Group 1: RVO Settings and Overall Trends - The 2026 - 2027 RFS final rule unifies the RVO measurement of BBD from "physical gallons" to "RINs", aligning with other fuel categories and simplifying compliance [1][2] - The total RVO in 2026 - 2027 reaches 26.81 and 27.02 billion RIN respectively, with an increase of over 20% compared to 2025, mainly driven by biomass - based diesel and advanced biofuels [2][3] - Cellulose biofuel RVO shows steady growth, reaching 1.36 and 1.43 billion RIN in 2026 - 2027 from 1.21 billion RIN in 2025, but faces terminal demand constraints [3] - The basic RVO of corn ethanol remains stable at 15 billion gallons, reducing the impact on the grain market [3] - The 70% re - distribution of SRE quotas from 2023 - 2025 to 2026 - 2027 is finalized, filling the compliance gap and stabilizing the RIN market [4][14] Group 2: Biomass - Based Diesel Analysis - In 2026, 9.07 billion RIN of biomass - based diesel is equivalent to 5.5 billion gallons, and in 2027, 9.2 billion RIN is equivalent to 6.1 billion gallons, meeting market expectations [2][5][6] - The production of biodiesel and renewable diesel is expected to be 40.7 billion gallons in 2025, 49.9 billion gallons in 2026, and 58.9 billion gallons in 2027. EIA may adjust the balance sheet [6] - The biomass - based diesel volume will increase by 35.1% in 2026 compared to 2025 and 10.9% in 2027 compared to 2026 [6] - North American raw materials (US soybean oil, Canadian canola oil, Mexican UCO) will benefit from the 45Z tax credit policy, while non - North American raw materials will be excluded from the US market [7] - The 45Z tax credit creates price differences between different raw materials. The EPA expects the supply of US soybean oil to meet the growing demand through various means, and the development of US biodiesel will drive global vegetable oil demand [8][9] - The EPA estimates that the price of US soybean oil will be 66 - 68 cents/lb in 2026 - 2027, with a risk of rising to 86 - 90 cents/lb in a high - price scenario [9] Group 3: Policy Adjustments - The EPA delays the effective date of the new equivalent values for renewable diesel, renewable jet fuel, and renewable naphtha to January 1, 2027 [10][11] - The Import RIN Reduction (IRR) policy is postponed to 2028 and later to avoid market supply shocks and rising refined oil prices, which is expected to benefit trade and raw material demand in the US, Canada, and Mexico [12] - Renewable electricity (eRINs) is removed from the list of eligible renewable fuels in the RFS program to strengthen the core position of liquid biofuels [13] - RIN generation rules are tightened, requiring a strict link between RIN generation and transportation use and adding importer joint - liability clauses [15]

Financial Data and Key Metrics Changes - Fiscal 2025 was marked by record ethanol sales volume of 290 million gallons, a slight increase from 289.7 million gallons in fiscal 2024, with fourth quarter volumes at 70.1 million gallons compared to 74.6 million gallons in Q4 2024 [11] - Average selling price for consolidated ethanol volumes was approximately $1.74 per gallon for the full fiscal year 2025 and $1.72 for the fourth quarter [11] - Gross profit for fiscal year 2025 was $93.7 million, up from approximately $91.5 million in fiscal year 2024, with Q4 gross profit at $28.9 million compared to $17.6 million in Q4 2024 [13][14] - Net income attributable to REX shareholders for the year was $83 million, compared to $58.2 million in fiscal year 2024, with Q4 net income at $43.7 million compared to $11.1 million in Q4 2024 [16] Business Line Data and Key Metrics Changes - Dried distillers grains sales volumes totaled 612,000 tons in fiscal 2025, a 3% decrease from 632,000 tons in fiscal 2024, with Q4 volumes at approximately 151,000 tons, a 9% decrease from Q4 2024 [12] - Modified distillers grains sales volumes increased to 81,900 tons in fiscal 2025 from approximately 70,000 tons in fiscal 2024, with Q4 volumes at approximately 19,700 tons, a 1% increase over Q4 2024 [12] - Corn oil sales volumes increased to approximately 97 million pounds in fiscal 2025 from 88.1 million pounds in fiscal 2024, with Q4 volumes at approximately 25.2 million pounds, a 7% increase over Q4 2024 [13] Market Data and Key Metrics Changes - Ethanol export demand remained strong throughout 2025, with U.S. exports reaching record levels, and this strength is expected to continue into 2026 [20] - Corn supplies are favorable, supporting manageable input costs and expected healthy crush margins [21] Company Strategy and Development Direction - The company is focused on expanding capacity at the One Earth Energy facility to 200 million gallons per year, with completion expected in fiscal 2026 [8] - The implementation of the 45Z tax credit is anticipated to positively impact results going forward, with the company positioned to capitalize on this program [5][9] - The company is committed to sustainability through its carbon capture and sequestration initiative, which is expected to enhance its