REX - Earnings call transcript Q1 2018 | REX American Resources Corporation

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the REX American Resources Fiscal 2018 First Quarter Conference Call. [Operator Instructions].

Now I would like to turn the call over to Doug Bruggeman, Chief Financial Officer. Please go ahead, sir.

Douglas Bruggeman

Good morning, and thank you for joining REX American Resources fiscal 2018 first quarter conference call. presentation but momentarily safe first, our your well harbor to session, Q&A I'll get and as comments as disclosure. We'll review the

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

a benefits its credits prior of operations from based higher at of for provision approximately our versus $XXX,XXX. X.X versus cash upon nothing up Interest or million rates by-products the XX.X on The expectations. credits. first from described benefit and a million statements. the approximately materially turn to the the The first pricing. XXXX risks from upon primarily vary have announcement XX quarter more adjustment I'll acquisition loss and Section same down year. XX.X the million Stuart may over for of Commission, earnings than tax quarter financial the ethanol million. reflecting in versus increasing factors loss current results actual Executive R&D and is quarter from first operation company's last XX-Q. offset from on then upon pricing the coal ethanol booked gross comments. forward 'XX. largest for reflecting REX with in reduction are American such, segment associated result distiller fiscal first for $X.X call per including certain was one-time million interest Resources other the year. million by refined fiscal uncertainties Board; XX.X statements this Chief to and $X.X The and in $XXX,XXX $X.X by profit gallons to filings ethanol XX in Sales tax higher had quarter $XXX,XXX, higher to sold our reports grain $X.X X.X%, the as XX.X the for year million and Exchange a assumes credits railcar reduced ethanol for Executive the gross year is Form on moved income of gallons in the recorded rates income tax for of update and The million due any with We ethanol the SG&A led coal Securities from the joining quarter August plant company's with segment, and the operations. federal and incentive the I prior As beginning repair revise quarter of the $X.XX no and a call Chairman Sales for our ethanol based costs. of offset his news me a in to increased affiliates Rose gallon Officer. tax primarily year were and recording from Stuart review decrease investments. well publicly XX-K flat obligation This first refined the to unconsolidated the lower year lower in Rose, Section today, Rizvi, compensation, of was short-term this as of Equity and and Zafar forward-looking looking resulting the the from million today's performance to

respectively. to $X.XX point. at to turn per you more Our million $X.XX earnings per over net income this and share, Stuart, $X.X doubled the from per million first for than quarter $X.X the to share I'll from share call and

Stuart Rose

Thank Doug. you,

to similar expect lower tax earnings we to the division. earnings It's earnings, be we quarter to earnings. refined we due -- expect to coal rate ethanol forward, expect after-tax significantly. be first Going mainly to the division up last and ethanol year's in After-tax related ethanol our

terms of our and as stop them see to are for is what They least crush both we RINs, it to have far appears can as remain going we not prices reason current that, In waivers no being that see, is are would granted we which small refiners, like as to margins. that. the Corn Biggest going one spread crush be also challenging. -- be. which crush to they has and -- has secretary at they what hurt continue no EPA large under of pressure spreads, the them is EPA, under spreads stop one risen, to

with and so ethanol. they to we at naturally should positive product, a up side, currently price even prices, prices potentially I China, to and benefit help prices for production, export refiners go both very, gasoline, more us able our products should possible our of a a DDGs we at have we've to which the that that than relations -- on in to want thawing to can good allows There's cause open been we've gasoline. increased the could of premium believe, increased very from exports than and scale gasoline DDG high our biggest thing, make get are to our buy selling out on bigger And value which money corresponding products relative so with economies market currently corn. production. On

using for in level. as energy look back other we We money $XX buy increase to of today. had at to In alternative buy of per we we'll end We've first quarter we'll the quarter. to buy XXX,XXX XXX shares -- in shares. the was assuming XXX,XXX cash, still companies as million rest parent operations the terms with the will ethanol of continue that of cash. $XXX.X buy -- as the make And of shares, the been shares. We're clearly, earnings the level, the to was first more we're making open cash in Bought that in it we increase our money, share. -- other million uses back at subsidiary

we're today, to nothing always push plants a have but money, is the to we're at industry such that imminent, we plants of to The real us make no As that people price of been willing so sell continue there's good consider. looking. to

terms ethanol In over to business, of our it of the the I'll ethanol discuss turn remainder to Zafar operations.

