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Posted on  

January 26, 2001

High Plains Projects Fiscal Third Quarter Earnings Between $.08 and $.10

Plains Corporation announced that it is projecting net earnings from operations for the fiscal third quarter to be between $.08 and $.10 per share. Earnings of $.08 per share for the quarter would bring year to date earnings through March 31, 2001 to $.30 per share, versus only $.08 for the same period of the prior year.

Gary Smith, President and CEO, stated that the Company was excited about first-half earnings of $.22 per share compared with only $.01 per share for the same period last year. "We've got $5.8 million net income before taxes versus $286,000 last year at six months, and cash is strong with $8.76 million EBITDA for the six month period. We've got a good first half behind us and will be working hard to make the next six months as strong as possible," he stated in the Company's recent earnings conference call. During the call, Company representatives outlined the basis for their expectations, which included the forward contracting or hedging of 86% of the Company's grain needs, 86% of anticipated natural gas usage, and 100% of its ethanol sales through the end of the quarter. A transcript of the conference call will soon be available on the Company's website at www.highplainscorp.com .

Smith also stated that industry fundamentals are still strong, even with the unusually high natural gas prices experienced this winter. "Oil and gasoline prices are high, grain is priced in the low $2 range, and there are numerous potential political opportunities," he commented. "Benefits from the MTBE controversy continue, with 10 states and the city of Chicago having banned, or enacted phase-outs of the toxic gasoline additive which is ethanol's primary competitor. Several other states are expected to consider restricting MTBE usage this year, and the U.S. Congress has at least one bill pending to ban MTBE nationwide. Additionally, recent federal and state legislative incentives are encouraging the production of ethanol as a renewable and environmentally friendly alternative to foreign oil. The Department of Agriculture's CCC Bioenergy Program, and Nebraska's $.075 per gallon incentive for ethanol production expansion, were both instrumental in our decision to pursue expansion of our York, Nebraska facility (announced December 29, 2000), and the Kansas legislature is now considering similar proposals to incentivize ethanol production expansions in Kansas," Smith continued.  

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