 % 17 % Customer B 11 % 11 % 12 % |
Schedule of purchases from external customers | Years Ended December 31, 2018 2017 2016 Supplier A 17 % 14 % 13 % Supplier B 14 % 13 % 4 % Supplier C 11 % 9 % 13 % Supplier D 10 % 10 % 8 % |
Schedule of inventory | December 31, 2018 2017 Finished goods $ 35,778 $ 35,652 Work in progress 6,855 8,807 Raw materials 7,233 7,601 Low-carbon and RIN credits 6,130 7,952 Other 1,824 1,538 Total $ 57,820 $ 61,550 |
Schedule of property and equipment useful lives | Buildings 40 years Facilities and plant equipment 10 – 25 years Other equipment, vehicles and furniture 5 – 10 years |
Schedule of earnings per share | Year Ended December 31, 2018 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol $ (60,273 ) Less: Preferred stock dividends (1,265 ) Basic and diluted loss per share: Loss available to common stockholders $ (61,538 ) 43,376 $ (1.42 ) Year Ended December 31, 2017 Loss Shares Denominator Per-Share Net loss attributed to Pacific Ethanol $ (34,964 ) Less: Preferred stock dividends (1,265 ) Basic and diluted loss per share: Loss available to common stockholders $ (36,229 ) 42,745 $ (0.85 ) Year Ended December 31, 2016 Income Shares Denominator Per-Share Amount Net income attributed to Pacific Ethanol $ 1,419 Less: Preferred stock dividends (1,269 ) Less: Income allocated to participating securities (2 ) Basic income per share: Income available to common stockholders $ 148 42,182 $ 0.00 Add: Options — 69 Diluted income per share: Income available to common stockholders $ 148 42,251 $ 0.00 |
PACIFIC ETHANOL PLANTS. (Tables
PACIFIC ETHANOL PLANTS. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Pacific Aurora [Member] | |
Schedule of purchase price allocation | Cash and equivalents $ 426 Accounts receivable 11,636 Inventories 9,227 Other current assets 1,560 Total current assets 22,849 Property and equipment 61,128 Other assets 328 Total assets acquired $ 84,305 Accounts payable, trade $ 5,683 Other current liabilities 1,486 Total current liabilities 7,169 Other non-current liabilities 209 Total liabilities assumed $ 7,378 Net assets acquired $ 76,927 Estimated goodwill $ — Total purchase price $ 76,927 |
Schedule of pro forma allocation | Years Ended December 31, 2017 2016 Net sales – pro forma $ 1,710,317 $ 1,802,159 Consolidated net income (loss) – pro forma $ (42,589 ) $ 8,329 Diluted net income (loss) per share – pro forma $ (0.95 ) $ 0.16 Diluted weighted-average shares – pro forma 42,745 42,251 |
ICP [Member] | |
Schedule of purchase price allocation | Cash and equivalents $ 1,453 Accounts receivable 16,804 Inventories 3,837 Other current assets 77 Total current assets 22,171 Property and equipment 115,759 Other assets 1,387 Total assets $ 139,317 Accounts payable and accrued liabilities $ 20,152 Other current liabilities 2,045 Long-term debt outstanding, net 621 Total liabilities $ 22,818 |
INVENTORIES. (Tables)
INVENTORIES. (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | September 30, December 31, Finished goods $ 41,034 $ 35,778 Work in progress 8,207 6,855 Raw materials 7,236 7,233 Low-carbon and RIN credits 4,150 6,130 Other 1,882 1,824 Total $ 62,509 $ 57,820 |
SEGMENTS. (Tables)
SEGMENTS. (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Segment Reporting [Abstract] | ||
Schedule of financial date for operating segments | The following tables set forth certain financial data for the Company’s operating segments (in thousands): Three Months Ended Nine Months Ended Net Sales 2019 2018 2019 2018 Production, recorded as gross: Ethanol/alcohol sales $ 212,897 $ 216,788 $ 586,680 $ 670,304 Co-product sales 65,693 73,259 199,177 226,307 Intersegment sales 403 518 1,187 1,531 Total production sales 278,993 290,565 787,044 898,142 Marketing and distribution: Ethanol/alcohol sales, gross $ 86,124 $ 79,877 $ 280,032 $ 282,940 Ethanol/alcohol sales, net 446 483 1,375 1,405 Intersegment sales 2,079 2,201 5,839 6,757 Total marketing and distribution sales 88,649 82,561 287,246 291,102 Intersegment eliminations (2,482 ) (2,719 ) (7,026 ) (8,288 ) Net sales as reported $ 365,160 $ 370,407 $ 1,067,264 $ 1,180,956 Cost of goods sold: Production $ 294,888 $ 295,574 $ 810,670 $ 914,638 Marketing and distribution 87,976 73,784 277,545 268,917 Intersegment eliminations (2,888 ) (2,719 ) (7,817 ) (8,456 ) Cost of goods sold as reported $ 379,976 $ 366,639 $ 1,080,398 $ 1,175,099 Income (loss) before benefit for income taxes: Production $ (25,999 ) $ (15,571 ) $ (50,682 ) $ (45,355 ) Marketing and distribution (998 ) 7,416 4,991 18,095 Corporate activities (2,076 ) (1,149 ) (5,833 ) (6,708 ) $ (29,073 ) $ (9,304 ) $ (51,524 ) $ (33,968 ) Depreciation and amortization: Production $ 11,833 $ 10,040 $ 35,390 $ 30,017 Corporate activities 195 177 554 618 $ 12,028 $ 10,217 $ 35,944 $ 30,635 Interest expense: Production $ 1,969 $ 1,692 $ 5,724 $ 5,416 Marketing and distribution 929 344 2,291 1,042 Corporate activities 2,265 2,157 6,999 6,417 $ 5,163 $ 4,193 $ 15,014 $ 12,875 | The following tables set forth certain financial data for the Company's operating segments (in thousands): Years Ended December 31, 2018 2017 2016 Net Sales Production, recorded as gross: Ethanol/alcohol sales $ 859,815 $ 845,692 $ 797,363 Co-product sales 296,686 257,031 248,444 Intersegment sales 1,995 1,898 1,169 Total production sales 1,158,496 1,104,621 1,046,976 Marketing and distribution: Ethanol/alcohol sales, gross $ 357,011 $ 527,869 $ 577,347 Ethanol/alcohol sales, net 1,859 1,663 1,604 Intersegment sales 8,773 8,464 8,029 Total marketing and distribution sales 367,643 537,996 586,980 Intersegment eliminations (10,768 ) (10,362 ) (9,198 ) Net sales as reported $ 1,515,371 $ 1,632,255 $ 1,624,758 Cost of goods sold Production $ 1,197,507 $ 1,101,651 $ 1,003,679 Marketing and distribution 343,991 535,033 575,920 Intersegment eliminations (10,963 ) (10,360 ) (9,199 ) Cost of goods sold as reported $ 1,530,535 $ 1,626,324 $ 1,570,400 Income (loss) before benefit for income taxes Production $ (77,833 ) $ (27,457 ) $ (6,879 ) Marketing and distribution 18,191 (2,463 ) 4,517 Corporate activities (8,856 ) (8,475 ) 2,907 $ (68,498 ) $ (38,395 ) $ 545 Depreciation: Production $ 40,099 $ 37,637 $ 34,528 Corporate activities 750 1,014 913 $ 40,849 $ 38,651 $ 35,441 Interest expense Production $ 7,116 $ 5,887 $ 20,794 Marketing and distribution 1,388 1,271 1,404 Corporate activities 8,628 5,780 208 $ 17,132 $ 12,938 $ 22,406 |
Schedule of assets by operating segments | The following table sets forth the Company’s total assets by operating segment (in thousands): Total assets: September 30, December 31, Production $ 527,950 $ 532,790 Marketing and distribution 108,960 112,984 Corporate assets 15,950 14,117 $ 652,860 $ 659,891 | The following table sets forth the Company's total assets by operating segment (in thousands): December 31, 2018 December 31, 2017 Total assets Production $ 532,790 $ 583,696 Marketing and distribution 112,984 127,242 Corporate assets 14,117 9,358 $ 659,891 $ 720,296 |
PROPERTY AND EQUIPMENT. (Tables
PROPERTY AND EQUIPMENT. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): December 31, 2018 2017 Facilities and plant equipment $ 621,909 $ 601,156 Land 8,970 8,970 Other equipment, vehicles and furniture 11,812 10,189 Construction in progress 30,312 38,041 673,003 658,356 Accumulated depreciation (190,346 ) (150,004 ) $ 482,657 $ 508,352 |
DERIVATIVES. (Tables)
DERIVATIVES. (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Schedule of derivatives not designated as hedging instruments | The classification and amounts of the Company's derivatives not designated as hedging instruments, and related cash collateral balances, are as follows (in thousands): As of September 30, 2019 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 2,400 Commodity contracts Derivative instruments $ 2,790 Derivative instruments $ 3,619 As of December 31, 2018 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 8,479 Commodity contracts Derivative instruments $ 1,765 Derivative instruments $ 6,309 | The classification and amounts of the Company's derivatives not designated as hedging instruments, and related cash collateral balances, are as follows (in thousands): As of December 31, 2018 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 8,479 Commodity contracts Derivative assets $ 1,765 Derivative liabilities $ 6,309 As of December 31, 2017 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 3,813 Commodity contracts Derivative assets $ 998 Derivative liabilities $ 2,307 |
Schedule of recognized gains (losses) on derivatives | The classification and amounts of the Company's recognized gains (losses) for its derivatives not designated as hedging instruments are as follows (in thousands): Realized Gains Three Months Ended Type of Instrument Statements of Operations Location 2019 2018 Commodity contracts Cost of goods sold $ 2,262 $ 916 Unrealized Losses Three Months Ended Type of Instrument Statements of Operations Location 2019 2018 Commodity contracts Cost of goods sold $ (5,582 ) $ (1,907 ) Realized Losses Nine Months Ended Type of Instrument Statements of Operations Location 2019 2018 Commodity contracts Cost of goods sold $ (2,150 ) $ (1,241 ) Unrealized Gains (Losses) Nine Months Ended Type of Instrument Statements of Operations Location 2019 2018 Commodity contracts Cost of goods sold $ 3,715 $ (3,121 ) | The classification and amounts of the Company's recognized gains (losses) for its derivatives not designated as hedging instruments are as follows (in thousands): Realized Gains (Losses) For the Years Ended December 31, Type of Instrument Statements of Operations Location 2018 2017 2016 Commodity contracts Cost of goods sold $ (3,479 ) $ (4,165 ) $ 1,386 $ (3,479 ) $ (4,165 ) $ 1,386 Unrealized Gains (Losses) For the Years Ended December 31, Type of Instrument Statements of Operations Location 2018 2017 2016 Commodity contracts Cost of goods sold $ (3,235 ) $ 2,088 $ (3,370 ) $ (3,235 ) $ 2,088 $ (3,370 ) |
LEASES. (Tables)
LEASES. (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of operating lease liabilities | The following table summarizes the remaining maturities of the Company's operating lease liabilities, assuming all land lease extensions are taken, as of September 30, 2019 (in thousands): Year Ended: Equipment Land Related 2019 $ 2,220 $ 262 2020 7,349 1,054 2021 4,364 1,077 2022 4,140 1,100 2023 3,500 1,013 2024-43 10,181 34,931 $ 31,754 $ 39,437 |
DEBT. (Tables)
DEBT. (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Schedule of long term debt | Long-term borrowings are summarized as follows (in thousands): September 30, December 31, Kinergy line of credit $ 79,685 $ 57,057 Pekin term loan 39,500 43,000 Pekin revolving loan 32,000 32,000 ICP term loan 12,000 16,500 ICP revolving loan 18,000 18,000 Parent notes payable 63,200 66,948 244,385 233,505 Less unamortized debt discount (150 ) (690 ) Less unamortized debt financing costs (1,019 ) (1,377 ) Less short-term portion (144,543 ) (146,671 ) Long-term debt $ 98,673 $ 84,767 | Long-term borrowings are summarized as follows (in thousands): December 31, 2018 December 31, 2017 Kinergy line of credit $ 57,057 $ 49,477 Pekin term loan 43,000 53,500 Pekin revolving loan 32,000 32,000 ICP term loan 16,500 22,500 ICP revolving loan 18,000 18,000 Pacific Aurora line of credit — — Parent notes payable 66,948 68,948 233,505 244,425 Less unamortized debt discount (690 ) (1,409 ) Less unamortized debt financing costs (1,377 ) (1,925 ) Less short-term portion (146,671 ) (20,000 ) Long-term debt $ 84,767 $ 221,091 |
Schedule of maturities of long-term debt | December 31: 2019 $ 86,260 2020 20,000 2021 19,500 2022 107,745 2023 — $ 233,505 |
PENSION PLANS. (Tables)
PENSION PLANS. (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Schedule of defined contribution plan schedule | Three Months Ended Nine Months Ended 2019 2018 2019 2018 Interest cost $ 55 $ 46 $ 165 $ 138 Service cost 17 2 51 6 Amortization of loss 30 33 90 99 Net periodic expense $ 102 $ 81 $ 306 $ 243 | |
Schedule of retirement plan costs | Three Months Ended Nine Months Ended 2019 2018 2019 2018 Interest cost $ 190 $ 174 $ 570 $ 522 Service cost 94 106 282 318 Expected return on plan assets (190 ) (204 ) (570 ) (612 ) Net periodic expense $ 94 $ 76 $ 282 $ 228 | |
Postretirement Plan [Member] | ||
Schedule of defined contribution plan schedule | Information related to the Retirement Plan as of and for the years ended December 31, 2018, 2017 and 2016 is presented below (dollars in thousands): 2018 2017 2016 Changes in plan assets: Fair value of plan assets, beginning $ 13,958 $ 12,423 $ 12,567 Actual gains (losses) (946 ) 1,722 523 Benefits paid (667 ) (665 ) (667 ) Company contributions 912 478 — Participant contributions — — — Fair value of plan assets, ending $ 13,257 $ 13,958 $ 12,423 Less: projected accumulated benefit obligation $ 18,690 $ 19,658 $ 18,455 Funded status, (underfunded)/overfunded $ (5,433 ) $ (5,700 ) $ (6,032 ) Amounts recognized in the consolidated balance sheets: Other liabilities $ (5,433 ) $ (5,700 ) $ (6,032 ) Accumulated other comprehensive loss (income) $ 1,069 $ 726 $ 1,047 Components of net periodic benefit costs are as follows: Service cost $ 424 $ 391 $ 223 Interest cost 694 750 686 Expected return on plan assets (816 ) (674 ) (794 ) Net periodic benefit cost $ 302 $ 467 $ 115 Loss (gain) recognized in other comprehensive income (expense) $ 343 $ (321 ) $ 1,932 Assumptions used in computation benefit obligations: Discount rate 4.15 % 3.60 % 4.15 % Expected long-term return on plan assets 6.25 % 6.00 % 6.75 % Rate of compensation increase — — — | |
