GPRE - Earnings call transcript Q1 2021

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Operator

Good morning and welcome to the Green Plains Inc. and Green Plains Partners First Quarter Earnings Conference Call. [Operator Instructions] I will now turn the conference call over to your host, Phil Boggs, Senior Vice President, Investor Relations. Mr. Boggs, please go ahead.

Phil Boggs

Alright. everyone Plains welcome and you to Inc. Green Thank quarter call. Green Plains earnings first Partners and XXXX today’s are Officer. on and Participants call Patrich Executive and Simpkins, Officer Chief Chief Financial Todd Becker, President you There slide Investor under corporate Events is the both it Presentations on presentation and page link a & websites. on can available the find

to today’s or based call, and press section call future of comments Commission. subject undertake events. about we not Exchange filings forward-looking and on During and that statements expectations to risks be during this Factors assumptions statements, and XX-K, which Form this results and differ statements Form XX-Q We any are Actual do other releases conference and duty making forward-looking will are current the and discussed statement. our predictions, other any Risk could projections of because uncertainties. These Securities in are materially in update the the reports made with factors

turn over to like would the Becker. I to call Now, Todd

Todd Becker

Thanks, Phil morning joining for thanks call and today. our and everyone good

fully lowers capture but today, the products. which carbon our key with first agricultural proteins, and of clean been combined transformation path our sequestration is total for becoming we the sustainable release company earlier as accelerating producing company, phase quarter. truly across most we the our and transformation toward events has that quarter every of intensity our executed carbon our of a transformative veg funded our technology, The plan oils We item in high-value highlighted during technology the XXXX plan, sugars, important

call. I later will verticals key several each the come the to back out and quarter on laid have We during

Consolidated averaged with of million market. ability year, in conjunction sale million daily of from convertible a results, to up $X.X per of charge $XX gain. diluted to of in quarter excluding million the flexibly daily the extinguishment available spot raise. quarter related the average EBITDA gain margins to to $X.XX changing reported the Adjusted inclusive around the we during or $XX.X that financial crush net the the us facility million our notes Ord generally a market to capital $XX.X a gallon, Turning and the our share related loss the the our in of margin million, prior the quarter during exceeded results $XX.X Plains underscores significantly adapt was Achieving X.X outperforming Green in the businesses. $X.XX

quarter prepared these as exceed is we that the that polar contend could to U.S. market results, important beneficial really were lower strong during remain of we platform much with. X.X our plan. something execute quarter a second during vortex hit gallons to Green is The to is Plains X.X, What volatility here due the as but transition Production is February. we the

ag Our the gas in merchant also and improved platform. distribution resulting in natural driven and distribution segment racks, trading operating quarter, during performed results market year-over-year, businesses volatility our well our energy oil fuel in corn storage and by

oil yields, this high-protein our we at exceed ever Wood gives and across higher as corn River further which the delivering yields expectations ultra portfolio. consistently Our deploy protein to increased us at continued and confidence increasing locations Shenandoah, business technology

swine poultry be it highlight produced to and was for on full XX% has production product used. aqua, and we how and are partners. scale this a positive feedback us end ration substantial Early customers, quarter, protein this a including very dairy, Achieving resulted the in During pet in delivered regarding indications development. pet, our can with food product

high-protein with as more X.X on during and on for feed consistently pleased you ingredients. protein above in get XX% weeks, Even exciting traditional premium low had variability is remaining the will seen We at is exciting growing great can yields reduced been distillers, that that bushel purities of Fluid expect and grains. per yields have our significantly Quip our have has several pounds a system. MSC In The product to slight are that post-MSC bushel pricing sustainable in be this is oil to we have a yet during to and we to more way is excited the recent positive pounds demand, pounds that bio-refinery of River corn than nicely later. the quarter. of period, different achieve consequence a we am seen progressing sub-lots value announce approaching high through protein need transformation for of solution at rations also applied X in we back third X.X contribute platform the to the startup past, the into Wood that our the another in meets we anticipate the Construction I a well the ultra future. and distillers

successfully to $XXX and million our and on $XX raised these well in as transactions in communicated balance over with and cash are of shape us equity objectives million including through well BlackRock the convert the to fully draw concurrent highlight continue goals has on and that we Our the funded ended well We transformation. excellent a and shareholders. has remaining have $XX All-in-all, our is our delayed term with our capital capital we structure out. as loan million we sheet $XXX accelerating monetized achieve quarter set transactions, MetLife. over to the up protein retiring million, have $XXX in closed for quarter each transactions, Again, transformation our facility our million on the debt, with was financing laid while executing we positioned Ord raise in of

nearing is on recently Madison up track the line construction the be initiative third Vernon XX and started as at is in Project finish Mount Our completed to quarter.

at to our evaluate York. to the upgrade continue We GNS plans complete

We contract as used quality been already No production started has USP volumes a have market. special in York to decision as is the XXXX the final made.

protein our benefits around technology accelerating is platform, deployment forward going across oil focus which also yields. our main Our corn

initiative promise. sequestration our great Lastly, carbon upcoming offers

million produced we which ethanol, XX% XXX to quarter, gallons rate. of utilization a equates the During

to summer commitments. recorded people protected driving as surface led into Plains demand by vaccine comfortable up season While lowest its we continued actions since took ethanol our as traveling enables favorable from country be position benefit feel in the fallen and Uri. Gasoline coming slightly to has structurally cash quarter lower, stable opens to and stocks barrels, strategic million macro which distribution flows more Green is primarily minimum volume by quarter improve production did below transportation. Partners winter the data another response our have as long-term The XXXX. are was storm industry continues management level XX financially wider risk to

During strategy repaid reduce of $XX quarter, our million we on Ord debt delivered debt, the including the and transaction. $XX.X to an from million additional

call call specifically to turn Green Inc. transformation ongoing and to over review and to more Patrich like into back Plains initiatives Now, Patrich? later to Plains talk each Partners Green on come both plan. will I would about I the our financial the how performance. fits our vertical

Patrich Simpkins

the in both as morning Todd first revenues well same with driven were or export as everyone. you, volumes ago, our quarter, the lower a the and down Consolidated Thank in million period segment. production $XXX.X being year good million run-rates and by XX.X% energy change lower ag $XX.X from

