REGI - Earnings call transcript Q4 2018 | Renewable Energy Group, Inc.

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Operator

Good day, ladies and gentlemen. Welcome to Renewable Energy Group's Fourth Quarter and Full Year 2018 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the call over to Mr. Todd Robinson, Treasurer. begin. may you Sir,

Todd Robinson

Officer, Good current full and call. year our Randy our Chief today Victor. Officer, Chief fourth Stone; Howard. Chairman Chad With to of quarter is and Executive and President and XXXX CEO new Warner; afternoon, you, our welcome Financial and everyone, former our me CJ Vice Thank earnings Board, conference the

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

later remind everyone and website manually to your will will this call the you. but First, beginning Relations webcast slide like I you webcast on will our as accompanying replay to the an that deck reference. the advance is being regi.com. we webcast, afternoon. is need Investor our would for be available A at prompt slides this available website appear section The includes of This automatically at with

dialing-in, the be you our can website. the deck release, of Relations” of “Investor press those the earnings For section slide with along downloaded in

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

Randolph Howard

call. sure business. process with the our I over better. track And refining know energy all fit has effective as long success succession have CEO, of introductory culture I'm a we completed Todd. turn for remarks directors new the the record years. most fuel operate, developed brief is Maybe January is in J. And the in you, as CEO of career. corporate President over to then CJ named you impressed over as experience segment Cynthia we a a leader. Thank thank she very which Warner. which going everyone, renewable are the a joining proven am industry get the you The to deep She for importantly, a in and CJ we as be experience make will in great call has their you, to REG, fit our the XX, XXXX, and planning Her XXXX. new December and well

employees for my thank the turn I and I of want also tenure during our support CJ, all XX Before month your to shareholders as over call to CEO.

REGs important that truly is XX the transition the REGs long best I am is team months. still fully ahead to a for achievement. the Company period. I history during a that in REG. am stepped of last inheriting XXXX, CJ continue achievements July confident fantastic lead As in, of director, proud I this and is over motivated

call our turn CJ Now, over CJ? Warner. to the new let CEO, me

Cynthia Warner

me. to Randy, over REG a Board, Board, Executive accessible extremely Randy I past of the role to has the for thank thank me for the the great remained transition for the Chairman months XX smooth for high and pleased very Team, you Randy part that Vice and in for delivering of warm that been agreeing to Randy, want am results has to I lead priority the a process. and of transition. the accepted welcome. as and publicly Ensuring has for

renewable its REG leadership of was in the fuels me. involved by renewable Being role team industry The interest. is built exciting our here I've actively foundation unrivaled an from for well a our watching come years, honored platform energy, success distance to that, in terrific our the their achievements and opportunity for and fourth outlook. for a in the ongoing is team been remains I'll aware with then Joining incredibly and the the REG industry and will back lead realize chosen cover be to financials. full for to then discuss discuss our cover operating goals. With I growth. in year. am to I'll highlights quarter let's the Chad and

First, let review we what XXXX. in me accomplished

to enabling growth. will future We we quarter well performance as continuing factors fourth cover as how build are for

$XXX effect, that level the performance on without our June record performance BTC. $XXX BTC in adjusted last without the of a for the excellent On the XXXX including Xx that of $XXX EBITDA XXXX In XXXX, generated that favorable REGs basis. adjusted being pre-BTC business Our is EBITDA credit profitability and $XXX capable the annual in is told operational and reflect you can see market effect, XXXX, in Company or reported of million number. and adjusted BTC year In we generating million blenders million, was conditions. you million a approached we Slide our EBITDA, tax Management results X,

