US BIOENERGY REPORTS 2006 FINANCIAL RESULTS
With 250 Million Gallons of Product Capacity US BioEnergy is the Largest Pure-Play Ethanol Producer in the U.S.
US BioEnergy Corporation (NASDAQ:USBE) today announced net income of $20.4 million, or $0.41 per share, for the year ended December 31, 2006 and net income of $21.0 million, or $0.36 per share, for the fourth quarter.
"This has been a year of significant progress and achievement for our company," said Gordon Ommen, US BioEnergy president and CEO. "In addition to a successful initial public offering in December, we grew our ethanol production capacity to 250 million gallons by year end. We achieved this rapid growth through well planned acquisitions, greenfield construction and facility expansion. By the end of 2008, we expect to have seven plants operational with ethanol production capacity of approximately 600 million gallons per year."
For the 12 months ended December 31, 2006 total revenues were $124.5 million. Fourth quarter 2006 revenues totaled $64.2 million. EBITDA for the full year and fourth quarter was $39.7 million and $35.3 million, respectively. Results for the year and quarter were driven by significant increases in the company's ethanol production capacity, which by December 31, 2006 totaled 250 million gallons per year. The company also recognized a year to date net pre-tax gain of $8.6 million and a fourth quarter net gain of $9.7 million related to its hedging strategy. In addition, during the fourth quarter, the company sold one of its build slots for $12.0 million, of which $8.0 million was realized as a pretax gain during the fourth quarter.
"We are pleased with these results, which reflect our first full quarter of operations at our Woodbury plant and our second full quarter of operations at our Platte Valley plant," said Ommen.
The company achieved a number of milestones during 2006, including:
-- Completing the company's initial public offering, which raised approximately $149.7 million in net proceeds;
-- Acquiring, expanding and completing the expansion of the Platte Valley plant;
-- Commencing operations at the Woodbury plant, and
-- Commencing operations at the Albert City plant.
The company currently owns and operates three ethanol plants, which have combined production capacity of 250 million gallons per year (mmgy) and has the following plants under construction and sites under evaluation:
-- Ord, Nebraska, a 50 mmgy facility, which is expected to start producing ethanol in the second quarter of 2007
-- Hankinson, North Dakota, a 100 mmgy facility, which is expected to start producing ethanol in the second quarter of 2008
-- Dyersville, Iowa, a 100 mmgy facility, which is expected to start producing ethanol in the second quarter of 2008
-- Janesville, Minnesota, a 100 mmgy facility, which is expected to start producing ethanol in the third quarter of 2008
-- Grinnell, Iowa, a 100 mmgy facility, of which US BioEnergy has a 50% ownership interest. Site work at the Grinnell facility is currently in progress. Due to pending lawsuits relating to zoning issues, the ability to secure debt financing for this facility has been delayed. As a result, a date to start the next phase of construction for this facility has not been set.
-- Additional sites the company has identified and is conducting feasibility studies on include those near Springfield, Minnesota; Guymon, Oklahoma and Altamont, Illinois. Selection and potential construction of projects, which typically takes 18 months, is contingent on zoning, permitting, financing and other factors.
Total construction expenditures for 2006 were $206.0 million and were primarily comprised of the following: Woodbury $32.7 million, Albert City $88.4 million, Platte Valley $40.2 million, Ord $30.8 million and Hankinson $4.5 million. Of the total, $58.1 million was expended in the fourth quarter. The company has entered into credit facilities to provide the debt financing necessary to complete construction of the Ord, Hankinson, Dyersville, and Janesville plants. In addition to these credit facilities, the company estimates $161.0 million will be funded by cash on hand and internal cash generation.
At December 31, 2006 total cash and cash equivalents were $170.1 million. Total debt as of December 31, 2006 totaled $150.1 million compared with $128.8 million on September 30, 2006 and shareholders equity was $484.4 million compared with $318.3 million on September 30, 2006.
Selected Results
12 months 3 months
ended ended
December 31, December 31,
2006 2006
-------------------------
Sales volumes (in thousands)
Ethanol gallons sold 49,604 28,068
Distillers grains tons sold 248 127
Production volumes (in thousands)
Ethanol gallons produced 51,743 29,457
Distillers grains tons produced 260 136
Average price realizations
Ethanol gross sales price per gallon $1.86 $1.84
Distillers grain sales price per gallon $0.23 $0.23
Average cost
Corn no hedging impact (per bushel) $2.51 $2.77
Corn w/ hedging impact (per bushel) $1.94 $1.80
Corn no hedging impact (per gallon) $0.86 $0.95
Corn w/ hedging impact (per gallon) $0.65 $0.57
Natural gas (per mmbtu) no hedging impact $7.28 $7.69
Natural gas (per mmbtu) w/ hedging impact $8.84 $8.70
Natural gas (per gallon of ethanol) no
hedging impact $0.18 $0.19
Natural gas (per gallon of ethanol) w/
hedging impact $0.22 $0.22
Comparability of Financial Results
Prior to May 1, 2006, US BioEnergy derived revenues principally from its marketing and services businesses. Since that time, the sale of ethanol and distillers grains has become the primary source of US BioEnergy's revenues. As a result, the company's financial results for periods after April 30, 2006 are not comparable to results for prior periods. In addition, due to the steep ramping of ethanol production between April and December 2006, the actual production figures for 2006 are not indicative of future operating results.
