Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 08, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Pacific Ethanol, Inc. | |
Entity Central Index Key | 778,164 | |
Document Type | 10-Q | |
Trading Symbol | PEIX | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 44,954,392 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Current Assets: | |||
Cash and cash equivalents | $ 62,581 | $ 49,489 | [1] |
Accounts receivable, net (net of allowance for doubtful accounts of $64 and $19, respectively) | 72,518 | 80,344 | [1] |
Inventories | 67,305 | 61,550 | [1] |
Prepaid inventory | 1,796 | 3,281 | [1] |
Derivative instruments | 7,634 | 998 | [1] |
Other current assets | 8,871 | 7,584 | [1] |
Total current assets | 220,705 | 203,246 | [1] |
Property and equipment, net | 495,274 | 508,352 | [1] |
Other Assets: | |||
Intangible assets | 2,678 | 2,678 | [1] |
Other assets | 4,575 | 6,020 | [1] |
Total other assets | 7,253 | 8,698 | [1] |
Total Assets | 723,232 | 720,296 | [1] |
Current Liabilities: | |||
Accounts payable - trade | 40,966 | 39,738 | [1] |
Accrued liabilities | 21,790 | 21,673 | [1] |
Current portion -capital leases | 162 | 592 | [1] |
Current portion - long-term debt | 20,000 | 20,000 | [1] |
Derivative instruments | 10,157 | 2,307 | [1] |
Other current liabilities | 6,567 | 6,396 | [1] |
Total current liabilities | 99,642 | 90,706 | [1] |
Long-term debt, net of current portion | 237,771 | 221,091 | [1] |
Capital leases, net of current portion | 101 | 123 | [1] |
Other liabilities | 25,457 | 24,676 | [1] |
Total Liabilities | 362,971 | 336,596 | [1] |
Commitments and Contingencies (Note 6) | |||
Pacific Ethanol, Inc. Stockholders' Equity: | |||
Preferred stock, $0.001 par value; 10,000 shares authorized; | 1 | 1 | [1] |
Common stock, $0.001 par value ; 300,000 shares authorized ; 44,960 and 43,985 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 45 | 44 | [1] |
Non-voting common stock, $0.001 par value ; 3,553 shares authorized ; 1 share issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | [1] | ||
Additional paid-in capital | 928,378 | 927,090 | [1] |
Accumulated other comprehensive loss | (2,234) | (2,234) | [1] |
Accumulated deficit | (589,838) | (568,462) | [1] |
Total Pacific Ethanol, Inc. Stockholders' Equity | 336,352 | 356,439 | [1] |
Noncontrolling interests | 23,909 | 27,261 | [1] |
Total Stockholders' Equity | 360,261 | 383,700 | [1] |
Total Liabilities and Stockholders' Equity | $ 723,232 | $ 720,296 | [1] |
[1] | Amounts derived from the audited financial statements for the year ended December 31, 2017 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Accounts receivable, net of allowance | $ 64 | $ 19 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000 | 10,000 |
Liquidation preference | $ 18,075 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 300,000 | 300,000 |
Common stock, issued | 44,960 | 43,985 |
Common stock, outstanding | 44,960 | 43,985 |
Nonvoting Common Stock [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 3,553 | 3,553 |
Common stock, issued | 1 | 1 |
Common stock, outstanding | 1 | 1 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 1,684 | 1,684 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 1,581 | 1,581 |
Preferred stock, issued | 927 | 927 |
Preferred stock, outstanding | 927 | 927 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 410,522 | $ 405,202 | $ 810,549 | $ 791,542 |
Cost of goods sold | 411,795 | 403,549 | 808,460 | 795,662 |
Gross profit (loss) | (1,273) | 1,653 | 2,089 | (4,120) |
Selling, general and administrative expenses | 8,898 | 8,762 | 18,213 | 14,212 |
Loss from operations | (10,171) | (7,109) | (16,124) | (18,332) |
Fair value adjustments | 18 | 473 | ||
Interest expense | (4,177) | (2,694) | (8,682) | (5,331) |
Other income (expense), net | (256) | (153) | 142 | (233) |
Loss before benefit for income taxes | (14,604) | (9,938) | (24,664) | (23,423) |
Benefit for income taxes | 563 | |||
Consolidated net loss | (14,604) | (9,938) | (24,101) | (23,423) |
Net loss attributed to noncontrolling interests | 1,696 | 1,097 | 3,352 | 1,946 |
Net loss attributed to Pacific Ethanol, Inc. | (12,908) | (8,841) | (20,749) | (21,477) |
Preferred stock dividends | (315) | (315) | (627) | (627) |
Loss available to common stockholders | $ (13,223) | $ (9,156) | $ (21,376) | $ (22,104) |
Net loss per share, basic and diluted | $ (0.31) | $ (0.22) | $ (0.50) | $ (0.52) |
Weighted-average shares outstanding, basic and diluted | 43,285 | 42,295 | 43,098 | 42,334 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | ||