XXXX very and longer. are the for continue to reinstated results getting be on retroactively with pleased We these we and focused BTC

energy XXXX $XXX move million downs sentiments. and million. EBITDA that for caution approximately underlying that, we short-term my by come. to $XXX growth as as would reaction almost do see we to thought observations as to REG. forces market might we Slide in want and to be this initial is as on will supply-and-demand X, for Assuming achieved, I general spread that Having years you said we will our ups in the since increase of I drive have shown can estimate in adjusted clearly believe trader joined feedstocks, I some interested well for

these, context strength people, in of production, optimistic sales so areas; and now REG the would I like the why XXXX our capital future. marketing, to many and contribution, has and Company we're them So, achievements framing share driven what has environmental in both allocation. about

elaborate noting of on briefly me view. my these, Let support results XXXX each how

at team First, REG. we have a great

here The what on knowledgeable and passion results. draws and into make challenges, industry, creative expertise team experience helped in a difference REG They're outstanding strategy the through the enables REG valuable with pushed have upon to to every Some group envelope solvers solved industry and to collective that their new the the beginning. day. from the fuel. to This the very create a to has persevered business waste improve problem value delivered to has technical offer. ways positive employees has our foster shape and downs And ups overall, us through multi-feedstock products primarily convert growth

a great production we're Second, Company.

real advantage. has competitive scale Our

multi-plant our very supply, place markets us in powerful a have and fleet how cross-functional our national feedstock the across system products footprint. operations, We that optimal our optimize helps we built sales

All profitability. enhances of this our

accomplished million grow XXX In of gallons in core focus on fuel, continue XXXX, double-digit this carbon modest we to our produced an year-over-year. to with Our We grade capital organically. biorefineries. us that increase is operations increase enables low investment XX%

grade to and continuous selected existing from production by Our fleet focusing continue improvement. on increase assets operations debottlenecking,

monthly, XX include Realized at million early XXXX. weekly set XXXX. quarterly, in gallons gains records of annual plant production Ralston and adding XX capacity Our in

marketing and a Company. are we Third, great sales

profitably gallons For years, than our sell produce. to have we we more ability demonstrated

production economics, capability a critical XXX a to we capacity this XX% gives in competitive serving where million high important. In increase. utilization gallons business customers. profitability, incredibly As sold us is fuel, is of our In advantage in scale XXXX,

We seven better have terminals our growing ensure distribution. network in base to points continues XX we our now to and distribution customer outstrip serve to new continue that demand of to own added We to invest our and production.

our focused end to sales. also direct are XX. in user customers doubled user XXXX to on end We We our total bring to

important of demand an element well margin creation capture. incremental is initiative additional downstream as as Our

You strategy. can expect our us years distribution in the to in invest expand ahead more we as integrated

demand Beyond smart order With on product are executing distribution. enviable been the we more in sales in position of XXXX in distribution, most value. allocating to the have simply create building we on

plant in the it and the best optimize leverage We fleet to our at The to to most sales channel sell the maximize fuel a to works with right all with linear for technical feedstock sales and continue to so team right it creation. marketing to offering convert price at team develop attractive optimize order closely we can our then fuel procure customers. programming the the view value our

REG recent diesel biodiesel Diesel our is of the performance. Our of this Ultra and fuel and development superior blend Clean most offers renewable of proprietary example that quality environmental

of lower focused few carbon keenly Nordic value and Columbia premium include examples California, are on to A these We the British place fuel. Oregon, on markets countries. markets

those XX% marketing to target markets sold met well. was more XXXX. extends to our as our markets. XXXX, fuel sales selling value and gallons of goal redirect we higher million XXX We During in Better to in that than coproducts

primarily Geismar other oil carbon mind when to coproduct XX or all vehicle Fourth, is know, equivalent of a over that environment an emissions in XX% tons demand is of miles to cost petroleum XXX emissions adds barrels in XXXX, driven coproduct. passenger channels. resulted produces believe purpose, you we reduce reductions investment. million million average preservation enhances and reduced REG exemplifies the gallons no gross biofuel by of and amount based diesel. Keep of our increases naphtha our $XX our essential to our we of LPG of renewable our profit biodiesel made substantially produces in as products the coproduct. that all and revenue That the of attractiveness reducing revenue in As contribution emissions. of higher production they by or very fleet In there an compared miles. and glycerin renewable makes this waste Approximately renewable level and with for is which carbon value increased of profitability quarters XX million carbon billion significant incremental displacing This identifying by an feedstock three essentially of since we generating produced XXXX million equivalent fuel X.X

