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BioFuel Energy Corp. (BIOF) filed Quarterly Report for the period ended 2011-09-30.
Biofuel Energy Corp. has a market cap of $59.87 million; its shares were traded at around $0.575 with and P/S ratio of 0.13.
This is the annual revenues and earnings per share of BIOF over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of BIOF.
Highlight of Business Operations:
Our operations and cash flows are subject to wide and unpredictable fluctuations primarily due to changes in commodity prices, specifically, the price of our main commodity input, corn, relative to the price of our main commodity product, ethanol, which is known in the industry as the “crush spread”. The prices of these commodities are volatile and beyond our control. As a result of the volatility of the prices for these and other items, our results fluctuate substantially and in ways that are largely beyond our control. For example, as shown in the accompanying consolidated financial statements, the Company was profitable during the three months ended September 30, 2011, with net income of $2.5 million, as commodity margins improved significantly from earlier in the year. However, primarily due to narrow commodity margins in the first half of the year, the Company incurred a net loss of $14.8 million during the nine months ended September 30, 2011.Net Sales: Net Sales were $162.5 million for the three months ended September 30, 2011 compared to $114.7 million for the three months ended September 30, 2010, an increase of $47.8 million or 41.7%. This increase was primarily attributable to an increase in ethanol revenues of $35.4 million and an increase in distillers grain revenues of $12.4 million. The increase in both ethanol and distillers grain revenue was primarily due to an increase in the per unit price we received for each product, reflecting increases in their respective market prices compared to the year ago period. This increase was partially offset by lower production of each product as compared to the year ago period resulting from four day fall maintenance shutdowns at both plants in September 2011 and reduced grind rates due to a tightened corn supply.
Net Sales: Net Sales were $489.1 million for the nine months ended September 30, 2011 compared to $312.0 million for the nine months ended September 30, 2010, an increase of $177.1 million or 56.8%. This increase was primarily attributable to an increase in ethanol revenues of $138.5 million and an increase in distillers grain revenues of $38.6 million. The increase in both ethanol and distillers grain revenue was primarily due to an increase in the per unit price we received for each product, reflecting increases in their respective market prices compared to the year ago period.
Our principal liquidity needs are expected to be funding our plant operations, capital expenditures, debt service requirements, and general corporate purposes. As noted elsewhere in this report, the Company was profitable during the three months ended September 30, 2011, with net income of $2.5 million, as commodity margins improved significantly from earlier in the year. However, primarily due to the narrow commodity margins in the first half of the year, the Company incurred a net loss of $14.8 million during the nine months ended September 30, 2011. We have had, and continue to have, limited liquidity. We cannot predict when or if crush spreads will fluctuate again or if the current commodity margins will improve or worsen. If crush spreads were to narrow again and continue there for an extended period of time, we may expend all of our other sources of liquidity, in which event we would not be able to pay principal or interest on our debt. Any inability to pay principal or interest on our debt would lead to an event of default under our Senior Debt facility and, in the absence of forbearance, debt service abeyance or other accommodations from our lenders could require us to seek relief through a filing under the U.S. Bankruptcy Code.
The Senior Debt facility is secured by a first priority lien on all right, title and interest in and to the Wood River and Fairmont plants and any accounts receivable or property associated with those plants and a pledge of all of our equity interests in the Operating Subsidiaries. The Operating Subsidiaries have established collateral deposit accounts maintained by an agent of the banks, into which our revenues are deposited, subject to security interests to secure any outstanding obligations under the Senior Debt facility. These funds are then allocated into various sweep accounts held by the collateral agent, including accounts that provide funds for the operating expenses of the Operating Subsidiaries. The collateral accounts have various provisions, including historical and prospective debt service coverage ratios and debt service reserve requirements, which determine whether there is, and the amount of, cash available to the LLC from the collateral accounts each month. The terms of the Senior Debt facility also include covenants that impose certain limitations on, among other things, the ability of the Operating Subsidiaries to incur additional debt, grant liens or encumbrances, declare or pay dividends or distributions, conduct asset sales or other dispositions, merge or consolidate, and conduct transactions with affiliates. The terms of the Senior Debt facility also include customary events of default including failure to meet payment obligations, failure to pay financial obligations, failure of the Operating Subsidiaries of the LLC to remain solvent and failure to obtain or maintain required governmental approvals. Under the terms of separate management services agreements between our Operating Subsidiaries and the LLC, the Operating Subsidiaries pay a monthly management fee of $834,000 to the LLC to cover salaries, rent, and other operating expenses of the LLC, which payments are unaffected by the terms of the Senior Debt facility or the collateral accounts.
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