REGI - Earnings call transcript Q1 2018 | Renewable Energy Group, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to Renewable Energy Group Incorporated First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the call over to Todd Robinson, Treasurer.

begin. may You

Todd Robinson

our Good Quarter Mark. are and to Howard; welcome President Thank to Earnings President Officer, Eric questions Marketing. of afternoon, Business Conference & First and Randy Sales Officer, Bowen, XXXX Chief the today Financial Call. Gary our and and Corporate are Legal President, you, and Executive answer everyone, Chief With our Affairs; Chad Vice Haer, on Stone. Development Also call our our Vice me

housekeeping few to a cover before I over me Let call the items Randy. turn

First, is appear includes I our on of replay available accompanying an with Investor would this like A automatically to remind which webcast. webcast the available section being at website slide everyone deck, that beginning Relations our call regi.com. be is website later at webcast this will and will The the afternoon.

will we to as You prompt you. the manually advance need slides

Relations the for If please along and For release, in those be can should click of downloaded, Investor of you deck dialing earnings available not be appear, press slide it deck does the section our with download. Refresh in, the the website.

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Turning such statements. annual detail XX-K and factors could Factors The results These to you discussed some contain on on in The will of from to guarantee investors press predict factors to advise statements measures. performance this of also not the with like contained Slide expectations. forward-looking of would could Several actual are sections the based information uncertainties will GAAP metrics appendix statements our the Risk undertakes a core forward-looking that We company’s speak conference These in or call any These see involve are company information difficult for help of non-GAAP to these business. materially other the on for accompanying performance. in the statements. no call. those this only Form measures of risks, that assumptions financial non-GAAP X. and contribute and or as differ assess such cause described a are includes differences. report to comparable XXXX forward-looking Today’s statements of to operating statements obligation most discussion the of deck our new We believe update revised the the the date measures. Please slide or publicly to the on forward-looking release file SEC. those reconciliation

Officer, for the earnings the As Because GAAP to XXXX tax reflected our call the of credit, we mixture XXXX. XXXX our net for on credit me benefit credit operating call the The of quarter our retroactive first Randy Executive allocation March, quarter will on X, biodiesel a give and mentioned on to full the that, detail adjusted over Howard. or With our benefits statements excise an XXXX operations, order let when results. more make XXXX. President in year in February was Chief financial he reflect comparisons our made back is year-to-year relates of BTC, in reinstatement you XXXX this our little reviews more financial the by Randy? turn results of to results our to sensible. the Chad bit

Randy Howard

quarter $X.XX start. XXXX. everyone, a and tax GAAP is earnings to excise for or biodiesel credit of $XXX the Obviously, call. of off joining million, share, recognition thanks, income for per Thank Todd, XXXX good net first the you, our represent

better high sold EBITDA XXXX, gallons for and would expected April. income end in and million higher, that XXXX gallons that million, the net quarter. XXXX. we but at the XX% a been the sold adjusted colder XXXX Slide have Adjusted providing our March, income gallons adjusted first quarter above of reflect which the representation sold EBITDA adjusted first of of $XX.X into performance. shows Our was when some first and for XXX the and guidance deliveries BTC a net the the based than allocation even the the for million benefit We was of quarter on first was X $X.X were quarter fuel, believe push

mentioned, adjusted I the which was adjusted EBITDA $XX.X million $XX As million, first better XXXX EBITDA, first quarter excluding was than the quarter BTC. over of

our we results breakeven a to which all is our operate the quarter to First result period more negatively makes items. Relative impacted was the by generally guidance, BTC, closer adjusted without EBITDA encouraging. two when

management guidance, a The gave of was loss the million. had nearly management risk gains $XX risk $X.X we of time we first million. At

guide guidance I forecast time. -- mean of try our know, we ULSD end where approximately you the does based to $XX are not negative at and strongly ULSD risk rallied million. by swung unleaded We As on the market management prices. March, at

estimate benefit change our year, earnings profit EBITDA see due power. $XX.X The reinstated earned $XX inventory support, RIN a what as Posting retroactively continued second solid for impact million million assuming RIN demonstrates of was the expected, write-down quarter the is in without prices would BTC Adjusted quarter as the in in BTC business $X our we quarter. the the to of place a a million. first late first the BTC later to improvement we the core net in continues in BTC in the dollar platform. fall around this reinstatement, step this quarter, be

