x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
26-4785427
|
(State of other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
416 South Bell Avenue Ames, Iowa
|
|
50010
|
(Address of principal executive offices)
|
|
(Zip code)
|
Large accelerated filer
¨
|
|
Accelerated filer
x
|
|
|
|
Non-accelerated filer
¨
|
|
Smaller reporting company
¨
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
|
|
|
|
|
||
CURRENT ASSETS:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
86,531
|
|
|
$
|
47,081
|
|
Accounts receivable, net
|
105,005
|
|
|
310,731
|
|
||
Inventories
|
98,222
|
|
|
85,890
|
|
||
Prepaid expenses and other assets
|
45,752
|
|
|
31,882
|
|
||
Total current assets
|
335,510
|
|
|
475,584
|
|
||
Property, plant and equipment, net
|
610,560
|
|
|
574,584
|
|
||
Goodwill
|
16,080
|
|
|
16,080
|
|
||
Intangible assets, net
|
29,973
|
|
|
30,941
|
|
||
Investments
|
12,158
|
|
|
8,797
|
|
||
Other assets
|
11,833
|
|
|
11,819
|
|
||
Restricted cash
|
4,000
|
|
|
105,815
|
|
||
TOTAL ASSETS
|
$
|
1,020,114
|
|
|
$
|
1,223,620
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
CURRENT LIABILITIES:
|
|
|
|
|
|
||
Lines of credit
|
$
|
6,354
|
|
|
$
|
23,149
|
|
Current maturities of long-term debt
|
10,349
|
|
|
5,206
|
|
||
Accounts payable
|
86,142
|
|
|
236,817
|
|
||
Accrued expenses and other liabilities
|
28,672
|
|
|
28,466
|
|
||
Deferred revenue
|
1,492
|
|
|
333
|
|
||
Total current liabilities
|
133,009
|
|
|
293,971
|
|
||
Unfavorable lease obligation
|
15,972
|
|
|
17,343
|
|
||
Deferred income taxes
|
17,766
|
|
|
19,186
|
|
||
Long-term contingent consideration for acquisitions
|
32,258
|
|
|
26,949
|
|
||
Convertible debt conversion liability
|
23,700
|
|
|
—
|
|
||
Long-term debt (net of debt issuance costs of $6,488 and $4,105, respectively)
|
201,884
|
|
|
247,251
|
|
||
Other liabilities
|
4,637
|
|
|
4,910
|
|
||
Total liabilities
|
429,226
|
|
|
609,610
|
|
||
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
||
EQUITY:
|
|
|
|
|
|
||
Common stock ($.0001 par value; 300,000,000 shares authorized; 38,553,413 and 43,837,714 shares outstanding, respectively)
|
5
|
|
|
4
|
|
||
Common stock—additional paid-in-capital
|
479,102
|
|
|
474,367
|
|
||
Retained earnings
|
193,810
|
|
|
169,680
|
|
||
Accumulated other comprehensive loss
|
(2,832
|
)
|
|
(4,009
|
)
|
||
Treasury stock (9,246,002 and 3,178,372 shares outstanding, respectively)
|
(81,824
|
)
|
|
(28,762
|
)
|
||
Total equity attributable to the Company's shareholders
|
588,261
|
|
|
611,280
|
|
||
Non-controlling interest
|
2,627
|
|
|
2,730
|
|
||
Total equity
|
590,888
|
|
|
614,010
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
1,020,114
|
|
|
$
|
1,223,620
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
REVENUES:
|
|
|
|
|
|
|
|
||||||||
Biomass-based diesel sales
|
$
|
523,739
|
|
|
$
|
393,758
|
|
|
$
|
1,223,294
|
|
|
$
|
981,239
|
|
Biomass-based diesel government incentives
|
100,336
|
|
|
1,066
|
|
|
255,890
|
|
|
18,132
|
|
||||
|
624,075
|
|
|
394,824
|
|
|
1,479,184
|
|
|
999,371
|
|
||||
Other revenue
|
565
|
|
|
32
|
|
|
1,627
|
|
|
165
|
|
||||
|
624,640
|
|
|
394,856
|
|
|
1,480,811
|
|
|
999,536
|
|
||||
COSTS OF GOODS SOLD:
|
|
|
|
|
|
|
|
||||||||
Biomass-based diesel
|
575,956
|
|
|
390,424
|
|
|
1,389,881
|
|
|
989,999
|
|
||||
Biomass-based diesel—related parties
|
—
|
|
|
—
|
|
|
—
|
|
|
4,542
|
|
||||
|
575,956
|
|
|
390,424
|
|
|
1,389,881
|
|
|
994,541
|
|
||||
Other costs of goods sold
|
1,336
|
|
|
27
|
|
|
1,334
|
|
|
111
|
|
||||
|
577,292
|
|
|
390,451
|
|
|
1,391,215
|
|
|
994,652
|
|
||||
GROSS PROFIT
|
47,348
|
|
|
4,405
|
|
|
89,596
|
|
|
4,884
|
|
||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|
20,799
|
|
|
18,468
|
|
|
61,426
|
|
|
51,268
|
|
||||
RESEARCH AND DEVELOPMENT EXPENSE
|
4,805
|
|
|
3,527
|
|
|
13,158
|
|
|
11,778
|
|
||||
GAIN ON INVOLUNTARY CONVERSION
|
(3,470
|
)
|
|
—
|
|
|
(8,010
|
)
|
|
—
|
|
||||
INCOME (LOSS) FROM OPERATIONS
|
25,214
|
|
|
(17,590
|
)
|
|
23,022
|
|
|
(58,162
|
)
|
||||
OTHER INCOME (EXPENSE), NET:
|
|
|
|
|
|
|
|
||||||||
Change in fair value of contingent consideration
|
(1,124
|
)
|
|
(1,106
|
)
|
|
(4,680
|
)
|
|
722
|
|
||||
Change in fair value of convertible debt conversion liability
|
3,013
|
|
|
—
|
|
|
16,445
|
|
|
—
|
|
||||
Gain on debt extinguishment
|
179
|
|
|
—
|
|
|
2,331
|
|
|
—
|
|
||||
Other income (loss), net
|
(493
|
)
|
|
4,896
|
|
|
(430
|
)
|
|
7,240
|
|
||||
Interest expense
|
(4,487
|
)
|
|
(2,921
|
)
|
|
(11,536
|
)
|
|
(8,592
|
)
|
||||
|
(2,912
|
)
|
|
869
|
|
|
2,130
|
|
|
(630
|
)
|
||||
INCOME (LOSS) BEFORE INCOME TAXES
|
22,302
|
|
|
(16,721
|
)
|
|
25,152
|
|
|
(58,792
|
)
|
||||
INCOME TAX (EXPENSE) BENEFIT
|
1,203
|
|
|
1,050
|
|
|
(821
|
)
|
|
2,654
|
|
||||
NET INCOME (LOSS)
|
23,505
|
|
|
(15,671
|
)
|
|
24,331
|
|
|
(56,138
|
)
|
||||
LESS—NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
63
|
|
|
4
|
|
|
201
|
|
|
(355
|
)
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY
|
23,442
|
|
|
(15,675
|
)
|
|
24,130
|
|
|
(55,783
|
)
|
||||
LESS—EFFECT OF PARTICIPATING SHARE-BASED AWARDS
|
(513
|
)
|
|
—
|
|
|
(462
|
)
|
|
—
|
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY’S COMMON STOCKHOLDERS
|
$
|
22,929
|
|
|
$
|
(15,675
|
)
|
|
$
|
23,668
|
|
|
$
|
(55,783
|
)
|
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS:
|
|
|
|
|
|
|
|
||||||||
BASIC
|
$
|
0.59
|
|
|
$
|
(0.36
|
)
|
|
$
|
0.57
|
|
|
$
|
(1.27
|
)
|
DILUTED
|
$
|
0.59
|
|
|
$
|
(0.36
|
)
|
|
$
|
0.57
|
|
|
$
|
(1.27
|
)
|
WEIGHTED AVERAGE SHARES USED TO COMPUTE NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS:
|
|
|
|
|
|
|
|
||||||||
BASIC
|
38,744,878
|
|
|
43,844,005
|
|
|
41,673,223
|
|
