Green Plains Partners LP

Good morning, and welcome to the Green Plains Inc. and Green Plains Partners first quarter earnings conference call. Following the company's prepared remarks, instructions will be provided for Q&A. At this time, all participants are in listen-only mode. I will now turn the conference call over to your host, Phil Boggs, Senior Vice President, Investor Relations. Mr. Boggs, please go ahead.

All right, thank you, and welcome, everyone, to Green Plains Inc. and Green Plains Partners first quarter 2021 earnings call. Participants on today's call are Todd Becker, President and Chief Executive Officer, and Patrick Simpkins, Chief Financial Officer. There is a slide presentation available, and you can find it on the investor page under the events and presentations link on both corporate websites. During this call, we will be making forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in today's press releases, in the comments made during this conference call, and in the risk factors section of our Form 10-Q and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement. Now I'd like to turn the call over to Todd Becker.

Thanks, Phil, and good morning, everyone, and thanks for joining our call today. The first quarter of 2021 has been truly transformative for our company and as we executed across every phase of our transformation plan, accelerating our path toward becoming a sustainable agricultural technology company, producing high-value proteins, veg oils, and clean sugars, combined with carbon capture and sequestration technology, which lowers the carbon intensity of our products. We highlighted the key events in our release earlier today, but the most important item is that we fully funded our total transformation plan during the quarter. We have laid out several key verticals during the quarter, and I will come back to each later on the call. Turning to the financial results, we reported a net loss of $6.5 million, or 17 cents, of diluted share in the quarter, inclusive of a $36.9 million gain related to the sale of the Ord facility and a $22 million charge related to the extinguishment of convertible notes in conjunction with our capital raise. Consolidated crush margins during the quarter averaged 11 cents per gallon, up significantly from the prior year, outperforming the daily average market. Adjusted EBITDA was $15.4 million, excluding the $36.9 million gain. Achieving results that exceeded the daily spot margin generally available during the quarter underscores our ability to flexibly adapt to the changing market around us in our Green Plains 1.0 businesses. The second quarter could exceed these results, but market volatility is something we remain prepared to contend with. Production gallons during the quarter were lower due to the polar vortex that hit much of the U.S. during February. What is really important here is that as we transition to Green Plains 2.0, a strong 1.0 platform is beneficial as we execute our plan. Our ag and energy segment also performed well during the quarter, resulting in improved operating results year over year, driven by market volatility in our merchant trading and distribution businesses, in our fuel racks, natural gas storage, and corn oil distribution platform. Our ultra-high protein business continued to exceed expectations at Shenandoah, consistently delivering higher protein yields and increased corn oil yields, which gives us ever-increasing confidence as we deploy this technology at Wood River and the further locations across our portfolio. During the quarter, we produced a 58% protein product in full-scale production and delivered it to our pet food partners. Early indications are very positive in how this product can be used. Achieving this was a highlight for us and has resulted in substantial feedback with end customers, including pet, aqua, dairy, poultry, and swine, regarding ration development. We are excited to contribute a high-value solution that meets the growing need for sustainable ultra-high protein feed ingredients. I am pleased to announce that during the period, we have also had several sublots in the low 60% protein purities as well, and we'll get back to you on more on that later. In recent weeks, we have seen protein yields of 4 pounds per bushel and have seen corn oil yields consistently above 1.1 pounds per bushel, approaching the 1.2 pounds we expect to achieve with the FluoEquip MSC system. Even more exciting is that our remaining post-MSC distillers is in great demand, pricing at a slight premium to traditional distillers grains. The variability of this product has been significantly reduced and can be applied to rations in a different way than in the past. yet another positive consequence of our transformation into the biorefinery platform of the future. Construction at Wood River is progressing nicely, and we anticipate its startup during the third quarter. Our balance sheet is in excellent shape, and we are well positioned to continue accelerating our transformation. We ended the quarter with $654 million in cash, as well as $45 million remaining on our delayed draw term loan with MetLife. All in all, We closed on over $600 million in transactions, including the concurrent equity raise and convert transactions, raised capital through our financing with BlackRock, and monetized our org facility for $64 million, while retiring over $170 million in debt. Successfully executing on each of these transactions was a highlight of the quarter and has set us up well to achieve the goals and objectives we have laid out. Again, our capital structure has fully funded the protein transformation process that we have communicated to our shareholders. Our Project 24 initiative is nearing the finish line as Mount Vernon started up recently and construction at Madison is on track to be completed in the third quarter. We continue to evaluate our plans to complete the GNS upgrade at York. We have already started to contract 2022 USP volumes as the York production is used as a special quality in the market. No final decision has been made. Our main focus going forward is around accelerating our protein technology deployment across our platform, which also benefits corn oil yields. Lastly, our upcoming carbon sequestration initiative offers great promise. During the quarter, we produced 178 million gallons of ethanol, which equates to a 71% utilization rate. While production was slightly lower, our quarter did financially benefit from our risk management position and strategic actions we took in response to winter storm URIE. The macro industry data has continued to be structurally favorable as ethanol stocks have fallen below 20 million barrels, which is the lowest level coming into summer driving season since 2014. Gasoline demand continues to improve as the country opens up and wider vaccine distribution enables people to feel more comfortable traveling, led primarily by surface transportation. Green Plains partners recorded another stable quarter as its cash flows are protected by long-term minimum volume commitments, During the quarter, we delivered on our strategy to reduce debt and repaid an additional $37.5 million of debt, including $27 million from the org transaction. Now I'd like to turn the call over to Patrick to review both Green Plains Inc. and Green Plains Partners' financial performance. I'll come back later on the call to talk more specifically about our ongoing initiatives and how each vertical fits into our transformation plan. Patrick?