Schedule of expected benefit payments | The following table summarizes the expected benefit payments for the Company's Retirement Plan for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter (in thousands): December 31: 2019 $ 760 2020 790 2021 800 2022 840 2023 890 2024-28 5,100 $ 9,180 | |
Retirement Plan [Member] | ||
Schedule of defined contribution plan schedule | Information related to the Postretirement Plan as of December 31, 2018 and 2017 is presented below (dollars in thousands): 2018 2017 Amounts at the end of the year: Accumulated/projected benefit obligation $ 5,711 $ 5,565 Fair value of plan assets — Funded status, (underfunded)/overfunded $ (5,711 ) $ (5,565 ) Amounts recognized in the consolidated balance sheets: Accrued liabilities $ (320 ) $ (240 ) Other liabilities $ (5,392 ) $ (5,325 ) Accumulated other comprehensive loss $ 1,390 $ 1,508 Years Ended December 31, 2018 2017 2016 Amounts recognized in the plan for the year: Company contributions $ 137 $ 157 $ 163 Participant contributions $ 14 $ 22 $ 22 Benefits paid $ (152 ) $ (179 ) $ (184 ) Components of net periodic benefit costs are as follows: Service cost $ 84 $ 84 $ 48 Interest cost 182 198 139 Amortization of prior service costs 131 134 — Net periodic benefit cost $ 397 $ 416 $ 187 Loss (gain) recognized in other comprehensive income $ (118 ) $ (65 ) $ 1,728 Discount rate used in computation of benefit obligations 3.35 % 3.80 % 3.95 % | |
Schedule of expected benefit payments | The following table summarizes the expected benefit payments for the Company's Post-Retirement Plan for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter (in thousands): December 31: 2019 $ 320 2020 320 2021 370 2022 360 2023 390 2024-28 2,350 $ 4,110 |
INCOME TAXES. (Tables)
INCOME TAXES. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The Company recorded a provision (benefit) for income taxes as follows (in thousands): Years Ended December 31, 2018 2017 2016 Current provision (benefit) $ (589 ) $ (490 ) $ 141 Deferred provision (benefit) 27 169 (1,122 ) Total $ (562 ) $ (321 ) $ (981 ) |
Schedule of reconciliation of effective tax rate | A reconciliation of the differences between the United States statutory federal income tax rate and the effective tax rate as provided in the consolidated statements of operations is as follows: Years Ended December 31, 2018 2017 2016 Statutory rate 21.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 5.4 4.0 6.4 Change in valuation allowance (20.3 ) (34.5 ) (298.8 ) Impact of Federal tax rate change on deferred taxes — (28.4 ) — Impact of Federal tax rate change on valuation allowance — 29.4 — Fair value adjustments and warrant inducements — 0.4 37.2 Noncontrolling interest (3.0 ) (3.2 ) — Stock compensation — (0.1 ) 58.8 Non-deductible items (0.7 ) (0.2 ) 8.9 Other (1.6 ) (1.6 ) (27.5 ) Effective rate 0.8 % 0.8 % (180.0 )% |
Schedule of components of deferred income taxes | The components of deferred income taxes included in the consolidated balance sheets were as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 48,082 $ 40,989 R&D, energy and AMT credits 4,247 1,797 Disallowed interest 3,769 — Railcar contracts 650 1,415 Stock-based compensation 782 738 Allowance for doubtful accounts and other assets 643 637 Derivatives 1,214 267 Pension liability 2,941 2,939 Other 2,134 2,097 Total deferred tax assets 64,462 50,879 Deferred tax liabilities: Property and equipment (23,013 ) (25,194 ) Intangibles (749 ) (749 ) Other (363 ) (521 ) Total deferred tax liabilities (24,125 ) (26,464 ) Valuation allowance (40,588 ) (24,639 ) Net deferred tax liabilities, included in other liabilities $ (251 ) $ (224 ) |
Schedule of net operating loss carryforwards | These net operating loss carryforwards expire as follows (in thousands): Tax Years Federal State 2019–2023 $ — $ — 2024–2028 12,256 20,217 2029–2033 98,360 49,947 2034 and after 40,955 95,868 Non-expiring NOLs 31,641 — Total NOLs $ 183,212 $ 166,032 Certain of these net operating losses are not immediately available, but become available to be utilized in each of the years ended December 31, as follows (in thousands): Year Federal State 2019 $ 94,739 $ 108,956 2020 6,374 5,345 2021 6,308 5,318 2022 6,308 5,318 2023 6,308 5,318 |
Schedule of income tax in the United States jurisdiction and various state jurisdictions | These jurisdictions, along with the years still open to audit under the applicable statutes of limitation, are as follows: Jurisdiction Tax Years Federal 2015 – 2017 Arizona 2015 – 2017 California 2014 – 2017 Colorado 2014 – 2017 Idaho 2015 – 2017 Illinois 2014 – 2017 Indiana 2015 – 2017 Iowa 2015 – 2017 Kansas 2015 – 2017 Minnesota 2015 – 2017 Missouri 2015 – 2017 Nebraska 2015 – 2017 Oklahoma 2015 – 2017 Oregon 2015 – 2017 Texas 2014 – 2017 |
COMMON STOCK AND WARRANTS. (Tab
COMMON STOCK AND WARRANTS. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrant activity | The following table summarizes warrant activity for the years ended December 31, 2018, 2017 and 2016 (number of shares in thousands): Number of Price per Weighted Balance at December 31, 2015 382 $6.09 – $735.00 $ 70.87 Warrants exercised (138 ) $8.43 $ 8.43 Balance at December 31, 2016 244 $6.09 – $735.00 $ 106.72 Warrants exercised (191 ) $6.09 $ 6.09 Warrants expired (49 ) $6.09 – $735.00 $ 444.00 Balance at December 31, 2017 4 $735.00 $ 735.00 Warrants expired (4 ) $735.00 $ 735.00 Balance at December 31, 2018 — $— $ — |
STOCK BASED COMPENSATION. (Tabl
STOCK BASED COMPENSATION. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of option activity | Summaries of the status of Company's stock option plans as of December 31, 2018 and 2017 and of changes in options outstanding under the Company's plans during those years are as follows (number of shares in thousands): Years Ended December 31, 2018 2017 Number Weighted Average Exercise Price Number Weighted Average Outstanding at beginning of year 230 $ 4.18 240 $ 4.18 Exercised/cancelled (1 ) 12.90 (10 ) 3.74 Outstanding at end of year 229 $ 4.15 230 $ 4.18 Options exercisable at end of year 229 $ 4.15 230 $ 4.18 |
Schedule of stock options by exercise price range | Stock options outstanding as of December 31, 2018 were as follows (number of shares in thousands): Options Outstanding Options Exercisable Range of Number Outstanding Weighted Average Remaining Contractual Weighted Average Number Exercisable Weighted Average $ 3.74 219 4.47 $ 3.74 219 $ 3.74 $ 12.90 10 2.59 $ 12.90 10 $ 12.90 |
Schedule of unvested restricted stock activity | The Company granted to certain employees and directors shares of restricted stock under its 2006 and 2016 Stock Incentive Plans. A summary of unvested restricted stock activity is as follows (shares in thousands): Number of Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2015 463 $ 10.00 Issued 742 $ 5.24 Vested (250 ) $ 9.01 Canceled (25 ) $ 6.24 Unvested at December 31, 2016 930 $ 6.57 Issued 664 $ 6.65 Vested (480 ) $ 7.30 Canceled (37 ) $ 6.08 Unvested at December 31, 2017 1,077 $ 6.31 Issued 1,175 $ 3.07 Vested (540 ) $ 7.69 Canceled (77 ) $ 7.14 Unvested at December 31, 2018 1,635 $ 3.49 |
Schedule of stock-based compensation expense | Stock-based compensation expense related to employee and non-employee restricted stock and option grants recognized in selling, general and administrative expenses, were as follows (in thousands): Years Ended December 31, 2018 2017 2016 Employees $ 2,905 $ 3,303 $ 2,173 Non-employees 533 525 443 Total stock-based compensation expense $ 3,438 $ 3,828 $ 2,616 |
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments - Capital and Operating Leases | Future minimum lease payments required by non-cancelable leases in effect at December 31, 2018 were as follows (in thousands): Years Ended December 31, Capital Leases Operating Leases 2019 $ 45 $ 10,207 2020 45 8,423 2021 33 5,441 2022 — 5,233 2023 — 4,511 Thereafter — 8,413 Total minimum payments 123 $ 42,228 Obligations due within one year (45 ) Long-term obligations under capital leases $ 78 |
FAIR VALUE MEASUREMENTS. (Table
FAIR VALUE MEASUREMENTS. (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||
Schedule of fair value measurements | The following table summarizes recurring fair value measurements by level at September 30, 2019 (in thousands): Fair Value Level 1 Level 2 Level 3 Assets: Derivative financial instruments(1) $ 2,790 $ 2,790 $ — $ — $ 2,790 $ 2,790 $ — $ — Liabilities: Derivative financial instruments(1) $ (3,619 ) $ (3,619 ) $ — $ — $ (3,619 ) $ (3,619 ) $ — $ — The following table summarizes recurring fair value measurements by level at December 31, 2018 (in thousands): Benefit Plan Percentage Fair Value Level 1 Level 2 Level 3 Allocation Assets: Derivative financial instruments(1) $ 1,765 $ 1,765 $ — $ — Defined benefit plan assets (pooled separate accounts): Large U.S. Equity(2) 3,621 — 3,621 — 27 % Small/Mid U.S. Equity(3) 1,844 — 1,844 — 14 % International Equity(4) 2,106 — 2,106 — 16 % Fixed Income(5) 5,686 — 5,686 — 43 % $ 15,022 $ 1,765 $ 13,257 $ — Liabilities: Derivative financial instruments $ (6,309 ) $ (6,309 ) $ — $ — (1) Included in derivative instruments in the consolidated balance sheets. (2) This category includes investments in funds comprised of equity securities of large U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (3) This category includes investments in funds comprised of equity securities of small- and medium-sized U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (4) This category includes investments in funds comprised of equity securities of foreign companies including emerging markets. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (5) This category includes investments in funds comprised of U.S. and foreign investment-grade fixed income securities, high-yield fixed income securities that are rated below investment-grade, U.S. treasury securities, mortgage-backed securities, and other asset-backed securities. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. | The following table summarizes recurring fair value measurements by level at December 31, 2018 (in thousands): Benefit Plan Fair Percentage Value Level 1 Level 2 Level 3 Allocation Assets: Derivative financial instruments $ 1,765 $ 1,765 $ — $ — Defined benefit plan assets(1) (pooled separate accounts): Large U.S. Equity(2) 3,621 — 3,621 — 27 % Small/Mid U.S. Equity(3) 1,844 — 1,844 — 14 % International Equity(4) 2,106 — 2,106 — 16 % Fixed Income(5) 5,686 — 5,686 — 43 % $ 15,022 $ 1,765 $ 13,257 $ — Liabilities: Derivative financial instruments $ (6,309 ) $ (6,309 ) $ — $ — The following table summarizes recurring fair value measurements by level at December 31, 2017 (in thousands): Benefit Plan Fair Percentage Value Level 1 Level 2 Level 3 Allocation Assets: Derivative financial instruments $ 998 $ 998 $ — $ — Defined benefit plan assets(1) (pooled separate accounts): Large U.S. Equity(2) 3,748 — 3,748 — 27 % Small/Mid U.S. Equity(3) 2,018 — 2,018 — 14 % International Equity(4) 2,528 — 2,528 — 18 % Fixed Income(5) 5,664 — 5,664 — 41 % $ 14,956 $ 998 $ 13,958 $ — Liabilities: Derivative financial instruments $ (2,307 ) $ (2,307 ) $ — $ — (1) See Note 9 for accounting discussion. (2) This category includes investments in funds comprised of equity securities of large U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (3) This category includes investments in funds comprised of equity securities of small- and medium-sized U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (4) This category includes investments in funds comprised of equity securities of foreign companies including emerging markets. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (5) This category includes investments in funds comprised of U.S. and foreign investment-grade fixed income securities, high-yield fixed income securities that are rated below investment-grade, U.S. treasury securities, mortgage-backed securities, and other asset-backed securities. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. |
EARNINGS PER SHARE. (Tables)
EARNINGS PER SHARE. (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per share | The following tables compute basic and diluted earnings per share (in thousands, except per share data): Three Months Ended Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (27,326 ) Less: Preferred stock dividends (319 ) Basic and diluted loss per share: Loss available to common stockholders $ (27,645 ) 47,777 $ (0.58 ) Three Months Ended Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (7,514 ) Less: Preferred stock dividends (319 ) Basic and diluted loss per share: Loss available to common stockholders $ (7,833 ) 43,299 $ (0.18 ) Nine Months Ended Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (47,862 ) Less: Preferred stock dividends (946 ) Basic and diluted loss per share: Loss available to common stockholders $ (48,808 ) 47,030 $ (1.04 ) Nine Months Ended Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (28,263 ) Less: Preferred stock dividends (946 ) Basic and diluted loss per share: Loss available to common stockholders $ (29,209 ) 43,171 $ (0.68 ) |
