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Southwest Iowa Renewable Energy, LLC Announces Results of Fiscal Year 2010

November 24, 2010

COUNCIL BLUFFS, Iowa, Nov. 24, 2010 /PRNewswire/ — On November 24, 2010, Southwest Iowa Renewable Energy, LLC (“SIRE“) announced its financial results for the 2010 fiscal year ending September 30, 2010. SIRE reported a net loss of $8,951,326, or $681.28 per unit, compared to a net loss of $12,674,976 or $964.68 per unit, during the same period in 2009. Revenues totaled $207,833,200 for SIRE’s 2010 fiscal year compared to $99,986,005 for the same period in 2009. For the year ended September 30, 2010, 84% of revenues were earned from the sale of denatured ethanol with the remaining 16% of revenues earned from the sale of wet and dry distiller’s grains with solubles and corn syrup. In the prior year ending September 30, 2009, 83% of revenues were earned from the sale of denatured ethanol and 17% from the sale of dry distiller’s grains.

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Cash and cash equivalents decreased from $7,455,084 on September 30, 2009 to $3,432,544 on September 30, 2010. Inventory increased from $4,913,675 on September 30, 2009 to $8,013,153 as of September 30, 2010. The increase of inventory and receivables and refinancing of a short-term loan, as well the build up of other current assets, resulted in a current financial ratio improvement from 0.97 to 1.41 for the year ending on September 30, 2010.

Brian T. Cahill, SIRE’s General Manager and CEO stated: “Ethanol margins expanded during the fourth quarter of our fiscal year 2010 allowing us to generate a positive gross margin as compared to fiscal year 2009. Our cash position continues to be affected by the market conditions of the fourth quarter of the 2010 fiscal year. We continue to work on increasing ethanol production levels and efficiencies here at SIRE.”

About Southwest Iowa Renewable Energy, LLC:

SIRE is an Iowa limited liability company, located in Council Bluffs, Iowa, formed in March, 2005 to construct and operate a 110 million gallon name plate capacity ethanol plant. SIRE began producing ethanol in February, 2009, and sells its ethanol, modified wet distillers grains with solubles and corn syrup in the continental United States. SIRE also sells its dried distillers grains with solubles in the continental United States, Mexico, and the Pacific Rim.

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “1995 Act“). Such statements are made in good faith by SIRE and are identified as including terms such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,” “plans,” or similar language. In connection with these safe-harbor provisions, SIRE has identified in its Annual Report on Form 10-K to Shareholders for the fiscal year ended September 30, 2010, important factors that could cause actual results to differ materially from those contained in any forward-looking statement made by or on behalf of SIRE, including, without limitation, the risk and nature of SIRE’s business, and the effects of general economic conditions on SIRE. The forward-looking statements contained in this Press Release are excluded from the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended (the “1933 Act“) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act“). SIRE further cautions that such factors are not exhaustive or exclusive. SIRE does not undertake to update any forward-looking statement which may be made from time to time by or on behalf of SIRE.

The following are condensed statements of operations for SIRE:

    Statements of Operations

                                                   Year Ended   Year Ended
                                                    September    September
                                                    30, 2010      30, 2009
                                                    ----------    ----------

    Revenues                                      $207,833,200   $99,986,005
                                                  ------------   -----------
    Cost of Goods Sold
      Cost of goods sold - non hedging             205,108,935   107,137,906
      Realized & unrealized hedging (gains)         (2,036,833)   (4,966,567)
          Cost of Goods Sold                       203,072,102   102,171,339

         Gross Margin                                4,761,098    (2,185,334)

    General and administrative expenses              4,540,205     5,505,160
                                                     ---------     ---------
       Operating income (loss)                         220,893    (7,690,494)
                                                       -------    ----------

    Other income and (expense):
           Pre-production realized and unrealized
            losses on                                        -      (656,973)
            derivative instruments
           Grant                                             -        49,252
           Interest income                              46,473       107,553
           Other income                                130,032       633,560
           Interest expense                         (9,348,760)   (5,117,874)
                                                    (9,172,255)   (4,984,482)
                                                    ----------    ----------

                  Net (loss)                       $(8,951,362) $(12,674,976)
                                                   ===========  ============

    Weighted average units outstanding                  13,139        13,139
                                                        ======        ======

    Net (loss) per unit - basic and diluted           $(681.28)     $(964.68)
                                                      ========      ========


    The following table shows SIRE's results of operations stated as a
    percentage of revenue:


                                           Year  Ended September 30, 2010
                                           ------------------------------
                                                     (unaudited)
                                                     -----------
                                Amounts
                                -------
    Income Statement Data
    Revenues                  $207,833,200
    Cost of Goods Sold         203,072,102
    Gross Margin                 4,761,098
    Selling, General and
     Administrative
     Expenses                    4,540,205
    Other (Expense)             (9,172,255)
                                ----------
    Net Loss                   $(8,951,362)