Operating Activities: | |||
Consolidated net loss | $ (24,101) | $ (23,423) | |
Adjustments to reconcile consolidated net loss to net cash provided by operating activities: | |||
Depreciation and amortization of intangibles | 20,418 | 18,408 | |
Deferred income taxes | (563) | ||
Fair value adjustments | (473) | ||
Amortization of debt discount | 357 | 273 | |
Inventory valuation adjustment | 256 | ||
Amortization of deferred financing fees | 608 | 189 | |
Non-cash compensation | 1,695 | 2,158 | |
Loss on derivative instruments | 3,370 | 352 | |
Bad debt expense | 45 | 2 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 7,781 | 39,835 | |
Inventories | (5,755) | (3,273) | |
Prepaid expenses and other assets | (1,437) | (4,454) | |
Prepaid inventory | 1,485 | (486) | |
Accounts payable and accrued expenses | 1,003 | (14,273) | |
Net cash provided by operating activities | 4,906 | 15,091 | |
Investing Activities: | |||
Additions to property and equipment | (7,340) | (6,229) | |
Net cash used in investing activities | (7,340) | (6,229) | |
Financing Activities: | |||
Net proceeds from Kinergys' line of credit | 22,551 | 5,295 | |
Proceeds from assessment financing | 728 | ||
Net proceeds from notes | 13,530 | ||
Principal payments on borrowings | (6,500) | (4,500) | |
Payments on capital leases | (626) | (386) | |
Proceeds from exercise of warrants and options | 690 | ||
Preferred stock dividends paid | (627) | (627) | |
Net cash provided by financing activities | 15,526 | 14,002 | |
Net increase in cash and cash equivalents | 13,092 | 22,864 | |
Cash and cash equivalents at beginning of period | 49,489 | [1] | 68,590 |
Cash and cash equivalents at end of period | 62,581 | 91,454 | |
Supplemental Cash Flow Information: | |||
Interest paid | 7,598 | 4,852 | |
Income tax refunds received | 168 | 3 | |
Reclass of warrant liability to equity upon warrant exercises | $ 178 | ||
[1] | Amounts derived from the audited financial statements for the year ended December 31, 2017 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. ORGANIZATION AND BASIS OF PRESENTATION. 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 accompanying consolidated financial statements include the results of ICP only as of December 31, 2017 and for the three and six months ended June 30, 2018. The Company is a leading producer and marketer of low-carbon renewable fuels in the United States. 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 The Company owns and operates nine production facilities, four in the Western states of California, Oregon and Idaho, and five in the Midwestern states of Illinois and Nebraska. 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. These plants produce among the lowest-carbon ethanol produced in the United States due to low energy use in production. 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. As of June 30, 2018, all nine facilities were operating. As market conditions change, the Company may increase, decrease or idle production at one or more operational facilities or resume operations at any idled facility. Basis of Presentation – Interim Financial Statements 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 $56,412,000 and $64,501,000 at June 30, 2018 and December 31, 2017, respectively, were used as collateral under Kinergy’s operating line of credit. The allowance for doubtful accounts was $64,000 and $19,000 as of June 30, 2018 and December 31, 2017, respectively. The Company recorded a bad debt recovery of $2,000 and $5,000 for the three months ended June 30, 2018 and 2017, respectively. The Company recorded a bad debt expense of $45,000 and $2,000 for the six months ended June 30, 2018 and 2017, respectively. The Company does not have any off-balance sheet credit exposure related to its customers. Benefit for Income Taxes Comprehensive Loss Noncontrolling Interests Financial Instruments Recent Accounting Pronouncements In May 2014, the FASB issued new guidance on the recognition of revenue (“ASC 606”). ASC 606 states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In March and April 2016, the FASB issued further revenue recognition guidance amending principal vs. agent considerations regarding whether an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The 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. This 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, ASU 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. The Company accounts for shipping and handling costs relating to contracts with customers as costs to fulfill its promise to transfer its products. Accordingly, the costs are classified as a component of cost of goods sold. See Note 2 for the Company’s revenue by type of contracts. Estimates and Assumptions |