PARENT COMPANY FINANCIALS. (Tab
PARENT COMPANY FINANCIALS. (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | ||
Schedule of balance sheets - parent company | Parent company financial statements for the periods covered in this report are set forth below (in thousands): September 30, December 31, Current Assets: Cash and cash equivalents $ 5,658 $ 6,759 Receivables from subsidiaries 12,270 17,156 Other current assets 1,183 1,659 Total current assets 19,111 25,574 Property and equipment, net 308 522 Other Assets: Investments in subsidiaries 249,641 286,666 Pacific Ethanol West plant receivable 55,750 58,766 Right of use operating lease assets, net 3,318 — Other assets 1,529 1,437 Total other assets 310,238 346,869 Total Assets $ 329,657 $ 372,965 Current Liabilities: Accounts payable and accrued liabilities $ 2,437 $ 2,469 Accrued PE Op Co. purchase 3,829 3,829 Current portion of long-term debt 62,866 66,255 Other current liabilities 587 385 Total current liabilities 69,719 72,938 Operating leases, net of current portion 3,108 — Deferred tax liabilities 251 251 Other liabilities — 9 Total Liabilities 73,078 73,198 Stockholders’ Equity: Preferred stock 1 1 Common and non-voting common stock 50 46 Additional paid-in capital 937,795 932,179 Accumulated other comprehensive loss (2,459 ) (2,459 ) Accumulated deficit (678,808 ) (630,000 ) Total Pacific Ethanol, Inc. stockholders’ equity 256,579 299,767 Total Liabilities and Stockholders’ Equity $ 329,657 $ 372,965 | Parent company financial statements for the periods covered in this report are set forth below. December 31, 2018 2017 ASSETS Current Assets: Cash and cash equivalents $ 6,759 $ 5,314 Receivables from subsidiaries 17,156 3,138 Other current assets 1,659 1,631 Total current assets 25,574 10,083 Property and equipment, net 522 1,071 Other Assets: Investments in subsidiaries 286,666 359,680 Pacific Ethanol West plant receivable 58,766 58,766 Other assets 1,437 1,565 Total other assets 346,869 420,011 Total Assets $ 372,965 $ 431,165 Current Liabilities: Accounts payable and accrued liabilities $ 2,469 $ 2,218 Payable to subsidiaries — 625 Accrued PE Op Co. purchase 3,829 3,828 Current portion of long-term debt 66,255 — Other current liabilities 385 245 Total current liabilities 72,938 6,916 Long-term debt, net — 67,530 Deferred tax liabilities 251 224 Other liabilities 9 56 Total Liabilities 73,198 74,726 Stockholders' Equity: Preferred stock 1 1 Common and non-voting common stock 46 44 Additional paid-in capital 932,179 927,090 Accumulated other comprehensive loss (2,459 ) (2,234 ) Accumulated deficit (630,000 ) (568,462 ) Total Pacific Ethanol, Inc. stockholders' equity 299,767 356,439 Total Liabilities and Stockholders' Equity $ 372,965 $ 431,165 |
Schedule of statements of operations parent company | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Management fees from subsidiaries $ 3,330 $ 3,330 $ 9,660 $ 9,738 Selling, general and administrative expenses 3,827 3,181 11,374 13,069 Income (loss) from operations (497 ) 149 (1,714 ) (3,331 ) Interest income 1,145 1,185 3,486 3,518 Interest expense (2,276 ) (2,171 ) (7,039 ) (6,458 ) Other expense (4 ) (4 ) (86 ) — Loss before benefit for income taxes (1,632 ) (841 ) (5,353 ) (6,271 ) Benefit for income taxes — — — 563 Loss before benefit for income taxes (1,632 ) (841 ) (5,353 ) (5,708 ) Equity in losses of subsidiaries (25,694 ) (6,673 ) (42,509 ) (22,555 ) Consolidated net loss $ (27,326 ) $ (7,514 ) $ (47,862 ) $ (28,263 ) | Years Ended December 31, 2018 2017 2016 Management fees from subsidiaries $ 12,408 $ 11,904 $ 12,968 Selling, general and administrative expenses 16,795 18,185 14,491 Loss from operations (4,387 ) (6,281 ) (1,523 ) Fair value adjustments — 473 (557 ) Interest income 4,703 4,793 5,964 Interest expense (8,678 ) (5,829 ) (240 ) Other income (expense), net (74 ) (95 ) 1,931 Income (loss) before provision (benefit) for income taxes (8,436 ) (6,939 ) 5,575 Provision (benefit) for income taxes (562 ) (321 ) (981 ) Income (loss) before equity in earnings of subsidiaries (7,874 ) (6,618 ) 6,556 Equity in losses of subsidiaries (52,399 ) (28,346 ) (5,137 ) Consolidated net income (loss) $ (60,273 ) $ (34,964 ) $ 1,419 |
Schedule of statements of cash flows parent company | For the Nine Months Ended September 30, 2019 2018 Operating Activities: Net loss $ (47,862 ) $ (28,263 ) Adjustments to reconcile net loss to cash used in operating activities: Equity in losses of subsidiaries 42,509 22,555 Depreciation 227 481 Deferred income taxes — 563 Amortization of debt discounts 539 357 Changes in operating assets and liabilities: Accounts receivables (114 ) (5,062 ) Other assets 173 2,489 Accounts payable and accrued expenses 1,950 5 Accounts payable with subsidiaries (502 ) (622 ) Net cash used in operating activities $ (3,080 ) $ (7,497 ) Investing Activities: Dividend from subsidiaries $ — $ 10,000 Contributions to subsidiaries — (5,000 ) Additions to property and equipment (13 ) (6 ) Net cash provided by (used in) investing activities $ (13 ) $ 4,994 Financing Activities: Proceeds from issuances of common stock $ 3,670 $ — Proceeds from Pacific Ethanol West 3,016 — Payments on senior notes (3,748 ) — Preferred stock dividend payments (946 ) (946 ) Net cash provided by (used in) financing activities $ 1,992 $ (946 ) Net decrease in cash and cash equivalents (1,101 ) (3,449 ) Cash and cash equivalents at beginning of period 6,759 5,314 Cash and cash equivalents at end of period $ 5,658 $ 1,865 | For the Years Ended December 31, 2018 2017 2016 Operating Activities: Net income (loss) $ (60,273 ) $ (34,964 ) $ 1,419 Adjustments to reconcile net income (loss) to cash provided by operating activities: Equity in losses of subsidiaries 52,399 28,346 5,137 Dividends from subsidiaries 25,000 3,500 — Depreciation 567 830 727 Fair value adjustments — (473 ) 557 Deferred income taxes 27 169 (1,122 ) Amortization of debt discounts 720 636 10 Changes in operating assets and liabilities: Accounts receivables (9,018 ) 4,065 7,302 Other assets 100 4,356 4,647 Accounts payable and accrued expenses 740 3,859 (3,741 ) Accounts payable with subsidiaries 2,409 (943 ) (9,385 ) Net cash provided by operating activities $ 12,671 $ 9,381 $ 5,551 Investing Activities: Additions to property and equipment $ (18 ) $ (468 ) $ (465 ) Investments in subsidiaries (10,000 ) (28,126 ) (50,886 ) Purchase of PE OP Co. debt — — (17,003 ) Net cash used in investing activities $ (10,018 ) $ (28,594 ) $ (68,354 ) Financing Activities: Proceeds from issuances of senior notes $ — $ 13,530 $ 53,350 Proceeds from issuance of common stock 2,057 — — Proceeds from warrant stock option exercises — 1,202 1,164 Payments on senior notes (2,000 ) — — Preferred stock dividend payments (1,265 ) (1,265 ) (1,269 ) Net cash provided by (used in) financing activities $ (1,208 ) $ 13,467 $ 53,245 Net increase (decrease) in cash and cash equivalents 1,445 (5,746 ) (9,558 ) Cash and cash equivalents at beginning of period 5,314 11,060 20,618 Cash and cash equivalents at end of period $ 6,759 $ 5,314 $ 11,060 |
QUARTERLY FINANCIAL DATA. (Tabl
QUARTERLY FINANCIAL DATA. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data | The Company's quarterly results of operations for the years ended December 31, 2018 and 2017 are as follows (in thousands). First Second Third Fourth December 31, 2018: Net sales $ 400,027 $ 410,522 $ 370,407 $ 334,415 Gross profit (loss) $ 3,362 $ (1,273 ) $ 3,768 $ (21,021 ) Loss from operations $ (5,953 ) $ (10,171 ) $ (5,202 ) $ (30,211 ) Net loss attributed to Pacific Ethanol, Inc. $ (7,841 ) $ (12,908 ) $ (7,514 ) $ (32,010 ) Preferred stock dividends $ (312 ) $ (315 ) $ (319 ) $ (319 ) Net loss available to common stockholders $ (8,153 ) $ (13,223 ) $ (7,833 ) $ (32,329 ) Basic and diluted loss per common share $ (0.19 ) $ (0.31 ) $ (0.18 ) $ (0.74 ) December 31, 2017: Net sales $ 386,340 $ 405,202 $ 445,442 $ 395,271 Gross profit (loss) $ (5,773 ) $ 1,653 $ 12,065 $ (2,014 ) Income (loss) from operations $ (11,223 ) $ (7,109 ) $ 3,345 $ (10,598 ) Net loss attributed to Pacific Ethanol, Inc. $ (12,636 ) $ (8,841 ) $ (202 ) $ (13,285 ) Preferred stock dividends $ (312 ) $ (315 ) $ (319 ) $ (319 ) Net loss available to common stockholders $ (12,948 ) $ (9,156 ) $ (521 ) $ (13,604 ) Basic and diluted loss per common share $ (0.31 ) $ (0.22 ) $ (0.01 ) $ (0.32 ) |
ORGANIZATION AND BASIS OF PRE_3
ORGANIZATION AND BASIS OF PRESENTATION. (Details) - Sales [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Customer A [Member] | |||
Concentration risk percentage | 14.00% | 16.00% | 17.00% |
Customer B [Member] | |||
Concentration risk percentage | 11.00% | 11.00% | 12.00% |
ORGANIZATION AND BASIS OF PRE_4
ORGANIZATION AND BASIS OF PRESENTATION. (Details 1) - Purchases [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplier A [Member] | |||
Concentration percentage | 17.00% | 14.00% | 13.00% |
Supplier B [Member] | |||
Concentration percentage | 14.00% | 13.00% | 4.00% |
Supplier C [Memebr] | |||
Concentration percentage | 11.00% | 9.00% | 13.00% |
Supplier D [Memebr] | |||
Concentration percentage | 10.00% | 10.00% | 8.00% |
ORGANIZATION AND BASIS OF PRE_5
ORGANIZATION AND BASIS OF PRESENTATION. (Details 2) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Finished goods | $ 41,034 | $ 35,778 | $ 35,652 | |
Work in progress | 8,207 | 6,855 | 8,807 | |
Raw materials | 7,236 | 7,233 | 7,601 | |
Low-carbon and RIN credits | 4,150 | 6,130 | 7,952 | |
Other | 1,882 | 1,824 | 1,538 | |
Total inventories | $ 62,509 | $ 57,820 | [1] | $ 61,550 |
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
ORGANIZATION AND BASIS OF PRE_6
ORGANIZATION AND BASIS OF PRESENTATION. (Details 3) | 12 Months Ended |
Dec. 31, 2018 | |
Building [Member] | |
Estimated useful lives | P40Y |
Facilities and plant equipment [Member] | Minimum [Member] | |
Estimated useful lives | P10Y |
Facilities and plant equipment [Member] | Maximum [Member] | |
Estimated useful lives | P25Y |
Other equipment, vehicles and furniture [Member] | Minimum [Member] | |
Estimated useful lives | P5Y |
Other equipment, vehicles and furniture [Member] | Maximum [Member] | |
Estimated useful lives | P10Y |
ORGANIZATION AND BASIS OF PRE_7
ORGANIZATION AND BASIS OF PRESENTATION. (Details 4) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loss Numerator | ||||||||||||||||
Net loss attributed to Pacific Ethanol, Inc. | $ (27,326) | $ (32,010) | $ (7,514) | $ (12,908) | $ (7,841) | $ (13,285) | $ (202) | $ (8,841) | $ (12,636) | $ (47,862) | $ (28,263) | $ (60,273) | $ (34,964) | $ 1,419 | ||
Less: Preferred stock dividends | (319) | $ (315) | $ (312) | (319) | (315) | (312) | (946) | (946) | (1,265) | (1,265) | (1,269) | |||||
Less: Income allocated to participating securities | (2) | |||||||||||||||
Basic income per share: | ||||||||||||||||
Income (loss) available to common stockholders, basic | $ (27,645) | $ (32,329) | $ (7,833) | $ (13,223) | $ (8,153) | $ (13,604) | $ (521) | $ (9,156) | $ (12,948) | $ (48,808) | $ (29,209) | (61,538) | (36,229) | 148 | ||
Diluted income per share: | ||||||||||||||||
Income (loss) available to common stockholders, diluted | $ (61,538) | $ (36,229) | $ 148 | |||||||||||||
Shares Denominator | ||||||||||||||||
Shares available to common stockholders - basic | 43,376 | 42,745 | 42,182 | |||||||||||||
Incremental shares - Options | 69 | |||||||||||||||
Shares available to common stockholders - diluted | 43,376 | 42,745 | 42,251 | |||||||||||||
Per-Share Amount | ||||||||||||||||
Per-Share amount - basic | $ (1.42) | $ (0.85) | $ 0 | |||||||||||||
Per-Shares amount - diluted | $ (1.42) | $ (0.85) | $ 0 |
ORGANIZATION AND BASIS OF PRE_8
ORGANIZATION AND BASIS OF PRESENTATION. (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($)shares | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($)shares | Dec. 31, 2018USD ($)Numbershares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | Dec. 15, 2016 | Dec. 31, 2015USD ($) | ||
Number of ethanol plants | Number | 9 | |||||||||
Ethanol production capacity per year | 605 million gallons per year | 605 million gallons of annual production capacity, of which plant assets representing 355 million gallons of capacity are either unencumbered, or their entire sales proceeds would be used to repay the senior secured notes. The Company has engaged an independent third party to help facilitate the marketing of certain of these assets; and in excess of $20 million of equity available under the Company’s shelf registration statement, including under its at-the-market equity program. | ||||||||
Ethanol market capacity per year | Markets nearly 1.0 billion gallons of ethanol | Markets nearly 1.0 billion gallons of ethanol | ||||||||
Other products produced per year | Produces over 3.0 million tons of co-products | Produces over 3.0 million tons of co-products | ||||||||
Accounts receivable used as collateral | $ 61,743 | $ 61,743 | $ 54,820 | $ 64,501 | ||||||
Allowance for doubtful accounts | 39 | 39 | 12 | 19 | ||||||
