Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - Granite Falls Energy, LLC | a8-kareacquisitionofprojec.htm |
| EX-99.2 - EXHIBIT - Granite Falls Energy, LLC | exhibit992-projectvikingll.htm |
| EX-99.1 - EXHIBIT - Granite Falls Energy, LLC | exhibit991-projectvikingll.htm |
GRANITE FALLS ENERGY, LLC
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated balance sheet combines the consolidated historical balance sheet of Granite Falls Energy, LLC (“GFE”) and the balance sheet of Project Viking, LLC (“Project Viking”), as of April 30, 2013, giving effect to the purchase of 100% of the Project Viking membership interests as if it had been consummated on April 30, 2013. The following unaudited pro forma consolidated statement of operations for the three and six month periods ended April 30, 2013 and the twelve month period ended October 31, 2012 combines the statement of operations of GFE for its three and six months ended April 30, 2013 and its year ended October 31, 2012 with the statements of operations of Project Viking for its three and six months ended April 30, 2013 and its year ended October 31, 2012, giving effect to the acquisition of the outstanding membership interests of Project Viking as if it had occurred at November 1, 2011.
The historical financial information has been adjusted to give effect to pro forma events that are related and/or directly attributable to the membership interest acquisition, are factually supportable and are expected to have a continuing impact on the combined results. Certain events related and attributable to the acquisition may have occurred at GFE prior the closing of the acquisition or immediately after the acquisition due to the acquisition transaction. Accordingly, the adjustments presented on the pro forma consolidated financial statements have been identified and presented in accordance with their timing to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the acquisition.
We are providing the following information to aid you in your analysis of the financial aspects of the acquisition. We derived the historical financial information of GFE for the three and six months ended April 30, 2013 from the unaudited financial statements of GFE as filed on Form 10-Q for the three and six months ended April 30, 2013. We derived the historical financial information of GFE for the year ended October 31, 2012 from the audited financial statements of GFE included in the Form 10-K filing dated January 29, 2013. We derived the historical financial information of Project Viking for the three and six months ended April 30, 2013 from Project Vikings’ unaudited internal financial statements incorporated herein and the October 31, 2012 audited financial statements, also incorporated herein. This information should be read together with GFE’s audited and unaudited financial statements and related notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of GFE included in its annual report on Form 10-K filed January 29, 2013 and its quarterly reports on Form 10-Q filed June 14, 2013 and September 16, 2013.
The unaudited pro forma condensed consolidated financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed consolidated financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience.
In the acquisition, GFE acquired 100% of the outstanding membership interests of Project Viking in exchange for $17,024,500. As a result, Project Viking is now a subsidiary. On the acquisition date, Project Viking owned approximately 63.3% of the membership units of Heron Lake BioEnergy, LLC (“Heron Lake”). Due to Project Viking acquiring control of Heron Lake on the acquisition date, Project Viking consolidated the balance sheet and results of operations of Heron Lake in the attached pro forma financial statements.
GRANITE FALLS ENERGY, LLC
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The unaudited pro forma condensed consolidated financial information included herein has been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission.
Pro forma adjustments are necessary to (i) record certain events related or attributable to the membership interest acquisition of Project Viking, and (ii) the accounting upon consummation of the business combination.
