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Green Plains Partners Reports Second Quarter 2023 Financial Results

By: via Business Wire

Results for the Second Quarter of 2023

  • Net income of $9.3 million, or $0.39 per common unit
  • Adjusted EBITDA of $12.7 million and distributable cash flow of $10.7 million
  • Quarterly cash distribution of $0.455 per unit
  • Distribution coverage ratio of 0.99x; LTM distribution coverage ratio of 1.01x
  • Leverage ratio, net of cash; 0.82x Adjusted EBITDA

Green Plains Partners LP (NASDAQ:GPP) today announced financial and operating results for the second quarter of 2023. Net income attributable to the partnership was $9.3 million, or $0.39 per common unit, for the second quarter of 2023, compared with net income of $10.5 million, or $0.44 per common unit, for the same period in 2022.

The partnership also reported adjusted EBITDA of $12.7 million and distributable cash flow of $10.7 million for the second quarter of 2023, compared with adjusted EBITDA of $12.9 million and distributable cash flow of $11.3 million for the same period in 2022. Distribution coverage was 0.99x for the three months ended June 30, 2023.

Second Quarter Highlights and Recent Developments

  • On July 20, 2023, the board of directors of the partnership’s general partner declared a quarterly cash distribution of $0.455 per unit, or approximately $10.8 million, for the second quarter of 2023. The distribution is payable on August 11, 2023, to unitholders of record at the close of business on August 4, 2023.

Results of Operations

Consolidated revenues for the three months ended June 30, 2023 increased by $0.9 million compared with the same period for 2022 primarily due to an increase in transportation service fees charged as a result of upgrading our leased railcar fleet to comply with government regulations and higher railcar volumetric capacity. Operations and maintenance expenses increased by $0.9 million for the three months ended June 30, 2023, compared with the same period for 2022, primarily due to higher railcar lease expense as a result of upgrading our leased railcar fleet. General and administrative expenses increased $0.7 million for the three months ended June 30, 2023 compared with the same period for 2022 primarily due to transaction costs related to the proposal from our parent to acquire all outstanding units of the partnership.

During the second quarter of 2023, Green Plains Inc.’s average production utilization rate was approximately 81.5% of capacity. Ethanol throughput was 196.1 million gallons, which was below the contracted minimum volume commitment. As a result, the Partnership charged Green Plains Trade $1.2 million related to the minimum volume commitment deficiency for the quarter, resulting in a credit to be applied against excess volumes in future periods. The cumulative balance of minimum volume deficiency credits available to Green Plains Trade as of June 30, 2023 was $1.7 million. If these credits are unused by Green Plains Trade, $0.5 million will expire on March 31, 2024 and $1.2 million will expire on June 30, 2024. These credits have been recognized in revenue by the partnership, and as such, future volumes throughput by Green Plains Trade in excess of the quarterly minimum volume commitment, up to the amount of these credits, will not be recognized in revenue in future periods.

 

GREEN PLAINS PARTNERS LP

SELECTED OPERATING DATA

(unaudited, in million gallons)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2023

 

2022

 

% Var.

 

2023

 

2022

 

% Var.

Product volumes (mmg)

 

 

 

 

 

 

 

 

 

 

 

Storage and throughput services

196.1

 

232.5

 

(15.7

)%

 

404.2

 

429.7

 

(5.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

Terminal services

 

 

 

 

 

 

 

 

 

 

 

Affiliate

30.1

 

27.7

 

8.7

 

 

56.4

 

55.0

 

2.5

 

Non-affiliate

25.9

 

23.7

 

9.3

 

 

50.5

 

45.2

 

11.7

 

 

56.0

 

51.4

 

8.9

 

 

106.9

 

100.2

 

6.7

 

 

 

 

 

 

 

 

 

 

 

 

 

Railcar capacity billed (daily avg.)

