Renewable Energy (REGI) 5 Mar 202019 Q4 Earnings call transcript

Greetings and welcome to Renewable Energy Group’s Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference call is being recorded.

I would now like to turn the conference over to your host, Todd Robinson. you. Thank

begin. may You

Good full and call. year Rob. fourth to quarter and XXXX afternoon, you, welcome everyone, our Thank earnings conference

me Financial President Warner; our today Executive With CJ Officer, and and Chad Officer, Chief Chief Stone. our is

items, Let I call turn before me CJ. few to the a cover housekeeping over

website, everyone available like regi.com. will later section is of slide beginning website this at being on the webcast webcast I would accompanying the that at Relations First, and replay appear webcast. Investor be will A our to remind The an afternoon. call is available with this automatically our includes which deck

You will prompt we need as to the manually slides you. advance

the For Relations the be deck Investor can with of release, those dialing downloaded website. our in of section in, slide the you along earnings press

this on call. forward-looking information We not statement, Turning factors call undertakes could materially this These contribute Factors statements are forward-looking detail or on like of involve such Company in Several from described are differences. Report forward-looking those risks, assumptions date to speak The factors These information SEC. you expectations. the of obligation statements. as and uncertainties statements. revised with new differ sections in statements and the update of to to Form predict such conference the only no on based and to file of that statements any publicly the in Form those could These subsequent X. which of on and would XX-Q, Risk XX-K other on are Annual to a our slide performance. some quarterly discussed reports will cause forward-looking Company's results are difficult contain contained actual advise that The guarantee or

metrics investors the reconciliation slide to see to business. will non-GAAP or Today's the includes the most these for press performance of measure. We a core comparable of the deck, appendix the non-GAAP financial assess accompanying Please our operating GAAP help discussion release believe also measures. the measures

end to point Tax BTC of benefit XXXX also X. and me of the Excise an and is reflected relates XXXX. the our for of EBITDA reflect know, our net the shown slide results XXXX reviews XXXX are items was benefit retroactive other will provide quarter Because which on year, fourth when and of statements. in the quarter near financial the XXXX. years for the allocation on It or reinstatement that credit put operations, to more last in Chad as XXXX, by and sold. our our Let retroactively for GAAP through reinstated this The XXXX XXXX Biodiesel in our line out, Mixture as also XXXX statements associated the was place both credit reflect financial net detail you he in Credit, to of gallons adjusted the period

that, With call over our the Warner. CJ CEO, to CJ? president and let me turn

And good afternoon, Thanks, Todd. everyone.

presented operational this industry, focus REG efficiencies. significant to calling strict challenges rose for to and on XXXX challenge. our optimization

approach our performance to on half. second the and BTC, very in as environment, result course and focus a margin the adjusted solid a a of gallons the difficult we returned profitable Over year, beyond despite

million XX% the with $XX million of As increase was the generated EBITDA and shown the million fourth $XX X, fourth we adjusting allocation. quarter BTC a quarter, slide the third on over quarter, for Adjusted the in $XXX after BTC. without revenue BTC,

EBITDA. depressed increased million feedstock due XXX fuel EBITDA revenue market shown to and Spreads and After energy were also slide conditions. tough On year-over-year tightened produced about For exemptions. refinery and $X.X prices very RIN comparative we million million from was lower uncertainties down XXXX the expanding the of X, a extended of to BTC and this XXX reinstatement full adjusted gallons of adjusted values year, generated as portion allocating of the $XXX on gallons. basis, small BTC, sold due costs. billion

challenges in X, value see in RIN can provide during XXXX of you highlighted our the HOBO slide The margin the more of decline overall the are where Chad environment presented update. in plus his details year-over-year spread. comparisons will the by

back initiatives. business and environment, from this, pleased a we're Standing growing underlying gains improvements, certain momentum, upon from early strategic regulatory with building our our performance more

along with start improvement slide efforts. in REG's Let's follow section. See X underlying performance to this

were profitable nationally by buoyed continuing results margin on and solid, markets focus half second and XXXX globally.

the strong have the continued demand us profitable increasing Nordics geographies. optimizing and there. diesel the for the Nordics routed directing given attractive promising as most We our markets exports reduction sales production carbon renewable to emerged Europe for with the by and to now

cooking based In incentives quarter, renewable we U.S. we half that year produce margins the diesel LCFS in the oil The produced in Geismar to In has there. attractive the to shipped at biodiesel and the fourth our used And Germany. particular Norway, of especially XX%. offer specific market well. improved in geographies, substantially Coast, continued for of carbon strong over with as biodiesel the full on over lower West for Europe

gallons highest California diesel over XX% fourth the sold the quarter in we fourth state and both quarter, was XXXX. increased our volume renewable for over California in biodiesel In XXXX. biodiesel by

year, XX% full over California more in XXXX. sold we For biodiesel the

the end consumers. demand and Recall expanded X across on renewable expansion our of chain; values biodiesel with volumes objectives: important sales through to biodiesel biodiesel downstream biodiesel our higher blends year, realization is via of blended the line BXXX course petroleum that the focused the value increased in for and capture Margin Over diesel; of margin strategy of downstream we into strategy.

