REGI - Earnings call transcript Q1 2019 | Renewable Energy Group, Inc.

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Operator

Greetings and welcome to the Renewable Energy Group's First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Todd Robinson. ahead. go Please

Todd Robinson

Chief afternoon, XXXX Good our welcome our and to and Stone. Thank conference everyone. call. quarter our Warner, C.J. earnings Executive is Officer, With first Chad Chief you. Officer, And Financial me President today

housekeeping a call before I Let over few turn C.J.. to me items, cover the

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

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

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

Cynthia Warner

strong. the you, Midwest, back in Then, in was Todd. indicated challenging Chad Gulf, Texas, it were of highlights call. Thank quarter first in gallons in be our to extreme good in discuss further at production the that come was. weather guidance Midwest Terminal plants. which conditions the by operating I environment, margin then And challenges the our and underlying we quarter I sold would our fog the and will terms discuss production and outlook. on March quarter flooding results. Those challenges, these first a provided our at Despite financial some Deer fire cover all Park, logistics to first afternoon of of the impacted ITC operational the We performance and the exacerbated those at will and will in

of in XXXX. We fuel. you the of XXX million quarter increase on than we year-over-year. see XXX XX% gallons XX% As X, a can first sold higher first quarter, slide gallons was the produced This million

million at the of prior-year production we renewable higher quarter. produced Geismar, which gallons XX a XX% is Specifically, rate than diesel

challenging adjusted highly and were negative conditions million the market our hand, EBITDA other for $XX was first quarter. the On

emphasis the feedstock risk Chad RIN will before and quarter any management increase quarter down. of advantaged would primarily on in million $XX $XX the same include estimate adjusted BTC. in EBITDA, retroactive first X, if gallon, dropping due a EBITDA reinstated benefit adjusted benefit potential a $XX held sold; markets; prices, that the Relative the per in both costs the quarter quarter the on first significant volumes quarter. So, up EBITDA as for some from greater his Remember reinstatement for incentive EBITDA you significant can conducted to first million XXXX margin our $X.XX million that affected by while influencing with see on charges had We factors flat; our a business elaborate of is first we the of in price average XXXX, and our comments. growing slide increase selling by is increase our our LCFS on to into adjusted selling reflecting lower XX% a in reduction revenue, impact elements terms. shortly

to We the margin the in was be margins in XXXX. quarter, very our performance summarize the will negative that operating underlying To earnings. reinstated despite continue environment depressed resulted biodiesel believe of business BTC that and good

to Additionally, the initiatives. BTC progress remains our potential of growth continue there the and we upside

on more now detail growth that is area focus continue optimization. bit and Let me initiatives. a these provide excellence we One on to of operational

we quarter, of plants our due XXX plants to new production establishing reduce produced is five XX% poor a records. This with we had weather to and our As temporarily and production result, was at record an that margins. of million gallons up noted, given is I the some exceptional for first

have we through As improvement. X, year-over-year, continuous slide can see added mostly on capacity you

increased see track domestic through the The gallons. efficiency reliability we of effectiveness accomplished can XX%, capacity by Geismar our our production the comparable this economics and and Since million was boosted our has have our we believe you XX XX% and are renewable the of diesel operations record. to renewable been a those pretreatment by increased of significant increasing This that between time Geismar's by throughput capacity. both of XXXX, effective peers. process turnarounds Specifically, has extending capacity diesel driver improving

team of downstream the execution and strategy. sales marketing Our continued expansion strong

the overall directly use of the expand We our and moving down pool. are fuel customers the focused on chain biodiesel serve to in value more

to are and quarter intended channels we'll programs offers, quarter In expanding out downstream and addition significantly. continue five terminals to sales, in develop several added small running strong more. relatively add We starting first new the before we to our first

you Next Massachusetts, week, we and of partnership which Haverhill, significantly oil fuel in Oil customers will the in for Broco bio-based with will heating terminal to about hear region. transportation availability new a expand company example, the in

end We directly from also to continued our expansion our user reach facilities. customers local