Note 2. Pro Forma Adjustments
Descriptions of the adjustments included in the unaudited pro forma condensed consolidated balance sheet and the condensed consolidated statements of operations are as follows:
(a) | Granite Falls Energy, LLC (“GFE”) acquired 100% of the outstanding membership interests of Project Viking, LLC (“Project Viking”). At the time of the transaction, Project Viking owned 63.3% of the outstanding membership units of Heron Lake BioEnergy, LLC (“Heron Lake”) and would have been required to consolidate. The acquisition is being accounted for under the acquisition method. Goodwill of approximately $1,941,000 would have been recorded in connection with the transaction had it occurred on April 30, 2013. The assets and liabilities of Project Viking and Heron Lake were recorded at their respective estimated fair values. The Company used a combination of the market and cost approaches to estimate the fair values of the Heron Lake assets acquired and liabilities assumed. The fair value estimates include an increase of approximately $2,600,000 to the long-term debt of Heron Lake based on our assessment of fair value in comparison to Heron Lake’s carrying values. A portion of Heron Lake’s debt facilities was also reclassified as a long-term liability for purposes of this pro forma financial statement due to acquisition transaction and related payment to the bank which satisfied the default provisions of the loan agreement. |
(b) | An adjustment was made to eliminate various overhead and third-party consulting expenses at Heron Lake that would have been eliminated as part of the transaction. |
(c) | An adjustment was made to GFE’s consolidated interest expense as a result of an increase in long-term debt as a result of the transaction. An adjustment was also made to amortize the debt premium that was calculated as part of the fair value adjustment at the acquisition date. |
(d) | An adjustment was made to record the 36.7% non-controlling interest in Heron Lake as if the transaction occurred on November 1, 2012 and 2011. |
(e) | An adjustment was made to eliminate Project Viking’s investment in Heron Lake and the related earnings/losses related to the investment due the required consolidation of Heron Lake and Project Viking as a result of the transaction. |
GRANITE FALLS ENERGY, LLC | |||||||||||||||||||||||
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET | |||||||||||||||||||||||
AS OF APRIL 30, 2013 | |||||||||||||||||||||||
HISTORICAL | HISTORICAL | HISTORICAL | PRO FORMA | PRO FORMA | |||||||||||||||||||
GRANITE FALLS | PROJECT VIKING | HERON LAKE | ELIMINATIONS | ADJUSTMENTS | CONSOLIDATED | ||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Current Assets | |||||||||||||||||||||||
Cash | $ | 1,386,003 | $ | — | $ | 888,616 | $ | — | $ | — | $ | 2,274,619 | |||||||||||
Restricted cash | 474,000 | — | — | — | — | 474,000 | |||||||||||||||||
Restricted certificates of deposit | — | — | 650,000 | — | — | 650,000 | |||||||||||||||||
Accounts receivable | 6,152,560 | — | 1,427,195 | — | — | 7,579,755 | |||||||||||||||||
Inventory | 12,790,395 | — | 2,426,922 | — | — | 15,217,317 | |||||||||||||||||
Prepaid expenses and other current assets | 262,314 | — | 928,737 | — | — | 1,191,051 | |||||||||||||||||
Total current assets | 21,065,272 | — | 6,321,470 | — | — | 27,386,742 | |||||||||||||||||
Net property, plant and equipment | 39,293,323 | — | 52,528,356 | — | — | 91,821,679 | |||||||||||||||||
Other Assets | — | 95,509 | 931,153 | (95,509 | ) | {e} | 931,153 | ||||||||||||||||
Goodwill | — | — | — | — | 1,941,567 | {a} | 1,941,567 | ||||||||||||||||
