Renewable Energy Group, Inc.recently announced its financial results for the first quarter ended March 31, 2016.Revenues for the quarter were $305.6 million on 98.0 million gallons of fuel sold. Compared to the first quarter of 2015, REG sold 63.7% more gallons of fuel resulting in an increase in revenue of 32.3%. Adjusted EBITDA for the quarter was $9.9 million compared to negative $30.2 million in the prior year period, without any adjustments for the 2015 Biodiesel Mixture Excise Tax Credit (BTC). Adjusted EBITDA for the first quarter of 2015, after giving effect to the retroactive reinstatement of the BTC (as discussed below), was negative $14.5 million.
“The REG team delivered solid execution in the quarter. We continued optimizing our fleet of plants while integrating our newest biorefinery in DeForest, Wisconsin and bringing REG Geismar back online,” said REG President and CEO Daniel J. Oh. “A more stable regulatory environment in the U.S. enabled us to focus on growing our business.”
First Quarter 2016 Highlights
All figures refer to the quarter ending March 31, 2016, unless otherwise noted. All comparisons are to the quarter ended March 31, 2015 unless otherwise noted.
REG sold a total of 98.0 million gallons of fuel, an increase of 63.7%. REG produced 86.2 million gallons of biomass-based diesel during the quarter, a 42.1% increase. The average price per gallon sold of biomass-based diesel decreased by 7.9% to $2.92 which was due to lower heating oil and RIN prices.
Revenues of $305.6 million increased 32.3%. The increase is attributable to the 63.7% increase in gallons sold and the impact of the BTC in effect in 2016 but not in effect in the first quarter of 2015, offset by the lower average sales price.
Gross profit was $25.1 million, or 8.2% of revenues, compared to gross loss of $16.2 million, or 7.0% of revenues. The increase in gross profit was due to the significant increase in gallons sold along with a better margin environment.
Net income attributable to common stockholders was $0.04 per share on a fully diluted basis, or $1.6 million. This compares to a net loss of $0.86 per share on a fully diluted basis, or $38.1 million.
REG repurchased 647,794 of its outstanding shares during the first quarter at an average price of $8.98 per share. From inception of the repurchase program in February 2015 through March 31, 2016, the Company has spent $29.1 million under its $30 million authorized share repurchase program, to repurchase 3,126,907 shares at an average price of $9.32 per share. The company completed the $30 million share repurchase program during the Month of April 2016, purchasing an additional 90,654 shares at an average price of $9.61.
At March 31, 2016, REG had cash and cash equivalents of $164.1 million, an increase of $117.0 million from the prior quarter end. This increase was largely the result of collections related to the retroactive reinstatement for 2015 of the biodiesel mixture excise tax credit.
At March 31, 2016, accounts receivable were $106.4 million, or 31 days of sales. Accounts receivable at December 31, 2015 were $310.7 million. The decrease in accounts receivable in the quarter was due to the collections related to the biodiesel mixture excise tax credit. Inventory was $133.8 million at March 31, 2016, or 43 days of sales, an increase of $47.9 million from the prior quarter end.