10-Q - SOUTH DAKOTA SOYBEAN PROCESSORS LLC (0001163609) (Filer)

Fri, May 9, 9:31 PM (42 days ago)

**South Dakota Soybean Processors, LLC (SDSP) Q1 2025 Financial Summary** **Ticker: SDSP** **Financial Health and Performance:** - **Revenue:** $117.9 million, down 20.5% YoY due to decreased average sales prices of soybean products. - **Gross Profit:** $5.9 million, down 19.5% YoY due to declining board crush margins. - **Net Income:** $4.1 million, down 32.2% YoY, primarily due to decreased gross margins. - **Earnings per Capital Unit:** $0.14, down from $0.18 in Q1 2024. **Profit Margins:** - **Gross Margin:** 5.0%, down from 4.9% in Q1 2024. - **Operating Margin:** 3.5%, down from 3.8% in Q1 2024. **Cash Flow:** - **Operating Cash Flow:** Negative $39.9 million, an increase in cash used of $8.1 million YoY. - **Investing Cash Flow:** Negative $60.8 million, an increase in cash used of $37.7 million YoY due to increased capital expenditures. - **Financing Cash Flow:** Positive $67.6 million, a decrease of $49.7 million YoY. **Earnings Changes:** - **Decrease in Net Income:** $1.1 million, primarily due to decreased gross margins. **Quarterly Performance Discussion:** - **Revenue Decrease:** Due to decreased average sales prices of soybean products, particularly soybean oil and meal. - **Gross Profit Decrease:** Due to declining board crush margins caused by decreased demand for soybean oil and increased U.S. soybean meal supply. - **Operating Expenses:** Relatively constant compared to Q1 2024. - **Interest Expense:** Decreased by 20.8% due to decreased borrowings and capitalized interest costs. - **Other Non-Operating Income:** Decreased by $0.8 million due to decreased interest income. **Trends and Uncertainties:** - **Market Trends:** Softening demand for soybean oil, regulatory uncertainty tied to biofuels programs, and potential global tariffs. - **Operational Trends:** Progress on the High Plains Processing plant, expected to begin operations in fall 2025. - **Liquidity:** Working capital decreased to $36.9 million due to construction expenditures. **Future Operations Impact:** - **Market Opportunities:** Positioned to capitalize on market opportunities with a robust supply base. - **Construction Progress:** High Plains Processing plant on schedule, with equipment deliveries nearly complete. - **Financial Covenants:** Subject to compliance with standard financial covenants and maintenance of certain financial ratios. **Key Financial Metrics:** - **Current Ratio:** 1.07 (Current Assets: $109.7 million, Current Liabilities: $102.5 million). - **Debt-to-Equity Ratio:** 0.53 (Total Debt: $177.2 million, Total Equity: $332.4 million). - **Interest Coverage Ratio:** 3.57 (EBIT: $4.2 million, Interest Expense: $1.2 million).