USBE US Bioenergy Corp (MM)

US BioEnergy Corporation (NASDAQ: USBE), today announced net income of $5.2 million, or $0.08 per share, and EBITDA of $18.3 million for the first quarter ended March 31, 2007. Total revenue for the first quarter of 2007 was $132.2 million, up approximately 106% compared to $64.2 million for the fourth quarter of 2006. Production volumes were 58.7 million gallons, up approximately 99% compared to 29.5 million gallons for the fourth quarter of 2006. EBITDA was $18.3 million, down approximately 48%, compared to $35.3 million for the fourth quarter of 2006. Financial and operating results for the first quarter were attributable to significant increases in the company�s ethanol production and improved pricing offset by higher corn costs. Milestones the company has achieved during the first quarter of 2007 include the following: First full quarter of operations for the company�s Albert City and expanded Platte Valley plants Began construction on a 100 mmgy ethanol plant near Janesville, Minnesota Entered into senior secured credit facilities which included $337.2 million structured as construction loans for Hankinson, North Dakota; Janesville, Minnesota; Dyersville, Iowa; and Ord, Nebraska �We are pleased with the strong growth we achieved during the quarter,� said Gordon Ommen, US BioEnergy�s CEO. �Our revenue during the quarter more than doubled on a sequential basis, reflecting the first full quarter of operations at our Albert City and expanded Platte Valley plants.� The company currently owns and operates four ethanol plants, which have combined production capacity of 300 million gallons per year (mmgy) and has the following plants under construction and sites under evaluation: Hankinson, North Dakota, a 100 mmgy plant, which is expected to start producing ethanol in the second quarter of 2008 Dyersville, Iowa, a 100 mmgy plant, which is expected to start producing ethanol in the second quarter of 2008 Janesville, Minnesota, a 100 mmgy plant, which is expected to start producing ethanol in the third quarter of 2008 Total construction expenditures for the first quarter of 2007 were $45.8 million, which were primarily comprised of the following: Ord $14.1 million, Hankinson $9.6 million, Dyersville $4.7 million, Janesville $1.4 million, and $5.9 million for Grinnell, of which US BioEnergy paid half, or $2.9 million. The company has put on hold any further funding of Grinnell. The company recently announced that its 50 million gallon ethanol plant located in Ord, Nebraska, has begun production. At March 31, 2007, total cash and cash equivalents were $215.4 million, up approximately 27% compared to $170.1 million on December 31, 2006. Total debt as of March 31, 2007 was $236.7 million compared with $150.1 million on December 31, 2006. Shareholders� equity was $490.5 million as of March 31, 2007 as compared with $484.4 million on December 31, 2006. Equity, as a percentage of total capitalization, was approximately 68% as of March 31, 2007. Selected Results � Three months ended March 31, 2007 December 31, 2006 � Sales volumes (in thousands): Ethanol gallons sold 59,726� 28,068� Distillers grains tons sold 270� 127� � Production volumes (in thousands) Ethanol gallons produced 58,660� 29,457� Distillers grains tons produced 259� 136� � Average price realizations Ethanol gross sales price per gallon $ 1.90� $ 1.84� Distillers grain sales price per gallon $ 0.26� $ 0.23� � Average cost Corn - no hedging impact (per bushel) $ 3.52� $ 2.77� Corn - w/ hedging impact (per bushel) $ 3.64� $ 1.80� � Corn - no hedging impact (per gallon of ethanol) $ 1.21� $ 0.95� Corn - w/ hedging impact (per gallon of ethanol) $ 1.25� $ 0.57� � Natural gas - no hedging impact (per mmbtu) $ 7.19� $ 7.69� Natural gas - w/ hedging impact (per mmbtu) $ 6.88� $ 8.70� � Natural gas - no hedging impact (per gallon of ethanol) $ 0.20� $ 0.19� Natural gas - w/ hedging impact (per gallon of ethanol) $ 0.19� $ 0.22� Comparability of Financial Results Prior to May�1, 2006, US BioEnergy derived revenues principally from its marketing and services businesses. Since that time, the sale of ethanol and distillers grains has become the primary source of US BioEnergy�s revenues. As a result, the company�s financial