Bad debt expense | 0 | $ 1 | 27 | $ 44 | 45 | 5 | $ 306 | |||
Benefit for income taxes | $ 563 | (562) | (321) | (981) | ||||||
Accounts receivable | 69,297 | 69,297 | $ 67,636 | [1] | 80,344 | |||||
Employees covered by collective bargaining agreement | 35.00% | |||||||||
Net inventory valuation adjustment | $ 0 | $ 0 | $ 2,328 | 2,678 | ||||||
Amortization of deferred financing costs | 900 | 503 | $ 137 | |||||||
Unamortized deferred financing costs | $ 1,377 | $ 1,925 | ||||||||
Potentially dilutive shares from convertible securities outstanding | shares | 635,000 | 425,000 | 635,000 | 635,000 | 635,000 | 719,000 | 704,000 | |||
Cash | $ 18,921 | $ 56,093 | $ 18,921 | $ 56,093 | $ 26,627 | [1] | $ 49,489 | $ 64,259 | $ 51,550 | |
Bad debts recovery | 0 | $ 1 | ||||||||
Ethanol production plant assest | 355 million gallons | |||||||||
Customer A and B [Member] | ||||||||||
Accounts receivable | $ 13,405 | $ 17,792 | ||||||||
Concentration risk percentage | 20.00% | 24.00% | ||||||||
ACEC [Member] | ||||||||||
Noncontrolling interest owned | 26.07% | 26.07% | ||||||||
Pacific Aurora [Member] | ||||||||||
Ownership interest | 73.93% | 73.93% | 100.00% | |||||||
Pacific Aurora [Member] | ACEC [Member] | ||||||||||
Ownership interest | 26.07% | 26.07% | ||||||||
Kinergy Marketing LLC [Member] | ||||||||||
Cash | 18,900 | $ 18,900 | ||||||||
Line of credit | $ 2,200 | $ 2,200 | $ 10,200 | |||||||
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
PACIFIC ETHANOL PLANTS. (Detail
PACIFIC ETHANOL PLANTS. (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2016 |
ICP [Member] | ||
Cash and equivalents | $ 426 | |
Accounts receivable | 11,636 | |
Inventories | 9,227 | |
Other current assets | 1,560 | |
Total current assets | 22,849 | |
Property and equipment | 61,128 | |
Other assets | 328 | |
Total assets acquired | 84,305 | |
Accounts payable, trade | 5,683 | |
Other current liabilities | 1,486 | |
Total current liabilities | 7,169 | |
Other non-current liabilities | 209 | |
Total liabilities assumed | 7,378 | |
Net assets acquired | 76,927 | |
Estimated goodwill | ||
Total purchase price | $ 76,927 | |
Pacific Aurora [Member] | ||
Cash and equivalents | $ 1,453 | |
Accounts receivable | 16,804 | |
Inventories | 3,837 | |
Other current assets | 77 | |
Total current assets | 22,171 | |
Property and equipment | 115,759 | |
Other assets | 1,387 | |
Total assets acquired | 139,317 | |
Accounts payable, trade | 20,152 | |
Other current liabilities | 2,045 | |
Long-term debt - term debt | 621 | |
Total liabilities assumed | $ 22,818 |
PACIFIC ETHANOL PLANTS. (Deta_2
PACIFIC ETHANOL PLANTS. (Details 1) - ICP [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net sales - pro forma | $ 1,710,317 | $ 1,802,159 |
Consolidated net income (loss) - pro forma | $ (42,589) | $ 8,329 |
Diluted net income (loss) per share - pro forma | $ (0.95) | $ 0.16 |
Diluted weighted-average shares - pro forma | $ 42,745 | $ 42,251 |
PACIFIC ETHANOL PLANTS. (Deta_3
PACIFIC ETHANOL PLANTS. (Details Narrative) - USD ($) $ in Thousands | Jul. 03, 2017 | Dec. 15, 2016 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Ethanol production capacity per year | 605 million gallons per year | 605 million gallons of annual production capacity, of which plant assets representing 355 million gallons of capacity are either unencumbered, or their entire sales proceeds would be used to repay the senior secured notes. The Company has engaged an independent third party to help facilitate the marketing of certain of these assets; and in excess of $20 million of equity available under the Company’s shelf registration statement, including under its at-the-market equity program. | |||||||
Net Revenue | $ 365,160 | $ 370,407 | $ 1,067,264 | $ 1,180,956 | $ 1,515,371 | $ 1,632,255 | $ 1,624,758 | ||
Pre-tax income | (29,073) | (9,304) | (51,524) | (33,968) | (68,498) | (38,395) | 545 | ||
Gain on settlement | $ 8,687 | $ 8,970 | $ 23,630 | $ 27,183 | $ 36,373 | $ 31,516 | $ 30,849 | ||
Pacific Aurora [Member] | |||||||||
Ownership interest sold | 14.22% | ||||||||
Pacific Aurora [Member] | |||||||||
Equity interest owned | 100.00% | 73.93% | 73.93% | ||||||
Cash received in sale of subsidiary | $ 30,000 | ||||||||
Description of agreement closed term | (i) PE Central contributed to Pacific Aurora 100% of the equity interests of its wholly-owned subsidiaries, Pacific Ethanol Aurora East, LLC (“AE”) and Pacific Ethanol Aurora West, LLC (“AW”), which owned the Company’s Aurora East and Aurora West ethanol plants, respectively, in exchange for an 88.15% ownership interest in Pacific Aurora, and (ii) ACEC contributed to Pacific Aurora its grain elevator adjacent to the Aurora East and Aurora West properties and related grain handling assets, including the outer rail loop and the real property on which they are located, in exchange for an 11.85% ownership interest in Pacific Aurora. | ||||||||
ACEC contribution in assets | $ 16,500 | ||||||||
ACEC additional cash contribution | 30,000 | ||||||||
Additional paid in capital for book value and contribution and sale | $ 16,200 | ||||||||
Pacific Aurora [Member] | ACEC [Member] | |||||||||
Equity interest owned | 26.07% | 26.07% | |||||||
ICP [Member] | |||||||||
Equity interest owned | 100.00% | ||||||||
Cash received in sale of subsidiary | $ 30,000 | ||||||||
Stock issued for acquisition, value | $ 46,900 | ||||||||
Ethanol production capacity per year | 90 million gallon per year | ||||||||
Accounts receivable | $ 11,636 | ||||||||
Net Revenue | 163,100 | $ 75,900 | |||||||
Pre-tax income | $ 6,500 | $ 3,700 |
INVENTORIES. (Details)
INVENTORIES. (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | ||||
Finished goods | $ 41,034 | $ 35,778 | $ 35,652 | |
Work in progress | 8,207 | 6,855 | 8,807 | |
Raw materials | 7,236 | 7,233 | 7,601 | |
Low-carbon and RIN credits | 4,150 | 6,130 | 7,952 | |
Other | 1,882 | 1,824 | 1,538 | |
Total | $ 62,509 | $ 57,820 | [1] | $ 61,550 |
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
INVENTORIES. (Details Narrative
INVENTORIES. (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | |||
Inventory, net of valuation adjustments | $ 0 | $ 2,328 | $ 2,678 |
INTERCOMPANY AGREEMENTS. (Detai
INTERCOMPANY AGREEMENTS. (Details Narrative) $ / shares in Units, $ in Thousands | Dec. 15, 2016$ / shares | Jul. 01, 2015Number$ / shares | Dec. 31, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Affiliate Management Agreement [Member] | ||||||
Agreement term | 1 year | |||||
Agreement renewal term | 1 year | |||||
Description of agreement termination | Pacific Ethanol may terminate the AMA, and any subsidiary may terminate the AMA, at any time by providing at least 90 days prior notice of such termination. | |||||
Revenues from related party | $ 12,048 | $ 11,904 | $ 12,968 | |||
Ethanol Marketing Agreement [Member] | Kinergy Marketing LLC [Member] | ||||||
Agreement term | 1 year | |||||
Agreement renewal term | 1 year | |||||
Number of plants | Number | 9 | |||||
Description of agreement terms | (i) the estimated purchase price payable by the third-party purchaser of the ethanol, minus (ii) the estimated amount of transportation costs to be incurred, minus (iii) the estimated incentive fee payable to Kinergy, which equals 1% of the aggregate third-party purchase price, provided that the marketing fee shall not be less than $0.015 per gallon and not more than $0.0225 per gallon. | |||||
Revenues from related party | 8,773 | 8,464 | 8,029 | |||
Corn Procurement and Handling Agreement [Member] | Pacific Ag. Products, LLC [Member] | ||||||
Agreement term | 1 year | |||||
Agreement renewal term | 1 year | |||||
Description of agreement terms | Each facility appointed PAP as its exclusive agent to solicit, negotiate, enter into and administer, on its behalf, corn supply arrangements to procure the corn necessary to operate its facility. | |||||
Services fees (per bushel) | $ / shares | $ 0.03 | $ 0.045 | ||||
Revenues from related party | 4,531 | 4,245 | 4,386 | |||
New Grain Procurement Agreement [Member] | Pacific Aurora [Member] | ACEC [Member] | ||||||
Agreement term | 1 year | |||||
Agreement renewal term | 1 year | |||||
Services fees (per bushel) | $ / shares | $ 0.03 | |||||
Grain procurement expenses | $ 107 | $ 1,381 | 1,488 | |||
Distillers Grains Marketing Agreements [Member] | Pacific Ag. Products, LLC [Member] | ||||||
Description of agreement terms | Within ten days after a plant delivers co-products to PAP, the plant is paid an amount equal to (i) the estimated purchase price payable by the third-party purchaser of the co-products, minus (ii) the estimated amount of transportation costs to be incurred, minus (iii) the estimated amount of fees and taxes payable to governmental authorities in connection with the tonnage of the co-products produced or marketed, minus (iv) the estimated incentive fee payable to the Company, which equals (a) 5% of the aggregate third-party purchase price for wet corn gluten feed, wet distillers grains, corn condensed distillers solubles and distillers grains with solubles, or (b) 1% of the aggregate third-party purchase price for corn gluten meal, dry corn gluten feed, dry distillers grains, corn germ and corn oil. Each distillers grains marketing agreement had an initial term of one year and successive one year renewal periods at the option of the individual plant. | |||||
Revenues from related party | $ 6,572 | $ 6,020 | $ 6,047 |
SEGMENTS. (Details)
SEGMENTS. (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net Sales | $ 365,160 | $ 370,407 | $ 1,067,264 | $ 1,180,956 | $ 1,515,371 | $ 1,632,255 | $ 1,624,758 | |||||||
Cost of goods sold | 379,976 | $ 334,415 | 366,639 | $ 410,522 | $ 400,027 | $ 395,271 | $ 445,442 | $ 405,202 | $ 386,340 | 1,080,398 | 1,175,099 | 1,530,535 | 1,626,324 | 1,570,400 |
Income (loss) before benefit for income taxes | (29,073) | (9,304) | (51,524) | (33,968) | (68,498) | (38,395) | 545 | |||||||
Depreciation and amortization | 12,028 | 10,217 | 35,944 | 30,635 | 35,441 | |||||||||
Interest expense | 5,163 | 4,193 | 15,014 | 12,875 | 17,132 | 12,938 | 22,406 | |||||||
Intersubsegment Eliminations [Member] | ||||||||||||||
Net Sales | (2,482) | (2,719) | (7,026) | (8,288) | (10,768) | (10,362) | (9,198) | |||||||
Cost of goods sold | (2,888) | (2,719) | (7,817) | (8,456) | ||||||||||
Ethanol Production [Member] | ||||||||||||||
Net Sales | 278,993 | 290,565 | 787,044 | 898,142 | 1,158,496 | 1,104,621 | 1,046,976 | |||||||
Cost of goods sold | 294,888 | 295,574 | 810,670 | 914,638 | 1,197,507 | 1,101,651 | 1,003,679 | |||||||
Income (loss) before benefit for income taxes | (25,999) | (15,571) | (50,682) | (45,355) | (77,833) | (27,457) | (6,879) | |||||||
Depreciation and amortization | 11,833 | 10,040 | 35,390 | 30,017 | 40,099 | 37,637 | 34,528 | |||||||
Interest expense | 1,969 | 1,692 | 5,724 | 5,416 | 7,116 | 5,887 | 20,794 | |||||||
Ethanol Production [Member] | Ethanol alcohol [Member] | ||||||||||||||
Net Sales | 212,897 | 216,788 | 586,680 | 670,304 | 859,815 | 845,692 | 797,363 | |||||||
Ethanol Production [Member] | Co-product sales [Member] | ||||||||||||||
Net Sales | 65,693 | 73,259 | 199,177 | 226,307 | 296,686 | 257,031 | 248,444 | |||||||
Ethanol Production [Member] | Intersegment Sales [Member] | ||||||||||||||
Net Sales | 403 | 518 | 1,187 | 1,531 | 1,995 | 1,898 | 1,169 | |||||||
Marketing And Distribution [Member] | ||||||||||||||
Net Sales | 88,649 | 82,561 | 287,246 | 291,102 | ||||||||||
Cost of goods sold | 87,976 | 73,784 | 277,545 | 268,917 | 343,991 | 535,033 | 575,920 | |||||||
Income (loss) before benefit for income taxes | (998) | 7,416 | 4,991 | 18,095 | 18,191 | (2,463) | 4,517 | |||||||
Interest expense | 929 | 344 | 2,291 | 1,042 | 1,388 | 1,271 | 1,404 | |||||||
Marketing And Distribution [Member] | Intersegment Sales [Member] | ||||||||||||||
Net Sales | 2,079 | 2,201 | 5,839 | 6,757 | ||||||||||
Marketing And Distribution [Member] | Ethanol alcohol Sales Member] | ||||||||||||||
Net Sales | 86,124 | 79,877 | 280,032 | 282,940 | 357,011 | 527,869 | 577,347 | |||||||
Marketing And Distribution [Member] | Ethanol alcohol Sales Net Member] | ||||||||||||||
Net Sales | 446 | 483 | 1,375 | 1,405 | 1,859 | 1,663 | 1,604 | |||||||
Marketing And Distribution [Member] | Intersubsegment Eliminations [Member] | ||||||||||||||
Net Sales | 8,773 | 8,464 | 8,029 | |||||||||||
Marketing [Member] | ||||||||||||||
Net Sales | 367,643 | 537,996 | 586,980 | |||||||||||
Corporate Activities [Member] | ||||||||||||||
Income (loss) before benefit for income taxes | (2,076) | (1,149) | (5,833) | (6,708) | (8,856) | (8,475) | 2,907 | |||||||
Depreciation and amortization | 195 | 177 | 554 | 618 | 750 | 1,014 | 913 | |||||||
Interest expense | $ 2,265 | $ 2,157 | $ 6,999 | $ 6,417 | $ 8,628 | $ 5,780 | $ 208 |
SEGMENTS. (Details 1)
SEGMENTS. (Details 1) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total Assets | $ 652,860 | $ 659,981 | [1] | $ 720,296 |
Ethanol Production [Member] | ||||
Total Assets | 527,950 | 532,790 | 583,696 | |
Marketing and Distribution [Member] | ||||
Total Assets | 108,960 | 112,984 | 127,242 | |
Corporate Assets [Member] | ||||
Total Assets | $ 15,950 | $ 14,117 | $ 9,358 | |
