Pacific Ethanol expects $23.9 Million Q1 net loss

SACRAMENTO
May 12, 2009 7:48am

West coast ethanol producer Pacific Ethanol Inc. (NASDAQ: PEIX) of Sacramento is warning it might fall into bankruptcy soon if it cannot work out a better deal with its creditors.

“The company has been actively pursuing a number of alternatives, including seeking to restructure its debt and seeking to raise additional debt or equity financing, or both,” it says in a filing Tuesday with the Securities and Exchange Commission.

“If the company cannot restructure its debt and obtain sufficient liquidity in the very near-term, the company will need to seek protection under the U.S. Bankruptcy Code,” it says.

Pacific Ethanol says it anticipates reporting a net loss of approximately $23.9 million for the three months ended March 31 as compared to a net loss of $35.2 million for the same period in 2008.

It says it expects to report net sales of about $86.7 million for the three months ended March 31, as compared to net sales of $161.5 million for the same period in 2008.

The decrease resulted primarily from a decrease in both the volume of ethanol sold and lower average sales prices, it says.

The volume of ethanol sold by the company for the three months ended March 31 decreased by approximately 24 percent as compared to the same period in 2008, it says. The average sales price of ethanol decreased 28 percent to $1.65 per from an average sales price of $2.30 per gallon for the same period in 2008.

The company says it was unable to file its Quarterly Report on Form 10-Q for the quarter ended March 31, on time because management needs additional time to complete the financial and other. It now plans to file its Quarterly Report by May 18.

It says its gross margin was approximately “negative 12.8 percent” for the three months ended March 31, as compared to a gross profit margin of 9.7 percent for the same period in 2008. The decline in the company’s gross margins was primarily due to increased costs to operate its four ethanol production facilities in relation to their reduced production levels and lower average sales prices.