REX - Earnings call transcript Q4 2024

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Operator

Good morning, and welcome to the REX American Resources Fourth Quarter and Full Fiscal Year 2023 Conference Call.

As a reminder, today's call is being recorded. [Operator Instructions]. I would now like to turn the call over to Mr. Doug Bruggeman, Chief Financial Officer of REX American. ahead. go Please

Douglas Bruggeman

and thank as and and safe have joining American But presentation will Executive REX me We'll I Executive Good to first, as get Fiscal you disclosure. your Year harbor QX our Chairman; Rose, Stuart Full the comments I the Rizvi, XXXX Resources Chief on Officer. momentarily morning, and call, for Zafar well Conference review joining session. Call. question-and-answer

today's facts the reflect In of contains statements performance. Private or conference addition beliefs conditions, risk within call forward-looking the statements current uncertainties Securities historical and future expectations meaning but involve that statements to current XXXX. Such Act forward-looking not of are of the company's Litigation and Reform of guarantees

vary assumes Securities expectations. The REX associated reports from actual Exchange company's would on the As announcement risks are in Resources call may the forward-looking such, the to any with in or today's results now including to with and over uncertainties and filings and like described statements. I news statements forward-looking Rose. Commission turn Form XX-Q. publicly company's Stuart revise and the the update materially American no to XX-K obligation

Stuart Rose

everyone to was American. joining Good thank you year for morning, and again us. XXXX great Fiscal for a REX

production Earths One project location. business X% the Illinois over than capture more strong core kicked of and with construction our an carbon co-product on at of of increase ethanol City, and was XXXX. Our ethanol XXX.X sold, Gibson million gallons Energy off sequestration We

to expansion the on of also production phase One capacity Energy are to Earth complete facility. first We track ethanol

were achievement our in quite the about second XX-year a income XXXX most REX's is quarter I'm proud third front, full per This and XXXX saw share company. and profitable the announce for quarter the history public company's from company. an during in financial net quarter year to as the year quarter. history also full perspective a Fourth the most On profitable

For proactively the American XXXX, team challenges is. company to everyone I'd the and hard dedication Rex us during success our that and work at looked the drove thank consistently year. it REX company successful the profitable met a in to their for over identifying throughout Board horizon, making like

Our the success. every coproducts and and the our day cornerstone been operational ethanol excellence is producing contract profitably. has in our and to Tim of monitoring continue market positions optimizing efficiently

REX's produce commitment capture our construction to ongoing sustainability for Our net never and process and if evidenced been innovation project, benefits. ever by carbon stronger, income and has carbon permitting footprint will reduce which, as successful, the

CCS This once We One significantly we expect Energy up the Earth to our assumes project and approved is necessary permits running. and results approvals. all to receive add it financial

Rizvi, the the our as of which quality facilities -- portfolio. see our do far though sense additional that not opportunities to we're looking we avenues market come and always make at of As in within that growth, Zafar detail. fit I'm several present CEO, we proud our standards economic excited discuss of turn done the project we next about so One direction the in company, our the Earths now over to things and the look greater years. I of have work into to

Zafar Rizvi

Thanks, Stuart.

also capture profitability well is testament for to the company Illinois strategic City, a to carbon the project to Our positioning our environment, only in in sequestration not the and commitment foresight but into Gibson future. our

facilities approvals plan year. operational gallons capacity million maximize which the through XXQ facilities we both and XXX before ethanol One are you if will the expansion bottom synergy to credit, with discussed have all XXB tax received to to City line REX's per contribute the Gibson Earth related of with project, and we our As production

focused process cash opens up production projects line. The of of other sequester class for we to ethanol focus the of in lines near-term picture on project that the potential see facility, preparation as that carbon addition up available And of Currently, X are the completed. bottom facility and add CCS for portion to continue this carbon presentation, our as on all the us running. To emergency to in for so-called our options, is additional of is the make well which CCS. facility exploring, you investor our construction potential sustainability is of construction together to We capture of the our ethanol for could can producers response morning. these of in-process updated however, the for point, website alcohol-to-jet fuel expect progress low-carbon but to use are permitting injection also in in the business our required these getting aviation and business X a significantly product getting other wells. as we the team completing plans Both of

beginning construction completion capture of the of and place. We the of of carbon in the of sources are additional continue after quarter testing to expect power XXXX, facility second calendar by end

application we permitting permit As far permit special agency, as Commerce use continue county. the for environmental application approvals, our monitor our Illinois the and protection X Commission Class with pipeline the [indiscernible] to for our injection and obtaining

as appropriate are keen ensure One Earths safely fast as approved to agencies project possible. and to closely committed our We regulatory service working very and with to requirements with Energy get compliance complete as are and into all the

our sustainable is into our As and operational we total budget million year-end, our the projects project One hand production million Bruggeman, expansion and belief $XXX production the and $XXX to This invested ethanol million expansion. capture commitment call This to discuss Gibson City. amount ethanol the approximately CFO, associated and financial have like at $XX.X our would investment Doug carbon to to compared results. underlines to now both the CCS energy Earths solutions. I to capacity for project of in potential