biodiesel gallons levels as that of and have of a As fuel. I scheduled downtime. the at The mentioned, We of despite to Ralston in the we fleet and quarter, sold impact biomass-based maintenance nameplate, our winter facilities XXX ran higher we gallons cold diesel produced operations. XXX Madison very did operation, XX% million of our million returned

in the XX in our to of of year. track operation was in inspection maintenance the we the biodiesel plants, we and Despite we and XX% the did vessels downtime achieve on the downtime goal more of in remainder of This completed accomplishment, remain weather plants first we successfully the than our quarter, set first XXXX. huge producing During a believe on for cycle. quarter are the a our XXX XXXX required year

XXX% run refinery diesel nameplate renewable Geismar QX. Our of in at at continues running well, to

margins were helped The market costs expected. feedstock. as feedstock The of abundance from an operating biomass-based diesel is first lower largely RIN quarter by

approval feedstock came has in by prices these is XXXX spread believe us, and the the of feedstocks no granting as to created granting on the lower levels The exemptions. in correspondingly for value shown can shown RIN X, increase RINs their of small many, down be of the the Slide on XXXX. their X. largely in as including authority for at end As fuel, between refiner and uncertainty recently in attributed exemptions, There prices most decrease quarter, and process EPA record exemptions the through exceeded the EPA transparency Slide

lawsuits be to on first was what The expect challenging Tuesday. EPA of filed we actions several

administrator was policy there of changes EPA were BTC discussion the promulgated. in come RIN publicly no believes congress, a included it was on cap, bill. should stated. and ethanol in omnibus not the from Although the reform The He any RFS administration. lot as year-around proposed EXX approve not sales such March

the year. of it However, the to we continued to be reinstated end near expect to

since provide year-to-year XXXX brief a released initiatives. allies for our congressional volatility. the We with solution months but we year to and update I the growth that our on been multiyear a two industry remove would It BTC supporters full want are has to results, only our enact working do

We growth. continue make renewable to diesel on progress steady

costs. into logistics phase for well capacity moving per as detailed Geismar to from engineering XX We year, last which are XXX per expansion, gallons the reduce as the would potential existing gallons of a million increase year million

final expect We project year-end. a decision by on this

fleet. biodiesel his In improve addition, will our remarks. moving on plans forward we on are our capital projects Chad high-return update to in

effort We to downstream customers fleet exciting selling continue been downstream distribution sales, able wholesale through the our products have directly the progress our steady of Clean enhance of to expansion is channel. terminals on Ultra at on and/or recent make By REG A our our Diesel to we our operations. yesterday margins launch moving and historic Advanced the development to direct downstream compared the Long biodiesel. versus Transportation REG proprietary Clean X cleanest among REG X diesel We substantially federal REG fuels. diesel-compliant Beach, reducing slides renewable fuels showing in California. and is on believe to fuel of performance a and ultraclean Ultra tables harmful California is patent-pending today, refer diesel emissions. Ultra superior Clean both Please Clean market blend and made from for Expo a the

We focused standard. associated value specifically a environmentally have California, targeted we where markets, premium extra fuel can take Ultra product as positioned low REG Clean in carbon of the with advantage the

meet Importantly, to require in additive which biodiesel, the stringent ultraclean a does an state the million RIN. supply. BXX year. the standards. to all carb May requirement the are first months, diesel X, of Minnesota XX, which approximately emissions From Midwest, biodiesel, on the of usage requirement May we contain implemented by X the the back In unlike nation fuel other X% conventional biodiesel well-positioned REG to Minnesota gallons state must XX% to in down sold reduces XX demand per All usage September increases not

coast, diesel. the Wednesday for gallon with east over XXX,XXX renewable We are diesel city most the New we using announced be fleet the a six-month a supply city biodiesel York continues and recently period. consumer City of On of working to that to renewable

maintain investment conclude divided most team. allocation by have we what our cash prudent of projects, strong The of and important touching return is the allocation. CapEx of me of capital responsibilities new one and We shareholders. capital priorities, capital to investment Let of one on our between highest flow a our management to our

first we notes As and convertible repurchase repurchase April, our the of during quarter for in under return shares plan. capital, and

we our our details our and As business creating will of substantial more we remain value continuous core offer continue returning the Chad cash program. generate commitment repurchase shareholders. flows, focused the to on improvement to on to and

financial Life to on to forward Chad business the want update, path an update Sciences discuss the call to turn I for Before the I give unit. you over

this We options of the in last of are have details. technology stages the value finalizing developed and to several attractive the monetize

soon. share to details We expect those

financial Now to and to update, let discuss turn I call outlook. the and over guidance return Chad will then the our for me