We have highlight. two examples to

retail Seneca open any which This to will which fuel we biorefinery. customer station automated, Soon, us. allows to fueling adjacent directly station, obtain our REG be is first-ever cardlock will XX/X an their the from

us approach this to directly produced This channel. plant. at Our further refine local station allows serve and us to biodiesel our expand enables will location to our blends our offer customers

produced Second, running REG direct blends operated delivery in owned pilot fleet fuel a we're distribution Iowa users. delivers our an locally that of end to biodiesel using and

One direct delivering advantages is blends. biodiesel of to content customer higher we the greater for are of generating enthusiasm

the system harsh modified round with – intend on significantly trucks a our in winters. Iowa XXX% to enables – business addition, biodiesel BXXX operator, as exciting expand we've even fuel to delivery us In that operate in We year fleet other words, model. this

XXXX. of biodiesel includes traction, diesel continues to brand. and quarter, sold the gain Diesel Finally, a biodiesel differentiated the in products to offer first our renewable of million renewable and Ultra We premium over REG's Clean rapid gallons this XX blends and quarter diesel of of expansion blends initiative

renewable unique based capabilities to and to leverage on enthusiasm opportunities of biodiesel the and We see customer diesel scale continue our find production.

expand project sales feel refreshing we we X. As we shown activities, our and and been the REG brand, of have as marketing look how slide the on

The relations and highlights new in noticed You initiatives the our offer global showcase products to fuels may to the updates recently downstream to demand. In investor our Forward Fuel is intended you encourage forward as the and I corporate a we is that for look a cleaner we look. to meet websites, and increasing push take our services to initiative providing if not have support and better of in strategy progressing future. and look growth planned our go summary,

update Sciences. me of Life let Now, our on you divestiture

of renewable to to Further focus diesel late identified and that have us. a we continues are We're anticipate be a we share in buyer. soon. We into expansion pleased closing stages for negotiation

advancing the renewable advantaged to from joint schedule refinery. with million are is on XXX progressing We to our diesel venture Ferndale plan to adjacent on Work renewable diesel a an for plant gallon nameplate project Coast. efforts engineer Phillips our West Washington to location XX produce Phillips

we regulatory all we remain XXXX XXXX. a federal for of Bipartisan the support incentives are and front, reinstated reinstatement BTC. grow awaiting to On will the be the confident retroactive and continues that

call to highlight the to our I contributions over Chad, Now, social I fronts. environmental the want and turn on some before of

tons metric about our proud fuel benefit more COX. low very in initiative, X, you XXX million achieved is are Fuel we slide quarter. the reduction On Forward months you'll of part in we carbon of the come. see renewable tremendous carbon This hearing that be displaced another which can the produced first XXX,XXX gallons to the We environmental of of

In addition, safety in the had improve we first zero we reportable and the to incidents track continue weather quarter record extreme conditions. despite our

for well then I guidance now industry financial the record rate Chad leadership. way and Our I the is and the average call at injury our company Chad? update to and level rolling a return discuss on XX-month low to will over is turn will to outlook. now

Chad Stone

C.J. you, afternoon, everyone. Thank good And

for into get to comparable of align quarter everyone quarter, I the on on want I results the my Before XXXX. the comments first

XXXX business, flat quarter full-year sold XX% the for first price, the to a which reinstatement separated average activity. million. well lower revenues lower XXXX These results, not as first basically were related in from RIN XX% retroactive to included results with from by of results slide offset quarter on see $XX revenues XXXX sales quarter versus benefited quarter an RINs. is Revenues be gallons you XXXX increase XX. first revenues LCFS of due increase adjusted we primarily as were lower increases associated selling BTC can XXXX. Total as Accordingly, in prices volumes and Our comparing our will to first