$X.X the partial Green a Plains of to loss capacity Ord XX.X% the million million were improved which first primarily last sale from run-rates ag a of excludes inclusive for of to Adjusted of $XX.X million notes. convertible sale the our gain quarter, prior realized in assets, consolidated a change extinguishment period the net margin to per EBITDA, the facility run-rate million in XX.X% year. or of of energy million quarter, adjusted share compared XXXX driven related of our period same XXXX. This and year. For the $X.XX of our $XX.X the improvements charge In EBITDA crush $XX.X was our quarter, gain was by the to the XXXX $X.X performance contributions compared significantly for in in and on in same for related

million Quip with our at $X.X this compared expenses to $XX.X to of the $XX.X interest quarter, in Consolidated million insurance prior was segments year company attributable the change year. million compared was in inclusion higher QX for million the For for costs the reported Fluid of expense SG&A $XX.X all the generally. XXXX, to

at notional However, with new adjusting to interest out value year. the related our the convertible that balance and expense Slide $XX.X debt prior the compared net line for no the debt, will charge longer debt investor interest. our which of through of to non-cash our to accounting first prior and one-time described deck, the capital, convertible summary provide the had On at earlier, $XXX $XXX.X was now X sheet of capital transaction sheet million include with in adopted running – of working highlights. financing million We note on of quarter. a convertible for the working accretion I have point records the cash expense convertible year we balance our also our quarter of end a want million we guidance,

Project at and primarily revolvers also draw along credit $XX related available equivalents maintenance capital high-protein to million including million, capital, the $X.X $XXX.X primarily quarter under million million This delayed restricted with position of loan. cash, approximately allocated approximately partnership. term the available initiatives. a being liquidity XX the facility cash our includes $X.X of working for of the $XX.X balance consisted Our cash, quarter amount of in end and million was CapEx $XXX.X under and with million CapEx our growth first to our

projected CapEx technology additional million million, the in be completion Vernon $XXX expected construction the of to at River, depending two $XX $XXX timing, our of the spending balance will XXXX, to two between is Wood year that sites. on be the quarters Maintenance buy over QX. that as XX% at coming million, projects expected For with for of $XX well in next start to on including the roughly is capital high-protein and million Mount as about

For Green as of lower down at of million sale at our from the was storage production gallons the as quarter rates a Hereford XXX of as had the Green volume during result XX.X and facility Plains Ord. of gallons XXXX first well throughput we million XX% or plants which quarter, Plains Partners,

XXXX, the billed reported quarter, partnership sale XXX.X in mainly Accordingly, first of X% an other to million Group the Ord. which at million was the for For the ancillary rates adjusted level, due by of to a of amended Trade in quarter, MVC partnership offset of GPP, increase slightly $XX.X the gallons EBITDA slightly after throughput the throughput the charged million costs. the up by $XX.X from quarter reported

and flow cash resulting coverage million, were distributions ratio declared For flow a a EBITDA million, partnerships, was the $XX.X for trailing was adjusted X.XXx for a XX-month $XX.X the quarter coverage quarter quarter cash of basis, XX distributable X.XXx the was for million compared and distributable same million, months. the the to $XX.X million XXXX. $XX.X $XX.X On first ratio in for

coverage excludes adjustment ratio payments quarter. for principal Our any the required during amortized

Todd. would to Now, back over the I turn to like call

Todd Becker

So thanks, Patrich.

So, a corn oil were the as The our Higher development the we accomplishments at and technology and facility of protein acceleration back was X.X. true our Green quarter, we first execute of purities Plains was started. saw transformation first to the clean towards of acquired. required yields achieved look sugar

largest protein, partnered we with sequestration Summit excited to world’s in we annually. When to of tons our capture and carbon capture to have carbon project Solutions the capture initiatives the combine about future oils Additionally, sugar, Carbon we sequester potential. potential XX are up of and million develop and COX veg with the

and of number we they is the business a from Our of with verticals can a corn. interrelated bushel each achieve maximize that value help up can are us lining

in deploying projects, a kernel as and the Quip we I on solutions. are expect applications a patent little technology patents time licensed. to to Plains it future did important spend great number that owned play to our total model. be Green around protein and role will Fluid a our whole business have ways. technology beneficial and are They We platform based they it want Besides XX have in of and

from patent protein filed patents In flex the had process, for that relating technology; supporting more addition, new the exciting quarter, Brazil food. make and of quarter zein in to in during recovery patent a corn the high-value, fourth is they market-leading patents product. from is protein were is issued gum was used Canada protein their new traditional from everything MSC to issued Zein an continuation new MSC X for the producing gluten X of sealers is to in and XXXX, wet chewing the X additional fractionation. and corn oil difficult low-value in This Also first during protein plant meal. quarter X X XXXX, from

FEL-X XXXX development, studies to Quip multiple underway, third-party R&D technology for projects we roadmap various on in stages X more is engineering base some early in for had Fluid and do with have validation. various very our While this and it also deployments. several testing

late-stage wet Finally, they the various Plains. deployments the is point global several My to in and that and agricultural of BlackRock, their and here related leading through we milling are believe dry new we of sales discussions with plants. have Osprey partnership IP in Green technology companies one

through Now, that which some ground very break and and on are construction deployment of protein specifically, and our technology budget the I already continues to Vernon specialty River Wood Obion of on verticals to and would carbon alcohol, accelerate. be covered MSC like walk protein, important should XXXX guidance. track In soon. to our sugar we is Mount beginning to oil,

up. were announce these which and their working quickly quickly strong up, protein we can want the to of perhaps complete projects a to we important diversify order our this from milestone this Once streams. add industry to others to earnings schedule the are build to wrap them are interest partner, our We continues we we in to to final sales the in more plan choose contractor, show channel a Fluid general also if that ability Quip believe and to than ourselves technology we speed conversations choose builds.