SEGMENTS
SEGMENTS | 6 Months Ended |
Jun. 30, 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 Six Months Ended 2018 2017 2018 2017 Net Sales Production, recorded as gross: Ethanol/alcohol sales $ 233,888 $ 197,657 $ 453,517 $ 382,112 Co-product sales 78,514 58,468 153,048 117,087 Intersegment sales 539 188 1,013 499 Total production sales 312,941 256,313 607,578 499,698 Marketing: Ethanol/alcohol sales, gross $ 97,634 $ 148,644 $ 203,063 $ 291,526 Ethanol/alcohol sales, net 486 433 921 817 Intersegment sales 2,330 1,963 4,555 3,800 Total marketing sales 100,450 151,040 208,539 296,143 Intersegment eliminations (2,869 ) (2,151 ) (5,568 ) (4,299 ) Net sales as reported $ 410,522 $ 405,202 $ 810,549 $ 791,542 Cost of goods sold: Production $ 320,631 $ 254,570 $ 619,064 $ 505,155 Marketing and distribution 94,203 151,130 195,135 294,806 Intersegment eliminations (3,039 ) (2,151 ) (5,739 ) (4,299 ) Cost of goods sold as reported $ 411,795 $ 403,549 $ 808,460 $ 795,662 Income (loss) before benefit for income taxes: Production $ (17,210 ) $ (6,304 ) $ (29,609 ) $ (18,619 ) Marketing and distribution 4,929 (1,435 ) 10,677 (1,286 ) Corporate activities (2,323 ) (2,199 ) (5,732 ) (3,518 ) $ (14,604 ) $ (9,938 ) $ (24,664 ) $ (23,423 ) Depreciation and amortization: Production $ 10,045 $ 9,016 $ 19,977 $ 17,862 Corporate activities 208 283 441 546 $ 10,253 $ 9,299 $ 20,418 $ 18,408 Interest expense: Production $ 1,700 $ 1,119 $ 3,724 $ 2,211 Marketing and distribution 336 302 699 610 Corporate activities 2,141 1,273 4,259 2,510 $ 4,177 $ 2,694 $ 8,682 $ 5,331 The following table sets forth the Company’s total assets by operating segment (in thousands): June 30, 2018 December 31, 2017 Total assets: Production $ 567,322 $ 583,696 Marketing and distribution 150,255 127,242 Corporate assets 5,655 9,358 $ 723,232 $ 720,296 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2018 | |
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 $2,678,000 valuation adjustment as of December 31, 2017. Inventory balances consisted of the following (in thousands): June 30, 2018 December 31, 2017 Finished goods $ 42,279 $ 35,652 Work in progress 8,115 8,807 Raw materials 7,834 7,601 Low-carbon and RIN credits 7,461 7,952 Other 1,616 1,538 Total $ 67,305 $ 61,550 |
DERIVATIVES
DERIVATIVES | 6 Months Ended |
Jun. 30, 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 June 30, 2018 Assets Liabilities Fair Fair Type of Instrument Balance Sheet Location Value Balance Sheet Location Value Cash collateral balance Other current assets $ 5,746 Commodity contracts Derivative instruments $ 7,634 Derivative instruments $ 10,157 As of December 31, 2017 Assets Liabilities Fair Fair Type of Instrument Balance Sheet Location Value Balance Sheet Location Value Cash collateral balance Other current assets $ 3,813 Commodity contracts Derivative instruments $ 998 Derivative instruments $ 2,307 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 Losses Three Months Ended June 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (499 ) $ (574 ) Unrealized Gains (Losses) Three Months Ended June 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (2,410 ) $ 6 Realized Losses Six Months Ended June 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (2,157 ) $ (2,918 ) Unrealized Gains (Losses) Six Months Ended June 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (1,213 ) $ 2,566 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 5. DEBT. Long-term borrowings are summarized as follows (in thousands): June 30, 2018 December 31, 2017 Kinergy line of credit $ 72,028 $ 49,477 Pekin term loan 50,000 53,500 Pekin revolving loan 32,000 32,000 ICP term loan 19,500 22,500 ICP revolving loan 18,000 18,000 Parent notes payable 68,948 68,948 260,476 244,425 Less unamortized debt discount (1,052 ) (1,409 ) Less unamortized debt financing costs (1,653 ) (1,925 ) Less short-term portion (20,000 ) (20,000 ) Long-term debt $ 237,771 $ 221,091 Kinergy Operating Line of Credit Pekin Term Loan Pacific Aurora Line of Credit Distribution Restrictions |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. COMMITMENTS AND CONTINGENCIES. Sales Commitments Purchase Commitments Litigation – General The Company assumed certain legal matters which were ongoing at July 1, 2015, the date of the Company’s acquisition of Aventine Renewable Energy Holdings, Inc. (“PE Central”). Among them were lawsuits between Aventine Renewable Energy, Inc. (now known as Pacific Ethanol Pekin, LLC) 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 six months ended June 30, 2017. |
