REX American Resources Corporation

Greetings and welcome to the RECS American Resources Fiscal 2022 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 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. I would now like to turn the conference over to Mr. Doug Brueggemann, Chief Financial Officer. Please go ahead.

Good morning, and thank you for joining Rex American Resources Fiscal 2022 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 uncertainty. within meetings of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company's current expectations and beliefs, but are not keys of future performance. As such, actual results may vary materially from expectations. The risk and uncertainties associated with the 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 reports 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 for his comments. Sales for the fourth quarter declined by 5.6% as we experienced lower volume for ethanol and distillers grain. Ethanol sales for the quarter were based upon 63.7 million gallons this year versus 69.9 million last year, as we experienced some weather-related disruptions to their operations during the quarter. We report a gross profit of 14.9 million for this year's fourth quarter versus a gross profit of 38.8 million in the prior year. In the current year quarter, we experienced lower ethanol pricing as well as higher corn and natural gas pricing. Corn cost increased by 22% and natural gas pricing increased by 12% for this year's quarter compared to the prior year as inflationary pressures and the impact of commodity pricing from the Ukraine-Russia conflict continued. We continue to experience higher basis pricing for corn near the Nugent facility based upon a poor corn harvest and reduced corn availability in that local area. SG&A increased for the fourth quarter to $6.7 million from $6 million in the prior year. The increase is primarily due to an increase in the number of ethanol contracts that require the freight to be paid by us compared to the prior year, which we classify as SG&A cost. We had income of $2.5 million from our unconsolidated equity investment in this year's fourth quarter versus income of $3.9 million in the prior year. The company's interest and other income in the current year increased dramatically to $2.6 million versus $13,000 the previous year, primarily reflecting increased yields on our cash. The discontinued operations reflecting the prior year numbers are from the refined coal business as we ended those operations on November 18, 2021. There was no impact in the current year. We reported a tax provision from continuing operations of $2.2 million for this year versus the provision of $10.7 million in the prior year, primarily reflecting the lower level of income in the current year. These factors led to net income attributable to REC shareholders from continuing operations of $8.2 million for this year's fourth quarter versus $21.3 million in the prior year. Total net income per share attributable to REC shareholders from continuing operations was $0.47 for this year's fourth quarter versus $1.19 in the prior year. Again, I'll point out all shared numbers reflect the three-for-one stock split, which was the effect of August 5th, 2022. Stuart, and I'll turn the call over to you.

Thank you, Doug. Going forward, ethanol currently is running a roughly break-even year to date. So far, Rizvi and his section will discuss ethanol much further. Our cash is approximately $280 million at the end of the year consolidated. And we have our uses of cash over the next couple of years include carbon capture, which again so far is we will discuss. Investing the cash right now. Right now we're investing the cash in interest-bearing accounts, mostly treasuries and money market accounts. And the banks that we are dealing with, and this is – to the best of our knowledge are very, very secure. We consider them top quality banks and we feel very comfortable that our cash is invested in a very, very good way. We are earning decent interest on that cash versus many companies that have debt. We do not have much, we have virtually no debt. So, so that's in our opinion, it's good a way as any to invest our cash at this time. We will buy back on dips. Uh, We have some plans for expansion of our ethanol plants, which Zafar Rizvi will talk about. We're always looking for additional ethanol plants to purchase at this time. We have nothing imminent, but if something were to come up, a very good ethanol plant, we would certainly look at it. I'll now turn the call over to Zafar Rizvi, our Chief Executive Officer. Thank you.