competitive position and financial benefits [5][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to build on momentum from fiscal 2025, citing expanded capacity, tax credit eligibility, and a strong financial foundation as key growth drivers [6][19] - The company has delivered 22 consecutive quarters of profitability, indicating operational excellence and market expertise [19] - Management remains optimistic about the favorable policy environment and the potential for increased ethanol demand through developments related to year-round E15 blending [20][21] Other Important Information - The company ended fiscal 2025 with total cash equivalents and short-term investments of $375.8 million, compared to $359.1 million at the end of fiscal 2024, and concluded the year without any bank debt [17][18] Q&A Session Summary Question: Regarding the 45Z tax credits, is the $28 million for Q4 or a catch-up for previous periods? - The $28 million represents the full fiscal year of 2025, and the company remains optimistic about claiming these credits in future years [24][25] Question: How will the carbon capture project impact the CI score? - The carbon capture project is expected to significantly improve the CI score, but specific details have not been disclosed [27][29] Question: What is the status of the Class VI injection permit? - The permitting process is in the final stage of technical review, with regular meetings ongoing with the EPA [32] Question: How are tariffs impacting operations for ethanol and corn oil? - There has been no negative impact from tariffs on ethanol exports, and high oil prices are expected to benefit the ethanol business [34][37] Question: What is the outlook for nationwide E15? - While nationwide E15 would be beneficial, management does not expect it to happen due to the influence of oil companies, but anticipates more independent retailers adopting E15 [51]

Financial Data and Key Metrics Changes - Earnings for Q4 2025 were $21 million, a $63 million improvement compared to Q4 2024. For the full year 2025, earnings were $12 million, a $72 million improvement [7][15] - Adjusted EBITDA for Q4 2025 was $28 million, a $36 million positive swing from last year. For 2025, adjusted EBITDA grew to $45 million, a $53 million improvement compared to 2024 [7][16] - Net sales for Q4 2025 were $232 million, $4 million lower than the prior year, reflecting a reduction in volume sold of 10.6 million gallons [10] Business Line Data and Key Metrics Changes - The Western production segment benefited from the Carbonic acquisition, contributing $1.4 million during Q4 2025 [12] - The average sales price per gallon increased to $2.10 from $1.88 per gallon, partially offsetting the reduction in volume sold [10] - Gross profit for Q4 2025 was $15.2 million, a significant increase of $16.6 million compared to Q4 2024's gross loss of $1.4 million [11] Market Data and Key Metrics Changes - The company expects to qualify approximately 90 million gallons of combined production on an annual basis for 45Z credits at its Columbia and Pekin dry mill facilities [8] - Renewable fuel export sales at premiums to domestic sales contributed $5 million on a higher volume and higher average sales price per gallon [11] Company Strategy and Development Direction - The company aims to focus on opportunities within its control to maximize earnings, including adjusting staffing and investing in plant efficiency [5][6] - Plans for 2026 include elevating capital expenditures to roughly $25 million while maintaining strong cost discipline and prioritizing high ROI projects [17][18] - The company is exploring large-scale CO2 utilization and sequestration opportunities at its Pekin campus [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering 2026 with a leaner cost structure and a higher mix of premium exports and carbon advantage volumes [19] - The first quarter is expected to be seasonally challenging due to extreme cold weather disrupting logistics and production [20] - Management believes the trajectory for E15 remains positive, supporting incremental ethanol demand over time [22] Other Important Information - The company recorded $7.5 million in 45Z credit earnings for the full year, contributing directly to the bottom line in Q4 2025 [14] - The company ended the year with a cash balance of $23 million and generated $10 million in cash flow from operations during Q4 2025 [16][17] Q&A Session Summary Question: What steps are being taken to increase 45Z tax credits? - Management is focused on lowering carbon intensity scores and increasing production capacity at the Pekin dry mill to capitalize on 45Z tax credits [26][27] Question: Are there expectations for revenue pickup in the Western asset in 2026? - Management intends to increase production capacity and overall utilization in the Western segment [30] Question: Can you quantify the ethanol exports locked in for the first half of 2026? - Management did not provide specific details but emphasized optimizing the value of products for export markets [39][40] Question: How has the company raised the floor for business performance? - Management highlighted improvements in operational efficiency, cost management, and diversification of revenue sources as key factors [46][48]

