-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IQOi0vioLh8sQAgeGooK3wRd7rBqiKpRF3weS8kOIzfAE2l1b/+8ipofdcnFuUDc I6Xp9a8dBVH3EnyCczwR2A== /in/edgar/work/0000941158-00-000038/0000941158-00-000038.txt : 20001120 0000941158-00-000038.hdr.sgml : 20001120 ACCESSION NUMBER: 0000941158-00-000038 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HIGH PLAINS CORP CENTRAL INDEX KEY: 0000317551 STANDARD INDUSTRIAL CLASSIFICATION: [2860 ] IRS NUMBER: 480901658 STATE OF INCORPORATION: KS FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08680 FILM NUMBER: 772701 BUSINESS ADDRESS: STREET 1: 200 W DOUGLAS STREET 2: STE 820 CITY: WICHITA STATE: KS ZIP: 67202 BUSINESS PHONE: 3162694310 MAIL ADDRESS: STREET 1: 200 W DOUGLAS STREET 2: STE 820 CITY: WICHITA STATE: KS ZIP: 67202 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN GASOHOL REFINERS INC DATE OF NAME CHANGE: 19830807 10-Q 1 0001.txt Form 10-Q Securities and Exchange Commission Washington, D.C. 20549 [ X ] Quarterly report pursuant to Section 13 of 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended September 30, 2000 or [ ] 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 1-8680 High Plains Corporation (Exact name of registrant as specified in its charter) Kansas #48-0901658 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 200 W Douglas 67202 Suite #820 (Zip Code) Wichita, Kansas (Address of principal executive offices) (316) 269-4310 (Registrant's telephone number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under plan confirmed by a court. Yes No Common Stock, Par Value $.10 per share, Outstanding at September 30, 2000 - 16,207,344 PART I FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Balance Sheet 3 - 4 Statements of Operations 5 Statements of Comprehensive Income/(Loss) 5 Statement of Stockholders' Equity 6 Statement of Cash Flows 7 Selected Notes to Financial Statements 8 - 9 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10 - 12 PART II OTHER INFORMATION Item 3. Legal Proceedings 12 Item 4. Other Information 12 - 13 Item 5. Exhibits and Reports on Form 8-K 14 HIGH PLAINS CORPORATION Balance Sheets (Unaudited) September 30, 2000 and June 30, 2000
Assets September 30, 2000 June 30, 2000 (Unaudited) ** Current Assets: Cash and cash equivalents $ 5,327,049 $ 4,886,011 Accounts receivable Trade (less allowance of $75,000) 9,259,915 10,026,422 Production credits and incentives (less allowance of $124,222) 271,154 329,829 Inventories 5,019,701 4,283,561 Notes receivable 50,000 50,000 Prepaid expenses 720,927 487,428 Refundable income tax 30,000 30,000 Total current assets 20,678,746 20,093,251 Property, plant and equipment, at cost: Land and land improvements 450,403 450,403 Ethanol plants 93,479,168 93,366,635 Other equipment 573,911 573,911 Office equipment 411,333 389,446 Leasehold improvements 48,002 48,002 Construction in progress 1,668,227 914,586 Sub-total 96,631,044 95,742,983 Less accumulated depreciation (32,223,871) (31,295,936) Net property, plant and equipment 64,407,173 64,447,047 Other assets: Deferred loan costs (less accumulated 795,514 849,244 amortization of $179,103 and $125,372, respectively) Other 2,904 13,054 Total other assets 798,418 862,298 $ 85,884,337 $ 85,402,596 See accompanying notes to financial statements. ** From audited financial statements.