our do customers for and carbon who low We are that extremely that well proud and their good transportation solution love we by are industry the doing are products can happy for vehicles. emphasized have of Fifth we our critical the balanced approach it on and past shareholder and prudent capital we couple allocation. focused creating is This to value. something in to remain is years

strengthen stepped has level cash past earnings strong that result to the to and business years of enabled shareholder us in two returns. invest Our the up has in generation

to In XXXX, between growth. Our reduction way that and a that objective bonds we repurchase allocated million is capital in buybacks, to and convertible achieves debt a $XXX stocks. for balance investment allocate over

we XXXX. Additionally, investments spent in capital $XX million over on

capital expenditures term. the discuss in Let's near

attractive As the and good diesel to renewable have diesel been is returns a renewable for The market primary robust. projects large growth opportunity. focus due now economic

our to XX% produced more nearly and reinforces maximize Geismar operational This half our increase than in assets. proven from gallons excellence a profits. XXXX is ability confidence in refinery generated our over value and XX XXXX of our in which Our existing our million

We forward other evaluate locations. in at path diesel best and continue capacity Geismar to renewable for investing additional the

desire to have the positioned best renewable Our globally. refineries is diesel

we be It BioSynfining a tank in XX rack and offers constructed plant Geismar, new diesel contemplated that the large The storage, is Phillips access. announced of proprietary to Looking existing currently year, Ferndale exploring Ferndale West Phillips State. XX. utilize Washington that infrastructure in our rail last would a leading scale on including are possible dock we The refinery Coast beyond would refinery of facility with refiner renewable construction technology. the truck plant the U.S. November adjacent and

the of evaluation to choose our provide directed this repurchase we notes to end fund renewable when projects continue At plan to if devote shareholder we $XX toward project an of diesel additional of an growth board of this these and year significant effort million will continue the focus or January and convertible appropriate. Even significant more potential program We the to returns. one to update share. authorized on

identified rapid have a we expect we pay return what will In projects. addition, suite high back of be

We are the divestitures unit. also demonstrated to intent our Sciences selected evaluating as by sell business Life

our strategic as sale now attractive an to way outright Our Board of objective. has to Directors the pursue decided achieve most

I Now XX to over been operations energy want logistics production briefly years. discuss directly involved in I've for safety. and

priority a is much strong positive excellence well operational Operating driving have a and seen safety a can basic safely demonstrates of as make basic and safety employees me. the value I is values as high our safety culture expression our capabilities. So difference how we for

incident As since downwards you our XX, can rate of January see or XXXX. RII total been on trending Slide have

per better REG average, X.XX every we a an Our a incidents achieve has and there. XXX but strong injury for is year rest than workplace. free not industry our other safety vision X in employees words must determination to culture

our Slide the Next on the gallons biomass of diesel at I'll EPA billion ethanol pleased a diesel XXXX update XX. provide these categories. a RVO X.XX X.XX minimum the with both satisfy November gallons were regulatory since front. advanced increases equivalent We biomass see can finalized at can on volume biofuel of based In a brief based XXXX these and for billion the you category

the reinstated, an biofuel refinery yet of success. you which featuring the U.S. summary, delivered for with has a robust team are performance most As XXXX beyond. we up us outstanding advanced aware confident In for and Congress however have we are BTC well will assets great BTC ongoing leading remain the that of sets and not been reinstate

on As we of our very back accomplishments. XXXX, look we proud are

turn to over the Chad? and our now for will me Let to I and the financial guidance then Chad call outlook. update discuss return