in X achieving market have this sale, tech X X year, more Brazil, previous Quip success to and at and starting other We a Fluid River with and proven U.S. no plants production. technology speed U.S. Wood a companies deployed ag the plants up in

oil, veg corn the higher. is oil complex accelerate continuing prices to to Turning

as Our advantage MSC by believe yields it we technology corn oil or more. deliver a can structural helps increase XX%

the In achieve increasing while the low-carbon margins, industry, market disruptor. bushel consistently a for move that of pounds adds our while feedstock growing for only enables to continuing valuable our to produce to as we sugar believe continue operating policies, prices The our produce opportunity will mill but piece opens sugar the platform technology to once us We and renewable markets outside biochemical, diesel flexibility our the the Quip of clean of government X.X milling to uplift technology bio-fuel deployment long-term dry we biology parameters be very an the supply to sugar, is dextrose provides and doors this corn and delivering of we value synthetic bio-refineries to helpful and refine not reliance corn and significant dry true per tap structural gives could higher, space. getting is very Clean Shenandoah unique production. lessens success. and oil. new upside to are X.X believe industry, critical unavailable with a a renewable intensity continue proteins which bio-fuels potential close, an is Fluid added from bioplastics It of to Green we a Plains on

Innovation York first installation our shipments. Center preparing at is our and CST completion for Our we commercial are nearing

end innovative and existing cash in sugar of full a our by technology these this scale for helping We value bushel develop facilities the can near deployment stable work to we to believe margin customers future. clean from maximize expanding flows, is corn. with to of of created goal a production one the Our strong, and select

sugar the which wet mill. products is carbon Importantly, than at same produced this intensity process much clean has a traditional a lower

formations. the into on focus carbon initial we during is to February, proposed locations carbon COX quarter new and on sequestration. geologic X included capture In launched One the pipeline sequester most be our exciting a of verticals our pure to growing announced

top connected company, a bio-refineries. pipeline development each to from we benefit on generated we partner LCFS the of at of the able As of income the believe founding be the will

to combined each carbon into early opportunity. to of last intensity to score nearly with excited the are our week or opportunity this is the CI being carbon add bio-refineries the the of products us success our with is XX% great of committed due allowing Iowa have that to project, to to it rounds, We the capacity these pipeline a Nebraska more pipeline announced improve expanded the of Southwest and X of

and Mount on we this, to are geologic of each, as potential are exploring I well More each to locations, that Madison injection the this sequestration as we explore want proximity addition, candidates potential for formations. Obion suitable remaining direct come did due to In but as X their carbon Vernon, this path our to mention well.

them While I we EBITDA XXXX once past have couple gone our on through worth it’s here. targets revisiting the calls, think do of again

baseline, full Renewable to deployed a is next to will coming contributor. gallons contracted to in we gallons we long-term but improvement million our this compression these a we add couple than capacity, to fuel initiative per adds In have $X.XX $XXX nearly we convert every potential $XX up pricing capacity, or million has sugar we of million alone. $XX depending alcohol XXX results lately, EBITDA. million contracting XX that if protein in technology volumes believe economics we once the $XXX capacity corn more deliver EBITDA of a specialty premium oil of through in are to of the ethanol corn With in EBITDA million $XXX million gallon be of is capacity will million years. million improves, this minimum EBITDA could of as sugar, clean place, contribute annual $XX some on business $X.XX as already go been since prices to $X.XX XXXX million protein is the already million pricing per cycles. achieve this to per of able There anticipated seeing in grade believe the gallons and over pound of XXX XX ultra-high incremental has contribution years. gallon the XXXX add and oil the over that significant and Our $X.XX With beginning to seen of that improve have

to split pipeline, if million with premiums XXX incremental EBITDA. only a of we capacity uplift our low Finally, of fuel conservative we consider XX:XX committed gallon a our gallons $X.XX standard potential due contribute that $XX over can carbon million

Added $XXX gross achieving cash on you moving and carbon have processor. traditional margins as we helpful economics to Optimal the to earnings the we online these to stable value considering combine food this, J-curve on to late-stage protein we puts to well. development and from to and comes the to all partner nutritional as move nutritious run-rate business by solutions. initiatives, enormously to from with under an of more sustainable over percentages our margin gross million we from there Osprey opportunity up our when legacy The This crush as get partners EBITDA as our track ingredients are to Syngenta and commodity So, that impressive to matter flows list just prior X.X us of to our low double-digit pet value Hayashikane speak, conclusion, from Summit In many Novozymes annual getting sequestration certainly single-digit all a high are a XXXX up wanting as more and markets. is started. much platform more renewable percentages and to for improved carbon, predictable low and products stable track help of margin truly

X.X inflection Green an XXXX towards heading sight. Plains quickly is are in point We and in

transformation. are we will We through as our that this the efforts is support for dedicated grateful it complete their of employees

Thanks for joining delivering for start we call to As Q&A we whole matter, are that the session. ingredients we and on today going execution solutions to look focused kernel the everyday. remain

Operator

[Operator Zaslow from of question from Instructions] Bank Montreal. And our Ken comes first

now open. Your line is

Ken Zaslow

Hey, good guys. morning

Todd Becker

Ken. Hi,

Patrich Simpkins

morning. Good

Ken Zaslow

questions. of relative couple you going if that’s rest go was the can of is and where portfolio? margin what there I the breakout about One structure Shenandoah, to think the a Just to

Todd Becker

Yes.

soybean product – terms, we the over soybean the to years year XX% over volumes roughly. started for So at we somewhere when the in between volumes $XXX and $XXX Shenandoah meal meal initial XX% first general gallon for based up a as on last Every protein. XXXX pricing well $XX premium is then a for and $X.XX sold the X the

current somewhere protein between distillers $XXX somewhere And $X.XX gallon land product. at to $X.XX so XX% a over, $XXX a at to premium grains between to

Ken Zaslow

if that So, – profit you relative I per what in saying what your $X.XX that gallon it’s – is facility? to the gallon, is put are the

Todd Becker

approximately we made margin, $X.XX what is facility a said XX year. to a initial again, gallons Well, to sales $XX a $XX million EBITDA at about million. the gallon $X.XX Initially, and were or profit million that that makes

Ken Zaslow

no Is – Okay. and not a no I there but you Then baked maybe the that revenue Fluid is that’s kind just understand and on that, this too? time, is the of comes just for whole or don’t relationship, – model? there top the I understand from equipment, don’t the it reason fair, something of is that just over that anything sharing or into there that is just

Todd Becker

Yes.

