Green Plains Partners Reports Fourth Quarter And Full Year 2018 Financial Results

The following excerpt is from the company's SEC filing.

Net income of $14.1 million, or $0.51 per common unit

Adjusted EBITDA of $15.2 million and distributable cash flow of $13.1 million

Quarterly cash distribution of $0.475 per unit

Distribution coverage ratio of 1.16x; LTM distribution coverage ratio of 1.01x

OMAHA, Neb., Feb. 11, 2019 (GLOBE NEWSWIRE) -- Green Plains Partners LP (NASDAQ:GPP) today announced financial and operating results for the fourth quarter of 2018. Net income was $14.1 million, or $0.51 per common unit, for the fourth quarter of 2018 compared with $16.3 million, or $0.50 per common unit, for the same period in 201 7. The partnership reported adjusted EBITDA of $15.2 million and distributable cash flow of $13.1 million for the fourth quarter of 2018, compared with adjusted EBITDA of $19.0 million and distributable cash flow of $17.6 million for the same period in 2017. Distribution coverage was 1.16x for the three months ended December 31, 2018.

“We are fully committed to Green Plains Partners and its business model, which remains a value-added segment and a driver of growth. Our primary focus is to provide terminal and logistics services to our customers, while seeking accretive growth opportunities that diversify our revenue through acquisitions and expansion of our product offerings,” said Todd Becker, president and chief executive officer of Green Plains Partners. “While the current ethanol environment may negatively impact put-through volumes at some of our storage locations, we remain focused on maintaining distributable cash flow per unit.”

Full Year Highlights

In April 2018, NLR Energy Logistics LLC, the partnership’s 50/50 joint venture with Delek Renewables LLC, commenced operations of its ethanol unit train terminal. The total cost of the project was approximately $7.0 million.

On July 16, 2018, Green Plains Inc. appointed Martin Salinas, Jr. as an independent director of Green Plains Partners’ general partner, Green Plains Holdings LLC. Mr. Salinas serves as a member of the board’s audit and conflicts committees.

On August 13, 2018, all of the 15,889,642 outstanding subordinated units held by Green Plains Inc. were converted into common units on a one-for-one basis. The conversion of the subordinated units did not impact the amount of cash distributions paid or the total number of outstanding units.

On November 15, 2018, Green Plains Inc. closed on the sale of three of its ethanol plants located in Bluffton, Ind., Lakota, Iowa, and Riga, Mich. to Valero Renewable Fuels Company, LLC (“Valero”). Correspondingly, the partnership’s storage assets located adjacent to such plants were sold to Green Plains Inc. for $120.9 million. As consideration, the partnership received 8.7 million Green Plains Inc. units and a portion of the general partner interest equating to 0.2 million equivalent limited partner units to maintain the general partner’s 2% interest, resulting in an accretive transaction for the unitholders. In conjunction with the sale:

The partnership received cash consideration of $2.7 million from Valero for the assignment of certain railcar operating leases.

The partnership amended the storage and throughput agreement with Green Plains Inc. to reduce the minimum volume commitment from 296.6 mmg of product per calendar quarter to 235.7 mmg, and to extend the terms an additional three years to June 30, 2028.

The Green Plains Partners revolver was reduced from $235 million to $200 million.

Results of Operations

Consolidated revenues decreased $5.0 million for the three months ended December 31, 2018, compared with the same period for 2017. Storage and throughput revenue decreased $3.4 million primarily due to a decrease in throughput and transload volumes driven by lower capacity utilization by Green Plains Inc., as well as Green Plains Inc.’s sale of the Bluffton, Lakota, and Riga plants. Revenues generated from rail transportation services decreased $1.5 million due to lower average rates charged for the railcar volumetric capacity provided as well as the reduction in volumetric capacity associated with the assignment of railcar operating leases to Valero in the fourth quarter of 2018. Revenues generated from terminal services decreased $0.1 million due to lower throughput at our fuel terminals.

Operations and maintenance expenses decreased $1.1 million for the three months ended December 31, 2018 compared with the same period for 2017, primarily due to a decrease in railcar lease expense.

General and administrative expenses increased $0.6 million for the three months ended December 31, 2018 compared with the same period for 2017, due to transaction costs incurred as part of the Valero transaction.