|
43,979,266
|
|
||||
DILUTED
|
38,751,706
|
|
|
43,844,005
|
|
|
41,678,988
|
|
|
43,979,266
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Net income (loss)
|
$
|
23,505
|
|
|
$
|
(15,671
|
)
|
|
$
|
24,331
|
|
|
$
|
(56,138
|
)
|
Unrealized gains (losses) on marketable securities, net of taxes of $0 and $0, respectively
|
—
|
|
|
14
|
|
|
—
|
|
|
(1
|
)
|
||||
Foreign currency translation adjustments
|
766
|
|
|
(470
|
)
|
|
1,052
|
|
|
(4,346
|
)
|
||||
Other comprehensive income (loss)
|
766
|
|
|
(456
|
)
|
|
1,052
|
|
|
(4,347
|
)
|
||||
Comprehensive income (loss)
|
24,271
|
|
|
(16,127
|
)
|
|
25,383
|
|
|
(60,485
|
)
|
||||
Less—Comprehensive income (loss) attributable to noncontrolling interest
|
(26
|
)
|
|
(53
|
)
|
|
(125
|
)
|
|
(623
|
)
|
||||
Comprehensive income (loss) attributable to the Company
|
$
|
24,297
|
|
|
$
|
(16,074
|
)
|
|
$
|
25,508
|
|
|
$
|
(59,862
|
)
|
|
Company Stockholders’ Equity
|
|
|
|
|
|||||||||||||||||||||||||
|
Common
Stock
Shares
|
|
Common
Stock
|
|
Common Stock -
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury
Stock
|
|
Noncontrolling Interest
|
|
Total
|
|||||||||||||||
BALANCE, January 1, 2015
|
44,422,881
|
|
|
$
|
4
|
|
|
$
|
453,109
|
|
|
$
|
321,083
|
|
|
$
|
(11
|
)
|
|
$
|
(4,412
|
)
|
|
$
|
8,889
|
|
|
$
|
778,662
|
|
Issuance of common stock
|
1,712,966
|
|
|
—
|
|
|
15,722
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,722
|
|
|||||||
Conversion of restricted stock units to common stock (net of 64,978 shares of treasury stock purchased)
|
178,156
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(616
|
)
|
|
—
|
|
|
(616
|
)
|
|||||||
Treasury stock purchases
|
(2,030,722
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,313
|
)
|
|
—
|
|
|
$
|
(19,313
|
)
|
||||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,416
|
)
|
|
(4,416
|
)
|
|||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
3,427
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,427
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,724
|
)
|
|
—
|
|
|
(623
|
)
|
|
(4,347
|
)
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,783
|
)
|
|
—
|
|
|
—
|
|
|
(355
|
)
|
|
(56,138
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
350
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350
|
|
|||||||
BALANCE, September 30, 2015
|
44,283,281
|
|
|
$
|
4
|
|
|
$
|
472,608
|
|
|
$
|
265,300
|
|
|
$
|
(3,735
|
)
|
|
$
|
(24,341
|
)
|
|
$
|
3,495
|
|
|
$
|
713,331
|
|
BALANCE, January 1, 2016
|
43,837,714
|
|
|
$
|
4
|
|
|
$
|
474,367
|
|
|
$
|
169,680
|
|
|
$
|
(4,009
|
)
|
|
$
|
(28,762
|
)
|
|
$
|
2,730
|
|
|
$
|
614,010
|
|
Issuance of common stock
|
33,973
|
|
|
—
|
|
|
316
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|||||||
Issuance of common stock in acquisition
|
500,000
|
|
|
1
|
|
|
4,049
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,050
|
|
|||||||
Conversion of restricted stock units to common stock (net of 69,307 shares of treasury stock purchased)
|
180,049
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(752
|
)
|
|
—
|
|
|
(752
|
)
|
|||||||
Partial termination of capped call options (inclusive of tax impact of $116)
|
—
|
|
|
—
|
|
|
1,863
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,863
|
|
|||||||
Convertible debt extinguishment impact (net of tax impact of $2,144)
|
—
|
|
|
—
|
|
|
(5,560
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,560
|
)
|
|||||||
Treasury stock purchases
|
(5,998,323
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52,310
|
)
|
|
—
|
|
|
(52,310
|
)
|
|||||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(179
|
)
|
|
(179
|
)
|
|||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
4,067
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,067
|
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,177
|
|
|
—
|
|
|
(125
|
)
|
|
1,052
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
24,130
|
|
|
—
|
|
|
—
|
|
|
201
|
|
|
24,331
|
|
|||||||
BALANCE, September 30, 2016
|
38,553,413
|
|
|
$
|
5
|
|
|
$
|
479,102
|
|
|
$
|
193,810
|
|
|
$
|
(2,832
|
)
|
|
$
|
(81,824
|
)
|
|
$
|
2,627
|
|
|
$
|
590,888
|
|
|
Nine months ended
|
||||||
|
September 30, 2016
|
|
September 30, 2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income (loss)
|
$
|
24,331
|
|
|
$
|
(56,138
|
)
|
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
|
|
|
|
||||
Depreciation expense
|
23,447
|
|
|
18,008
|
|
||
Amortization expense of assets and liabilities, net
|
676
|
|
|
369
|
|
||
Gain on involuntary conversion
|
(8,010
|
)
|
|
—
|
|
||
Accretion of convertible note discount
|
3,820
|
|
|
3,507
|
|
||
Amortization of marketable securities
|
—
|
|
|
183
|
|
||
Change in fair value of contingent consideration
|
4,680
|
|
|
(722
|
)
|
||
Change in fair value of convertible debt conversion liability
|
(16,445
|
)
|
|
—
|
|
||
Gain on debt extinguishment
|
(2,331
|
)
|
|
—
|
|
||
Bargain purchase gain from acquisition
|
—
|
|
|
(5,358
|
)
|
||
Provision for doubtful accounts
|
42
|
|
|
(843
|
)
|
||
Stock compensation expense
|
4,067
|
|
|
3,427
|
|
||
Deferred tax expense (benefit)
|
505
|
|
|
(2,991
|
)
|
||
Other operating activities
|
(43
|
)
|
|
(248
|
)
|
||
Changes in asset and liabilities, net of effects from acquisitions:
|
|
|
|
||||
Accounts receivable, net
|
205,733
|
|
|
262,499
|
|
||
Inventories
|
(10,482
|
)
|
|
36,810
|
|
||
Prepaid expenses and other assets
|
(13,857
|
)
|
|
(8,974
|
)
|
||
Accounts payable
|
(147,268
|
)
|
|
(124,827
|
)
|
||
Accrued expenses and other liabilities
|
1,114
|
|
|
(8,965
|
)
|
||
Deferred revenue
|
1,159
|
|
|
(16,680
|
)
|
||
Net cash flows provided by operating activities
|
71,138
|
|
|
99,057