EBITDA
This news release describes "EBITDA" in addition to earnings calculated in accordance with generally accepted accounting principles (GAAP). Management believes that EBITDA is useful in evaluating the company's operating performance in relation to other companies in its industry because the calculation of EBITDA generally eliminates the effects of financings and income taxes which items may vary for different companies for reasons unrelated to overall operating performance. EBITDA is not a measure of financial performance under GAAP, and should not be considered an alternative to net income, or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. EBITDA has its limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of the company's results as reported under GAAP. Some of the limitations of EBITDA are:
-- EBITDA does not reflect cash used for capital expenditures;
-- Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced and EBITDA does not reflect the cash requirements for replacements;
-- EBITDA does not reflect changes in, or cash requirements for, the company's working capital requirements;
-- EBITDA does not reflect the cash necessary to make payments of interest or principal on the company's indebtedness; and
-- EBITDA includes non-recurring payments to the company which are reflected in other income.
Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to the company to service its debt or to invest in the company's growth. The company compensates for these limitations by relying on GAAP results as well as on EBITDA.
Conference Call
The company will host a conference call today at 10:00 a.m. Central Time. Investors interested in participating in the call can dial (888) 373-8893 and reference conference ID 2280294. A webcast will be available on the investor relations section of the company's web site at www.usbioenergy.net . For those unable to participate during the live broadcast, the webcast and telephone replay will be archived through April 13, 2007. The telephone replay will be available approximately two hours after the call concludes by dialing (800) 642-1687 or (706) 645-9291 and reference conference ID 2280291.
About US BioEnergy Corporation
US BioEnergy Corporation is a producer and marketer of ethanol and distillers grains. The company currently owns and operates three ethanol plants and has five additional ethanol plants under construction. Upon completion of these initiatives, the company will own and operate eight plants with combined expected ethanol production capacity of 650 million gallons per year.
Safe Harbor Statement
Certain matters discussed in this news release are "forward-looking statements." The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words like "believe," "anticipate," "target," "expect," "pro forma," "estimate," "intend," "guidance" or words of similar meaning. Forward-looking statements describe future plans, objectives, expectations or goals. Although US BioEnergy Corporation believes that its expectations are based on reasonable assumptions, all forward-looking statements involve risk and uncertainty. Therefore, actual results could vary materially from what we expect. Please review our filings the Securities and Exchange Commission, including Annual Report on Form 10-K for the year ended December 31, 2006, for important risk factors that could cause results to differ materially from those in any such forward-looking statements. Any forward-looking statement speaks only as of the date such statement was made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made except as required by applicable laws or regulations.
US BioEnergy Corporation
Consolidated Balance Sheets
Twelve Months Ended December 31,
2006 2005
--------------------------------
Assets (Dollars in Thousands, Except
Per Share Data)
Currents Assets
Cash and cash equivalents:
Cash and commercial paper $170,099 $6,809
Reverse repurchase agreement - 33,641
--------------------------------
170,099 40,450
Receivables 40,958 27,446
Inventories 28,420 14,671
Derivative financial instruments 7,144 -
Prepaid expenses 3,572 217
Deferred income taxes - 51
--------------------------------
Total current assets 250,193 82,835
--------------------------------
Other Assets
Deposits 4,307 -
Interest rate swap 252 -
Investment in equity of
unconsolidated subsidiary 1,509 -
Goodwill 65,489 2,445
Intangible assets 3,174 3,346
Other assets 52 154
--------------------------------
74,783 5,945
--------------------------------
Property and Equipment, net 408,814 68,042
--------------------------------
Total assets $ 733,790 $156,822
================================
Liabilities and Shareholders' Equity
--------------------------------
Liabilities
Current maturities of long-term debt $8,131 $-
Checks written on controlled
disbursement accounts 13,270 6,483
Notes payable 1,815 315
Accounts payable 47,163 39,157
Accrued expenses 4,938 1,415
Deferred income tax liability 2,913 -
Deferred revenue 545 209
Other current liabilities 3,410 276
--------------------------------
Total current liabilities 82,185 47,855
--------------------------------
Long-term debt 140,128 6,250
--------------------------------
Deferred income taxes 27,099 267
--------------------------------
Commitments and Contingencies
Shareholders' Equity
Preferred stock, $0.01 par value,
authorized 75,000,000 shares, issued
none - -
Class A common stock, $0.01 par value,
authorized 750,000,000 shares;
67,968,885 and 30,840,125 shares
issued and outstanding as of December
31, 2006 and 2005, respectively 679 308
Additional paid-in capital 467,552 106,427
Retained earnings (deficit) 16,147 (4,285)
--------------------------------
484,378 102,450
--------------------------------
Total liabilities and
shareholders' equity $ 733,790 $156,822
================================
See notes to consolidated financial statements.