So, because that from on the from earns Quip with Quip Quip each Fluid in partners, in streams that But a Quip revenue business. package makes – have ongoing for full each have the produced, they we benefit of does package. the bought And once reported plant margin made. the will obviously, Fluid Fluid have But and that technology partnership. now our Fluid Quip, the sale be they general, returns make. the acquired that’s they their small purchased Fluid sale that

Ken Zaslow

out? there? if margins what type are nothing you to projects ethanol zero be margin done. They changed. Just of and then were then play going will zero nobody and question showing just assuming given how margin, but be is, And what And can believes that projects EBITDA let’s leave you what it last of context us done would know just completely that, and a some flat were In Okay. are I give XXXX, would I my ethanol zero. assume

Todd Becker

of and X plants that’s can that’s then that we see rest platform about zero the million XXXX, start plants based on. inflection we to plants million if which forward believe turn the a in to if XXX just our we kind is zero really comes $XXX do X have coming plants our we X that operating, late think We why for for then is and basis zero of on And to XXXX on the gallon in come That you run really gallons. the it on we $X.XX will at assume inflection And $XXX half XXXX million ethanol – oil corn completion and put a ‘XX EBITDA, mid-‘XX. on. XXX But where potentially $XXX XX%, And we adding million on calculus just $XXX X will But obviously, or we on Yes. when it’s ethanol operating. ‘XX point of that, to with be we when model of in alcohol, – on with average to think just business, X plants dates kind traditional rate a is XXXX. when in million margin to base line of protein then think in million. base top

Ken Zaslow

That’s great. Thank you.

Operator

you. thank from next Alexander And comes question our Jefferies. Laurence from And

now is open. line Your

Laurence Alexander

morning. Good

Todd Becker

morning. Good

Laurence Alexander

and bottlenecks are flesh be industry you you a bit And sort some the of dextrose capacity and that consider to in would the thinking investing a bottleneck Can little because clearly facing? fermentation is that appears partnerships about Good morning, there? opportunity how out of the you

Todd Becker

buying already they technologies that new be Yes. to mills is have it carbon customers about we where dextrose. that traditional with technologies been been have thinking of customers, working wet involved or dozens want with our How are have potential from low we either

is like our our than is or or obviously, fermentation what else different be whether lactic constraints, you look capacity. fermentation some but may the fermentation that, obviously, also of And important. something one PLA what very and And – fermentation need. is others need, at then so acid And

that goal want – to customers they Biochem. market companies are to all our commercially first the and products going work which which to just shipped have potentially do can’t of to customers at development want as them, where to their stages well. to conversations We just the a way all are in product because confectionery co-locate, identify we to selling we various with is want have So, is development. be And we with in had customers not just

we combination technology going the to the sugar where as co-location And sites so clean it’s as a it be potential to well. as shipping well customer opportunities the at of deploy

know, very We often it’s bottleneck, also obviously, is that expensive. you as and fermentation a said,

available, have have deploy as well. especially fermentation you less need for We your the when fermentation sugar plants scale capability you at technology, will capacity

So, in something in the as working on have product. strategic I there retrofitting our mainly sizes will with I well right are and future. we various a we carbon well now, driven just think that’s to their some And in think various manager be access times to will be But it. that customers this there intensity low going by evolution as of

Laurence Alexander

then the that of any, with timeframe, on increase considering to if capital a COX economics what’s the And investment pipeline? pipeline, your taking –

Todd Becker

Yes.

are not already, very their tons of capacity. I think they XX signing there now, in right achieve to are they is the pipeline process still If close. of up amount the final million

they they to to their think has a are or want decisions obviously, we some point, rights We in the through continue permitting. in how invest shippers it then other and I And we make project. far And – on to have have at that And think to interest engineering ethanol producers – will shovel-ready from capital raising will basically project the once had then job terms of because next to has capacity done decides sign invest. to think a had significant industry great mainly in be Summit capturing it to had market. significant emitters other significant to from full in of Summit at everybody gets continue the then the needed, ultimately I of terms of capacity this point look get round where a they this to from it’s project, going I up. successful very to And have

Laurence Alexander

Thank you.

Operator

our next Thank Goldman from question you. from Sachs. And Adam Samuelson comes

is line open. Your now

Adam Samuelson

Thanks. Good Yes. everyone. morning

Todd Becker

Adam. morning Good

Adam Samuelson

Good morning.

dig gave Todd, little you more I to Ken’s was of the a on commercialization kind some on hoping response And to question for of XXXX. So XXXX helpful you how high bit in proteins. and color tons maybe sold the Shenandoah

of replicating we ability you protein been higher protein Obion think at could off-take that Shenandoah that as premium kind content able real sold of those do values kind just you much to opportunity the move think realize how think and Vernon, you more do value be and capture in about have high we and have to the about How of protein content, down when be your commercialize – markets up the those it’s etcetera, road, agreements? high-pro As thinking the at about that incremental at Mount about and ticker? you the timing River able you would of we Wood actually think to

Todd Becker

Yes.

that confidence lot we a have produce higher now state. of a can point get We to a at steady proteins to

announcement a have of We XX of obviously, since lot Pro. made of that progress, announcement

We think biologically, have we lot. both the mechanically can scale. up move learned a protein We and

it’s of we that from of learned have and come are biology that come to and of other it things from Some mechanics interesting. some things going

in protein dairy, of or We are those every of talked about, verticals swine one have need. that customers levels working with different and aqua, poultry, whether we of different a it’s those pet, on customers each

prices sent and as that stages several the discussions ration. with product out of – formulate today increasing online well we have who in as River And comes protein are and around – with of that purities that protein as ways up in later on them around to the for XXXX it protein customers higher we will books using we higher it, goal probably using and in well. our figuring is their in up Wood customers the we kind Our final in XXXX now the about end are the

protein do quickly to is as goal purities up that. customer move to and our possible So, have higher to support the as

progress we are as we I think good making going we are – to speak. very

rations, aqua and to And protein – as go straight decide then terms from quite our several several discussions. don’t the We of we where And going be are and priced to being consistently. to guided I we in let are studies, customers are in stop. it’s we several XX market in to how produce to what – our – just it they pet frankly, said, – want need

the protein have as on you free we so but away give that We expansive make making in And it, to order kind are don’t well. to more decision. want protein, use get of to

but out then customers great to and year. to Wood when working – we and as are the confidence River being Shenandoah are higher initial But So customers we from are remainder come we of the with where we take on purities, we our for start-up want going today steady of have to able go guided achieve as to we we be can. fast there protein that pricing state,

