Well, I definitely didn't see that coming. Late last week, Aventine Renewable Energy (NYSE: AVR) reported positive earnings for its difficult fourth quarter. So does that mean the ethanol enthusiast is out of the cornfield? I'm afraid not.

While Aventine reported quarterly gross margins more or less in line with The Andersons' (Nasdaq: ANDE) ethanol segment, adjusted EBITDA of $11.4 million, and net income of $3.3 million, the plain fact is that the business is consuming cash. Operations used $6.4 million in the fourth quarter, but you had to tune in to the conference call to discover this fact -- there was no quarterly cash flow statement issued. The company plowed $2 million into share repurchases, which in retrospect looks a lot less prudent than the recent buybacks of fuddy-duddy energy firms like Valero Energy (NYSE: VLO) and Holly Corp (NYSE: HOC).

The reason I'm blabbering on about bucks is because Aventine has stashed a large portion of its cash in auction-rate securities. This AAA-rated paper has been caught in the credit crunch, and there are simply no buyers. Not anywhere near "par," or 100 cents on the dollar, anyway. Aventine did manage to liquidate some of its position, incurring a $1.5 million pre-tax loss in the process. Around $127 million remains effectively frozen.

Given enough time, the markets for high-quality fixed-income securities will return to normal. But Aventine doesn't have a lot of time, given its capex commitments. The company needs to complete two big expansion projects at a cost of about $300 million. Outright cancellation is not considered an option, because of the significant investments made to date. Since it has roughly $223 million in cash and borrowing capacity, one of two things needs to happen. Aventine can try to raise more capital, or delay the projects. Neither is an attractive proposition.

Troubled companies don't go under because of a lack of earnings -- they shutter because of a lack of cash. I'm not suggesting that Aventine is on the verge of following E3 Biofuels into bankruptcy. But the company is cash-constrained to the point where its future is unknowable. That places the stock firmly in speculative territory, so tread carefully.

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