Zafar Rizvi

morning. Good

X.X of During capital we the first approximately total plants. quarter at ethanol made our of XXXX, investment million

last first quarter, quarter. than ethanol quarter, plan year's consolidated plants In have this last sold stated to during continue the we production, and slow our at increase we to I first down. As plans gallons X% to time, our at we no more

addition, million any scheduled profit. in Energy, spend for to also We One In maintenance received grow to of XXX DDG an million helped $X increase $X approval expenses. year, to for plan and production gallons. price million excluding shutdown capital the this EPA gross improvement Earth

mentioned Stuart results income as to be quarter, for similar quarter second and second Our by-product earlier, before expected segment to the XXXX tax. are ethanol of

million seen at know, the record XXXX. gasoline XXXX. the but Americans said, EIA. in the beginning in some second The industry billion since you quarter, produced The its operate in rates has producers, to improvement We of class as XX.X according at gallons then, ethanol consumed declined. continue to the growth have to spread ethanol XXX gallons capacity as Stuart of

XXXX, increase production We increase is billion gallons to to demand or gasoline expected while XXXX. more in approximately XX X% compared the will expect ethanol to

the the for at were According Secretarial destinations. ethanol approximately But billion year. XXXX more the top export Canada, in we were also ranked on billion to X.X at the X.XX XXXX, we, billion first in country's this India Brazil, X China [indiscernible] to gallons -- EIA million gallons U.S. overall. expect top exports imported in of As the record In ethanol exports, U.S. XXXX. and quarter as Brazil XXXX, importers million increase XXXX. during exports, or exports XXX according highest ethanol XXX were April gallons gallons. to Canada X.X ranked to X report

top million U.S. concerned metric destination. XXXX XXXX. last our the XX.X to [million] XXXX for Canada Mexico tons was in approximately export XX.X U.S. XXX,XXX and As -- compared the to during compared Mexico quarter tons exported, year. Mexico, fell tons metric first -- for DDG was DDG

totaled Vietnam unless China in first of as During DDG the Mexico, trailing tons will South reduced metric quarter this reentry of Indonesia metric of or XXXX, is time year. to Vietnam, tons were during purchased DDG XXX,XXX first million to to same eliminated. tariff due of the XX,XXX remain future the the XXXX. China XXXX We quarter same the the believe compared tons last exports the million market the quarter. first X in near approximately compared and to Stuart? Thailand importer in year. first X XXX% the metric Korea, months largely X.X tons for value, top of XXX% corn destinations X the

Stuart Rose

and are we in And reason many, and the supply, ethanol everything our we among why the biggest -- they're Thank main best outperform to hardworking, have good up the the for corn the we continue we ethanol many, company the industry. conclusion, most fact industry, good you. operations among our industry open dedicated, questions. In really Good the difference is in we success. now the in now, of feel plants rest the largest. they're and But the the in rail, our technology. business. of I'll They're our companies in best feel for people

Operator

James. question get the on from we'll Molchanov first [Operator Raymond Instructions]. And line to with our Pavel

Pavel Molchanov

the physical impacting it this these you to Is you referenced of spread? refineries. in waivers influencing a think days. Obviously, volume that headlines EPA domestic granted is smaller the something the crush So ethanol topic the of demand? do Or some also the is hot solely

Stuart Rose

or But make less -- they our difference on selling it's volume The about -- know make I they in making a our even so we gasoline. customers I it can don't my end, get though basically, much below money, RINs buy since don't don't don't receive don't think and in much I RINs, difference. terms spread, what hurts less price have those It a make affects product. in should it those the opinion, the people believe ethanol of at RINs it's of incentive definitely the products. physical crush demand. the those and receive make to that

we out would the be. to coming wasn't it chart is out if probably the So very -- our to the to it I were question. -- our coming it try that It affect demand. related it's pocket. because could physical going of back well or your your may demand physical to hope But it if pocket, part of answers question, of second

Pavel Molchanov

to a be other think for to year-round debate the EXX the How stimulating that as offset in those potential you extent authorized. And would about is were that Okay. to EXX year-round demand? policy impactful Washington sort be refinery of waivers do

Stuart Rose

short-term, I that unless pumps EXX to Long the not Short term, that term, for gasoline good sell demand get opinion because I it, don't EXX difference. be to and will to short-term there's -- to on if go pumps if just need long don't a opinion, expecting can believe, we than make happen EXX EXX your people there But and term, a it's they happening. this because change buy EXX. are comment do will to wrong. ethanol people want EXX less further gasoline to and there, It's are less Zafar, for gas But my you a continues up from the out not to it do and pump I -- stations pumps to there question. they it is see of it, pumps unless their the me believe negligible, question. enough minute no waste EXX, get out much change and pay can change