PENSION AND RETIREMENT BENEFIT
PENSION AND RETIREMENT BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Pension And Retirement Benefit Plans | 7. 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, 2017, the Retirement Plan’s accumulated projected benefit obligation was $19.7 million, with a fair value of plan assets of $14.0 million. The underfunded amount of $5.7 million is recorded on the Company’s consolidated balance sheet in other liabilities. Of the net periodic expense for the Retirement Plan and Postretirement Plan, the Company recognizes the service cost component in cost of goods sold and the interest cost, expected return on plan assets and amortization of gain (loss) in other income (expense), net. The Company’s net periodic Retirement Plan costs are as follows (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Interest cost $ 174 $ 98 $ 348 $ 195 Service cost 106 188 212 375 Expected return on plan assets (204 ) (169 ) (408 ) (337 ) Net periodic expense $ 76 $ 117 $ 152 $ 233 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, 2017, the Postretirement Plan’s accumulated projected benefit obligation was $5.6 million 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 Six Months Ended 2018 2017 2018 2017 Interest cost $ 46 $ 21 $ 92 $ 42 Service cost 2 50 4 100 Amortization of (gain) loss 33 33 66 66 Net periodic expense $ 81 $ 104 $ 162 $ 208 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8. 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 June 30, 2018 (in thousands): Fair Value Level 1 Level 2 Level 3 Assets: Derivative instruments $ 7,634 $ 7,634 $ — $ — Liabilities: Derivative instruments $ (10,157 ) $ (10,157 ) $ — $ — |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 9. EARNINGS PER SHARE. The following tables compute basic and diluted earnings per share (in thousands, except per share data): Three Months Ended June 30, 2018 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (12,908 ) Less: Preferred stock dividends (315 ) Basic and diluted loss per share: Loss available to common stockholders $ (13,223 ) 43,285 $ (0.31 ) Three Months Ended June 30, 2017 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (8,841 ) Less: Preferred stock dividends (315 ) Basic and diluted loss per share: Loss available to common stockholders $ (9,156 ) 42,295 $ ( 0.22 ) Six Months Ended June 30, 2018 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (20,749 ) Less: Preferred stock dividends (627 ) Basic and diluted loss per share: Loss available to common stockholders $ (21,376 ) 43,098 $ ( 0.50 ) Six Months Ended June 30, 2017 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (21,477 ) Less: Preferred stock dividends (627 ) Basic and diluted loss per share: Loss available to common stockholders $ (22,104 ) 42,334 $ ( 0.52 ) There were an aggregate of 1,606,000 and 721,000 potentially dilutive weighted-average shares from convertible securities outstanding for the three and six months ended June 30, 2018, respectively. These convertible securities were not considered in calculating diluted net loss per share for the three and six months ended June 30, 2018, as their effect would have been anti-dilutive. |
ORGANIZATION AND BASIS OF PRE15
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Organization and Business | 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 accompanying consolidated financial statements include the results of ICP only as of December 31, 2017 and for the three and six months ended June 30, 2018. The Company is a leading producer and marketer of low-carbon renewable fuels in the United States. 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 The Company owns and operates nine production facilities, four in the Western states of California, Oregon and Idaho, and five in the Midwestern states of Illinois and Nebraska. 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. These plants produce among the lowest-carbon ethanol produced in the United States due to low energy use in production. 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. As of June 30, 2018, all nine facilities were operating. As market conditions change, the Company may increase, decrease or idle production at one or more operational facilities or resume operations at any idled facility. |
