x
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
|
|
|
|
For the quarterly period ended March 31, 2018.
|
|
|
|
OR
|
|
|
o
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
|
|
|
For the transition period from to .
|
|
|
|
COMMISSION FILE NUMBER 000-53036
|
Indiana
|
|
20-2327916
|
||
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
||
|
|
|
||
1554 N. County Road 600 E., Union City, IN 47390
|
||||
(Address of principal executive offices)
|
||||
|
||||
(765) 964-3137
|
||||
(Registrant's telephone number, including area code)
|
|
Page Number
|
|
|
ASSETS
|
March 31, 2018
|
|
September 30, 2017
|
||||
|
(Unaudited)
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash
|
$
|
297,191
|
|
|
$
|
18,995,755
|
|
Restricted cash
|
1,517,714
|
|
|
401,406
|
|
||
Trade accounts receivable
|
13,914,867
|
|
|
15,006,093
|
|
||
Miscellaneous receivables
|
193,909
|
|
|
384,508
|
|
||
Inventories
|
30,289,718
|
|
|
14,604,975
|
|
||
Prepaid and other current assets
|
401,267
|
|
|
253,791
|
|
||
Commodity derivative instruments
|
317,209
|
|
|
492,842
|
|
||
Total current assets
|
46,931,875
|
|
|
50,139,370
|
|
||
|
|
|
|
||||
Property, plant, and equipment, net
|
102,572,995
|
|
|
107,936,389
|
|
||
|
|
|
|
||||
Other Assets
|
|
|
|
||||
Investment
|
1,295,192
|
|
|
1,096,237
|
|
||
Total other assets
|
1,295,192
|
|
|
1,096,237
|
|
||
|
|
|
|
||||
Total Assets
|
$
|
150,800,062
|
|
|
$
|
159,171,996
|
|
LIABILITIES AND MEMBERS' EQUITY
|
|
|
|
||||
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Checks written in excess of bank balances
|
$
|
2,920,987
|
|
|
$
|
—
|
|
Advances from Customers
|
891,427
|
|
|
—
|
|
||
Accounts payable
|
2,137,379
|
|
|
3,983,923
|
|
||
Accounts payable-grain
|
2,463,043
|
|
|
8,378,095
|
|
||
Accrued expenses
|
1,355,994
|
|
|
1,381,734
|
|
||
Commodity derivative instruments
|
383,158
|
|
|
513,829
|
|
||
Current maturities of long-term debt
|
4,404,752
|
|
|
3,749,826
|
|
||
Total current liabilities
|
14,556,740
|
|
|
18,007,407
|
|
||
|
|
|
|
||||
Long-Term Debt, net of current maturities
|
15,570,715
|
|
|
14,581,758
|
|
||
|
|
|
|
||||
Commitments and Contingencies
|
|
|
|
||||
|
|
|
|
||||
Members’ Equity
|
|
|
|
||||
Members' contributions, net of cost of raising capital, 14,606 units authorized, issued and outstanding
|
70,912,213
|
|
|
70,912,213
|
|
||
Retained earnings
|
49,760,394
|
|
|
55,670,618
|
|
||
Total members' equity
|
120,672,607
|
|
|
126,582,831
|
|
||
|
|
|
|
||||
Total Liabilities and Members’ Equity
|
$
|
150,800,062
|
|
|
$
|
159,171,996
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
March 31, 2018
|
|
March 31, 2017
|
|
March 31, 2018
|
|
March 31, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
65,712,336
|
|
|
$
|
59,473,502
|
|
|
$
|
121,567,824
|
|
|
$
|
117,528,266
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of Goods Sold
|
62,569,584
|
|
|
55,018,000
|
|
|
115,023,721
|
|
|
104,468,176
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross Profit
|
3,142,752
|
|
|
4,455,502
|
|
|
6,544,103
|
|
|
13,060,090
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses
|
1,687,267
|
|
|
1,434,866
|
|
|
3,326,016
|
|
|
2,621,623
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Income
|
1,455,485
|
|
|
3,020,636
|
|
|
3,218,087
|
|
|
10,438,467
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other Income (Expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(236,627
|
)
|
|
(134,427
|
)
|
|
(425,493
|
)
|
|
(270,467
|
)
|
||||
Miscellaneous income
|
30,011
|
|
|
15,089
|
|
|
60,782
|
|
|
31,335
|
|
||||
Total
|
(206,616
|
)
|
|
(119,338
|
)
|
|
(364,711
|
)
|
|
(239,132
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
1,248,869