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Cash paid for marketable securities
|
—
|
|
|
(52,153
|
)
|
||
Cash received from maturities of marketable securities
|
—
|
|
|
61,642
|
|
||
Cash receipts for involuntary conversion
|
8,010
|
|
|
6,500
|
|
||
Cash receipts of restricted cash
|
1,985
|
|
|
13,345
|
|
||
Cash paid for purchase of property, plant and equipment
|
(42,809
|
)
|
|
(61,014
|
)
|
||
Cash paid for acquisitions and additional interests, net of cash acquired
|
(12,720
|
)
|
|
(40,996
|
)
|
||
Cash paid for investments
|
(3,249
|
)
|
|
(639
|
)
|
||
Other investing activities
|
—
|
|
|
—
|
|
||
Net cash flows used in investing activities
|
(48,783
|
)
|
|
(73,315
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Net borrowings (repayments) on revolving line of credit
|
(20,855
|
)
|
|
5,744
|
|
||
Borrowings on other lines of credit
|
8,807
|
|
|
—
|
|
||
Repayments on other lines of credit
|
(263
|
)
|
|
—
|
|
||
Cash received from notes payable
|
163,646
|
|
|
410
|
|
||
Cash paid on notes payable
|
(72,548
|
)
|
|
(5,084
|
)
|
||
Cash paid for debt issuance costs
|
(5,876
|
)
|
|
(383
|
)
|
||
Cash paid for treasury stock
|
(51,474
|
)
|
|
(19,929
|
)
|
||
Cash paid for contingent consideration settlement
|
(4,871
|
)
|
|
(2,106
|
)
|
||
Cash received on partial termination of capped call options
|
159
|
|
|
—
|
|
||
Net cash flows provided by (used in) financing activities
|
16,725
|
|
|
(21,348
|
)
|
||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
39,080
|
|
|
4,394
|
|
||
CASH AND CASH EQUIVALENTS, Beginning of period
|
47,081
|
|
|
63,516
|
|
||
Effect of exchange rate changes on cash
|
370
|
|
|
(1,093
|
)
|
||
CASH AND CASH EQUIVALENTS, End of period
|
$
|
86,531
|
|
|
$
|
66,817
|
|
|
Nine months ended
|
||||||
|
September 30, 2016
|
|
September 30, 2015
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
|
|
|
|
||||
Cash paid (received) for income taxes
|
$
|
203
|
|
|
$
|
50
|
|
Cash paid for interest
|
$
|
5,496
|
|
|
$
|
4,418
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
||||
Amounts included in period-end accounts payable for:
|
|
|
|
||||
Purchases of property, plant and equipment
|
$
|
4,220
|
|
|
$
|
4,043
|
|
Debt issuance cost
|
$
|
135
|
|
|
$
|
84
|
|
Incentive stock liability for raw material supply agreement
|
$
|
—
|
|
|
$
|
239
|
|
Issuance of common stock for acquisitions
|
$
|
4,050
|
|
|
$
|
15,310
|
|
Contingent consideration for acquisitions
|
$
|
4,500
|
|
|
$
|
5,000
|
|
Debt assumed in acquisition
|
$
|
—
|
|
|
$
|
5,225
|
|
Release of restricted cash to pay off the GOZone Bonds
|
$
|
101,315
|
|
|
$
|
—
|
|
Repayment of GOZone Bonds
|
$
|
100,000
|
|
|
$
|
—
|
|
Non-cash transfer of line of credit to long-term debt
|
$
|
4,498
|
|
|
$
|
—
|
|
Accruals of insurance proceeds related to impairment of property, plant and equipment
|
$
|
1,414
|
|
|
$
|
11,027
|
|
|
|
|
|
||||
|
|
|
|
||||
See "Note 3 - Acquisitions" for noncash items related to the acquisition transactions.
|
|
|
|
|
Three Months
Ended September 30, 2016 |
|
Three Months
Ended September 30, 2015 |
|
Nine Months
Ended September 30, 2016 |
|
Nine Months
Ended September 30, 2015 |
||||||||
Revenues
|
$
|
624,640
|
|
|
$
|
399,665
|
|
|
$
|
1,489,237
|
|
|
$
|
1,013,963
|
|
Net income (loss)
|
22,929
|
|
|
(17,208
|
)
|
|
23,670
|
|
|
(60,382
|
)
|
||||
Basic net income (loss) per share
|
$
|
0.59
|
|
|
$
|
(0.39
|
)
|
|
$
|
0.57
|
|
|
$
|
(1.36
|
)
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Raw materials
|
$
|
46,636
|
|
|
$
|
28,989
|
|
Work in process
|
3,879
|
|
|
3,014
|
|
||
Finished goods
|
47,707
|
|
|
53,887
|
|
||
Total
|
$
|
98,222
|
|
|
$
|
85,890
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Commodity derivatives and related collateral, net
|
$
|
11,187
|
|
|
$
|
10,097
|
|
Prepaid expenses
|
14,540
|
|
|
8,504
|
|
||
Deposits
|
2,758
|
|
|
3,824
|
|
||
RIN inventory
|
12,229
|
|
|
5,656
|
|
||
Taxes receivable
|
1,135
|
|
|
1,814
|
|
||
Other
|
3,903
|
|
|
1,987
|
|
||
Total
|
$
|
45,752
|
|
|
$
|
31,882
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Spare parts inventory
|
$
|
2,922
|
|
|
$
|
2,922
|
|
Deposits
|
2,280
|
|
|
2,370
|
|
||
Other
|
6,631
|
|
|
6,527
|
|
||
Total
|
$
|
11,833
|
|
|
$
|
11,819
|
|
|
September 30, 2016
|
||||||||||||
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
|
Weighted Average Remaining Life
|
||||||
Raw material supply agreement
|
$
|
6,230
|
|
|
$
|
(1,875
|
)
|
|
$
|
4,355
|
|
|
9.3 years
|
Renewable hydrocarbon diesel technology
|
8,300
|
|
|
(1,291
|
)
|
|
7,009
|
|
|
12.8 years
|
|||
Ground lease
|
200
|
|
|
(123
|
)
|
|
77
|
|
|
5.1 years
|
|||
Acquired customer relationships
|
2,900
|
|
|
(324
|
)
|
|
2,576
|
|
|
8.8 years
|
|||
Total amortizing intangibles
|
17,630
|
|
|
(3,613
|
)
|
|
14,017
|
|
|
|
|||
In-process research and development, indefinite lives
|
15,956
|
|
|
—
|
|
|
15,956
|
|
|
|
|||
Total intangible assets
|
$
|
33,586
|
|
|
$
|
(3,613
|
)
|
|
$
|
29,973
|
|
|
|
|
December 31, 2015
|
||||||||||||
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
|
Weighted Average Remaining Life
|
||||||
Raw material supply agreement
|
$
|
6,230
|
|
|
$
|
(1,551
|
)
|
|
$
|
4,679
|
|
|
10.0 years
|
Renewable hydrocarbon diesel technology
|
8,300
|
|
|
(876
|
)
|
|
7,424
|
|
|
13.5 years
|
|||
Ground lease
|
200
|
|
|
(112
|
)
|
|
88
|
|
|
5.9 years
|
|||
Acquired customer relationships
|
2,900
|
|
|
(106
|
)
|
|
2,794
|
|
|
9.6 years
|
|||
Total amortizing intangibles
|
17,630
|
|
|
(2,645
|
)
|
|
14,985
|
|
|
|
|||
In-process research and development, indefinite lives
|
15,956
|
|
|
—
|
|
|
15,956
|
|
|
|
|||
Total intangible assets
|
$
|
33,586
|
|
|
$
|
(2,645
|
)
|
|
$
|
30,941
|
|
|
|
October 1, 2016 through December 31, 2016