HIGH PLAINS CORPORATION Balance Sheets (Unaudited) September 30, 2000 and June 30, 2000
Liabilities and Stockholders Equity September 30, 2000 June 30, 2000 (Unaudited) ** Current Liabilities: Current portion of long-term debt $ 2,569,637 $ 2,507,138 Current maturities of capital leases 573,767 561,518 Accounts payable 7,326,920 8,695,216 Accrued interest 305,610 295,772 Accrued payroll and property taxes 983,623 779,199 Total current liabilities 11,759,557 12,838,843 Long-term debt 15,930,360 16,492,860 Capital lease obligations, less current maturities 801,110 940,376 Deferred income tax payable 2,167,558 1,389,000 Other 276,806 273,253 Total non-current liabilities 19,175,834 19,095,489 Stockholders' Equity: Common stock, $.10 par value, authorized 50,000,000 shares; issued 16,484,191 and 16,453,798 shares at September 30, 2000 and June 30, 2000, respectively, of which 276,847 and 276,847 were held as treasury stock at September 30, 2000 and June 30, 2000, respectively. 1,648,419 1,645,380 Additional paid-in capital 37,734,250 37,695,277 Retained earnings 16,163,529 14,865,932 Accumulated other comprehensive income: Grain derivatives 136,865 0 55,683,063 54,206,589 Less: Treasury stock-at cost (710,849) (710,849) Deferred compensation (23,268) (27,476) Total stockholders' equity 54,948,946 53,468,264 $ 85,884,337 $ 85,402,596 See accompanying notes to financial statements. ** From audited financial statements.
HIGH PLAINS CORPORATION Statement of Operations (Unaudited) Three Months Ended September 30, 2000 and 1999
Three Months Ended September 30, 2000 1999 Net sales and revenues $ 29,181,796 $ 22,703,652 Cost of goods sold 25,814,985 22,051,469 Gross profit 3,366,811 652,183 Selling, general and administrative expenses 899,170 902,788 Operating income/(loss) 2,467,641 (250,605) Other income/(expense): Interest expense (489,302) (389,646) Interest and other income 97,816 14,630 Gain on sale of assets 0 22,000 (391,486) (353,016) Net income/(loss) before income taxes 2,076,155 (603,621) Income tax expense (778,558) (10,000) Net earnings/(loss) $ 1,297,597 $ (613,621) Basic and diluted earnings/(loss) per share $ .08 $ (.04)
Statement of Comprehensive Income/(Loss) Three Months Ended September 30, 2000 and 1999 (Unaudited)
Three Months Ended September 30, 2000 1999 Net earnings/(loss) $ 1,297,597 $ (613,621) Other comprehensive income: Grain derivatives 136,865 0 Comprehensive income/(loss) $ 1,434,462 $ (613,621) See accompanying notes to financial statements.
HIGH PLAINS CORPORATION Statement of Stockholders' Equity (Unaudited) Three Months Ended September 30, 2000
Common Stock (Issued) Additional Accumulated Number of Paid-In Retained Other Comprehensive Treasury Deferred Shares Amount Capital Earnings Income Stock Compensation Total Balance, June 30, 2000 16,453,798 $1,645,380 $37,695,277 $14,865,932 $ 0 $ (710,849) $ (27,476) $53,468,264 Exercise of options under espp 393 39 722 761 Exercise of stock options 30,000 3,000 38,251 41,251 Amortization of deferred compensation 4,208 4,208 Grain derivatives 136,865 136,865 Net earnings for quarter 1,297,597 1,297,597 Balance, September 30, 2000 16,484,191 $1,648,419 $37,734,250 $16,163,529 $ 136,865 $ (710,849) $ (23,268) $54,948,946 See accompanying notes to financial statements.
HIGH PLAINS CORPORATION Statement of Cash Flows (Unaudited) Three Months Ended September 30, 2000 and 1999
2000 1999 Cash flows from operating activities: Net earnings $ 1,297,597 $ (613,621) Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 981,664 955,990 Amortization of deferred compensation 4,208 22,744 Compensation expense on treasury stock grants 0 222,802 Gain on sale of equipment 0 (22,000) Deferred income taxes 778,558 0 Change in operating assets and liabilities: Accounts receivable 982,198 (136,654) Notes receivable 0 1,000,000 Inventories (736,140) (291,105) Income tax payable/receivable 0 0 Prepaid expenses (233,499) (670,707) Accounts payable (1,150,432) 853,992 Accrued liabilities (13,602) (212,752) Net cash provided by operating activities 1,910,552 1,108,689 Cash flows from investing activities: Proceeds from sale of equipment 0 22,000 Acquisition of property, plant and equipment (878,217) (490,395) Decrease (increase) in other non-current assets 0 0 Net cash used in investing activities (878,217) (468,395) Cash flows from financing activities: Payments on long-term debt (500,001) 0 Payments on revolving lines-of-credit 0 (500,000) Payments on capital lease obligations (136,861) (126,512) Proceeds from exercise of stock options 41,251 0 Increase (decrease) in other non-current liabilities 4,314 10,200 Net cash provided (used) by financing activities (591,297) (616,312) Increase (decrease) in cash and cash equivalents 441,038 23,982 Cash and cash equivalents: Beginning of period 4,886,011 330,672 End of period $ 5,327,049 $ 354,654 See accompanying notes to financial statements.
