REX American Resources Corporation

Greetings and welcome to the RECS American Resources Fiscal 2020 Fourth Quarter Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach an operator, please press star zero. I would now like to turn the conference over to Doug Bruggeman, Chief Financial Officer. Please go ahead.

Good morning, and thank you for joining the REFS American Resources Fiscal 2020 Fourth Quarter Conference Call. We'll get to our presentation and comments momentarily, as well as your question and answer session, but first I'll review the Safe Harbor Disclosure. In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements that involve risk and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company's current expectations and beliefs, but are not guarantees of future performance. As such, actual results may vary materially from expectations. The risk and uncertainties associated with forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's report on Form 10-K and 10-Q. Rex American Resources assumes no obligation to publicly update or revise any forward-looking statements. I have joining me on the call today Stuart Rose, Executive Chairman of the Board and Zafar Rizvi, Chief Executive Officer. I'll first review our financial performance and then turn the call over to Stuart Rose for his comments. Sales for the quarter increased approximately 4.2%, primarily reflecting higher year-over-year production in the ethanol segment and increased distillers grain pricing. Sales were based upon 67.7 million gallons this year versus 65.9 million in the prior year fourth quarter. Gross profit for the ethanol and byproduct segment increased for the fourth quarter from 8.1 million to 8.3 million, primarily due to improved distillers and corn oil pricing. The refined coal segment had a similar fourth quarter loss of 1.4 million for this year versus $1.5 million for the prior year. SG&A decreased for the fourth quarter from $5.6 million to $4.4 million, largely due to lower ethanol freight charges recorded in selling general administration due to certain contract terms. The company recorded income from its unconsolidated equity investment of $332,000 for the fourth quarter of this year versus $1 million in the prior year. We recognized a tax benefit of $1.8 million in this year's fourth quarter versus a benefit of $3.4 million in the prior year's fourth quarter. The refined coal segment contributed a benefit of $1.7 million this year versus $1.5 million in the prior year fourth quarter for the tax benefit. The above factors led to net income for the fourth quarter of fiscal 2020 of $3.5 million compared to $4.4 million in the prior year. while diluted earnings per share decreased from 70 cents to 59 cents. Stuart, I'll now turn the call over to you.

Thank you, Doug. Going forward, ethanol now is currently profitable and we're up against a period last year, a COVID-related closure period last year. In terms of corn and ethanol prices, they're both up as virtually all commodities are up and crush spreads remain challenging. DDG is up. with the price of corn. The new Biden administration appears to have appointees that are favorable to the ethanol industry, but RIN pricing is still up right now. We are still waiting to see how they will treat RIN pricing. In terms of the COVID, the COVID news is with the opening up of different states, it should help driving, which should improve demand for our product. especially versus last year. In terms of refined coal, remains profitable on an after-tax basis. We plan on ending that operation by year-round this year. In terms of going forward with our cash, we have about $180 million in consolidated cash and equivalents, no debt. Our plans are to continue to explore investing in carbon capture. We've made progress there and I spent a fair amount of time on working on that project. We also are looking, continue to look for high quality ethanol plants. The ethanol plants we would hope to find if we, should we find ones to buy would be in our opinion something that has the best technology, has good technology, good locations, good people. At this point I'll turn it over to will talk a little bit more about our carbon capture business and our ethanol business. Thank you.