Financial Data and Key Metrics Changes - Earnings for Q4 2025 were $21 million, a $63 million improvement compared to Q4 2024. For the full year 2025, earnings were $12 million, a $72 million improvement [6][15] - Adjusted EBITDA for Q4 2025 was $28 million, a $36 million positive swing from last year. For 2025, adjusted EBITDA grew to $45 million, a $53 million improvement compared to 2024 [6][16] - Net sales were $232 million, $4 million lower than the prior year, reflecting a reduction in volume sold of 10.6 million gallons [9] Business Line Data and Key Metrics Changes - The Carbonic acquisition contributed positively to profitability in the Western segment for both Q4 and the full year 2025 [7] - Gross profit for Q4 2025 was $15.2 million, a significant increase of $16.6 million compared to Q4 2024's gross loss of $1.4 million [9][10] - The Western essential ingredients return improved to 48% in Q4 from 30% a year ago, contributing to an increase in consolidated return to 52% from 43% [11] Market Data and Key Metrics Changes - The company expects to qualify approximately 90 million gallons of combined production on an annual basis for 45Z credits at its Columbia and Pekin facilities [7] - Increased renewable fuel export sales at premiums to domestic sales contributed $5 million on higher volume and higher average sales price per gallon [10] Company Strategy and Development Direction - The company plans to elevate capital expenditures to roughly $25 million in 2026 while maintaining strong cost discipline and prioritizing high ROI projects [17][18] - The focus remains on operational excellence and disciplined capital allocation, with an emphasis on improving profitability and executing growth opportunities [19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering 2026 with a leaner cost structure and higher mix of premium exports and carbon advantage volumes [19] - The company views E15 as a meaningful long-term demand tailwind for the farming and ethanol industries, with positive regulatory momentum [23] Other Important Information - The company generated $10 million in cash flow from operations during Q4 2025 and ended the year with a cash balance of $23 million [16] - The company received a maximum insurance coverage payment of $10 million related to damage at its Pekin campus, with $1.5 million recorded as a reduction to cost of goods sold [12][13] Q&A Session Summary Question: What steps are being taken to increase 45Z tax credits? - Management is focused on lowering carbon intensity scores and optimizing sourcing to enhance eligibility for 45Z credits [27] Question: Are there expectations for revenue pickup in the Western asset in 2026? - Management intends to increase production capacity and overall utilization in the Western segment [32] Question: Can you quantify the ethanol exports locked in for the first half of 2026? - While specific details were not provided, management emphasized the importance of optimizing product value and increasing demand in export markets [42][44]

Financial Data and Key Metrics Changes - The net income per share for Q3 2025 was $0.71, an increase from $0.69 in Q3 2024, reflecting strong performance despite lower prices for ethanol and distillers grains [11] - Gross profit for Q3 2025 was $36.1 million, down from $39.7 million in Q3 2024, primarily due to lower prices [11] - Cash, cash equivalents, and short-term investments totaled approximately $335 million, maintaining a strong financial position with no bank debt [5][11] Business Line Data and Key Metrics Changes - Ethanol sales volumes reached 78.4 million gallons in Q3 2025, up from 75.5 million gallons in Q3 2024, while the average selling price decreased to $1.73 per gallon from $1.83 [10] - Dried distillers grains sales volumes were approximately 160,000 tons, with an average selling price of $139.93 per ton, down from 170,000 tons and $147.14 per ton in the prior year [10] - Corn oil sales volumes increased by approximately 17% to 27.4 million pounds, with an average selling price rising by approximately 36%, leading to a 60% increase in sales revenue for corn oil [10] Market Data and Key Metrics Changes - U.S. ethanol exports were approximately 10% ahead of the 2024 pace, with exports 14% higher than the first eight months of 2024 [13] - The USDA projects that corn production in South Dakota and Illinois for the 2025-2026 harvest season will be among the highest in recent years, favoring lower input prices [13] Company Strategy and Development Direction - The company is focused on solidifying its core business of ethanol production and expanding its One Earth Energy facility to 200 million gallons per year, expected to be completed in 2026 [4][5] - REX is actively engaged in evaluating potential benefits from the 45Z tax credits and is working on its carbon intensity