HIGH PLAINS CORPORATION Selected Notes to Financial Statements 1) Basis of Presentation The accompanying financial statements have been prepared by High Plains Corporation ("Company") without audit, unless otherwise noted. In the opinion of management, all adjustments (which include only normally occurring adjustments) necessary to present fairly the financial position, results of operations and changes in financial position for the periods presented, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principals have been condensed or omitted. The results of operations for the period ended September 30, 2000 are not necessarily indicative of the operating results for the entire year. 2) Financial Arrangements On December 3, 1999, the Company was able to obtain a $28 million credit facility through Bank of America. The credit facility consisted of a $20 million term loan and a $8 million revolving line-of-credit. The credit facility is for a five-year period, which may be extended for a series of one-year renewals. As of September 30, 2000, the revolving line-of-credit had $8 million of credit available and undrawn. 3) Stock Options On May 8, 2000, 5,000 options were granted at $2.50 per share to key management personnel in lieu of signing bonus. On September 19, 2000, 15,000 options were granted at $3.063 to the president as a result of the reload provision on 15,000 options that were exercised on the same date. The option grants were made at the fair market value of the stock on the date of grant. An additional 15,393 options were exercised during the quarter by former employees and directors. 4) Stock-Based Compensation The Company continues to account for stock-based compensation for employees using the intrinsic value method prescribed in APB No. 25. Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company's stock at the date of grant over the amount an employee must pay to acquire the stock. Had compensation cost for the stock-based compensation been determined based on the fair value grant date, consistent with the provisions of FAS 123, the Company's net earnings and diluted earnings per share above would have been reduced to pro forma amounts below:
For the three months ending September 30, 2000 1999 Net earnings/(loss) As reported $ 1,297,597 $ (613,621) Pro forma 1,257,908 (740,957) Diluted earnings/(loss) per share As reported $ .08 $ (.04) Pro forma .08 (.05)
The Company's basic earnings per share for the pro forma information noted above is the same as the Company's diluted earnings per share for all the periods disclosed. 5) Earnings Per Share The Company, as required under FASB Statement No. 128 Earnings Per Share (FAS 128) has replaced the presentation of primary earnings per share (EPS) with Basic EPS and Diluted EPS. Under FAS 128 both the basic and diluted must be presented in the financial statements. Also, under the FAS 128 all prior period EPS data presented in the financial statements must be restated for comparative purposes. The diluted earnings per share for the three months ended September 30, 2000 and 1999 have been calculated based on 16,347,207 and 16,104,340 diluted shares outstanding, respectively. 6) Inventories
September 30, 2000 June 30, 2000 Inventories consisted of the following components: Raw Materials $ 1,622,717 $ 1,276,938 Work in progress 433,823 493,064 Finished goods 1,892,359 1,469,053 Spare parts 1,070,802 1,044,506 Total $ 5,019,701 $ 4,283,561
7) Other comprehensive income Under FASB Statement No. 130, Reporting Comprehensive Income, the Company is required to report the total of other comprehensive income as a component of equity that is displayed separately from retained earnings and additional paid-in capital whenever such items exist at the end of the accounting period. In addition, the Company must also present a Statement of Comprehensive Income that presents other comprehensive income items as adjustments to the Company's net income after tax results, net of tax.