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
SEGMENTS. (Details Narrative)
SEGMENTS. (Details Narrative) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Number of operating segments | Number | 2 | ||
Ethanol Production [Member] | |||
Management fees | $ 10,248,000 | $ 9,744,000 | $ 9,968,000 |
Marketing and Distribution [Member] | |||
Management fees | $ 2,160,000 | $ 2,160,000 | $ 3,000,000 |
PROPERTY AND EQUIPMENT. (Detail
PROPERTY AND EQUIPMENT. (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment, Gross | $ 673,003 | $ 658,356 | ||
Accumulated Depreciation | (190,346) | (150,004) | ||
Property, Plant and Equipment, Net | $ 442,810 | 482,657 | [1] | 508,352 |
Facilities And Plant Equipment [Member] | ||||
Property, Plant and Equipment, Gross | 621,909 | 601,156 | ||
Land [Member] | ||||
Property, Plant and Equipment, Gross | 8,970 | 8,970 | ||
Other Equipment, Vehicles and Furniture [Member] | ||||
Property, Plant and Equipment, Gross | 11,812 | 10,189 | ||
Construction in Progress [Member] | ||||
Property, Plant and Equipment, Gross | $ 30,312 | $ 38,041 | ||
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
PROPERTY AND EQUIPMENT. (Deta_2
PROPERTY AND EQUIPMENT. (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Depreciation expense | $ 40,849 | $ 38,651 | $ 35,441 |
Capital Investment Activities [Member] | |||
Capitalized interest | $ 1,170 | $ 822 | $ 1,307 |
INTANGIBLE ASSET. (Details Narr
INTANGIBLE ASSET. (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | [1] | Dec. 31, 2017 | Dec. 31, 2016 |
Intangible assets amount | $ 2,678 | $ 2,678 | $ 2,678 | ||
Trade Names [Member] | Kinergy Marketing LLC [Member] | |||||
Intangible assets amount | $ 2,678 | ||||
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
DERIVATIVES. (Details)
DERIVATIVES. (Details) - Non Designated Derivative Instruments [Member] - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Cash Collateral Balance [Member] | |||
Derivative assets | $ 2,400 | $ 8,479 | $ 3,813 |
Commodity Contracts [Member] | |||
Derivative assets | 2,790 | 1,765 | 998 |
Derivative liabilities | $ 3,619 | $ 6,309 | $ 2,307 |
DERIVATIVES. (Details 1)
DERIVATIVES. (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Realized Gains (Losses) | $ 1,565 | $ (4,362) | |||||
Unrealized Gains (Losses) | $ (3,235) | $ 2,088 | $ (3,370) | ||||
Non Designated Derivative Instruments [Member] | Commodity Contracts [Member] | Cost of goods sold [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Realized Gains (Losses) | $ 2,262 | $ 916 | (2,150) | (1,241) | (3,479) | (4,165) | 1,386 |
Unrealized Gains (Losses) | $ (5,582) | $ (1,907) | $ 3,715 | $ (3,121) | $ (3,235) | $ 2,088 | $ (3,370) |
DERIVATIVES. (Details Narrative
DERIVATIVES. (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Recognized losses due to change in fair value | $ 3,320 | $ 991 | $ (6,714) | $ (2,077) | $ (1,984) |
LEASES. (Details)
LEASES. (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
2019 | $ 10,207 | |
2020 | 8,423 | |
2021 | 5,441 | |
2022 | 5,233 | |
2023 | 4,511 | |
2024-43 | 8,413 | |
Total | $ 42,228 | |
Equipment [Member] | ||
2019 | $ 2,220 | |
2020 | 7,349 | |
2021 | 4,364 | |
2022 | 4,140 | |
2023 | 3,500 | |
2024-43 | 10,181 | |
Total | 31,754 | |
Land Related [Member] | ||
2019 | 262 | |
2020 | 1,054 | |
2021 | 1,077 | |
2022 | 1,100 | |
2023 | 1,013 | |
2024-43 | 34,931 | |
Total | $ 39,437 |
LEASES. (Details Narrative)
LEASES. (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Right of assets and operating lease liability | $ 43,753 | $ 43,753 |
Operating lease, weighted average discount rate | 6.01% | 6.01% |
Operating lease costs | $ 2,157 | $ 6,490 |
Selling, General and Administrative Expenses [Member] | ||
Operating lease costs | $ 119 | $ 354 |
Equipment [Member] | ||
Weighted average remaining lease term | 2 years 7 months 28 days | 2 years 7 months 28 days |
Land Related [Member] | ||
Weighted average remaining lease term | 13 years 5 months 5 days | 13 years 5 months 5 days |
Minimum [Member] | ||
Lease term | 1 year | 1 year |
Maximum [Member] | ||
Lease term | 57 years | 57 years |
DEBT. (Details)
DEBT. (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Long-term borrowings are summarized as follows | ||||
Total debt | $ 244,385 | $ 233,505 | $ 244,425 | |
Less unamortized debt discount | (150) | (690) | (1,409) | |
Less unamortized debt financing costs | (1,019) | (1,377) | (1,925) | |
Less short-term portion | (144,543) | (146,671) | [1] | (20,000) |
Long-term debt | 98,673 | 84,767 | [1] | 221,091 |
Term Loan [Member] | Illinois Corn Processing, LLC [Member] | ||||
Long-term borrowings are summarized as follows | ||||
Term debt | 12,000 | 16,500 | 22,500 | |
Parent Notes Payable [Member] | ||||
Long-term borrowings are summarized as follows | ||||
Notes payable | 63,200 | 66,948 | 68,948 | |
Revolving Credit Facility [Member] | Illinois Corn Processing, LLC [Member] | ||||
Long-term borrowings are summarized as follows | ||||
Term debt | 18,000 | 18,000 | 18,000 | |
Kinergy Marketing LLC [Member] | ||||
Long-term borrowings are summarized as follows | ||||
Line of credit | 2,200 | 10,200 | ||
Kinergy Marketing LLC [Member] | Line of Credit [Member] | ||||
Long-term borrowings are summarized as follows | ||||
Line of credit | 79,685 | 57,057 | 49,477 | |
Pacific Ethanol Pekin, Inc [Member] | Term Loan [Member] | ||||
Long-term borrowings are summarized as follows | ||||
Term debt | 39,500 | 43,000 | 53,500 | |
Pacific Ethanol Pekin, Inc [Member] | Revolving Credit Facility [Member] | ||||
Long-term borrowings are summarized as follows | ||||
Term debt | $ 32,000 | $ 32,000 | $ 32,000 | |
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
DEBT. (Details 1)
DEBT. (Details 1) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | |||
2019 | $ 86,260 | ||
2020 | 20,000 | ||
2021 | 19,500 | ||
2022 | 107,745 | ||
2023 | |||
Total debt | $ 244,385 | $ 233,505 | $ 244,425 |
DEBT. (Details Narrative)
DEBT. (Details Narrative) - USD ($) $ in Thousands | Mar. 21, 2019 | Mar. 30, 2018 | Sep. 15, 2017 | Aug. 07, 2017 | Jun. 30, 2017 | May 20, 2017 | Dec. 15, 2016 | Dec. 12, 2016 | Dec. 31, 2015 | Jul. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 20, 2019 | Aug. 06, 2019 | Feb. 26, 2016 | |
Debt maturity date | Dec. 15, 2019 | ||||||||||||||||||
Debt discount | $ 150 | $ 690 | $ 1,409 | ||||||||||||||||
Principal balance | 244,385 | 233,505 | 244,425 | ||||||||||||||||
Net assets | 652,860 | 659,981 | [1] | 720,296 | |||||||||||||||
A-1 Term Loan (Pacific Ethanol West Plants' Term Debt) [Member] | |||||||||||||||||||
Line of credit | $ 17,003,000 | $ 17,003,000 | |||||||||||||||||
Description of maturity date | Mature in June 2016. | ||||||||||||||||||
Debt retiremnt amount | $ 17,003,000 | ||||||||||||||||||
Increased in debt amount | 58,766 | $ 58,766 | $ 41,763 | ||||||||||||||||
Credit Agreement [Member] | Illinois Corn Processing, LLC [Member] | |||||||||||||||||||
Description payment terms | Maintain working capital of not less than $8.0 million. In addition, ICP is required to maintain an annual debt service coverage ratio of not less than 1.50 to 1.00 beginning for the year ending December 31, 2018. | ||||||||||||||||||
Credit Agreement [Member] | Term Loan [Member] | Illinois Corn Processing, LLC [Member] | |||||||||||||||||||
Debt face amount | $ 24,000 | ||||||||||||||||||
Interest rate term | Accrues at a rate equal to 3.75% plus the one-month LIBOR | ||||||||||||||||||
Principal payments | $ 1,500 | ||||||||||||||||||
Frequency of periodic payments | Quarterly | ||||||||||||||||||
Description payment terms | Principal payments in sixteen equal consecutive quarterly installments of $1,500,000 each until September 20, 2021. | ||||||||||||||||||
Note Purchase Agreement [Member] | Notes Payable [Member] | Five Accredited Investors [Member] | |||||||||||||||||||
Debt face amount | $ 55,000 | ||||||||||||||||||
Description of borrowing terms | Private offering for aggregate gross proceeds of 97% of the principal amount of the Notes sold. | ||||||||||||||||||
Repayment of debt | 2,000 | ||||||||||||||||||
Note Purchase Agreement [Member] | Total Notes Payable [Member] | Five Accredited Investors [Member] | |||||||||||||||||||
Debt maturity date | Dec. 15, 2019 | ||||||||||||||||||
Interest rate term | (i) the greater of 1% and the three-month LIBOR, plus 7.0% from the closing through December 14, 2017, (ii) the greater of 1% and LIBOR, plus 9% between December 15, 2017 and December 14, 2018, and (iii) the greater of 1% and LIBOR plus 11% between December 15, 2018 and the Maturity Date. | ||||||||||||||||||
Debt default interest rate | 2.00% | ||||||||||||||||||
Description of debt collateral | Secured by a first-priority security interest in the equity interest held by Pacific Ethanol in its wholly-owned subsidiary, PE Op. Co., which indirectly owns the Company’s plants located on the West Coast. | ||||||||||||||||||
Second Note Purchase Agreement [Member] | Notes Payable [Member] | Five Accredited Investors [Member] | |||||||||||||||||||
Debt face amount | $ 13,900 | ||||||||||||||||||
Description of borrowing terms | Private offering for aggregate gross proceeds of 97% of the principal amount of the notes sold | ||||||||||||||||||
Revolving Credit Facility [Member] | Credit Agreement [Member] | Illinois Corn Processing, LLC [Member] | |||||||||||||||||||
Maximum borrowing capacity | $ 18,000 | ||||||||||||||||||
Unused facility fees | 0.75% | ||||||||||||||||||
Kinergy Marketing LLC [Member] | |||||||||||||||||||
Line of credit | 2,200 | 10,200 | |||||||||||||||||
Kinergy Marketing LLC [Member] | Line of Credit [Member] | |||||||||||||||||||
Maximum borrowing capacity | $ 100,000 | ||||||||||||||||||
Line of credit maturity date | Aug. 2, 2022 | ||||||||||||||||||
Description of interest rate | Interest accrues under the line of credit at a rate equal to (i) the three-month London Interbank Offered Rate (“LIBOR”), plus (ii) a specified applicable margin ranging between 1.50% and 2.00%. | ||||||||||||||||||
Interest rate at end of period | 4.31% | ||||||||||||||||||
Interest margin rate | 1.50% | ||||||||||||||||||
Description of payment made to company | Payments that may be made by Kinergy to the Company as reimbursement for management and other services provided by the Company to Kinergy are limited under the terms of the credit facility to $1,500,000 per fiscal quarter. | ||||||||||||||||||
Description of collateral | The credit facility is based on Kinergy’s eligible accounts receivable and inventory levels, subject to certain concentration reserves. The credit facility is subject to certain other sublimits, including inventory loan limits. | ||||||||||||||||||
Unused borrowing capacity | 4,430 | $ 10,200 | |||||||||||||||||
Interest rate term | Accrue interest at an annual rate equal to the daily three month LIBOR plus an applicable margin of 4.00%. | ||||||||||||||||||
Line of credit | 79,685 | $ 57,057 | $ 49,477 | ||||||||||||||||
Description of borrowing capacity | The borrowing base under the credit facility at 90% of eligible accounts receivable, plus the lesser of (a) $50,000,000, (b) 80% of eligible inventory, or (c) 95% of the estimated recovery value of eligible inventory. | ||||||||||||||||||
Additional borrowing | 4,430 | ||||||||||||||||||
Kinergy Marketing LLC [Member] | Line of Credit [Member] | Minimum [Member] | |||||||||||||||||||
Unused facility fees | 0.25% | ||||||||||||||||||
Kinergy Marketing LLC [Member] | Line of Credit [Member] | Maximum [Member] | |||||||||||||||||||
Unused facility fees | 0.38% | ||||||||||||||||||
Pacific Ag. Products, LLC [Member] | Line of Credit [Member] | |||||||||||||||||||
Description of payment made to company | Payments that may be made by PAP to the Company as reimbursement for management and other services provided by the Company to PAP are limited under the terms of the credit facility to $500,000 per fiscal quarter. | ||||||||||||||||||
Description of collateral | The credit facility also includes the accounts receivable of PAP as additional collateral. | ||||||||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Term Loan [Member] | |||||||||||||||||||
Debt face amount | $ 3,500 | $ 3,500 | |||||||||||||||||
Debt maturity date | May 31, 2018 | Mar. 31, 2018 | |||||||||||||||||
Description of debt covenant | One of the Company's subsidiaries, amended its term loan facility by reducing the amount of working capital it is required to maintain to not less than $13.0 million from March 31, 2018 through November 30, 2018 and not less than $16.0 million from December 1, 2018 and continuing at all times thereafter. | Pekin amended its term loan facility by reducing the amount of working capital it is required to maintain to not less than $13.0 million from March 31, 2018 through November 30, 2018 and not less than $16.0 million from December 1, 2018 and continuing at all times thereafter. | |||||||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Credit Agreement [Member] | 1st Farm Credit Services [Member] | |||||||||||||||||||
Interest rate term | Annual rate equal to the 30-day LIBOR plus 3.75%, payable monthly. | ||||||||||||||||||