70.7

 

74.5

 

(5.1

)

 

71.7

 

72.1

 

(0.6

)

 

Liquidity and Capital Resources

Total liquidity as of June 30, 2023 consisted of $15.6 million in cash and cash equivalents. Total debt outstanding was $57.1 million, net of unamortized debt issuance costs of $0.4 million.

Conference Call Information

On August 4, 2023, Green Plains Partners LP and Green Plains Inc. will host a joint conference call at 9 a.m. Eastern time (8 a.m. Central time) to discuss second quarter of 2023 financial and operating results for each company. Domestic and international participants can access the conference call by dialing 888.210.4215 and 646.960.0269, respectively, and referencing conference ID 5027523. Participants are advised to call at least 10 minutes prior to the start time. Alternatively, the conference call will be accessible on Green Plains Partners’ website here.

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, depreciation and amortization, plus adjustments for transaction costs related to acquisitions or financing transactions, unit-based compensation expense, net gains or losses on asset sales, and the partnership’s proportional share of EBITDA adjustments of our equity method investee. Distributable cash flow is defined as adjusted EBITDA less interest paid or payable, net of interest received, income taxes paid or payable, maintenance capital expenditures and the partnership’s proportionate share of distributable cash flow adjustments of our equity method investee. References to LTM refer to results from the immediately preceding twelve-month period. Adjusted EBITDA and distributable cash flow are not presented in accordance with U.S. 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 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 leading biorefining company focused on the development and utilization of fermentation, agricultural and biological technologies in the processing of annually renewable crops into sustainable value-added ingredients. This includes the production of cleaner low carbon biofuels, renewable feedstocks for advanced biofuels and high purity alcohols for use in cleaners and disinfectants. Green Plains is an innovative producer of ultra-high protein and novel ingredients for animal and aquaculture diets to help satisfy a growing global appetite for sustainable protein. The Company also owns a 48.8% limited partner interest and a 2.0% general partner interest in Green Plains Partners LP. For more information, 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

GREEN PLAINS PARTNERS LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

June 30,

2023

 

December 31,

2022

 

(unaudited)

 

 

ASSETS

Current assets

 

 

 

Cash and cash equivalents

$

15,550

 

 

$

20,166

Accounts receivable, including from affiliates

 

15,200

 

 

 

12,997

Other current assets

 

1,520

 

 

 

1,410

Total current assets

 

32,270

 

 

 

34,573

Property and equipment, net

 

25,984

 

 

 

26,137

Operating lease right-of-use assets

 

55,189

 

 

 

47,002

Other assets

 

14,076

 

 

 

13,710

Total assets

$

127,519

 

 

$

121,422

 

 

 

 

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Current liabilities

 

 

 

Accounts payable, including to affiliates

$

4,043

 

 

$

4,225

Operating lease current liabilities

 

17,226

 

 

 

14,734

Other current liabilities

 

7,498

 

 

 

6,710

Total current liabilities

 

28,767

 

 

 

25,669

Long-term debt

 

57,101

 

 

 

58,559

Asset retirement obligations

 

3,534

 

 

 

2,862

Operating lease long-term liabilities

 

39,583

 

 

 

33,582

Total liabilities

 

128,985

 

 

 

120,672

 

 

 

 

Partners' equity (deficit)

 

(1,466

)

 

 

750

Total liabilities and partners' equity (deficit)

$

127,519

 

 

$

121,422

GREEN PLAINS PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands except per unit amounts)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2023

 

 

 

2022

 

 

% Var.

 

 

2023

 

 

 

2022

 

 

% Var.

