Pacific Ethanol, Inc. Announces Financial Results

Pacific Ethanol, Inc. (Nasdaq:PEIX), the leading West Coast-based marketer and producer of ethanol, announced today its financial results for the three months and year ended December 31, 2009.

The Company's net loss available to common stockholders for the three months ended December 31, 2009 was $245.6 million compared to $34.7 million for the same period in 2008. The loss includes a noncash impairment charge of $250.2 million associated with the Company's ethanol production facilities.

The Company's gross profit for the three months ended December 31, 2009 was positive $1.4 million compared to negative gross profit of $29.2 million for the same period in 2008. The Company's selling, general and administrative expenses for three months ended December 31, 2009 were $4.3 million compared to $7.5 million for the same period in 2008. In the fourth quarter, the Company impaired its wholly-owned ethanol production facilities to their estimated fair value.

The estimated fair value was based on a combination of recent ethanol production facility transactions within the industry and the Company's negotiations related to a plan of reorganization in respect of its plant subsidiaries. In addition, the Company recorded a gain from the write-off of liabilities of $14.2 million associated with the Company's final disposition of its Imperial Valley project.

After adjusting for these one-time noncash items, the Company's Adjusted EBITDA for the three months ended December 31, 2009 was positive $1.0 million, which included reorganization costs of $1.7 million, compared to Adjusted EBITDA of negative $22.2 million for the three months ended December 31, 2008.

The Company's net loss available to common stockholders for the year ended December 31, 2009 was $311.4 million compared to $151.4 million for the same period in 2008. The loss for 2009 includes noncash impairment charges of $252.4 million associated with the Company's ethanol production facilities, as discussed above, as well as an asset impairment charge attributed to the Company's Imperial Valley project. The Company's gross profit for the year ended December 31, 2009 was negative $22.0 million compared to negative gross profit of $33.4 million for the same period in 2008.

The Company's selling, general and administrative expenses for the year ended December 31, 2009 were $21.5 million compared to $31.8 million for the same period in 2008. The loss for 2008 includes a noncash goodwill impairment charge and a noncash asset impairment charge of $127.9 million associated with the original asset impairment on the Company's Imperial Valley project. The Company's Adjusted EBITDA for the year ended December 31, 2009 was negative $24.1 million compared to negative $29.0 million for the same period in 2008.

Neil Koehler, the Company's President and CEO, commented, "2009 was a challenging year for the ethanol industry and Pacific Ethanol. Through aggressive cost reductions and efforts to restructure our balance sheet to significantly reduce debt, the Company is focused on achieving stability and profitability in 2010."

The Company also recently announced the filing of a Plan of Reorganization (the "Plan") and related Disclosure Statement for its wholly-owned plant holding company ("PEH") and its four plant subsidiaries (collectively, "Plant Subsidiaries") with respect to their filings under chapter 11 of the U.S. Bankruptcy Code.

The Company and its subsidiaries, other than PEH and the Plant Subsidiaries, did not enter bankruptcy; accordingly, their ownership structure, particularly as it relates to ownership of the Company by its common and preferred stockholders, will not change under the terms of the Plan. Upon confirmation of the Plan, the Company's balance sheet will reflect the disposition of the Plant Subsidiaries' assets and cancellation of their related secured debt of approximately $293.5 million.

Under the terms of the Plan, the Company will continue to staff, manage and operate the four ethanol production facilities held by the Plant Subsidiaries for a negotiated fee and profit-sharing arrangement. In addition, the Company, through its other subsidiaries not in bankruptcy, will continue marketing ethanol for third parties as well as the ethanol and related feed products produced by the four facilities.

"We believe the Plan represents a positive outcome for Pacific Ethanol's stockholders. With this Plan, the equity of the Company will no longer be burdened by excessive debt." Mr. Koehler continued, "There remains significant value in the operating, marketing and profit sharing agreements proposed in the Plan. A confirmed Plan combined with our 42% ownership interest in Front Range Energy and our growing Kinergy Marketing business creates a strong platform for improving stockholder value."

source: cnn