Adam Samuelson

helpful. how that just arguably a trying trying performing your up? given better margins? think on rates market calibrate just inventories, operating seems in kind given have quarter. contribute just the then performance the and industry marginal from am to state think, I volatile And what see better actually backdrop of Alright. obviously, Shenandoah first am to it kind take The about to and broadly I to given to really ethanol industry what conditions. the but of you we to backdrop to bit guarded market base your about would little sounded more industry the crush helped get gotten of That’s business

Todd Becker

out in coming River – still a No, we And we XX. comes plants out or Vernon rid still just every got are time a is are Mount Wood we – – plant Project are shutdown. – I we Madison of other are listen, X of general, am sorry, or we as XX. Obviously, Project shutdown well. and of

in in management the QX but in obviously, the is our through prior well obviously, are watching QX, agricultural of now the had is, movements first did volatile QX, our one to But programs ability markets. these and that storms and we right – risk quarter. quarter, some put place looking the we it are – through thing we So manage we to how through the at

able paper than or that of in on ethanol as we and first what quite to something look as fast, so better way achieve. of QX are not with obviously, we going on – up in limb up well certainly because while to has the better QX. going considered, patient out margins good we all performed be that’s terms saying were it’s be to and think to moving kind our going moving be I corn quarter, maybe In and

watching to I gasoline. at hasn’t Obviously, as fast us, we So trading and think for a market as moved up volatility premium corn, are closely. we ethanol are

am is very kind somewhat I QX corn remain veg – and very still going But bit. from QX. contribution corn to little But this getting started the helpful. So, until just terms corn it’s through very oil get harder we we okay. of far, watch And is further as in to of a oils good Thus out we guarded got physical market buy to well.

farmer carry watch the end record pace. has a anybody incentive way. moved the the almost tight lot in – commercial inverse to a There marketing year. all of farmer whatever at this no to The left hands, its I think through of something that’s have is for is the to corn through we

held basis being it’s gains. for in obviously, physical So increase

So that we are watch well. as closely to going

am place just into this are and QX. over last to be season. than driving guarded point in I we this year But were definitely a kind time general, at better of going QX, summer we going So, in

a coming though, We fundamental we million are into great stocks are season. in driving great. I under summer XX in say, ethanol barrels would with situation

corn We for margins think have and we we QX, excited we cheap. how haven’t seen today. It’s we the we out Those paper on. year are in physical all procured, we we I are are obviously, versus working octane years. still about. make look are enthusiastic the general, that is very But one And But that’s fuels. to liquid we got overall, something sure are our X have we obviously, competing optimistic. to watch best that. And thing again, But there. interesting. of our price that’s on about And

Adam Samuelson

color. helpful That’s it. Thanks. very Got

Todd Becker

Thanks.

Operator

comes next from Capital. And Irwin from And ROTH thank you. our Craig question

Craig Irwin

morning. Thanks my Good taking for questions.

California. opportunities been have of of that be maybe of online, strategic you little the point. is feedstock high-pro the most the As of already comes So, bit the top But for largest mind talk We years? and of addressed more being in there, bit spot, this which simply from into support exposed very you credits soy strategic LCFS value production did grab to see for look Is are this crusher favored at construction. the to you Todd, things at your own your opportunity like that about out producers Philips over dip point? a there what does a couple one little to market going next can a oil for maybe were corn monetizing the do than an was good thing into something a

Todd Becker

Fluid are Yes. that increases Even score market, we That’s beneficial allocated. how and is and taking we don’t more in The yet the gets spot we well. the is CI CI that into taking obviously, customers product through for our consideration And into taken how roll our the industry. will renewable exciting an what place. Fluid when carbon the But to an and in technology, increase which get the be increase is you will plants for phenomenon. the they that through margin being is oil Quip a I think buy overall as of And our plant, corn volumes. obviously, the feedstock consideration. this Quip sequester I strategic diesel veg oil And changed are as think

of We and type how of approaches have do point. terms agreements on had partner in things supply at those this we

as plant a that how are our empowered and bit I the The fundamentally I in industry say a patient it approach To and in market. soy company. optimistic still we veg energy we we of crush right very was we the that through XXXX. structurally kind track. XXXX pricing us, mean actually, by think on being – are invested are on friendly it was oil We move to

much lower today. best have or than corn what CI oil oil oil is We soybean

if you fit of is they security But I And is with opportunity the so But that needed. think absolutely that to us, see think wait story happen. happens willing think actually great to for we are right we that will the intact we to the you and supply corn see not. industry right we And the to right it’s commit and that more I oil, it. or well. the right did very that our It’s empowering our track. be It and tells partner for find have economics, I on will if

be watch of I think with monetize soybean to industry our I closely, oils these potentially making projects not there and strategic out there and the to very and and end the which will with to in to going the about, that’s somebody because security sheet there any of a veg available, that’s be in brewing all to and these we will soybean call may you to and that be balance what supply, provide to it’s sheet think times what’s something overall. up tightness buy beneficial some opportunities flows balance could feedstock be your is have

Craig Irwin

Excellent.

quarters for I can and this with very hoping are you update Novozymes, on them relationship your from expect an working So, important number over with on was the what we what next relationship? of