|
$
|
324
|
|
2017
|
1,302
|
|
|
2018
|
1,309
|
|
|
2019
|
1,315
|
|
|
2020
|
1,322
|
|
|
2021
|
1,328
|
|
|
2022 and thereafter
|
7,117
|
|
|
Total
|
$
|
14,017
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
4.00% Convertible Senior Notes, $152,000 face amount, due in June 2036
|
$
|
112,755
|
|
|
$
|
—
|
|
2.75% Convertible Senior Notes, $73,838 face amount, due in June 2019
|
66,619
|
|
|
126,053
|
|
||
REG Geismar GOZone bonds, secured, variable interest rate of daily LIBOR, due in October 2033
|
—
|
|
|
100,000
|
|
||
REG Danville term loan, secured, variable interest rate of LIBOR plus 4%, due in December 2017
|
8,800
|
|
|
—
|
|
||
REG Newton term loan, secured, variable interest rate of LIBOR plus 4%, due in December 2018
|
13,789
|
|
|
16,800
|
|
||
REG Mason City term loan, fixed interest rate of 5%, due in July 2019
|
2,898
|
|
|
3,675
|
|
||
REG Ames term loans, secured, fixed interest rates of 3.5% and 4.25%, due in January 2018 and December 2019, respectively
|
3,651
|
|
|
3,901
|
|
||
REG Grays Harbor term loan, variable interest of minimum of 3.5% or Prime Rate plus 0.25%, due in May 2022
|
9,500
|
|
|
5,225
|
|
||
Other
|
709
|
|
|
908
|
|
||
Total term debt before debt issuance costs
|
218,721
|
|
|
256,562
|
|
||
Less: Current portion of long-term debt
|
10,349
|
|
|
5,206
|
|
||
Less: Debt issuance costs (net of accumulated amortization of $2,973 and $2,296, respectively)
|
6,488
|
|
|
4,105
|
|
||
Total long-term debt
|
$
|
201,884
|
|
|
$
|
247,251
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Amount outstanding under lines of credit
|
$
|
6,354
|
|
|
$
|
23,149
|
|
Maximum available to be borrowed under lines of credit
|
$
|
67,972
|
|
|
$
|
23,067
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Gross amounts of derivatives recognized at fair value
|
$
|
861
|
|
|
$
|
5,831
|
|
|
$
|
4,644
|
|
|
$
|
185
|
|
Cash collateral
|
16,157
|
|
|
—
|
|
|
5,638
|
|
|
—
|
|
||||
Total gross amount recognized
|
17,018
|
|
|
5,831
|
|
|
10,282
|
|
|
185
|
|
||||
Gross amounts offset
|
(5,831
|
)
|
|
(5,831
|
)
|
|
(185
|
)
|
|
(185
|
)
|
||||
Net amount reported in the condensed consolidated balance sheets
|
$
|
11,187
|
|
|
$
|
—
|
|
|
$
|
10,097
|
|
|
$
|
—
|
|
|
Location of Gain (Loss)
Recognized in income |
|
Three Months
Ended September 30, 2016 |
|
Three Months
Ended September 30, 2015 |
|
Nine Months
Ended September 30, 2016 |
|
Nine Months
Ended September 30, 2015 |
||||||||
Commodity derivatives
|
Cost of goods sold – Biomass-based diesel
|
|
$
|
5,865
|
|
|
$
|
23,349
|
|
|
$
|
(28,931
|
)
|
|
$
|
19,358
|
|
•
|
Level 1 — Quoted prices for identical instruments in active markets.
|
•
|
Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.
|
•
|
Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
|
As of September 30, 2016
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Commodity contract derivatives
|
$
|
(4,970
|
)
|
|
$
|
(2,782
|
)
|
|
$
|
(2,188
|
)
|
|
$
|
—
|
|
Convertible debt conversion liability
|
(23,700
|
)
|
|
—
|
|
|
(23,700
|
)
|
|
—
|
|
||||
Contingent considerations for acquisitions
|
(46,021
|
)
|
|
—
|
|
|
—
|
|
|
(46,021
|
)
|
||||
|
$
|
(74,691
|
)
|
|
$
|
(2,782
|
)
|
|
$
|
(25,888
|
)
|
|
$
|
(46,021
|
)
|
|
As of December 31, 2015
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Commodity contract derivatives
|
$
|
4,459
|
|
|
$
|
2,196
|
|
|
$
|
2,263
|
|
|
$
|
—
|
|
Contingent considerations for acquisitions
|
(41,712
|
)
|
|
—
|
|
|
—
|
|
|
(41,712
|
)
|
||||
|
$
|
(37,253
|
)
|
|
$
|
2,196
|
|
|
$
|
2,263
|
|
|
$
|
(41,712
|
)
|
|
Contingent Consideration for Acquisitions
|
||||||
|
2016
|
|
2015
|
||||
Balance at beginning of period, January 1
|
$
|
41,712
|
|
|
$
|
39,319
|
|
Fair value of contingent consideration at measurement date
|
4,500
|
|
|
—
|
|
||
Change in estimates included in earnings
|
(15
|
)
|
|
293
|
|
||
Settlements
|
(581
|
)
|
|
(1,052
|
)
|
||
Balance at end of period, March 31
|
45,616
|
|
|
38,560
|
|
||
Change in estimates included in earnings
|
3,571
|
|
|
(2,121
|
)
|
||
Settlements
|
(809
|
)
|
|
(943
|
)
|
||
Balance at end of period, June 30
|
48,378
|
|
|
35,496
|
|
||
Fair value of contingent consideration at measurement date
|
—
|
|
|
5,000
|
|
||
Change in estimates included in earnings
|
1,124
|
|
|
1,106
|
|
||
Settlements
|
(3,481
|
)
|
|
(111
|
)
|
||
Balance at end of period, September 30
|
$
|
46,021
|
|
|
$
|
41,491
|
|
|
Three Months
Ended September 30, 2016 |
|
Three Months
Ended September 30, 2015 |
|
Nine Months
Ended September 30, 2016 |
|
Nine Months
Ended September 30, 2015 |
||||
Options to purchase common stock
|
87,026
|
|
|
87,026
|
|
|
87,026
|
|
|
87,026
|
|
Restricted stock units
|
—
|
|
|
709
|
|
|
—
|
|
|
709
|
|
Stock appreciation rights
|
2,484,757
|
|
|
2,430,414
|
|
|
2,428,095
|
|
|
2,120,550
|
|
2019 Convertible notes
|
5,922,068
|
|
|
10,838,218
|
|
|
8,677,528
|
|
|
10,838,218
|
|
2036 Convertible notes
|
14,106,725
|
|
|
—
|
|
|
6,229,612
|
|
|
—
|
|
Total
|
22,600,576
|
|
|
13,356,367
|
|
|
17,422,261
|
|
|
13,046,503
|
|
|
Three Months
Ended September 30, 2016 |
|
Three Months
Ended September 30, 2015 |
|
Nine Months
Ended September 30, 2016 |
|
Nine Months
Ended September 30, 2015 |
||||||||
Net income (loss) attributable to the Company’s common stockholders - Basic
|
$
|
22,929
|
|
|
$
|
(15,675
|
)
|
|
$
|
23,668
|
|
|
$
|
(55,783
|
)
|
Less: effect of participating securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) attributable to common stockholders - Dilutive
|
$
|
22,929
|
|
|
$
|
(15,675
|
)
|
|
$
|
23,668
|
|
|
$
|
(55,783
|
)
|
Shares:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares used to compute basic net income (loss) per share
|