Douglas Bruggeman

of price $X.XX XXXX consolidated per XXXX Thanks, XXXX for volumes fiscal distiller quarter over million with REX's fiscal Volumes XXX.X DDG our ton fiscal grain volume during compared XXX.X XXXX volumes totaled year. an increase volumes. year approximately increase increase fourth was Zafar. Dried $XXX.XX I'll fourth during X% approximately the Average over XXXX. results. XXXX the grain XX,XXX in approximately operational a sales quarter were selling an was for tons gallon begin over million for the sales X.XX% ethanol during full XX.X% volume price volume sales year tons, year. Modified ethanol approximately full our gallons. distiller gallons, tons, of year sales year for selling fiscal XXX,XXX XXX,XXX XX,XXX per of Average XXXX. were were fiscal tons in with fiscal

million price grain per was XXXX. approximately totaled increase compared sales were in sold ton volume XX.X%. the an approximately XX.X full For approximately modified tonnes, pounds the year. Corn X.X% of XXXX, same fiscal Average over for for volumes distiller $XXX.XX million fiscal approximately selling year an to quarter, of the XX,XXX fourth XXXX period MDG pounds oil increase year XX.X in

was quarter, increase for totaled $X.XX pounds, was due profit million XXXX. natural similar to increase the improved fiscal million for an seen million production approximately gas The in XXXX. price full I've to the XXXX corn for $XX.X X% selling QX to gross and $XX.X For and dynamics XXXX. oil Average for oil was the compared million was in year sales per due QX year corn $XX.X levels products fourth full prices. approximately $XX.X lower XX XXX% increase more Gross over profit gross fourth was year. in of versus of quarter pound profit profit year. Gross approximately corn for REX fiscal than The million XXXX

quarter approximately million XX% the of significant performance. million the Our fourth increase $XX.X approximately income XXXX. fourth interest same and each incentive in the $X.X for other approximately XXXX, versus approximately million, $XX.X totaling $XX We XXXX case, before fiscal a XXXX from increased million primarily interest for and $X.X compared to million million to quarter XXXX. the with In versus quarter company's increased fourth million other versus Interest XXXX. $X.X compensation $XX.X taxes $XX.X grew SG&A period expenses million SG&A noncontrolling by the in million for to was for was the due $XX.X to XXXX. in for increase $X.X and year XXXX. Income income million in reported approximately of fiscal higher related in

versus During previous the year. during this we the million million fourth $XX.X metric quarter, period the reported during in same approximately $XX.X

at the a perspective mentioned attributable fiscal second million to shareholders REX was the best year income year $XX.X our million compared XXXX beginning Stuart net from the call, for Net was XXXX. income As year the history. of in $XX.X to company's

the On short-term $XXX.X basis, compared now fourth call production Also $X.XX a per income of amounts REX related like For of per conservative $X.X year million the One investments $XXX.X with the diluted full year, this for fourth XXXX. share share same diluted quarter was equaled this $XX.X ended XXXX. per quarter for in share And for compared the the XXXX, $X.XX million XXXX million in with per net to the share the to share $X.XX income compared previous to net the in conservative was CCS compared debt. I'd per year turn $X.XX year-end back our build fiscal fiscal location. per ethanol total year. We fourth quarter approach, reflective cash, period without Energy XXXX, to and of equivalents cash anticipated to to with bank XXXX Earth City project at Zafar. the million expansion approach, capacity The this expenditures our XXXX. to during cash related capital any for American and Gibson the share ended

Zafar Rizvi

some give around how the Thanks, see calender Doug. remainder now I to market we through color the progressing XXXX. like would ethanol of

commodity ethanol Looking continued we co-product in and market. anticipate market, changes at the

every looking the contracting the at position team However, as us in in we matter better the a market put positions no these watching conditions. our have our seen our market capable adjusting that markets, incredible forward and years, strategy over is day.

so hard our As of currently period driven ahead the corn are In more ago. profitability, ethanol in to our natural work than seeing running during most slightly want thank for a and This year dedicated very closing, whose favor ago. innovation gas have important resulted year pricing inputs our has I same employees we run far success. and the in XXXX, our cental market a as year far

to We to are our continued in excited your support. you our about shareholders. Thank confident the future strategy value and for deliver

like to questions. things would open I Now these for Operator?