volumes blending in strategy, of Focusing on expanded XXXX. the substantially aspect blended our

customers fourth and petroleum in gallons XX%. We blend nearly XXX% year. That gallons full compared We engines. of XXXX. XXXX, sold sold biodiesel XX blended In Ultra fuel gallons for our this Clean, end-user the to proprietary Our past million is million year. more of year was into grew carbon for quarter fuel new We the XX for REG's XX% low diesel year. a XX% diesel blended added XXX average

biodiesel user increases enthusiasm sell customers, for learning being to are directly We higher blends. and able end to

and We continue footprint directly, the confidence carbon enables the customers our experience value to customers expand increases percentages great our right our reduce biodiesel. cardlock With that capture to us chain businesses through to of our that quality and customer the blending through to both margin inspires, are seamlessly. able moving serve service and their high distribution

enabling significant that we or of January substantially BXX As California. began the and customer This from note California already for X, a way storage to underground is higher higher X% increasing there. blends potential XXXX blends storing seeing in blends sales important increase and on XX% the it's up tanks. biodiesel forward, increase cleared We're in biodiesel an move to limitation, for prior demand in

seeing downstream significant are opportunity We capture from margin blending. a

the Our customers petroleum are and diesel biodiesel rather, recognizing that XXX% or high-quality the of can low-carbon of provide biodiesel renewable function all diesel. aspects robust blends

Turning from upstream. to downstream

enabled flexible Our procurement fluctuated. more adjusting feedstock capability, coupled advantaged to optimize patterns us our feedstock usage to and the experience with buying as team’s by price differentials

the you types As volatility see X, can is from high. and differential feedstock between slide

enable advantage to to capabilities mix. our feedstock take movements flexible of feed these Our us optimize

in improvement, continuous organic underlying as performance in capability, XX. focus is our shown slide growth operational has manufacturing on improvement of area in resulted production which We excellence. Another consistent

produced. and utilization Geismar reduced and gallons improvement optimization year-over-year response our production the by despite activities underlying with performance As at over before adjusted resulting coupled in other blended This environment. XXXX, part challenging of X% of environment. increasing excellence operational on optimization, of same to compressed pipeline EBITDA regional higher production focus that quarters, feedstock us to six margin biodiesel this our XX extremely flexibility all of generate BTC realized fleet capacity time, sales, in the effort, in eight the incremental million enabled At in last diverse earlier, noted I we the we positive the margin fuel

turn to the Let's regulatory environment. now

support for our grateful are with and extension. BTC industry We the immensely reinstatement of strong Congress's

to the growing our to will Company expanded from of As we the and XXXX financial receive nearly will with XXXX noted of help million uncertainty us engine low-carbon net sustainability, products. we has and will receive reinstatement BTC. retroactive and The fuel BTC $XXX been earlier, for certainty. both now from benefit volumes position unprecedented which removed -- were cash sustainable growth deliver replaced will the

important the standards. on is fuel regulatory the renewable Another front area

are related to We Appeals with very refinery small of pleased the by the favorable Court Circuit XXth exemptions. ruling

We the that will are total amount. a hopeful minimis de return this volume SREs to of

We details finalized. will RFS continue program the in to monitor are as developments being

requirements that XX% California XXXX the it's At reduction is carbon reduction increase. to in LCFS X.XX% on the is slide in increasing state XX. escalate. shown continue XXXX, This as from to The to X.X% important a note level,

focus forward take while moment discuss profitability conditions resulting shareholders. capital value from generation for With to our better sheet, investing visibility these more returning a be to strong sustaining planned and balance REG's let's market allocation. our lines, certain Along growth on attractive and our to cash will

provide will a moment. in Chad details

For I'd like and a we're approach. strategic emphasize taking to now, disciplined that

as strong a invest on consistent safe basis will safety ongoing reliability base First, operations. to a we continue and point, in to and ensure

continuous we projects. high-return, a key rapid of select a as Second, payback group allocate improvement element of approach, our will to capital

returns, ROIC invest significant than including and considerations safety and target we buyback on reliability greater investments, our fit. growth is shareholder IRR, Third, strategic our basing including for and decisions Overall, will XX%. strong

rate hurdle XX% established for an internal of have We projects growth IRR.