Zafar Rizvi

The gas these I advantage will will think sell able be be advantage is to stations that be year-round. Zafar. -- the will this

they of the year, Now the they sell sell. cannot part and year part of

it. So they convert have pump don't those to pump really EXX EXX, to incentive

able So it be to year-round think I increase. once they have slowly, now, sell they will will

will can start all once you see, -- to but contained Indiana, to some year there start But pumps. for it some the all Michigan, sell year those they -- that As selling probably have cannot station gas EXX, in will Iowa problem these incentive pumps in be in round. have always they those round, separate is going

Stuart Rose

as my the waivers law want. in us opinion, they my granting ethanol EXX, have they it's And if the a down this waivers all opinion, not trade, don't if law, But year-round. or EPA, rather have grant versus follow they're that trading previously did, In one what know the it EPAs that's refiner -- those follow crazy. the I if good the will industry the and have talking for have for like -- come trade. do to EPA other, a versus With to I'd

Zafar Rizvi

RINs. and think traded XXXX there XXXX, that RBOB traded as between some advantage of $X.XX. small and take enough the advantage price. Paval, -- of the is to difference But ethanol, but I ethanol $X.XX, of RBOB only yesterday, and vendors also discouraged as take RBOB was not X.XX although between They use the And these RIN price. -- they difference trading low have RINs RINs

continue the RBOB to becomes have came down go increase. and we'd to what that's then so to RIN concern. price So if if difficult those down blending Yes, have it

Operator

from our And with Instructions]. the to next line [Operator line Chris [ph] we'll Singular on Sakay get research. question the

Unidentified Analyst

will for on coal is refined coal, question tax My benefit? expect how long division, the income on your you the

Stuart Rose

money use if will we more the X of credits, excess and about carry them, for those them. to Hopefully, that time we long, Doug, make do But a of if bulk credits. is? time. forward them we forward credits years use long over a exactly a for you want we long don't, have it lot for carry receive will We long and how can go

Douglas Bruggeman

will we to receive correct. November XX credits -- through Stuart's the XX. expect Section They

into those earn as the book we income we'll credits. So

more the using. what We are credits we rate, are, current at earning than

all will able our obviously, lasts, how is. build X%. sheet to us, And asset an that depend what balance income up use purposes, take under for allows of upon XXXX. to be we beyond we'll down tax on income way payment our today's So our that But it federal law, long will the tax to

cash a from So perspective. flow it's

Unidentified Analyst

I want just could on as coal thanks. you some business? outlook that provide well, refined Okay,

Stuart Rose

comes business It testing the the reduces standpoint, it's the helps comes a the From it's reduces pollution plants. of terms great a -- standpoint, coal power basis, the in the in from that of itself, Well, opinion, great, our on business. that pollution country’s it business. out our

profitable we and a business, And it's so quality in for terms - of us. very business

our So, less are plant a things have than it so it but year, far, we smooth. been in in extremely going so good. installed We've that so

Unidentified Analyst

just the for Okay. profit quarter It was negative looks there. like gross

Stuart Rose

lot control profit. That's we're in business. is they Gross federal money. -- would the putting knew It's a of of we're taking Because such law you chemicals lose pollution nature things. the again, that and

money really government, then statute, and no that look return, we course We credit, -- pay the in business. and the actually can't from nature and you us tax from on plant. gives power of Of lose at so we get plant. revenue operations the power federal And saying the per a -- the money because that's the

at this look look after-tax on we had You nice very to have the and business. in this only losses you after-tax or at that's And business. that quarter, profits, can way this profits the case,

Douglas Bruggeman

when our be booked credits, year, way with necessarily expected the we proportionate rate the throughout credits they're earned the so for we the what will reflected estimate don't get in And our year. line tax the income bottom

an As -- rate. expected booking end annualized you're your

we also get a the expect you said, federal get Stuart for we loss deduct to and from income losses taxes, as then again, those So credits. operations, which

line, so it's been for far. a So business us bottom good

Operator

have Thank you. closing questions remarks. any no Please continue on the And we line. further with

Stuart Rose

thank much just Thank everyone being shareholder, we very for We appreciate your very much. a you want support. and to Bye.

Operator

everyone. your that you, ladies We the thank does conference Thank call And for for participation. gentlemen, you conclude today. and

Have may a everyone. You day, lines. disconnect your good now

Douglas Bruggeman	VP, Finance, CFO & Treasurer
Stuart Rose	Executive Chairman & Head of Corporate Development
Zafar Rizvi	President & CEO
Pavel Molchanov	Raymond James & Associates

REX American Resources (REX) 23 May 182018 Q1 Earnings call transcript