as Our C.J. were quarter, in mentioned. margins the challenged

And the We other continued the predicted years when our combination spread. Market similar and the in on at low BTC are the of margin caused concerns primarily upside with also a in to higher anticipation was RIN are XXXX prices below is exemptions and margins. portfolio refinery the believe in $X.XX level by the We the market's the to current for based RIN per due with with BTC downward biodiesel the prices prices impacting run from around historical carbon of reinstatement. were XX reinstatement this effect. spot pound, positive contribution current potential that prices a our XXXX pressure prices HOBO not BTC to suppressed a lower feedstock the small average on for shows correlation options up XXXX. than for Slide

cooking used can have soybean oil in oil and see is As both you the to low compression prices on believe corn between spreads to distillers' attributed response with XX, part soybean slide trade compressed. We oil and in oil China. the

remain management usual for the intended for final On Operating percent for on low of realized years. and a of $X XXXX. prices feedstocks as has the compared with X% due are gallons efficient other the $XX quarter goods markets building quarter we to demand down quarter risk first focused expenses demand which of the we gains included particularly are is supportive in for organizational when in quarters some recognized in of and where loss premium that expect relevant provided the lower period, this oils. Recall XXXX structure. to quarter, first management were intensity pricing million losses prior SG&A when were delivered side, consistent risk lean of sold We revenue a peak advance in Cost reminder waste carbon expenses compensation. inventory million and fats the risk loss of subsequent and in by employee-related the improved our in opportunistically is are economics. management offset a primarily the

EBITDA of benefit EBITDA first would respective for $XX a was the million. in reinstated, quarters quarter reinstatement the and would $XX If is first of and The BTC adjusted the pre-BTCs. an BTC retroactive increase the XXXX for million adjusted be of adjusted XXXX. a $XX million our net Our million in result negative $XX EBITDA for the positive

reflect impacts consistently, As long-term business time XX-month year return clearly seasonality, our a power. and results XX our slide capital. quarter's the shows see periods The the of BTC bar of trailing To we XX and to at is trailing XX-month our reduce charts not net EBITDA adjusted do invested reflects our power and more. benefit on blue as shows or reinstated. Slide on long-term the seasonal more we believe of we earnings earnings note look a single the light

Moving inventory were balance This on working reduced draws seasonal in increased expectation of feedstock at the as that sheet they advantage our quarter-end, during the normally hand to peak while historically securities is in and during lower our Receivables higher on better slide lines slower we winter substantially months, build the to but reduced payables. were the was on taking addition of matured. during unchanged quarter, funding XX, summer. cash and capital. credit also inventory production prices season see full we'll We demand with prices the capability marketable our

we're that improve at starting plus end We and out lines available of emerging cash our end now marketable the and we're seasonally liquidity, $XX the flows. of we the to cash credit had Looking had at million equivalents slow of quarter. inventory more securities of the our $XXX on at period, And sell million cash March. winter our

past, in have in set mentioned we bonds aside the that cash maturing for I've the are convertible June. As XXXX

$XX million projects. have CapEx this $XX to excluding million renewable of budgeted large remaining any We year, diesel

We projects impact exercising our prudence. fiscal prioritize continue to while highest

Our effective to XXXX expected tax X%. rate be less for than is

expect tax and future foreseeable our to continue blended less forward, for X%. less than our rate X% interest Going to is the than rate be average we

back call outlook. C.J. the discuss the turn C.J.? I'll to to Now,

Cynthia Warner

slide Thanks, Chad. refer XX our Please to I'll guidance. now for

For of XXX range in of sold to quarter the a the over ongoing we margin the continue strong be regulatory front. to to May. of increase maintenance quarter greater place the gallons includes of underlying the in planned due XXXX, prices during anticipate to XX% second RIN to performance take the second do million the million XXX lower This is challenging to expect which XXXX. in gallons, XX% with the environment Geismar on second absence We scheduled quarter turnaround certainty federal