Todd Becker

purities. think to that’s of protein innovation ago, many, involved people we Quip yeast. on levels can or is relationships Yes. start opportunities really And you a and I tailor yeast, mean the that oftentimes, to applied, technology. within XX% around just early needs the been been us of we had protein at we because, be with it’s looking nutritional product end as spend protein start evolution of forget, this Novozymes many got have technologies I where that for XX% are a really more lots lot their before lot that about time – going characteristics And to long many, for library that move purity of years of can that’s is in providing we user. up and with the not something Novozymes Novozymes that Fluid that working even many of mean specific

for around while. something that’s a so And been that’s

product of working comes start to a tailor to incredible how progress we says, own comes at are hey, But the really and and I an is in, is us so, the acid, we on can – can with this nutritional I really increase we protein our make this we lot. this is would It’s nutritional library characteristic, we us characteristics And more more can product. more tell or to really available do but for other user to where lot of look at even quality that we there. that of to we product can characteristics, one, the product, our that’s express of really nutritional We just power this increasing Quip exciting mechanically. tailor and that’s express tailor some can in working a now what on exists each purities that you, amino can that its the purities, relationships. looking end where think partially protein importantly yeast need need we and is think when that’s increase distillers. but purities, more we number to value More post-MSC Fluid I so to can get

what’s cutting – and premium the we we well. up distillers are of get – a a think would an rest tons, and very But have product reduced to do. another in we was product they what is adding off of is straight and Wood really to and millions to now Start now piece premiums off grain, whole start respected nutritionists much and start post the and more very traditional. for post-MSC unexpected the starting getting traditionally, nutritionist grains ration, again also starting post-MSC as the next a our add of of this where big grains, and much we was on are on that distillers What swine happen. we can are in is protein that turning in space, we the in our I the uniform poultry will and consequence would that seeing this technology Actually, distillers use has now is go of is dairy be So MSC leave to of that, we the space distillers – grains starts we in bring great us. variability initially of has to really, that this Quip’s to component even grains, Shenandoah River by to the product thought more which Walter Fluid about the going out Shenandoah are the that for want space and and distillers that thought are started value a thinking which fast, excited opportunity

Craig Irwin

Thanks for taking questions. my

Operator

comes Levy question Securities. thank Jordan And And next Truist you. from from our

open. now Your line is

Jordan Levy

renewable Good following producer and any corn that on sense morning start elsewhere corn markets on seem it would yield. question ethanol out to make just CI everyone. and given of the diesel oil much to oil, feedstocks for low for look Kind Craig’s pretty to need their up increase

Fluid that as that of might it technology I kind alongside to the just your relates So, what technology, license Quip’s to that, out get like? wanted and Quip create for have next capacity investment is to upside potential and through in Fluid beyond some that made you start guys over the out? few thoughts on have laid that the what value flow And you years to what look to then

Todd Becker

Yes.

and per the plant systems, maybe of in oil more pounds X.X besides oil. So XX-pound little their corn in a to of would corn liberate protein remember, of that higher bushel. mean, corn between to pounds which X.X liberates systems, pounds, bit pounds than And traditionally, in ethanol oil, oil, I X.X somewhere bushel X.X an a of the terms

we us Fluid have up, to at MSC pounds X.X at believe, there. liberation a per technology. once per return prices, we additional the higher or another pounds up still return And so to And in leaves very from now extraction just you prices. the That Quip will be but liberate gets are able we starts XX% bushel to put in bushel another X.X increasing and an the to XX%, lower which it process, diminishing through soon

that to distillers of oil your But taking where after terms by value. change go to to want product of the veg to see that. remaining some you all degrading the relative $X.XX justify you kind post-MSC the in enough after final products want oil $X.XX, value may because out, of you much and at too the don’t prices we’re because has between still all oil oil, grains going rest you So can the

to starting and obviously, you work is a that X.X think that Quip I X, X. that? do after starting holy is grail, And bit kind make on Fluid that’s going are a going So but step to to Step there. of how pounds of that’s progress solution. really

are oil how point, kernel. to to corn liberate to you out too of degrade the could others think be well, the certain value is get I as you But start products the to a greatly. you more if of other careful, have

to of is we’re we’re to those want out. to of kind we in to solutions. X.X on spot So work going settle try continuing kind where bushel, per kind And X.X of pounds that of pounds sweet to

at of we’re excited platform, you about look very that terms In Quip, Fluid it. when

of applied have are our platforms. yields company a working in it’s we there got a of across to of in higher if not there’s got or Our oil higher they and Plains a website, purities. the It’s valuation they’re technologies. think true things on technologies, of terms technology lot partners fractionation many multiple this they’ve on – are technologies, are, fiber we different and up plant, that try They’ve increase different throughout profitability the not and besides technology, got it’s just you they’ve put go lot protein ethanol technologies the plants Green plants – whether just other that

overall the for we’re started the our getting think ourselves So we our is We value future for we and and of partners. think think in get continues development to that only company there. going just greater

Jordan Levy

on to or and your entity? there back gears thinking think up-to-date just whatever GPP helpful. touch about a And That’s I most in-house to you – or Great. on to how bring wanted refi potential change then either it that you’re views bit.

Todd Becker

Yes.

its of will we be now and to year, debt utilized address well year strategic combination down $XX GPP and on sure a which about maybe operating million, obligations. the like the So refinancings actions making we debt, that we remaining focused this those only outlined. current end of is pretty paying right And the cash of maturity repay at think

actions of the we at place, should of we’ll couple the other to take. restructuring then strategic debt opportunities, think third in can other the whether hopefully, that just have or months, next I unable end the we’re we if in quarter. maybe by refinance, And it’s look

this we outlined that And mainly are that achieve platform. that focused we today. on confident that’s the very point, for what at will We’re goals we have

at the increasing the end place depending XXXX, some the Our facility debt think, at the eliminating where maybe our as have will Plains. in perform like, repaying overall, amortization, point, Birmingham MVC and the on the Green continues lenders from And this well to heavy we the structure point, back amortization, by debt refinancing. with new obviously, there. new well, hopefully, on look notwithstanding in up sometime we whatever distribution They

fine. So at point, standalone, doing on. this a that’s as it’s we’re what focusing And just

Jordan Levy

Appreciate guys. results Nice it. Great.

Todd Becker

you Thank very much.

Operator

you. comes Stephens. next And Bienvenu from Thank from Ben question our

Your now line open. is

Ben Bienvenu

morning everybody. good Hey,

Todd Becker

morning. Good

Ben Bienvenu

I carbon just to clear to I the ask about capture sequestration timing. on and be the want want project.

work for start I line sooner Or operational on pathway in noted yet be do of expect Is you’d had that on think CI California time is you you and from to then still applying sense for a score XXXX. previously that same when program? LCFS you the could those the lines, an expected? you a project than the along have updated to

Todd Becker

the they things I think of they out as continuing that, the guys starting XXXX some accelerate have get in on a geographics bring XXXX try obviously, in start want obviously, we And say, and I of would are to I some can would Yes. mean, that’s pipeline. the shipments. outlined build If different there, there to and kind for but date goal.

the we are where would Obion, realize low Madison, any if credits, are working there that, and the to economics on addition Vernon well. the Mount standard all sites direct inject XXQ that’s fuel we and of In as from three carbon

exciting. about we’re great and obviously, lots getting we’re are so both well and do those those started in as question? we’re each for geographically of But was think there second So there. those What in excited locations the to well, We as of just very parts.