Chad Stone

review financial turn Please you, first and Thank X, the to Slide results. Randy. quarter I'll

by the Randy you first over on adjusted Slide Randy this years $XX.X in five our for quarter described earnings reinforces the the EBITDA As a best million. mentioned, in first capability is quarter $XX step million call. the comparable adjusted was XX, This meeting our see On for last last quarter, pre-BTC. basis, EBITDA change our earnings first can

$XX.X BTC In addition, net for $XX as to EBITDA quarter the adjusted total million. adjusted has of of upside million first XXXX for reinstated a approximately is EBITDA there

give allocated impact try XX. we you simple me how Slide to explanation reflected Let on of a the XXXX

adjusted EBITDA, we income sold. when benefit net were the allocate the adjusted gallons For quarters the and to

owe sharing we any additional is metrics The additional the to that collect going are comparable to roughly $XXX tax to benefit we of IRS $XXX adjustments. REG those that of million $XXX BTC million attributable with attributed that So million. is adjustments, XXXX $XX our first Of with million the amount are quarter customers XXXX. of amount, under reinstatement The reinstatement agreement. from the to and without gross for to million net XXX

quarter For be. first BTC revenues, means GAAP expense purposes, is recognized sold, the financial higher accounts of of they our benefit payable statements. to in goods all some This entire are otherwise items, receivable, XXXX the accounts than cost would our

So sharing the diesel the line line payment of is BTC biomass-based the the customer are amount BTC, sales. revenue in in for as reflected government item. In a reflected reduction the example, gross incentives

sales $XX So revenue expect revenue increased are $XX million. the this more in sales selling agreements explains BTC When $XXX diesel customer-sharing why price. you higher you decreased would with gallons consider a as our million, in million, fact biomass-based biomass-based diesel

begin of risk guidance. during to management let’s RINs relative the write-down and impact our of to Now the quarter

increase last quarter ULSD the on ULSD chart first in to March on of guidance $X.XX the $X.XX of XX gallon. XX. days quarter we management at risk that, When X, loss. per was the end gallon. the Slide increased This per through to After at March provided Turning ULSD trading resulted end our in

guidance ULSD the risk guidance forward $XX results in the increase, was and and result, from between variance for Our a our million. not factor $X.XX did management actual curve as in that

prices, RIN million in lower in resulted We market. write-down a also $X of cost saw decrease in which a to

our these back actual our of add midpoint variances two you which would guidance. near have been If $XX.X results, our adjusted to million, EBITDA is the

through shareholder the emphasis with the $XX the and share inflow million margins, And of from we see allocation on repurchase on million a we we December, X.X program. price cash XX share. you $XX.XX In on Slide capital shares April, focused current BTC repurchased per at With $XX.X million of an announced an disciplined average return. for are end can

at of a We also repurchased bonds X% convertible premium. million $X.X

also focused slightly million We were are of guidance. In fuel million XX XX million ahead program, high gallons greater repurchase XXX were from gallon. our were addition gallons amount, our of the average diesel. on returns gallons gallons XX%. petroleum-based return our excluding $X.XX were by than German million and to The Of we that per gallons biodiesel, projects price with million sold diesel, sold renewable XX parties, third X were BTC was million XX subsidiary benefit selling

Our is due the to impact $XXX largely total net or increased of XX%. revenue BTC. This million the

quarter, second when of expense gallons is SG&A year-over-year financial to comparable the XXXX. million for million or the benefit, better to inclusive the revenue, outstanding due of expense in reflected total quarter. price. gallons which $XX The be of losses Our which risk risk delivered recognized are million by of revenue, employee-related excluding largely the net gains sold increase average cost BTC Most of will management $X.X we SG&A Through in more quarter management XXXX. in year incurred this increased March is higher the first resulting to X% was $X.X the performance driven the full BTC. a in XX%, of margins of from selling was in first compared the losses in quarter XXXX