Pre-tax Tax Expense Net-of-Tax Amount (Benefit) Amount Other comprehensive income consisted of the following components: Grain derivatives $ 136,865 $ 0 $ 136,865 Grain Derivatives Balance, beginning $ 0 Current period change 136,865 Balance, ending $ 136,865
8) Derivatives and hedging activities During the first quarter of fiscal 2000, the Company adopted the provisions of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133). The adoption of this pronouncement did not have a material effect on the financial statements at September 30, 2000. SFAS 133 requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivatives qualify as hedges of recognized assets, liabilities or firm commitments under SFAS 133, changes in the fair value of derivatives are offset against the changes in fair value of assets, liabilities, or firm commitments through earnings. If the derivatives qualify as cash flow hedges of forecasted transactions, then changes in the fair value of the derivatives are recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of the derivative's change in fair value, if any, will be immediately recognized in earnings. The Company also routinely enters into forward contracts for grain purchase requirements. Some of these forward contracts are unpriced, subject to market fluctuations, and some of them are priced. The Company's fixed priced forward contracts for purchases of normal grain requirements are not considered derivatives and, accordingly, changes in the market value of such contracts are not recognized; instead, the fixed price cost of the grain is included in cost of goods sold at the time the grain is consumed in the conversion process. As of and during the quarter ended September 30, 2000, the Company held derivative positions accounted for as cash flow hedges of its forecasted grain purchase requirements, under SFAS 133. The resulting net gain or loss from such derivatives is reported in cost of goods sold when the related grain purchase transaction occurs. The grain derivative gains or losses reflected in other comprehensive income at September 30, 2000, will be recognized in earnings during the subsequent time period when the related forecasted grain transaction occurs, generally during the subsequent quarter. The Company does not hedge all of its forecasted grain transactions. Currently, the maximum length of time over which the Company is hedging forecasted grain purchase transactions with derivative positions is one quarter. Part I MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Item 2. Forward-looking Statements Forward-looking statements in this Form 10-Q, future filings including but not limited to, the Company's annual 10K, Proxy Statement, and 8K filings by the Company with the Securities and Exchange commission, the Company's press releases and oral statements by authorized officers of the Company are intended to be subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the risk of a significant natural disaster, the inability of the Company to ensure against certain risks, the adequacy of its loss reserves, fluctuations in commodity prices, change in market prices or demand for motor fuels and ethanol, legislative changes regarding air quality, fuel specifications or incentive programs, as well as general market conditions, competition and pricing. The Company believes that forward-looking statements made by it are based upon reasonable expectations. However, no assurances can be given that actual results will not differ materially from those contained in such forward- looking statements. The words "estimate", "anticipate", "expect", "predict", "believe" and similar expressions are intended to identify forward-looking statements. Three Months Ended September 30, 2000 and 1999 Net Sales and Operating Expenses. Net sales and revenues for the three months ended September 30, 2000, increased 29% compared to the same period ended September 30, 1999. During the quarter ended September 30, 2000, approximately 18.1 million gallons of fuel grade ethanol were sold at an average price of $1.25 per gallon compared to approximately 16.3 million gallons sold at an average price of $.97 per gallon, for the same period ending September 30, 1999. Fuel grade ethanol sales included 2.7 million gallons of brokered fuel grade ethanol (marketed on behalf of other producers) for the quarter ended September 30, 2000 compared to .6 million gallons of brokered fuel grade ethanol for the same period ending September 30, 1999. In addition, approximately 1.4 million gallons of industrial/beverage grade ethanol were sold at an average price of $1.47 per gallon during the quarter ended September 30, 2000 compared to approximately .8 million gallons sold at $1.48 per gallon for the same period ending September 30, 1999. Industrial/beverage grade ethanol sales included .4 million gallons of brokered industrial/beverage grade ethanol for the quarter ended September 30, 2000 compared to .3 million gallons of brokered fuel grade ethanol for the same period ending September 30, 1999. Fuel grade gallons sold during the quarter ended September 30, 2000 increased approximately 11% compared to the same period in 1999. Industrial/beverage grade gallons sold during the quarter ended September 30, 2000 increased approximately 78% compared to the same period in 1999. The fuel grade ethanol market demand was very