Operator

first Securities. Instructions] Jordan the of Levy [Operator question from line Truist comes Our with

Henry Roberts

It's Henry here. another on on quarter. first Jordan for excellent Congratulations

Illinois regulatory EPA Commission. incremental any start or there the are on Commerce with with give discussions us the the you and on to the can side, updates Just color

Stuart Rose

Zafar?

Zafar Rizvi

Sure.

me Let stand information some we where today. you give

Our carbon construction. is facility under

August. process but by As you under -- review approve, we for July is permit it under knowledge know, beginning end APA, is which X the of is complete by when Class to or no review. expected will the technical it's they of Permitting have

is well expect and get is to it waiting August. And process through and so all to pipeline and in are and the early all by -- the #X we also able or to end able that process are ICSC the to the complete July are signed where far of well. easement We we #X, well are we going the for #X have well for three

X also have at XX% time well the We area for of this #X. the

have completed. for we've easement take also the well #X of us which to approximately #X, We will XX% X-mile and the pipeline,

new agreement the have able gen year. to is summit also -- successfully also -- It's also pass signed in improving to We get facilities Summit -- the South with [indiscernible]. able last there legislation some

no far they So a we and agencies Jordan, coming when that is have certainly that. to approve as will and this knowledge it's as process, the long basically again, government process back and when

Stuart Rose

everyone A like to lot Henry, won't holes for stuff things much. Mnet they XX% that get add is has I tried our of incredible to like number to want It's we have that. hope anything that virtually an I that that add want -- that. less like in and -- do domain their and that to else Henry,

of might a from having of something pharma us. that's, done people incredible We troubled little that this think, other that support amount separates from an get the than a more to have we us project partners our and lot be

Henry Roberts

I thinking not Just of are -- projects, of use there about One I'm carbon capital allocation. a just space capture at around of or the at your anything of looking in guys a are ethanol cash you thinking on ethanol call, terms outside things that's worthy this guess, Earth and point. quick of you know follow-up mentioned if asset the there's wondering you -- purchasing any -- for in current uses. I you're haven't seen

Stuart Rose

That's a good question.

-- of plants. at some looked have a We couple at

of number lot so so And COX we're lot in moment there's say, in if to there of just future, that future talk way can for the this plants say, a focused I fuel, let's point. But jet way way, our anything emit mean but at found the a date, a on capture, this power and -- be be COX. the that this let's at nearby far is for example, carbon haven't uses we could of capital,

carbon We're getting We we capture -- have permitted. have holes.

Now there's partners chances There's plants them. with cement to there. be

probably drops, you stock when people. our We buyback also, as know, we're prolific

So there's always for cash that. to opportunity the the use

excited So capture there's capture, or carbon can carbon the people's about future. things future. we're carbon we other our do in capture the after so with combined many

Zafar Rizvi

$XXX Yes. of plants, And to the to also, going and CCS this of end or to that $XXX the for expected million million you know, by expansion complete as which early have we're approximately is is XXXX. year

lot any to think have So then future for mentioned. the properties other at leads of purchase And will our that it we a cash, this I as available, which also us be taking future Stuart of expansion, still stage.

Operator

of line with the Our James. Pavel Molchanov next comes Raymond question from

Pavel Molchanov

assets production size. asset of I'd maybe good before, post base? come the for any your are to not latest to question opportunity company they I've on this. are capture Good a this Is get as but you're there rich kind there your And to as obvious extremely state thoughts ethanol up existing of as periodically your I that thought for connect sale. to add yours, I sale, for always. mean

Stuart Rose

We are -- we're always looking.

can large Illinois at this near looking, are want, in the or which carbon ethanol capture the find capture is plants but years next to imminent. We we Vegan these What ideally at Illinois in have nothing someplaces is to as make least we as time, near on hard we or we much that's plant near business. ICM for few have potential the because would carbon

would a that's preferably look really to it be has supply So would We new, plant It that have good ideal have look things was relatively that ideal. future. good wasn't Vegan that plans would at on never something corn we now good much for, be that if a what planned one capture, we if great have so ICM. we with for We're carbon the found we pretty and right stringent where plant.

Zafar Rizvi

also And also organically what to add that growing. is I are would we Pavel,

Energy gallons. So million-gallon XXX One each the XXX million as we are million. originally, this And now Earths you plants see, expanding plants can XXX than expanded to we million were to then these XXX

much location So -- ethanol plants believe than I possible is any project, any better other the CCS at our have best certainly think we other location we that they -- produced location. and

make locations we our also also to our before and buy trying to grow sure are reinvest we which organically So that not something try we in may fit criteria.