Chad Stone

you afternoon Thank and CJ, everyone. good

need figures supplemental in press in You'll in release the find all you slides. the comparison the

otherwise all quarter. to quarter I the of the instead fourth adjusted we’ll and at influence out factors I'll refer here quarter. fourth year are for guidance EBITDA briefly the for that comment on repeat now gallant and we're full We an mentioned numbers I outstanding quarter high year results. with on year focus So exceeded We note the all comparisons not closed guidance fourth any primary to we year. the will turn for results and figures then the sold. end over Unless

XX. was gallon petroleum fourth sold. quarter in see significant to downstream up The produced Slide increase support and sold our can in You quarter production a X% diesel customers. increases biomass-based on fourth in volume XX% for in by by gallons diesel gallons Volume our highlights financial was sales year-on-year driven increase in increase the

almost on rapidly risk procure result prices spike price ULSD up trends late due during in in decline higher you third RIN prices the quarter management ULSD the to due that were primarily Slide realized see down risk revenue as year. we our BTC excluding margins fourth as and declined quarter losses with XX% as we quarter Despite in those were that cost chart. as recognized selling the fourth over year gains ULSD feedstocks during reversed revenues the However, adjusted to declining management the the EBITDA we can XX occurred the XX% lower the substantially. meaningfully average quarter the able a of lower which declined to was Margins improved and

EBITDA. at XX, network as year efforts. We excellence highlights. shows operating distribution our grew income which line strong growth and full Slide growth generated net financial full of our demand marketing and gallons resulted earlier operating and in mentioned year sold gallons at exemplified revenue both growth expansion The essentially with gallon Now through let's We sold CJ adjusted expense in XX%. in produced our and held the look sales

which our better which generating fully earnings trailing of XX XX power. first reflects the our seasonality adjusted per was cash our flow quarter return Our on shows XXXX invested recognized shows XXXX. share Slide Slide trailing are BTC diluted XX-month capability excludes and XX-month net capital. benefit in EBITDA full year and earnings $X.XX includes the

and the retroactively is ROIC of XX% is we net XX% Our benefit expected on pretax XXXX. credit for based our BTC estimate reinstated to

expect line increase expected receivables of gets the growth Looking was reinstated another had with course up for capital the shown and increase balance inventory at actually Slide sound of with assuming down we the sheet XXXX.Working on in large BTC of at we an XXXX XX, end business. management cash rather as the an of

will long notice big debt classified of is current as tranche a You term liabilities. that

convertible bonds bonds also enabling convertible current the so and mature XXXX as conversion stock XXXX have Our liabilities. year price hit this trigger they're in treated their June

June the convertible the during a bond Our bonds plan is detail to combination Slide in retire and principal with XXXX for year. cash for share the the on of conversion and our gives stock premium. repurchases amount XX

million. repurchases statement of keep number full net benefit estimated of the subtract operating approximately to you in would XXXX receipt the $XXX cash yet that shares flow rather related large of the BTC includes should you I the converts retroactive the cash our million XXXX $XXX net converts. flows see flow In your mind of When the cash included and Our of do should XXXX that cash of remind but analysis our activity that not analyzing BTC. reinstatement the also flow, you underlying our XXXX the to the the XXXX benefit include

investments capital million to evaluation. the $XX from attractive currently and to million. CJ large CapEx the range for This XXXX as $XX investments under is plan $XX diesel is be renewable for and Our before were in million the XXXX mentioned expected

was tax X%. rate approximately effective for XXXX Our

less Going our tax forward we X% rate be for continue foreseeable than expect to future. the to

Our deferred benefit valuation the a resulting future the is to around valuation treatment. at was end. made our tax - million low $XXX effective Without year NOLs due of NOLs rate allowance tax from assets the of our tax allowance mostly is against up BTC cash

presentation. the turn I to back CJ, operations call to the Before want I discuss discontinued

historical our discontinued the Sciences’ Life been all of sale business adjusted have to periods. Life operations Sciences financial a pursue unit to the statements as determined and have reflect for We business

well operations net like to loss outlook. Life on from I'd for from net notice operations from REG With as as back CJ? CJ each turn our continuing The you'll that income net loss to exclusively income Sciences impact. statement. year call discontinued reflects the operations the to discuss discontinued So