adjusted values would full-year being deferral. The the LCFS change quarters book All earnings In and four $XX in quarter. guidance, range one-time estimate to for to added last pro EBITDA we account deferral adjusted at million pushed existing add the change quarter fulfilled more be period the and to takes $XX deferral in third reflect million. in approximately item slide range quarter and call this table actual these second numbers LCFS forward LCFS net quarter of guidance the our the through actual breakeven is second the $XX LCFS the impact month we of in second by extended changes BTC of a reinstated, in occur EBITDA closely negative back prices, the addition, second ULSD this is with million. back effect from the The quarterly volatility one-time deferral back range value. contracts being the actual million. be $XX is EBITDA in to of the To adjusted Furthermore, million period. have expected prior four-month $XX that margins, on million. $XX of in put of normally performance, for million. a is end EBITDA quarter LCFS quarter adjusted quarter if second $XX performance is booked the would quarterly a market context in in if to Therefore, of in We of the Recall adjusted deferral validation mind, in the or XXXX created of estimate affect to XXXX. the the noted based be rules end a be forma in existing in we on level of If will pro $XX is could is $XX the on credit would is deferral an the increase into XX. quarter. as results the this year to RINs have reduction in BTC we and our would range the the and what quarter million to to begin would for resulting be the credit compliance into for reinstated through three-month million actual that quarter million the March, for second estimated timing This negative a terms through forma margins of subsequent or to a to With Any to spot EBITDA that results. $XX range week will our not

the have quarter as forward guidance, We management April million included estimate on for our XXth reflects $XX based risk of our the losses in curve. which ULSD of

to that million Our guidance increasing XXX million gallons in be of We of million be million. the to full-year the sold in and estimate is will improved performance. XXX range produced XXX with slightly to underlying XXX now range gallons

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

Operator

you. from Capital Instructions] comes question with Irwin Thank go first Please Our Partners. ROTH Craig [Operator ahead.

Craig Irwin

taking Good evening. And for my thanks questions.

about What The ask first XXXX. the on remind apply would was us the up cash sheet? would if for you the your to is you balance thing BTC REGI would I that that wanted for from for be tomorrow? value then reinstated what show IRS Can

Chad Stone

Craig, Chad. for is question. this Thanks the

$XX So, and the the for the XXXX net quarter million. $XXX is is first benefit million net to amount benefit of BTC the the

So, in that's total, million. $XXX

Craig Irwin

one-time year XXXX. million correct? $XXX would cash for would be the the everything a Is cash payment payment But this IRS be And that from additive? then,

Chad Stone

that's correct. Net Yes, benefit.

Craig Irwin

Okay. Excellent.

just item. question, Second picture a big

oil corn Would been oil range year, couple some a But between trade trade settlement wide But to corn oil expect soybean $X.XX over the oil period, for narrowed pricing? soybean with a oil widen provide is oil have rallied. on over oil. in year. distillers last the uplift corn compressed things time And accommodative fight, over soybean to soybean, in out soybean has quite and trade the and to pricing? or again $X.XX in rise look the with of the you last optimism distillers of oil expect Would further China. was when an average there this trade years there same would on settlement we for increases be with you So, that distillers for prices course soybean ago China actually the seeing prices spread

Chad Stone

Chad is Craig, this a stab take that. at again. I'll

including with soybean trade I So, we've first, what the the downward I oil. that soybean comment believe – on on complex, your with experienced is agree pressure China entire

been think lid a So, that's keep I at prices. soybean a oil to on force work

that's of one equation. the part So,

the side there. I other going corn on of of on a equation the oil, On there's couple distiller think things

