Five years after mothballing its production plants and placing them in Chapter 11 bankruptcy protection, Pacific Ethanol this week announced record earnings and said it will restart its Madera plant this spring.
The Sacramento-based company brewed its first batch of ethanol at the facility in 2006, which has been idle for five years. It’s the last of the four Pacific Ethanol plants to go back into service after horrendous market conditions forced the company into hibernation when the market went into a tailspin.
“We are excited to achieve this important milestone for the company,” said President and Chief Executive Neil Koehler in a news release Wednesday. “We are pleased to be providing new jobs and economic development in the Central Valley of California.”
Pacific Ethanol went into a severe downturn several years ago, caught between a collapse in ethanol prices and a spike in the price of corn, its raw material. More recently, ethanol prices have stabilized, and in the past year the price of corn has fallen by more than 50 percent. Pacific Ethanol has also diversified its feedstock and now uses sorghum and beet sugar as well as corn.
The company said it earned $8.6 million in the fourth quarter, compared to a loss of $5.5 million a year earlier. Per-share income was 55 cents, compared to a loss of 60 cents.
For the year, it lost $781,000 vs. a loss of $19 million in 2012.
Revenue grew to $215.3 million in the quarter, up from $197 million the year before. For the whole year, revenue rose to $908.4 million from $816 million.
The results cap “a year of record financial performance and significant progress,” Koehler said.
Pacific Ethanol was one of the first to jump into the ethanol market, back when clean energy was still a concept unknown to many. Boosted by an early $80 million investment from Microsoft co-founder Bill Gates, the company set out to dominate the West Coast ethanol market and quickly started four plants.
By 2009, all four had shut down: Madera; Stockton; Boardman, Ore.; and Burley, Idaho. The reason was the collapse in the ethanol business.
The company never went bankrupt but placed each of the four plants in Chapter 11 protection. The result was that the production facilities were controlled by creditors. But in recent years, Pacific Ethanol has gradually taken back ownership and now owns 91 percent of the equipment in the facilities.
The results were announced after the market closed Wednesday, and the price soared nearly $3 to $11.44 in after-hours trading on the Nasdaq exchange. It closed Friday at $13.58.
Former California Secretary of State Bill Jones of Fresno co-founded Pacific Ethanol and is chairman of the company’s board of directors.