Cynthia Warner

Chad. Thanks

There three mind for specific set I I factors to guidance context outlook XXXX. want are numbers we coming the year. are our Before for in to give establish as the that important bear

gallons can our bigger move is market meaningfully and a predictability in confidence we on produced based estimate well things first a other operating the factors and prices conditions controllable short Spread market we have and factors The change good In of as level HOBO of margins. the dictates to or ability our can will have sold. feedstock contrast, ULSD forecast when challenge periods. over we very always

So our Bear we this to then visibility into standpoint quarter. ULSD the near moves can these we term mitigate and an areas entering in limited have significant some of volatility from management short-term even end contracts. near confidence frequently of experienced mind in and the is risk in by the economic

make to HOBO want I The norms. is point that than exceptionally was Spread was XXXX good second The year spreads. wider for historical an recent

the to output our feedstock increased due On complex. the in ample rates fat was protein side, supply

depressed issues crush trade and oil harvest China. with exacerbated Soybean by prices soybean due and bumper to a were

On the other side of of firm tracking energy most the the complex. spread ULSD prices the for were year

the unchanged and this October. precipitously it environment now is it enjoy ULSD dropped remains last would a well prudent staging quarter extrapolate it out highs not margin be year into we While to fourth it below reached comeback the during although the XXXX. during

of from demand rise coupled in biomass resolution easily industry. could trade prices the with increasing diesel Chinese based with feedstock steadily XXXX the Our issue

RIN observed spread the correlated terms dramatically. see contracted been more we HOBO on RIN DX spread. RIN inversely have spread the while Slide HOBO In in RIN expanded. flat as the remained prices October while have have has prices of HOBO XXXX prices you to fell XX, Since can relatively that

that Our further. continue correlation RIN should would to observed indicate rise

relates important point COX. prices supportive which The LCFS the at an $XXX California continues third geography to to California for be of over company. ton per remain

revenue this which change REG's primarily We due one-time XXXX financial case in rather XXXX LCFS the of second in notwithstanding will pushed LCFS recognized. credit quarter one does to factors finalized credits recognizing and it's in recently the actual for LCFS and but impact not is changes expect Note these result it the this any timing that to XXXX quarter into rest of reflect a when creation value being be rules just results. for monetizing the change positive

thus quarter some for Now the first guidance, three first has for primary far around context our challenging reasons. quarter been

BTC if for reinstated the was February XXXX you recall retroactively in XXXX. First

for as had not will believe XXXX XXXX industry the certainty previously year. we have do Currently, mentioned. So at for we certainty last time this I although that we

record has year exceptionally due to Second, extreme is the quarter so. seasonally the and down Midwest weather, first weather experienced snowfall always but cold this

Third, quarter has the margin environment in the poor. first been

let’s would XX. on to shown to mentioned, As we all level get on based HOBO today's more increase expect our prices as from spread. Slide DX narrower RIN I With a that guidance as background

XXX For million range the in we sold quarter XXX in gallon of expect be of gallons. gallons and to of first XXX the gallons million to million the XXXX, range million produced XXX to

margins Our quarter we to periods. future ongoing build expect production in inventory as us strategically levels improve are to enabling this

be build to XX% last inventory record build. quarter than is year's inventory on higher track Our first around