First very of advantaged all, supportive a that's ethanol at then, for because say look been California, low corn margins like would for Oregon, they've premium that take producers for CI give it's very been a some carbon demand feedstock intensity. a lower distiller the carbon or the operational low intensity and that's strong of us And helpful, I but and markets environment. the that's oil. And had challenging others

has somewhat The is supply at significant year-over-year we corn cooking of compression and work. amount And of the of in because been between So, oil net-net distiller the that oil. certainly and oil soybean a have impacted. used spread think forces seen it's all those I

oil out keep that variable pressure. an is supplies of palm eye there on to that other The growing got keeps you've

pressure the China to oil that's also soybean addition In on trade, prices. keeping

used floor going So, from low markets oil oil. carbon a cooking think inedible to provide or corn all distiller the to said, fats, feedstocks that and like being for that animal the is oil, demand advantaged intensity increasing increasing corn I continue premiums

lots and back opinions know So, my of it I'll may It's be. get kind stop to of where not other in the used there. just but market out there's lots the opinion, of historical I forces, spread to

Cynthia Warner

term. C.J. in with And And likely implication is feed going There's close the to herd, the on slaughter couple required course, soy So, a China a to in have keep market, the is is near rates pressure they've dynamic. need on eye for been some to the large as very Craig, epidemic. things is that swine to been downward slaughter them had And change absolutely one tragic. of some prices the in And fairly dramatically. other the interesting that put on this flu their of have

fairly watching the a significant And blend and the which IMO eye going have an go and is for half for so level us to were been are that's in marine likely XXXX, to down sulfur the predictions to in I for views standard So, people fuel. of of to marine where down is our fuel point thing second and marine second ULSD at half keep for happen know probably other spike the that sulfur in the prices it the And dynamic, of going up, waiting the to the on. for effect are pool to regulation is this demand go XXXX. diesel the

Craig Irwin

there of that capital been the Okay. at question were projects number executing. a My next projects in I that is about are smaller Geismar. you've know consideration

in second specific see now your many could we profitable summer? ability impacting markets As to at to expect most executing advantage local selling demand? quarter what to have either of through How alternative those potentially and being of to of take discuss these look the different or the that facility, of the waterways REG. dynamics Can you're Geismar work could projects actually should I at projects maybe and you what highest return the continue you

Cynthia Warner

capital the going. to close on eye question. is our keep plan And Yeah, keep great and something a we momentum seek

focus we category. with that's the highest on impact. projects first order of And priority the across the in So, of kind

growth So, as line. that's their get an all first Geismar, to highest example, highly for projects continuing because well do access maintenance, in engineering and us. for waterways, are strategy strategic the priority as we in as the to safety, And

Craig Irwin

were we very nine And very may, last Okay. nothing but this drag months confident of question, it's done comfortable, on. ago. BTC, something I And then, all if reinstatement is

items as past. some the will and some Senate hostility can into to that policies us specific us Can votes, – And that champions to reaffirm the in then, that putting you the the particularly committed and was the given for American year? a was are the ag still that reinstatement happen Democrats dynamic the changed highlight everything. confidence dramatically as the then I for obviously, of shutdown different with Now, give But in the change know the something this that your support us in supposed different you and, there's the fairly dynamic far just with support point BTC House, there maybe ag. you House to bill key at a

Cynthia Warner

a it it's Yeah, being I'll if, Congress. actually then back is when. having hear that no us on BTC the jump are lot of me in and Washington has that and but not direct it's And a to see we really and It in said of He's lot back isn't there we had can trouble of other activated, lately. in been us, that matter to of Chad experience a up. get doubt frustrating to all matter a of things but just know continue

and well. lot the as in be see support. do stymieing that's other a a bit ongoing BTC of many growth So, ways of victim movement a polarity of appears bipartisan We actually to

it. other good a very floated because Senate the sign. upon is strong act the good Senate which with really that's to for So, changing. from affecting bipartisan not and the bill you attached be out, to in see BTC the to be the dynamics to are support, there's that's But House the pointed And Senate resolve can thing the we brought some the where as

Committee, Senator a the the Chairman also from Democrat the on side As Republican in Means is Wyden you Ranking know, Grassley and sponsor. a champion have but strong Ways we

And that's good so, very a sign.