|
|
|
$
|
2,901,298
|
|
|
$
|
2,853,376
|
|
|
$
|
10,199,335
|
|
|
|
|
|
|
|
|
|
||||||||
Weight Average Units Outstanding - basic and diluted
|
14,606
|
|
|
14,606
|
|
|
14,606
|
|
|
14,606
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net Income Per Unit - basic and diluted
|
$
|
86
|
|
|
$
|
199
|
|
|
$
|
195
|
|
|
$
|
698
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions Per Unit
|
$
|
200
|
|
|
$
|
200
|
|
|
$
|
600
|
|
|
$
|
800
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
Six Months Ended
|
||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
|
|
|
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net income
|
$
|
2,853,376
|
|
|
$
|
10,199,335
|
|
Adjustments to reconcile net income to net cash provided by (used in) operations:
|
|
|
|
||||
Depreciation
|
5,799,420
|
|
|
5,142,156
|
|
||
Change in fair value of commodity derivative instruments
|
347,710
|
|
|
(2,034,778
|
)
|
||
Gain on sale of equipment
|
(9,561
|
)
|
|
—
|
|
||
Non-cash dividend income
|
(198,955
|
)
|
|
(157,986
|
)
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Trade accounts receivables
|
1,091,226
|
|
|
(297,745
|
)
|
||
Miscellaneous receivable
|
190,599
|
|
|
(5,743
|
)
|
||
Inventories
|
(15,684,743
|
)
|
|
(8,021,612
|
)
|
||
Prepaid and other current assets
|
(147,476
|
)
|
|
(168,721
|
)
|
||
Commodity derivative instruments
|
(302,748
|
)
|
|
1,825,091
|
|
||
Advances from customers
|
891,427
|
|
|
—
|
|
||
Accounts payable
|
(1,846,544
|
)
|
|
1,132,791
|
|
||
Accounts payable-grain
|
(5,915,052
|
)
|
|
603,451
|
|
||
Accrued expenses
|
1,376,374
|
|
|
(733,262
|
)
|
||
Net cash provided by (used in) operating activities
|
(11,554,947
|
)
|
|
7,482,977
|
|
||
|
|
|
|
||||
Cash Flows from Investing Activities
|
|
|
|
||||
Capital expenditures
|
(1,749,054
|
)
|
|
(1,155,175
|
)
|
||
Payments for construction in progress
|
(89,525
|
)
|
|
(3,744,854
|
)
|
||
Proceeds from sale of equipment
|
10,000
|
|
|
—
|
|
||
Net cash used for investing activities
|
(1,828,579
|
)
|
|
(4,900,029
|
)
|
||
|
|
|
|
||||
Cash Flows from Financing Activities
|
|
|
|
||||
Checks written in excess of bank balances
|
2,920,987
|
|
|
—
|
|
||
Distributions paid
|
(8,763,600
|
)
|
|
(11,684,799
|
)
|
||
Proceeds from long-term debt
|
12,020,863
|
|
|
—
|
|
||
Payments on long-term debt
|
(10,376,980
|
)
|
|
(1,428,519
|
)
|
||
Net cash used for financing activities
|
(4,198,730
|
)
|
|
(13,113,318
|
)
|
||
|
|
|
|
||||
Net Decrease in Cash and Restricted Cash
|
(17,582,256
|
)
|
|
(10,530,370
|
)
|
||
|
|
|
|
||||
Cash and Restricted Cash – Beginning of Period
|
19,397,161
|
|
|
24,462,911
|
|
||
|
|
|
|
||||
Cash and Restricted Cash – End of Period
|
$
|
1,814,905
|
|
|
$
|
13,932,541
|
|
|
Six Months Ended
|
|
Six Months Ended
|
||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
Reconciliation of Cash and Restricted Cash
|
|
|
|
||||
Cash - Balance Sheet
|
$
|
297,191
|
|
|
$
|
13,101,228
|
|
Restricted Cash - Balance Sheet
|
1,517,714
|
|
|
831,313
|
|
||
Cash and Restricted Cash
|
1,814,905
|
|
|
13,932,541
|
|
||
|
|
|
|
||||
Supplemental Cash Flow Information
|
|
|
|
||||
Interest paid
|
$
|
402,246
|
|
|
$
|
178,361
|
|
|
|
|
|
||||
Supplemental Disclosure of Non-cash Investing and Financing Activities
|
|
|
|
||||
|
|
|
|
||||
Construction in process included in accrued expenses and accounts payable
|
$
|
59,168
|
|
|
$
|
1,270,578
|
|
•
|
Ethanol Production Division. Based on the nature of the products and production process and the expected financial results, the Company’s operations at its ethanol plant, including the production and sale of ethanol and its co-products, are aggregated into one financial reporting segment.