During the fourth quarter of 2018, Green Plains Inc.’s average utilization rate was approximately 62.5% of capacity, resulting in ethanol production of 205.1 million gallons, which was below the contracted minimum volume commitment. As a result, the partnership charged Green Plains Trade a deficiency payment of $3.0 million related to the minimum volume commitment during the fourth quarter of 2018. Total throughput for the fourth quarter of 2018 was 208.0 million gallons, which included an incremental 2.5 million gallons related to transload volumes.

GREEN PLAINS PARTNERS LP

SELECTED OPERATING DATA

(unaudited, in million gallons)

Three Months Ended

Twelve Months Ended

% Var.

Product volumes

Storage and throughput services

 208.0

 335.0

 (37.9

 1,134.7

 1,248.9

Terminal services:

Affiliate

 (12.4

 133.7

 161.5

 (17.2

Non-affiliate

 (21.5

 116.2

 131.8

 (11.8

 (16.7

 249.9

 293.3

 (14.8

Railcar capacity billed (daily average)

Liquidity and Capital Resources

Total liquidity as of December 31, 2018, was $66.6 million, including $0.6 million in cash and cash equivalents, and $66.0 million available under the partnership’s revolving credit facility. The balance outstanding on the partnership’s revolving credit facility was $134.0 million as of December 31, 2018.

Conference Call Information

Green Plains Partners LP and Green Plains Inc. will host a joint conference call Monday Feb. 11

at 11 a.m. Eastern time (10 a.m. Central time), to discuss fourth quarter 2018 financial and operating results for each company. Domestic and international participants can access the conference call by dialing 877.711.2374 and 281.542.4862, respectively, and referencing conference ID 3273159. Participants are advised to call at least 10 minutes prior to the start time. Alternatively, the conference call, transcript and presentation will be accessible on Green Plains Partners’ website at http://ir.greenplainspartners.com.

Non-GAAP Financial Measures

Adjusted EBITDA and distributable cash flow are supplemental financial measures used to assess the partnership’s financial performance. Management believes adjusted EBITDA and distributable cash flow provide investors useful information in assessing the partnership’s financial condition and results of operations. Adjusted EBITDA is defined as earnings before interest expense, income tax expense, depreciation and amortization, plus adjustments for transaction costs related to acquisitions or financings, minimum volume commitment deficiency payments, unit-based compensation expense, net gains or losses on asset sales and the partnership’s proportional share of EBITDA adjustments of equity method investees. Distributable cash flow is defined as adjusted EBITDA less interest paid or payable, income taxes paid or payable, maintenance capital expenditures and the partnership’s proportionate share of distributable cash flow adjustments of equity method investees. Adjusted EBITDA and distributable cash flow are not presented in accordance with generally accepted accounting principles (GAAP) and therefore should not be considered in isolation or as alternatives to net income or any other measure of financial performance presented in accordance with GAAP to analyze the partnership’s results.

About Green Plains Partners LP

Green Plains Partners LP (NASDAQ:GPP) is a fee-based Delaware limited partnership formed by Green Plains Inc. to provide fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage tanks, terminals, transportation assets and other related assets and businesses. For more information about Green Plains Partners, visit www.greenplainspartners.com.

About Green Plains Inc.

Green Plains Inc. (NASDAQ:GPRE) is a diversified commodity-processing business with operations related to ethanol production, grain handling and storage, cattle feeding, and commodity marketing and logistics services. The company is one of the leading producers of ethanol in the world and, through its adjacent businesses, is focused on the production of high-protein feed ingredients and export growth opportunities. Green Plains owns a 49.1% limited partner interest and a 2.0% general partner interest in Green Plains Partners. For more information about Green Plains, visit www.gpreinc.com.

Forward-Looking Statements

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements reflect management’s current views, which are subject to risks and uncertainties including, but not limited to, anticipated financial and operating results, plans and objectives that are not historical in nature. These statements may be identified by words such as “believe,” “expect,” “may,” “should,” “will” and similar expressions. Factors that could cause actual results to differ materially from those expressed or implied are discussed in Green Plains Partners’ reports filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. Green Plains Partners assumes no obligation to update any such forward-looking statements, except as required by law.