we for the through sold BTC increase As of based through is higher the million. estimated months EBITDA EBITDA XX range a million negative Any the adjusted affect the We $XX estimate performance the end XX expect approximately spot first XX the margin to to if the quarter quarter. by as result, through negative quarter that million would of estimate adjusted quarter in into first quarter we first to or for end believe LCFS existing existing changes results. margins the we could of the and are contracts expected market to that the our guidance expect of that or is Bear an being RINs credit value reinstated be value subsequent level inventory the margins in quarter in created volatility mind, additional takes not forward actual to period. XXXX. and capture does reflect in fulfilled the This February on account into is

to continuing range project estimated year, to million to in and million gallons. million gallons XXX the XXX million the full produced be growth XXX the to sold of with of gallons we range in be XXX gallons For

margins expect progresses. attractive We the as year general LCFS and RIN market values to margins, more recover we monitor closely will and Factors levels volatility. include to

and positive we summary, believe earnings these facing power is So challenging factors long-term of build quarter to we bit robustly. long-term versus continuing and our with Notwithstanding a we a are XXXX are we to performance a for in underlying first headwind XXXX margin. respect substantial see

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

Operator

first Instructions] from And Moore [Operator the line our Canaccord. question Chip comes of from

You may begin.

Chip Moore

we your blender's, give thoughts timelines for start in Maybe just of what and resolution with could potential support on there? the us hearing latest bipartisan terms you're

Cynthia Warner

have House down from both we’ve So up and well positioned way support Senate to the end clearly all in industry support user. front-end in the bipartisan across really the the agriculture broad from and the

just retroactive XXXX. that really last top restatement does he done probably Chairman a now some Committee measures there which introduced might reinstatement is BTC Wyden is the a both a bill for of and So strong of on Ron whose and the include Senator Senate of help proactively to This support know for bill week the to committee disaster as get that quickly. Democrat release and Senator XXXX you Finance Grassley includes Oregon, Grassley,

designed address to a hours few other side BTC just we March among Committee the a and house the that's the a on heard that even announced subcommittee things. Ways Means and XX On few hearing ago,

things we of support and doesn't we as bipartisan even going promising on other the the happen are down up activity on in get there know the in is So both if have the hopefully course and I we while going that said sometime Congress see to reinstatement is of still very April and we think now year. areas across activity that and

Chip Moore

latest returns. CapEx And could for could potential switch on bit Geismar XX maybe this the about and that’s expand a potential maybe XX can more we Ferndale expansion? then projects what's And year where renewable talk we for going larger diesel you over the maybe to on to and

Cynthia Warner

Yes sure, I'm do. to happy

overall return to sweet existing So in I continue them. a is as comments the of projects build to nice we very actually payback company's mentioned performance my high out have of this and strategy a and rapid of part and assets really program

this ways happening an find more maintenance gotten of capital capital for we well year-on-year. and developed of those just would some we've then of A and that to good projects. of equipment. good is see the of goes culture assets a that of ability background can small are do out devoted that be year you that get So stewards year-on-year innovation amount There to as our the even what really into sort we've to

capacity. of has terms amount In diesel activity developing renewable diesel, lot there this a tremendous there there's of on and renewable in company been a focus of

some projects. So engineering goes XX/XX that of actually the into development for those

you So past. let me start with in with Geismar Geismar, I know there about has been the discussion

at Geismar, doubling smaller way be additional looking Geismar. even to been bring two one was RD at capacity a potentially the fairly of one basically and looking rapid at was amounts at considered another to options we've so relatively on capacity And a

earlier at one to news having have So creative to solutions. were added I is that more looking we and debottlenecking they I continues think the consistent is capital. initially is tremendously XXXX Really that approach debottleneck of XXXX. which described and innovative what from first that one, year-on-year through which the XX% the to on we unit really an good additional improve without Geismar's capacity spend additional performance this

of weight revealed elements for the So of we're that capacity, supporting the of if well add because economies all we've the scale. the capacity to basically engineering going go of plant, what we debottlenecked basically additional was may as

at that that'll announced doubling report have the looking is PXX; a same to course looking we look and in at we're At be in we project going we're we stopped project and forward time, at with meaningful potentially that year. in to another be Washington looking continues now be And very of well as made. large coming capital as capacity for Ferndale back progress the small for so focus plant, and the its