|
•
|
Trading Division. During 2017, the Company constructed a grain loading facility within our single site to buy, hold and sell inventories of agricultural grains, primarily soybeans. We perform no additional processing of these grains, unlike the corn inventory we hold and use in ethanol production. The activities of buying, selling and holding of grains other than for ethanol and co-product production comprise this financial reporting segment.
|
|
March 31, 2018 (Unaudited)
|
|
September 30, 2017
|
||||
Ethanol Division:
|
|
|
|
||||
Raw materials
|
$
|
8,886,223
|
|
|
$
|
5,754,084
|
|
Work in progress
|
1,216,272
|
|
|
1,354,346
|
|
||
Finished goods
|
4,315,757
|
|
|
2,722,869
|
|
||
Spare parts
|
2,980,988
|
|
|
2,633,371
|
|
||
Ethanol Division Subtotal
|
$
|
17,399,240
|
|
|
$
|
12,464,670
|
|
Trading Division:
|
|
|
|
||||
Grain inventory
|
$
|
12,890,478
|
|
|
$
|
2,140,305
|
|
Trading Division Subtotal
|
$
|
12,890,478
|
|
|
$
|
2,140,305
|
|
Total Inventories
|
$
|
30,289,718
|
|
|
$
|
14,604,975
|
|
|
|||||||||
Instrument
|
Balance Sheet Location
|
|
Assets
|
|
Liabilities
|
||||
Ethanol futures and options contracts
|
Commodity Derivative Instruments - Current
|
|
$
|
23,100
|
|
|
$
|
—
|
|
Corn futures and options contracts
|
Commodity Derivative Instruments - Current
|
|
$
|
—
|
|
|
$
|
308,584
|
|
Soybean futures and options contracts
|
Commodity Derivative Instruments - Current
|
|
$
|
58,552
|
|
|
$
|
—
|
|
Soybean forward purchase contracts
|
Commodity Derivative Instruments - Current
|
|
$
|
235,557
|
|
|
$
|
74,574
|
|
Totals
|
Commodity Derivative Instruments - Current
|
|
$
|
317,209
|
|
|
$
|
383,158
|
|
Instrument
|
Balance Sheet Location
|
|
Assets
|
|
Liabilities
|
||||
Ethanol futures and options contracts
|
Commodity Derivative Instruments - Current
|
|
$
|
—
|
|
|
$
|
89,019
|
|
Corn futures and options contracts
|
Commodity Derivative Instruments - Current
|
|
$
|
489,531
|
|
|
$
|
—
|
|
Soybean futures and options contracts
|
Commodity Derivative Instruments - Current
|
|
$
|
—
|
|
|
$
|
175,338
|
|
Soybean forward purchase contracts
|
Commodity Derivative Instruments - Current
|
|
$
|
3,311
|
|
|
$
|
249,475
|
|
Totals
|
Commodity Derivative Instruments - Current
|
|
$
|
492,842
|
|
|
$
|
513,832
|
|
Instrument
|
Statement of Operations Location
|
Three Months 3/31/2017
|
|
Six Months 3/31/2017
|
|
Three Months 3/31/2018
|
|
Six Months 3/31/2018
|
||||||||
Corn Futures and Options Contracts
|
Cost of Goods Sold
|
$
|
162,724
|
|
|
$
|
556,596
|
|
|
$
|
(437,723
|
)
|
|
$
|
(181,388
|
)
|
Ethanol Futures and Options
|
Revenues
|
1,384,770
|
|
|
1,346,560
|
|
|
(252,292
|
)
|
|
(325,076
|
)
|
||||
Natural Gas Futures and Options Contracts
|
Cost of Goods Sold
|
62,845
|
|
|
133,830
|
|
|
36,584
|
|
|
157,013
|
|
||||
Soybean Futures and Options Contracts
|
Cost of Good Sold
|
(2,208
|
)
|
|
(2,208
|
)
|
|
(753,160
|
)
|
|
(929,987
|
)
|
||||
Soybean Forward Purchase Contracts
|
Cost of Goods Sold
|
—
|
|
|
—
|
|
|
804,575
|
|
|
931,728
|
|
||||
Totals
|
|
$
|
1,608,131
|
|
|
$
|
2,034,778
|
|
|
$
|
(602,016
|
)
|
|
$
|
(347,710