growth. to turn now Let's

as XX% shown growth As our specific biodiesel. slide by of CAGR moving evidenced gallons expanding in focus, our XX, company. to diesel chain value value XXXX, areas REG strategy in participation sold and And downstream for a since the forward full capture the outlines two is in renewable

diesel, facility. design million as a per renewable you developing for have been year XXX gallon For know, we the

in While use developed have cancellation we renewable other deployed other in our by technology for we we us the proprietary be the utilizes of BioSynfining design excellent State, were works. the have process Washington The and diesel locations. with project can projects readily disappointed at engineering

considering. that of currently are alternative expansion the sites. highly exciting existing our evaluating process active operations of we're And only Geismar the of is options one in We

to which vehicles An weather. other seamless BXXX, technology as are value described downstream the to our have encouraged An able part we several operate on a city's that Turning is in delivery downstream we’re our that is downstream Council diesel be to goes to fuel exploring blending encouraging BXXX earlier, our are City are allows into of The of is reliably successfully that profile pleased technology, as making BXXX various share with example chain. strategy carbon business the any initial effort. we in These participation, important expand proud very actively we progress snow accelerate to us to We're effort our the our entries downstream options very this plows and on reduce way. to operating City move initiative. using deploying in beyond the Ames, strategy,

continue areas on low-carbon our to our of renewable participation of growth downstream diesel accelerate expect both XXXX. to focus, We and accelerating available. for is of society's in having expansion Fueling of strategy options expectations

direct a at we are driven state socially policies the result, and municipal increased seeing levels. As

As carbon REG fuels fuels are including world and these about made to shown on see policies. with The our sustainability. some you of slide waste. XX, by also reducing hears cares Much intensely feedstocks world And of emissions, the carbon XX%. can reduce emissions up about renewable

Our the are for away transition components dependence renewable fossil from upon products key fuels.

investors. is are passenger produced can the of emissions million you becoming tons, miles vehicle, or in BlackRock risk XX, latest recent billion climate by X.X slide by which petroleum metric on well-publicized equivalent compared Street examples. The X.X oil. XXXX, diesel barrels pieces to million are State Sustainability fuel As petroleum for reduced about X.X average REG an extremely from our important of and and driven carbon see the

efforts Furthermore, as see well. every we up individual their companies day, step

Delta Lines neutral. instance, For and made carbon Air to BP recently become commitments

to We positioned and part we of continue expect integral this be momentum to ideally are build an it. to

we deserve because are price petroleum of they will a premium and diesel. the of attributes fact, command green fuels, our relative to that In convinced

gain associated having Our fuels large investments our without customers alternative BTUs. a to beyond carbon from the in just deliver carbon And low diesel value infrastructure. make from can reduction

of pursuit carbon we reduction summary, continuing shareholder and as the a on create leader. to margins, In initiatives, value value leveraging expanding growth our innate intent are through

Now, call the fourth Chad to I'll our quarter financial performance for year. Chad? to and turn over review the the

everyone. afternoon, good and CJ, you, Thank

excited $XXX of very our report off X results million. EBITDA years XXXX row a adjusted We're cap which with over to in

next great the a with beyond incentives three performance, and certainty strong sheet, the the place underlying profitability enabling in in are BTC, with the improving for balance We years. position

the years XXXX As really CJ last was mentioned, challenging. two especially and

a that we scenarios, foundation We industry. for expertise are and the in variety of our of our out model, and margin proud under be proven resilience of business a regulatory believe and which low-carbon us scale provide leader a is fuel the to

looking XX cover the and quarter results me year. offer perspective slide on full at then we'll fourth Let first

our while of the at for We were Nordics. down. increased sold guidance. Gallons demand midpoint exports strong demand was was Renewable biodiesel of diesel diesel the renewable

quarter due the profitability in North biodiesel scheduled, XXXX fourth XXXX. were In complement we the Geismar did our third-party produced of hurdles. to volume renewable down third-party addition, gallons America. we sales the and almost sold, our gallons a when biodiesel of grow doubled mainly fourth which to North diesel passed down done. meet as more tradings as America quarter are X.X have X always not continuing We from of sold renewable we we more gallons we Biodiesel were diesel compared of to in Gallons the of in million reduced also million on as to third-party sales

production X% sold efforts pricing continue through. Even shift organic hand, diesel the due come renewable the up to was better as slightly, we renewable at growth with gallons diesel. On other Geismar mix our to of realized year-over-year down to

as flat, attractive EBITDA as was margins, Adjusted reflected for and within million into fuel by fourth for decrease These North was quarter, in increase on in in American Revenue, million biodiesel was low the our American EBITDA driven $XX.X million million range. the sales essentially performance lower challenges improvements in mostly Nordics. which at the diesel Coast management the slide and gallon in guidance shown renewable gallons carbon by total $XX diesel $XX risk to adjusted a sold most North is offset including spreads. Adjusted and impacts of an BTC the which decrease XX. markets, an biodiesel XX.X increase West were renewable underlying

quarter on half results are a second of fourth results Solid consider XXXX. XX. what and off be XX Full capped year good we slide to

impacted X%, due average For Comparable lower partially was REG-produced offset increases we price, selling increase revenue to diesel the by year, by sold in increased in sold. renewable flat and diesel. mostly renewable gallons third-party the by a gallons

was decrease and EBITDA in million resulted management in a million, by $XX down adjusted lower $XXX XXXX. record from is million spreads. year adjusted in $XXX decrease decrease driven $XXX American in North Full risk mostly EBITDA which from of generated The biodiesel the margins, a million

negative only approximately is four included from included quarters California previously LCFS change, not reflective for As company XXXX, impact administrative noted, compared is was due $XX which performance credits of to to an income three which XXXX a million, quarters. This and onetime occurrence.

