Pacific Ethanol Inc. (PEIX, Financial) filed Quarterly Report for the period ended 2009-09-30.
Pacific Ethanol, Inc. is currently in the business of marketing ethanol in the Western United States through Kinergy Marketing, a wholly-owned subsidiary of the Company and the largest West Coast-based marketer of renewable fuels. The Company intends, in the near future, to construct an ethanol production facility at its Madera County, California, site. Pacific Ethanol Inc. has a market cap of $22.5 million; its shares were traded at around $0.39 .
Although we are actively pursuing a number of alternatives, including seeking a confirmed plan of reorganization with respect to the Chapter 11 Filings, seeking to defer the $1.9 million payment owed to our judgment creditor, seeking to restructure our debt with Lyles United, LLC and Lyles Mechanical Co. and seeking to raise additional debt or equity financing, or both, there can be no assurance that we will be successful. If we cannot confirm a plan of reorganization with respect to the Chapter 11 Filings, defer the $1.9 million payment owed to our judgment creditor, restructure our debt and raise sufficient capital, in each case in a timely manner, we may need to seek further protection under the U.S. Bankruptcy Code, including at the parent-company level, which could occur prior to the end of the November 2009 and March 2010 periods anticipated above. In addition, we could be forced into bankruptcy or liquidation by our creditors, namely, our judgment creditor or Lyles United, LLC and Lyles Mechanical Co., or be forced to substantially restructure or alter our business operations or obligations. See “—Liquidity and Capital Resources” below.
Our average sales price per gallon decreased 29% to $1.73 for the three months ended September 30, 2009 from an average sales price per gallon of $2.45 for the three months ended September 30, 2008, while the average CBOT price per gallon decreased 32% to $1.59 for the three months ended September 30, 2009 from an average CBOT price per gallon of $2.34 for the three months ended September 30, 2008. Our average sales price per gallon did not decrease as much as the average CBOT price per gallon, and remained above the CBOT average price for the period.
Our average sales price per gallon decreased 30% to $1.70 for the nine months ended September 30, 2009 from an average sales price per gallon of $2.43 for the nine months ended September 30, 2008. The average CBOT price per gallon decreased 33% to $1.61 for the nine months ended September 30, 2009 from an average CBOT price per gallon of $2.40 for the nine months ended September 30, 2008. As in the three month period, our average sales price per gallon remained above the CBOT price per gallon.
Our selling, general and administrative expenses, or SG&A, decreased in absolute dollars, but increased as a percentage of net sales for the three months ended September 30, 2009. SG&A decreased by $3,516,000 to $3,215,000 for the three months ended September 30, 2009 as compared to SG&A of $6,731,000 for the same period in 2008. The decrease in the dollar amount of SG&A is primarily due to the following factors:
Our SG&A decreased in absolute dollars, but also increased as a percentage of net sales for the nine months ended September 30, 2009. SG&A decreased by $7,132,000 to $17,143,000 for the nine months ended September 30, 2009 as compared to SG&A of $24,275,000 for the same period in 2008. The decrease in SG&A is primarily due to the following factors:
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Pacific Ethanol, Inc. is currently in the business of marketing ethanol in the Western United States through Kinergy Marketing, a wholly-owned subsidiary of the Company and the largest West Coast-based marketer of renewable fuels. The Company intends, in the near future, to construct an ethanol production facility at its Madera County, California, site. Pacific Ethanol Inc. has a market cap of $22.5 million; its shares were traded at around $0.39 .
Highlight of Business Operations:
A payable in the amount of $1.9 million from a judgment arising out of litigation against us in 2008 is due on December 1, 2009. We do not believe that we will have sufficient funds to make this payment. As a result, we believe we have sufficient liquidity to meet our anticipated working capital, debt service and other liquidity needs through the end of November 2009. We are communicating with the judgment creditor in an attempt to defer the required $1.9 million payment. If we are able to defer the payment to the end of the first quarter of 2010, or later, we believe we will have sufficient liquidity to meet our anticipated working capital, debt service and other liquidity needs through the end of March 2010. Our expectations above concerning our available liquidity through November 2009 and March 2010 presume that Lyles United, LLC and Lyles Mechanical Co. do not pursue any action against us due to our default on an aggregate of $31.5 million of indebtedness to those entities and that we maintain our current levels of borrowing availability under our Wachovia line of credit.Although we are actively pursuing a number of alternatives, including seeking a confirmed plan of reorganization with respect to the Chapter 11 Filings, seeking to defer the $1.9 million payment owed to our judgment creditor, seeking to restructure our debt with Lyles United, LLC and Lyles Mechanical Co. and seeking to raise additional debt or equity financing, or both, there can be no assurance that we will be successful. If we cannot confirm a plan of reorganization with respect to the Chapter 11 Filings, defer the $1.9 million payment owed to our judgment creditor, restructure our debt and raise sufficient capital, in each case in a timely manner, we may need to seek further protection under the U.S. Bankruptcy Code, including at the parent-company level, which could occur prior to the end of the November 2009 and March 2010 periods anticipated above. In addition, we could be forced into bankruptcy or liquidation by our creditors, namely, our judgment creditor or Lyles United, LLC and Lyles Mechanical Co., or be forced to substantially restructure or alter our business operations or obligations. See “—Liquidity and Capital Resources” below.
Our average sales price per gallon decreased 29% to $1.73 for the three months ended September 30, 2009 from an average sales price per gallon of $2.45 for the three months ended September 30, 2008, while the average CBOT price per gallon decreased 32% to $1.59 for the three months ended September 30, 2009 from an average CBOT price per gallon of $2.34 for the three months ended September 30, 2008. Our average sales price per gallon did not decrease as much as the average CBOT price per gallon, and remained above the CBOT average price for the period.
Our average sales price per gallon decreased 30% to $1.70 for the nine months ended September 30, 2009 from an average sales price per gallon of $2.43 for the nine months ended September 30, 2008. The average CBOT price per gallon decreased 33% to $1.61 for the nine months ended September 30, 2009 from an average CBOT price per gallon of $2.40 for the nine months ended September 30, 2008. As in the three month period, our average sales price per gallon remained above the CBOT price per gallon.
Our selling, general and administrative expenses, or SG&A, decreased in absolute dollars, but increased as a percentage of net sales for the three months ended September 30, 2009. SG&A decreased by $3,516,000 to $3,215,000 for the three months ended September 30, 2009 as compared to SG&A of $6,731,000 for the same period in 2008. The decrease in the dollar amount of SG&A is primarily due to the following factors:
Our SG&A decreased in absolute dollars, but also increased as a percentage of net sales for the nine months ended September 30, 2009. SG&A decreased by $7,132,000 to $17,143,000 for the nine months ended September 30, 2009 as compared to SG&A of $24,275,000 for the same period in 2008. The decrease in SG&A is primarily due to the following factors:
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