|
)
|
Instruments
|
Carrying Amount
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||
Corn Futures and Options Contracts
|
$
|
(308,584
|
)
|
$
|
(308,584
|
)
|
$
|
(308,584
|
)
|
$
|
—
|
|
$
|
—
|
|
Ethanol Futures and Options Contracts
|
$
|
23,100
|
|
$
|
23,100
|
|
$
|
23,100
|
|
$
|
—
|
|
$
|
—
|
|
Soybean Futures and Options Contracts
|
$
|
58,552
|
|
$
|
58,552
|
|
$
|
58,552
|
|
$
|
—
|
|
$
|
—
|
|
Soybean Forward Purchase Asset
|
$
|
235,557
|
|
$
|
235,557
|
|
$
|
—
|
|
$
|
235,557
|
|
$
|
—
|
|
Soybean Forward Purchase Liability
|
$
|
(74,574
|
)
|
$
|
(74,574
|
)
|
$
|
—
|
|
$
|
(74,574
|
)
|
$
|
—
|
|
Soybean Inventory
|
$
|
12,890,478
|
|
$
|
12,890,478
|
|
$
|
—
|
|
$
|
12,890,478
|
|
$
|
—
|
|
Instruments
|
Carrying Amount
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||
Corn Futures and Options Contracts
|
$
|
489,351
|
|
$
|
489,351
|
|
$
|
489,351
|
|
$
|
—
|
|
$
|
—
|
|
Ethanol Futures and Options Contracts
|
$
|
(89,019
|
)
|
$
|
(89,019
|
)
|
$
|
(89,019
|
)
|
$
|
—
|
|
$
|
—
|
|
Soybean Futures and Options Contracts
|
$
|
(175,338
|
)
|
$
|
(175,338
|
)
|
$
|
(175,338
|
)
|
$
|
—
|
|
$
|
—
|
|
Soybean Forward Purchase
|
$
|
(246,162
|
)
|
$
|
(246,162
|
)
|
$
|
—
|
|
$
|
(246,162
|
)
|
$
|
—
|
|
Soybean Inventory
|
$
|
2,140,305
|
|
$
|
2,140,305
|
|
$
|
—
|
|
$
|
2,140,305
|
|
$
|
—
|
|
Term note
|
$
|
10,272,265
|
|
Grain Loadout facility loan
|
9,703,202
|
|
|
Less amounts due within one year
|
(4,404,752
|
)
|
|
Net long-term debt
|
$
|
15,570,715
|
|
April 1, 2018 to March 31, 2019
|
$
|
4,404,752
|
|
April 1, 2019 to March 31, 2020
|
4,545,995
|
|
|
April 1, 2020 to March 31, 2021
|
5,607,232
|
|
|
April 1, 2021 to March 31, 2022
|
1,428,571
|
|
|
April 1, 2022 to March 31, 2023
|
3,988,917
|
|
|
Total long-term debt
|
$
|
19,975,467
|
|
|
Total
|
||
April 1, 2018 to March 31, 2019
|
$
|
1,085,788
|
|
April 1, 2019 to March 31, 2020
|
918,000
|
|
|
April 1, 2020 to March 31, 2021
|
918,000
|
|
|
April 1, 2021 to March 31, 2022
|
612,000
|
|
|
Total minimum lease commitments
|
$
|
3,533,788
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
March 31, 2018
|
|
March 31, 2017
|
|
March 31, 2018
|
|
March 31, 2017
|
||||||||
Revenue:
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
||||||||
Ethanol production
|
$
|
55,705,899
|
|
|
$
|
59,473,502
|
|
|
$
|
106,424,886
|
|
|
$
|
117,528,266
|
|
Grain trading
|
$
|
10,006,437
|
|
|
$
|
—
|
|
|
$
|
15,142,938
|
|
|
$
|
—
|
|
Total Revenue
|
$
|
65,712,336
|
|
|
$
|
59,473,502
|
|
|
$
|
121,567,824
|
|
|
$
|
117,528,266
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
March 31, 2018
|
|
March 31, 2017
|
|
March 31, 2018
|
|
March 31, 2017
|
||||||||
Gross Profit (Loss):
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
||||||||
Ethanol production
|
$
|
3,167,673
|
|
|
$
|
4,455,502
|
|
|
$
|
6,219,334
|
|
|
$
|
13,060,090
|
|
Grain trading
|
$
|
(24,921
|
)
|
|
$
|
—
|
|
|
$
|
324,769
|
|
|
$
|
—
|
|
Total Gross Profit
|
$
|
3,142,752
|
|
|
$
|
4,455,502
|
|
|
$
|
6,544,103
|
|
|
$
|
13,060,090
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
March 31, 2018