in were All increase attractive diesel improvements carbon markets. including biodiesel in the to renewable and offset of these by into gallons challenges underlying performance of fuel renewable low diesel gallons, increase sales total million most XX an an and

power. generating smoothes shows Slide our which EBITDA, XX earnings better our as seasonality XX-month flow cash trailing and reflects capability and adjusted

Slide XX shows trailing was which XX-month XX% for ROIC, over XXXX.

recognized we a XXXX, For small benefit. tax

continue to rate forward, Going foreseeable less expect our X% to tax be future. than the for we

less X%. low interest than rate to average and was be blended Our continues

XX. the to we receivables partial gross slide from reflect is us, the BTC the the accounts the has Accounts which line impact in amount for BTC. major a with Turning the on of offset balance share Naturally, to others. payable amounts sheet

As net almost for to exactly XXXX billion, with CJ million the benefit is mentioned, $XXX and $X.X $XXX million XXXX. us for

first We expect during the the to of all of collect half XXXX. funds

repurchases and cash were cash marketable to in over or notes due well plans. other securities cash operation, line repayment of changes year. marketable as for lower in convertible The the decrease cash debt, items, as securities the the notable of used repayment were at our is only Looking which invested -- and

same credit of on balance the the increased the reason. Additionally, for line

the with cash the for in Our XXXX for matured June, and shares premium. which we bonds settled principal convertible

pounds of repurchased and December, year. million in in first of the XXXX also $XX.X We principal our quarter in this

details recent convertible gives repurchases. on XX our bound Slide

Danville and approximately total. in Additionally, which we Harbor was January of paid off million this debt our and year, plans $XX Grays in

the with from we We along operations. will to allocation continue cash proceeds generated approach deploy as capital our with disciplined from cash BTC

CapEx projects high-return This of reliability years; million for $XX approved Our than two budget is million tend and less our in recoup fleet; payback approximately million XXXX Board $XX our rapid $XX for integrity to and existing million. for for projects. investment asset we that growth includes $XX safety, total

Additional approval. Board separate major capital require would a

returns. threshold Board before, the and projects overall, And safety is As million prior additional $XX remaining of continue $XXX approved million our inclusive we a from on mentioned is reliability XX%, still an internal CJ In the have our growth XX%. And ROIC focus authorization. target for than repurchase IRR. investments, course, authorization. We shareholder of to greater February, will

convertible $XXX $XX.X outstanding. authorized. have have now still recent the principal repurchases, of After total million we So, we in bond million a

Now, the call turn outlook. CJ discuss back to the I'll to CJ?

Thanks, Chad.

specific want set XXXX. Before I the I numbers, context to give for

position We are well REG the optimistic capitalized. ahead. an excellent year is in about and

of operating years place a we profitably. has the coronavirus Having and our impact BTC of far significant And none the adjustment of a be continue us We in reinstatement, said in are next at certainty period minimum. to that, industry level potentially a higher we following that present. from for the can the three at have predict BTC with

optimization. are respond closely We watching margins be to will with and appropriate prepared

we cannot up our Our as year performance general first emergent is strong quarter sentiment a [Technical as environment count Difficulty] full being on to is although be. shaping

oil we're been that German It our is or for from impacted. include impact and monitoring has China on our as COVID-XX chain Supply important cooking the we the closely to note this operations coronavirus business. assess used

our apply plants planning, XX part next for our business feedstock continuity we days. the As of have Germen secured for

We work manage business potentially a plans to our to continuality are continuing situation. extended

shown on as get slide context, in down that numbers XX. to With let's

million sold range For we're targeting the of gallons to full million. XXX the XXX in year,

demand million through and XXX excess produce million will fulfill gallons. to XXX third-party to expect the gallons We

XXX the of to sold For XXX range expect we gallons XQ, million. million in

forecasted primarily first Our northeast a winter for XXXX are quarter sold as result due from oil there. down in heating sold XXXX to historically lower quarter gallons of the the warm a of volume first of

We for expect million million adjusted EBITDA quarter. range the in first of $XX to $XX the

end through the actual quarter, spot the could performance end LCFS and for to account of values, fulfilled based credit XXth market prices, volatility estimate the changes the the of to expected of be margins, This through quarter Any the results. margins takes actual ULSD contracts or February first existing on is level RINs affect and through quarter. forward into or existing

$XX our estimate our gains based have quarter the XXth, of reflects for in of ULSD guidance We the million risk curve. which on management included as February forward

Beyond market the to the above unknown continue to underlying Nevertheless, and impact the optimization. predict and margin we adjustments ahead first noted the on the quarter, precise. and becomes coronavirus, our less about given focus remain optimistic from performance will year ability

Now, operator for our call turn I'd Rob? to over like the the segment to question-and-answer the of call.