Stuart Rose

than when changed And the place to be honest, transactions taken that's been less have plants have of hands. some lesser expensive that

Pavel Molchanov

Okay.

to So earlier to jet up in alcohol first in this Georgia. to guess, year, the world open facility the I ethanol -- or,

be M&A conversion existing And running your is would if course, SaaS. curious yet project. I'm this you opportunity, ethanol the any or sites to Of LanzaJet produce of some future at of kind interested potentially this in project

Zafar Rizvi

only dynamics some there. at thing billion was Thursday I of Pavel, SAF about there market last XX Yes, And the this hearing kind Airline And aviation is there. American There demand. fuel. no fuel, kinds of consistent. Southwest is Aviation is different and everyone approximately there X Airlines barrels aviation that. one was was million use of market. be Approximately very Friday, gallons was this to earlier one projection the approximately a and is which United the expected week, and Airline, conference There of is actually, also day for fuel

what make part. are into currently we may participate. looking sense how on could REX And most this So the

are option I and However, One conference, -- our it's we are gallons there approximately the which expected permitted we right by looking plant only and or most is getting is is and there not from CCS enough our in importantly, at at Earths produced, operation, there to time, what market, really XX that successful -- successful means maybe in plants, to there's learned gallons. CCS are this X right time. But now, from only on making own maybe billion market. is and concentrating million first in costs, an the future, this X pivot on XX that be and our now. but carbon to will at behind for in up do But X, focused running There project fast things grow years ethanol build are SAF XXXX but great the sequestration of

there yes, So enough at a time, really demand is but there this there. isn't great future, market

Stuart Rose

keys One see the and of not the the have pioneer to but and wait best there. out technology has who for the technology best to our been Pavel best success, be technology has the to

So we're in this -- look but that as someone well, someone a arrows, that it as as very other least soon is questions? and seriously be the else soon can pioneer come at not be We'll jumping business. Any profitable at shows shows this the we'll take into as it. a let someone

Operator

the comes from line ] of with question Research. Cook Singular next [ Our DJ

Unknown Analyst

Just quick. on new capacity the Is there in City? expansion info -- any Gibson you guys have or update

Zafar Rizvi

I didn't repeat your I'm you hear question. again, please? that Could sorry,

Unknown Analyst

Gibson sorry. or Yes, the any update capacity on expansion have City. at new information you Do

Zafar Rizvi

is any we before is facility end permit CCS we start still pipeline, early But the compressor facility of sequestration. wait the arriving and of we every to I end X and for that building plant. building previously XXX have completed think that is also the of project mentioned are and construction expanding facility construction as going this we I is the expect a that And CCS is ethanol the of then gallon single be year. Class permit August, facility, and be before or the Equipment for million to carbon ethanol almost kind July is will we that complete. be expect the by will day in the EPA The progress. completed.

as well. permits. it's the main those waiting are things going facility, for are concerned But about the far the we as So very

Douglas Bruggeman

Doug. This is

to we facility, we to Initial When million EPA XXX gallons. to us we can that and go add. be take once that the plans approval, run further then to will achieve me and at XXX get construction million go expand gallons. gallon million XXX Let

Unknown Analyst

you guys are it. looking capacity get But guys of expect run How to remainder up. year, for utilization you a kind of target Fantastic. at it moving is the to

Douglas Bruggeman

We Question cut because there just plan full only do. corn decent we've cut we times where won't was maintenance. -- as much capacity we back be be capacity. on tons go when full out capacity. will as a we pretty assuming we were be time will ever that basically, back running market. There we'll profitable But The we always the run crop, get CCS all for back go doing with can't much out. cut We'll we're quite a usually we when all it's And utilization.

Zafar Rizvi

Yes.

We a not slowdown. have really

-- Our slowdown kind is sometimes shutdown. maintenance process it's is of unexpected some

this the to full capacity are corn because to and we year So be a the possible South in last belt we same. expected try Illinois and was in year area use great [indiscernible] basically practically

So plan to this we at have slow no stage. really down

Operator

turn Rose reached we closing back session. the remarks. of for question-and-answer over call end the to And have I'll Stuart the now

Stuart Rose

thank to for like I'd Okay. everyone listening.

And listening REX We great to much. our you think everything next for between them, thank and makes quarter. what to and employees everyone prospects heard, Talk we working want growth appreciate the to We the industry. is the the best feel As the to also best it very We call. that's we in key difference to we the else we thank us. want just really Bye. have our plants, the you have in and great industry, you for terrific plants, have people execution employees. of

Operator

you this disconnect and lines And today's your conference, you Thank this at may for concludes time. participation. your

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