|
|
March 31, 2017
|
|
March 31, 2018
|
|
March 31, 2017
|
||||||||
Operating Income (Loss):
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
||||||||
Ethanol production
|
$
|
1,676,267
|
|
|
$
|
3,020,636
|
|
|
$
|
3,273,745
|
|
|
$
|
10,438,467
|
|
Grain trading
|
$
|
(220,782
|
)
|
|
$
|
—
|
|
|
$
|
(55,658
|
)
|
|
$
|
—
|
|
Total Operating Income
|
$
|
1,455,485
|
|
|
$
|
3,020,636
|
|
|
$
|
3,218,087
|
|
|
$
|
10,438,467
|
|
|
March 31, 2018
|
|
September 30, 2017
|
||||
Grain Inventories:
|
(unaudited)
|
|
|
||||
Ethanol production
|
$
|
8,886,223
|
|
|
$
|
5,754,084
|
|
Grain trading
|
$
|
12,890,478
|
|
|
$
|
2,140,305
|
|
Total Grain Inventories
|
$
|
21,776,701
|
|
|
$
|
7,894,389
|
|
|
|
|
|
||||
|
March 31, 2018
|
|
September 30, 2017
|
||||
Total Assets:
|
(unaudited)
|
|
|
||||
Ethanol production
|
$
|
129,721,466
|
|
|
$
|
156,548,789
|
|
Grain trading
|
$
|
21,078,596
|
|
|
$
|
2,623,207
|
|
Total Assets
|
$
|
150,800,062
|
|
|
$
|
159,171,996
|
|
•
|
Reduction, delay, or elimination of the Renewable Fuel Standard;
|
•
|
Changes in the availability and price of corn, natural gas and other grains;
|
•
|
Our inability to secure credit or obtain additional equity financing we may require in the future to continue our operations;
|
•
|
Decreases in the price we receive for our ethanol, distiller grains,corn oil and other grains;
|
•
|
Our ability to satisfy the financial covenants contained in our credit agreements with our senior lender;
|
•
|
Our ability to profitably operate the ethanol plant and maintain a positive spread between the selling price of our products and our raw material costs;
|
•
|
Negative impacts that our hedging activities may have on our operations;
|
•
|
Ethanol and distiller grains supply exceeding demand and corresponding price reductions;
|
•
|
Our ability to generate free cash flow to invest in our business and service our debt;
|
•
|
Changes in the environmental regulations that apply to our plant operations;
|
•
|
Changes in our business strategy, capital improvements or development plans;
|
•
|
Changes in plant production capacity or technical difficulties in operating the plant;
|
•
|
Changes in general economic conditions or the occurrence of certain events causing an economic impact in the agriculture, oil or automobile industries;
|
•
|
Lack of transport, storage and blending infrastructure preventing our products from reaching high demand markets;
|
•
|
Changes in federal and/or state laws;
|
•
|
Changes and advances in ethanol production technology;
|
•
|
Competition from alternative fuel additives;
|
•
|
Changes in interest rates or the lack of credit availability;
|
•
|
Changes in legislation benefiting renewable fuels;
|
•
|
Our ability to retain key employees and maintain labor relations;
|
•
|
Volatile commodity and financial markets;
|
•
|
Limitations and restrictions contained in the instruments and agreements governing our indebtedness; and
|
•
|
Decreases in export demand due to the imposition of tariffs by foreign governments on ethanol and distillers grains produced in the United States.
