Xethanol: Another Multimillion Dollar Loss
Xethanol continues to demonstrate that even with generous subsidies, they can’t make any money:
For the second quarter of 2007, the company reported a net loss of $6.6 million, or ($0.23) per share, as compared to a $5.9 million net loss, or ($0.24) per share, for the same period of the prior year. The increase in the net loss was primarily related to $4.5 million in non-cash charges including a $2.8 million impairment charge on property held for development.
The company reported net sales of $3.3 million for the second quarter of 2007 compared to $3.2 million in net sales in the second quarter of 2006. Cost of goods sold was $3.4 million in the quarter as compared to $2.4 million in the comparable period in the prior year. The increase was attributable to the higher cost of corn compared to the same period in the prior year.
General and administrative (G&A) costs were $2.2 million in second quarter 2007 as compared to $1.3 million for the comparable period in the prior year. The increase in G&A was primarily due to an increase in legal, accounting and professional fees.
As of June 30, 2007, the company had cash, cash equivalents and marketable securities of $18.1 million and $437,000 of long-term debt.
So, a $6.6 million loss on sales of $3.3 million. Regarding their cash on hand, it is down from $21 million at the end of the last quarter. XNL continue their march toward bankruptcy, which is one of the predictions I have made. Given their inability to profit during good times for ethanol producers, how will they fare when margins are squeezed?