Green Plains Inc. (GPRE) has reported a 28.31 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $7.93 million, or $0.20 a share in the quarter, compared with $6.18 million, or $0.16 a share for the same period last year. Revenue during the quarter grew 13.34 percent to $841.85 million from $742.80 million in the previous year period. Gross margin for the quarter expanded 131 basis points over the previous year period to 9.86 percent. Total expenses were 96.33 percent of quarterly revenues, down from 97.33 percent for the same period last year. This has led to an improvement of 100 basis points in operating margin to 3.67 percent.
Operating income for the quarter was $30.86 million, compared with $19.83 million in the previous year period.
"We generated $42 million of segment operating income for the third quarter of 2016, which is our best performance since the end of 2014. Based on current markets, we expect a stronger fourth quarter," said Todd Becker, president and chief executive officer. "We have grown significantly over the last year as we have increased our ethanol production capacity organically and through acquisitions by nearly 50 percent to approximately 1.5 billion gallons per year, and acquired Fleischmann's Vinegar Company. We continue to focus on our core competencies as we efficiently integrate these acquisitions and aggressively grow our platform to create long-term shareholder value."
Operating cash flow turns positive
Green Plains Inc. has generated cash of $60.98 million from operating activities during the nine month period as against cash outgo of $7.48 million in the last year period. The company has spent $289.53 million cash to meet investing activities during the nine month period as against cash outgo of $47.77 million in the last year period.
Cash flow from financing activities was $251.04 million for the nine month period, up 99.87 percent or $125.44 million, when compared with the last year period.
Cash and cash equivalents stood at $407.36 million as on Sep. 30, 2016, down 17.85 percent or $88.50 million from $495.86 million on Sep. 30, 2015.
Working capital declines
Green Plains Inc. has witnessed a decline in the working capital over the last year. It stood at $510.08 million as at Sep. 30, 2016, down 11.70 percent or $67.58 million from $577.65 million on Sep. 30, 2015. Current ratio was at 2.15 as on Sep. 30, 2016, down from 2.48 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 20 days for the quarter from 33 days for the last year period. Days sales outstanding went down to 14 days for the quarter compared with 17 days for the same period last year.
Days inventory outstanding has decreased to 20 days for the quarter compared with 32 days for the previous year period. At the same time, days payable outstanding went down to 14 days for the quarter from 16 for the same period last year.
Debt increases substantially
Green Plains Inc. has witnessed an increase in total debt over the last one year. It stood at $923.51 million as on Sep. 30, 2016, up 42.60 percent or $275.88 million from $647.63 million on Sep. 30, 2015. Total debt was 42.42 percent of total assets as on Sep. 30, 2016, compared with 34.43 percent on Sep. 30, 2015. Debt to equity ratio was at 0.96 as on Sep. 30, 2016, up from 0.67 as on Sep. 30, 2015. Interest coverage ratio improved to 2.61 for the quarter from 1.95 for the same period last year.
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