strong for the quarter ended September 30, 2000, due to favorable blending economics. The Company's fuel grade ethanol sales volume increases were primarily driven by the increased brokered volume for the comparable periods. Industrial/beverage grade gallons increased primarily in response to increased marketing efforts in that segment of the Company's business. The higher net sales were the result of increased volumes in both grades of ethanol and a 29% increased in the average delivered price of fuel grade ethanol. The Company's Portales, New Mexico facility contributed $5,226,195 and $3,733,459 of net sales and revenues for the periods ended September 30, 2000 and 1999, respectively. Cost of products sold as a percentage of net sales and revenues was 88.5% and 97.1% for the three months ended September 30, 2000 and 1999, respectively. The cost of products sold as a percentage of net sales and revenues for the quarter ended September 30, 2000 decreased dramatically compared to the same period in 1999. The decrease was due to a combination of a decrease in the average grain prices and the previously noted increase in the average delivered price of fuel grade ethanol for comparable periods. The average cost of grain declined to $1.83 per bushel for the quarter ended September 30, 2000, down from $2.03 per bushel for the same quarter in 1999. These favorable price moves were somewhat offset by much higher natural gas costs for the comparable periods. Natural gas spot market prices have approximately double compared to the same quarter in 1999. The Company's Portales, New Mexico facility contributed $4,581,493 and $4,418,552 of cost of goods sold for the periods ended September 30, 2000 and 1999, respectively. Selling, general and administrative (SG&A) expenses remained flat for the quarter ended September 30, 2000, compared to the same period ended September 30, 1999. However, if the stock grants to key management personnel of $.4 million were factored out of the quarter ended September 30, 1999, SG&A would show approximately an 80% increase from the comparable quarter in 1999. This increase is the result of an increase in administrative salary and benefit expenses resulting from an increase in staff and increased research and development expenses resulting from the glycerol side-stream project. The increased staffing is the result of new initiatives, such as in house grain procurement, being under taken by management and reclassification of staff into SG&A cost centers from operations cost centers. Net Earnings. Net earnings increased 311% for the three months ended September 30, 2000, compared to net earnings for the same period ended September 30, 1999. Net earnings as a percentage of net sales and revenues increased from (2.7%) to 4.4% for the comparable periods. The increase is the result of increased gross profit percentages from 2.9% to 11.5% due to higher average fuel grade ethanol prices coupled with lower average grain prices, and increased sales resulting primarily from brokering activities for comparable periods. Diluted earnings per share at September 30, 2000, were 300% higher than diluted earnings per share for the same period in 1999 due to the increased earnings. The Company's Portales, New Mexico facility contributed $644,702 and ($685,093) of operating margin before taxes, allocated overhead and interest for the periods ended September 30, 2000 and 1999, respectively. Liquidity and Capital Resources The Company's primary source of funds during the quarter ended September 30, 2000 was cash flow from operating activities. At September 30, 2000, the Company had working capital of approximately $8.9 million compared to working capital of approximately $7.3 million for the period ended June 30, 2000. The increase in working capital was primarily due to increases in cash and cash equivalents and inventories netted against decrease in trade accounts payable. The Company's inventory increase is due to stock piling grain at its Colwich, Kansas facility to take advantage of favorable grain prices experienced at harvest time and increased fuel grade ethanol inventory at its York, Nebraska facility. Capital expenditures for the first three months of fiscal 2001 amounted to approximately $.9 million for modifications to the Company's three plants compared to approximately $.5 million for the same period in fiscal 2000. The majority of the expenditures relate to modifications to the Company's Colwich, Kansas facility, which is in the process of receiving modification to its dryers for increased output and more reliable operations. The Company was able to refinance its revolving-lines-of credit into term debt December 3, 1999. The Company obtained a $28 million credit facility, which consisted of $20 million term loan and $ 8 million revolving line-of-credit. The $8 million revolving line-of-credit was available and undrawn, as of September 30, 2000. The Company believes it has adequate short-term working capital and borrowing availability under its new financing arrangement to meet its operating cash needs. However, in the event the Company encounters unforeseen changes in market conditions that adversely affect its ability to generate cash flow from operations, the Company could seek to raise additional funds through the sale of stock, or issuance of debt and/or equity securities. The Company