Revenues

 

 

 

 

 

 

 

 

 

 

 

Affiliate

$

19,460

 

 

$

18,742

 

 

3.8

%

 

$

39,116

 

 

$

36,837

 

 

6.2

%

Non-affiliate

 

1,063

 

 

 

912

 

 

16.6

 

 

 

2,182

 

 

 

1,917

 

 

13.8

 

Total revenues

 

20,523

 

 

 

19,654

 

 

4.4

 

 

 

41,298

 

 

 

38,754

 

 

6.6

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Operations and maintenance (excluding depreciation and amortization reflected below)

 

7,070

 

 

 

6,160

 

 

14.8

 

 

 

14,323

 

 

 

11,725

 

 

22.2

 

General and administrative

 

1,625

 

 

 

925

 

 

75.7

 

 

 

2,855

 

 

 

2,110

 

 

35.3

 

Depreciation and amortization

 

828

 

 

 

823

 

 

0.6

 

 

 

1,644

 

 

 

1,721

 

 

(4.5

)

Total operating expenses

 

9,523

 

 

 

7,908

 

 

20.4

 

 

 

18,822

 

 

 

15,556

 

 

21.0

 

Operating income

 

11,000

 

 

 

11,746

 

 

(6.4

)

 

 

22,476

 

 

 

23,198

 

 

(3.1

)

Interest income

 

238

 

 

 

—

 

 

100.0

 

 

 

363

 

 

 

—

 

 

100.0

 

Interest expense

 

(1,910

)

 

 

(1,384

)

 

38.0

 

 

 

(3,807

)

 

 

(2,623

)

 

45.1

 

Income before income taxes and income from equity method investee

 

9,328

 

 

 

10,362

 

 

(10.0

)

 

 

19,032

 

 

 

20,575

 

 

(7.5

)

Income tax expense

 

(293

)

 

 

(39

)

 

651.3

 

 

 

(194

)

 

 

(77

)

 

151.9

 

Income from equity method investee

 

311

 

 

 

196

 

 

58.7

 

 

 

420

 

 

 

371

 

 

13.2

 

Net income

$

9,346

 

 

$

10,519

 

 

(11.2

)%

 

$

19,258

 

 

$

20,869

 

 

(7.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to partners' ownership interests

 

 

 

 

 

 

 

 

 

 

 

General partner

$

188

 

 

$

210

 

 

(10.5

)%

 

$

386

 

 

$

417

 

 

(7.4

)%

Limited partners - common unitholders

 

9,158

 

 

 

10,309

 

 

(11.2

)

 

 

18,872

 

 

 

20,452

 

 

(7.7

)

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per limited partner unit (basic and diluted)

 

 

 

 

 

 

 

 

 

 

 

Common units

$

0.39

 

 

$

0.44

 

 

(11.4

)%

 

$

0.81

 

 

$

0.88

 

 

(8.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average limited partner units outstanding (basic and diluted)

 

 

 

 

 

 

 

 

 

 

 

Common units

 

23,227

 

 

 

23,208

 

 

 

 

 

23,227

 

 

 

23,208

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Revenues Data

 

 

 

 

 

 

 

 

 

 

 

Storage and throughput services

$

11,565

 

 

$

11,570

 

 

—

%

 

$

23,129

 

 

$

23,128

 

 

—

%

Railcar transportation services

 

6,369

 

 

 

5,119

 

 

24.4

 

 

 

12,678

 

 

 

9,771

 

 

29.8

 

Terminal services

 

2,173

 

 

 

2,036

 

 

6.7

 

 

 

4,250

 

 

 

4,120

 

 

3.2

 

Trucking and other

 

416

 

 

 

929

 

 

(55.2

)

 

 

1,241

 

 

 

1,735

 

 

(28.5

)

Total revenues

$

20,523

 

 

$

19,654

 

 

4.4

%

 

$

41,298

 

 

$

38,754

 

 

6.6

%

GREEN PLAINS PARTNERS LP

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited, in thousands)

 

 

Six Months Ended

June 30,

 

 

2023

 

 

 

2022

 

Cash flows from operating activities

 

 

 

Net income

$

19,258

 

 

$

20,869

 

Noncash operating adjustments

 

 

 

Depreciation and amortization

 

1,644

 

