REX - Earnings call 3 2024 | REX American Resources Corporation

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Operator

Greetings, and welcome to the REX American Resources Fiscal 2023 Third Quarter Conference Call. [Operator Instructions]

I would now like to turn the conference over to Mr. Doug Bruggeman, Chief Financial Officer. Please go ahead.

Douglas Bruggeman

Good morning, and thank you for joining REX American Resources Fiscal 2023 Third Quarter Conference Call. presentation but momentarily safe first, our your well harbor to session, question-and-answer I'll get and as comments as disclosure. We'll review the

conditions, of Act forward-looking current but to conference meaning 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

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

million categories, pricing period. last all XX.X time benefited gas over XX.X lower million third to lower The increase in reflecting year. the for results. net million increased corn quarter. SG&A and -- quarter year. upon increase across year We for to as from pleased sales prior from report increase compensation versus in were gallons primarily earnings. share these quarter we for million the this the reported increased profit sales to incentive Ethanol third $X.X for $X.X third million million from due the and by are $XX.X earnings $XX prior linked million large volume offset increased to in commodity based per this the record to We year quarterly the year compared third to $X.X very this year prior Sales versus the gross in natural largely pricing a third income quarter the were quarter pricing

made quarter handling instead ago accounting versus prior year mentioned per $X.XX second net over interest the income of and REX profit administrative Net well reported. a $X.X noncontrolling share received $X.X REX the $XX.X cost As the change of you. costs shipping accounting comparability the versus presented prior in in within year's policy. provision third shareholders led year. this quarter and million to I'll method year. turn This the million has a year. Stuart, quarter. These applied $XX.X as rates application million begin expense gross comparable new to of million a selling, general third SG&A all-time income classifying of in in sales $X.XX quarter, attributable of to the historically factors of for as order of million its income and The this to million company third $X.X before and in the improve retrospective tax administrative compared reported for in million company and reflects the prior only the an We to from the for $XXX,XXX shareholders now increase on was attributable year's The versus of improved the call reported record to of $X.X in versus this other period. from our primarily interest USDA prior expense, this change cost impacts and with provision year's this impact income industry year, period. primarily for prior $X.X of the of taxes in has the investment was the earnings no relief grants as goods million reported. We a time unconsolidated quarter quarter. Income versus $X.X We general and in interest $X during $XXX,XXX had the year COVID conditions increased third as income from selling, sold in operating equity reflecting million and

Stuart Rose

Thank Doug. you,

forward, quarter to his fourth One plant. year's the working the also than project ethanol of the be carbon discuss we has continued will increasing -- last strong, and segment. making to expect on Earth quarter. business our and capture business Going hard better business Zafar in also be and our carbon are significantly capacity capture corresponding We're our and

significantly it of plant's of better million. hope last expansion consolidated -- cash $XXX interest use significantly balance which than our We're million $XXX year. better be on We cash will to sheet we be have cash. or ethanol that benefit that, should earning from on part our of expertise. that cash. also use looking that of the his for this ethanol discuss businesses entities Again, carbon some we'll on The capture and some could carbon of other call. We're The Zafar other project, always capture

front. So imminent nothing acquisition the far, we have on

currently, still And Zafar are not any buybacks buy the to back We turn over we now call on our have conference We available. dips. shares. I'll Rizvi. purchasing

Zafar Rizvi

today Thank quarter joining you thank for you, us Good earnings morning, call. third Stuart. the for and

As successfully Doug in capitalized were history company. the best commodity Stuart and the and of to able previously in the the market result the mentioned, opportunity achieve team our

quarter ethanol significantly the cash to last third year's report, to results decline still production we during achieve fourth the XX some quarter. According but the and in better stock in EIA We believe comparison and week. to in quarter, have dropped November the compared margin we fourth able be seen the to

output acre showed bushels yield of natural XXX.X the for record USDA seen a per bushel 'XX. positive an considerably, highest X, and We also has XXXX, expected have impact year which results. second on financial the billion corn, price drop XX.XX our XXXX, on November of gas report The

this to XXX-bushel XXX are We corn pleased yields Marion, compared at estimated South last Dakota, that in per acre bushels year. year is