Our our each primarily cost expense to in million oil employee-related would've due yet related without the as increased of period. some for revenue down the year-over-year less product. increase as X% well field Similar prior trials cost the $X.X to to R&D for the is is impact. been SG&A, period, up [Indiscernible] $X.X is SG&A which million, expense X% BTC than from was

share. share, $XXX was million business, XXXX, from income adjusted again income quarter first the $XX.X BTC Adjusted the or million. commercialization of $XXX,XXX the for While excluding per excluding strategic $X.X was Net BTC. a a $XX approximately quarter, to on sciences engaged an during EBITDA on to conducted net of the primarily are our benefit again first million review still This we or the the for XXXX reinstatement would we of the adjusted million, of moving was $X.XX maximize in the our life of $XX.X again, of was $XX.X of net the million. quarter based total business BTC, XXXX compared value of for be million of quarter retroactive The to first forward EBITDA which compares Net per loss business result impact. adjusted are the $X.XX efforts BTC unit. this

$XX CapEx For primarily modeling used be to to was growth on purposes, expect In not CapEx the mainly, Madison we exclusively, directed for diesel. although our Harbor. and renewable million quarter, we Ralston, Grays that spent

plant CapEx XX projects our in to The $XX XX approved CapEx, million $XX high-return board to Our primarily million. month related diesel is for the improvement growth renewable maintenance is platform. and next

expected to benefit the tax against deferred and resulting tax effective over which than $XXX up at NOLs the our NOLs million the to end. X%, effective cash reserve tax is quarter is is treatment. from of our was BTC valuation for Our future tax rate mostly allowance, due be made rate XXXX valuation our allowance asset, Without less of low a

strong that us Finally, encouraged balance by to strength of I'm sheet our the multiple our liquidity goals. positions achieve and

over the We adjusted shareholder program, to best be expand with while optimize diesel investing can XX-month in view continued EBITDA fleet, empathize on performance our return to believe repurchase to time, We high-return our you Slide strong also trailing capabilities. biodiesel continues see projects our our our renewable to XX. way which

projects in XX% invested see on XX. capital resulted focus excess return of can You on in a is our high-return Slide on

discuss I'll back Randy? the to call turn Now outlook. Randy the to

Randy Howard

QX prices inventories supportive conditions are EIA diesel season. recent the at showing attractive are were And prices second and we numbers remain Energy for as good Thanks, feedstock than with quarter. look lower in low. Chad. Market usual the

response mentioned, feedstock. RIN to we spread I in large the lower, have between cost prices trended of fuel As think and the partially

competitors price create We capacity expect feedstocks strengthen year ranges comes production the for feedstock to new online. and prices their markets historical to return in later additional as demand as

feedstock We adjust spreads the healthy as for between RIN markets will refining fuel our contract, assets. expect profit upwards maintaining and

maintenance of its most for turnaround biodiesel and three did planned annual we quarter, maintenance the catalyst change. has on first required diesel approximately QX, downtime Geismar plants. for our In the plant renewable our During weeks

million are and are adjusted a continue turnaround. ran we as We XXX% year-over-year second performance $XX improved sold forecasting XXX last XX, facility $XX million to months million million our gallons the current since Based Geismar to on of as it the of in XXXX environment be without gallons at to see its quarter nine to nameplate EBITDA XXX for the Slide forecasting on BTC. shown

would BTC price could exceed achieved is the step be change XXXX to affect be fulfilled is EBITDA the the performance quarter. $XX a through reinstatement, of for retroactive contracts end earnings the BTC, BTC, of estimate be should $XXX it $XX actual XXXX, the of performance expected in quarter we saw ultimately $XX on demonstrates substantial EBITDA million. without or expected the of BTC would Any million credits $XX this in record our levels reinforce million, retroactive our Adjusted XXXX through RINs we to of first This margins spot through which changes in for to April, the with in And of of half, the million reinstatement million. adjusted the LCFS the Assuming the in and diesel, estimated end range With existing to results. our we to expect XXXX. range approximately power. based the be reinstatement existing forward

like would the the of call segment question-and-answer operator for Now call. turn over I Operator? to to our the

Operator

Partners. line Roth the Craig from comes capital Irwin Instructions] [Operator first of Our question of