38,744,878
|
|
|
43,844,005
|
|
|
41,673,223
|
|
|
43,979,266
|
|
||||
Adjustment to reflect conversion of preferred stock
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Adjustment to reflect warrants to purchase common stock
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Adjustment to reflect stock appreciation right conversions
|
6,828
|
|
|
—
|
|
|
5,765
|
|
|
—
|
|
||||
Weighted-average shares used to compute diluted net income (loss) per share
|
38,751,706
|
|
|
43,844,005
|
|
|
41,678,988
|
|
|
43,979,266
|
|
||||
Net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Diluted
|
$
|
0.59
|
|
|
$
|
(0.36
|
)
|
|
$
|
0.57
|
|
|
$
|
(1.27
|
)
|
|
Three Months
Ended September 30, 2016 |
|
Three Months
Ended September 30, 2015 |
|
Nine Months
Ended September 30, 2016 |
|
Nine Months
Ended September 30, 2015 |
||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
Biomass-based Diesel (includes Petrotec's net sales of $41,671 and $124,388 and $40,777 and $108,851for the three and nine months ended September 30, 2016 and 2015, respectively)
|
$
|
599,198
|
|
|
$
|
377,070
|
|
|
$
|
1,423,867
|
|
|
$
|
964,359
|
|
Services
|
21,051
|
|
|
28,231
|
|
|
63,184
|
|
|
71,625
|
|
||||
Renewable Chemicals
|
565
|
|
|
—
|
|
|
1,565
|
|
|
—
|
|
||||
Corporate and Other
|
28,781
|
|
|
23,154
|
|
|
69,412
|
|
|
45,716
|
|
||||
Intersegment revenues
|
(24,955
|
)
|
|
(33,599
|
)
|
|
(77,217
|
)
|
|
(82,164
|
)
|
||||
|
$
|
624,640
|
|
|
$
|
394,856
|
|
|
$
|
1,480,811
|
|
|
$
|
999,536
|
|
Income (loss) before income taxes:
|
|
|
|
|
|
|
|
||||||||
Biomass-based Diesel (includes Petrotec's income (loss) of $306 and $1,922 and $135 and ($1,856) for the three and nine months ended September 30, 2016 and 2015, respectively)
|
$
|
25,598
|
|
|
$
|
(10,358
|
)
|
|
$
|
27,143
|
|
|
$
|
(38,458
|
)
|
Services
|
1,753
|
|
|
2,464
|
|
|
3,587
|
|
|
2,716
|
|
||||
Renewable Chemicals
|
(5,783
|
)
|
|
(4,573
|
)
|
|
(14,388
|
)
|
|
(12,780
|
)
|
||||
Corporate and Other
|
734
|
|
|
(4,254
|
)
|
|
8,810
|
|
|
(10,270
|
)
|
||||
|
$
|
22,302
|
|
|
$
|
(16,721
|
)
|
|
$
|
25,152
|
|
|
$
|
(58,792
|
)
|
Depreciation and amortization expense, net:
|
|
|
|
|
|
|
|
||||||||
Biomass-based Diesel (includes Petrotec's amounts of $707 and $2,419 and $817 and $2,419 for the three and nine months ended September 30, 2016 and 2015, respectively)
|
$
|
7,516
|
|
|
$
|
5,559
|
|
|
$
|
21,584
|
|
|
$
|
15,984
|
|
Services
|
108
|
|
|
79
|
|
|
321
|
|
|
217
|
|
||||
Renewable Chemicals
|
382
|
|
|
389
|
|
|
1,164
|
|
|
1,051
|
|
||||
Corporate and Other
|
265
|
|
|
390
|
|
|
1,054
|
|
|
1,125
|
|
||||
|
$
|
8,271
|
|
|
$
|
6,417
|
|
|
$
|
24,123
|
|
|
$
|
18,377
|
|
Cash paid for purchases of property, plant and equipment:
|
|
|
|
|
|
|
|
||||||||
Biomass-based Diesel (includes Petrotec's amounts of $734 and $1,038 and $256 and $1,233 for the three and nine months ended September 30, 2016 and 2015, respectively)
|
$
|
10,560
|
|
|
$
|
23,193
|
|
|
$
|
36,059
|
|
|
$
|
48,283
|
|
Services
|
4,647
|
|
|
9,855
|
|
|
5,812
|
|
|
10,980
|
|
||||
Renewable Chemicals
|
16
|
|
|
242
|
|
|
635
|
|
|
546
|
|
||||
Corporate and Other
|
119
|
|
|
17
|
|
|
303
|
|
|
1,205
|
|
||||
|
$
|
15,342
|
|
|
$
|
33,307
|
|
|
$
|
42,809
|
|
|
$
|
61,014
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Goodwill:
|
|
|
|
||||
Services
|
$
|
16,080
|
|
|
$
|
16,080
|
|
|
|
|
|
||||
Assets:
|
|
|
|
||||
Biomass-based Diesel (including Petrotec's assets of $56,159 and $45,471, respectively)
|
$
|
855,486
|
|
|
$
|
1,048,923
|
|
Services
|
48,892
|
|
|
60,308
|
|
||
Renewable Chemicals
|
23,214
|
|
|
23,872
|
|
||
Corporate and Other
|
275,114
|
|
|
308,782
|
|
||
Intersegment eliminations
|
(182,592
|
)
|
|
(218,265
|
)
|
||
|
$
|
1,020,114
|
|
|
$
|
1,223,620
|
|
|
Three Months
Ended September 30, 2016 |
|
Three Months
Ended September 30, 2015 |
|
Nine Months
Ended September 30, 2016 |
|
Nine Months
Ended September 30, 2015 |
||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
582,969
|
|
|
$
|
354,079
|
|
|
$
|
1,356,473
|
|
|
$
|
890,685
|
|
Foreign
|
41,671
|
|
|
40,777
|
|
|
124,338
|
|
|
108,851
|
|
||||
|
$
|
624,640
|
|
|
$
|
394,856
|
|
|
$
|
1,480,811
|
|
|
$
|
999,536
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Long-lived assets:
|
|
|
|
||||
United States
|
$
|
590,780
|
|
|
$
|
553,987
|
|
Foreign
|
19,780
|
|
|
20,597
|
|
||
|
$
|
610,560
|
|
|
$
|
574,584
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
the operations of the following biomass-based diesel production facilities:
|
•
|
a 12 mmgy nameplate biodiesel production facility located in Ralston, Iowa;
|
•
|
a 35 mmgy nameplate biodiesel production facility located near Houston, Texas;
|
•
|
a 45 mmgy nameplate biodiesel production facility located in Danville, Illinois;
|
•
|
a 30 mmgy nameplate biodiesel production facility located in Newton, Iowa;
|
•
|
a 60 mmgy nameplate biodiesel production facility located in Seneca, Illinois;
|
•
|
a 30 mmgy nameplate biodiesel production facility located near Albert Lea, Minnesota;
|
•
|
a 15 mmgy nameplate biodiesel production facility located in New Boston, Texas;
|
•
|
a 30 mmgy nameplate biodiesel production facility located in Mason City, Iowa;
|
•
|
a 75 mmgy nameplate renewable hydrocarbon diesel production facility located in Geismar, Louisiana;
|
•
|
a 27 mmgy nameplate biodiesel production facility located in Emden, Germany;
|
•
|
a 23 mmgy nameplate biodiesel production facility located in Oeding, Germany;
|
•
|
a 100 mmgy nameplate biodiesel production facility located in Grays Harbor, Washington; and
|
•
|
a 20 mmgy nameplate biodiesel production facility located in DeForest, Wisconsin, since its acquisition in March 2016.