co-sponsors coming and bill does XX the to of vehicles could different a to be We weeks. there have appear attached the still that in bill be the couple

to security, And is is One for many do the to we to them waiting administration they are attach know it. so that who just a anything? that a bill. this bill, want from senators we speaking you float tax retirement add have to can other really of Chad, the them House

Chad Stone

and production think was lot XX a well was paying that's bipartisan Yeah, again, DC paying add I the I of thing C.J. communities good biodiesel types fly-in it group good bicameral a that Democrats. a even XX One as was those co-sponsor XX Means times of great. fairly hosted and Congress of I documented of just yesterday, Ways a really there. is by been demonstrating lot. think a lot of folks House to rural, it Nine And producers all of jobs, co-sponsors as something of recently get need there to would bill the that's of the referenced, folks jobs Congress in is, more and highlighting bipartisan, Senate, support Of are first those. in of that that the times and

industry our in progress make they the important of types that has So, things House sure that's that trying to the the accomplish. Democrats and made our were inroads with to make to in-power newly we're onboard industry issues to

Craig Irwin

Great. That's really encouraging. Thank you. I'll jump back into the queue.

Chad Stone

you. Thank

Cynthia Warner

Thank you, Craig.

Operator

Hamed Please ahead. go from Financial. Khorsand next comes BWS question Our with

Hamed Khorsand

a here be in little margin expecting traction to that what with of about the sort bit Hi. to starting increase get side? will just positive Could production you're talk as you on the you some

Cynthia Warner

focus just somewhat positive out the contribution because us separate, guess, are months, in two winter to I getting Well, a volume the which now. coming we're we the know on continue but is underlying performance production margin of we

snow in still margins experience feedstock play just us tend the we basically week. our build winter prices to in the in time. that get with that production had using summer of the arbitrage the last and higher product we capacity Some an We've have inventory the been to and lower

developing we as that. substantial very increased of production. enables of benefit advantage that us that BTC are course, to And, we're doing So, a take

Hamed Khorsand

the capacity how then, excess summer get of right And you we much have to months? keep before into producing

Chad Stone

sorry? I'm

Hamed Khorsand

gallons raised at now through. because producing you do know you capabilities? just you I maximum or Are sell expecting more from you're to have guidance the

Cynthia Warner

Yeah.

based Our production that we sell to our is we're guidance and everything our and produce. improvement able on capabilities

Hamed Khorsand

Okay. All right. you. Thank

Chad Stone

you. Thank

Operator

with Energy. Patrick ahead. from Our Please next Flam question Simmons comes go

Patrick Flam

question. taking Thanks my right. for All

wondering question of million guys basically authorized first to you if spending capital have you still you million cadence like was CapEx plan correctly, left $XX plan. you in The If about $XX something plan the is place. the the I talk about that have in heard said could it I

Cynthia Warner

then be prudence I But and of the of CFO our you start stage a to it hear very fiscal our course, use, for strict in think place policy. will he's terms we spending. put that for good gating from I'll in do

that prioritization expenditure And sure is doing the have obvious we PXX which the the we JV. as through so, example to to pull we of strategic carry natural ensures that I on that probably At able within to that addition capital items. and include we've through undertake guidelines on make And would carrying we activity we're fiscal be working we same would some mentioned that prudence. plan order we're CFO and impact so the a we're to for to strict value far, our that that earlier, the another time, the and that in the projects, Geismar co-engineering longer-term that following that highest through able first But, been are in the water like. ensure the project plan, some want cadence project,

some might to want you add color to that. Chad, So

Chad Stone

C.J. Thanks, Sure.

generally full million million guided at to had year. of first had CapEx in Patrick, point, quarter, the $XX we first if the to $XX million in look range So, for yeah, that quarter. you We about $X

And to projects XX XX take sometimes these months. months

throughout we out meantime, going, maintenance rapid BTC, you but around on payback go first, on you imagine, got have availability, flow these. very all based then the certainty more we've sooner you first cash So, as execute safety we're profitable, the obviously, are that underway. we and the In the can year, projects the prioritizing likely queue that in payback, some fast have forecasting first, and the

planned Phillips got XX. our talked venture with several For times Seneca. example, we've at great about one a We've

