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

Good morning and thank you for joining REX American Resources' fiscal 2014 fourth quarter conference call. We'll get to our presentation and comments shortly, as well as your Q&A 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. REX is proud to report record fourth quarter and fiscal year earnings and diluted earnings per share. Diluted earnings per share for the fourth quarter increased 31% from $1.95 to $2.55. And the full year diluted EPS increased 151% to $10.76. Net sales and revenues for the fourth quarter declined 13% to $127.7 million compared to last year's fourth quarter, primarily reflecting lower ethanol and distiller grain pricings for the quarter. These prices declined for the full year as well, but the distiller grain pricing decline was more significant in the fourth quarter as trying to head back away from the market during that time. Our plant production rate for the fourth quarter remained relatively consistent with year-to-date production rates as we ran about 10% to 15% above nameplate capacity. The production rates continued to substantiate our belief that we have amongst the best quality plants in the industry. Gross profit increased 14% for…

Thank you. The ethanol industry, it's a cyclical industry. Currently, it's a struggling industry. In the first quarter, many, many plants in the industry are struggling to turn a profit, oil prices are probably the biggest cause of that. During the fourth quarter as everyone knows oil prices dropped drastically. It's made the export market more challenging, because we are priced less competitive to oil, also made E85 and E15 less competitive. Another issue is there has been no finalization of blending requirements from the EPA, the uncertainty effects and does affect the industry. In terms of ethanol inventory levels, there is high, many plants came on last year that maybe shouldn't have come on or aren't as efficient were previously closed. They are currently still running and that's created a glut on the market and has drastically reduced the crush spreads. Going forward, the industry will continue to face heavy lobbying pressure probably as greatest ever from the oil companies. They refuse to pay any attention to the benefits of ethanol, air quality, national defense deficit reduction, balance of trade, energy independence, and totally focused on their market share and the lost market share to ethanol. And again, they will continue to do that. However, with Iowa caucuses coming, it is our belief there will be no more major legislative changes in the near future. In terms of EPA, there seem to be no greater urgency to set funding limits, and we don't think that they will cause great harm to our industry in the near future, maybe even will benefit the industry, if they ever do come out with their blending limits. Oversupply issues should ease somewhat, inefficient plants have already started to cut production, thriving season is about to start, demand will pick-up, it was a rough…

Thank you. [Operator Instructions] So our first question comes from Katja Jancic with Sidoti & Co. Please proceed with your question.

Hi. Thank you for taking my call. First, can you talk a little bit about capital expenditures for this year, what are your expectations?

Doug, you want to have that –

Yes. We don't currently have any major expenditures planned. I would tell you I would expect it to be anywhere from $2 million to $5 million, and no major projects on the plate right now.

And regarding dry distiller grains, do you see this really helping in this quarter, or are we going to see this more in the next – the second quarter, the benefit from increase?

I think it will help a little bit this quarter. But, I expect a bigger benefit next quarter. The dry distiller grains, there is a little bit of a lag between – you have to go out a little bit further selling the product, but prices definitely have gotten better since Chinese got in the market.

So Stuart, you mentioned possibly acquiring, are you looking at acquiring other producers, or are you looking to increasing the shares, the equity stake in the facility you already own?

We have looked at acquiring other producers. One thing that we are looking that I didn't talk much about is increase – slowly increasing the capacity of our existing -- not necessarily buying more shares in the company, so we own minority positions, but increasing the capacity of our existing plants and that's probably the most efficient thing we can do, in terms of growing the company is just gradually grow our existing plants. We have looked at – with one Fagen ICM, Corn Belt plants, and we have looked at them, but the pricing that we have seen has been greater than –the pricing that other people have been willing to pay is greater than we are willing to pay. We are opportunistic buyers.

You mentioned increasing capacity, are these projects in -- because you have previously said there is no major capital expenditures, so I am guessing this is not yet planned or –?

You try to increase a little bit as you can get more, basically it's – you do little things, we wanted a few – couple of our plants were one of the few that the EPA's were extremely efficient and a lot more rents. But there is nothing that I can report today that is not in Doug's numbers. But that could be something that comes up, if we are lucky later in the year.

Okay. That's all from me.

It will be a little more capital expenditures should that come up, but it's nothing we can talk about today.

Okay. Thank you.

[Indiscernible] of capital expenditures.

Our next question comes from Shannon Collins with Water Street Capital. Please proceed with your question.

Hi, Stuart.

Hi.

Just a quick question, I know that you discussed this briefly, but your pricing both on an ethanol basis and a corn basis was better than – would be available on the CME. I know in the past that's not always been the case. And can you just give me a bit of a hint as to why that is? And then also if you think that that's sustainable going forward?

One of the beauties of our company in the fourth quarter was we did very little hedging out and we were on the spot market. CME is not the spot market, even the most current month, it is not the spot market. The spot market had a nice spike during part of the fourth quarter, which allowed us to get an average price, pretty significantly above this CME price. Today, the spot market is not above – it's not significantly above CME, it is pretty much right. It's not anything. CME would be a good barometer of where we are selling our product at. We are actually selling it a little below CME because of the transportation and things like that. But, fourth quarter was unusual because the spot market was extremely strong.

Was that a railcar issue on the spot market or –?

No my feeling is someone who had sold something out and we don't know someone who has committed something, but wanted to sell one and got caught, may have to buy the product at a higher price than CME.

Good for you and too bad for them.

We do not know who that is and that’s just right. My gut feeling it would happen.

Good. Well, thanks very much. And I appreciate the insight. That's all I have got.

Sure.

[Operator Instructions] And our next question comes from Jeremy Hellman with Singular Research. Please proceed with your question.

Hi, good morning, guys.

Hi.

Hi. Just a follow-up on the initial question that you were wrapping up. In terms of capacity expansion on the existing plants, can I get some sense of maybe as a percentage of current volume that you might be able to increase, and also what boxes you in, is it just simple physics and engineering or do you – at a certain point, do you run into the EPA having to come stick their nose into it?

We would like to do about 10% more in a certain point in EPA, RINs haven’t become a factor, but we would like to get it up about 10% more. And we don't – we think the EPA would cooperate with that. So, we are not – I can't say a 100% sure, but that's probably what we are shooting, what we would like to do, so let's see what happens.

Right. So that 10% is more driven just by physics if you will, physics and –

Right. It's improving. You get better as you go down the experience curve, you get better each year what you are doing just better efficiencies, change some pilot and see where we can make things a little better, and as you can see we started with 100 million gallon nameplate on these plants, we are running well in excess right now of 100 million nameplate. So, we have already raised our past what originally these plants were planning to do. So that should give you some idea.

Okay. And congrats on getting the balance sheet down to a debt free state and I know you still got some remaining room on your share repurchase program and given your comments in terms of new build or purchase, do you have kind of a number or a range in mind in terms of when you get that too much cash on your balance sheet?

Right now because – right now we have what we have, I don't think that's an issue at the moment because the industry is in such – is on a downside of a cyclical industry. But too much I don't think – I think we continue to buying shares and never let that happen. But that's again that's a Board decision not my decision. But that's been our historical – what we have done historically.

Okay. Thanks.

We have no further no phone questions at this time. So I will turn it back over to your Mr. Rose of your closing remarks.

Well, I would like to thank everyone for their support. And again, it's very much appreciated and even if the industry is in a little bit of a tough time right now. We are very, very big believers in the ethanol industry long-term, have great hopes and faith that it will continue to do very, very well over the long-term. Thank you for listening and appreciate it. Bye.