received its last production incentive payment under its original agreement with the state of Nebraska in the second quarter of fiscal 2000. The impact of the loss of the Nebraska incentive on the Company's liquidity was mitigated by increased profitability and continued emphasis on diversifying the Company's York, Nebraska facility's products. However, in the future the lack of the incentive could substantially and negatively impact the Company's liquidity position. The Company continues to improve efficiencies, to implement cost controls, and focus efforts on expanding its presence in the higher margin industrial/beverage grade markets to assist in improving the Company's liquidity and earnings. Seasonality Fuel grade ethanol prices are historically soft during the non-oxygenate period, which coincides with the Company's first and fourth fiscal quarters. Typically fuel grade ethanol prices firm up during the winter months, which coincide with the Company's second and third fiscal quarters, due to the mandated markets of the Federal Oxygen Program. Prices generally increase in the weeks before September, and decrease by March due to shipping schedules. Additionally, fuel grade ethanol prices historically have been influenced by the price of unleaded gasoline, which remained strong during the first quarter of fiscal 2001. Due to the continued strength of the unleaded gasoline market, fuel grade ethanol remained uncharacteristically high through the first quarter of fiscal 2001. Now with the Company entering into the oxygenate season and with many analysts projecting continued strength in the oil markets, management believes fuel ethanol pricing will remain at the current levels throughout the oxygenate season. Furthermore, the Company has contracted approximately three quarters of its fuel grade ethanol production through the March 2001 (end of oxygenate season) at fixed prices, thus minimizing the Company's exposure in the event of an unforeseen downturn in the market, but conversely limiting the Company's ability to gain from additional market increases. Currently, there is legislation pending which could significantly affect the demand for fuel grade ethanol either positively or negatively. Current legislation is attempting to deal with the perceived problems surrounding the MTBE environmental contamination issues by phasing out MTBE over the next several years, eliminating the oxygenate requirement, and implementing a minimum renewable fuels content for all fuel consumed, excluding diesel. As of September 30, 2000, no such legislation had been enacted. Grain prices also continue to be favorable for the ethanol industry. Although corn and milo feedstock prices have increased somewhat from harvest lows, market fundamentals (projected crop size, carryouts, export and demand numbers) appear to favor continued low grain prices through the next crop year. As always, grain prices are subject to significant changes due to weather patterns, or in the event of changes in the fundamental market factors described above. The Company has currently contracted approximately 10 million bushels under either fixed priced forward contracts, or unpriced basis differential forward contracts which will be priced at a later date. The Company continues to utilize grain futures contracts to hedge against price fluctuations related to its grain feedstock requirements. Market indicators have led management to believe that grain prices will remain favorable compared to historic prices through second quarter of fiscal 2001. Prices for the Company's distillers grain by-products, as known as distillers grain solubles (DGS), historically fluctuate with the price of corn, and provide the Company with some hedge against the possibility of higher grain prices. Although grain prices remained low, DGS prices (also at historically low levels overall) strengthened in the first quarter of fiscal 2001. The Company has emphasized production of a wet distillers grain product at its Nebraska and New Mexico facilities in an effort to strengthen and stabilize its feed markets. However, anticipated softness in grain prices should also result in some decline in prices for the Company's DGS products. PART II OTHER INFORMATION Item 1. LEGAL PROCEEDINGS No new legal proceedings were instigated during the quarter ended September 30, 2000, which would be considered other than in the ordinary course of the Company's business. Item 2. CHANGES IN SECURITIES Not Applicable Item 3. DEFAULTS UPON SENIOR SECURITES Not Applicable Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable Item 6. EXHIBITS AND REPORTS ON FORM 8-K a). Exhibit 27-1 Financial Data Schedule b). Reports on Form 8-K. During the quarter for which this report is filed, the company filed the following Form 8-K's: July 31, 2000 Company announced adoption of corporate governance. August 31, 2000 Company announced Fiscal 2000 earnings and Fiscal 2000 fourth quarter results. October 17, 2000 Company announced Fiscal 2001 first quarter results. EX-27 2 0002.txt
5 3-MOS JUN-30-2001 SEP-30-2000 5,327,049 0 9,780,291 199,222 5,019,701 20,678,746 96,631,044 32,223,871 85,884,337 11,759,557 19,874,874 0 0 1,648,419 53,300,527 85,884,337 29,181,796 29,181,796 25,814,985 25,814,985 899,170 0 489,302 2,076,155 778,558 1,297,597 0 0 0 1,297,597 .08 .08
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