ROTH Thank Partners. first you. Our Craig Capital comes with Instructions] [Operator Irwin from question

Good evening.

booking credits, First, congratulations blenders strong few the lot million a the years. last it’s on of at quarter the been over and from XXX work

Thanks, Craig.

I the from this seeing discuss the specifically comparable to margins to the to Geismar. year? this is you Geismar, Are $X ask for renewable we’re Geismar? Can or in at they other it at full what million first were the days? referring Do operating you expect the question about fourth you wanted stable remain X% quarter, And to So, year? fairly increase facilities maybe these diesel was

Yes.

Okay.

So, three questions, Craig.

we're -- that with others of the specifics. you value we from way and disclose as we know, margin at and you specifically, Geismar. see we that don't, structured, can create competitive produce that tell are But, we we because what on we So, the

for what’s that a through volume and ratable what's strong the whole from year. million $XX increase that are a was coming good operation, year-on-year, We number and is the

the up and full X was year. X% million That early number Yes. was

Is year. year? XX versus to That is there million a there $XX progress. million potential XX go So, great maybe to last this

to our and track up there working that. team the small keep be do continues finding is keep to We’ll record that things -- to down add

into to what think end don't a the numbers, XXX at I operating gallon California of to because peak sort of just sending a people any Renewable and $X, talk gallon. then, with less somewhere between diesel, right, today facility matters that's of day. XXX there's than the So,

range. size Geismar the I'd assumption? expect that Given midpoint facilities other a of relative at fair out of the versus there, to you Is that be

We can't not specific, But, really you're report off. far anything Craig.

your So, is say I you model I think would doing well. --

of of the feedstock REGI several is So, where side then, progress has money is side. a other over give made this to the lot front house end years, biodiesel tremendous the invested the capability last in differentiated you flexibility. And

I slides hard, Has conversation. Our or at Wheeler, your profitability Mr. and smacked to damage got some your circuit. who EPA, good in done in friends, but pretty down XX the guess

the basis mentioned in gallon quarter, there. adjusted $XX out You fourth in sort like EBITDA the $X.XX an step this seeing something million headwinds for range down a year-over-year of of plus on the from

to If of you impact? resolution we something in the EPA, proper look the were that a the fair that gallons reallocation way macro gallons? those of up of Is at misdeeds or expect to the would normalize, maybe a of range see $X.XX profitability the to

a little start really still it Craig, because think, conversation be the might and modeling in putting bit early remains I live. to

So,, don't attempt what And to dampen course, what the of we terms XXth but also the positive, Circuit in to which for going to of know that's is refining. the ruling, RVO. effects ongoing was try we're hearing be Court an hearing, we're

So, we're to to call we and watch it could it. that's optimistic it really is we which feeling actually said, happen. what why we before But, about what's said have closely going we say

what that in year our first see depressed win and that did half response the Yes. is in actually you the tight Craig, to margins I'll uncertainty was to throughout year, add that, being the results that created. particularly in values of

very favorable expect spreads. is you'd pick forward. supportive cause lot as so, the on And and had improve up, from yes, that that And pressure RINs, to current would a volumes of going ruling margins

helpful. That's Thank very you.

guess, really So, in Phillips interested all I growth for plans green diesel. people in XX… your are

We lost you, Craig.

How about now?

Better.

might go venture the the It wants is necessarily with bad not unfortunate of growth So, you maybe a over partner, green diesel the closer in partner. of what describe ideal where opportunity an renewable the on for one joint as thing. offers diesel next could see And Phillips REGI? and partner? what phase call at us you couple an is to look to to dissolution would possible it go maybe years. is to that the you an for out look And growth ideal everybody you it a there better alone get But, you XX of next can

questions, pivot Craig, of we are bookings. And the ones we balanced possibility Great table. as to ourselves ought framework our and too at and capabilities we through is bring the order a what worked look partnerships and like the have to in for. one going create and But of alone what to definitely we're oftentimes look important valuable, aiming

definitely bring but So in alignment to table. there, we possibly so partnership, we we some looking strategies, that different a be likeminded the someone with have each could things for

we bring and if themselves, that partnership. something each other So, can a that really strong nice couldn't makes the do by

sell direct self-blending, just of expect for your you're prior build? million, I the to outlook to on there own maybe those million Growth pretty terminals if increase. terminals, the can see is describe And to XXXX blending gallons, biodiesel at a year the this XXX this capacity to diesel utilization subject year, to terminals for terminals growth you it's in Great. to you Can up gallons to you million maybe $XX fair from out XX touch existing your next customers. The with think is wanted or nice frame number better And a serving $XX might your growth spare what be? How is this you point? across past gallons? many us get

