FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported) January 21, 1997.
HIGH PLAINS CORPORATION
(Exact name of registrant as specified in its charter)
Kansas #1-8680
(State or other jurisdiction of (Commission File
incorporation) Number)
200 W. Douglas #48-0901658
Suite #820 (IRS Employer
Wichita, Kansas 67202 Identification No.)
(Address of prinicipal
exeuctive offices)
(316)269-4310
(Registrant's telephone number)
<PAGE>
Item 5 Other Information
Wichita, KS, January 15, 1997 -- High Plains Corporation (NASDAQ:HIPC) today
announced the retirement of the $13.2 million balance of its debt through Bank
One, Indianapolis, with proceeds from a new loan obtained through the National
Bank of Canada (NBC). The new financing consists of an $11 million 5 year
term loan, and a $4 million revolving loan, secured by the Company's York,
Nebraska Ethanol plant and all cash, receivables, and inventory. The Company
has drawn the full $11 million on the reducing term note and has drawn $2.3
million on the revolving note, for an initial $13.3 million balance with NBC.
The blended first year interest rate for the $11 million term note is
approximately 8.11%, down from the 9.7% Bank One rate. The initial interest
rate on the $4 million note is 8.14%, down from the 9.7% Bank One rate. The
Company projects a first year savings in interest expense from this
refinancing of approximately $225,000.00.
"We are happy to have begun a new relationship with a competitive bank such
as the National Bank of Canada, which recognizes, as we do, the opportunities
that exist in the Ethanol Industry," said Raymond G. Friend, the Company's
Executive Vice President and Chief Financial Officer.
"We were able to prepay the Bank One debt without prepayment penalty. In
addition, we managed to keep our Colwich, Kansas Ethanol Plant unencumbered,
by excluding it from the new loan's collateral package. This allows us the
versatility of utilizing the Colwich plant as collateral for future borrowing
if needed or desired."
Mr. Friend added, "The Company also announced the completion of new financing
to fund its Industrial Grade Ethanol production upgrade. This High Quality
Ethanol production capacity has been added to its York, Nebraska Ethanol
production facility, in order to fulfill the Company's requirements to supply
high grade ethanol under the $17 million contract which was previously
announced. This project is nearing startup, which is expected to occur
within the next 30 days. The Company has financed this addition with a six
year lease through MetLife Capital Corporation. The $3.1 million lease
agreement has a five year buy back option which provides an overall effective
interest rate of 7.6%."
Based in Wichita, Kansas, High Plains Corporation is the only publicly traded
company whose sole business is Ethanol. It is one of the largest producers
of Ethanol with 60 million gallons per year of current capacity. Clean
burning Ethanol reduces pollutants in automotive gasoline and increases
octane levels for better engine performance without increasing gas pump
prices.
<PAGE>
Wichita, KS, January 17, 1997 -- High Plains Corporation (NASDAQ:HIPC) today
announced a contract with Centennial Trading LLC (Centennial) to source and
purchase grain. Centennial now replaces Farmland's Grain Division as the
primary grain strategist and purchasing agent for High Plains. Centennial
will provide consultation to the Company in the areas of market projections
and risk management strategies, and will source grain for the Colwich, Kansas
plant. Grain for the York, Nebraska plant will be sourced primarily by High
Plains' employees in cooperation with Centennial. Centennial is a commodity
trading company recently established by former employees of the grain
division of Farmland Industries, Inc. with whom High Plains has had a long
standing and mutually beneficial relationship.
"Farmland performed an excellent job for us in both risk management and grain
sourcing for our plants," said Raymond G. Friend, Executive Vice President
and Chief Financial Officer. "However, the hiring of Centennial will allow
the company to take a more active role in the sourcing of its grain
requirements, while still retaining the advantages of having a contracted
grain purchasing agent familiar with High Plains. High Plains expects this
arrangement to lower its overall grain costs by allowing more flexibility in
grain origination and contracting alternatives with producers and elevators.
Furthermore, High Plains expects to realize freight savings through more
direct control of the trafficking."
"High Plains will continue to have up-to-date information on grain markets
and gain greater versatility in its purchasing and risk management
strategies," said Friend.
