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Posted on  

August 16, 2001

High Plains Announces $.38 Earnings (Vs $.01 for Prior Year) on Record Annual Revenues

High Plains Corporation (Nasdaq: HIPC) today announced earnings for the fiscal year ended June 30, 2001 in the amount of $6,163,713, or $.38 per share, compared with only $160,354, or $.01 per share for the 2000 fiscal year. The Company also reported record annual revenues of $150,458,632, up a significant 39 percent from the prior year's record of $108,531,461. The year was completed with a strong earnings performance in the fiscal fourth quarter of $1,275,425, or $.08 per share, in line with the projections made by the ethanol producer at the beginning of the quarter, and a dramatic reversal of the $1,213,293 loss reported for the same quarter of the previous fiscal year ended June 30, 2000. Revenues for the quarter were $45,019,384, up 37 percent from the $32,912,232 for the fourth quarter of fiscal 2000.

"This improvement in profitability is due not only to the beneficial economics of the industry, but also to the improved efficiencies, cost reductions, and commodity risk management advances implemented by our management team over the past year," said Gary R. Smith, President and CEO. "Our diligence is paying off in the absence of unexpected charges which have marred prior fourth quarter performances. We will continue to focus on these priority items during our ongoing expansions of both production and marketing, so that every gallon we produce is made as efficiently as possible, and so our profitability can be more consistent. We intend to keep our eyes on our goal of becoming not only a larger producer, but a more stable and cost efficient operator," he continued.

Smith also commented on the tremendous potential for an increase in the demand for ethanol nationwide in the event that efforts to maintain and enforce the Clean Air Act requirements, and to ban MTBE on a national basis, are successful. MTBE currently supplies over 80 percent of the oxygenate requirements of the Clean Air Act, while ethanol supplies less than 20 percent. "The recent action by the EPA in denying California's request for a waiver from the Clean Air Act evidences the Bush administration's support for clean and renewable fuels such as ethanol. Congress has joined this cause with its overwhelming defeat of Congressman Waxman's amendment to recent legislation in the House which would have allowed California to sidestep this oxygen requirement," he said.

Quoting Bob Dinneen, president of the Renewable Fuels Association, Smith acknowledged that California has now filed a lawsuit in a desperate attempt to force the EPA to reverse its decision on the waiver, but stated that the suit is based more on state politics than on legal or technical merits. "We agree with Dinneen's conclusion that the lawsuit is an exercise in futility, as courts rarely overturn the technical and scientific conclusions of EPA experts. With fourteen states now having legislated either the elimination or restriction of MTBE use within their borders, and federal legislation proposed to further limit MTBE and to promote renewable fuels nationwide, the ethanol industry in general, and High Plains in particular, is poised to take advantage of an unprecedented increase in demand for our product," Smith concluded.
 

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