OTC:SDSYA
SOUTH DAKOTA SOYBEAN PROCESSORS LLC
A major U.S.-based processor of soybeans and oilseeds serving domestic markets with significant recent capex investments.
Key Metrics
Investment Thesis
Bull Case
The company's massive $175.7M capital expenditure program indicates aggressive expansion or modernization efforts that could drive future long-term profitability. With current assets of $127M and a manageable operating profit margin, the firm retains a solid operational base if revenue stabilizes after recent volatility.
Bear Case
Revenue fell sharply to $554.4M from $703.1M in 2023, signaling potential demand issues or significant pricing pressures that eroded profitability. The negative net change in cash of $33.3M combined with high accounts payable changes raises concerns about liquidity constraints and the sustainability of current growth strategies.
About SOUTH DAKOTA SOYBEAN PROCESSORS LLC
South Dakota Soybean Processors LLC is a leading food processing entity specializing in soybeans, corn, and oilseeds within the United States. The company operates across multiple states including North and South Dakota, Minnesota, Nebraska, Montana, Iowa, and Illinois to process raw agricultural commodities into consumer goods and industrial ingredients.
Analysis
Management Discussion
While the company generated positive operating profit of $23.3M, net income dropped significantly to $21.8M as capital expenditures surged to $175.7M, resulting in a net cash burn of $33.3M. Despite strong gross profit margins relative to revenue decline, the heavy investment in fixed assets and negative change in working capital suggests a transition phase that may pressure liquidity.
Industry Overview
The agricultural processing industry is cyclical and heavily dependent on global commodity prices, weather patterns affecting crop yields, and domestic demand for food and fuel ingredients. Companies in this sector face constant pressure to optimize supply chains while managing exposure to volatile input costs like soybeans and corn.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $721.5M | $703.1M | $554.4M |
| Cost of Revenue | $648.1M | $624.7M | $525.0M |
| Gross Profit | $73.4M | $78.4M | $29.4M |
| Operating Expenses | $5.7M | $6.5M | $6.1M |
| Operating Income | $67.7M | $71.9M | $23.3M |
| G&A | $5.7M | $6.5M | $6.1M |
| D&A | $5.6M | $5.8M | $6.5M |
| Depreciation | $5.6M | $5.8M | $6.5M |
| Other OpEx | $0 | $0 | $0 |
| Non-Operating Income | $0 | $0 | $0 |
| Interest Expense | $2.2M | $2.8M | $6.4M |
| Pre-Tax Income | $67.7M | $71.9M | $23.3M |
| Income Tax | $282.1K | $819.3K | $1.6M |
| Continuing Ops | $67.5M | $71.1M | $21.8M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $67.5M | $71.1M | $21.8M |
| Minority Interest | $0 | $659.6K | $1.4M |
| Net to Common | $67.5M | $70.4M | $20.3M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $197.5M | $205.8M | $127.0M |
| Cash & Equivalents | $866.7K | $72.9M | $39.6M |
| Accounts Receivable | $43.5M | $43.5M | $29.8M |
| Inventory | $134.2M | $72.0M | $45.1M |
| Other Current Assets | $18.9M | $17.3M | $12.6M |
| Long-Term Assets | $113.6M | $218.9M | $414.9M |
| PP&E (Net) | $74.6M | $174.9M | $359.8M |
| Operating Leases | $22.7M | $28.3M | $35.8M |
| Other LT Assets | $1.8M | $2.1M | $19.3M |
| Total Assets | $311.2M | $424.7M | $541.9M |
| Current Liabilities | $121.5M | $105.6M | $102.5M |
| Accounts Payable | $2.2M | $7.5M | $4.0M |
| Current Debt | $0 | $0 | $9.0M |
| Current Leases | $2.6M | $2.8M | $3.5M |
| Deferred Revenue | — | — | $10.5M |
| Other Current Liab | $116.7M | $95.4M | $75.5M |
| Long-Term Liabilities | — | $22.9M | $103.4M |
| Long-Term Debt | $8.8M | $0 | $57.7M |
| LT Operating Leases | $17.2M | $22.8M | $29.9M |
| Other LT Liab | — | $54.1K | $15.9M |
| Total Liabilities | — | $128.5M | $205.9M |
| Shareholders' Equity | — | $296.2M | $336.0M |
| Total L&E | $311.2M | $424.7M | $541.9M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $67.5M | $71.1M | $21.8M |
| Non-Cash Adjustments | $-137.1M | $186.7M | $97.3M |
| Working Capital Changes | $97.1M | $-131.4M | $-60.7M |
| Cash from Operations | $27.4M | $126.4M | $58.4M |
| Capital Expenditures | $7.8M | $104.3M | $175.7M |
| Cash from Investing | $-10.0M | $-104.2M | $-176.0M |
| Debt Issuances | $5.8M | $22.7M | $69.2M |
| Debt Repayments | $13.8M | $31.6M | $0 |
| Cash from Financing | $-17.4M | $49.8M | $84.3M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $33.0K | $72.0M | $-33.3M |
| Beginning Cash | $833.7K | $866.7K | $72.9M |
| Ending Cash | $866.7K | $72.9M | $39.6M |
Frequently Asked Questions
How does SOUTH DAKOTA SOYBEAN PROCESSORS LLC make money?
1) Soybean processing and crushing for oil and meal production, 2) Corn processing operations, 3) Oilseed handling and distribution, 4) General agricultural commodity trading and logistics.
What are the main risks for SDSYA?
Substantial recent capital outflows of $176M impacting near-term cash reserves, a sharp 24% revenue contraction from the previous year, sensitivity to fluctuating agricultural commodity prices and crop yields, and potential debt service pressure given the current leverage profile.
What is SDSYA's competitive advantage?
Strategic geographic footprint across the U.S. Midwest providing efficient supply chain access to farmers, significant scale in capital expenditures relative to peers, and strong working capital management evidenced by high accounts receivable turnover.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.