results for periods after April�30, 2006 are not comparable to results for prior periods. In addition, due to the steep ramping of ethanol production between April and December 2006, the actual production figures for 2006 are not indicative of future operating results. EBITDA This news release describes �EBITDA� in addition to earnings calculated in accordance with generally accepted accounting principles (GAAP). Management believes that EBITDA is useful in evaluating our operating performance in relation to other companies in our industry because the calculation of EBITDA generally eliminates the effects of financings and income taxes which items may vary for different companies for reasons unrelated to overall operating performance. EBITDA is not a measure of financial performance under GAAP, and should not be considered an alternative to net income, or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. EBITDA has its limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of the limitations of EBITDA are: EBITDA does not reflect our cash used for capital expenditures; Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced and EBITDA does not reflect the cash requirements for replacements; EBITDA does not reflect changes in, or cash requirements for, our working capital requirements; EBITDA does not reflect the cash necessary to make payments of interest or principal on our indebtedness; and EBITDA includes non-recurring payments to us which are reflected in other income. Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to us to service our debt or to invest in the growth of our business. We compensate for these limitations by relying on our GAAP results as well as on our EBITDA. Conference Call The company will host a conference call today at 9:00 a.m. Central Time. Investors interested in listening to the call can dial (888) 895-4463 and reference conference ID 7777931. This call will be webcast and can be accessed via US BioEnergy's Web site at www.usbioenergy.net (follow the instructions on the Investor Relations page). A replay of the webcast will be available through June 11, 2007. The telephone replay will be available approximately two hours after the call concludes by dialing (800) 642-1687 or (706) 645-9291 and reference conference ID 7777931. About US BioEnergy Corporation US BioEnergy Corporation is a producer and marketer of ethanol and distillers grains. The company currently owns and operates four ethanol plants and has three additional ethanol plants under construction. Upon completion of these initiatives, the company will own and operate seven plants with combined expected ethanol production capacity of 600 million gallons per year. Safe Harbor Statement Certain matters discussed in this news release are "forward-looking statements." The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words like "believe," "anticipate," "target," "expect," "pro forma," "estimate," "intend," "guidance" or words of similar meaning. Forward-looking statements describe future plans, objectives, expectations or goals. Although US BioEnergy Corporation believes that its expectations are based on reasonable assumptions, all forward-looking statements involve risk and uncertainty. Therefore, actual results could vary materially from what we expect. Please review our filings the Securities and Exchange Commission, including Annual Report on Form 10-K for the year ended December 31, 2006, for important risk factors that could cause results to differ materially from those in any such forward-looking statements. Any forward-looking statement speaks only as of the date such statement was made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made except as required by applicable laws or regulations. US BioEnergy Corporation Condensed Consolidated Balance Sheets (in thousands, except share data) � � March 31, December 31, 2007� 2006� ASSETS (Unaudited) � Currents Assets Cash and cash equivalents $ 215,444� $ 170,099� Receivables 54,217� 40,958� Inventories 27,803� 28,420� Derivative financial instruments 1,569� 7,144� Prepaid expenses 2,394� 3,572� Total current assets 301,427� 250,193� � Other Assets Deposits 4,010� 4,307� Investment in equity of unconsolidated subsidiary 1,793� 1,509� Goodwill 