|
•
|
purchases and resales of biomass-based diesel, petroleum-based diesel, Renewable Identification Numbers ("RINs") and Low Carbon Fuel Standard credits, and raw material feedstocks acquired from third parties;
|
•
|
sales of biomass-based diesel produced under toll manufacturing arrangements with third-party facilities using our feedstocks; and
|
•
|
incentives received from federal and state programs for renewable fuels.
|
•
|
biomass-based diesel facility management and operational services, whereby we provide day-to-day management and operational services to biomass-based diesel production facilities; and
|
•
|
construction management services, whereby we act as the construction management and general contractor for the construction of biomass-based diesel production facilities.
|
•
|
research and development activities focusing on microbial fermentation to develop and produce renewable chemicals, additional advanced biofuels and other products;
|
•
|
collaborative research and development and other service activities to continue to build out the technology platform; and
|
•
|
the operations of a demonstration scale fermentation facility located in Okeechobee, Florida since its acquisition in January 2014.
|
|
2014
|
2015
|
2016
|
2017
|
Biomass-based diesel
|
1.63 billion gallons
|
1.73 billion gallons
|
1.90 billion gallons
|
2.00 billion gallons
|
|
2014
|
2015
|
First 9 Months of 2016
|
Biomass-based diesel produced or imported volume
|
1.75 billion gallons
|
1.81 billion gallons
|
1.80 billion gallons
|
|
|
Feedstock
|
||||
Factors Influencing Supply and Price
|
|
Inedible Corn Oil
|
Used Cooking Oil
|
Inedible Animal Fat
|
Canola Oil
|
Soybean Oil
|
Demand for inedible corn oil from renewable fuel and other markets
|
|
þ
|
|
|
|
|
Ethanol production
|
|
þ
|
|
|
|
|
Export demand
|
|
þ
|
þ
|
þ
|
þ
|
þ
|
Extraction system yield
|
|
þ
|
|
|
|
|
Implementation of inedible corn oil separation systems into existing and new ethanol facilities
|
|
þ
|
|
|
|
|
Implementation of co-located biodiesel/renewable diesel plants with ethanol facilities
|
|
þ
|
|
|
|
|
Feed demand
|
|
þ
|
þ
|
þ
|
|
|
New or expected biodiesel capacity
|
|
þ
|
|
|
|
|
Weather conditions
|
|
þ
|
|
|
þ
|
þ
|
Biomass-based diesel demand
|
|
|
þ
|
|
þ
|
þ
|
Population
|
|
|
þ
|
|
|
|
Number of restaurants in the vicinity of collection facilities and terminals which is dependent on population density
|
|
|
þ
|
|
|
|
Cooking methods and eating habits, which can be impacted by the economy
|
|
|
þ
|
|
|
|
Number of slaughter kills in the United States
|
|
|
|
þ
|
|
|
Demand for inedible animal fat from other markets
|
|
|
|
þ
|
|
|
Demand for canola oil for food use
|
|
|
|
|
þ
|
|
Canola crush margin
|
|
|
|
|
þ
|
|
Canola meal demand
|
|
|
|
|
þ
|
|
Crop disease
|
|
|
|
|
þ
|
þ
|
Palm oil supply
|
|
|
|
|
þ
|
|
Soybean meal demand
|
|
|
|
|
|
þ
|
South American crop production
|
|
|
|
|
|
þ
|
Farmer planting decisions
|
|
|
|
|
|
þ
|
Government policies and subsidies
|
|
|
|
|
|
þ
|
(1)
|
Used cooking oil prices are based on the monthly average of the daily low sales price of Missouri River yellow grease as reported by The Jacobsen (based on 8.5 pounds per gallon).
|
(2)
|
Inedible corn oil prices are reported as the monthly average of the daily distillers’ corn oil market values delivered to Illinois as reported by The Jacobsen (based on 8.2 pounds per gallon).
|
(3)
|
Choice white grease prices are based on the monthly average of the daily low prices of Missouri River choice white grease as reported by The Jacobsen (based on 8.0 pounds per gallon).
|
(4)
|
Soybean oil (crude) prices are based on the monthly average of the daily closing sale price of the nearby soybean oil contract as reported by CBOT (based on 7.5 pounds per gallon).
|
(1)
|
Biodiesel prices are based on the monthly average of the midpoint of the high and low prices of B100 (Upper Midwest) as reported by The Jacobsen.
|
(2)
|
Soybean oil (crude) prices are based on the monthly average of the daily closing sale price of the nearby soybean oil contract as reported by CBOT (based on 7.5 pounds per gallon).
|
(3)
|
Choice white grease prices are based on the monthly average of the daily low price of Missouri River choice white grease as reported by The Jacobsen (based on 8.0 pounds per gallon).
|
(4)
|
Spread between biodiesel price and choice white grease price.
|
(5)
|
Spread between biodiesel price and soybean oil (crude) price.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Gallons sold
|
163.1
|
|
|
120.0
|
|
|
411.2
|
|
|
275.9
|
|
||||
Average B100 price per gallon
|
$
|
3.14
|
|
|
$
|
2.57
|
|
|
$
|
3.22
|
|
|
$
|
2.88
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
624,640
|
|
|
$
|
394,856
|
|
|
$
|
1,480,811
|
|
|
$
|
999,536
|
|
Cost of goods sold
|
577,292
|
|
|
390,451
|
|
|
1,391,215
|
|
|
994,652
|
|
||||
Gross profit (loss)
|
47,348
|
|
|
4,405
|
|
|
89,596
|
|
|
4,884
|
|
||||
Selling, general and administrative expenses
|
20,799
|
|
|
18,468
|
|
|
61,426
|
|
|
51,268
|
|
||||
Research and development expense
|
4,805
|
|
|
3,527
|
|
|
13,158
|
|
|
11,778
|
|
||||
Gain on involuntary conversion
|
(3,470
|
)
|
|
—
|
|
|
(8,010
|
)
|
|
—
|
|
||||
Income (loss) from operations
|
25,214
|
|
|
(17,590
|
)
|
|
23,022
|
|
|
(58,162
|
)
|
||||
Other income (expenses), net
|
(2,912
|
)
|
|
869
|
|
|
2,130
|
|
|
(630
|
)
|
||||
Income tax (expense) benefit
|
1,203
|
|
|
1,050
|
|
|
(821
|
)
|
|
2,654
|
|
||||
Net income (loss)
|
23,505
|
|
|
(15,671
|
)
|
|
24,331
|
|
|
(56,138
|
)
|
||||
Less: Net income (loss) attributable to noncontrolling interest
|
63
|
|
|
4
|
|
|
201
|
|
|
(355
|
)
|
||||
Net income (loss) attributable to the Company
|
23,442
|
|
|
(15,675
|
)
|
|
24,130
|
|
|
(55,783
|
)
|
||||
Effect of participating share-based awards
|
(513
|
)
|
|
—
|
|
|
(462
|
)
|
|
—
|
|
||||
Net income (loss) attributable to the Company's common stockholders
|
$
|
22,929
|
|
|
$
|
(15,675
|
)
|
|
$
|
23,668
|
|
|
$
|
(55,783
|
)
|
(In thousands)
|
Three Months
Ended September 30, 2016 |
|
Three Months
Ended September 30, 2015 |
|
Nine Months
Ended September 30, 2016 |
|
Nine Months
Ended September 30, 2015 |
||||||||
Net income (loss)
|
$
|
23,505
|
|
|
$
|
(15,671
|
)
|
|
$
|
24,331
|
|
|
$
|
(56,138
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Income tax expense (benefit)
|
(1,203
|
)
|
|
(1,050
|
)
|
|
821
|
|
|
(2,654
|
)
|
||||
Interest expense
|
4,487
|
|
|
2,921
|
|
|
11,536
|
|
|
8,592
|
|
||||
Gain on involuntary conversion
|
(3,470
|
)
|
|
—
|
|
|
(8,010
|
)
|
|
—
|
|
||||
Gain on bargain purchase
|
—
|
|
|
(5,358
|
)
|
|
—
|
|
|
(5,358
|
)
|
||||
Other (income) expense, net
|
(2,699
|
)
|
|
462
|
|
|
(18,349
|
)
|
|
(1,882
|
)
|
||||
Change in fair value of contingent liability
|
1,124
|
|
|
1,106
|
|
|
4,680
|
|
|
(722
|
)
|
||||
Straight-line lease expense
|
(73
|
)
|
|
(19
|
)
|
|
(247
|
)
|
|
(322
|
)
|
||||
Depreciation
|
7,949
|
|
|
6,261
|
|
|
23,447
|
|
|
18,008
|
|
||||
Amortization
|
(129
|
)
|
|
(199
|
)
|
|
(403
|
)
|
|
(624
|
)
|
||||
Other
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
355
|
|
||||
Biodiesel tax credit (1)
|
—
|
|
|
27,264
|
|
|
—
|
|
|
65,892
|
|
||||
Non-cash stock compensation
|
2,133
|
|
|
1,191
|
|
|
4,067
|
|
|
3,427
|
|
||||
Adjusted EBITDA
|
$
|
31,624
|
|
|
$
|
16,904
|
|
|
$
|
41,873
|
|
|
$
|
28,574
|
|
(1)
|
On December 18, 2015, the Protecting Americans from Tax Hikes Act of 2015 was signed into law, which reinstated and extended a set of tax provisions, including the retroactive reinstatement for 2015 and extension for 2016 of the federal biodiesel mixture excise tax credit. The retroactive credit for 2015 resulted in a net benefit to us that was recognized in the fourth quarter of 2015, however because this credit relates to the full year operating performance and results, we allocated a portion of the tax credit to the first three quarters of 2015 based upon gallons sold.
