Ladies and gentlemen, thank you for standing by. Welcome to the REX American Resources Fiscal 2013 First Quarter Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Doug Bruggeman, Chief Financial Officer with REX American Resources. Please go ahead, Sir.

Good morning, everyone, and thank you for joining REX American Resources Fiscal 2013 First 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 the forward-looking statements are described in today's news announcement, in the company's filing 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'd now like to turn the call over to Stuart Rose, Chairman of the Board of REX American Resources.

Thank you, Doug, and welcome, everyone, to our first quarter conference call. Earnings per share this quarter were up 291% over last year's first quarter on an 18% increase in revenue. The actual earnings were $3.3 million versus $800,000 last year. Earnings were $0.40 for this quarter -- first quarter this year versus $0.09 last year. Shares outstanding, 8.2 million versus 8.439 million last year. Income from continuing operations $5.9 million this year versus $1.9 million last year. Our ethanol business had a dramatic turnaround in the first quarter. We were aided by improved -- price improved crush margins. That's the spread between the purchase of the corn and the price of ethanol. Went very much in our favor. Higher DDG prices. DDG is the part of the corn that we save for food. Higher corn oil prices, which we make out of DDG. We are still, however, impacted -- our business is still being impacted by high corn prices and also the basis that we pay over the Chicago Board price of corn. That's significantly higher, and was during the fourth quarter, than normal. And again, that -- the cost of that was because of the drought that took place last year and the general shortage of corn in our market and throughout the country. Going forward, we're trending in the second quarter well, well above last year's second quarter and significantly above our first quarter results that we just released. The ethanol business is benefiting from a RIN -- a high RIN price. A RIN is what's sold with every gallon of ethanol. The major refineries are all required to buy a certain amount of RINs during the year to ensure that they buy ethanol. And RIN pricing is currently, again, fairly strong, I believe well above $0.50…

[Operator Instructions] Our first question comes from the line of William Jones with Singular Research.

My question is, what is your opinion, just in general, on the industry? Are we moving in a direction of a more healthy industry on the whole? Or what's your thoughts about that?

I think, my opinion, is that the industry is moving to a more healthy industry, but there's still plants out there that, especially not ICM/Fagen plants out there, that are plants that aren't in the corn belt that are going to continue to underperform the industry. And they'll be the plants that, when times are really good, they come back, or when times are really bad, they go back off. It's never going to be a straight, stable industry where everyone, in an out quarter after quarter, is going to make the same amount of money or anything like that, the better plants, and we feel very strongly that we have the very best plants there in the corn belt, ICM/Fagen technology. The better plants are going to continue to outperform the industry like they always have, and we feel we -- we don't feel it's our -- we know that -- we know we've worked hard to have the best plants, and we think we're good.

Excellent. And obviously, the numbers are very good this quarter, but I'm still digging through them. But just a follow-up on that question with the plants that aren't in the corn belt that are kind of the problem plants, which are not your plants, but the -- some of the others in the industry. I mean, will they continue to hurt the industry because, I mean, even if they go offline, they just keep coming back on, it seems, soon as the price...

Well, will they hurt the industry? The industry probably needs their production to hit the mandates that the government requires our customers to buy. So not just -- I don't think necessarily that will hurt the industry, but if there is -- if people start expanding their plants or doing things to increase their production, then they could squeezed out, but they really don't affect us that much, the ones that open and close. What's more important to us, Bill, is the federal mandate. If that stays, we'll be -- in my opinion, we'll be fine.

If I heard correctly, you said you're doing even better this quarter, so once again...

We are trending better this quarter than last quarter, and trending way better this quarter than last year, second quarter.

And our next question comes from the line of Katja Jancic with Sidoti & Company. Katja Jancic - Sidoti & Company, LLC: You mentioned that you're looking at pursuing new opportunities. Could you provide more information on that, and is this near-term? Are you looking at anything specific? Could you talk a little bit about that, please?

Yes, we are looking at something specific. It's not a large investment. It's maybe $1 million, but we're looking at proprietary -- purchasing a majority interest in proprietary. There's billions and billions of heavy oil in the world and we're just -- I wouldn't say consider -- we're pursuing something with, as long as we can have majority on our ship, that will give us proprietary product that has a potential to lift this heavy oil. Again, it's not a large investment, and so I don't want to make any big deal out of it. The -- at least, the initial investment would be under $1 million, but it's something we are looking at. Katja Jancic - Sidoti & Company, LLC: And time-wise, is there any timeframe where you would provide more information on it?

