Southwest Iowa Renewable Energy Announces Results of Third Quarter

COUNCIL BLUFFS, Iowa, Aug. 14, 2012 /PRNewswire/ -- On August 14, 2012, Southwest Iowa Renewable Energy, LLC ("SIRE") announced its unaudited financial results for the third quarter of fiscal year 2012 ("Fiscal 2012") which ended June 30, 2012. SIRE reported a net loss of $4,153,049, or $316.09 per unit, compared to a net loss of $1,287,162, or $97.96 per unit, for the same period during the year ended September 30, 2011 ("Fiscal 2011"). For Fiscal 2012 through June 30, 2012, SIRE reported a net income of $855,593 or $65.12 compared to a net loss of $2,357,512 or $179.43 per unit for the same period in Fiscal 2011. The cash flow provided by operations for the first three quarters of Fiscal 2012 was $12,346,881, compared to $12,427,088 for the same period in Fiscal 2011.

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Adjusted EBITDA, which is defined as earnings before interest, income taxes, and depreciation and/or amortization ("EBITDA"), as adjusted for unrealized hedging losses (gains), was$787,024 for the third quarter in Fiscal 2012 and $4,577,670 for the same period in Fiscal 2011. Adjusted EBITDA for Fiscal 2012 through June 30, 2012 was $11,720,646 and $16,477,891 for the same period in Fiscal 2011. At June 30, 2012, SIRE had $8,237,313 million in cash and equivalents and $14,625,000 available under committed loan agreements (subject to satisfaction of specified lending conditions and covenants), as well as an additional $6,250,000 available under uncommitted loan agreements. For reconciliations of Adjusted EBITDA to net income attributable to SIRE, see "Adjusted EBITDA" below.

Brian Cahill, SIRE's General Manager and CEO, stated, "Our third quarter in Fiscal 2012, reflects less than favorable margins resulting from the relative prices of our primary inputs and products during the quarter. In particular, the key factors during the quarter were increases in the price of our primary input, corn, resulting in part from the current drought conditions in the United States. Notwithstanding these margins, with our positive cash flow we have continued to make scheduled and excess cash flow payments to our banks, resulting in further principal reduction in overall debt and reduced interest costs. We have also continued to make modest capital investments that are resulting in incremental productivity improvements in our plant."

About Southwest Iowa Renewable Energy, LLC:

SIRE is an Iowa limited liability company, located in Council Bluffs, Iowa, formed in March, 2005 to construct and operate a 110 million gallon name plate capacity ethanol plant. SIRE began producing ethanol in February, 2009 and sells its ethanol, modified wet distillers grains with solubles, corn syrup, and corn oil in the continental United States. SIRE also sells its dried distillers grains with solubles in the continental United States, Mexico and the Pacific Rim.

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.Such statements are made in good faith by SIREand are identified by including terms such as "may," "will," "should," "expects," "anticipates," "estimates," "plans," or similar language.In connection with these safe-harbor provisions, SIREhas identified in its Annual Report on Form 10-K for the fiscal year ended September 30, 2011, and in the Company's subsequent filings with the SEC, important factors that could cause actual results to differ materially from those contained in any forward-looking statement made by or on behalf of SIRE, including, without limitation, the risk andnature of SIRE's business andthe effects of general economic conditions on SIRE.SIRE may experience significant fluctuations in future operating results due to a number of economic conditions, including, but not limited to, competition in the ethanol industry, commodity market risks, financial market risks, counter-party risks, and risks associated with changes to federal policy or regulation. The cautionary statements in this press release expressly qualify all of SIRE's forward-looking statements. The forward-looking statements contained in this press releaseare included in the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.SIRE further cautions that such factors are not exhaustive or exclusive.SIRE does not undertake to update any forward-looking statement which may be made from time to time by or on behalf of SIRE unless an update is required by applicable securities laws.

Summary Balance Sheets
SOUTHWEST IOWA RENEWABLE ENERGY, LLC Balance Sheets
ASSETS	June 30, 2012			September 30, 2011
	(Unaudited)
Current Assets
Cash and cash equivalents	$	8,237,313		$	11,006,590
Restricted cash		362,382			301,361
Accounts Receivable		325,999			224,176
Accounts receivable, related party		10,110,432			17,642,245
Due from broker		2,052,381			3,428,450
Derivative financial instruments, related party		1,090,706			-
Inventory		12,348,405			11,198,147
Prepaid expenses and other		1,407,079			1,107,354
Total current assets		35,934,697			44,908,323
Property, Plant and Equipment
Land		2,064,090			2,064,090
Plant, Building and Equipment		204,431,928			203,749,761
Office and Other Equipment		750,511			742,360
Total Cost		207,246,529			206,556,211
Accumulated Depreciation		(50,852,792)			(42,293,441)
Net property and equipment		156,393,737			164,262,770
Other Assets
Financing costs, net of amortization of $2,693,184 and $2,341,400		1,509,956			1,538,733
Total Assets	$	193,838,390		$	210,709,826

SOUTHWEST IOWA RENEWABLE ENERGY, LLC Balance Sheets
LIABILITIES AND MEMBERS' EQUITY	June 30, 2012			September 30, 2011
	(Unaudited)
Current Liabilities
Accounts payable	$	1,741,970		$	2,090,561
Accounts payable, related parties		5,495,449			5,239,128
Derivative financial instruments, related party		-			2,097,075
Derivative financial instruments		1,036,750			2,875,075
Accrued expenses		2,376,929			2,615,092
Accrued expenses, related parties		2,955,988			3,831,583
Current maturities of notes payable		15,090,684			21,236,780
Total current liabilities		28,697,770			39,985,294
Long Term Liabilities
Notes payable, less current maturities		116,036,306			121,400,805
Other		525,013			600,010
Total long term liabilities		116,561,319			122,000,815
Commitments and Contingencies
Members' Equity
Members' capital, 13,139 Units issued and outstanding		76,474,111			76,474,111
Accumulated (deficit)		(27,894,810)			(27,750,394)
Total members' equity		48,579,301			48,723,717
Total Liabilities and Members' Equity	$	193,838,390		$	210,709,826