|
•
|
Adjusted EBITDA does not reflect our cash expenditures for capital assets or the impact of certain cash clauses that we consider not to be an indication of our ongoing operations;
|
•
|
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital requirements;
|
•
|
Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for such replacements;
|
•
|
stock-based compensation expense is an important element of our long term incentive compensation program, although we have excluded it as an expense when evaluating our operating performance; and
|
•
|
other companies, including other companies in the industry, may calculate these measures differently than we do, limiting their usefulness as a comparative measure.
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
4.00% Convertible Senior Notes, $152,000 face amount, due in June 2036
|
$
|
112,755
|
|
|
$
|
—
|
|
2.75% Convertible Senior Notes, $73,838 face amount, due in June 2019
|
66,619
|
|
|
126,053
|
|
||
REG Geismar GOZone bonds, secured, variable interest rate of daily LIBOR, due in October 2033
|
—
|
|
|
100,000
|
|
||
REG Danville term loan, secured, variable interest rate of LIBOR plus 4%, due in December 2017
|
8,800
|
|
|
—
|
|
||
REG Newton term loan, secured, variable interest rate of LIBOR plus 4%, due in December 2018
|
13,789
|
|
|
16,800
|
|
||
REG Mason City term loan, fixed interest rate of 5%, due in July 2019
|
2,898
|
|
|
3,675
|
|
||
REG Ames term loans, secured, fixed interest rates of 3.5% and 4.25%, due in January 2018 and December 2019, respectively
|
3,651
|
|
|
3,901
|
|
||
REG Grays Harbor term loan, variable interest of minimum of 3.5% or Prime Rate plus 0.25%, due in May 2022
|
9,500
|
|
|
5,225
|
|
||
Other
|
709
|
|
|
908
|
|
||
Total term debt before debt issuance costs
|
$
|
218,721
|
|
|
$
|
256,562
|
|
|
Nine Months Ended
September 30,
|
||||||
|
2016
|
|
2015
|
||||
Net cash flows provided by operating activities
|
$
|
71,138
|
|
|
$
|
99,057
|
|
Net cash flows used in investing activities
|
(48,783
|
)
|
|
(73,315
|
)
|
||
Net cash flows provided by (used in) financing activities
|
16,725
|
|
|
(21,348
|
)
|
||
Net change in cash and cash equivalents
|
39,080
|
|
|
4,394
|
|
||
Cash and cash equivalents, end of period
|
$
|
86,531
|
|
|
$
|
66,817
|
|
|
First nine months of 2016 Volume
(in millions) |
|
Units
|
|
Hypothetical
Adverse Change in Price |
|
Impact on Annual
Gross Profit (in millions) |
|
Percentage
Change in Gross Profit |
|||||
Total Biodiesel
|
413.4
|
|
|
gallons
|
|
10
|
%
|
|
$
|
(259.6
|
)
|
|
(277.34
|
)%
|
Total Lower Cost Feedstocks
|
1,591.4
|
|
|
pounds
|
|
10
|
%
|
|
$
|
(86.8
|
)
|
|
(92.77
|
)%
|
Total Canola Oil
|
404.6
|
|
|
pounds
|
|
10
|
%
|
|
$
|
(26.6
|
)
|
|
(28.4
|
)%
|
Total Soy Oil
|
221.9
|
|
|
pounds
|
|
10
|
%
|
|
$
|
(14.5
|
)
|
|
(15.5
|
)%
|
•
|
The sales contract review control was further enhanced from a quarterly meeting to a periodic meeting noting, among other data, any sharing agreements regardless of having the biodiesel mixture excise tax credit in place or not, as well as expanding meeting members to include treasury and tax personnel as well as sales and accounting personnel; and
|
•
|
Increase education, training, support and oversight of our employees tasked with the identification and evaluation of sales contract with nonstandard terms.
|
•
|
difficulty in integrating the operations and personnel of the acquired company;
|
•
|
difficulty in effectively integrating the acquired technologies, products or services with our current technologies, products or services;
|
•
|
demands on management related to the increase in our size after the acquisition;
|
•
|
the diversion of management’s attention from daily operations to the integration of acquired businesses and personnel;
|
•
|
failure to achieve expected synergies and costs savings;
|
•
|
difficulties in the assimilation and retention of employees;
|
•
|
difficulties in the assimilation of different cultures and practices, as well as in the assimilation of broad and geographically dispersed personnel and operations;
|
•
|
difficulties in the integration of departments, systems, including accounting systems, technologies, books and records and procedures, as well as in maintaining uniform standards and controls, including internal control over financial reporting, and related procedures and policies;
|
•
|
incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating results;
|
•
|
the need to fund significant working capital requirements of any acquired production facilities;
|
•
|
potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or challenges of an acquired company or technology, including but not limited to, issues with the acquired company’s intellectual property, product quality, environmental liabilities, data back-up and security, revenue recognition or other accounting practices, employee, customer or partner issues or legal and financial contingencies;
|
•
|
e
xposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to, claims from terminated employees, customers, former stockholders or other third parties;
|
•
|
incurring significant exit charges if products or services acquired in business combinations are unsuccessful; and
|
•
|
if we are unable to complete the tender offer, our ability to control the operations of Petrotec may be limited.
|
•
|
recruiting and retaining talented and capable management and employees in foreign countries;
|
•
|
challenges caused by distance, language and cultural differences;
|
•
|
protecting and enforcing our intellectual property rights;
|
•
|
difficulties in the assimilation and retention of employees;
|
•
|
the inability to extend proprietary rights in our technology into new jurisdictions;
|
•
|
currency exchange rate fluctuations;
|
•
|
general economic and political conditions in foreign jurisdictions;
|
•
|
foreign tax consequences;
|
•
|
foreign exchange controls or U.S. tax restrictions that might restrict or prevent us from repatriating income earned in countries outside the United States;
|
•
|
political, economic and social instability;
|
•
|
higher costs associated with doing business internationally; and
|
•
|
export or import regulations as well as trade and tariff restrictions.