We're well-involved in it now. So you can almost -- again, we're not ready to make any big deal out of it because it's such a small investment relative to our $250 million net worth. But again, it's a type of thing that has the potential to -- and that's what we look toward, the potential, with low-risk and high, high, high return that has a potential to REX American Resources to change America's position or to change the world's position on energy independence. And again, we'll look for something with low downside and high, high upside ethanol, which was one -- our first entrée into that. And we think we've got a lot in the ethanol business to make our country energy independent, and we'd like to continue on that trend.

Our next question comes from the line of A.J. Strasser with Cooper Creek Partners.

It's A.J. from Cooper Creek. I guess -- so you mentioned, obviously, that Q2 is trending, I think significantly better than Q1. Obviously, you don't know how the rest of May...

It's trending better than Q1 and significantly, significantly better than last year's Q2 for comparison.

But by my math, and, I mean, we're looking at kind of spot margins and your own efficiencies, et cetera, and kind of -- it looks like Q2, the margins are kind of roughly double that of Q1 for the industry. And obviously, you guys do better. Is that within the ballpark of what you're seeing out there?

Well, we just started Q2. We're on July 31 year end, so keep that in mind. So again, we probably benefited from some of what you're looking at already in Q1. But yes, we are seeing a strong, in terms of -- crush spreads are strong market right now, it's a very good market period. And with RIN prices pretty high and with refiners behind them, what they need to purchase, we're very optimistic.

The crush spreads...

Again, we don't just want to do well, we want to do better than the rest of the industry. And that's always our goal. We don't just compare ourselves to how we want to do -- we want to -- and we want to show, and we did this quarter, and we -- it's our goal to do it every quarter, show we're the premier company in the ethanol industry, period.

Can you just remind us, at what percentage of your capacity is on -- is the -- is 1 month beyond the March quarter, so it's only a percentage of your capacity, correct?

Doug, do you -- can you tip -- I know -- why don't you give some idea of what that is.

It's the -- the one plant that we own 99% of is the one that's on an April 30 or January 31 year end. The other one is December 31 year end. So roughly $100 million of the $250 million is on April or January 31 versus December 31.

And then there's been a lot of talk, and some of your peers have already start mentioning this, in terms of the MLP Parity Act, where Congress is making a push to enable yourself and your peers to convert to MLPs. There's been a particular push out of this coming from Senator Coons in Delaware. I was curious to get your thoughts on it. It's starting to gain some traction and some of your peers are actually talking about it. Obviously, it would be a tremendous opportunity for you guys. I was wondering if you have any thoughts.

These are just off the top of my head. I know what you're talking about, and I've -- this is not court approved or anything like that, but just my own observation, it would be -- once our debt is paid off, it would be a tremendous way to get -- to put cash flow to our shareholders. Being the large shareholder, it's pretty exciting. But [indiscernible] what's going to happen. And I said, it could be paid off. We have a good year, a good couple of years, our debt could be paid off by the end of next year, conceivably, who knows.

And Stuart, just given your background, as sort of not just take an operator but also as an investor, it's safe to say that it's -- if the Congress did approve MLP Parity Act, that this would be something that you guys would be completely willing to do?

Can't say. I can't speak for the board. It's not my decision entirely, but it sure is exciting to me, I can say that.

Great. And I had one other question, just to -- you mentioned that corn basis continues to be high. I just wanted to make sure, if you look kind of quarter-to-quarter, was Q1 impacted by the high corn basis, as well?

Q1 was very much impacted by the high corn basis, and we had paid significantly more for corn above basis. Basis is the Chicago price. Generally, in a good -- when there's a good crop, we pay well, under basis, and we've been paying well above basis and still reported these numbers.

Our next question comes from the line of Paul Resnik with Uncommon Equities.

I was wondering, do all of your plants now produce corn oil?

Yes.

Okay, so they all do. And when you -- and looking at the alternatives, are you looking at any alternative feedstocks to corn?

At this point in time, considering our plants' locations, we don't really -- corn is, in our opinion, still, by far, the best product. It was a bad harvest, but we believe that harvest was a one-off. And certainly, there's no drought going on currently anywhere in our markets.

Okay. And with the fund -- are any of your partially owned plants, do you think there's a possibility for taking a larger-percentage ownership? Or are these figures kind of fixed by now?

There's always that chance. There's always people who want to sell. It could happen. You just never know. We have nothing imminent. If something came up, we'd pursue it opportunistically. Last year, I think we bought a couple percent of Patriot, one of the plants, and you just never know.

[Operator Instructions] And our next question comes from the line of Derek Wagner [ph], the private [ph] investor.

I was wondering if you could take a crack at what you thought -- I know the earnings are very volatile, even on a quarter-to-quarter level, even on the year-to-year level, what normalized earnings power is at the company? I believe, at one point, you had given some free cash flow guidance of like $2.50 a share, but I can be wrong about that. And then lastly, any thoughts to implementing a dividend?