this increase year. on corn Gibson year at remember to Marion approximately in -- So ] more acres of planted But stable crop acre City, XXX,XXX per year. draught compared year were more to [ Dakota compared an and more were that of the Illinois, XXX,XXX X% were year. South last less bushels have last bushels As you XXX XX% planted ] couple we last acre years area. Also XXX planted per last compared to are this acres, where [ acres were almost

same ethanol the billion approximately X drop through the and export year, factors, the if export in DDG our affect we ahead, through X.X September XXXX Considering to XXXX. much compared throughout same X.X billion gallons Looking XXX,XXX results XXXX better is negatively during fourth year. Ethanol previously. could were the next period were gallons expected these export billion continue still DDG approximately decrease X future a to September mentioned million compared tons, million metric results all quarter I to tons XXXX believe quarter metric -- of as metric in approximately approximately compared compared the the to period. this X last tons produce to same

Let projects. about our you me give some update carbon

sequestration As goals shareholders. performance further have I our our previous impact and a mentioned will sustainability capture calls, that improve financial in project we our for will carbon company's our advance and believe the

by of and is of related comparison build compression time to has second be facility to modular ordered. capture for Earth million-gallons been the We which by next expand all end is and at have will of be other facility the the early scheduled equipment XXX construction quarter, of to a $XXX projects reducing the plant, facility the Energy compression intensity. The and carbon facility, the and delivered The storage have started items facility year. the annually carbon construction budgeted completed ultimately million long One expected testing undertake begin. capture approximately to And lead

the will complete a agencies. for other injection entered various X.X several predict an to recently we withdrew we All updates, Class carbon the local withdrew has pipeline. different with performance application. X carbon federal million paperwork Resources pipeline we their state, to application. of EPA these Big approval on for agreement Commerce Commission's Illinois receive Navigator, pipeline approvals agency, while of -- cannot River carbon X.X construct these wait on companies and these the continue We depends VI into Unfortunately, which government the agencies. In pipeline permits approval permit miles carbon and other their when

the complete government year. big different are milestone have we hope so will and about approvals next far We early agency their pleased reached

announce continue low in carbon to provide would a in expected performance believe that year. the if energy improved achieve our improve summary, reduce are byproducts our and most our successfully produced carbon financial We to prepared efficiencies, same and quarter be the the is company's evaluate will profitable we intensity quarter pleased result we much better fourth to shareholders. In our impact last be a that to we for compared to reducing will period ethanol history and other the social carbon projects our also of with goal, we impact atmosphere

million and increase We One colleagues. Energy benefits. Once to the could tax to sequestration not ethanol production our again, continue work without to credit on to hard carbon progress of milestone project XXX and maximize we our plan gallons of XXD this make achieve Earth a dedication ultimately

to Stuart? efforts comments. will achieving Stuart? results. I for these Rose appreciative in We very the of back positive their Stuart are give floor additional

Stuart Rose

We In drastically industry. XX-year conclusion, our the public outperformed we completed the in history as a best quarter company.

we patents the are listening are open said, his patents. -- or said -- no to patents don't Elon As he his he call, Musk who has for as people conference different all yesterday,

our the execute at industry. capture, the competitors I our in doing. In that else big in other a people done We has projects. patent for carbon best We capture carbon reason know of the have we but and the In believe people super doable. other they moment, long ago. what business. that believe is everyone best sky that. the very ethanol the feel in capture of business these in the -- was lead ethanol know than than any real better people no have example, And We carbon that, project that or project the we're our are project like I anything pie focused for which feel ADM, on in ahead we our they're we They're to the we

we that and we anyone more that feel anything again, at than to we're going we're, show, than So is way believe else. execution else, better important

this As for terrific good good good is most for feel we It's now people. earlier, deserve the thing we the know I have a plans, And get said open have people questions. know we it. I'll have we just we leave are quarter. job and all important they but just our credit and forum locations, -- they terrific the we

Operator

Instructions] comes with Jordan Our Levy question Securities. from [Operator Truist first

Henry Roberts

and here. off, you before. was the XX if the the then be that we build CCS of the looking to from both on the on benchmarks, XX construction months? around different next should some over on side EPA Jordan date for wondering Start for first you color on quarter. XQ Henry on more mentioned It's have any the I the Congrats I know

Zafar Rizvi

I'll take that.