Basis of Presentation-Interim Financial Statements | Basis of Presentation – Interim Financial Statements |
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 $56,412,000 and $64,501,000 at June 30, 2018 and December 31, 2017, respectively, were used as collateral under Kinergy’s operating line of credit. The allowance for doubtful accounts was $64,000 and $19,000 as of June 30, 2018 and December 31, 2017, respectively. The Company recorded a bad debt recovery of $2,000 and $5,000 for the three months ended June 30, 2018 and 2017, respectively. The Company recorded a bad debt expense of $45,000 and $2,000 for the six months ended June 30, 2018 and 2017, respectively. The Company does not have any off-balance sheet credit exposure related to its customers. |
Benefit for Income Taxes | Benefit for Income Taxes |
Comprehensive Loss | Comprehensive Loss |
Noncontrolling Interests | Noncontrolling Interests |
Financial Instruments | Financial Instruments |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued new guidance on the recognition of revenue (“ASC 606”). ASC 606 states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In March and April 2016, the FASB issued further revenue recognition guidance amending principal vs. agent considerations regarding whether an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The 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. This 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, ASU 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. The Company accounts for shipping and handling costs relating to contracts with customers as costs to fulfill its promise to transfer its products. Accordingly, the costs are classified as a component of cost of goods sold. See Note 2 for the Company’s revenue by type of contracts. |
Estimates and Assumptions | Estimates and Assumptions |
SEGMENTS (Tables)
SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Financial Data for Operating Segments | The following tables set forth certain financial data for the Company’s operating segments (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Net Sales Production, recorded as gross: Ethanol/alcohol sales $ 233,888 $ 197,657 $ 453,517 $ 382,112 Co-product sales 78,514 58,468 153,048 117,087 Intersegment sales 539 188 1,013 499 Total production sales 312,941 256,313 607,578 499,698 Marketing : Ethanol/alcohol sales, gross $ 97,634 $ 148,644 $ 203,063 $ 291,526 Ethanol/alcohol sales, net 486 433 921 817 Intersegment sales 2,330 1,963 4,555 3,800 Total marketing sales 100,450 151,040 208,539 296,143 Intersegment eliminations (2,869 ) (2,151 ) (5,568 ) (4,299 ) Net sales as reported $ 410,522 $ 405,202 $ 810,549 $ 791,542 Cost of goods sold: Production $ 320,631 $ 254,570 $ 619,064 $ 505,155 Marketing and distribution 94,203 151,130 195,135 294,806 Intersegment eliminations (3,039 ) (2,151 ) (5,739 ) (4,299 ) Cost of goods sold as reported $ 411,795 $ 403,549 $ 808,460 $ 795,662 Income (loss) before benefit for income taxes: Production $ (17,210 ) $ (6,304 ) $ (29,609 ) $ (18,619 ) Marketing and distribution 4,929 (1,435 ) 10,677 (1,286 ) Corporate activities (2,323 ) (2,199 ) (5,732 ) (3,518 ) $ (14,604 ) $ (9,938 ) $ (24,664 ) $ (23,423 ) Depreciation and amortization: Production $ 10,045 $ 9,016 $ 19,977 $ 17,862 Corporate activities 208 283 441 546 $ 10,253 $ 9,299 $ 20,418 $ 18,408 Interest expense: Production $ 1,700 $ 1,119 $ 3,724 $ 2,211 Marketing and distribution 336 302 699 610 Corporate activities 2,141 1,273 4,259 2,510 $ 4,177 $ 2,694 $ 8,682 $ 5,331 |
Schedule of Assets by Operating Segments | The following table sets forth the Company’s total assets by operating segment (in thousands): June 30, 2018 December 31, 2017 Total assets: Production $ 567,322 $ 583,696 Marketing and distribution 150,255 127,242 Corporate assets 5,655 9,358 $ 723,232 $ 720,296 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventory balances consisted of the following (in thousands): June 30, 2018 December 31, 2017 Finished goods $ 42,279 $ 35,652 Work in progress 8,115 8,807 Raw materials 7,834 7,601 Low-carbon and RIN credits 7,461 7,952 Other 1,616 1,538 Total $ 67,305 $ 61,550 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2018 Assets Liabilities Fair Fair Type of Instrument Balance Sheet Location Value Balance Sheet Location Value Cash collateral balance Other current assets $ 5,746 Commodity contracts Derivative instruments $ 7,634 Derivative instruments $ 10,157 As of December 31, 2017 Assets Liabilities Fair Fair Type of Instrument Balance Sheet Location Value Balance Sheet Location Value Cash collateral balance Other current assets $ 3,813 Commodity contracts Derivative instruments $ 998 Derivative instruments $ 2,307 |