Total Assets | $ | 60,358,595 | $ | 95,509 | $ | 59,780,979 | $ | (95,509 | ) | $ | 1,941,567 | $ | 122,081,141 | ||||||||||
LIABILITIES AND MEMBERS' EQUITY | |||||||||||||||||||||||
Current Liabilities | |||||||||||||||||||||||
5,000,000 | {a} | ||||||||||||||||||||||
4,025,500 | {a} | ||||||||||||||||||||||
8,000,000 | {a} | ||||||||||||||||||||||
Current portion of long-term debt | $ | 116,953 | $ | — | $ | 38,547,491 | $ | — | $ | (38,547,491 | ) | {a} | $ | 17,142,453 | |||||||||
Accounts payable | 1,432,609 | — | 947,010 | 2,379,619 | |||||||||||||||||||
Corn payable to FCE | 4,496,144 | — | — | — | — | 4,496,144 | |||||||||||||||||
Commodity derivative instruments | 47,813 | — | — | — | — | 47,813 | |||||||||||||||||
Accrued liabilities | 602,592 | — | 512,425 | — | 1,115,017 | ||||||||||||||||||
Total current liabilities | 6,696,111 | — | 40,006,926 | — | (21,521,991 | ) | 25,181,046 | ||||||||||||||||
Long-Term Debt, less current portion | 553,789 | — | 4,047,908 | — | 32,404,856 | {a} | 37,006,553 | ||||||||||||||||
Commitments and Contingencies | |||||||||||||||||||||||
Members’ Equity | |||||||||||||||||||||||
Members' equity | 53,108,695 | 95,509 | 15,425,740 | (95,509 | ) | {e} | (15,425,740 | ) | {a} | 53,108,695 | |||||||||||||
Noncontrolling interst | — | — | 300,405 | 6,484,442 | {a} | 6,784,847 | |||||||||||||||||
Total members' equity | 53,108,695 | 95,509 | 15,726,145 | (95,509 | ) | (8,941,298 | ) | 59,893,542 | |||||||||||||||
Total Liabilities and Members’ Equity | $ | 60,358,595 | $ | 95,509 | $ | 59,780,979 | $ | (95,509 | ) | $ | 1,941,567 | $ | 122,081,141 | ||||||||||
GRANITE FALLS ENERGY, LLC | ||||||||||||||||||||||||
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||||||||||||
FOR THE SIX MONTH PERIOD ENDED APRIL 30, 2013 | ||||||||||||||||||||||||
HISTORICAL | HISTORICAL | HISTORICAL | PRO FORMA | PRO FORMA | ||||||||||||||||||||
GFE | PROJECT VIKING | HERON LAKE | ELIMINATIONS | ADJUSTMENTS | CONSOLIDATED | |||||||||||||||||||
Revenues | $ | 95,137,724 | $ | — | $ | 79,620,231 | $ | — | $ | 174,757,955 | ||||||||||||||
Cost of Goods Sold | 90,675,608 | — | 78,044,767 | — | — | 168,720,375 | ||||||||||||||||||
Gross Profit | 4,462,116 | — | 1,575,464 | — | — | 6,037,580 | ||||||||||||||||||
Operating Expenses | 1,145,660 | — | 1,863,719 | — | (175,000 | ) | {b} | 2,834,379 | ||||||||||||||||
Operating Income | 3,316,456 | — | (288,255 | ) | — | 175,000 | {b} | 3,203,201 | ||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||
Loss from equity investment | — | (795,106 | ) | — | 795,106 | {e} | — | — | ||||||||||||||||
Other income, net | 24,225 | — | 19,276 | — | — | 43,501 | ||||||||||||||||||
Interest income | 95 | — | 16,753 | — | — | 16,848 | ||||||||||||||||||
(425,000 | ) | {c} | ||||||||||||||||||||||
Interest expense | (87,406 | ) | — | (1,498,635 | ) | — | 375,000 | {c} | (1,636,041 | ) | ||||||||||||||
Total other expense, net | (63,086 | ) | (795,106 | ) | (1,462,606 | ) | 795,106 | (50,000 | ) | (1,575,692 | ) | |||||||||||||
Net Income (Loss) | $ | 3,253,370 | $ | (795,106 | ) | $ | (1,750,861 | ) | $ | 795,106 | $ | 125,000 | $ | 1,627,509 | ||||||||||
Net Loss Attributable to Noncontrolling Interest | $ | — | $ | (641,515 | ) | {d} | ||||||||||||||||||
Net Income Attributable to Controlling Interest | $ | 3,253,370 | $ | 2,269,024 | {d} | |||||||||||||||||||
Weighted Average Units Outstanding - Basic and Diluted | 30,606 | 30,606 | ||||||||||||||||||||||
Net Income Per Unit - Basic and Diluted | $ | 106.30 | $ | 74.14 | ||||||||||||||||||||
GRANITE FALLS ENERGY, LLC | ||||||||||||||||||||||||
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||||||||||||
FOR THE THREE MONTH PERIOD ENDED APRIL 30, 2013 | ||||||||||||||||||||||||