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to payments of principal, interest on, and other fees related to such indebtedness, thereby reducing the availability of our cash flow to fund working capital and capital expenditures, and for other general corporate purposes;
|
•
|
increase our vulnerability to general adverse economic and biomass-based diesel industry conditions;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the biomass-based diesel industry, which may place us at a competitive disadvantage compared to our competitors that have less debt; and
|
•
|
limit among other things, our ability to borrow additional funds.
|
•
|
actual or anticipated fluctuations in our financial condition and operating results;
|
•
|
changes in the performance or market valuations of other companies engaged in our industry;
|
•
|
issuance of new or updated research reports by securities or industry analysts;
|
•
|
changes in financial estimates by us or of securities or industry analysts;
|
•
|
investors’ general perception of us and the industry in which we operate;
|
•
|
changes in the political climate in the industry in which we operate, existing laws, regulations and policies applicable to our business and products, including RFS2, and the continuation or adoption or failure to continue or adopt renewable energy requirements and incentives, including the BTC;
|
•
|
other regulatory developments in our industry affecting us, our customers or our competitors;
|
•
|
announcements of technological innovations by us or our competitors;
|
•
|
announcement or expectation of additional financing efforts, including sales or expected sales of additional common stock;
|
•
|
additions or departures of key management or other personnel;
|
•
|
litigation;
|
•
|
inadequate trading volume;
|
•
|
general market conditions in our industry; and
|
•
|
general economic and market conditions, including continued dislocations and downward pressure in the capital markets.
|
•
|
the right of the board of directors to elect a director to fill a vacancy created by the expansion of the board of directors;
|
•
|
the requirement for advance notice for nominations for election to the board of directors or for proposing matters that can be acted upon at a stockholders’ meeting;
|
•
|
the ability of the board of directors to alter our bylaws without obtaining stockholder approval;
|
•
|
the ability of the board of directors to issue, without stockholder approval, up to 10,000,000 shares of preferred stock with rights set by the board of directors, which rights could be senior to those of common stock;
|
•
|
a classified board;
|
•
|
the required approval of holders of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our bylaws or amend or repeal the provisions of our amended and restated certificate of incorporation regarding the classified board, the election and removal of directors and the ability of stockholders to take action by written consent; and
|
•
|
the elimination of the right of stockholders to call a special meeting of stockholders and to take action by written consent.
|
Period
|
Total Number of Shares Purchased
|
Average Price per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plan
|
Approximate Dollar Value of Shares that May Yet Be Purchased
|
||||||
March 2016 Share and Convertible Debt Repurchase Program:
|
||||||||||
July 2016 (July 1, 2016 to July 31, 2016)
|
500,000
|
|
$
|
8.88
|
|
4,942,823
|
|
$
|
7,100,000
|
|
August 2016 (August 1, 2016 to August 31, 2016)
|
57,561
|
|
$
|
9.50
|
|
5,000,384
|
|
$
|
6,600,000
|
|
September 2016 (September 1, 2016 to September 30, 2016)
|
69,991
|
|
$
|
8.40
|
|
5,070,375
|
|
$
|
—
|
|
Exhibit No.
|
|
Description
|
10.1
|
|
Form of Performance Restricted Stock Unit Award Agreement
#
|
10.2
|
|
Joinder and Amendment No. 11 to Credit Agreement, dated as of September 30, 2016, by and among the lenders identified on the signature pages thereto, Wells Fargo Capital Finance, LLC, Fifth Third Bank, REG Services Group, LLC and REG Marketing & Logistics Group, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 4, 2016).
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).
|
32.1*
|
|
Certification of the Chief Executive Officer pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2*
|
|
Certification of the Chief Financial Officer pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
RENEWABLE ENERGY GROUP, INC.
|
|
|
|
|
|
|
|
|
|
Dated:
|
November 4, 2016
|
By:
|
/s/ Daniel J. Oh
|
|
|
|
Daniel J. Oh
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
Dated:
|
November 4, 2016
|
By:
|
/s/ Chad Stone
|
|
|
|
Chad Stone
|
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
Dated:
|
November 4, 2016
|
By:
|
/s/ Chad A. Baker
|
|
|
|
Chad A. Baker
|
|
|
|
Controller and Chief Accounting Officer (Principal Accounting Officer)
|
2.
|
Vesting of Performance Restricted Stock Units.
|
(i)
|
If the volume weighted average trading price of a share of Common Stock over any period of twenty (20) consecutive trading days that begins during the three year period commencing on the Grant Date (each such period of trading days referred to herein as a “Trading Period”) is equal to or greater than $11.74, then fifty percent (50%) of the Performance Restricted Stock Units granted under this Agreement shall vest as of the last day of such Trading Period. Each Performance Restricted Stock Unit that vests pursuant to this Section 2(a)(i) shall be converted into the right to receive one share of Common Stock to be delivered on or as soon as practicable (but no later than thirty (30) days) after the later of (A) the last day of such Trading Period or (B) the first (1
st
) anniversary of the Grant Date. Notwithstanding the above, if vesting under this Section 2(a)(i) occurs on or before December 31
st
of the calendar year in which the Performance Restricted Stock Units are granted, settlement of the vested units will occur no later than March 15
th
of the following calendar year.
|
(b)
|
Accelerated Vesting of Performance Restricted Stock Units
.
|
(i)
|
Death, Disability or Approved Retirement
. The Performance Restricted Stock Units are not subject to accelerated vesting upon termination of employment or service by reason of death, Disability or Approved Retirement.
|
(ii)
|
Change of Control
. The Performance Restricted Stock Units may be subject to accelerated vesting and settlement in connection with a Change of Control to the extent provided in Section 10 of the Plan.
|
3.
|
Forfeitures of Performance Restricted Stock Units
.
|
4.
|
Restrictions on Transfer Before Vesting.
|
11.
|
Limitation of Rights.
Nothing in this Agreement or the Plan may be construed to:
|
16.
|
Section 409A
.
|
17.
|
Entire Agreement.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Renewable Energy Group, Inc.
|
2.
|
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;
|
3.
|
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;
|
4.
|
The registrant’s other certifying officer 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:
|
a.
|
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;
|
b.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
The registrant’s other certifying officer 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):
|
a.
|
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
|
b.
|
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.
|
Dated:
|
November 4, 2016
|
|
|
|
|
|
|
|
|
|
/s/ Daniel J. Oh
|
|
|
Daniel J. Oh
|
|
|
Chief Executive Officer
|
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Renewable Energy Group, Inc.
|
2.
|
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;
|
3.
|
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;
|
4.
|
The registrant’s other certifying officer 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:
|
a.
|
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;
|
b.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
The registrant’s other certifying officer 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):
|
a.
|
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
|
b.
|
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.
|
Dated:
|
November 4, 2016
|
|
|
|
|
|
|
|
|
|
/s/ Chad Stone
|
|
|
Chad Stone
|
|
|
Chief Financial Officer
|
|
|
|
Dated:
|
November 4, 2016
|
|
|
|
|
|
|
|
|
|
/s/ Daniel J. Oh
|
|
|
Daniel J. Oh
|
|
|
Chief Executive Officer
|
|
|
|
Dated:
|
November 4, 2016
|
|
|
|
|
|
|
|
|
|
/s/ Chad Stone
|
|
|
Chad Stone
|
|
|
Chief Financial Officer
|
|
|
|