Renewable Energy Group, Inc. (NASDAQ:REGI) announced today that the Company is revising its earnings guidance for third quarter 2015.
REG now expects to report a net loss of $9 million to $15 million and non-GAAP adjusted EBITDA in the range of negative $7 million to negative $13 million, which is below the Company's prior guidance of adjusted EBITDA in the range of $0 to $10 million.
“Throughout the quarter, we experienced a volatile commodity environment coupled with a significant decline in RIN prices,” said REG President and CEO Daniel J. Oh. “Feedstock prices did not decline as significantly as energy prices and RINs during the quarter, mainly due to continued high industry production levels in anticipation of a retroactive reinstatement of the federal biodiesel mixture excise tax credit.”
If the tax credit is retroactively reinstated as anticipated, the net benefit to REG for the quarter would be between $35 million and $40 million.
The Company also gave a time range for resumption of production at its Geismar, LA renewable hydrocarbon diesel biorefinery following the September 3 fire at the plant.
“Our first priority at Geismar remains the recovery of our employee and the three contractors who were injured,” said Oh. “Our thoughts and prayers remain with them and their families.”
“The structural damage from the September fire was far less than the April incident. We continue to have great confidence in the technology and facility. Our current estimate is that our team will have the plant back online by the end of January.”
Note Regarding Use of Non-GAAP Financial Measures
In this
press release, the Company presents adjusted EBITDA, a non-GAAP measure.
A reconciliation of adjusted EBITDA to net income determined in
accordance with GAAP is included in the table below. We have included
adjusted EBITDA in this press release in order to assist investors in
analyzing performance across reporting periods on a consistent basis by
excluding items that are not believed to be indicative of core operating
performance. Adjusted EBITDA is used by the Company to evaluate, assess
and benchmark financial performance on a consistent and comparable basis
and as a factor in determining incentive compensation for Company
executives. Accordingly, we believe that adjusted EBITDA provides useful
information to investors and analysts in understanding and evaluating
our operating results in the same manner as our management and board of
directors. Our use of adjusted EBITDA has limitations as an analytical
tool and should not be considered in isolation or as a substitute for
analysis of our results as reported under GAAP. In particular, many of
the adjustments to our GAAP financial measures reflect the exclusion of
items, specifically interest, tax and depreciation and amortization
expenses, equity-based compensation expense and certain other
non-operating expenses, that are recurring and will be reflected in our
financial results for the foreseeable future. In addition, these
measures may be calculated differently from similarly titled non-GAAP
financial measures used by other companies, limiting their usefulness
for comparison purposes.
The following table sets forth a reconciliation of the preliminary range of adjusted EBITDA for the third quarter to net loss computed in accordance with GAAP:
(in millions) | ||||
Three months ended | ||||
September 30, 2015 | ||||
Range | ||||
Adjusted EBITDA | Low | High | ||
Net loss | (14.6) | (8.6) | ||
Depreciation and amortization | 7.6 | 7.6 | ||
Stock based compensation | 1.2 | 1.2 | ||
Interest expense | 1.9 | 1.9 | ||
Other | (9.1) | (9.1) | ||
Adjusted EBITDA | (13.0) | (7.0) | ||
About Renewable Energy Group
Renewable Energy Group, Inc. is a leading North American advanced biofuels producer and developer of renewable chemicals. REG utilizes a nationwide production, distribution and logistics system as part of an integrated value chain model to focus on converting natural fats, oils and greases into advanced biofuels and converting diverse feedstocks into renewable chemicals. With 11 active biorefineries across the country, research and development capabilities and a diverse and growing intellectual property portfolio, REG is committed to being a long-term leader in bio-based fuels and chemicals.
For more than a decade, REG has been a reliable supplier of advanced biofuels which meet or exceed ASTM quality specifications. REG sells REG-9000™ biomass-based diesel to distributors so consumers can have cleaner burning fuels that help diversify the energy complex and increase energy security. REG-9000™ biomass-based diesel is distributed in most states in the US. REG also markets ultra-low sulfur diesel and heating oil in the northeastern and midwestern US. For more information on REG visit our website at www.regi.com.
Note Regarding Forward-Looking Statements
This press release
contains certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 as amended, including
statements regarding its anticipated third quarter 2015 financial
results, including net loss and adjusted EBITDA, its expectations
regarding the retroactive reinstatement of the federal biodiesel mixture
excise tax credit and its expectations regarding its Geismar, LA
renewable hydrocarbon diesel biorefineries. These forward-looking
statements are based on current expectations, estimates, assumptions and
projections that are subject to change, and actual results may differ
materially from the forward-looking statements. Factors that could cause
actual results to differ materially include, but are not limited to
finalization of the third quarter financial results, the failure of the
federal biodiesel mixture excise tax credit to be reinstated
retroactively, unexpected delays in our repair Geismar, LA biorefinery,
and other risks and uncertainties described from time to time in REG's
quarterly reports on Forms 10-Q for the period ended June 30, 2015,
annual report on Form 10-K for the year ended December 31, 2014 and
other periodic filings with the Securities and Exchange Commission. All
forward-looking statements are made as of the date of this press release
and REG does not undertake to update any forward-looking statements
based on new developments or changes in our expectations.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151014005760/en/
Contacts:
Media Contact:
Anthony
Hulen, 703-822-1972
Executive Director, Corporate Affairs
anthony.hulen@regi.com
or
Investor
Relations Contact:
Todd Robinson, 515-239-8048
Director,
Investor Relations
todd.robinson@regi.com