score to qualify for these credits [5][12] - The company aims to leverage near-term opportunities provided by the 45Z tax credit program to enhance earnings as its ethanol production expansion and carbon sequestration facilities come online [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fourth quarter, expecting to generate a higher net profit than the previous year's fourth quarter [14] - The company anticipates continued growth and improved performance in 2026, supported by a strong balance sheet and expanding business opportunities [14] - Management highlighted the importance of operational excellence and strategic investments in driving superior results [5][12] Other Important Information - The company has invested approximately $155.8 million in carbon capture and ethanol expansion projects, remaining within a combined budget range of $220 million to $230 million for both initiatives [8][9] - REX has maintained profitability for 21 consecutive quarters, reflecting the team's discipline and operational excellence [12] Q&A Session Summary Question: Thoughts on key hurdles and timing for the 45Z tax credit program - Management is awaiting guidelines from the Treasury and is reviewing facts with experts to determine potential tax credits, with updates expected next quarter [17] Question: Impact of tariffs and crush spreads on the industry - Management noted that tariffs initially impacted exports but have led to increased ethanol exports to Europe and other countries, with expectations for continued growth in 2026 [19][20] Question: Status of the carbon sequestration project and permitting process - Management indicated that the Illinois Commerce Commission is working on pipeline requirements, and the moratorium will end on July 1, allowing applications to proceed [21][22] Question: Potential for partnerships in carbon capture - Management is focusing on the first well's operation before negotiating contracts for carbon sequestration with third parties [30]

Financial Data and Key Metrics Changes - The company reported net income of $20 million, or $0.59 per diluted share, and adjusted net income of $29 million, or $0.84 per diluted share for Q3 2025, compared to adjusted net income of $25 million, or $0.72 per diluted share in Q3 2024 [8] - Revenues increased slightly due to the addition of Skyland, despite lower overall commodity prices [8] - Adjusted EBITDA for Q3 was $78 million, down from $97 million in 2024 [9] Business Line Data and Key Metrics Changes - Agribusiness segment reported adjusted pre-tax income of $2 million, down from $19 million in Q3 2024, with adjusted EBITDA of $29 million compared to $45 million in 2024 [11][12] - Renewables segment generated adjusted pre-tax income of $46 million, up from $26 million in Q3 2024, with adjusted EBITDA of $67 million compared to $63 million last year [13][14] Market Data and Key Metrics Changes - The egg cycle remains in a trough due to abundant domestic supply and trade policy uncertainty, impacting export trade flows for some commodities [6] - Fertilizer business saw improved margins and volume in a typically quiet quarter, indicating potential for better results in the next planting season [12][44] Company Strategy and Development Direction - The company is focused on strategic growth in renewable fuels and agribusiness, with investments in facility expansions and improvements [4][5] - Plans include two significant long-term construction projects expected to be operational in 2026, including soybean meal export capacity and a mineral processing plant [5] - The company is evaluating additional capital investments and M&A opportunities due to current economic pressures [6][11] Management's Comments on Operating Environment and Future Outlook - Management expects a reduction in corn prices as harvest progresses and anticipates record production across the grain belt despite lower yield expectations [15][17] - Clarity on trade policy is expected to improve merchandising and sales opportunities, with a focus on integrating agribusiness segments and optimizing the portfolio [18] - The company aims to reach a run rate EPS of $4.30 by 2026, driven by improved agribusiness results and increased ethanol plant ownership [19] Other Important Information - The company generated cash flow from operations of $68 million in Q3 2025, down from $86 million in Q3 2024, with a cash balance of $82 million at the end of the quarter [9][10] - Capital spending for Q3 was $67 million, with expectations of approximately $200 million for the year, primarily for growth projects [10] Q&A Session Summary Question: Insights on 45Z tax credits and future expectations - Management expects a $10-$15 million EBITDA benefit from 45Z tax credits for Q4 2025, with further guidance on 2026 to be provided at the investor day [22][23] Question: Impact of trade policy clarity on agribusiness - Management indicated that clarity on trade policy could lead to immediate benefits, particularly in sorghum exports, but guidance on earnings normalization cannot be provided until purchases are confirmed [24][26] Question: Ethanol demand and margin outlook - Management noted that while board crush margins have decreased, the overall ethanol margins may not necessarily be down due to regional variations and reduced corn basis levels [30][33] Question: Future M&A opportunities - Management emphasized a disciplined approach to capital allocation and indicated that expected cash flows from tax credits may allow for larger M&A projects in the future [34][35] Question: Fertilizer business outlook - Management reported improved volumes and margins in the fertilizer business, with cautious optimism from farmers regarding input spending for the next marketing year [43][44]