about As But concerned of far and the under as I will construction facility review idea have a the long they previously, already will that have started, -- technical by how technical in the we we it's take. XX think July as unit, EPA, no by review February. be mentioned is and earlier. which believe I marginal be the or -- arriving as completed that our facility And will

Stuart Rose

not may we still may does for be on That on still little that XX, take business it July because to permits mean be be... a waiting possible we'll longer

Zafar Rizvi

and operate the I as which of the EPA But will think we earlier. far mentioned concerned, be construction permit the cannot completed. permit, construction we compression -- be be completed receive facility unless will facility the completed the as but will pipeline

Henry Roberts

of are projects? looking at have potential on you this carbon the your compared just how having looking ahead to you the for year, line conversations nearby And landscape then your operators started ethanol year? kind where with guys offtake of to carbon any And of guys up next kind capture you're shaping time advanced given at current

Zafar Rizvi

I'm again? that -- you're sorry, wasn't what could not please. I sure asking, exactly you repeat question I'm

Henry Roberts

buildout? the quick nearby shaping any where a potential ethanol offtake with anything next a how at you the conversations that seeing with operators given just if for then have of Just have begun you're having year? kind them landscape, you're CCS carbon one for up on on And you

Zafar Rizvi

forward, as business. in think are as commodity ethanol, mentioned I a concerned, as far that I looking we

hard very it's think more couple a than or X months. I of to predict even months

see market materialize and to So really commodity -- And when going what every there to stage, be day any we or at we're opportunity, change what the this cannot will I predict we every that. its single with happened month.

-- fourth we that cannot think we the So be return sources happened feasible believe will once if carbon, I -- of than Otherwise, year's else. we mentioned, XXXX. exactly facilities, next as is quarter, XXQ, But that far other better the quarter. But the be At about XXZ will higher year. will end expansion that same than ethanol by complete the our from and be what using I of with there the predict is on last fourth much I really a as can we even be anybody return certainly, much concerned facility carbon we I of as the -- available very it will that of investment -- time, will still see is expect. project probably

Stuart Rose

XXZ and on question, reason thing future. happen said you your guarantees done, that -- that know floors done. of I a think been that they we're than else. And by quarter addition and his that's as no and my going to to per have -- the stat past, are again, their our Other commodity of his -- it. in I we in they know at completed year, have traders hope if team the with be quarter in there's after drastically when realize One and Zafar the potentially you look people end to executing better should business have it's say they would there's have and team I we you no a which for better that on underperformed But have the quarter business everyone this really at carbon Zafar good team again, a with our huge capture, all think after what contracts everything, you the you've time. what following huge, have call, long happened next with And share. and probably proven futures big earnings and to commodity the permits

And really that's good and like if thing are that what that, So the like again, the And ethanol efforts do business, team most done area, is they putting shape. putting, the Zafar we does we'll -- in happens. growth that he see they've if into. in his we're

Zafar Rizvi

to our that Yes. And XXX add to are gallons. million I production increasing since we

reduction every gallon $X.XX reduction So a from $X.XX is every gallon.

sequestration So if approximately we to the points. $X.XX XX is carbon to and -- somewhere XX -- $X.XX

can are our ethanol we tax footprint, reduce so are million-gallon if million intensity. So as years, to the X And we generate other for on projects some facility our working several carbon credit. able to with were we $XXX over million XXX $XXX

Stuart Rose

be most we would the can that Again, generate.

so but get in all even we people to we what don't to that, half that's putting and share. we right, -- tax that So get want to if that increase per their of numbers, working we're hard that's in earnings

and hard -- that's bogey much we we're out as us get So there going it to can. work to have we a as big of

Zafar Rizvi

reason the major is allocating Yes. return risk, and certainly much it, are it's much and higher. is a $XXX believe That's the million it we the better investment but we to

Operator

Singular question Sakai with next from Our comes Chris Research.

Joichi Sakai

a seeing Just . you demand most ethanol? question, are where for the

Zafar Rizvi

side? Where we see you in mean the ethanol, export most demand

Joichi Sakai

Right.

Zafar Rizvi

Korea, Colombia. right Netherlands, South the we seen mostly Kingdom, think have I and the seen we recently now, United have Canada,

are So the those top X.

in We have also. India seen some

-- it's countries of these importing. certainly, a are lot So

on always is #X. Canada So

Joichi Sakai

and you How the price quarter? modified distillers and of seeing guys distillers corn into next dried are the heading Great. grain grain Okay.

