US Bioenergy Corp (MM) (NASDAQ:USBE)
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US BioEnergy Corporation (NASDAQ: USBE) today reported net income of
$17.4 million, or $0.23 per diluted share, for the full year ended
December 31, 2007. Total revenues for the year were $588.6 million,
while the Company generated $61.4 million of EBITDA.
The company reported a net loss of $7.2 million, or $0.09 per share, for
the quarter ended December 31, 2007, due primarily to a $14.0 million
charge for mark-to-market losses related to the Company’s
commodity hedging activities. In addition, the company incurred a
one-time expense of $2.8 million, related to the company’s
pending merger with VeraSun Energy Corporation. Revenues for the quarter
were $151.9 million and EBITDA was ($2.8) million.
“We are very pleased to deliver another
quarter of robust production and sales," said Gordon Ommen, US BioEnergy’s
CEO. ”It was the second full quarter of
production at our Ord, Neb. plant. In February 2008, we commenced
operations at our newly acquired Marion plant. We now have five plants
in operation and three additional plants under construction with a total
production capacity of 750 million gallons per year (mmgy). We look
forward to completing our merger with VeraSun and becoming the largest
ethanol producer in the country.”
During the fourth quarter of 2007, the company sold 73.8 million gallons
of ethanol at an average selling price of $1.77 per gallon, compared
with 73.2 million gallons of ethanol at an average selling price of
$1.76 per gallon for the third quarter of 2007.
After taking hedging related gains and losses into account, the
company's corn costs averaged $3.47 per bushel, or $1.23 per gallon of
ethanol sold, for the fourth quarter of 2007, compared to $3.15 per
bushel, or $1.10 per gallon of ethanol sold, for the third quarter of
2007. Before taking hedging gains into account, corn costs averaged
$3.59 per bushel, or $1.27 per gallon of ethanol sold, compared with
$3.58 per bushel, or $1.25 per gallon of ethanol sold in the third
quarter of 2007.
Milestones the company achieved during 2007 include the following:
Began construction of an ethanol plant near Janesville, Minn.
Entered into five senior secured credit facilities with AgStar
Financial Services, PCA, as administrative agent and as a lender, and
a group of other lenders to provide financing for the Ord, Hankinson,
Dyersville and Janesville construction projects and to refinance the
Platte Valley credit facility
Completed construction of the Ord plant and commenced operations
Acquired Millennium Ethanol, LLC, an ethanol plant that was under
construction near Marion, S.D. and commenced operations at the plant
in February 2008
Entered into a merger agreement with VeraSun Energy Corporation
(VeraSun)
Sold United Bio Energy Ingredients, LLC, and UBE Services, LLC, a
third-party distillers grains marketing and services businesses
The company currently owns and operates five ethanol plants, which have
combined production capacity of 420 mmgy and has the following plants
under construction:
Hankinson, N.D., a 110 mmgy facility, which is expected to start
producing ethanol in the first half of 2008.
Dyersville, Iowa, a 110 mmgy facility, which is expected to start
producing ethanol in the second half of 2008.
Janesville, Minn., a 110 mmgy facility, which is expected to start
producing ethanol in the second half of 2008.
The company's total construction expenditures for 2007 were $369.8
million, which were primarily comprised of the following: Hankinson
$111.3 million, Dyersville $112.3 million, Janesville $76.0 million, and
Marion $27.9 million. The remaining construction-related costs of $174.3
million to complete each of these projects are expected to be fully
funded through available construction loans.
At December 31, 2007, total cash and cash equivalents were $54.4
million, compared to $170.1 million on December 31, 2006. None of the
company’s cash is invested in auction rate
securities. Total debt as of December 31, 2007 was $430.3 million
compared to $150.1 million on December 31, 2006. Equity, as a percentage
of total capitalization, was approximately 59 percent as of December 31,
2007.