Summary of Alto Ingredients Conference Call - October 21, 2025 Company Overview - **Company**: Alto Ingredients (NasdaqCM:ALTO) - **Industry**: Renewable fuels, ethanol production, and related products Key Points and Arguments Company Evolution and Strategy - Alto Ingredients began as a small ethanol brokering firm 25 years ago and evolved into a renewable fuel ethanol producer with multiple plants on the West Coast [5][6] - The company faced challenges due to increased corn costs, leading to the sale of two California facilities and idling the Burley, Idaho plant [6][8] - A shift towards high protein and corn oil expansion technology was initiated, but market conditions led to idling the facility [7][9] - The acquisition of a liquid CO2 processing facility has stabilized earnings and contributed positively to the portfolio [10][12] Diversification and Product Portfolio - Alto Ingredients diversified its operations by acquiring plants in the Midwest, allowing entry into various markets such as industrial, pharmaceutical, and beverage [11][12] - The PEAKIN campus includes facilities capable of producing renewable fuels, high-quality alcohols, and various protein products, enhancing product mix and market flexibility [12][13] - The company rebranded in 2021 to reflect its broader product offerings beyond ethanol [13] Financial Performance and Cost Management - The company has focused on improving profitability by reducing expenses, including an $8 million annual reduction through staffing adjustments [14] - Integration of Eagle Alcohol's distribution center with Kennergy marketing segment has eliminated redundancies and improved customer service [15] Growth Opportunities - CO2 utilization is a significant growth opportunity, with the Columbia facility capable of processing 170,000 tons of CO2 annually [16][17] - Regulatory changes, such as the 45Z tax credits, are expected to enhance profitability, with potential earnings of $4 million to $8 million from the Columbia facility starting in 2025 [22][23] - The shift to E15 blends could increase demand for ethanol by 50%, providing a substantial market opportunity [25][26] Regulatory Environment - Positive regulatory changes, including support for E15 and 45Z credits, are seen as tailwinds for the industry [21][25] - The company is assessing the impact of recent regulations on carbon capture projects, particularly in Illinois [20][30] Market Dynamics - The demand for CO2 is increasing, particularly in the beverage sector, with limited competition in the West Coast market [31] - The company is exploring opportunities to maximize the value of its CO2 production through investments in capture and compression equipment [18][19] Additional Important Information - The company has shifted production focus from renewable fuels to high-quality alcohols, which currently yield higher margins [29] - Alto Ingredients is dedicated to operational excellence and strategic diversification to capture market opportunities [29] This summary encapsulates the key insights from the conference call, highlighting the company's strategic direction, financial performance, growth opportunities, and the regulatory landscape affecting its operations.

Core Viewpoint - Palm oil futures have shown a bullish trend, with the main contract reaching a peak of 8522.00 yuan and closing at 8482.00 yuan, reflecting a 1.27% increase [1]. Group 1: Market Analysis - Hualian Futures suggests a support level for palm oil at around 7800 yuan [2]. - Zhonghui Futures anticipates that palm oil will mainly operate below previous highs in the near term [3]. - Ningzheng Futures recommends a low-position buying strategy for palm oil due to reduced production and increased exports in June [4]. Group 2: Supply and Demand Dynamics - SPPOMA data indicates a 0.65% month-on-month decrease in Malaysian palm oil production from June 1 to June 30, while exports have slightly increased, alleviating inventory pressure [2]. - The recent U.S. Senate decision to restrict tax credits for biofuels produced from non-North American materials is expected to positively impact soybean oil prices, indirectly affecting palm oil [2]. - The domestic market is experiencing a supply surplus of palm oil, leading to weak demand, as indicated by the ongoing inversion in the price difference between soybean and palm oil [4].