Craig Irwin

excluding have after it kind to risk sell lot capacity the and First what in management is the to comment sold this gains if us ask you out? Can guidance. the includes of BTC maybe the losses? EBITDA of $XX or June quarter? is of between you spot first thing seems $XX market quarter wanted your Do strong available about quarter. million now And EBITDA, to Adjusted portion end I for million, a of the

Chad Stone

Thanks will I Craig, Chad. start. question. the for This is

there’s average throughout If you been X. with I’m kind margins -- to slides improving show is the at and X a quarter. is spread oil X the kind you peak. shows Slide seeing and in [total] It’s they heating slides monthly oil you’re sorry, bean price. that to X, look of What the RIN spread at have its the X

So you’re all, first committed, in the largely pretty quarter. for we losses that to described substantial were of in to our expecting right risk and a we've management related quarter that that committed gallons book already second got second locked were

a know, in to have we last the the that around three or weeks in we the what second get reflected described risk pretty XX but tend be further days like better risk margin into in was expect out, of you good than in those if visibility $XX not quarter turning As we quarter, roughly management loss ahead. quarter. to either usually about the much But management million the too we

that So that into is guidance. factored

Randy Howard

Craig. other The thing,

think we I you production not very first but second big did and are quarter, we that by have the in sold operation in also obviously sales. projecting is note the also should plant only in the gallons standards low thing our quarter increase the

turnaround, productions that the sold that -- with those online increased. has for down fall of fact the both of is so our caveat gallons its dramatically the And both back Geismar

So I all think that. from it's coming

Craig Irwin

you the included Great. of second guidance you that million for us shared that with loss In the the initial guidance EBITDA is assumption what $XX of your of to quarter that your million you of volatility. maybe million risk materializes management remarks, $XX the $XX the first $X.X million for commodity a Can gave, management a quarter? share risk the assumption game because prepared for

Chad Stone

Are in you about what's talking in that's amount guidance the the the…

Craig Irwin

risk guidance contribution as What management? in the EBITDA is numeric or base in a far

Chad Stone

million. $XX Roughly

Craig Irwin

XX in gains? million So

Chad Stone

turning is million management. risk through the around or in The margins quarter reversal into of gains the either first quarter management second $XX from better risk

Craig Irwin

Okay, excellent.

environment together, that's way representation. we it? if first to sort Is a more the think a combine natural basically, that half much of So fair flagged of

Randy Howard

we thinking. that's Yes, are how

Chad Stone

That’s yes. how we’re –

Craig Irwin

Excellent.

been the know biodiesel about at at How lot of So excited. is then firming of should into continued don't this of potential a week summer operationally, the weak of the over summer have we as have were you your yet, constructive demand the of on as this on look up, driving season, we talking of sort expansion look season? the feedstocks the availability prices side head for for but biodiesel pretty margins retail fleets number last energy do to are environment the driving a expo consumers product. and at going With feel weeks? continue you new A the people way the obviously crush I margins beginning we lot they

Randy Howard

if Well, on prices? I much we can like right project who I -- are But EIA, at the of mean, low energy look you again side. or said, out now, diesel range inventories

we to So the ramping continuing that see to Minnesota, this in as both Obviously up diesel example and demand week see mean there lot renewable prices continuing drive I to a firm. We increase is California, as do of BXX diesel. and strength. of a of the

are where we second said, kind like I bullish were for I quarter. -- of mean, the that sit So very we on positive

Craig Irwin

Excellent. past think, identified, And over well that you In $XX projects. last calls capital then may, question, shared you've if million. I I your

access XX of end of you think $XX where allow be period. may in what months’ that you I that frame execution Do or these vast longer-term targeting selection in EBITDA putting projects on XX% markets. investments these the that be some million on into to out now of the preventative could you time for we are to an in returns was you're expect the certain short-term us capital on maybe site the strategic return Can EBITDA and you program over deliver you projects? majority high you right thought that are

Randy Howard

projects. reduction high some capital months. returns, it’s capital more these of in just more high-return safety focus but the finished blend of Again, improves some a the buckets, improvement couple different and actually a some We’ve just profit rebuilt. capital, Harbor substantially. maintenance that been It’s capital at of value glycerin and Madison Grays the cost Ralston there We’ve getting and major some facilities done capital byproduct our

like for up. the We So we’ve year. variety there's that projects kicked already off wound just projects a of

two we’ll next we’re were have see three the we summary or can months the those able really first think a of some so with can traction the quarter. tick of gaining in begin we I to the there. how off implementing so of projects you Part downtime we had

So I – our think not it'll but you'll profit improvement consistent rate rolling cost and but the out only see be some, again, the improvement plant, from through they’ll year.