Consolidated Financial Results

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

ASSETS

(unaudited)

Current assets

Cash and cash equivalents

Accounts receivable, including from affiliates

 15,357

 19,974

Other current assets

 1,158

 Total current assets

 16,616

 21,634

Property and equipment, net

 40,911

 48,305

Other assets

 23,617

 22,329

Total assets

81,144

92,268

LIABILITIES AND PARTNERS' CAPITAL

Current liabilities

Accounts payable, including to affiliates

 3,177

 7,960

Other current liabilities

 5,011

 8,098

 Total current liabilities

 8,188

 16,058

Long-term debt

 142,025

 134,875

Other liabilities

 3,385

 4,181

 Total liabilities

 153,598

 155,114

Partners' capital

 (72,454

 (62,846

 Total liabilities and partners' capital

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands except per unit amounts)

Three Months Ended

Twelve Months Ended

 21,318

 26,789

 (20.4

 94,267

 100,808

 1,935

 1,461

 6,481

 6,185

Total revenues

 23,253

 28,250

 (17.7

 100,748

 106,993

Operating expenses

Operations and maintenance (excluding depreciation and

amortization reflected below)

 7,280

 8,340

 (12.7

 30,866

 33,501

 1,569

 5,258

 4,223

Depreciation and amortization

 1,036

 1,330

 (22.1

 4,442

 5,111

 (13.1

Gain on assignment of operating leases

 (2,721

 Total operating expenses

 7,164

 10,635

 (32.6

 37,845

 42,835

 (11.6

Operating income

 16,089

 17,615

 62,903

 64,158

Other income (expense)

Interest income

Interest expense

 (2,054

 (1,461

 (7,307

 (5,402

Other, net

 (70.7

 (20.7

 Total other expense

 (1,990

 (1,291

 (7,107

 (5,171

Income before income taxes and income (loss) from equity method investees

 14,099

 16,324

 (13.6

 55,796

 58,987

Income tax (expense) benefit

Income (loss) from equity method investees

 14,136

 16,339

 (13.5

 55,681

 58,867

Net income attributable to partners' ownership interests:

General partner

 (13.2

 1,114

 1,177

Limited partners - common unitholders

 13,853

 8,013

 37,868

 28,869

Limited partners - subordinated unitholders

 8,000

 16,699

 28,821

 (42.1

Earnings per limited partner unit (basic and diluted):

Common units

 1.81 

Subordinated units 

Weighted average limited partner units outstanding (basic

 27,390

 15,922

 20,950

 15,916 

 15,890

 9,752

 15,890 

Supplemental Revenues Data:

 13,325

 16,748

 59,290

 62,443 

Railcar transportation services

 6,275

 7,770

 (19.2

 26,055

 29,939 

 (13.0

 2,470

 2,593

 10,498

 11,309 

Trucking and other

 1,183

 1,139

 4,905

 3,302 

 106,993 

* Percentage variance not considered meaningful.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

Cash flows from operating activities:

Noncash operating adjustments:

 1,152

 1,038

Net change in working capital

 (3,163

Net cash provided by operating activities

 55,391

 64,054

Cash flows from investing activities:

Purchases of property and equipment, net

 (1,256

 (1,914

Proceeds from assignment of operating leases

 2,721

Contributions to equity method investees

 (1,425

 (2,248

Net cash provided by (used in) investing activities

 (4,162

Cash flows from financing activities:

Payments of distributions

 (61,805

 (57,771

Net proceeds (payments) - revolving credit facility

 7,100

 (2,100

Payments of loan fees

Net cash used in financing activities

 (55,364

 (60,012

Net change in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES

(unaudited, dollars in thousands)

 2,054

 7,307

 5,402

Income tax expense (benefit)

Minimum volume commitment adjustments

Transaction costs

Unit-based compensation expense

Proportional share of EBITDA adjustments of equity

method investees

Gain on assignment of operating leases

 15,169

 18,982

 65,972

 69,708

Interest paid or payable

Income taxes paid or payable

Maintenance capital expenditures

 13,082

 17,565

 58,514

 64,033

Distributions declared

 11,268

 15,306

 57,767

 59,124

Coverage ratio

(1) Adjustments related to the storage and throughput quarterly minimum volume commitments.

(2) Represents our proportional share of depreciation and amortization, interest expense, and income tax expense of equity method investees.

(3) Consideration received related to the assignment of railcar operating leases to Valero Renewable Fuels Company, LLC.

(4) Distributions declared for the applicable period and paid in the subsequent quarter.

Contact:

Jim Stark | Vice President, Investor & Media Relations | 402.884.8700 | jim.stark@gpreinc.com

The above information was disclosed in a filing to the SEC. To see the filing, click here.

To receive a free e-mail notification whenever Green Plains Partners LP makes a similar move, sign up!

Auto Refresh

Feedback