Selected Results
Three months ended
Three months ended
Three months ended
Three months ended
December 31, 2007
September 30, 2007
June 30, 2007
March 31, 2007
Sales volumes (in thousands):
Ethanol gallons sold
73,794
73,178
67,068
59,726
Distillers grains tons sold
365
346
302
272
Production volumes (in thousands)
Ethanol gallons produced
72,896
73,107
68,188
58,660
Distillers grains tons produced
364
346
305
262
Average price realizations
Ethanol sales price per gallon
$
1.77
$
1.76
$
1.91
$
1.90
Distillers grain sales price per gallon
$
0.26
$
0.25
$
0.26
$
0.26
Average cost
Corn - no hedging impact (per bushel)
$
3.59
$
3.58
$
3.79
$
3.52
Corn - w/ hedging impact (per bushel)
$
3.47
$
3.15
$
3.97
$
3.64
Corn - no hedging impact (per gallon of ethanol)
$
1.27
$
1.25
$
1.35
$
1.21
Corn - w/ hedging impact (per gallon of ethanol)
$
1.23
$
1.10
$
1.41
$
1.25
Natural gas - no hedging impact (per mmbtu)
$
6.62
$
5.25
$
7.31
$
7.19
Natural gas - w/ hedging impact (per mmbtu)
$
6.62
$
5.25
$
7.36
$
6.88
Natural gas - no hedging impact (per gallon of ethanol)
$
0.16
$
0.13
$
0.18
$
0.20
Natural gas - w/ hedging impact (per gallon of ethanol)
$
0.16
$
0.13
$
0.18
$
0.19
COGS - w/ hedging impact (per gallon of ethanol)
$
1.98
$
1.62
$
1.97
$
1.89
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 since April
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 the industry
because the calculation of EBITDA generally eliminates the effects of
financings and income taxes, items that 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 you
should not consider it in isolation or as a substitute for analysis of
our 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, working
capital requirements;
EBITDA does not reflect the cash necessary to make payments of
interest or principal on indebtedness; and
EBITDA includes non-recurring payments which are reflected in other
income.
Because of these limitations, EBITDA should not be considered as a
measure of discretionary cash available to service debt or to invest in
the growth of our business. Management compensates for these limitations
by relying on GAAP results as well as EBITDA.
Conference Call
The company will host a conference call today at 10:00 a.m. Central
Time. Investors interested in listening to the call can dial (888)
895-4463 and reference conference ID 37569771. This call will be webcast
and can be accessed via US BioEnergy's Web site at www.usbioenergy.net
(follow the instructions on the Investor Relations page). A replay of
the webcast will be available through March 31, 2008. 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 37569771.
About US BioEnergy Corporation
US BioEnergy Corporation (NASDAQ: USBE), based in St. Paul, Minn., is a
leading producer and marketer of ethanol and distillers grains. Founded
in 2004, the company currently owns and operates five ethanol plants in
Albert City, Iowa, Marion, S.D., Ord and Platte Valley, Neb., and
Woodbury, Mich. Three additional ethanol plants are currently under
construction in Hankinson, N.D., Dyersville, Iowa, and Janesville, Minn.
Upon completion of these initiatives, the company will own and operate
eight plants with combined expected ethanol production capacity of 750
million gallons.
Forward-Looking Statements:
Certain statements in this release, and other written or oral statements
made by or on behalf of us, are "forward-looking statements" within the
meaning of the federal securities laws. Statements regarding future
events and developments and our future performance, as well as
management's expectations, anticipations, beliefs, plans, targets,
estimates, or projections and similar expressions relating to the
future, are forward-looking statements within the meaning of these laws.