HISTORICAL | HISTORICAL | HISTORICAL | PRO FORMA | PRO FORMA | ||||||||||||||||||||
GFE | PROJECT VIKING | HERON LAKE | ELIMINATIONS | ADJUSTMENTS | CONSOLIDATED | |||||||||||||||||||
Revenues | $ | 48,020,602 | $ | — | $ | 35,498,926 | $ | — | $ | — | $ | 83,519,528 | ||||||||||||
Cost of Goods Sold | 44,390,630 | — | 34,800,114 | — | — | 79,190,744 | ||||||||||||||||||
Gross Profit | 3,629,972 | — | 698,812 | — | — | 4,328,784 | ||||||||||||||||||
Operating Expenses | 582,965 | — | 891,699 | — | — | {b} | 1,474,664 | |||||||||||||||||
Operating Income | 3,047,007 | — | (192,887 | ) | — | — | {b} | 2,854,120 | ||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||
Loss from equity investment | — | (413,629 | ) | — | 413,629 | {e} | — | — | ||||||||||||||||
Other income, net | 23,078 | — | (5,684 | ) | — | — | 17,394 | |||||||||||||||||
Interest income | 41 | — | 334 | — | — | 375 | ||||||||||||||||||
(212,500 | ) | {c} | ||||||||||||||||||||||
Interest expense | (38,183 | ) | — | (723,885 | ) | — | 187,500 | {c} | (787,068 | ) | ||||||||||||||
Total other expense, net | (15,064 | ) | (413,629 | ) | (729,235 | ) | 413,629 | (25,000 | ) | (769,299 | ) | |||||||||||||
Net Income (Loss) | $ | 3,031,943 | $ | (413,629 | ) | $ | (922,122 | ) | $ | 413,629 | $ | (25,000 | ) | $ | 2,084,821 | |||||||||
Net Loss Attributable to Noncontrolling Interest | $ | — | $ | (337,866 | ) | {d} | ||||||||||||||||||
Net Income Attributable to Controlling Interest | $ | 3,031,943 | $ | 2,422,687 | {d} | |||||||||||||||||||
Weighted Average Units Outstanding - Basic and Diluted | 30,606 | 30,606 | ||||||||||||||||||||||
Net Income Per Unit - Basic and Diluted | $ | 99.06 | $ | 79.16 | ||||||||||||||||||||
GRANITE FALLS ENERGY, LLC | ||||||||||||||||||||||||
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||||||||||||
FOR THE TWELVE MONTH PERIOD ENDED OCTOBER 31, 2012 | ||||||||||||||||||||||||
HISTORICAL | HISTORICAL | HISTORICAL | PRO FORMA | PRO FORMA | ||||||||||||||||||||
GFE | PROJECT VIKING | HERON LAKE | ELIMINATIONS | ADJUSTMENTS | CONSOLIDATED | |||||||||||||||||||
Revenues | $ | 175,162,043 | $ | — | $ | 168,659,935 | $ | — | $ | — | $ | 343,821,978 | ||||||||||||
Cost of Goods Sold | 172,708,074 | — | 166,529,283 | — | — | 339,237,357 | ||||||||||||||||||
Gross Profit | 2,453,969 | — | 2,130,652 | — | — | 4,584,621 | ||||||||||||||||||
Operating Expenses | 2,449,596 | — | 31,915,910 | — | — | {b} | 34,365,506 | |||||||||||||||||
Operating Income | 4,373 | — | (29,785,258 | ) | — | — | {b} | (29,780,885 | ) | |||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||
Loss from equity investment | — | (795,106 | ) | — | 795,106 | {e} | — | — | ||||||||||||||||
Other income, net | 182,186 | — | 47,164 | — | — | 229,350 | ||||||||||||||||||
Interest income | 18,050 | — | 10,773 | — | — | 28,823 | ||||||||||||||||||
(850,000 | ) | {c} | ||||||||||||||||||||||
Interest expense | (44,002 | ) | — | (2,625,322 | ) | — | 2,250,000 | {c} | (1,269,324 | ) | ||||||||||||||
Total other expense, net | 156,234 | (795,106 | ) | (2,567,385 | ) | 795,106 | 1,400,000 | (1,011,151 | ) | |||||||||||||||
Net Income (Loss) | $ | 160,607 | $ | (795,106 | ) | $ | (32,352,643 | ) | $ | 795,106 | $ | 1,400,000 | $ | (30,792,036 | ) | |||||||||
Net Loss Attributable to Noncontrolling Interest | $ | — | $ | (11,854,008 | ) | {d} | ||||||||||||||||||
Net Income Attributable to Controlling Interest | $ | 160,607 | $ | (18,938,028 | ) | {d} | ||||||||||||||||||
Weighted Average Units Outstanding - Basic and Diluted | 30,614 | 30,614 | ||||||||||||||||||||||
Net Income Per Unit - Basic and Diluted | $ | 5.25 | $ | (618.61 | ) | |||||||||||||||||||