Schedule of Recognized Gains (Losses) for 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 Losses Three Months Ended June 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (499 ) $ (574 ) Unrealized Gains (Losses) Three Months Ended June 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (2,410 ) $ 6 Realized Losses Six Months Ended June 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (2,157 ) $ (2,918 ) Unrealized Gains (Losses) Six Months Ended June 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (1,213 ) $ 2,566 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | Long-term borrowings are summarized as follows (in thousands): June 30, December 31, Kinergy line of credit $ 72,028 $ 49,477 Pekin term loan 50,000 53,500 Pekin revolving loan 32,000 32,000 ICP term loan 19,500 22,500 ICP revolving loan 18,000 18,000 Parent notes payable 68,948 68,948 260,476 244,425 Less unamortized debt discount (1,052 ) (1,409 ) Less unamortized debt financing costs (1,653 ) (1,925 ) Less short-term portion (20,000 ) (20,000 ) Long-term debt $ 237,771 $ 221,091 |
PENSION AND RETIREMENT BENEFI20
PENSION AND RETIREMENT BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Pension And Retirement Benefit Plans Abstract | |
Pension Plans | The Company’s net periodic Retirement Plan costs are as follows (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Interest cost $ 174 $ 98 $ 348 $ 195 Service cost 106 188 212 375 Expected return on plan assets (204 ) (169 ) (408 ) (337 ) Net periodic expense $ 76 $ 117 $ 152 $ 233 |
Postretirement Plan | The Company’s net periodic Postretirement Plan costs are as follows (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Interest cost $ 46 $ 21 $ 92 $ 42 Service cost 2 50 4 100 Amortization of (gain) loss 33 33 66 66 Net periodic expense $ 81 $ 104 $ 162 $ 208 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Recurring Fair Value Measurements by Level | The following table summarizes recurring fair value measurements by level at June 30, 2018 (in thousands): Fair Value Level 1 Level 2 Level 3 Assets: Derivative instruments $ 7,634 $ 7,634 $ — $ — Liabilities: Derivative instruments $ (10,157 ) $ (10,157 ) $ — $ — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (12,908 ) Less: Preferred stock dividends (315 ) Basic and diluted loss per share: Loss available to common stockholders $ (13,223 ) 43,285 $ (0.31 ) Three Months Ended June 30, 2017 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (8,841 ) Less: Preferred stock dividends (315 ) Basic and diluted loss per share: Loss available to common stockholders $ (9,156 ) 42,295 $ ( 0.22 ) Six Months Ended June 30, 2018 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (20,749 ) Less: Preferred stock dividends (627 ) Basic and diluted loss per share: Loss available to common stockholders $ (21,376 ) 43,098 $ ( 0.50 ) Six Months Ended June 30, 2017 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (21,477 ) Less: Preferred stock dividends (627 ) Basic and diluted loss per share: Loss available to common stockholders $ (22,104 ) 42,334 $ ( 0.52 |
ORGANIZATION AND BASIS OF PRE23
ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Ethanol production capacity per year | 605 million gallons per year | ||||
Ethanol market capacity per year | Markets nearly 1.0 billion gallons of ethanol | ||||
Other products produced per year | Produces over 3.0 million tons of co-products | ||||
Accounts receivable used as collateral | $ 56,412 | $ 56,412 | $ 64,501 | ||
Bad debt recovery | 2,000 | $ 5,000 | |||
Allowance for doubtful accounts | 64 | 64 | $ 19 | ||
Bad debt expense | 45 | $ 2 | |||
Benefit for income taxes | $ (563) |
SEGMENTS. (Details)
SEGMENTS. (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net Sales | $ 410,522 | $ 405,202 | $ 810,549 | $ 791,542 |
Cost of goods sold | 411,795 | 403,549 | 808,460 | 795,662 |
Income (loss) before provision for income taxes | (14,604) | (9,938) | (24,664) | (23,423) |
Depreciation and amortization | 10,253 | 9,299 | 20,418 | 18,408 |
Interest expense | 4,177 | 2,694 | 8,682 | 5,331 |
Intersubsegment Eliminations [Member] | ||||
Net Sales | (2,869) | (2,151) | (5,568) | (4,299) |
Cost of goods sold | (3,039) | (2,151) | (5,739) | (4,299) |
Ethanol Production [Member] | ||||
Net Sales | 312,941 | 188 | 607,578 | 499,698 |
Cost of goods sold | 320,631 | 619,064 | 505,155 | |
Income (loss) before provision for income taxes | (17,210) | (29,609) | (18,619) | |