Description of debt covenant | Under the terms of the Pekin Credit Agreement, Pekin is required to maintain not less than $20.0 million in working capital and an annual debt coverage ratio of not less than 1.25 to 1.0. | ||||||||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Credit Agreement [Member] | 1st Farm Credit Services [Member] | Term Loan [Member] | |||||||||||||||||||
Debt face amount | $ 64,000 | ||||||||||||||||||
Debt maturity date | Aug. 20, 2021 | ||||||||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Amendment Credit Agreement [Member] | 1st Farm Credit Services [Member] | |||||||||||||||||||
Interest rate term | Increase the interest rate under the facilities by 25 basis points to an annual rate equal to the 30-day LIBOR plus 4.00%. | ||||||||||||||||||
Principal payments | $ 3,500 | ||||||||||||||||||
Description of debt covenant | Maintain working capital of not less than $17.5 million from August 31, 2017 through December 31, 2017 and working capital of not less than $20.0 million from January 1, 2018 and continuing at all times thereafter. In addition, the required debt service coverage ratio was reduced to 0.15 to 1.00 for the fiscal year ended December 31, 2017. | ||||||||||||||||||
Description of debt covenant subsequent | Working capital covenant requirement to $13.0 million for the month ended February 28, 2018. | ||||||||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Line of Credit [Member] | |||||||||||||||||||
Debt face amount | 10,500 | ||||||||||||||||||
Net assets | $ 184,800 | ||||||||||||||||||
Date of first required principal payment | Nov. 15, 2019 | ||||||||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Line of Credit [Member] | Lender [Member] | |||||||||||||||||||
Debt face amount | $ 3,500 | $ 3,500 | |||||||||||||||||
Debt maturity date | Feb. 20, 2019 | ||||||||||||||||||
Interest rate term | Interest rate under the facilities by 125 basis points to an annual rate equal to the 30-day LIBOR plus 5.00%. | ||||||||||||||||||
Description of maintain working capital | Working capital of not less than $15,000,000 from March 21, 2019 through July15, 2019 and working capital of not less than $30,000,000 from July 15, 2019 and continuing at all times thereafter. | ||||||||||||||||||
Description of event of default | At which time the waivers will become permanent if Pacific Ethanol Central, LLC (“PE Central”), PE Pekin’s parent, has made a contribution to PE Pekin in an amount equal to $30,000,000, minus the then-existing amount of PE Pekin’s working capital, plus the amount of any accounts receivable owed by PE Central to PE Pekin, plus $12,000,000 (the “PE Central Contribution Amount”). | ||||||||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Revolving Credit Facility [Member] | Credit Agreement [Member] | 1st Farm Credit Services [Member] | |||||||||||||||||||
Maximum borrowing capacity | $ 32,000 | ||||||||||||||||||
Line of credit maturity date | Feb. 1, 2022 | ||||||||||||||||||
Unused facility fees | 0.75% | ||||||||||||||||||
Description of collateral | Secured by a first-priority security interest in all of Pekin’s assets under the terms of a Security Agreement | ||||||||||||||||||
Principal payments | $ 3,500 | $ 3,500 | |||||||||||||||||
Frequency of periodic payments | Quarterly | ||||||||||||||||||
Description payment terms | Principal payment of $4.5 million at maturity on August 20, 2021 | ||||||||||||||||||
Pacific Aurora Line of Credit [Member] | Line of Credit [Member] | |||||||||||||||||||
Deferred financing fees | $ 300 | ||||||||||||||||||
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
PENSION PLANS. (Details)
PENSION PLANS. (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of net periodic benefit costs are as follows: | |||
Loss (gain) recognized in other comprehensive income (expense) | $ 225 | $ (386) | $ 3,660 |
Retirement Plan [Member] | |||
Changes in plan assets: | |||
Fair value of plan assets, beginning | 13,958 | 12,423 | 12,567 |
Actual gains (losses) | (946) | 1,722 | 523 |
Benefits paid | (667) | (665) | (667) |
Company contributions | 912 | 478 | |
Participant contributions | |||
Fair value of plan assets, ending | 13,257 | 13,958 | 12,423 |
Less: projected accumulated benefit obligation | 18,690 | 19,658 | 18,455 |
Funded status, (underfunded)/overfunded | (5,433) | (5,700) | (6,032) |
Amounts recognized in the consolidated balance sheets: | |||
Other liabilities | (5,433) | (5,700) | (6,032) |
Accumulated other comprehensive loss (income) | 1,069 | 726 | 1,047 |
Components of net periodic benefit costs are as follows: | |||
Service cost | 424 | 391 | 223 |
Interest cost | 694 | 750 | 686 |
Expected return on plan assets | (816) | (674) | (794) |
Net periodic benefit cost | 302 | 467 | 115 |
Loss (gain) recognized in other comprehensive income (expense) | $ 343 | $ (321) | $ 1,932 |
Assumptions used in computation benefit obligations: | |||
Discount rate | 4.15% | 3.60% | 4.15% |
Expected long-term return on plan assets | 6.25% | 6.00% | 6.75% |
PENSION PLANS. (Details 1)
PENSION PLANS. (Details 1) - Retirement Plan [Member] $ in Thousands | Dec. 31, 2018USD ($) |
2019 | $ 760 |
2020 | 790 |
2021 | 800 |
2022 | 840 |
2023 | 890 |
2024-28 | 5,100 |
Total expected benefit payments | $ 9,180 |
PENSION PLANS. (Details 2)
PENSION PLANS. (Details 2) - Postretirement Plan [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amounts at the end of the year: | ||
Accumulated/projected benefit obligation | $ 5,711 | $ 5,565 |
Fair value of plan assets | ||
Funded status, (underfunded)/overfunded | (5,711) | (5,565) |
Amounts recognized in the consolidated balance sheets: | ||
Accrued liabilties | (320) | (240) |
Other liabilities | (5,392) | (5,325) |
Accumulated other comprehensive loss (income) | $ 1,394 | $ 1,508 |
PENSION PLANS. (Details 3)
PENSION PLANS. (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of net periodic benefit costs are as follows: | |||
Loss (gain) recognized in other comprehensive income (expense) | $ 225 | $ (386) | $ 3,660 |
Postretirement Plan [Member] | |||
Amounts recognized in the plan for the year: | |||
Company contributions | 137 | 157 | 163 |
Participant contributions | 14 | 22 | 22 |
Benefits paid | (152) | (179) | (184) |
Components of net periodic benefit costs are as follows: | |||
Service cost | 84 | 84 | 48 |
Interest cost | 182 | 198 | 139 |
Amortization of prior service costs | 131 | 134 | |
Net periodic benefit cost | 397 | 416 | 187 |
Loss (gain) recognized in other comprehensive income (expense) | $ (118) | $ (65) | $ 1,728 |
Discount rate used in computation of benefit obligations | 3.35% | 3.80% | 3.95% |
PENSION PLANS. (Details 4)
PENSION PLANS. (Details 4) - Postretirement Plan [Member] $ in Thousands | Dec. 31, 2018USD ($) |
2019 | $ 320 |
2020 | 320 |
2021 | 370 |
2022 | 360 |
2023 | 390 |
2024-28 | 2,350 |
Total expected benefit payments | $ 4,110 |
PENSION PLANS. (Details Narrati
PENSION PLANS. (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Postretirement Plan [Member] | |
Expected net periodic benefit cost for 2017 | $ 320 |
Percentage of pre-Medicare postretirement medical benefits | 6.75% |
Per capita cost of covered benefits | 7.00% |
Percentage of adjusting rate assumed health care | For purposes of determining the cost and obligation for pre-Medicare postretirement medical benefits, a 6.75% annual rate of increase in the per capita cost of covered benefits (i.e., health care trend rate) was assumed for the plan in 2018, adjusting to a rate of 4.50% in 2026. |
Retirement Plan [Member] | |
Expected contributions by the company | $ 600 |
Expected net periodic benefit cost for 2017 | $ 760 |
INCOME TAXES. (Details)
INCOME TAXES. (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||||
Current provision (benefit) | $ (589) | $ (490) | $ 141 | ||||
Deferred provision (benefit) | 27 | 169 | (1,122) | ||||
Total | $ 563 | $ (562) | $ (321) | $ (981) |
INCOME TAXES. (Details 1)
INCOME TAXES. (Details 1) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective income tax rate reconciliation | |||
Statutory rate | 21.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 5.40% | 4.00% | 6.40% |
Change in valuation allowance | (20.30%) | (34.50%) | (298.80%) |
Impact of Federal tax rate change on deferred taxes | (28.40%) | ||
Impact of Federal tax rate change on valuation allowance | 29.40% | ||
Fair value adjustments and warrant inducements | 0.40% | 37.20% | |
Noncontrolling interest | (3.00%) | (3.20%) | |
Stock compensation | (0.10%) | 58.80% | |
Non-deductible items | (0.70%) | (0.20%) | 8.90% |
Other | (1.60%) | (1.60%) | (27.50%) |
Effective rate | 0.80% | 0.80% | (180.00%) |
INCOME TAXES. (Details 2)
INCOME TAXES. (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 48,082 | $ 40,989 | |
R&D, energy and AMT credits | 4,247 | 1,797 | |
Disallowed interest | 3,769 | ||
Railcar contracts | 650 | 1,415 | |
Stock-based compensation | 782 | 738 | |
Allowance for doubtful accounts and other assets | 643 | 637 | |
Derivatives | 1,214 | 267 | |
Pension liability | 2,941 | 2,939 | |
Other | 2,134 | 2,097 | |
Total deferred tax assets | 64,462 | 50,879 | |
Deferred tax liabilities: | |||
Property and equipment | (23,013) | (25,194) | |
Intangibles | (749) | (749) | |
Other | (363) | (521) | |
Total deferred tax liabilities | (24,125) | (26,464) | |
Valuation allowance | (40,588) | (24,639) | $ (12,683) |
Net deferred tax liabilities, included in other liabilities | $ (251) | $ (224) |
INCOME TAXES. (Details 3)
INCOME TAXES. (Details 3) $ in Thousands | Dec. 31, 2018USD ($) |
Federal [Member] | |
Non-expiring NOLs | $ 31,641 |
Net operating loss carryforward | 183,212 |
Federal [Member] | 2019-2023 [Member] | |
Net operating loss carryforward | |
Federal [Member] | 2024-2028 [Member] | |
Net operating loss carryforward | 12,256 |
Federal [Member] | 2029-2033 [Member] | |
Net operating loss carryforward | 98,360 |
Federal [Member] | 2034 and After [Member] | |
Net operating loss carryforward | 40,955 |
State [Member] | |
Non-expiring NOLs | |
Net operating loss carryforward | 166,032 |
State [Member] | 2019-2023 [Member] | |
Net operating loss carryforward | |
State [Member] | 2024-2028 [Member] | |
Net operating loss carryforward | 20,217 |
State [Member] | 2029-2033 [Member] | |
Net operating loss carryforward | 49,947 |
State [Member] | 2034 and After [Member] | |
Net operating loss carryforward | $ 95,868 |
INCOME TAXES. (Details 4)
INCOME TAXES. (Details 4) $ in Thousands | Dec. 31, 2018USD ($) |
Federal [Member] | |
Net operating loss carryforward | $ 183,212 |
Federal [Member] | 2019 [Member] | |
Net operating loss carryforward | 94,739 |
Federal [Member] | 2020 [Member] | |
Net operating loss carryforward | 6,374 |
Federal [Member] | 2021 [Member] | |
Net operating loss carryforward | 6,308 |
Federal [Member] | 2022 [Member] | |
Net operating loss carryforward | 6,308 |
Federal [Member] | 2023 [Member] | |
Net operating loss carryforward | 6,308 |
State [Member] | |
Net operating loss carryforward | 166,032 |
State [Member] | 2019 [Member] | |
Net operating loss carryforward | 108,956 |
State [Member] | 2020 [Member] | |
Net operating loss carryforward | 5,345 |
State [Member] | 2021 [Member] | |
Net operating loss carryforward | 5,318 |
State [Member] | 2022 [Member] | |
Net operating loss carryforward | 5,318 |
State [Member] | 2023 [Member] | |
Net operating loss carryforward | $ 5,318 |
INCOME TAXES. (Details 5)
INCOME TAXES. (Details 5) | 12 Months Ended |
Dec. 31, 2018 | |
US Treasury and Government [Member] | |
Tax Years still open to audit | 2015-2017 |
Arizona [Member] | |
Tax Years still open to audit | 2015-2017 |
California [Member] | |
Tax Years still open to audit | 2014-2017 |
Colorado [Member] | |
Tax Years still open to audit | 2014-2017 |
Idaho [Member] | |
Tax Years still open to audit | 2015-2017 |
Illinois [Member] | |
Tax Years still open to audit | 2014-2017 |
Indiana [Member] | |
Tax Years still open to audit | 2015-2017 |
Iowa [Member] | |
Tax Years still open to audit | 2015-2017 |
Kansas [Member] | |
Tax Years still open to audit | 2015-2017 |
Minnesota [Member] | |
Tax Years still open to audit | 2015-2017 |
Missouri [Member] | |
Tax Years still open to audit | 2015-2017 |
Nebraska [Member] | |
Tax Years still open to audit | 2015-2017 |
Oklahoma [Member] | |
Tax Years still open to audit | 2015-2017 |
Oregon [Member] | |
Tax Years still open to audit | 2015-2017 |
Texas [Member] | |
Tax Years still open to audit | 2014-2017 |
INCOME TAXES. (Details Narrativ
INCOME TAXES. (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation allowance | $ 40,588 | $ 24,639 | $ 12,683 | ||||
Increase (decrease) in valuation allowance | 15,949 | $ 11,956 | (27,155) | ||||
Revised federal income tax rate | 21.00% | ||||||
Valuation allowance absent of deferred tax liability | $ (10,545) | ||||||
Decreased gross deferred assets | (10,170) | ||||||
Accrued tax uncertainties | $ 235 | 235 | |||||
Description of income tax | provisions of Internal Revenue Code Section 163(j), as amended by the TCJA, became effective which now limit the deductibility of interest expense to 30% of adjusted taxable income. | ||||||
Provision (benefit) for income taxes | $ 563 | $ (562) | $ (321) | (981) | |||