US BioEnergy Corporation
Consolidated Statements of
Operations
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
-------------------------------------------------- -------------------
(Dollars in Thousands, Except Per
Share Data)
Revenues:
Product sales $60,052 $3,423 $111,966 $9,633
Services and commissions 3,174 2,946 8,839 6,782
Other revenues 945 - 3,730 -
------------------ -------------------
Total revenues 64,171 6,369 124,535 16,415
------------------ -------------------
Cost of goods sold:
Cost of product sales 33,699 3,436 73,177 9,467
Cost of services and
commissions 899 1,338 5,190 3,520
------------------ -------------------
Total cost of goods sold 34,598 4,774 78,367 12,987
------------------ -------------------
Gross profit 29,573 1,595 46,168 3,428
Selling, general and
administrative expenses 9,364 5,387 27,089 8,016
------------------ -------------------
Operating income (loss) 20,209 (3,792) 19,079 (4,588)
------------------ -------------------
Other income (expense):
Interest expense (706) (212) (2,076) (467)
Interest income 812 282 2,436 319
Other income 9,776 99 9,814 104
Equity in net income of
unconsolidated subsidiary 532 - 456 -
Minority interest in net loss
of subsidiary - - 391 -
------------------ -------------------
10,414 169 11,021 (44)
------------------ -------------------
Income (loss) before income
taxes 30,623 (3,623) 30,100 (4,632)
Federal and state income tax
(expense) benefit (9,668) 401 (9,668) 401
------------------ -------------------
Net income (loss) $20,955 $(3,222) $20,432 $(4,231)
================== ===================
Earnings (loss) per common
share:
Basic $0.36 $(0.12) $0.41 $(0.38)
Diluted 0.35 (0.12) 0.41 (0.38)
US BioEnergy Corporation
Consolidated Statements of Cash Flows
Twelve Months Ended
December 31,
2006 2005
----------------------------------------------------------------------
(Dollars in thousands)
Cash Flows from Operating Activities
Net income (loss) $20,432 $(4,231)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation 6,487 322
Amortization 1,031 487
Minority interest in net loss of subsidiary (391) -
Stock-based compensation 399 3,552
Deferred income taxes 9,905 (677)
Equity in net income of unconsolidated
subsidiary (456) -
Gain on sale of 50% interest in Provista (1,764) -
Changes in working capital components, net
of affects of business acquisitions and
deconsolidation of equity method investee:
Receivables (34,191) (11,219)
Inventories (28,884) (9,833)
Prepaid expenses (2,988) (90)
Derivative financial instruments (6,785) -
Accounts payable 17,172 14,428
Accrued expenses 3,012 989
Deferred revenue 197 (52)
----------------------
Net cash used in operating activities (16,824) (6,324)
----------------------
Cash Flows from Investing Activities
Purchases of property and equipment (206,010) (53,388)
Cash acquired in purchase of UBE, LLC - 103
Cash acquired in purchase of US Bio Woodbury,
LLC - 204
Acquisition of US Bio Platte Valley and US Bio
Ord, net of cash received (20,708) -
Acquisition of US Bio Hankinson, LLC, net of
cash received (773) -
Investment in Provista (1,000) -
Proceeds received on sale of 50% interest in
Provista 2,400 -
Deposits made (4,307) -
Other 170 148
----------------------
Net cash used in investing activities (230,228) (52,933)
----------------------
Cash Flows from Financing Activities
Increase in checks written on controlled
disbursement accounts 6,787 3,556
Debt issuance costs paid (977) (1,032)
Net change in notes payable 13,951 (6,043)
Proceeds from long-term debt 119,242 6,250
Payments of long-term debt (1,645) -
Proceeds from issuance of 23,300,563,
26,454,125 and 2,687,500 shares of common
stock, respectively 255,499 96,317
Offering costs paid (16,156) (99)
----------------------
Net cash provided by financing
activities 376,701 98,949
----------------------
Net increase in cash and cash
equivalents 129,649 39,692
Cash and Cash Equivalents
Beginning of period 40,450 758
----------------------
End of period $170,099 $40,450
======================
US BioEnergy Corporation
EBITDA - 3 Months and Year Ended December 31, 2006
Three months ended Year ended
December 31, 2006 December 31, 2006
------------------------------------
(Dollars in Thousands)
Net Income $20,955 $20,432
Interest 706 2,076
Income Taxes 9,668 9,668
Depreciation 3,800 6,487
Amortization 207 1,031
------------------------------------
EBITDA $35,336 $39,694
*T
US BioEnergy Corporation Investor Contact:
Investor Relations, 651-355-8340 investor@usbioenergy.net
Media Contacts: Integrated Corporate Relations James McCusker, 203-682-8200 jmccusker@icrinc.com
US BioEnergy Corporation JD Bergquist, 651-355-8357 media@usbioenergy.net