Ben Bienvenu

be in On your sold getting score the a for revised to CI ethanol [indiscernible]?

Todd Becker

Yes.

have well. – on two work Summit have the a score us there of what each those signing similar starting carbon manner sent and as any prior to pipeline, if carb Carbon plants and others but plans not on are very – shipper from a And scores and sequestered had point on team been on pipeline. two ourselves, two plants the lot in we we they the guys, that to that the that to half. there going the gotten management up There that just as happen scores have well, carbon of their becoming and would in carbon, have the two in got basically plants that have plants, they done partners of the the cut So

on lower CI. they oil-based the XX obviously, the that, other you oils And And from waste XX into are to oil-based – So in the oil that. if in a start CI corn is some that’s And think then as XX about soybean went oil, and diesel then of – based, you XX the renewable the even scores or diesel, to the our into XX. look the and at renewable vegetable than well. of

play interesting fuel be low-carbon and lower is in the that that’s or a plants for more on carb what we as world that’s the fuels. more carbon be half, cut tank we example ethanol when think I does path demands going which to two a confidence, fuel told the low-carbon need that us really getting carbon is on the storing after which ethanol future, sequestering gave low-carbon the in the So bio-fuel. And how in to really in a saw us would pump

into compete be because the And of able so taken to Brazilian I to in it tank, consideration think in consideration terms – to fuel we’re imports. but into be has how not where the of into fit the we I future going with think taken quantity, being that’s

and be as to CI able a we national to standpoint going states with be standpoint. potentially to standard. the from across renewable compete to United able and expand a compete from CI LTFs diesel States with We’re multiple We’ll

of be will in pipeline have this that prepared comes the made to the well lowest carbon we online think bio-fuels some world. when I are

Ben Bienvenu

is ethanol great. of the second core question That’s My Understood. kind fundamentals. revisiting just

with for good the the those – much know Q&A, said As you’re I’m looks optimistic. S&D next you pretty I your or next here it his Adam driving. are cautiously year did the or noted Todd, fund in transformation little industry market demand resurging margins little reticent in there a that curious to if bit impact undergoing? for Is would that this for improved. The it X while in anything have self-fund an more south where or ability you’re turn that on fully

Todd Becker

the the was running last reason optimistic last I’m it because the capacity of way industry. and is And that oversupply at X to in years, other an keep Yes. reticent have be, faced. kind And that still obviously, of to cautiously but only we’re mind X full saw the years challenges X as you you always yet or not the

well. even in we’re how forward of that watch watch closely to have as overall. that that, price the margin have structure of more than the terms we’ll think impacts going But So to I feedstocks, very to those carefully

discipline there’s watch that a have maintains industry and industry that focus optimistic, capacity if shape an and I’m cautiously in its to the its but off-line of closely. as stay shape, great in we very fundamental to So optimistic lot we’re

we’ve several bit a be years. but little And cautiously our maybe optimistic the optimistic all is more we’re in last obviously, worst there been going now, so own And out I’m enemy what today. to than

of back seen We that not come we the China – bit resurgence a market, a earlier a have little the year. in seen bit We export on we’ve but of yet. saw seen little haven’t

from where for in strong into be I than is And that’s X.X alternative, I’d gets baseline beneficial ethanol did XXXX, a on our baseline. everything ‘XX a zero place. X.X And really it We are our steady, so numbers So good zero based but just just or the to – that’s contribution mean, is a platform numbers. just rather strategy. EBITDA, I X even all a think we’re is this sure. here

on fine hard So just steady line, would get when protein we’ve production turn within in X.X industry now coming – And cash now, ethanol from XXXX our ever I or flows the a especially year not be sitting, four we X, have five in, to the basis a have X. that capacity way it flow. all where the a generating mean on been finish generate historical with right us. pretty markets be even on would be capacity those from to we’re to the Day would And funding so. cash or to you just start day they worse

even great So I And these trying be Sure. there just lead our costs other anything while time got are it – place closely, little bit? the be fact a that equipment in that’s we place, point, that what it in to build. we’re of even in is with at escalating that this pretty long of where we’re We’ve for shape. plants good market this of such And additional of and Obviously, steel tough we’re liquidity most significant small sheet have balance in think on a component needed the locked already insulate that way we’ve would executing even in if on to company, five best successfully stuff us order to ethanol the but took right pretty get a now as to our started to get X.X. way in we turn think a pricing. our a projects structured, four I can. point available equipment. Could as at watching liquidity But in we’re shape, we

completion the our pretty something this be successful point. X.X way strategy at it’d to get in tough of So a for of

Ben Bienvenu

Yes.

rest Okay, accomplished great. everything on of Congrats with you and good the this the quarter luck year.

Todd Becker

you. Thank

Operator

Thank from you. comes next Suisse. Gupta question from And Credit Manav our

now Your line open. is

Manav Gupta

Hi guys.

capture, $X.XX carbon $X.XX you gallon the drops to core a On XX CIS the uplift. XX. indicated from to That’s almost that

on $X.XX slide deck. You’re indicating about your

the question with a doing is, split on your being is along competitors this takes to it IRS is as with So credits of project to here? agreement involved is belong And credits who in a second carbon one Carbon, is project your there very similar the transportation cost LCFS with trying that clear credits. understand, XXQ off? a this case, Summit I’m there solely

Todd Becker

you the the you, Basically, credits which how no cost Yes. that Summit, a gets in shipper splitting on capital pipeline want just built, is a be the up to you’re at to if pipeline shipper, signing as XXQ. with

being obviously, shipper, not economics, is the the investment just So very putting because investment on high a you’re any return in. the