Deferred tax assets | 3,749 | ||||||
Federal [Member] | |||||||
Remaining net operating loss carryforwards | 183,212 | ||||||
State [Member] | |||||||
Remaining net operating loss carryforwards | $ 166,032 | ||||||
PE Central [Member] | |||||||
Increase (decrease) in valuation allowance | (13,500) | ||||||
Pacific Aurora [Member] | |||||||
Increase (decrease) in valuation allowance | $ (11,500) |
PREFERRED STOCK. (Details Narra
PREFERRED STOCK. (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2019 | |
Preferred undesignated shares authorized | 6,734,835 | |||
Preferred shares authorized | 10,000,000 | 10,000,000 | 10,000 | |
Preferred stock dividends accrued and paid | $ 1,265 | $ 1,265 | $ 1,269 | |
Series A Preferred Stock [Member] | ||||
Preferred shares authorized | 1,684,375 | 1,684,375 | 1,684 | |
Preferred shares outstanding | ||||
Cumulative dividends payable in cash | 5.00% | |||
Series B Preferred Stock [Member] | ||||
Preferred shares authorized | 1,580,790 | 1,580,790 | 1,581 | |
Preferred shares outstanding | 926,942 | 926,942 | 927 | |
Preferred stock convertible into common shares, common shares | 634,641 | |||
Cumulative dividends payable in cash | 7.00% | |||
Liquidation preference stock holder | $ 19.50 |
COMMON STOCK AND WARRANTS. (Det
COMMON STOCK AND WARRANTS. (Details) - Warrants [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Shares | |||
Begining Balance | 4,000 | 244,000 | 382,000 |
Warrants exercised | (191,000) | (138,000) | |
Warrants expired | (4,000) | (49,000) | |
Ending Balance | 4,000 | 244,000 | |
Price per Share | |||
Begining Balance | $ 735 | ||
Warrants exercised | 6.09 | 8.43 | |
Warrants expired | 735 | ||
Ending Balance | 735 | ||
Weighted Average Exercise Price | |||
Begining Balance | 735 | 106.72 | 70.87 |
Warrants exercised | 6.09 | 8.43 | |
Warrants expired | 735 | 444 | |
Ending Balance | 735 | 106.72 | |
Minimum [Member] | |||
Price per Share | |||
Begining Balance | 6.09 | 6.09 | 6.09 |
Warrants exercised | |||
Ending Balance | 6.09 | 6.09 | |
Maximum [Member] | |||
Price per Share | |||
Begining Balance | $ 735 | 735 | 735 |
Warrants exercised | |||
Ending Balance | $ 735 | $ 735 |
COMMON STOCK AND WARRANTS. (D_2
COMMON STOCK AND WARRANTS. (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |||
Warrant inducements | $ 0 | $ 0 | |
Fair value adjustments for warrants | $ (473) | $ 557 | |
Number of stock issued (in shares) | 838,213 | ||
Number of stock issued, value | $ 2,056,966 | ||
Fees paid | $ 36,951 | ||
Maturity term | Dec. 15, 2019 |
STOCK-BASED COMPENSATION. (Deta
STOCK-BASED COMPENSATION. (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | ||
Begining Balance | 230,000 | 240,000 |
Exercised/cancelled | (1,000) | (10,000) |
Ending Balance | 229,000 | 230,000 |
Options exercisable at end of year | 229,000 | 230,000 |
Weighted Average Exercise Price | ||
Begining Balance | $ 4.18 | $ 4.18 |
Expired | 12.90 | 3.74 |
Ending Balance | 4.15 | 4.18 |
Options exercisable at end of year | $ 4.15 | $ 4.18 |
STOCK-BASED COMPENSATION. (De_2
STOCK-BASED COMPENSATION. (Details 1) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
$12.90 | |
Number Outstanding | shares | 10,000 |
Weighted Average Remaining Contractual Life (yrs) | 2 years 7 months 2 days |
Weighted Average Exercise Price | $ / shares | $ 12.90 |
Number Exercisable | shares | 10,000 |
Weighted Average Exercise Price | $ / shares | $ 12.90 |
$3.74 | |
Number Outstanding | shares | 219,000 |
Weighted Average Remaining Contractual Life (yrs) | 4 years 5 months 19 days |
Weighted Average Exercise Price | $ / shares | $ 3.74 |
Number Exercisable | shares | 219,000 |
Weighted Average Exercise Price | $ / shares | $ 3.74 |
STOCK-BASED COMPENSATION. (De_3
STOCK-BASED COMPENSATION. (Details 2) - Restricted Stock - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Shares | |||
Begining Balance | 1,077,000 | 930,000 | 463,000 |
Issued | 1,175,000 | 664,000 | 742,000 |
Vested | (540,000) | (480,000) | (250,000) |
Canceled | (77,000) | (37,000) | (25,000) |
Ending Balance | 163,500 | 1,077,000 | 930,000 |
Weighted Average Grant Date Fair Value | |||
Begining Balance | $ 6.31 | $ 6.57 | $ 10 |
Issued | 3.07 | 6.65 | 5.24 |
Vested | 7.69 | 7.30 | 9.01 |
Canceled | 7.14 | 6.08 | 6.24 |
Ending Balance | $ 3.49 | $ 6.31 | $ 6.57 |
STOCK-BASED COMPENSATION. (De_4
STOCK-BASED COMPENSATION. (Details 3) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total stock-based compensation expense | $ 2,103 | $ 2,579 | $ 3,438 | $ 3,828 | $ 2,616 |
Employees [Member] | |||||
Total stock-based compensation expense | 2,905 | 3,303 | 2,173 | ||
Non-Employees [Member] | |||||
Total stock-based compensation expense | $ 533 | $ 525 | $ 443 |
STOCK-BASED COMPENSATION. (De_5
STOCK-BASED COMPENSATION. (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 14, 2018 | Jun. 16, 2016 | |
Total compensation cost related to unvested awards | $ 3,648 | ||||
Compensation cost weighted average period | 1 year 7 months 17 days | ||||
2006 Stock Incentive Plan [Member] | |||||
Shares authorized | 1,715,000 | ||||
2016 Stock Incentive Plan [Member] | |||||
Shares authorized | 3,650,000 | 1,150,000 | |||
Stock Options [Member] | |||||
Intrinsic values of outstanding options | $ 84,000 | $ 84,000 | |||
Fair value of stock vested | $ 1,629 | $ 3,210 | $ 1,142 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES. (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Capital Leases | ||
2019 | $ 45 | |
2020 | 45 | |
2021 | 33 | |
2022 | ||
2023 | ||
Thereafter | ||
Total minimum payments | 123 | |
Obligations due within one year | (45) | $ (592) |
Long-term obligations under capital leases | 78 | $ 123 |
Operating Leases | ||
2019 | 10,207 | |
2020 | 8,423 | |
2021 | 5,441 | |
2022 | 5,233 | |
2023 | 4,511 | |
Thereafter | 8,413 | |
Total minimum payments | $ 42,228 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES. (Details Narrative) - USD ($) $ in Thousands | Dec. 29, 2016 | Feb. 27, 2015 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Rent expense | $ 12,436 | $ 16,572 | $ 16,253 | ||||
Gain on litigation settlement | 3,600 | ||||||
Proceeds from legal settlement | 3,900 | ||||||
Ethanol Purchase Contracts [Member] | |||||||
Indexed-price purchase contracts | 7,150,000 gallons | ||||||
Fixed-price purchase contracts value | $ 23,930 | ||||||
Ethanol Sales Contracts [Member] | |||||||
Open ethanol indexed-price sales contracts | 184,865,000 gallons | ||||||
Open fixed-price sales contracts valued | $ 124,090 | ||||||
Co-products Sales Contracts [Member] | |||||||
Open ethanol indexed-price sales contracts | 50,000 tons | ||||||
Open fixed-price sales contracts valued | $ 33,575 | ||||||
Suppliers [Member] | Ethanol Purchase Contracts [Member] | |||||||
Fixed-price purchase contracts value | $ 14,304 | ||||||
Assessment Financing [Member] | |||||||
Maximum amount of finance to be amortized under property tax assessments | $ 10,000 | ||||||
Project amortized period | 20 years | ||||||
Capital expenditures | $ 9,342 | $ 7,714 | |||||
Additional property tax payments | $ 900 | ||||||
Interest rate on outstanding balance of assessment | 5.60% | ||||||
Western Sugar Contract [Member] | |||||||
Litigation reserve | 2,800 | ||||||
Gain on litigation settlement | $ 1,100 | ||||||
Settlement cliam | $ 1,700 | ||||||
Amount of expectation damages | $ 8,600 | ||||||
Ethanol contracts [Member] | |||||||
Sales commitments | $ 92,900 | ||||||
Indexed-price contracts to sell | 258,200,000 gallons | ||||||
Ethanol contracts [Member] | Suppliers [Member] | |||||||
Purchase commitments | $ 6,605 | ||||||
Indexed-price purchase contracts | 30,800,000 gallons | ||||||
Co-product contracts [Member] | |||||||
Sales commitments | $ 44,800 | ||||||
Indexed-price contracts to sell | 801,000 tons | ||||||
Corn contract [Member] | Suppliers [Member] | |||||||
Purchase commitments | $ 28,294 |
PENSION AND RETIREMENT BENEFI_2
PENSION AND RETIREMENT BENEFIT PLANS. (Details) - Retirement Plan [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest cost | $ 190 | $ 174 | $ 570 | $ 522 |
Service cost | 94 | 106 | 282 | 318 |
Expected return on plan assets | (190) | (204) | (570) | (612) |
Net periodic expense | $ 94 | $ 76 | $ 282 | $ 228 |
PENSION AND RETIREMENT BENEFI_3
PENSION AND RETIREMENT BENEFIT PLANS. (Details 1) - Postretirement Plan [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest cost | $ 55 | $ 46 | $ 165 | $ 138 |
Service cost | 17 | 2 | 51 | 6 |
Amortization of loss | 30 | 33 | 90 | 99 |
Net periodic expense | $ 102 | $ 81 | $ 306 | $ 243 |
PENSION AND RETIREMENT BENEFI_4
PENSION AND RETIREMENT BENEFIT PLANS. (Details Narrative) $ in Thousands | Dec. 31, 2018USD ($) |
Postretirement Plan [Member] | |
Accumulated projected benefit obligation | $ 5,711 |
Retirement Plan [Member] | |
Accumulated projected benefit obligation | 18,690 |
Fair value of plan assets | 13,257 |
Underfunded amount | $ 5,433 |
FAIR VALUE MEASUREMENTS. (Detai
FAIR VALUE MEASUREMENTS. (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Assets: | ||||||
Assets | $ 2,790 | $ 15,022 | $ 14,956 | |||
Liabilities: | ||||||
Liabilities | (3,619) | |||||
Derivative Financial Instrument [Member] | ||||||
Assets: | ||||||
Assets | 2,790 | [1] | 1,765 | [1] | 998 | |
Liabilities: | ||||||
Liabilities | (3,619) | [1] | (6,309) | (2,307) | ||
Defined Benefit Plan Assets Large U.S. Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[3] | $ 3,621 | $ 3,748 | |||
Liabilities: | ||||||
Benefit plan allocation percentage | [2],[3] | 27.00% | 27.00% | |||
Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[4] | $ 1,844 | $ 2,018 | |||
Liabilities: | ||||||
Benefit plan allocation percentage | [2],[4] | 14.00% | 14.00% | |||
Defined Benefit Plan Assets International Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[5] | $ 2,106 | $ 2,528 | |||
Liabilities: | ||||||
Benefit plan allocation percentage | [2],[5] | 16.00% | 18.00% | |||
Defined Benefit Plan Assets Fixed Income [Member] | ||||||
Assets: | ||||||
Assets | [2],[6] | $ 5,686 | $ 5,664 | |||
Liabilities: | ||||||
Benefit plan allocation percentage | [2],[6] | 43.00% | 41.00% | |||
Level 1 [Member] | ||||||
Assets: | ||||||
Assets | 2,790 | $ 1,765 | $ 998 | |||
Liabilities: | ||||||
Liabilities | (3,619) | |||||
Level 1 [Member] | Derivative Financial Instrument [Member] | ||||||
Assets: | ||||||
Assets | 2,790 | [1] | 1,765 | [1] | 998 | |
Liabilities: | ||||||
Liabilities | (3,619) | [1] | (6,309) | (2,307) | ||
Level 1 [Member] | Defined Benefit Plan Assets Large U.S. Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[3] | |||||
Level 1 [Member] | Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[4] | |||||
Level 1 [Member] | Defined Benefit Plan Assets International Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[5] | |||||
Level 1 [Member] | Defined Benefit Plan Assets Fixed Income [Member] | ||||||
Assets: | ||||||
Assets | [2],[6] | |||||
Level 2 [Member] | ||||||
Assets: | ||||||
Assets | 13,257 | 13,958 | ||||
Liabilities: | ||||||
Liabilities | ||||||
Level 2 [Member] | Derivative Financial Instrument [Member] | ||||||
Assets: | ||||||
Assets | [1] | [1] | ||||
Liabilities: | ||||||
Liabilities | [1] | |||||
Level 2 [Member] | Defined Benefit Plan Assets Large U.S. Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[3] | 3,621 | 3,748 | |||
Level 2 [Member] | Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[4] | 1,844 | 2,018 | |||
Level 2 [Member] | Defined Benefit Plan Assets International Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[5] | 2,106 | 2,528 | |||
Level 2 [Member] | Defined Benefit Plan Assets Fixed Income [Member] | ||||||
Assets: | ||||||
Assets | [2],[6] | 5,686 | 5,664 | |||
Level 3 [Member] | ||||||
Assets: | ||||||
Assets | ||||||
Liabilities: | ||||||
Liabilities | ||||||
Level 3 [Member] | Derivative Financial Instrument [Member] | ||||||
Assets: | ||||||
Assets | [1] | [1] | ||||
Liabilities: | ||||||
Liabilities | [1] | |||||
Level 3 [Member] | Defined Benefit Plan Assets Large U.S. Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[3] | |||||
Level 3 [Member] | Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[4] | |||||
Level 3 [Member] | Defined Benefit Plan Assets International Equity [Member] | ||||||
Assets: | ||||||
Assets | [2],[5] | |||||
Level 3 [Member] | Defined Benefit Plan Assets Fixed Income [Member] | ||||||
Assets: | ||||||
Assets | [2],[6] | |||||
[1] | Included in derivative instruments in the consolidated balance sheets. | |||||
[2] | See Note 9 for accounting discussion. | |||||
[3] | This category includes investments in funds comprised of equity securities of large U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. | |||||
[4] | This category includes investments in funds comprised of equity securities of small- and medium-sized U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. | |||||
[5] | This category includes investments in funds comprised of equity securities of foreign companies including emerging markets. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. | |||||
[6] | This category includes investments in funds comprised of U.S. and foreign investment-grade fixed income securities, high-yield fixed income securities that are rated below investment-grade, U.S. treasury securities, mortgage-backed securities, and other asset-backed securities. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. |