Craig Irwin

than just half that adjustments I REG The of year. there actually impact in turnaround out, making the second are the or that might catalyst up other technology there. follow the you And performance Geismar upgrades change bed the in

Randy Howard

out some we've move that that what – are improvements there. There's can efficiency. would we’re things improve significantly. of improved There dial few a that doing call I really I onstream done the would -- Nothing to that’s lot the make some

So But there so that making some improvements able capital goals we hopeful significant I that plant pleased at yes, stretch so they dialed I'm mean, just to this has if this year, first no been I turnaround. got we've in, projects and significant, the reach. and new run. plant am nothing there. are keep we’ve that always quarter

Operator

from Craig Irwin of Capital We Partners. from Instructions] line [Operator Roth another question have

Craig Irwin

keep as always. can going I

Randy Howard

Yes, the Craig. yours, is floor

Craig Irwin

Thank you.

and know in not representation reinstatement to? the year? is could transparent biodiesel be as a in five-year a a of hard Congress Do credit that’s tax what’s excise point ramp you completely attached credit I working changed to potentially our is like. down possible that And some our your last-minute biodiesel producer’s negotiations would with that of confidence tax were some vehicle that So really advocates the credit. a the we feel may see seeing at this there

Randy Howard

is the that same pleased starting my in we of has around last Craig, remarks, and at period mentioned taught seek industry we together and a come even the long-term experience solar. believe in examples. -- of months call us I and we the think I these do too us I'm industry I were of that wind the taught multiyear need We get time really at XX good that like that. using with Both think Well, the a look last the to to extension, those able as plan. with approximately examples can to them

working said, that's for we Like the So BTC. what be are I same as I believe a now. it’ll on me, form in

think the I in everyone us in and common understanding a brings that support. broader a point or common allows much industry

see I in the -- it the I of think So you'll BTC. don't form

Craig Irwin

good That’s Great. to hear.

wanted Next in you you've thing I engineering the is at and Geismar. about Obviously, different studies It’s something that ongoing REG remarks to your talked ask about the of expansion technical times. prepared said are right now.

might this execute a the share to for next project capital see within some the other to project? back And far with couple in what we orders items placing lead maybe as expansion. of items if to expect necessary as permitting us ground would move towards or going XXXX? You is quarters, land very of Can you when make long to necessary bought the you time the

Randy Howard

we We engineering, So of a us order passed magnitude said, preliminary good as or passed I cost did gate. we gave and on which that schedule. stage

engineering there many We is existing in of it's items of -- because include not That is although we project. an long using have expansion the lead this -- prior now time what's time case, long gone those. lead may into that for pretty detailed facilities level purchased the from items, some some

is that mostly can detailed year. to engineering sanctioned later our this it's detail we finish engineering and to down So targeted execute getting like the so project the it said, quickly. I And

Craig Irwin

site Analyst comment you existing as project this upgrade the describe the enhance maybe you or existing at would upgrade capital detail able potentially when some then future benefits And footprint. whether that profitability to on may and as significant a be what for in not of the everybody there the being about this logistical as envision for on existing start there already 'XX Can would and the handling your step Day, capacity projects your for you that path infrastructure logistical then a at gave far footprint. -- you the be the be plan are that logistics significant

Randy Howard

and Yes, upgrades. as some my includes logistic the I mentioned detailed remarks, in engineering

engineering on the it's working yes, So part now. detailed of they’re

Craig Irwin

Europe, similar European like as your you as it's volatility many us see to arbitrage longer-term the feedstock predominantly of focus market the for as not I far here Excellent. volatility biodiesel? greener it over Obviously Okay. opportunity cleaner, for guess in ability, tighter double of sourcing maybe call people more what and opportunity available is sketch here. counting the investors. and strong you ourselves REG given for your Can in out as the a economic guess, Europe? Europe capabilities Is for an this over subsidies I really they our

