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

Renewable Energy Group (REGI)

The Top Line. For 2018, net income from continuing operations of $295.8 million, or $6.78 per diluted share, compared to a net loss from continuing operations of $66.3 million, or $1.71 per diluted share y/y. Net loss from discontinued operations of $11.3 million, or $0.30 per diluted share, compared to net loss from discontinued operations of $12.8 million, or $0.33 per diluted share y/y. Adjusted EBITDA of $138.9 million, up from $25.3 million y/y, excluding allocation of the 2017 BTC. Revenues of $2.4 billion.

The Big Highlights. 649.2 million gallons of fuel sold. REG announced the selling of the Company’s life sciences business unit,” known as RE Life Sciences. “As a result, the fourth quarter and year-end financial statements have been adjusted to reflect the life sciences unit as discontinued operations for all historical periods,” the company added, “The Company also recognized a $11.2 million impairment charge related to this business unit in the fourth quarter of 2018.”

Potential bidders could include companies interested in REG Life Sciences’ collaborations with Clariant and ExxonMobil in fuels development, especially the cellulosic sugars-to-biodiesel pathways.

REG CEO CJ Warner, described it as “an outstanding result reflecting strong operational performance and a favorable margin environment,” said “In addition, we remain confident that Congress will reinstate the BTC for 2018 which we estimate would add approximately $237 million to our 2018 Adjusted EBITDA,” Warner added. “We are excited about the growth opportunities that this level of profitability would permit.”

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