Yes.

we're we existing important build with, moving different don't start contract of capacity, with available regions. so we that terminals, into So, actually really to capable

So, it's a for us. big not capital thing

to our that more I a of of expand sure to There's blending. want get But really strategy. question, in broad. exposure it's your those it all we variety is clear. team wide that’s terminals make closer in definitely things of doing, one our So, answer order capable where things, And variety different to to to of happen can Expanding customers the that is things. much is about downstream

customers very way. that is further these an another important some way. we've of cardlock to Moving downstream that The way; expanding distribution expanding direct described have is important is important an sale into we're

strategy that very we multipronged So, have seeing this you're you're we're a that's to increase why seeing this. able year-on-year. rapid wide do And percentage

Great. I And then, may. last question, if

blended volumes end was the of something volumes increasing that of mention frame of potential year. the biodiesel the us California growth at the you change in the by is out of blending at as that XXXX tail accommodated approximate regulatory the did what and for end the Can you're You XXXX? course maybe over

Yes.

large that X% Chad. think to limitation. the kind limit, I really XX% go growing. was that a California deck, -- could And it Craig, limit themselves potential a it's from in speaking, and technical a just some comfortable of year you've in in investor seen got is share our The practically growth we they of slides last until California

in So, quadrupled. theory, your limit

we said fuel the to of As gallons earlier, a our third But, individual incentivize state we give approaching specific enjoy. that of premium markets, West don't Coast out because CJ low-carbon gallons. go could

it's year-over-year significantly that so, think for I and large growing volume. us. that grew there's rattled CJ very earlier And some statistics And a off

so, it And is market. certainly an attractive

what seeing talked pays we've one Coast, You're into in the getting Nordics, about the largely past, whichever and the West all and premium. diesel best Canada, is California the incentivized renewable

mix, And dynamic of sales we've top so, that's the been of. staying on really the

Chad. point a clarification, of Just

or including of third you gallons? referring I think, gross biodiesel Are third a your the gallons. Geismar gallons said to of a you

and gallons That would diesel be renewable total. in biodiesel

comes question next from Our Amit Dayal with Wainwright. H.C.

bit could the visibility for BTC XXXX now. you now Does X of pretty this in Just feel? If view this factors billing competitive add this post environment, with we to competition these should the this market invite how you and of on respect years further BTC some the with good? to a restated more sort little next

question insightful. a is The certainty and of Great a sword. bit double edged

can For But, the much additional invite the that in mode -- in than part, caught it's when it we it were most market. you're middle was the gallons. of better incremental the right

the lower in it we more to percentage expect terms also a part, sharing. it For most makes competitive And little of bit BTC be margin. those

So, what market shaking we're a of that's we as need is that to be seeing the itself little aware bit and of out.

And the BTC was RIN, with after if that you you there announced, pretty can look at see big a was the plus HOBO showed market adjustment. we slide

And coming going learning trying in season, summer next some winter everyone's to that And X out out. place. figure the I I as some would get some to are a will of period months. more be still say out, things it's help and going probably a think lining that over getting volumes of mode are us and the We're is of ratable of into sort in to the in,

to this Amit, color is see I'll Chad. add there. CJ’s

of bit line, up It In you XXX production was shut the context the it you had credit each extended a north the was were of tallied in prices there lapsed them. and year, refinery saw one announcements SRE, came down weak, of half If through exemptions, as tax was RIN uncertainty small of of for marketplace a the off gallons. capacity what in you second little going number happening two put on XXXX, if the where biodiesel years. and long million

post line that that's context BTC off come line. make So, will of came on because back couldn't through they But the some environment. the it challenging of up world, production that

isn't back up. shut plant, down ramp Our we -- you going to weren't that going and told Boston that that new to we was

We the project or down that Flint also the closed good. and for shuttered -- said Beatrice, in Hills others,

back renewable biodiesel projects, on time announced to million other another before it'll not gallons that while we be see long won't lead in the But, of out So are There's than marketplace a a diesel available greenfield that be greenfield biodiesel. but line. that, There lot don't they'll there. was be XX coming compete.

helpful, from you within what concrete cetera timeline and on growth we might more to a path those a Is color so And downstream just guys. the the That's guess really on more for efforts. much Thank clarity you little -- both maybe you bit a there front that. expansion then, can capacity bit I your fronts? get which growth initiatives, and on little choose pick et perspective on a projects what

what it one can rather predict is are expect can Amit XXXX, than one be later deals, never thing and our would and you happen comes timing. sooner to easily I it say And would working plan. definitely to than I we can exact actively. assiduously when But, more commercial actually Well, in say, on

Understood. And respect the Thank that. for with buybacks. to you

facility in You've on the in you -- Have million place. go into front? still raise does on mean, this in your already stock any effect Could already color -- levels efforts added some this to effect attractive. or that Is at $XXX point looks give I the that pretty the was future? these

that’s Amit. $XXX Board our as million That's to our authority and Yes, authorized execute on.

place in it's So, today.