Randy Howard

Sure. things I a in on going the are Europe. there few mean,

the margins the First quarter, subsidized boats poor. flooding Argentinean were say and let’s just Europe pretty were into

second specifically the oil, again, look largely vegetable based And for better not Our cooking which our margins oil. use quarter, improving. there. over on They are much facilities, are

ester, get produced product double the our value. and counting. markets into get is higher do as eco because we get do so methyl And We the

we product here, to using we’re into also So -- strategies the using specific there we’re where some get take highest we’re of customers value. that's what our really the

our we margins see to expand as that a there. way So over

Craig Irwin

And diesel last in seeing may. pretty tailwinds. some question, then the nice hydrocarbon the like it’s renewable for term, US looks Longer Great. if I potential

you those you to a of Can you addition couple of or provide would forward would How that come the very large the you RHD us necessary together? see Geismar. discussed facilities for recap on to expect environment just maybe You potential picture want to plants? move would what in the to this decisions have make to kind the to for build opportunity

Randy Howard

two Well, there things. are

project preliminary our We double plant the build doing we part of engineering Geismar RHD -- of essentially the are, as the are on a another size to there. and

derisk looking So also part cost those decision and new obviously of what of the what all both will partners be, with things. how we’re plant lending timing again the And at and be be. would would to the that the total making

everything of standpoint, that and there go their fleet. said, we So things a in there's markets City even final York Canada, to renewable be diesel. see renewal with it’s sometime upside of Washington to Like believe we’re State Oregon, a excited low-carbon California, is that decision. buying diesel From the New going because for now we growth to fuel in come market suggest emerging will run together plenty variety I make that those our

So next of diesel, those vehicles, Craig. renewable running our one it's see time you'll you city on know

Craig Irwin

quarter. to hear. what better eyes on my guidance. taking strong good for the second congratulations the I little thinking That’s again was Thanks questions It’s and than keep definitely open. obviously I for my

that’s So healthy.

Operator

from question from line our Growth. of comes And Michael Gentile next Formula the

Michael Gentile

capital action pleased guys to here see on the I buyback want months. in Really the thoughts there your get throughout allocation. in if you again two last the just

stock terms of your of value. In trading XX% and book

versus a XXX board allocation stock how plan building capital the at going $X.XX at $X. cents priority feels on is those buying new two on Your your priorities about $X back forward? And the here

Randy Howard

I of one the That's return board, through to the I not to $XX that. balance even we of certainly from halfway Again, our million have capital again, work authorization the continue see you'll of shareholders. to think continue the first to said, take at end the day, we’re like Well, us big within our and priorities. steps we

our as you’ll as take both steps repurchases. to see on the So us cap structure to continue share well improve converts possible

to trying improve cap structure. our we’re do both to again, ultimately So

Michael Gentile

of still the shareholders at your probably it lower value would reflects be I replacement the short base lower plans stock risk/higher it's least proposition for buying of business? to your until a like the existing risk in at cost the return a term here discount

Randy Howard

we showing consistent believe certainly and we platform. from our growth now performance are year-on-year earnings quarter-on-quarter, Understand, that

other will you recognize think that. we investors and So

Operator

to further at I [Operator Randy to time. would like this over the call back Howard, no turn showing closing questions CEO, remarks. Instructions] and I'm President for

Randy Howard

Thank business. about are builds you, future optimistic great grow we that going quarter, that see first Operator. balance wrap and this strong To want on our I our strong to emphasize sheet forward up, very we opportunities to the our

Todd REG. going to we before investor mention close, is upcoming events Todd? for Now

Todd Robinson

Thanks, Randy.

AIMS Meeting AM. at meeting Annual begins at our next offices Our in XX:XX May and Stockholders is week X the

We BMO Market the May will Conference on Annual be attending XXth to Farm XX.

London. Corporate at will June both we Capital the Day in is invitation by be attending XXth ROTH Attendance on events only. Access Additionally,

you with Thank representative your contact sales us. again. now one-on-one or please schedule And disconnect. This you you want to So may meetings if attend call. the all concludes

Todd Robinson	Treasurer
Randy Howard	President and Chief Executive Officer
Chad Stone	Chief Financial Officer
Eric Bowen	Vice President, Corporate Business Development & Legal Affairs
Gary Haer	Vice President of Sales and Marketing
Craig Irwin	Roth Capital Partners
Michael Gentile	Formula Growth

Renewable Energy (REGI) 3 May 182018 Q1 Earnings call transcript