Zafar Rizvi

trading as I see, the Yesterday, can some increase. was and corn $X. you think is, today about speaking, $X.XX generally it that's is

gone up have So have I bit. that, we a in seen as the previously some area, And I Illinois in bases. Dakota think bases minus overall some mentioned has we seen certainly, South little in

minus part good seen is where it production it We area otherwise, and to last was year of in have the plus compared some as most But basis basis. as basis. Minneapolis is other the not

Joichi Sakai

the of And into natural as winter? we what price gas about the head

Zafar Rizvi

And January, March mentioned for dropped less than seen price that as natural gas or low $X.XX The is February. seen have considerably we about have for as that I we $X.XX. $X as that has

seen be So natural a that as prepared remarks have will the that in major that drop previous my impact, I gas in mentioned pricing. we

Operator

next Locke Investments. from with David Old comes Our [ question ] Mammoth

Unknown Analyst

teams seem a some from questions. off, their that investors to public I'd you questions for First sort there of take thank There taking guys like forum. really to afraid are in out

your this. So and in doing time thanks for candor your

Stuart Rose

asking you. you for Thank Thank questions.

Unknown Analyst

by margin that guys overall what the few And contributed is fires, like to been last industry for operational the explosions, question my the cetera. so ton how year financial to et So of old last has are first To and have months, problems, of sidestep has beset good a environment the relatedly, to how or you half all plants relative . that? managed average? your industry extent

Stuart Rose

built on believe, be to and stuff buy They're us don't I they -- fires newest to some they years situation help. of be the had we That go number we a industry. better any and service some plants. you They're things know to plants. those maybe But in our where just the old, see bit. little you not if but state-of-the-art anything in are if on product I are service we you. semiannually all the had the we of did, a or care they to down, the some in shut small do plant, can buy the XX And see many with have the case, We of always tornado commitments open something, be materially just that these seldom don't plants, would plants. And you of terrifically. The honest under any XXX market. -- go extensive builder an a we older We have take -- a -- plants -- own and they're take I decision plants. these That's part of all and plants with plants. we if made they -- under have the can We good helped better these best had extremely we There all I'm a made -- these problems should in I sure and not spot where best I market plants, certainly, those the but only When I Fagen/ICM I'm newer we plants of think that with the have wrong in do don't of just plants. a operational beginning, know not very say, Fagen/ICM -- built. themselves know million-gallon on plants.

Zafar Rizvi

God that to followed forgives, very our closely month, the are priority. to happen add #X are review safety can is mentioned, I safety will making think I every the anything safety the always Stuart and We other that thing. but anybody monitored procedure. procedures we is, And couple happening all a sure happened safety plants, and there's that drills are things. as which of the

-- down X in I while. XX couple for a shut plants think plants or down bring ADM for shut plant was maybe there's if that that South were about were Dakota, only more. of you happened million-gallon weeks a

trading is look And trading I to a -- maybe corn and and plenty also forward. a has so October it at is think so that I an worth time have commodity mentioned time Xnd margin at to impact. sure there think if you the was in on there you lock look is $X.XX, $X.XX is that this at makes when there minor that overall, ethanol to Stuart the that make the moving But difference market,

enough that let's Stuart I what profit and and in this think what move your all time lock when on. you depends mentioned, as and good and execute consider So is -- its

Douglas Bruggeman

Let me add.

Stuart Rose

just team plants, best team, not but really the the We Zafar trading believe believe business. best ethanol best commodity the by in I have commodity strongly the we led trading have we

Douglas Bruggeman

XXXX, that I built consolidated on. between if were and can Our add just XXXX plants

Stuart Rose

you, Yes. more. Doug. little a It's Thank

Unknown Analyst

that's ones? ones of there your look scour and is guys looking diving not bring M&A but that looking like Are you So plants for opportunities there find continue to dumpster are fix the these maybe the are expertise for as you for older -- -- Or like anything up that you you one worthwhile. have? market of sort to management like you

Stuart Rose

dumpster -- don't have we We dive.

hasn't would very to be close artists. our on or So have that but up that were don't it XXX and not most and that did that ours, plants do come has plants to very we and that are gone similar buying not won't us. fix Fagen/ICM we're those plants we want for. whatever what price look really gallons say, couldn't that be million are We worked -- the we be up for out would and saying I'm reason really you -- one it Unfortunately well very, doing fortunately, plants. preference, to much or would really, but another,

anything you see this But what don't happen. industry, might imminently. I never So coming in know