Well, one thing I learned about this business, you can't -- I've -- whatever number I told you, would change in a week because it can -- it's a business. It's so dependent on how the corn crops are and so dependent on crush spreads that change constantly. It's really hard to normalize anything, and I'd be afraid to -- I wouldn't -- I'd be afraid to tell you anything past 1 quarter at a time. Again, we're very comfortable with saying trending in the second quarter above first quarter and way, way above last year's second quarter. Past that, I'd be out of line to tell you we're going to do XYZ, because this business, as you can see from last quarter to this quarter, it can -- it's a different business. It's very hard to go -- to plan, to say you have normalized earnings. What we can say is we feel strongly we have the best plants in the business and the people operating these plants are, in my opinion, the very best in the business. And what was the second part of your question?

I thought, at some point, that you have had given some free cash flow guidance, and then the implementation of…

Again, the same story. If we did in the past, I don't recall. But if we did, I'd be very afraid to do that today. But as you can see from last quarter this quarter, a drought hits and everything goes out the window. A strong corn harvest hits and things go through the roof if crush spreads are still strong. So it's just crazy, but that's the business we chose and again, our goal is always to be the best in that business.

So the last 2 parts, the implementation of -- maybe of a dividend. And then also, why do feel like the stock sells at such a big discount to tangible book value?

We're disappointed that it's -- that's a good question, a really good question, and we're really disappointed that it is. Instead of a dividend, because the stocks are cheap, we chose to buy back the stock. When we buy back the stock, if the stock doesn't go up and discount -- and we're buying below book value -- the discount to tangible book value even becomes greater and greater. But then when we report good numbers, it has a potential to when people start noticing us again and I think that's starting to happen, and the discount narrows, our tangible book value, because of buyback just gone up significantly. The stock has that much more -- for people that look at book value has had much more potential to appreciate, and that's how I've always looked at it. That's why I like stock buybacks so much better than a dividend. And in my opinion, we're not a company big enough to do both.

[Operator Instructions] Our next question comes from the line of Patrick Jobin with Crédit Suisse. Patrick Jobin - Crédit Suisse AG, Research Division: I have 2 questions. I echo your sentiment on the crazy crush environment. It sure is volatile. So 2 quick questions for you. I guess, first, on the basis comments you made. Can you maybe give us an idea of what you're seeing more recently, or at what point of the planting and early growing season we should expect to see that basis narrow?

On the first question, we're paying well above basis. I don't know that we published exactly how much it is and it changes day to day, but it's significantly above -- and I don't expect it to -- until the harvest is in, which should be September, October, in that period. Until then, I would expect to continue to pay well above basis.

Okay. And then can you remind us on your hedging activities into the next few quarters? Or is it all...

We tend -- we -- if we could sell -- our problem with hedging, we can hedge on the corn side, but we only want to hedge if we can hedge on the ethanol side, if we can sell our ethanol to match it. We're very big believers that you have the match it to hedge and lock in your profit. Generally, we're only able to do it for 1 month or 2. We have not been able to do it for 6 or 8 or 10 months because we've had a hard time. To date, we continue to look at and try to find people who will take long-term ethanol at today's prices. But if we could do that, it would be great. But we -- right now, so far, we've only been able to lock in for short periods of time. Patrick Jobin - Crédit Suisse AG, Research Division: Sure. And then last question for me, on the regulatory front, it looks like the EPA has put out a proposal to some RFS changes, and I guess one of them includes adjusting the baseline versus nameplate. Can you just maybe remind us if you have the data, or if you know if there's any impact to your business here, what percent of nameplate capacity you're running at versus what the registered capacity might be with EPA? Is that going to change the benefit?

I know our nameplate is about $100 million. And, Doug, do you know exactly what we ran last year on average?

Yes. Over the trailing 12 months, we've been running about 112 million to 111 million gallons, so about 10% above nameplate. Patrick Jobin - Crédit Suisse AG, Research Division: Right. Okay. So the change to the RFS, which would allow you to no longer have to purchase RINs if you run above nameplate, would be a benefit?

I'm not sure. I don't -- I haven't studied that, Patrick, so I don't know. I'll take your word for it, but I don't know. Patrick Jobin - Crédit Suisse AG, Research Division: It's early days. We'll see it evolve, but, great, I appreciate it.

Patrick, although we're above nameplate, but actually we're not above the EPA approved nameplate that's out there.

Thank you. And there are no further questions on the phone line at this time.

Very good. Well, thank you, everyone, for listening, and we very, very much appreciate your support. Thank you. Bye.