Depreciation and amortization | 10,045 | 19,977 | 17,862 | |
Interest expense | 1,700 | 3,724 | 2,211 | |
Ethanol Production [Member] | Ethanol alcohol [Member] | ||||
Net Sales | 233,888 | 453,517 | ||
Ethanol Production [Member] | Co-product sales [Member] | ||||
Net Sales | 78,514 | 58,468 | 153,048 | 117,087 |
Ethanol Production [Member] | Intersegment Sales [Member] | ||||
Net Sales | 539 | 1,013 | ||
Ethanol Production [Member] | External Customers [Member] | ||||
Net Sales | 197,657 | 382,112 | ||
Ethanol Production [Member] | Intersegment Net Sales [Member] | ||||
Net Sales | 499 | |||
Marketing [Member] | ||||
Net Sales | 100,450 | 208,539 | ||
Cost of goods sold | 94,203 | 195,135 | ||
Income (loss) before provision for income taxes | 4,929 | 10,677 | ||
Interest expense | 336 | 699 | ||
Marketing [Member] | Ethanol alcohol Sales Member] | ||||
Net Sales | 97,634 | 148,644 | 203,063 | 291,526 |
Marketing [Member] | Ethanol alcohol Sales Net Member] | ||||
Net Sales | 486 | 433 | 921 | |
Marketing [Member] | Net Ethanol Alcohol Sales [Member] | ||||
Net Sales | 256,313 | 817 | ||
Cost of goods sold | 254,570 | |||
Income (loss) before provision for income taxes | (6,304) | |||
Depreciation and amortization | 9,016 | |||
Interest expense | 1,119 | |||
Marketing and Distribution [Member] | ||||
Net Sales | 151,040 | 296,143 | ||
Cost of goods sold | 151,130 | 294,806 | ||
Income (loss) before provision for income taxes | (1,435) | (1,286) | ||
Interest expense | 302 | 610 | ||
Marketing and Distribution [Member] | Intersegment Sales [Member] | ||||
Net Sales | 2,330 | 4,555 | ||
Marketing and Distribution [Member] | Intersegment Net Sales [Member] | ||||
Net Sales | 1,963 | 3,800 | ||
Corporate Activities [Member] | ||||
Income (loss) before provision for income taxes | (2,323) | (2,199) | (5,732) | (3,518) |
Depreciation and amortization | 208 | 283 | 441 | 546 |
Interest expense | $ 2,141 | $ 1,273 | $ 4,259 | $ 2,510 |
SEGMENTS. (Details 1)
SEGMENTS. (Details 1) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Total Assets | $ 723,232 | $ 720,296 | [1] |
Ethanol Production [Member] | |||
Total Assets | 567,322 | 583,696 | |
Marketing and Distribution [Member] | |||
Total Assets | 150,255 | 127,242 | |
Corporate Assets [Member] | |||
Total Assets | $ 5,655 | $ 9,358 | |
[1] | Amounts derived from the audited financial statements for the year ended December 31, 2017 |
INVENTORIES. (Details)
INVENTORIES. (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Finished goods | $ 42,279 | $ 35,652 | |
Work in progress | 8,115 | 8,807 | |
Raw materials | 7,834 | 7,601 | |
Low-carbon and RIN credits | 7,461 | 7,952 | |
Other | 1,616 | 1,538 | |
Total | $ 67,305 | $ 61,550 | [1] |
[1] | Amounts derived from the audited financial statements for the year ended December 31, 2017 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) $ in Thousands | Dec. 31, 2017USD ($) |
Inventories Details Narrative Abstract | |
Net inventory valuation adjustment | $ 2,678 |
DERIVATIVES (Details)
DERIVATIVES (Details) - Non Designated Derivative Instruments [Member] - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Cash Collateral Balance [Member] | ||
Derivative assets | $ 5,746 | $ 3,813 |
Commodity Contracts [Member] | ||
Derivative assets | 7,634 | 998 |
Derivative liabilities | $ 10,157 | $ 2,307 |
DERIVATIVES (Details 1)
DERIVATIVES (Details 1) - Non Designated Derivative Instruments [Member] - Commodity Contracts [Member] - Cost of goods sold [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Realized Gains (Losses) | $ (499) | $ (574) | $ (2,157) | $ (2,918) |
Unrealized Gains (Losses) | $ (2,410) | $ 6 | $ (1,213) | $ 2,566 |
DERIVATIVES (Details Narrative)
DERIVATIVES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Recognized losses due to change in fair value | $ 2,909 | $ 568 | $ 3,370 | $ 352 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Long-term borrowings are summarized as follows | |||
Total debt | $ 260,476 | $ 244,425 | |
Less unamortized debt discount | (1,052) | (1,409) | |
Less unamortized debt financing costs | (1,653) | (1,925) | |
Less short-term portion | (20,000) | (20,000) | [1] |
Long-term debt | 237,771 | 221,091 | [1] |
Term Loan [Member] | Illinois Corn Processing, LLC [Member] | |||
Long-term borrowings are summarized as follows | |||
Term debt | 19,500 | 22,500 | |
Parent Notes Payable [Member] | |||
Long-term borrowings are summarized as follows | |||
Notes payable | 68,948 | 68,948 | |
Revolving Credit Facility [Member] | Illinois Corn Processing, LLC [Member] | |||