                              Year  Ended September 30, 2010
                              ------------------------------
                                        (unaudited)
                                        -----------
                                                       Gallons
                                                       Average
                             Amounts         % of     Price(2)
                             -------       Revenues   --------
    Income Statement Data
    Revenues                      100%        $1.87
    Cost of Goods Sold             98%         1.83
    Gross Margin                    2%         0.04
    Selling, General and
     Administrative
     Expenses                       2%         0.04
    Other (Expense)               (4%)        (0.08)
                                 ----         -----
    Net Loss                      (4%)       $(0.08)


                            Year Ended September 30, 2009
                                        (1)
                           ------------------------------
                                  (unaudited)
                                  -----------
                             Amounts
                             -------
    Income Statement Data
    Revenues                             $99,986,005
    Cost of Goods Sold                   102,171,339
    Gross Margin                          (2,185,334)
    Selling, General and
     Administrative
     Expenses                              5,505,160
    Other (Expense)                       (4,984,482)
                                          ----------
    Net Loss                            $(12,674,976)


                                 Year Ended September 30, 2009
                                                    (1)
                                     -----------------------------
                                          (unaudited)
                                          -----------
                                                               Gallons
                                                               Average
                             Amounts              % of        Price(2)
                             -------            Revenues      --------
    Income Statement Data
    Revenues                              100%                    $1.82
    Cost of Goods Sold                    102%                     1.86
    Gross Margin                          (2%)                    (0.04)
    Selling, General and
     Administrative
     Expenses                               5%                     0.10
    Other (Expense)                       (5%)                    (0.09)
                                         ----                     -----
    Net Loss                             (12%)                   $(0.23)


    (1) Because we did not begin operations of the Facility until mid-
    February and we were operating at a reduced capacity of
    approximately 84% during this period, the losses that we incurred
    are not indicative of any losses or profits that we might achieve
    when the plant is running at full capacity
    (2) Includes ethanol and distillers grains converted to gallons.

    Below are condensed balance sheets for SIRE:
    Balance Sheets
    --------------
    September 30, 2010 and 2009
    ---------------------------

                                                        2010         2009
                                                        ----         ----
    ASSETS

    CURRENT ASSETS                                $3,432,544   $7,455,084
       Cash and cash equivalents
       Accounts receivable                                 -    1,831,722
       Accounts receivable, related party         23,392,670   12,396,172
       Due from broker                             2,260,015    2,108,267
       Inventory                                   8,013,153    4,913,675
       Derivative financial instruments,
        related party in 2010                        688,039      263,688
       Prepaid expenses and other                    533,513      439,431
                                                     -------      -------
                Total current assets              38,319,934   29,408,039
                                                  ----------   ----------

    PROPERTY AND EQUIPMENT
       Land                                        2,064,090    2,064,090
       Plant, building, and  equipment           199,771,260  197,435,327
       Office and other equipment                    720,529      680,145
                                                     -------      -------
                                                 202,555,879  200,179,562
       Accumulated depreciation                 (28,757,303)   (9,600,217)
                                                 -----------   ----------
                                                 173,798,576  190,579,345
                                                 -----------  -----------

    OTHER ASSETS
           Other                                   1,142,388            -
       Financing costs, net of amortization
        of $1,949,651 and                          1,930,482    2,382,317
                       $1,467,677, respectively    ---------    ---------
                Total other assets                 3,072,870    2,382,317

                        TOTAL ASSETS            $215,191,380 $222,369,701
                                                ============ ============

    LIABILITIES AND MEMBERS' EQUITY

    CURRENT LIABILITIES                             $978,388   $1,351,156
           Accounts  payable                       2,542,055    4,297,990
           Accounts payable, related parties               -      697,770
           Retainage payable, related party
           Derivative financial instruments           75,125            -
           Accrued expenses                        2,624,916    5,727,245
           Accrued expenses, related parties       2,913,206            -
           Current maturities of  notes payable   18,058,574   18,215,803
                                                  ----------   ----------
                  Total current liabilities       27,192,264   30,289,964
                                                  ----------   ----------

    NOTES PAYABLE, less current maturities       135,868,087  130,897,350
    Other                                            700,006      800,002
                                                     -------      -------
                                                 136,568,093  131,697,352
                                                 ===========  ===========
    COMMITMENTS

    MEMBERS' EQUITY
       Members' capital, 13,139 units issued
        & outstanding                             76,474,111   76,474,111
       Earnings (deficit)                       (25,043,088)  (16,091,726)
                                                 -----------  -----------
                                                  51,431,023   60,382,385
                                                  ----------   ----------

                                                $215,191,380 $222,369,701
                                                ============ ============

SOURCE Southwest Iowa Renewable Energy


Source: newswire



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