Learnings from the Earnings – Who’s Up? Who’s Down?

Green Plains (GPRE)

The Top Line. Results for the full year of 2018 include revenues of $3.9 billion and net income of $15.9 million, or $0.39 per diluted share. EBITDA of $224.7 million, inclusive of a $150.4 million gain on the sale of assets and $4.2 million of severance expense.

The Big Highlights. Green Plains’ portfolio optimization plan said it would divest assets that do not support the company’s strategic focus on the production of high-protein feed ingredients and ethanol exports to significantly reduce or eliminate the company’s term debt and invest in high-protein process technology at certain ethanol facilities. And that it did.

“Our cash position and balance sheet remain solid even as the ethanol industry margin environment has been under pressure for an extended period of time,” stated Todd Becker, president and chief executive officer. “We executed on each component of the portfolio optimization plan during the quarter by proving value of our assets through the sale of certain ethanol plants and the vinegar business as well as paying off our term loan B which achieved the milestone of having no direct encumbered ethanol assets for the first time in the company’s history. We also achieved a nearly $19 million forward run-rate reduction in annualized controllable expenses, we executed a small share repurchase and continued construction on our first high-protein technology project in Shenandoah. We continue to carry out the portfolio optimization plan, as we look to divest additional assets and focus on capital allocation in the future.”

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