Chip Moore

are that along in maybe more you exit And think as how one we about sciences, far do and impacts burn cash you how process business? on life related that

Cynthia Warner

Yes.

and well, much extremely is potential on on can't are so We've sales comment with more of actually process the are ensuring or we technology a we to too in even it finding hopeful this milestones next that With robustly we more had we phase So, we're strength focus success developing continues Clariant. and them very process, the our commercialization. any you continue tremendous be really to JVA sale our Exxon, I and our in developed we're good that much to tell that for to home can with partners. very exceed But example, for moving had I in specifics. meet as forward

we continue so and potential buyer looking to Chemical. JVA that ACS, We're are a who's successful project. look with of with in launch intent Aroma And we strongly at partner. [indiscernible] Also of going with full the to that the sale, that continue support new very at our much

robustly. and so and technology to And moving we're sale objectives create hopeful, looking achieve the very, all our that the very quite towards keep be we'll of commercialization promising able strategic

Operator

Capital Irwin [Operator next the Partners. from comes question from Instructions] Our line Craig ROTH of

You may begin.

Craig Irwin

about ask first the in wanted the risk the I to quarter. management So, gains is thing

had you fourth in of was remember I $XX quarter protective quarter, million the the $XX of swing million that a last So, negative quarter.

component management an guidance. gain the think absolute what Can how talked changed basis? the this million on something fourth you during quarter your about quarter us on in you I was $X.X maybe risk the update a in like and that of

Chad Stone

be I you Craig. that. might thought asking Sure,

and in arrows. jumping jumping real to at X, of mind you - beginning quarter. to quarter there at is price, the the and spike in so wouldn't is the end see driver you ULSD because right is large Slide notably the shows that If really Chad, the you two see last the One movement this of ULSD the

talked we bit December it So about go then ULSD then see down X, $X.XX. you a saw gallon $X.XX October about you through XX, a a from to quite and from since then,

at you're experienced the about in at further time So, fourth results. since million guidance, we at end - we short the seen a you've quarter already of further. ULSD $XX quarter we've time that were just And time said that time, right. when real went exactly about in that seen into in the and reversed a talking point we've talked and last period move that the down of the had quarter We

it's The other where around once again. the note quarter activity first to is thing turned

fourth it a you XX-K the see then So, $XX a gallon. as can is to quarter gone for in from talk about management a $X million quarter, $X.XX, ULSD is up the there first in guidance risk see you'll gain that and we

quarter around the some reflective So, first that quarter as for our of look is guidance at and of first you already reversed in that. is

for over risk know So, and today. guidance has on $XX $XX our losses million then going million quarter based what we fourth forward management reflected of actual

Craig Irwin

flattened you million quarter? was a number? What's benefit leash you gave versus like how benefit, which recall the said in would the number but think when anticipated out that you I guidance? quarter So correct Was more it's $XX $XX compare the million I original the million that means from $XX a last

Chad Stone

some from is that’s Yes, that delta that the that seen we we in to right then of first first we've around fact of trails the it and quarter. way portion you $XX gave when into were million quarter guidance, the and where think turn

Craig Irwin

the $XX us Are loss you number number the in first quarter hedge the as we number, can share your in for quarter talking maybe assumption first the then the about a that's in that's quarter? far as with And guidance first million guidance. negative negative again

Chad Stone

million. It's actually $XX

Craig Irwin

Thank that. you excellent. Okay, for

terminal. about thing the to the Next wanted of ask is out I build

are the growing gallons change guys the of this approximately where achieve you your hold value value your compliance what full full of value? monetization full us you'd you this the you're you the end quantify the right expect end the thing of able the BTC, to be to to at percentage to Do additions of with actually year, of at terminal do doing maybe where base of approximate XXXX, materially RIM. you you care to Can do the your So like XXXX? on for this obviously distribution