These statements are based on assumptions and assessments made by our
management in light of their experience and their perception of
historical trends, current conditions, expected future developments and
other factors they believe to be appropriate. Any forward-looking
statements are not guarantees of our future performance and are subject
to risks and uncertainties that could cause actual results, developments
and business decisions to differ materially from those contemplated by
any forward-looking statements. We disclaim any duty to update any
forward-looking statements. Some of the factors that may cause actual
results, developments and business decisions to differ materially from
those contemplated by any forward-looking statements include the
volatility and uncertainty of corn, natural gas, ethanol and unleaded
gasoline prices; the completion and results of our pending merger with
VeraSun Energy; the results of our recently acquired Marion, SD
facility; the results of our hedging transactions and other risk
mitigation strategies; operational disruptions at our facilities; our
ability to implement our expansion strategy as planned or at all; our
ability to locate and integrate potential future acquisitions;
development of infrastructure related to the sale and distribution of
ethanol; our limited operating history; excess production capacity in
our industry; our ability to compete effectively in our industry; our
ability to implement a marketing and sales network for our ethanol;
changes in or elimination of governmental laws, tariffs, trade or other
controls or enforcement practices; environmental, health and safety
laws, regulations and liabilities; our reliance on key management
personnel; future technological advances; limitations and restrictions
contained in the instruments and agreements governing our indebtedness;
our ability to raise additional capital and secure additional financing;
and costs of construction and equipment, as more fully described in the
"Risk Factors" section of our annual report on Form 10-K for the year
ended December 31, 2007.
Additional Information
In connection with the proposed transaction between VeraSun Energy and
US BioEnergy, VeraSun has filed with the SEC a registration statement on
Form S-4 containing a definitive joint proxy statement of VeraSun and US
BioEnergy that also constitutes a prospectus of VeraSun, which was
mailed to the shareholders of VeraSun and US BioEnergy. SHAREHOLDERS ARE
URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS, AND ANY OTHER
RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT VERASUN, US BIOENERGY AND THE
PROPOSED TRANSACTION. The joint proxy statement/prospectus and other
documents relating to the proposed transaction (when they are available)
can be obtained free of charge from the SEC's website at http://www.sec.gov.
These documents (when they are available) can also be obtained free of
charge from US BioEnergy upon written request to VeraSun Energy
Corporation, Attention: Investor Relations, 100 22nd Avenue, Brookings,
South Dakota 57006, or by calling 605-696-7236, or from US BioEnergy,
upon written request to US BioEnergy Corporation, Attention: Investor
Relations, 5500 Cenex Drive, Inver Grove Heights, Minnesota 55077, or by
calling 651-554-5491.
US BioEnergy Corporation
Condensed Consolidated Balance Sheets
(in thousands, except share data)
December 31,
December 31,
2007
2006
ASSETS
Current Assets
Cash and cash equivalents
$
54,432
$
170,099
Receivables
42,609
40,958
Inventories
40,368
28,420
Deferred income taxes
4,279
-
Prepaid expenses and other current assets
9,989
7,306
Total current assets
151,677
246,783
Other Assets
Goodwill
63,991
65,489
Other long-term assets
10,036
9,294
74,027
74,783
Property and equipment, net
943,141
408,814
Total assets
$
1,168,845
$
730,380
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Current maturities of long-term debt
$
17,024
$
8,131
Accounts payable
10,035
45,489
Accrued expenses
20,170
5,483
Deferred income tax liability
-
2,913
Notes payable
-
1,815
Total current liabilities
