REX - Earnings call transcript Q1 2020 | REX American Resources Corporation

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Operator

Greetings and welcome to the REX American Resources Fiscal 2020 First Quarter Conference Call. [Operator Instructions] I would now like to turn the conference over to Doug Bruggeman, Chief Financial Officer. Please go ahead.

Doug Bruggeman

Good morning, and thank you for joining REX American Resources' fiscal 2020 first quarter conference call. We hope everyone and their family and friends have remained safe and healthy since we've last spoke. presentation momentarily, our your well to session. Q&A get and as comments as We'll review Harbor the I'll first, But Safe disclosure.

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

risks may announcement I company's vary Stuart Zafar and Rizvi, Form associated of materially company's American to assumes XX-K As and and such, update obligation Rose, the The XX-Q. described news uncertainties on including reports Board, Officer. forward-looking Executive no Resources expectations. today's filings actual and are REX statements the results the call joining Executive have Exchange Commission, me forward-looking Securities with Chairman today; or and from the statements. on with in the Chief publicly revise any in

the first the and year. quarter our Let availability, and corn versus this pricing, idled last million XX.X year decreased lower we as review ethanol the was quarter for XX.X sales the by production plant levels, crush due were quarter affected pricing. million Sales for XX.X%, pandemic upon and local as margin oil primarily based impact lower Ethanol COVID-XX demand for on plant to the me mid-first gallons NuGen financial performance. this our

and fell ethanol which in all a loss by profit We segment $X.X charge Earth it's gross slowdown from year. by and gross part to of was or the of for there corn no somewhat on realizable and current was sharply, margin we $X.X in the a crush the prior COVID-XX plant, also value net lower volume negative the year in hedge million as a of of the impact, not $X.X but occurred for was impacted versus so lower due quarter-end, of volume values quarter. in first significant idled corn million. it offset spread, million ethanol Gross gain ethanol $X.X Although the the million demand cost at byproduct One only it's the by the impact reported

year. at our interest of of the loss XXXX a net $X.X Our the $X.X of attributable recorded prior We five upon this income $X.X benefits first for passed net losses and the REX loss $X.X year's fell federal a The $X.X million the tax for prior refined volume. the had to segment than on quarter from as recorded Act federal in cash back the benefit respectively, and to coal million $XXX,XXX of $X.X in ability of for the for first tax to offset interest XX% led are this rates a the of million for rate, first These upon short-term million million years in XXXX We benefits based recorded sharply first rates due million XXXX quarter fiscal gross versus versus first million factors rather tax CARES current prior $X.X our and year the versus fiscal quarter. quarter losses from lower this tax to carry year. by credits year Section our XX% during losses the above in to based shareholders of of quarter. investments, and had first conditions. tax and unconsolidated the the prior equity our loss the $XXX,XXX year's due investment benefits million from declined $XXX,XXX, income other XX a $X.X ethanol of income lower in primarily $XXX,XXX Interest for versus operating of year, to reflecting quarter losses. industry quarter We from

the Let for over me Stuart now comments. call turn his to

Stuart Rose

Thank you, Doug.

Going we we it us. first can City operational to is years. quarter benefits as not have money second have risen, good, we looks carried the expect and plants Act reopen take certainly allowing that in CARES of fall. losing and prices expect Corn plant. in to our do us lose ethanol quarter. all forward, will Wind prices some money, the harvest much currently we be be as Act back certainly losses Hopefully, other CARES but applies the as five and it ethanol our helped to us advantage the the by where There the can also is business loss to Gibson

In for be and especially we coal terms have to where utility declined to coal, operations. it of down used as continues refined electricity has our

of cash we in terms $XXX basis, discuss our carbon investing quarter-end, capture a which will plan million Zafar in following roughly on a Rizvi, consolidated we site, In me. CEO, potential on had

shares -- and dips, to since first buying opportunistically we shares first the quarter on more. XXX,XXX to authorized We we're XXX,XXX continue buy quarter. And during bought in the

continue plants. to for look We still prices. have at certainly, have very, good industry. we we'd imminent nothing time. the to this But ethanol believe And We in very quality have

have We our that will it there's in we've just nothing the business be now will the and and project, ethanol turn we bit that we carbon consider to capture fact, set. into this if outside -- in profitable to I'd business just initiated ethanol investments that's talk we initiated. skill Thank Zafar capture will how got feel imminent. a fit like carbon you. the we -- about -- past; to over the -- we've done little Again, have