65,823� 65,489� Other assets 3,861� 3,478� 75,487� 74,783� � Property and equipment, net 465,400� 408,814� Total assets $ 842,314� $ 733,790� � � LIABILITIES AND SHAREHOLDER'S EQUITY � Liabilities Current maturities of long-term debt $ 7,761� $ 8,131� Checks written on controlled disbursement accounts 49� 13,270� Notes payable 970� 1,815� Accounts payable 69,558� 47,163� Accrued expenses 5,836� 4,938� Deferred income tax liability 916� 2,913� Other current liabilities 1,594� 3,955� Total current liabilities 86,684� 82,185� � Long-term debt 228,018� 140,128� Deferred income taxes 32,427� 27,099� Long-term income taxes payable 662� -� Minority interest in subsidiary 3,993� -� � Commitments and Contingencies � Shareholders' Equity Preferred stock, $0.01 par value, authorized 75,000,000 shares, issued none -� -� Common stock, $0.01 par value, authorized 750,000,000 shares; 67,975,135 and 67,968,885 shares issued and outstanding as of March 31, 2007 and December 31, 2006, respectively � 680� 679� Additional paid-in capital 468,261� 467,552� Retained earnings (deficit) 21,589� 16,147� 490,530� 484,378� Total liabilities and shareholders' equity $ 842,314� $ 733,790� US BioEnergy Corporation Condensed Consolidated Statements of Operations (in thousands, except per share data) � Three Months Ended March 31, 2007� 2006� (unaudited) Revenues: Product sales $ 130,048� $ 3,945� Services and commissions 2,169� 2,074� Total revenues 132,217� 6,019� � Cost of goods sold: Cost of product sales 113,149� 3,870� Cost of services and commissions 926� 1,525� Total cost of goods sold 114,075� 5,395� Gross profit 18,142� 624� Selling, general and administrative expenses 7,568� 2,182� Operating income (loss) 10,574� (1,558) � Other income (expense): Interest expense (4,409) (48) Interest income 2,293� 214� Other income 23� 14� Equity in net income of unconsolidated subsidiary 283� -� (1,810) 180� Income (loss) before income taxes and minority interest 8,764� (1,378) Federal and state income tax expense (3,529) -� Minority interest in net loss of subsidiary 7� -� Net income (loss) $ 5,242� $ (1,378) � Income (loss) per common share: Basic $ 0.08� $ (0.04) Diluted 0.08� (0.04) � Weighted average shares outstanding: Basic 67,974� 30,980� Diluted 68,913� 30,980� US BioEnergy Corporation Condensed Consolidated Statements of Cash Flows (dollars in thousands) Three Months Ended March 31, 2007� 2006� (unaudited) Cash Flows from Operating Activities Net income (loss) $ 5,242� $ (1,378) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: � Depreciation 5,007� 170� Amortization 916� 336� Minority interest in net loss of subsidiary (7) -� Stock-based compensation expense 681� 58� Deferred income taxes 3,992� (221) Change in derivative financial instruments 5,827� -� Equity in net income of unconsolidated subsidiary (283) -� Changes in working capital components, net of affects of business acquisitions: � Receivables (13,059) 6,181� Inventories 617� (2,269) Prepaid expenses 1,178� 201� Accounts payable 10,237� (31,719) Accrued expenses and other liabilities (1,464) 2,731� Net cash provided by (used in) operating activities 18,884� (25,910) � Cash Flows from Investing Activities Purchases of property and equipment (45,770) (30,534) Acquisition of US Bio Hankinson, LLC, net of cash received -� (773) Deposits made 297� -� Other -� (125) Net cash used in investing activities (45,473) (31,432) � Cash Flows from Financing Activities Increase (decrease) in checks written on controlled disbursement accounts (13,221) 14,871� Debt issuance costs paid (1,550) (210) Net change in notes payable (845) 2,925� Proceeds from long-term debt 125,495� -� Payments of long-term debt (37,974) -� Proceeds from the issuance of common stock 29� 94,394� Net cash provided by financing activities 71,934� 111,980� Net increase in cash and cash equivalents 45,345� 54,638� � Cash and Cash Equivalents Beginning of period 170,099� 40,450� End of period $ 215,444� $ 95,088� US BioEnergy Corporation Reconciliation of GAAP to Non-GAAP EBITDA � 3 months ended March 31, 2007 3 months ended December 31, 2006 � Net Income $ 5,242� $ 20,955� � Interest Expense 4,409� 706� Income Taxes 3,529� 9,668� Depreciation 5,007� 3,800� Amortization 100� 207� � EBITDA $ 18,287� $ 35,336