47,229
63,831
Long-term debt
413,298
140,128
Construction payable
31,488
14,944
Deferred income taxes
47,839
27,099
Other long-term liabilities
811
-
Total long term liabilities
493,436
182,171
Total liabilities
540,665
246,002
Minority interest in subsidiary
3,921
-
Commitments and Contingencies
Shareholders' Equity
Preferred stock, $0.01 par value, authorized 75,000,000 shares,
issued none
-
-
Common stock, $0.01 par value, authorized 750,000,000 shares;
79,582,679 and 67,968,885 shares issued and outstanding as of
December 31, 2007 and December 31, 2006, respectively
796
679
Additional paid-in capital
589,710
467,552
Retained earnings
33,753
16,147
Total shareholders' equity
624,259
484,378
Total liabilities and shareholders' equity
$
1,168,845
$
730,380
US BioEnergy Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
December 31, 2007
September 30, 2007
(Unaudited)
Revenues:
Product sales
$
150,539
$
147,178
Other revenues
1,409
2,867
Total revenues
151,948
150,045
Cost of goods sold:
Cost of product sales
146,444
119,318
Other cost of goods sold
693
1,942
Total cost of goods sold
147,137
121,260
Gross profit
4,811
28,785
Selling, general and administrative expenses
12,518
10,846
Loss on impairment of asset
-
2,471
Operating income
(7,707
)
15,468
Other income (expense):
Interest expense
(371
)
(1,425
)
Interest income
944
1,257
Other income
(3,142
)
7
Equity in net income of unconsolidated subsidiary
645
1,094
(1,924
)
933
Income before income taxes and minority interest
(9,631
)
16,401
Federal and state income tax expense
2,411
(5,330
)
Minority interest in net loss of subsidiary
21
7
Net income
$
(7,199
)
$
11,078
Income per common share:
Basic
$
(0.09
)
$
0.15
Diluted
(0.09
)
0.15
Weighted average shares outstanding:
Basic
79,633
72,043
Diluted
80,424
72,908
US BioEnergy Corporation
Consolidated Statements of Cash Flows
(dollars in thousands)
Twelve Months Ended
December 31,
2007
2006
Cash Flows from Operating Activities
Net income (loss)
$
17,406
$
20,432
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation
23,271
6,487
Amortization
1,189
1,031
Minority interest in net loss of subsidiary
(79
)
(391
)
Distributions received from unconsolidated subsidiary
1,347
Stock-based compensation expense
2,939
399
Deferred income taxes
13,214
9,905
Change in derivative financial instruments
19,650
(6,785
)
Equity in net income of unconsolidated subsidiary
(2,827
)
(456
)
Other, net
666
-
Gain on sale of 50% interest in Provista
-
(1,764
)
Loss on impairment of assets
2,471
-
Other changes in operating assets and liabilities, exclusive of
acquisitions and dispositions
Receivables
(11,487
)
(34,191
)
Inventories
(11,948
)
(28,884
)
Accounts payable
(18,025
)
13,762
Accrued expenses and other current liabilities
16,012
3,012
Other, net
(24,724
)
619
Net cash provided by (used in) operating activities
29,075
(16,824
)
Cash Flows from Investing Activities
Purchases of property and equipment
(369,806
)
(206,010
)
Acquisition of development stage companies, net of cash received
(15,633
)
(21,481
)
Proceeds from disposition of subsidiaries
4,826
2,400
Deposits
4,307
(4,307
)
Other, net
107
(830
)
Net cash used in investing activities
(376,199
)
(230,228
)
Cash Flows from Financing Activities
Proceeds from long-term debt
299,617
119,242
Payments on long-term debt
(51,429
)
(1,645
)
Net change in notes payable
(1,815
)
13,951
(Decrease) increase in checks written on controlled disbursement
account
(13,270
)
6,787
Debt issuance costs paid
(1,717
)
(977
)
Proceeds from the issuance of common stock
71
255,499
Deferred offering costs paid
-
(16,156
)
Net cash provided by financing activities
231,457
376,701
Net (decrease) increase in cash and cash equivalents
(115,667
)
129,649
Cash and Cash Equivalents
Beginning of year
170,099
40,450
End of year
$
54,432
$
170,099
US BioEnergy Corporation
EBITDA
Twelve months ended Dec. 31, 2007
Three months ended Dec. 31, 2007
Net Income
$
17,406
$
(7,199
)
Interest Expense
8,609
371
Income Taxes
11,706
(2,411
)
Depreciation
23,271
6,395
Amortization
376
-
EBITDA
$
61,368
$
(2,844
)