EARNINGS PER SHARE. (Details)
EARNINGS PER SHARE. (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loss Numerator | ||||||||||||||||
Net loss attributed to Pacific Ethanol, Inc. | $ (27,326) | $ (32,010) | $ (7,514) | $ (12,908) | $ (7,841) | $ (13,285) | $ (202) | $ (8,841) | $ (12,636) | $ (47,862) | $ (28,263) | $ (60,273) | $ (34,964) | $ 1,419 | ||
Less: Preferred stock dividends | (319) | $ (315) | $ (312) | (319) | (315) | (312) | (946) | (946) | (1,265) | (1,265) | (1,269) | |||||
Basic and diluted loss per share: | ||||||||||||||||
Loss available to common stockholders | $ (27,645) | $ (32,329) | $ (7,833) | $ (13,223) | $ (8,153) | $ (13,604) | $ (521) | $ (9,156) | $ (12,948) | $ (48,808) | $ (29,209) | $ (61,538) | $ (36,229) | $ 148 | ||
Shares Denominator | ||||||||||||||||
Shares available to common stockholders - basic and diluted | 47,777 | 43,299 | 47,030 | 43,171 | ||||||||||||
Per-Share Amount | ||||||||||||||||
Per-Share amount - basic and diluted | $ (0.58) | $ (0.74) | $ (0.18) | $ (0.31) | $ (0.19) | $ (0.32) | $ (0.01) | $ (0.22) | $ (0.31) | $ (1.04) | $ (0.68) | $ (1.42) | $ (0.85) | $ 0 |
EARNINGS PER SHARE. (Details Na
EARNINGS PER SHARE. (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||||||
Potentially dilutive shares from convertible securities outstanding | 635,000 | 425,000 | 635,000 | 635,000 | 635,000 | 719,000 | 704,000 |
PARENT COMPANY FINANCIALS. (Det
PARENT COMPANY FINANCIALS. (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current Assets: | |||||||
Cash and cash equivalents | $ 18,921 | $ 26,627 | [1] | $ 56,093 | $ 49,489 | $ 64,259 | $ 51,550 |
Other current assets | 5,228 | 11,866 | [1] | 6,841 | |||
Total current assets | 161,936 | 168,804 | [1] | 203,246 | |||
Property and equipment, net | 442,810 | 482,657 | [1] | 508,352 | |||
Other Assets: | |||||||
Other assets | 6,645 | 5,842 | [1] | 6,020 | |||
Total Assets | 652,860 | 659,981 | [1] | 720,296 | |||
Current Liabilities: | |||||||
Current portion of long-term debt | 144,543 | 146,671 | [1] | 20,000 | |||
Total current liabilities | 228,431 | 231,859 | [1] | 90,706 | |||
Long-term debt, net | 244,385 | 233,505 | 244,425 | ||||
Other liabilities | 7,662 | 7,282 | [1] | 6,396 | |||
Total Liabilities | 380,345 | 340,616 | [1] | 336,596 | |||
Stockholders' Equity: | |||||||
Common and non-voting common stock | 50 | 46 | [1] | 44 | |||
Additional paid-in capital | 937,795 | 932,179 | [1] | 927,090 | |||
Accumulated other comprehensive loss | (2,459) | (2,459) | [1] | (2,234) | |||
Accumulated deficit | (678,808) | (630,000) | [1] | (568,462) | |||
Total Pacific Ethanol, Inc. stockholders' equity | 256,579 | 299,767 | [1] | 356,439 | |||
Total Liabilities and Stockholders' Equity | 652,860 | 659,981 | [1] | 720,296 | |||
Parent Company [Member] | |||||||
Current Assets: | |||||||
Cash and cash equivalents | 5,658 | 6,759 | $ 1,865 | 5,314 | $ 11,060 | $ 20,618 | |
Receivables from subsidiaries | 12,270 | 17,156 | 3,138 | ||||
Other current assets | 1,183 | 1,659 | 1,631 | ||||
Total current assets | 19,111 | 25,574 | 10,083 | ||||
Property and equipment, net | 308 | 522 | 1,071 | ||||
Other Assets: | |||||||
Investments in subsidiaries | 249,641 | 286,666 | 359,680 | ||||
Pacific Ethanol West plant receivable | 55,750 | 58,766 | 58,766 | ||||
Other assets | 1,529 | 1,437 | 1,565 | ||||
Total other assets | 310,238 | 346,869 | 420,011 | ||||
Total Assets | 329,657 | 372,965 | 431,165 | ||||
Current Liabilities: | |||||||
Accounts payable and accrued liabilities | 2,437 | 2,469 | 2,218 | ||||
Payable to subsidiaries | 625 | ||||||
Accrued PE Op Co. purchase | 3,829 | 3,829 | 3,828 | ||||
Current portion of long-term debt | 62,866 | 66,255 | |||||
Other current liabilities | 587 | 385 | 245 | ||||
Total current liabilities | 69,719 | 72,938 | 6,916 | ||||
Long-term debt, net | 67,530 | ||||||
Operating leases, net of current portion | 3,108 | ||||||
Deferred tax liabilities | 251 | 251 | 224 | ||||
Other liabilities | 9 | 56 | |||||
Total Liabilities | 73,078 | 73,198 | 74,726 | ||||
Stockholders' Equity: | |||||||
Preferred stock | 1 | 1 | 1 | ||||
Common and non-voting common stock | 50 | 46 | 44 | ||||
Additional paid-in capital | 937,795 | 932,179 | 927,090 | ||||
Accumulated other comprehensive loss | (2,459) | (2,459) | (2,234) | ||||
Accumulated deficit | (678,808) | (630,000) | (568,462) | ||||
Total Pacific Ethanol, Inc. stockholders' equity | 256,579 | 299,767 | 356,439 | ||||
Total Liabilities and Stockholders' Equity | $ 329,657 | $ 372,965 | $ 431,165 | ||||
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
PARENT COMPANY FINANCIALS. (D_2
PARENT COMPANY FINANCIALS. (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Selling, general and administrative expenses | $ 8,687 | $ 8,970 | $ 23,630 | $ 27,183 | $ 36,373 | $ 31,516 | $ 30,849 | |||||||||
Loss from operations | (23,503) | $ (30,211) | (5,202) | $ (10,171) | $ (5,953) | $ (10,598) | $ 3,345 | $ (7,109) | $ (11,223) | (36,764) | (21,326) | (51,537) | (25,585) | 23,509 | ||
Interest expense | (5,163) | (4,193) | (15,014) | (12,875) | (17,132) | (12,938) | (22,406) | |||||||||
Other income (expense), net | (407) | 91 | 254 | 233 | 171 | (345) | (1) | |||||||||
Income (loss) before provision (benefit) for income taxes | (29,073) | (9,304) | (51,524) | (33,968) | (68,498) | (38,395) | 545 | |||||||||
Provision (benefit) for income taxes | 563 | (562) | (321) | (981) | ||||||||||||
Consolidated net income (loss) | (29,073) | $ (8,290) | $ (14,161) | (9,304) | $ (14,604) | $ (9,497) | (51,524) | (33,405) | (67,936) | (38,074) | 1,526 | |||||
Parent Company [Member] | ||||||||||||||||
Management fees from subsidiaries | 3,330 | 3,330 | 9,660 | 9,738 | 12,408 | 11,904 | 12,968 | |||||||||
Selling, general and administrative expenses | 3,827 | 3,181 | 11,374 | 13,069 | 16,795 | 18,185 | 14,491 | |||||||||
Loss from operations | (497) | 149 | (1,714) | (3,331) | (4,387) | (6,281) | (1,523) | |||||||||
Fair value adjustments | 473 | (557) | ||||||||||||||
Interest income | 1,145 | 1,185 | 3,486 | 3,518 | 4,703 | 4,793 | 5,964 | |||||||||
Interest expense | (2,276) | (2,171) | (7,039) | (6,458) | (8,678) | (5,829) | (240) | |||||||||
Other income (expense), net | (4) | (4) | (86) | (74) | (95) | 1,931 | ||||||||||
Income (loss) before provision (benefit) for income taxes | (1,632) | (841) | (5,353) | (6,271) | (8,436) | (6,939) | 5,575 | |||||||||
Provision (benefit) for income taxes | 563 | (562) | (321) | (981) | ||||||||||||
Income (loss) before equity in earnings of subsidiaries | (1,632) | (841) | (5,353) | (5,708) | (7,874) | (6,618) | 6,556 | |||||||||
Equity in losses of subsidiaries | (25,694) | (6,673) | (42,509) | (22,555) | (52,399) | (28,346) | (5,137) | |||||||||
Consolidated net income (loss) | $ (27,326) | $ (7,514) | $ (47,862) | $ (28,263) | $ (60,273) | $ (34,964) | $ 1,419 |
PARENT COMPANY FINANCIALS. (D_3
PARENT COMPANY FINANCIALS. (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Operating Activities: | |||||||||||||||||
Net income (loss) | $ (27,326) | $ (32,010) | $ (7,514) | $ (12,908) | $ (7,841) | $ (13,285) | $ (202) | $ (8,841) | $ (12,636) | $ (47,862) | $ (28,263) | $ (60,273) | $ (34,964) | $ 1,419 | |||
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||||||||||||||||
Fair value adjustments | (473) | 557 | |||||||||||||||
Deferred income taxes | (563) | 27 | 169 | (1,122) | |||||||||||||
Amortization of debt discounts | 539 | 539 | 720 | 636 | 2,322 | ||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Accounts receivables | (370) | 12,656 | 12,663 | 17,562 | (25,235) | ||||||||||||
Other assets | (101) | 1,839 | 191 | 6,738 | (3,973) | ||||||||||||
Accounts payable and accrued expenses | (6,323) | 2,307 | 4,105 | (5,538) | 9,279 | ||||||||||||
Net cash provided by operating activities | (27,203) | 26,077 | 1,566 | 36,509 | 37,228 | ||||||||||||
Investing Activities: | |||||||||||||||||
Additions to property and equipment | (2,144) | (10,874) | (15,154) | (20,866) | (19,171) | ||||||||||||
Net cash used in investing activities | (2,144) | (10,874) | (15,154) | (50,440) | (14,597) | ||||||||||||
Financing Activities: | |||||||||||||||||
Proceeds from issuances of senior notes | 13,530 | 53,350 | |||||||||||||||
Proceeds from issuance of common stock | 3,670 | 2,057 | |||||||||||||||
Proceeds from warrant stock option exercises | 1,202 | 1,164 | |||||||||||||||
Net cash used in financing activities | 21,641 | (8,599) | (9,274) | (839) | (9,922) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | (7,706) | 6,604 | (22,862) | (14,770) | 12,709 | ||||||||||||
Cash and cash equivalents at beginning of period | 56,093 | 49,489 | 64,259 | 26,627 | [1] | 49,489 | 49,489 | 64,259 | 51,550 | ||||||||
Cash and cash equivalents at end of period | 18,921 | 26,627 | [1] | 56,093 | 49,489 | 18,921 | 56,093 | 26,627 | [1] | 49,489 | 64,259 | ||||||
Parent Company [Member] | |||||||||||||||||
Operating Activities: | |||||||||||||||||
Net income (loss) | (47,862) | (28,263) | (60,273) | (34,964) | 1,419 | ||||||||||||
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||||||||||||||||
Equity in losses of subsidiaries | 25,694 | 6,673 | 42,509 | 22,555 | 52,399 | 28,346 | 5,137 | ||||||||||
Dividends from subsidiaries | 25,000 | 3,500 | |||||||||||||||
Depreciation | 227 | 481 | 567 | 830 | 727 | ||||||||||||
Fair value adjustments | (473) | 557 | |||||||||||||||
Deferred income taxes | 563 | 27 | 169 | (1,122) | |||||||||||||
Amortization of debt discounts | 539 | 357 | 720 | 636 | 10 | ||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Accounts receivables | (114) | (5,062) | (9,018) | 4,065 | 7,302 | ||||||||||||
Other assets | 173 | 2,489 | 100 | 4,356 | 4,647 | ||||||||||||
Accounts payable and accrued expenses | 1,950 | 5 | 740 | 3,859 | (3,741) | ||||||||||||
Accounts payable with subsidiaries | (502) | (622) | 2,409 | (943) | (9,385) | ||||||||||||
Net cash provided by operating activities | (3,080) | (7,497) | 12,671 | 9,381 | 5,551 | ||||||||||||
Investing Activities: | |||||||||||||||||
Dividend from subsidiaries | 10,000 | ||||||||||||||||
Contributions to subsidiaries | (5,000) | ||||||||||||||||
Additions to property and equipment | (13) | (6) | (18) | (468) | (465) | ||||||||||||
Investments in subsidiaries | (10,000) | (28,126) | (50,886) | ||||||||||||||
Purchase of PE OP Co. debt | (17,003) | ||||||||||||||||
Net cash used in investing activities | (13) | 4,994 | (10,018) | (28,594) | (68,354) | ||||||||||||
Financing Activities: | |||||||||||||||||
Proceeds from issuances of senior notes | 13,530 | 53,350 | |||||||||||||||
Proceeds from issuance of common stock | 3,670 | 2,057 | |||||||||||||||
Proceeds from Pacific Ethanol West | 3,016 | ||||||||||||||||
Proceeds from warrant stock option exercises | 1,202 | 1,164 | |||||||||||||||
Payments on senior notes | (3,748) | (2,000) | |||||||||||||||
Preferred stock dividend payments | (946) | (946) | (1,265) | (1,265) | (1,269) | ||||||||||||
Net cash used in financing activities | 1,992 | (946) | (1,208) | 13,467 | 53,245 | ||||||||||||
Net increase (decrease) in cash and cash equivalents | (1,101) | (3,449) | 1,445 | (5,746) | (9,558) | ||||||||||||
Cash and cash equivalents at beginning of period | 1,865 | $ 5,314 | $ 11,060 | 6,759 | 5,314 | 5,314 | 11,060 | 20,618 | |||||||||
Cash and cash equivalents at end of period | $ 5,658 | $ 6,759 | $ 1,865 | $ 5,314 | $ 5,658 | $ 1,865 | $ 6,759 | $ 5,314 | $ 11,060 | ||||||||
[1] | Amounts derived from the audited consolidated financial statements for the year ended December 31, 2018. |
PARENT COMPANY FINANCIALS. (D_4
PARENT COMPANY FINANCIALS. (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Condensed Financial Information Disclosure [Abstract] | ||
Net asset | $ 184,763 | $ 190,200 |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Data Unaudited | ||||||||||||||
Net sales | $ 379,976 | $ 334,415 | $ 366,639 | $ 410,522 | $ 400,027 | $ 395,271 | $ 445,442 | $ 405,202 | $ 386,340 | $ 1,080,398 | $ 1,175,099 | $ 1,530,535 | $ 1,626,324 | $ 1,570,400 |
Gross profit (loss) | (14,816) | (21,021) | 3,768 | (1,273) | 3,362 | (2,014) | 12,065 | 1,653 | (5,773) | (13,134) | 5,857 | (15,164) | 5,931 | 54,358 |
Loss from operations | (23,503) | (30,211) | (5,202) | (10,171) | (5,953) | (10,598) | 3,345 | (7,109) | (11,223) | (36,764) | (21,326) | (51,537) | (25,585) | 23,509 |
Net loss attributed to Pacific Ethanol, Inc. | (27,326) | (32,010) | (7,514) | (12,908) | (7,841) | (13,285) | (202) | (8,841) | (12,636) | (47,862) | (28,263) | (60,273) | (34,964) | 1,419 |
Preferred stock dividends | (319) | (319) | (315) | (312) | (319) | (319) | (315) | (312) | ||||||
Net loss available to common stockholders | $ (27,645) | $ (32,329) | $ (7,833) | $ (13,223) | $ (8,153) | $ (13,604) | $ (521) | $ (9,156) | $ (12,948) | $ (48,808) | $ (29,209) | $ (61,538) | $ (36,229) | $ 148 |
Basic and diluted loss per common share (in dollars per share) | $ (0.58) | $ (0.74) | $ (0.18) | $ (0.31) | $ (0.19) | $ (0.32) | $ (0.01) | $ (0.22) | $ (0.31) | $ (1.04) | $ (0.68) | $ (1.42) | $ (0.85) | $ 0 |