Of and course, improvements going engineering Seneca. there's with on some at some that, work Geismar

the fiscal that our is, cash obviously, availability. and by driven said, prudence So, forecasting

Patrick Flam

That's very helpful.

follow-up it call, XX their tied And XXXX time a comment that can potentially that it question, second talked As BTC way in the Ferndale a you anything on recent the to is is Is Phillips FID-ed of year-end, or which being about would on issue? for a before that there on? project renewal start-up. any

Cynthia Warner

[indiscernible] together We're stage strict cadence for project. would So, we in support our partner gating. closely the that just working

us and and project capital soon enables we get that going to to we're get place schedule-driven RD in together. the because at decision as possible. together right basically work the So, want it's as making ensure wisely the time And both right spending to production a the

Patrick Flam

Okay, great. Thanks.

Chad Stone

you. Thank

Operator

Alex Our [Operator [ph]. Approachable Please ahead. go Long from next question Management Instructions] comes Capital with

Unidentified Participant

guys. and to on is you're have be be Should a topic. that $XX Is will not – into XXXX, that right the LCFS that all Hi, guys in million about to credit QX during understand, pushed question $XX so quick all book that QX. any to LCFS million able booking QX think I the to way you deferred it? supposed I

Chad Stone

This Yeah. Chad, way. Alex. is it this Think about

from in Before deferral, issued and credits June have able we would been that monetize them. those have California would to been normally

let's going say, them to we further the those them just we're of can't in, and before get July I benefit deliver Now, get of because delay and record one month them. the

to what really shift one of quarter there's So, California trying kind for comply the to a auditing that's improve program. out. of validation why, their And and people with a doing is is us,

The more separately diligence. to of hands them they and can they're delayed them slightly. better is time, is affects it do sell So, our so for that then way on ability to participants our customers us kind get asking

And expect really it second again. impact going that's become ratable So, we're to highlighting on the forward, why this quarter. then, we

Unidentified Participant

it. Got

book you the to worth of LCFS LCFS? will but In QX, three resume XXXX, your in rule months' book like you you just XXXX, had in changed, get – zero. QX, credit, because QX So, you'll

Chad Stone

the exactly that XXXX quarter increase of That's C.J.'s to in XXXX. a by of and amount one and and number California they've higher thing quarter million fuel of a said into is substantially. the than per of selling earlier ago LCFS driven we And significant part the attributable is were other was we're one $XXX right. down that is – the credits And credit near other $XX in comments year increased credits

and we model So, get that's become to value give to to flag why a quarter. the they've really wanted to and dollar us, more – it more they so radar, of significant become this things people's is can start what like on this sense and have value the in

Unidentified Participant

Okay. Appreciate it.

Chad Stone

to closing over to the Thank comments. further Operator like turn questions. C.J. you. There you. I floor Thank would no for are

Cynthia Warner

place on and confident controllable believe Thank that you to To our long-term exciting everyone, remain so continue power to We will our much, put in programs accelerate into the plan elements we deliver wrap we several continue the operator. earnings up, of growth we have future. and in value the create.

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

Todd Robinson

C.J. Thanks,

May the Attendance New XXth on Market Conference conference BMO XX, at Annual this shown to present invitation-only. is XXth As slide in York. on at Farm will we

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

be Xth Xth so through attending only, sales to schedule want the XXth. We & Technology Conference these your the through Baird or you if contact Consumer, Xth is at Services meetings. representative Attendance Annual June June London also XXth conferences please Conference invitation will the attend and ROTH one-on-one

meeting you office now at Iowa. place registration. at you in all. for Xth o'clock will on take our our the open Ames, may will call Lastly, May disconnect. XX X Thank Doors and Annual at concludes o'clock This

Renewable Energy (REGI) 2 May 192019 Q1 Earnings call transcript