Green Plains Inc. (NASDAQ:GPRE) Q4 2019 Earnings Conference Call - Final Transcript

Feb 11, 2020 • 11:00 am ET


Green Plains Inc. (NASDAQ:GPRE) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the Green Plains Incorporated and Green Plains Partners Fourth Quarter and Full Year 2019 Earnings Conference Call. Following the Company's prepared remarks, instructions will be provided for Q&A. At this time, all participants are in a listen-only mode.

I will now turn the conference call over to your host, Phil Boggs, Senior Vice President, Investor Relations and Treasurer. Mr. Boggs, please go ahead.

Phil Boggs

Thanks, Daniel. Welcome to Green Plains, Inc. and Green Plains Partners fourth quarter 2019 earnings call. Participants on today's call are Todd Becker, President and Chief Executive Officer; Patrich Simpkins, our Chief Financial Officer; and Walter Cronin, our Chief Commercial Officer. There is a slide presentation available, and you can find the presentation on the Investor page under the Events and Presentations link on both corporate websites.

During this call, we will be making forward-looking statements, which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in yesterday's press releases and the comments made during this conference call and in the Risk Factors section of our Form 10-K, Form 10-Q and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement.

Now, I'd like to turn the call over to Todd Becker.

Todd Becker

Good morning, and thank you for joining our call today. For the quarter, we reported adjusted net loss of $14.4 million or $0.41 a diluted share, which excludes a reversal of a deferred tax asset of $25 million that affected EPS negatively. This was a non-cash adjustment and had no impact on our financial strength. As expected, the financial results were improved from the prior quarter due to the ethanol margin environment at the beginning of the fourth quarter.

We reported $16 million in adjusted EBITDA for the quarter, and we were free cash flow positive as well. We remain net debt zero against our convertible debt, as the debt at GPP is non-recourse to the parent and the revolvers at Green Plains, Inc. are secured against receivables and inventories. We are in a position -- we are in this position as an outcome of our portfolio optimization plan.

We are now embarking on a total transformation plan, which I will discuss later in the call as well. Our quarter was also impacted negatively by a shutdown -- by the shutdown of Wood River for our Project 24 upgrade and the final stages of the Madison shutdown as these occurred during a positive margin environment, and we believe this affected our quarter negatively by $0.02 a gallon to $0.03 a gallon. Both plants came back to full rates during December, and we expect them to continue to operate well during 2020.

We produced approximately 239 million gallons of ethanol, which put us at an 84.5% utilization rate for the quarter. While this was lower than