|
Date Declared
|
|
Distribution Declared Per Unit
|
|
Total Distribution Amount
|
|
Month Distribution Paid
|
||||
February 20, 2018
|
|
$
|
200
|
|
|
$
|
2,921,200
|
|
|
March 2018
|
|
2018
|
|
2017
|
||||||||||
Statement of Operations Data
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||
Revenue
|
$
|
65,712,336
|
|
|
100.0
|
|
|
$
|
59,473,502
|
|
|
100.0
|
|
Cost of Goods Sold
|
62,569,584
|
|
|
95.2
|
|
|
55,018,000
|
|
|
92.5
|
|
||
Gross Profit
|
3,142,752
|
|
|
4.8
|
|
|
4,455,502
|
|
|
7.5
|
|
||
Operating Expenses
|
1,687,267
|
|
|
2.6
|
|
|
1,434,866
|
|
|
2.4
|
|
||
Operating Income
|
1,455,485
|
|
|
2.2
|
|
|
3,020,636
|
|
|
5.1
|
|
||
Other Expense, Net
|
(206,616
|
)
|
|
(0.3
|
)
|
|
(119,338
|
)
|
|
(0.2
|
)
|
||
Net Income
|
$
|
1,248,869
|
|
|
1.9
|
|
|
$
|
2,901,298
|
|
|
4.9
|
|
|
2018
|
|
2017
|
||||||||
Revenue:
|
Amount
|
% of Total Revenues
|
|
Amount
|
% of Total Revenues
|
||||||
Ethanol production
|
$
|
55,705,899
|
|
84.8
|
%
|
|
59,473,502
|
|
100.0
|
%
|
|
Grain trading
|
$
|
10,006,437
|
|
15.2
|
|
|
$
|
—
|
|
—
|
|
Total Revenue
|
$
|
65,712,336
|
|
100.0
|
%
|
|
$
|
59,473,502
|
|
100.0
|
%
|
|
2018
|
|
2017
|
||||||||
Revenue Source
|
Amount
|
% of Revenues
|
|
Amount
|
% of Revenues
|
||||||
Ethanol Sales
|
$
|
42,657,305
|
|
76.6
|
%
|
|
$
|
49,525,748
|
|
83.3
|
%
|
Distillers Grains Sales
|
10,889,653
|
|
19.5
|
|
|
7,675,673
|
|
12.9
|
|
||
Corn Oil Sales
|
1,805,210
|
|
3.2
|
|
|
1,949,748
|
|
3.3
|
|
||
Carbon Dioxide Sales
|
123,375
|
|
0.3
|
|
|
123,377
|
|
0.2
|
|
||
Other Revenue
|
230,356
|
|
0.4
|
|
|
198,956
|
|
0.3
|
|
||
Total Revenues
|
$
|
55,705,899
|
|
100.0
|
%
|
|
$
|
59,473,502
|
|
100.0
|
%
|
|
2018
|
|
2017
|
||||||||
Revenue Source
|
Amount
|
% of Revenues
|
|
Amount
|
% of Revenues
|
||||||
Soybean Sales
|
$
|
10,006,437
|
|
100.0
|
%
|
|
$
|
—
|
|
—
|
%
|
Total Revenues
|
$
|
10,006,437
|
|
100.0
|
%
|
|
$
|
—
|
|
—
|
%
|
|
2018
|
|
2017
|
||||||||
|
Amount
|
% of Revenues
|
|
Amount
|
% of Revenues
|
||||||
Soybeans
|
$
|
10,031,358
|
|
100.0
|
%
|
|
$
|
—
|
|
—
|
%
|
Total Cost of Goods Sold
|
$
|
10,031,358
|
|
100.0
|
%
|
|
$
|
—
|
|
—
|
%
|
|
2018
|
|
2017
|
||||||||||
Statement of Operations Data
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||
Revenue
|
$
|
121,567,824
|
|
|
100.0
|
|
|
$
|
117,528,266
|
|
|
100.0
|
|
Cost of Goods Sold
|
115,023,721
|
|
|
94.6
|
|
|
104,468,176
|
|
|
88.9
|
|
||
Gross Profit
|
6,544,103
|
|
|
5.4
|
|
|
13,060,090
|
|
|
11.1
|
|
||
Operating Expenses
|
3,326,016
|
|
|
2.7
|
|
|
2,621,623
|
|
|
2.2
|
|
||
Operating Income
|
3,218,087
|
|
|
2.6
|
|
|
10,438,467
|
|
|
8.9
|
|
||
Other Expense, Net
|
(364,711
|
)
|
|
(0.3
|
)
|
|
(239,132
|
)
|
|
(0.2
|
)
|
||
Net Income
|
$
|
2,853,376
|
|
|
2.3
|
|
|
$
|
10,199,335
|
|
|
8.7
|
|
|
2018
|
|
2017
|
||||||||
Revenue:
|
Amount
|
% of Total Revenues
|
|
Amount
|
% of Total Revenues
|
||||||
Ethanol production
|
$
|
106,424,886
|
|
87.5
|
%
|
|
$
|
117,528,266
|
|
100.0
|
%
|
Grain trading
|
$
|
15,142,938
|
|
12.5
|
|
|
$
|
—
|
|
—
|
|
Total Revenue
|
$
|
121,567,824
|
|
100.0
|
%
|
|
$
|
117,528,266
|
|
100.00
|
%
|
|
2018
|
|
2017
|
||||||||
Revenue Source
|
Amount
|
% of Revenues
|
|
Amount
|
% of Revenues
|
||||||
Ethanol Sales
|
$
|
82,506,875
|
|
77.5
|
%
|
|
$
|
97,805,477
|
|
83.2
|
%
|
Distillers Grains Sales
|
19,384,679
|
|
18.2
|
|
|
15,193,586
|
|
12.9
|
|
||
Corn Oil Sales
|
4,056,549
|
|
3.8
|
|
|
4,056,484
|
|
3.5
|
|
||
Carbon Dioxide Sales
|
246,750
|
|
0.3
|
|
|
235,150
|
|
0.2
|
|
||
Other Revenue
|
230,033
|
|
0.2
|
|
|
237,569
|
|
0.2
|
|
||
Total Revenues
|
$
|
106,424,886
|
|
100.0
|
%
|
|
$
|
117,528,266
|
|
100.0