Unknown Analyst

How sort feels X.X supply/demand do generally for some better mean broad with the margins feel we've year had early environment and like, fall. decades, ones for over about year ethanol this of just guys the now? we've consistently right I you been although it Okay. the really high part oversupplied summer decent all of

balance little we like of bit a some So managed make with to have supply are to -- finally it offline? coming demand and increased

Zafar Rizvi

think Stuart, say. want you I go to ahead, --

Stuart Rose

keep There'll going know our to There and in will I of expanding fuel. has have support things given not what to or does it and one happen. be and government this demand, you may some it's commodity The up of was continue a if jet the always will expansion are supplying -- supply an with will lot may happen. like it plants. We're hoped as say, be it. it opinion, there another. or But then we a my way never happening industry

very have pumps are than more creates run to XX% today I also can low very, our around addition pumps, be ethanol. I country, are We cars there more and fuel that fuel, -- that it greater see them manufactured carbon And now be ethanol today more in them are -- see the XX% Dayton. country. in we I them the even see on would what more across and for in to -- a in demand is hoped which

make stations So ethanol. the then that would on in be more XX% increase gas money a XX%

So incentives. they have

will that So demand. this that, help increase

business our commodity moving question, a of a are to things it's but direction. in So your answer lot

Unknown Analyst

my need some then campaigning Do there question like that the Clown Illinois. Okay. domain of Show whole imminent is in with is like guys issue. And And on Iowa seems pipeline last happen? about any in recently Vivek you the rulings to problems that. Iowa in make it that actually sort And have been

So are getting for I'm just installed. items that of sort curious the gating what

Zafar Rizvi

a can answer bit. that I little Yes,

do if only this you the miles think But look not the as well domains I we stage, to Eminent well at to of we at, state the pipeline, and have reached is Illinois it's eminent X that clearly regarding we law X, use Illinois are regardless because not domain. law attention, use eminent domain. it have #X we use believe we #X. to But pipeline. state well approximately can the time the plan by clearly last we X.X pipeline far that miles as And our we

do so what there far have have in difficulties. this which any exists will which we still be eminent whatsoever we we domain. we we maybe not that but do attention We we choice And believe the But of using is law may not we -- that's that some no indication, primary as know. case and at stage. consider not our is have have But as concerned,

Stuart Rose

X land -- miles are And their a -- for people we're dealing going to mind, are helping the over selling us. we're miles, has said, these miles where is lot X that Zafar in with corn of these X and keep farmland as we're only it's that

are I believe. some and shareholders, them -- of So

a off make incentive because cases, XXXX. well this having least in since happen a to have many, been do and they as So Doug said they're us great they'll it's big partnership well. And do for both many at years, better

good We're believe. other -- -- miles. in we these for hundreds think know we've X going they've not done we -- thinking you them. So have I you're Iowa, been pipelines good it's And when they're I miles. done done are these have going us, -- for and -- of

we us it's believe it's we it law if going So be think but this an time. Illinois up any at it don't back -- will not to issue is, don't issue be

Zafar Rizvi

And I exactly exactly. right. think Yes, Stuart is

people protest. As are you the there mentioned, out going

know state same That's -- we're far do. they and what we happen. values in that's that's provide every the we you Illinois, but have As them. have certainly to Iowa, concerned, to that We think -- they what cannot as they're and have we in to go and can stop concentrate opinion, Dakota their what the as South almost that, people continue and

Unknown Analyst

Okay. Thanks clarification nuance on That's kicking thanks excellent the all butt. got. and congratulations on a bunch quarter, and for for I've that. And another everybody's

Stuart Rose

Thanks for the . questions

Operator

are you. there the further turn time. to I back will Rose, Mr. at now questions call this no

Stuart Rose

forward thank we to the to Bye. everyone like you. next and We'd for listening, look Thank to talking quarter. of you the at end

Zafar Rizvi

Thanks.

Operator

you thank the conclude disconnect does participation conference that ask please your We Have day, That your call for for today. you and line. a great everyone.

REX American Resources (REX) 30 Nov 232024 Q3 Earnings call transcript