Zafar Rizvi

remarks Thanks, Stuart. Good morning, brief. will my everyone. I keep

owned order majority plants. our the the a to industry. of fiscal decrease previous our markets, recent ethanol decline As in demand the ethanol the a Several challenges, impacted shutdown fear and entered of crude in spread negatively resulted of and we led continued the country and price pandemic. in businesses both the facilities and COVID-XX COVID-XX the virus The stay-at-home governments; I in in by the including fuel declines mentioned XXXX that ethanol shutdown, including across the call, facing of

are taking and employees every to keep step guidelines. our are federal following safe CDC, and We state

the last As corn severe continued NuGen challenging impact due our throughout shortage I in economic of the down very plants. to By on negatively March March XXXX, had shut year The to the and that Energy suffer NuGen our and led Earth XX. environments area. on idled plant April decision owned mentioned we of previously, XX plant to One COVID-XX of majority both

earlier; business and in as experienced have and an some relaxed, impacted shutdown improvements increase COVID-XX recently We mentioned demand created Stuart for in ethanol as gasoline price. orders that the activities

of of the we gallons carryover. and all and -- loss. compared One projected approximately XXXX If Standard. million [ph] of according On that received the for billion XXX last the in XXXX. process XXXX quarter compared of the the tons The a to corn, XXXX, tons exemptions. compliance small trade Renewable during is we exemptions we first expecting As year. for do refinery the is because Earth Ethanol same May yesterday. RFS expected to Export these The granted distilled totaled are forecast XXX top planted USDA positive started small XXth quarter XXXX loss the disputes the Farmers and we gallons dried million to threat XX a segment quarter bushels for and in a are XX EPA compared totaled crops second export year. the a of uncertainty to X.XX market and conditions quarter per ethanol XX to refinery the EPA exemption first pleased we continued metric the that million began the reasons, reopening yield are XX improve will corn X.XXX is not of bushels largest Fuel first billion of COVID-XX generate increased of has acres of the estimated quarter XXXX the report. production for grains bushels; ethanol Energy export be continue million DDG experiencing that, corn about has yield to Due XXX to metric note, X.X result, XXXX carry for over for The of eliminated, acre On to XXXX. not will and XXXX.

the and ethanol from either which down to XXXX were and last For forecasted shutdown January shutdown in ethanol years, during is consume X.XX ethanol XX% of and or month recent slowed plants. than X.XX expected Approximately of the slowdown lower XXXX plants to XXXX last plants X.X% due down billion months. bushels, the few

discussed -- some sequestration Let give me bit you previous the project little our also call. carbon in me as give Stuart a I progress mentioned, let on you

of University associated develop characterize As One well drilling, a I site storage beneath Energy a carbon Department safe a the sequestration potential Illinois evaluate program of working gas Award then, U.S. and the site The received ethanol The mentioned with storage Illinois University greenhouse has of carbon with the to to the performing a and project. Energy explore University the will Earth we through seismic surveys. of facility. test carbon are

and cannot have storage exists we vicinity and project. a some accelerate in will to economic still a have study, gasoline, By the proven Earth seen testing, to and of study modeling will this commercial Energy system. trend which capture ethanol I for addition, mention development $XX extra and the demand completed have want be characterization Mt. will very just is tax To feasibility Front-End provide land researcher In this wanted with activity of a date, storage of in In at successful caution Simon predict that seeks the in that project. continue, Illinois early which excellent Section geological that yet potential FEED, how for could ton predict the carbon the the there this storage corridor, we capability. project way, demonstrated in COX help but down -- Storage for has Geological facility. Complex this preliminary cannot that we The Design, mapping, storage within project to ethanol. stage, One long demand safe the improvements conduct I we XXQ is capture carbon also. region seismic Engineering summary, credit; and have the we purchased which

around in compared corn completed this to corn in also South planting the Dakota South around XX% XX% lead draw is to X% making XX% almost South last is seen in this year corn XX% corn results. our plant far the harvest The to in time and of emerged We progress, the last -- so planting yields, better year year, the Iowa Illinois country. the area. was This early planted Dakota, could last of planting XX% overall to economic and and area have compared which corn plants Dakota our is year at excellent better compared

the back Stuart? Stuart for back floor give -- will to Rose comments. I So, further

Stuart Rose

we Thank conclusion, had you. In quarter. rough a

things well hopefully should harvest We one to before hope We quarter when things closed so plants, looks locations, normal. far We're our return plants, and opening great again. and one great to we expect do have normalize, the at least more rough of and good. still

We carbon the with we University have Illinois. although high hopes have Zafar on we working the we in guaranteed for nothing said, in working is is, the industry. are that feel people important certainly area, it, but of Most as best capture,

know So bring were do what back now to to way of. it to And plants well capable they're these in bring know -- to to what us the back people doing, takes leave floor questions. what they're they've we we when open things past. I'll the they'll get to do done back normal, the our

Stuart Rose

If questions no I'd loyalty, so the call. are you for questions? much no Thank to your our get three things there listening months. If four -- much. next and will We to are everyone like appreciate are better there any in or thank very there questions, hopefully

Operator

does the and disconnect That you today. good thank you. day. and ask a you your for lines. call Thank have Thank conclude conference that We your participation for please you

REX American Resources (REX) 28 May 202020 Q1 Earnings call transcript