|
%
|
|
2018
|
|
2017
|
||||||||
Revenue Source
|
Amount
|
% of Revenues
|
|
Amount
|
% of Revenues
|
||||||
Soybean Sales
|
$
|
15,142,938
|
|
100.0
|
%
|
|
$
|
—
|
|
—
|
%
|
Total Revenues
|
$
|
15,142,938
|
|
100.0
|
%
|
|
$
|
—
|
|
—
|
%
|
|
2018
|
|
2017
|
||||||||
|
Amount
|
% of Revenues
|
|
Amount
|
% of Revenues
|
||||||
Soybeans
|
$
|
14,818,169
|
|
100.00
|
%
|
|
$
|
—
|
|
—
|
%
|
Total Cost of Goods Sold
|
$
|
14,818,169
|
|
100.00
|
%
|
|
$
|
—
|
|
—
|
%
|
|
March 31, 2018
(Unaudited)
|
|
September 30, 2017
|
||||
Current Assets
|
$
|
46,931,875
|
|
|
$
|
50,139,370
|
|
Current Liabilities
|
$
|
14,556,740
|
|
|
$
|
18,007,407
|
|
Long-Term Liabilities
|
$
|
15,570,715
|
|
|
$
|
14,581,758
|
|
Member's Equity
|
$
|
120,672,607
|
|
|
$
|
126,582,831
|
|
|
|
2018
|
|
2017
|
||||
Net cash provided by (used in) operating activities
|
|
$
|
(11,554,947
|
)
|
|
$
|
7,482,977
|
|
Net cash used for investing activities
|
|
$
|
(1,828,579
|
)
|
|
$
|
(4,900,029
|
)
|
Net cash used for financing activities
|
|
$
|
(4,198,730
|
)
|
|
$
|
(13,113,318
|
)
|
Net decrease in Cash and Restricted cash
|
|
$
|
(17,582,256
|
)
|
|
$
|
(10,530,370
|
)
|
Cash and Restricted cash, beginning of period
|
|
$
|
19,397,161
|
|
|
$
|
24,462,911
|
|
Cash and Restricted cash, end of period
|
|
$
|
1,814,905
|
|
|
$
|
13,932,541
|
|
|
Three Months Ended
|
Three Months Ended
|
Six Months Ended
|
Six Months Ended
|
||||||||
|
March 31, 2018
|
March 31, 2017
|
March 31, 2018
|
March 31, 2017
|
||||||||
Corn Futures and Options Contracts
|
$
|
(437,723
|
)
|
$
|
162,724
|
|
$
|
(181,388
|
)
|
$
|
556,596
|
|
Ethanol Futures and Options Contracts
|
(252,292
|
)
|
1,384,770
|
|
(325,076
|
)
|
1,346,560
|
|
||||
Natural Gas Futures and Options Contracts
|
36,584
|
|
62,845
|
|
157,013
|
|
133,830
|
|
||||
Soybean Futures and Options Contracts
|
(753,160
|
)
|
(2,208
|
)
|
(929,987
|
)
|
(2,208
|
)
|
||||
Soybean Forward Contracts
|
804,575
|
|
—
|
|
931,728
|
|
—
|
|
||||
Totals
|
$
|
(602,016
|
)
|
$
|
1,608,131
|
|
$
|
(347,710
|
)
|
$
|
2,034,778
|
|
|
Estimated Volume Requirements for the next 12 months (net of forward and futures contracts)
|
Unit of Measure
|
Hypothetical Adverse Change in Price as of March 31, 2018
|
Approximate Adverse Change to Income
|
|||||
Natural Gas
|
3,382,800
|
|
MMBTU
|
10
|
%
|
|
$
|
400,590
|
|
Ethanol
|
129,632,400
|
|
Gallons
|
10
|
%
|
|
$
|
19,185,595
|
|
Corn
|
43,497,600
|
|
Bushels
|
10
|
%
|
|
$
|
15,920,068
|
|
DDGs
|
1,850,400
|
|
Tons
|
10
|
%
|
|
$
|
28,246,472
|
|
Corn Oil
|
32,290,800
|
|
Pounds
|
10
|
%
|
|
$
|
658,661
|
|
Soybeans
|
9,000,000
|
|
Bushels
|
10
|
%
|
|
$
|
7,478,485
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(a)
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The following exhibits are filed as part of this report.
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Exhibit No.
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Exhibit
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3.1
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31.1
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31.2
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32.1
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32.2
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101
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The following financial information from Cardinal Ethanol, LLC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Balance Sheets as of March 31, 2018 and September 30, 2017, (ii) Condensed Statements of Operations for the three and six months ended March 31, 2018 and 2017, (iii) Condensed Statements of Cash Flows for the six months ended March 31, 2018 and 2017, and (iv) the Notes to Condensed Unaudited Financial Statements.**