Cynthia Warner

access if it not had having result giving So, blend or then may terminals enables correctly, in to what it's either of customers your that we sales have to us our we products purchased cases I additional understand the we've access which products before. doing sales and provide before, in. couldn't actually provided blends us many also third-party to additional of in question superior have is that can And

So, us. for successful actually has benefits multitude because for the are is been play of terminals fantastic That there a very a it.

customers example are We continue our markets diesel to received looking to extremely having that well the blend, about look use at California, I some to well with been what's has Ultra of in access those enthused additional as terminals And if very we're just happening especially because Clean it gives as access us more customers it. those as markets the at. an favorable

actually in what to volume. build those and access can demand so do access, terminal And customers meet we're greater more so is we trying that

Craig Irwin

true terminals it one-third various the that other at two-thirds versus you is values of traditionally actually markets? compliance around markets you the in in capture have value least of the So, where

Cynthia Warner

pin really The have with. concerned and what it's capture want to all basis. think they're I customers a anything different happens down because to what hard on they sale-by-sale about preferences keep

very art that's department. So, sales our something that's much an in

Craig Irwin

And ask biodiesel this is capital on any plants? this CapEx bit spending a program. for detail the to million? where wanted being $XX the much you're going million of the break more you $XX this I existing down money much is venture How to maybe of is joint about little Is for How maintenance Phillips us Geismar? Can to at point? spent this

Cynthia Warner

as then back for that other is currently maintenance income producing that doing. just year pay typical roughly, And for just in being would the us so to two XX% of say two-thirds. at good it I looking one-third the of what And that's we're So, CapEx. background these XX% Maybe roughly projects. fairly sustaining about we're is support

We have at going and working plants. to integration to some that talk plant [indiscernible] lower on to better, with plant that's one our of byproducts the being at on take cost about very moving some upgrade significant other us feedstocks and able that we we're help

that's engineering. to And for then give be very going that's good rest area. the a us it of project attractive a So, payback would in the biodiesel

Craig Irwin

that then that turnaround that New feedstock in New have RHD was or you have fats or you at sources been And if update production as may. and the speculation XXXX? been there have throughput There's pricing of I from the heard for little outage for facility? there, for And of REG confirm for out speculation some used are been or market reduction area. Greater different bit pretty Orleans Orleans, a Geismar last sloppy down. Can the question overall us whether that this any on there's us production not Geismar utilization in is And might whether true can schedule or the not any people

Cynthia Warner

April. turnaround British But, way interesting intelligence." the been is a no, market Yes, We running "In great. for do fine, which interesting sounds we've planned like have

Craig Irwin

And how many weeks is that?

Cynthia Warner

its just at back believe weeks. I two-and-half pushed to end April. of to I'm sorry the I And X. three misspoke May It

Operator

questions [Operator I'd Instructions] turn at showing remarks. CJ closing I'm And the to like call back this no time. for Warner, to

Cynthia Warner

quarters to we we leading to our the and I'm up, that All reporting to right. new great achievements experienced team, strategy, Thank ability have biorefineries, want fleet national to and come. multi-feedstock forward look of in you excited our a you, emphasize for compete Operator. now the To and be believe REG that reach I wrap successful ahead. years to be with sales very to

going Now, is Investor upcoming Events before to REG. we for close, Todd? mention Todd

Todd Robinson

CJ. Thanks,

will be attending in conference Niguel is the Laguna Attendance XXst Orange on County. this Ritz-Carlton, ROTH the at We Conference Annual by March invitation-only. at XX

your contact if you one-on-one please with or attend meetings want representative sales us. ROTH to So schedule

the attend through at Annual XX is BMO Conference in will we May on Farm invitation-only. Market the conference this XXth New to York. also by XX Additionally, Attendance

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

Renewable Energy (REGI) 5 Mar 192018 Q4 Earnings call transcript