Financial Results
SOUTHWEST IOWA RENEWABLE ENERGY, LLC Statements of Operations (Unaudited)
	Three Months Ended June 30, 2012			Three Months Ended June 30, 2011			Nine Months Ended June 30, 2012			Nine Months Ended June 30, 2011
Revenues	$	79,820,338		$	94,853,474		$	264,896,990		$	236,555,894
Cost of Goods Sold
Cost of goods sold-non hedging		81,065,194			87,611,198			257,677,120			214,589,874
Realized & unrealized hedging (gains)
and losses		(537,629)			5,180,771			(4,274,696)			13,792,563
		80,527,565			92,791,969			253,402,424			228,382,437
Gross Margin (Loss)		(707,227)			2,061,505			11,494,566			8,173,457
General and Administrative Expenses		1,048,264			933,741			3,377,965			3,293,090
Operating Income (Loss)		(1,755,491)			1,127,764			8,116,601			4,880,367
Other (Income) Expense
Interest Income		(5,346)			(5,853)			(16,893)			(12,862)
Interest Expense		2,408,809			2,426,329			7,341,800			7,312,267
(Gain) Loss on disposal of fixed assets		-			-			10,503			-
Miscellaneous income		(5,905)			(5,550)			(74,402)			(61,526)
Total		2,397,558			2,414,926			7,261,008			7,237,879
Net Income (Loss)	$	(4,153,049)		$	(1,287,162)		$	855,593		$	(2,357,512)
Weighted Average Units Outstanding
- Basic & Diluted		13,139			13,139			13,139			13,139
Net income (loss) per unit
- basic & diluted	$	(316.09)		$	(97.96)		$	65.12		$	(179.43)

Adjusted EBITDA

Management uses Adjusted EBITDA, a non-GAAP measure, to measure the SIRE's financial performance and to internally manage its business. Management believes that adjusted EBITDA provides useful information to investors as a measure of comparison with peer and other companies. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or cash flow as determined in accordance with generally accepted accounting principles. Adjusted EBITDA calculations may vary from company to company. Accordingly, our computation of Adjusted EBITDA may not be comparable with a similarly-titled measure of another company.

The following sets forth the reconciliation of Net Loss to Adjusted EBITDA (unaudited) for the periods indicated:

		Three Months Ended			Three Months Ended
		June 30, 2012			June 30, 2011
Net loss	$	(4,153,049)		$	(1,287,162)
Interest Expense, net		2,403,463			2,420,476
Depreciation		2,859,105			2,717,789
EBITDA		1,109,519			3,851,103
Unrealized hedging (gains) losses		(322,495)			726,567
Adjusted EBITDA	$	787,024		$	4,577,670
Adjusted EBITDA per unit	$	59.90		$	348.40
		Nine Months Ended			Nine Months Ended
		June 30, 2012			June 30, 2011
Net Income (Loss)	$	855,593		$	(2,357,512)
Interest Expense, net		7,324,907			7,299,405
Depreciation		8,566,253			10,809,431
EBITDA		16,746,753			15,751,324
Unrealized hedging (gains) losses		(5,026,107)			726,567
Adjusted EBITDA	$	11,720,646		$	16,477,891
Adjusted EBITDA per unit	$	892.05		$	1,254.12

Statistical Information
Three Months Ended June 30, 2012 (Unaudited)						Three Months Ended June 30, 2011 (Unaudited)
Statistical Revenue Information	Gallons / Tons Sold	% of Revenues		Gallons / Tons Average Price		Statistical Revenue Information	Gallons / Tons Sold	% of Revenues		Gallons / Tons Average Price
Denatured Ethanol	28,735,866	74%		$ 2.07		Denatured Ethanol	30,703,782	82%		$ 2.53
Dried Distiller's Grains	71,827	19%		$ 209.92		Dried Distiller's Grains	70,926	15%		$ 194.74
Corn Oil	3,580	3%		$ 773.37		Corn Oil	2,230	2%		$ 907.64
Wet Distiller's Grains	26,870	3%		$ 89.59		Wet Distiller's Grains	10,988	1%		$ 69.32
Syrup	5,329	0%		$ 65.88		Syrup	13,212	0%		$ 12.44
Nine Months Ended June 30, 2012 (Unaudited)						Nine Months Ended June 30, 2011 (Unaudited)
Statistical Revenue Information	Gallons / Tons Sold	% of Revenues		Gallons / Tons Average Price		Statistical Revenue Information	Gallons / Tons Sold	% of Revenues		Gallons / Tons Average Price
Denatured Ethanol	92,351,685	77%		$ 2.22		Denatured Ethanol	85,766,206	81%		$ 2.24
Dried Distiller's Grains	221,657	17%		$ 200.63		Dried Distiller's Grains	227,968	18%		$ 166.69
Corn Oil	9,818	3%		$ 758.12		Corn Oil	3,958	1%		$ 892.95
Wet Distiller's Grains	78,410	3%		$ 86.68		Wet Distiller's Grains	16,461	0%		$ 68.25
Syrup	23,817	0%		$ 50.21		Syrup	27,400	0%		$ 13.71

SOURCE Southwest Iowa Renewable Energy, LLC