Separately, High Plains applauded Nebraska Legislation introduced this week
which would require that gasoline sold in Nebraska after January 1, 1998
contain an oxygen content of at least 2.7 percent. This proposed legislation
mirrors recent legislation which was passed and is being implemented in
Minnesota.
"Ethanol is very competitive in markets where required gasoline oxygen levels
are at a 2.7% minimum," said Mr. Friend. "Nebraskans should see cleaner air
at lower costs than alternatives, such as modifications to stationary
pollution sources, and they will realize added value for their grain crops.
Additional utilization of ethanol should not only create a stronger market
for corn and milo, but should also reduce foreign energy dependence, help
promote renewable sources of energy, and create jobs."
Based in Wichita, Kansas, High Plains Corporation is the only publicly traded
company whose sole business is Ethanol. It is one of the largest producers
of Ethanol with 60 million gallons per year of current capacity. Clean
burning Ethanol reduces pollutants in automotive gasoline and increases
octane levels for better engine performance without increasing gas pump
prices.
<PAGE>
Wichita, KS, January 21, 1997 -- High Plains Corporation (NASDAQ:HIPC) today
reported net income of $3,012,711 or $.19 per share on sales of $16,788,866
for the fiscal second quarter ended December 31, 1996 compared to net income
of $1,856,772 or $.12 per share on sales of $23,594,686 for the same quarter
last year.
The Company also reported net income of $1,174,473 or $.08 per share for the
six month period ended December 31, 1996, on sales of $18,128,100, compared
to net income of $2,280,358 or $.15 per share on revenues of $43,656,631 for
the same six month period last year.
<TABLE>
<CAPTION>
Financial Highlights
Three-Months Ended Six Months
Ended December 31, Ended December 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Sales $16,788,866 $23,594,686 $18,128,100 $43,656,631
Net Income $ 3,012,711 $ 1,856,772 $ 1,174,473 $ 2,280,358
Net earnings per share $ .19 $ .12 $ .08 $ .15
Weighted average shares
outstanding 16,073,460 16,022,106 16,043,765 15,715,761
</TABLE>
"We are pleased to announce both our profitable quarter and six month
periods," said Stanley E. Larson, President and Chief Executive Officer.
During this recently ended quarter, we overcame startup difficulties at our
York, Nebraska plant, and now both that facility and our Colwich, Kansas
plant are operating at full capacity.
"We are currently purchasing our grain feedstock for as low as $2.27 per
bushel, less than half of its summertime high of $5.60 per bushel. As
announced last week, we anticipate additional grain cost savings in the
future through our new relationship with Centennial Trading, LLC," Mr. Larson
said.
"We continue to have between thirty and forty percent of our fuel ethanol
gallons presold at approximately $1.40 per gallon FOB our plants. With
current low grain prices and strong distiller's grain sales, we have pretax
margins as high as $.70 on those gallons. Current fuel ethanol spot plant
prices have dropped to approximately $1.05 per gallon, a level which still
provides over $.20 per gallon before tax margin."
"In addition, we are announcing that we have completed construction and
initial testing of our high quality ethanol processing equipment. During
testing, we operated the equipment at a 28,000 gallon per day rate. Initial
testing indicates that the high quality ethanol will be within contract
specification levels. This processing equipment should be capable of full
operation by late January 1997."
"We are preparing to begin deliveries of up to one million gallons per month
of high grade ethanol under contract for approximately $1.60 per gallon FOB
our York, Nebraska plant. The production and sale of these gallons should
provide both additional profitability and product diversification to our
Company, increasing value for our shareholders."
Based in Wichita, Kansas, High Plains Corporation is the only publicly traded
company whose sole business is Ethanol. It is one of the largest producers
of Ethanol west of the Mississippi River, with 60 million gallons per year of
current capacity. Clean burning Ethanol reduces pollutants in automotive
gasoline and increases octane levels for better engine performance without
increasing gas pump prices.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date January 21, 1997 HIGH PLAINS CORPORATION
Raymond G. Friend
Executive Vice President
- Chief Financial Officer