 

 

1,721

 

Other

 

(399

)

 

 

(53

)

Net change in working capital

 

(1,888

)

 

 

(1,343

)

Net cash provided by operating activities

 

18,615

 

 

 

21,194

 

 

 

 

 

Cash flows from investing activities

 

 

 

Purchases of property and equipment

 

(129

)

 

 

(305

)

Net cash used in investing activities

 

(129

)

 

 

(305

)

 

 

 

 

Cash flows from financing activities

 

 

 

Payments of distributions

 

(21,586

)

 

 

(20,976

)

Principal payments on long-term debt

 

(1,500

)

 

 

(1,031

)

Other

 

(16

)

 

 

—

 

Net cash used in financing activities

 

(23,102

)

 

 

(22,007

)

 

 

 

 

Net change in cash and cash equivalents

 

(4,616

)

 

 

(1,118

)

Cash and cash equivalents, beginning of period

 

20,166

 

 

 

17,645

 

Cash and cash equivalents, end of period

$

15,550

 

 

$

16,527

 

GREEN PLAINS PARTNERS LP

RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES

(unaudited, in thousands except ratios)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

LTM Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

Net income

 

9,346

 

 

 

10,519

 

 

 

19,258

 

 

 

20,869

 

 

 

39,039

 

Interest expense, net

 

1,672

 

 

 

1,384

 

 

 

3,444

 

 

 

2,623

 

 

 

6,745

 

Income tax expense

 

293

 

 

 

39

 

 

 

194

 

 

 

77

 

 

 

198

 

Depreciation and amortization

 

828

 

 

 

823

 

 

 

1,644

 

 

 

1,721

 

 

 

4,016

 

Transaction costs

 

455

 

 

 

—

 

 

 

455

 

 

 

—

 

 

 

455

 

Unit-based compensation expense

 

60

 

 

 

60

 

 

 

119

 

 

 

119

 

 

 

240

 

Proportional share of EBITDA adjustments of equity method investee (1)

 

45

 

 

 

45

 

 

 

90

 

 

 

90

 

 

 

180

 

Adjusted EBITDA

 

12,699

 

 

 

12,870

 

 

 

25,204

 

 

 

25,499

 

 

 

50,873

 

Interest paid or payable, net of interest received

 

(1,672

)

 

 

(1,384

)

 

 

(3,444

)

 

 

(2,623

)

 

 

(6,745

)

Income taxes paid or payable

 

(293

)

 

 

(39

)

 

 

(194

)

 

 

(77

)

 

 

(198

)

Maintenance capital expenditures

 

(4

)

 

 

(126

)

 

 

(84

)

 

 

(258

)

 

 

(410

)

Distributable cash flow (2)

$

10,730

 

 

$

11,321

 

 

$

21,482

 

 

$

22,541

 

 

$

43,520

 

Distributions declared (3)

$

10,802

 

 

$

10,666

 

 

$

21,595

 

 

$

21,213

 

 

$

43,190

 

Coverage ratio

 

0.99x

 

 

 

1.06x

 

 

 

0.99x

 

 

 

1.06x

 

 

 

1.01x

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

 

 

 

 

 

 

$

57,101

 

Less: Cash and cash equivalents

 

 

 

 

 

 

 

 

 

15,550

 

Long-term debt, net of cash and cash equivalents

 

 

 

 

 

 

 

 

$

41,551

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

$

50,873

 

Leverage ratio

 

 

 

 

 

 

 

 

 

0.82x

 

 

(1) Represents our proportional share of depreciation and amortization of our equity method investee.

(2) Distributable cash flow does not include adjustments for the principal payment on the term loan of $1.5 million for the three and six months ended June 30, 2023. Distributable cash flow does not include adjustments for the principal payments on the term loan of $1.0 million for the six months ended June 30, 2022.

(3) Represents distributions declared for the applicable period and paid in the subsequent quarter.

 

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