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jrsiajdranch
Veteran Advisor

golden grain energies fiscal report.

Got this off of Yahoo finance. the whole link is very interseetoing to read. 

 

http://biz.yahoo.com/e/110614/120694210-q.html

 

 

For those in a hurry here's the numbers

 

Results of Operations for the Three Months Ended April 30, 2011 and 2010

The following table shows the results of our operations and the percentage of
our revenue, cost of goods sold, operating expenses and other items to total
revenue in our statement of operations for the three months ended April 30, 2011
and 2010:

2011 2010
Income Statement Data Amount % Amount %
Revenue $ 67,503,827 100.0 $ 44,027,018 100.0
Cost of Goods Sold 66,607,657 98.7 43,248,727 98.2
Gross Profit 896,170 1.3 778,291 1.8
Operating Expenses 645,212 1.0 611,864 1.4
Operating Income 250,958 0.4 166,427 0.4
Other Income 1,220,359 1.8 722,839 1.6
Net Income $ 1,471,317 2.2 $ 889,266 2.0

 

Looks like ethol isn't having any profit problems to me!

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11 Replies
hardnox604008
Advisor

Re: golden grain energies fiscal report.

Dumb question- what is "other income"?

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k-289
Senior Advisor

Re: golden grain energies fiscal report.

Kind of a far cry from  Exon/Mobil ----as far as other income it might DDG sales or commodities---accounting procedures vary from each facility---the one I'm familiar with has my head a scratching to get to the final analysis  --

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Mark, ncIA
Frequent Contributor

Re: golden grain energies fiscal report.

Nox, they've got a pretty significant amount of investment in a couple of other plants that they &/or some of their board founded.  The equity in the net income of investments line was where all the income was in the statement of operations.

 

From the 10-Q:  Other Income (Expense). We had no interest income during the second quarter of our 2011 fiscal year compared to the same period of 2010 because all of our extra cash was used to pay down our revolving lines of credit with our primary lender. In addition, our interest expense decreased significantly during the second quarter of our 2011 fiscal year compared to the same period of 2010 because the interest rate on our long-term loans decreased significantly when we refinanced with Farm Credit. We also had less debt outstanding during the second quarter of our 2011 fiscal year compared to the same period of 2010 which decreased our interest expense. Our equity in the net income of our investments increased during the second quarter of our 2011 fiscal year compared to the same period of 2010 due primarily to our investment in Guardian Energy.

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hardnox604008
Advisor

Re: golden grain energies fiscal report.

So you're telling me that they basically made zippo on an operating basis and the profit is from unrealized gain in equity in another business that is in the identical same line of business?

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hardnox604008
Advisor

Re: golden grain energies fiscal report.

Did a bit more research.

 

So apparently they and others bought the new plant out of BR from AgStar/Verasun so they're making money on that one?

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hardnox604008
Advisor

Re: golden grain energies fiscal report.

Which, by the way, is a pretty good definition of a commodity business. Narrow to no magins for the average cost producer but good returns on assets that are bought below replacement cost.

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timetippingpt
Honored Advisor

Re: golden grain energies fiscal report.

Maybe a finer point, but where is Depr? Depr is not part of COGS by any accounting rules they taught at Purdue. Repairs to capital items are the same way. They surely have some, at least for equipment upgrades. Or maybe they are doing farmer accounting?

 

Also, just wondering, no business in the world can survive on a .4% profit margin for long. Just mathematically virtually impossible. This report really begs alot of questions. It almost looks like they are shifting things around to get such a  consistent income number in some way. Especially in an environment where both the inputs and outputs and even catalyst prices have varied wildly.

 

Nox with no depr in these numbers, it would make your comment about margins inapplicable. They have no cost for the asset in the cost cost number, therefore it is considered free on a cost basis. Which is fine, but .4% in not much of a return on a investment.

 

Maybe they are changing there cost for corn to equal their selling price. If equity is 100% owned by farmers supplying corn, that would explain the income number.

 

 

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Mark, ncIA
Frequent Contributor

Re: golden grain energies fiscal report.

Ken & Knox,

 

Whatever your thoughts on the accounting methodology, I've found it an exercise in futility to argue with accounting firms who do SEC work, can't give my opinion on FASB on this forum, as there might be children reading.  Certainly the Janesville plant, along with most of the others bought second hand, will be leaders in profitablity & cash flow due to discounted purchase prices.

 

While Q1 results don't seem to shinny, I can assure you this is a very well run company.  Had their Q1 been a 3/31 vs a 4/30, it would have looked better, margins tanked in late Feb and stunk until the end of April.  If they've got a downfall, it's probably that they've rolled out way too much cash to their owners over their short history.  That put them in a tight spot in '08 & it appears they've worked through that. 

 

See the 10-Q here:  http://www.sec.gov/Archives/edgar/data/1206942/000120694211000011/a10-qfqe43011.htm

 

Cash & foreward ethanol margins this week are some of the highest we've seen since pre-great recession.  Falling corn prices actually helped, as usually ethanol tanks harder than corn in down markets.  We're not doing any rationing of old crop on the ethanol side, regardless of senate wrangling.

 

Mark

 

 

 

 

 

 

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Buc10
Veteran Contributor

Re: golden grain energies fiscal report.

That is a good web site Mark. Where does it show what they are getting from the government in handouts?

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