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CARDINAL ETHANOL, LLC
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Date:
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May 8, 2018
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/s/ Jeffrey Painter
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Jeffrey Painter
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date:
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May 8, 2018
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/s/ William Dartt
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William Dartt
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Chief Financial Officer
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(Principal Financial and Accounting Officer)
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(i)
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Merge, consolidate, exchange or otherwise dispose of at one time all or substantially all of the Property, except for a liquidating sale of the Property in connection with the dissolution of the Company;
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(ii)
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Issue Units at a purchase price of less than $1,666.66 per Unit. Notwithstanding the foregoing, the Directors shall have the authority to issue Units below the purchase price as compensation for services rendered for the Company or for any other compensation purpose;
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(iii)
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Issue more than an aggregate of 25,000 Units; and
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(iv)
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Cause the Company to acquire any equity or debt securities of any Director or any of its Affiliates, or otherwise make loans to any Director or any Affiliates.
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1.
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I have reviewed this quarterly report on Form 10-Q of Cardinal Ethanol, LLC;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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May 8, 2018
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/s/ Jeffrey Painter
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Jeffrey Painter, Chief Executive Officer
(President and Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Cardinal Ethanol, LLC;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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May 8, 2018
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/s/ William Dartt
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William Dartt, Chief Financial Officer
(Principal Financial Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Jeffrey Painter
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Jeffrey Painter, President and
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Principal Executive Officer
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Dated:
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May 8, 2018
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ William Dartt
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William Dartt, Chief Financial Officer
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(Principal Financial Officer)
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Dated:
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May 8, 2018
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