And the signed plans some it economics. ourselves type plants different where others risk. me I But not asking, think takes have signed for for And season. X-year the we’re of similar up all we that a open take-or-pay that like an very also nobody up and asked project. it’s a And like that’s in obviously, off-take great

So we wouldn’t – would we involved really have to wanted to something in. going that’s get be not

the other. are why XX to have the It’s pipeline. is pipeline, the put each it, the $X.XX in include, XX a just we’ll that or LCFS commit to credit. imagine But XX to consortium even about we’ll Summit with obviously. depending shippers – we’re to opportunity involved share other with you at the on in volume, some incredible is of as well, take those the right guys score get credits incredible that, on It’s involved of risk. partners then the go going reduce voluntary economics. ship to get you’re where and doesn’t an I you and that on – economics, a gallon would the It’s and involved their on to ourselves from a to all And build So go And you to? partners XX or market look the going starting that the CI reduce other to as that’s shippers you’re whatever the together shippers pipeline, the point. level exactly be going Where that obviously, all and

come see we’ll what and then schemes – in so other LCFS obviously, And place.

well. be I to The as on is shipper that in share everybody economics from all in those great our is if as and line standpoint, invest wanted to – a the well can thing general, think economics. do it’s So about Summit share pipeline, we we the in start

us. for opportunity exciting pretty a it’s So

Manav Gupta

your a lot follow-up natural in ethanol Okay. on peers here And of one quick gas some facilities. their prices hit is of took high

Somehow that you bullet. completely dodged

If was you how how you did achieve can that? elaborate, that –

Todd Becker

many cold that thing place think remember, That’s anticipated it team gets gas something been for cold natural snap. great that cold. they we a have I snaps in And put many the have it’s one that years. seen here something we winter They’ve was for and just and protection look Well, certain. the for

X and up And big – cold two set your vortex back polar where go the obviously, of – to go look ourselves that if ourselves these in snaps. winter. – we had protect and years, extreme polar or before was probably not the we it’s happened and three So you you every had that, last back it vortexes against

then it’s we’re get the very planted, that And much the be those that. protect we’re markets, results. do of crop yearly. But thing in gas, get thing it’s the in cold. whether was is it to whether And so like team were markets, right get to whether certain proud that the corn going want to we really to to in The how it’s the if place don’t one to that’s one crush, corn achieve it’s against well. we ethanol for a we And able planted. do, going natural for we as certain other able is And in

always we into in whether it’s who were snap corn, in ourselves and that. we downside risk some we there’s of company risks, are it’s in for this natural gas ethanol. insurance capital or and protect have investing whether able – we always and a that’s whether mean, the have it’s set been to I those a looking in it’s that all up whether as oil, of And winter, at in the we So corn cold

Manav Gupta

for Thank my taking questions. you so much

Todd Becker

much. you Thank very

Operator

question next Akyol And from Thank Stifel. Selman comes our from you.

Your line is open. now

Selman Akyol

Good you. morning. Thank

Todd Becker

morning. Good

Selman Akyol

Green comments Very earlier on appreciate much Plains. the

Just in role there, you things. and thinking evaluate a for think Plains opportunity see about have the you about at that Partners sequestration Green you carbon Do as all?

Todd Becker

developer that’s of that we’ve some pipeline not of I the we – something solutions. think that carbon Obviously, don’t we’re the examined.

shipper partner. as a a and investor involved it as potential We’re as and as in a well

the yet were there’s have basically If one it’s others, mean, I last after MLPs or to Don’t nice one so, last the to will obviously, the two how Green a public. that think maybe And recall, the I to apply very of Plains we know go – I Carbon Plant. ever Partners. But us.

is at optionality carbon there will optionality that this or of there. But in early in well. how and is there development determined. not as point, is partners its yet there’s up lot to But end still certainly, playing be So a playing

Selman Akyol

Alright. Thank you very much.

Todd Becker

much. very you Thank

Operator

Stine And from you. question Thank Eric our comes next from Craig-Hallum.

line now open. is Your

Eric Stine

Good morning everyone.

Todd Becker

morning. Good

Eric Stine

in you’ve the with the Just conversation past, parties about clean think there. quickly, I talked on sugars, plus XX

that clean that? online And where So using have then or you’ve think you’re producing – big just plant about plan? I curious Is the talked by XXXX, still I one small that in the the secondly, stands? hoping that and plant one to sugars? past, mean

Todd Becker

been seen our that plant keep start us reengineer it at commercially forward, than it we’ve positive out have has York for We given York. positive of this brought so what to York moving much has Everything then, and already was bigger and to remember, back New sites, disposition out. you to to to far obviously, Yes. we’re roll deployed doing at a

talked is now So on for what everything about. track right we’ve

today We are working customers we as speak. with

we to In co-location We others to with have that to right dextrose the on is what customers CI opportunities, think are seen types right at supply. that achieve track. able we that we’re including that next of co-location we’re to different the achieve it score opportunities it able all the that like have have want we’ve uses, has price that absolutely with much general,

date great I this seen very be think that Plains. out we’ve so to far, York exciting gives for is that us everything confidence Green to of going

Eric Stine

thank you. Okay,

Todd Becker

Thank you much. very

Operator

now I to like call further Todd Becker for closing Thank would over to showing I remarks. no you. am questions. And the turn back

Todd Becker

Yes. on for Thanks, coming Thanks call. the everybody.

us what’s shape. is our is really for think in I balance sheet exciting great

We have transformation. our fully funded

confidence just I going now The The projects we’re We purities to more us outlined. is also this on right don’t is in made the these to us are gains – increasing for purities us direction. a gives think to remaining achieving of we’re On and others. is in our Everything yields lot increasing was we’re solid continue we in this the those that just going general, that underway. around results, company. platform from protein then higher continue helpful. our I purities transformational know that ability and construction heading is a of in value concern that of that, out top our qualities. stop we projects stable right truly But innovating of path a path. to innovating successful the very be that and roll can And nothing down of there’s nutritional we’ve terms around believe a X.X telling and getting

talk So next Thank quarter. to we appreciate we’ll your you support, and you. guys

Operator

participating today’s call. concludes and conference This you. Thank disconnect. may you Thank for you now

Green Plains (GPRE) 3 May 212021 Q1 Earnings call transcript