The company operates within the US and has limited geographic presence. Despite being a leading
producer of ethanol in the North American market, the company’s sales are restricted to a single
country. On the other hand, the company generates majority of its revenues from a single operating
segment although it operates through four segments. For instance, in FY2013, Green Plains generated
94.5% of the total revenues from its marketing and distribution segment.
Geographic and revenue concentration exposes Green Plains to business risks associated with that
particular region.This overdependence makes the company vulnerable to the economic fluctuations
of the US and might negatively affect its revenues.
Unfavorable debt arrangements
The company is currently engaged in several debt arrangements that require it to abide by certain
restrictive loan covenants. Particularly, the loan agreements governing secured debt financing at
the company’s subsidiaries contain a number of restrictive affirmative and negative covenants.These
covenants limit the ability of the company’s subsidiaries to, among other things, incur additional
indebtedness, make capital expenditures above certain limits, pay dividends or distributions , merge