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from comes question next with Our Patrick Flam Energy. Simmons

million XXX of why a as that over little than XXX just of about question. gallons million a little drop flood looking on million the much the basically, Hi, bit sold in team. was XXXX, guidance my could I'm as congrats XXXX, or we lower My the BTC. bit hoping here as of to at And first forward taking I to a for guidance. kind about cash figure. Thanks gallon for that give think breakdown your number XXX from expecting? And it's were should your you're that get of range. you expected But, you is, be us I is question to quite in

So, Patrick, it’s the at first stab I'll it. Chad, take

is say, the in understand less like oil and lot going And Northeast So because first bio warmest going a there's mind, of history. that heating winter would heat of through keep all, in is I there. third in I the what recorded

profit So, tend highest anyway. our gallons, which we've margin don't lower got be to gallons,

going bit with oil into heating there's Northeast. that on the So, of a

outside also run New small a mechanical improved of rates, mix. by our Boston impact have our at being running You for and better offset availability. higher rates run plants That's and

being BTC. gallons at were BTC. careful of you We had The tax period to the Congress. upside would of to loss upside at the had We not on a run to to exposure point just dependent plants to Congress long timing with didn't last I want plenty loss a the We for and on -- of be other a very thing of at if quarter look XXXX, time. credit the is, produce lapsed

operational total fleet. But every the mechanical So, X gallons. a improving biggest existing influenced our things single that say of and been year X better otherwise, availability, those are would performance the better I or there's has underlying on trend

Underlying metrics. Patrick, focus is you, you volume go Chad have the that. gallons. we add steer, of more to, this Chad. an in optimization is sometimes change the in is in to is may which to gallons, volume the primary result CJ. actually on focusing And referring strategy marginal Thank course a profitable past, as but just to in which some really my about comments of some underneath. mix is of that this And And look specifically on important of our been need letting

REG up gallons definitely going change. the within are that So,

the in difference is the great a of in the markets. are we with of you're heating also biodiesel actually seeing petroleum premium gallons oil. one are these up, biodiesel gallons. going gallons the blending that were to total with especially route Some year-on-year to bulk the session to those get And that And

profitability And volume at so, just able belies you mix. of to ultimate being look the it if see without

a the know that I BXX the year. in decent will said level effect. you taking California I year, allow beginning of question last pretty you know on sales uplift follow-up rule At the saw is tanks over of storage that. of As underground guys and this

and started have add of additional you quite market, that that yet? You any into expect volumes that potential see will to this

part in BXX great of instead sell really change because that a enthusiastic and of it's us, this BX, earliest we for are Definitely, year. the seeing can already we uptake some

Okay. That’s awesome.

that to at question currently is program. about close that imagine Sound looking you at I pretty other believe are process an is potentially recently thinking I uptaking was the I guys one in LCFS type So, would Puget situation.

So, you that's be That any if all playing of helpful. there's can give into out? or updates how would very insight us

a for been very believe I lively state lively definitely a whole it's as now standard a debate. at the a well. the while. continues to low-carbon that It's Actually, but fuel debate look debate continues resolution, without

of little color And a just too. I’ll that bit to

line portion from it's keeps large anyway. counties, going in for the finish Sound. state I act. the They've and their of is really I the the all to the over refined state try populated where up fuel around hands is XX% fuel the air do X Puget the We're to the saying of the think to to close it right goes X, the basically population think X, thrown we're Sound, last going you're wait to Puget of the that because years frustration getting And through hearing there. the not

And they so, and more a to that's it. why come believe have you see resolution to -- they authority they do they can believe streamlined the

helpful. very that's Okay,

assume in last partially one through I XXXX, I is, And on spending unlocked deferred question for have expansion So, was BTC. with capital guys that the know currently underway is guys the me completed. project. Seneca recently it you that that you

hoping give that So, I future And an to plans into could of update have then, your was on cardlock doing been how the operation potentially as you us that. any stations and well? expand sort

but is well volume, just and making report, plant. We're margin the underway. And to this XX%. definitely expanding to that the it's be good Yes. of existing happy Seneca expanding about back and IRR for its not progress. clear, It's plant, above was is project project performance improving

get to track. back that happy we're on So,

intent do well, that In we we terms want there's is different need do been approach, of make quickly. that been the work experience things excellent learning, projects very was And what to optimize very to we're too. several which an cardlock, subsequent to because that’s what understand the whole

complete So, great learn we're results but we're with and continuing projects, to getting the not improve. to

to my Thank hosting and the this excellent. all in you for Vegas at Okay, our you conference Las We're answering looking questions. later month. team forward

