Ladies and gentlemen, thank you for standing by, and welcome to the REX American Resources Third Quarter Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards we will conduct the question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Doug Bruggeman, Chief Financial Officer. Please go ahead.

Good morning and thank you for joining REX American Resources’ fiscal 2014 third 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 risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and 10-Q. REX American Resources assumes no obligation to publicly update or revise any forward-looking statements. Now moving on to our third quarter financial results. REX again outperformed the industry and reported record third quarter net income of $23.3 million and recorded record earnings per share of $2.86. We believe some of the factors that contributed to our ability to outperform are our plant locations and ability to source corn on average below CBOT pricing, our continued ability to get railcars. We have not sold out all of our ethanol in the future markets and can take advantage of more favorable spot or index pricing. And our plans continue – excuse me, continue to operate efficiently as they are all Fagen constructed ICM technology which we consider to be the gold standard for the industry. For the quarter, our sales declined from $166.2 million to $138.5 million reflecting lower ethanol and dry distiller grain pricing. However, gross profit for the quarter doubled from $18 million to $36.5 million, as lower…

Thank you, Doug. First of all I'd like to talk about ethanol and its importance to our country and we get talked in a negative way to often and our industry tends to not fight back like it should though ethanol has great benefits to our country, cars burn cleaner, where we see no government subsidies. We pay a huge amount in taxes. Our farmers are paying more taxes, due to ethanol and due to the fact that they have a place to sell their crops to and consequently producing more crops where - there is no bad economics in the farm belt during the last recession. Again, thanks, we think in part to ethanol. Our balance of trade has improved – improves, because of ethanol; we import significantly less oil, because of ethanol, we are now sending money - as much money overseas to people who are sometimes aren’t friendly to the United States and in some cases the oil money is used even to fight the United States. Today there is an oversupply of corn. After the last crop there is plenty of corn in the market and again ethanol helps to drive that corn up and keep the farmers making money instead of relying on government subsidies. In terms of REX going forward, quarter is currently running at a rate that puts us slightly ahead of last year. Our comparable quarter last year was $1.95. We have no long-term hedges out there; everything is either spot or index pricing. At this point in time, our corn pricing is below basis, natural gas prices seem to be steady at this point in time. We have no interest expense since – from December on after paying off our debt. We have less shares outstanding due to a buyback and…

[Operator Instructions] And we now have a question from the line of Katja Jancic with Sidoti & Company. Please go ahead.

Hi. Thank you for taking my call.

Hi, Katja. How are you?

I am good. How are you?

Good, good.

Stuart, you mentioned you expect based on the current situation, you expect the last quarter to be slightly better than last year, is that correct?

So far this year we are tracking, so far this quarter that’s way we're tracking, correct.

What's the situation with dry distiller grains? Do you see any uptick, or could you talk a little bit about that?

Well, the corn is up ticked a little bit and so the dry distiller grain market is up ticked; exports are still a problem, China is still been difficult. But generally we look at dry distiller grains as being about 30 to – roughly 30% of the cost of corns. So we get back about 30%. For people who don’t know dry distiller grains is left over product after the ethanol is made with the corn. It’s a very, very high protein corn and we resell that into the feed market. And roughly 30% of our cost comes back. So as the price of corn comes down we'll get less money for dry distiller grain, generally as it goes up we'll get more money and it has – price of corn has gone up a little bit.

But you did mention – yes, sorry

If I just can add on to that, if I can add on, I would expect the fourth quarter DDG pricing to be lower than our average was for the third quarter. The third quarter we benefited little bit having sold out some of our DDGs prior to the pricing coming down. So again my expectation would be on average it would be lower than fourth quarter that what was reported in the third quarter.

Okay. And you did mention that you're buying corn below basis. Can you talk a little bit about how much below or percentage wise could you give us a little more clarity on that?

We don’t like to disclose exactly, but it’s public knowledge what the feedlots right to next to us are selling corn for. And so it’s something that can be looked up pretty easily. And they publish prices, so you can get a pretty good idea of how much it is below. But we like to keep exactly what we're paying pretty much. We don’t – don’t want to disclose it on the conference call.

Okay. In the third quarter your tax rate was lower than historically, what's the situation with that and just going forward how could we look at that?

Yes, we had some true-ups that we booked here in the third quarter as we're doing our tax to provision to return true-up, so we booked that in the third quarter. On a year-to-date basis our tax rate was about 37.5%, I think anywhere from 37.5% to 38.5% is a probably pretty much normalized rate.

Just one more question, and then I'll go back in the line. Regarding the new plant, how far you – what have you done, is there – have you submitted any application to the EPA, what's the situation with that?

We are working with the builder and we're working. He is – him and I, we have done some work, but we have not submitted our full application to the EPA or disclosed where the plant is yet. But we have a site and we are working with the builder. Again, we want to make sure if we submit something that it would be approved and even it’s approved the Board will still have to make a start, go or no go decision and a lot of that will depend on what we can do with our cash, where the industry is, that type of thing. But, like I said earlier in the call, this industry has been a very, very profitable industry for REX and we know what we're doing when it comes to opening new plants. So – and I should say if we do open a new plant it will be state-of-the-art, be better than anything else that we have currently, by definition it will be better just because it’s a – the technology has moved on and it has to move on to meet EPA standards. So we'll see what happens. It’s interesting but – and we're working on it, but there is – and we're working fairly, not fairly hard, we're working hard on it. But we'll see what happens.

Okay. Thank you so much.

Thanks, Katja.

Okay. And our next question is from the line of Jeremy Hellman with Singular Research. Please go ahead.

Hi. Good morning, everybody.

Hi, Jeremy.

I just wanted to talk more high level about what – and this is more, I guess more of a opinion question for you. But you know with the Republican Congress and both houses coming in, everything I have read related to the EPA it sounds like there may be some de-funding, is going to be the most likely path and you know, and this is all what you read, so taking with some grain of salt. But do you think that there – that’s going to be splitting hairs and related to ethanol Republican legislators from ethanol states are going to have a loud enough voice that any de-funding will be more focused on things like carbon and leaving ethanol alone or just kind of curious for your general…

I've never looked at de-funding as a risk because the legislature is out there. So the worse, [Inaudible] if they de-funded the EPA completely they’d have to – the EPA right now is only as far as I know talking about decreasing the mandate, the number of RINs that are required. So, if there was – if the EPA, that division was de-funded, which I don’t think it will be, then it will just go to – then it will just go the legislation which was very positive for the industry, [Inaudible] to grow every year. So I don’t look at de-funding as an issue. As far as legislative, that’s – it’s not a Democrat, Republican issue, it’s a farm belt, oil belt issue. We are doing a great job of domestically taking market share from the oil companies and that’s what we were made to do. The programs are working perfectly. We've taken large amounts of market share while helping our farmers and the oil companies have noticed us and blame us in part for their fall in prices. But we are proud of that. We're proud of our industry. But we'll always have to fight oil producing states and oil producing state representatives and rightly so they are trying to protect their oil industry just like our farm legislature – legislators try to protect our ethanol industry.

Okay. And then shifting gears to the new build question or you know analysis that you're going through. Has land acquisition been part of your discussion with respect to your cash, now you've cleaned out your debt, you're going to have pretty much maximum flexibility…

The way we will do it is through options.

Okay. Okay. That’s it from me. Thanks.

Sure, Jeremy.

Any other questions? Hello? Hello?

I was done, if the operator was waiting for me to state that more clearly.

Okay. Operator, is there any other questions? I think there is no more questions. So, Doug are you on the line also?

Yes, I am here.