Long-term borrowings are summarized as follows | |||
Line of credit | 18,000 | 18,000 | |
Kinergy Marketing LLC [Member] | Line of Credit [Member] | |||
Long-term borrowings are summarized as follows | |||
Line of credit | 72,028 | 49,477 | |
Pacific Ethanol Pekin, Inc [Member] | Term Loan [Member] | |||
Long-term borrowings are summarized as follows | |||
Term debt | 50,000 | 53,500 | |
Pacific Ethanol Pekin, Inc [Member] | Revolving Credit Facility [Member] | |||
Long-term borrowings are summarized as follows | |||
Line of credit | $ 32,000 | $ 32,000 | |
[1] | Amounts derived from the audited financial statements for the year ended December 31, 2017 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | [1] | |
Net assets | $ 723,232 | $ 720,296 | |
Kinergy Marketing LLC [Member] | Line of Credit [Member] | |||
Unused borrowing capacity | $ 2,612 | ||
Pacific Ethanol Pekin, Inc [Member] | Term Loan [Member] | |||
Description of debt covenant | 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. | ||
Debt face amount | $ 3,500 | ||
Debt maturity date | May 31, 2018 | ||
Pacific Aurora Line of Credit [Member] | Line of Credit [Member] | |||
Deferred financing fees | $ 300 | ||
Net assets | $ 196,000 | ||
[1] | Amounts derived from the audited financial statements for the year ended December 31, 2017 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Proceeds from legal settlement | $ 3,900 |
Gain on litigation settlement | $ 3,600 |
Co-products Sales Contracts [Member] | |
Open ethanol indexed-price sales contracts | 697,000 tons |
Open fixed-price sales contracts valued | $ 22,713 |
Ethanol Sales Contracts [Member] | |
Open ethanol indexed-price sales contracts | 297,162,000 gallons |
Open fixed-price sales contracts valued | $ 76,289 |
Ethanol Purchase Contracts [Member] | |
Indexed-price purchase contracts | 8,774,000 gallons |
Fixed-price purchase contracts value | $ 6,109 |
Ethanol Purchase Contracts [Member] | Suppliers [Member] | |
Fixed-price purchase contracts value | $ 28,453 |
PENSION AND RETIREMENT BENEFI34
PENSION AND RETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Retirement Plan [Member] | ||||
Components of net periodic benefit costs are as follows: | ||||
Service cost | $ 174 | $ 98 | $ 348 | $ 195 |
Interest cost | 106 | 188 | 212 | 375 |
Expected return on plan assets | (204) | (169) | (408) | (337) |
Net periodic benefit cost | 76 | 117 | 152 | 233 |
Postretirement Plan [Member] | ||||
Components of net periodic benefit costs are as follows: | ||||
Service cost | 46 | 21 | 92 | 42 |
Interest cost | 2 | 50 | 4 | 100 |
Expected return on plan assets | 33 | 33 | 66 | 66 |
Net periodic benefit cost | $ 81 | $ 104 | $ 162 | $ 208 |
PENSION PLANS (Details Narrativ
PENSION PLANS (Details Narrative) $ in Thousands | Dec. 31, 2017USD ($) |
Postretirement Plan [Member] | |
Accumulated projected benefit obligation | $ 5,600 |
Retirement Plan [Member] | |
Accumulated projected benefit obligation | 19,700 |
Fair value of plan assets | 14,000 |
Underfunded amount | $ 5,700 |
FAIR VALUE MEASUREMENTS. (Detai
FAIR VALUE MEASUREMENTS. (Details) - Derivative Financial Instrument [Member] $ in Thousands | Mar. 31, 2018USD ($) |
Assets: | |
Assets | $ 7,634 |
Liabilities: | |
Liabilities | 10,157 |
Level 1 [Member] | |
Assets: | |
Assets | 7,634 |
Liabilities: | |
Liabilities | 10,157 |
Level 2 [Member] | |
Assets: | |
Assets | |
Liabilities: | |
Liabilities | |
Level 3 [Member] | |
Assets: | |
Assets | |
Liabilities: | |
Liabilities |
EARNINGS PER SHARE. (Details)
EARNINGS PER SHARE. (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Loss Numerator | ||||
Net loss attributed to Pacific Ethanol, Inc. | $ (12,908) | $ (8,841) | $ (20,749) | $ (21,477) |
Less: Preferred stock dividends | (315) | (315) | (627) | (627) |
Basic and diluted loss per share: | ||||
Net loss available to common stockholders | $ (13,223) | $ (9,156) | $ (21,376) | $ (22,104) |
Shares Denominator | ||||
Shares available to common stockholders - basic | 43,285 | 42,295 | 43,098 | 42,334 |
Shares available to common stockholders - diluted | 43,285 | 42,295 | 43,098 | 42,334 |
Per-Share Amount | ||||
Per-Share amount - basic | $ (0.31) | $ (0.22) | $ (0.50) | $ (0.52) |
Per-Shares amount - diluted | $ (0.31) | $ (0.22) | $ (0.50) | $ (0.52) |
EARNINGS PER SHARE. (Details Na
EARNINGS PER SHARE. (Details Narrative) - shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Earnings Per Share. | ||
Potentially dilutive shares from convertible securities outstanding | 1,606,000 | 721,000 |