Thanks.

too. looking We’re forward

Financial. comes Hamed from next Instructions] question Our [Operator Khorsand with BWS

Hi.

see, QX want around of thinking corona, as that feedstock could goes? commentary as the then just what forward, sourcing you and you're kind especially just far off, be your providing on guidance the are given first to go you So, impact in there as

China. the imported So, so cooking Hamed oil is use seeing biggest from thing far that's we're

through. So, more than as impacts still I that us, mentioned for our come we're To anywhere in forward else. planning, directly getting my European comments, operation

in completely you supply that of news is things hear, the slowing slowing China. as it it chain, all with a So, in about stopped terms down, down out multi-industries hasn't exports of but in keeping

weeks, of the that's is and our business forward, most at on least a everything of A more continuity is an present. So shuts a probably going can't see literally actually project while first the our which and broad. that. quarantine. is thing down in effect, lot going at plan Everything supply you don't what's happen focusing everyone's if is But we bit poignant, really to couple else why for domestic,

to like to fact, is business something and happen, who to go having trained out. need do in that having about continuity we plans, might be for if ready what people So, anyone think to make were feedstock enough up enough

in we're manage order So an all working on unknown really potential things of point. what's those through to this at

fuel a on based forwarded is worldwide whether prices, not and worldwide sulfur are just fuel depending derivative a and Hamed, ultra-low fuel of Chad. there's impact, bit that's diesel. and on comment, -- or indexed this I impacting demand to going was all consumption our sales

things effect on that. risk book So, the derivative former a and like have that would and management

are just we watching So, closely.

just competitors are strategizing, line your and talking about on How given is than to that last back BTC happened the come Okay. expecting you back a And you’re product more and or lot then, environment. year? produce current

It's a whole strategy, Hamed.

very we both So, It's from low feedstock channels, and about efficient, are and perspective. cost a it's great so operator. customers supply being that a about having great

up So we that value premium down and the all chain, the have way routes.

a one competitors? by in there that Is cornered two get could risk the your feedstock market or

a stab at take that Hamed. I'll Yes.

of hundreds suppliers. have feedstock We

that expanding the you’ve in world marketplace and to even into we and untapped sourcing isn't is going to because buying And currently feedstock world feedstock have do and out a So, are sources there -- the around biodiesel about and diverse diesel. ensure wide, goal the see real us our talked we're out far renewable around that internationally supply.

and feedstock a sourcing world. North American base, So, also European and around we're diverse the we've got

lot sheet? of program that's a There's the there's you going coming So, your last the is be question given low, on cash on are cash why in of so balance versa, just this right? in here, why board, delta amount or so sheet. your And Why low? cash balance to is vice is, much carrying stock CapEx buyback

plan the are on that The projects on approved. capital and is capital specific actually based books

capability will to would But into to going separately do major it. major capital said by I to as my and what approved that So, comments, in we a is specific when the certainly be to capital Board it. knowing need ready waiting that we what's meant have have intend large establishing until the opposed I without additional the go, of doing we're budget investment

for We like to have Warner I'd reached the At time, session. end of over call turn the comments. CJ back question-and-answer closing the to this

Rob. Thanks,

to XXX highlight firms up, wrap sustainable included clean value company, great provide for a Corporate making to planet. products recently on to as that services is of and of world’s I'd revenue large. example created mission Knights list. Carbon a This REG Clean list to that our list society and in society. REG build was We're creating from shareholders the value like our sustainable according is the size that executing So, prominent solutions brings This be of ESG proud a the at and to to for products

events going close, is REG. upcoming mention Todd? investor Todd for we And to now, before

CJ. upcoming conferences. Thanks, our shows XX Slide

We Ritz is Attendance invitation-only. attending on XXth Conference Annual at in March will Orange the XXnd Carlton the ROTH Laguna conference Niguel at in be County. this

XXth if representative, or us you schedule sales XXth. with ROTH your contact or please March one-on-one to want meetings on So, attend

Conference Piper scheduled On at March biodiesel the present XXth, Las on Sandler XXth panel Energy the CJ to Annual in is Vegas.

host will We Piper to meeting. of meetings investor conference Attendance XXth March secure is Wednesday, contact XX. March your invitation-only this also a sales should and Piper Sandler. for Investors representative Sandler throughout clients by at Tuesday,

again. all you the you Thank This now and disconnect. may call concludes

conference. today's concludes This

time. participation. your at thank for we disconnect may And you your lines You this