Green Plains Inc. Q3 FY2025 earnings call

• Executed the sale of the Obion, Tennessee facility and used proceeds to fully repay approximately $130 million of high-cost debt, and refinanced most of the 2027 convertible debt with a new $200 million facility due in 2030.
• Executed on the first 45Z clean fuel production tax credit monetization agreement and commissioned and started up the carbon capture facility at York, Nebraska, with Central City and Wood River, Nebraska locations ramping up capture rates.
• Plants achieved over 101% capacity utilization, the highest level in over a decade, driven by operational excellence programs improving fermentation yields and reducing plant downtime.
• Financially, the quarter reflected the new foundation laid, with $52.6 million in adjusted EBITDA and $11.9 million in net income, and began realizing benefits from the 45Z clean fuel production tax credit, recognizing $25 million in Q3 and anticipating $15-25 million in Q4.
• Strengthened balance sheet with $353 million total debt, down over $220 million from year-end 2024, with no significant near-term debt maturities.
• Implemented an overhaul of CapEx policy, revamped plant financial models, and a cross-functional sales and operations planning process.

For the third quarter of 2025, Green Plains Inc. reported net income attributable to the company of $11.9 million or $0.17 per share, compared to $48.2 million or $0.69 per diluted share in Q3 2024. Adjusted EBITDA for the quarter was $52.6 million, down slightly from $53.3 million in Q3 2024. Revenue for the quarter was $508.5 million, a 22.8% year-over-year decrease. SG&A totaled $29.3 million, higher than the prior year due to certain onetime expenses. Depreciation and amortization was $25 million, down from $26.1 million in the prior year quarter. Interest expense rose to $47.8 million, including significant nonrecurring charges related to debt. The balance sheet was strengthened with the sale of the Obion, Tennessee facility, which was used to repay high-cost debt, and the company had $211.6 million in cash equivalents and restricted cash at quarter end.

• Anticipate $15-25 million of benefit from the 45Z clean fuel production tax credit in the fourth quarter.
• Expect 45Z values to grow in 2026 as the program expands to all plants and policy changes take effect January 1.
• SG&A is expected to improve on a go-forward run rate, aiming to exit 2025 with corporate and trade SG&A in the low $40 million area and full company consolidated SG&A in the low $90 million range.
• Capital expenditures for the remainder of 2025 are expected to be approximately $5 million to $10 million, excluding fully financed carbon capture equipment in Nebraska.

• Actual results could materially differ due to factors discussed in the press release and risk factors section of reports.
• Risks related to policy changes affecting the monetization of 45Z clean fuel production tax credits.
• Operational execution risks that could impact plant performance and capacity utilization.
• Potential impact of debt and liquidity management on the company's ability to deliver sustainable results.

Q: Manav Gupta asked about key challenges to get back to prior run rates.

A: Focus on managing costs, ensuring plant assets are competitive, delivering on the carbon program, and focusing on day-to-day operations like buying corn, running plants, and selling products.

Q: Pooran Sharma asked about unlocking 45Z credits in non-Nebraska assets.

A: Worked to improve the efficiency of non-Nebraska operations to lower their CI scores, expecting a $38 million P&L impact for those locations now that the Obion plant is not part of the fleet.

Q: Matthew Blair asked about changes at the plants.

A: Focus on process changes, higher yields through operational excellence, reliability-centered maintenance to reduce downtime, and rebaselining plant performance.

Q: Eric Stine asked about investment in non-pipeline plants for 45Z.

A: No specific investment planned, but technologies are available to make those plants more efficient, expecting a $38 million P&L impact in 2026 regardless of additional CapEx.

Q: Craig Irwin asked about carbon sequestration status.

A: York plant is fully operational, Central City and Wood River are ramping up capture rates, pipeline team is working on operationalizing the pipeline to send gas to Wyoming, and there is plenty of capacity for plants to put carbon in the pipeline.