Ladies and gentleman thank you for standing by. Welcome to the REX American Resources Second 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] As a reminder, this conference is being recorded Thursday, August 25, 2016. I would now like to turn the conference over to Doug Bruggeman, Chief Financial Officer, REX American Resources. Please go ahead.

Good morning and thank you for joining REX American Resources’ fiscal 2016 second quarter conference call. We’ll get to our presentation and comments momentarily, as well as your Q&A, 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, our 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. I have joining me on the call today Stuart Rose, Executive Chairman of the Board and Zafar Rizvi, Chief Executive Officer. I'll first review our financial performance and then turn the call over to Stuart for his comments. Sales for the quarter increased approximately 2%, sales were based upon $60.9 million ethanol gallons this year, versus $57.9 million gallons in the prior year, which resulted in increased ethanol sales of $3.9 million. We experienced approximately $35 per ton reduction in dried distillers grains pricing year-over-year for the quarter, which resulted in approximately $2.6 million reduction in DDG sales. Gross profit declined from $18.3 million to $17.3 million for the second quarter, principally due to the aforementioned DDG pricing and slightly higher year-over-year corn pricing for the quarter. DDG pricing continues to be affected by uncertainty of demand from China, and anti-dumping and countervailing duty investigations. SG&A was reduced slightly year-over-year from $6.5 million to…

Thank you, Doug. Going forward, earnings in the third quarter are currently running at a pre-tax rate that is a little bit better than last year’s corresponding third quarter. We are being benefited by lower corn prices, a crush spread that’s little better than last year, EPA is provided more stability this year and natural gas prices remain low. As Doug mentioned earlier, there are a couple of negatives out there that we are having to overcome lower DDG prices, which is our buy product in the biggest one and the lack or the lessening of China demand. We also have a potential possibility of less corn supply or a little bit lower harvest in last year due to a little bit less rain in South Dakota, we are monitoring that situation, but it’s too early to tell whether that will affect our business. We also are being hurt a little bit by lower oil prices as oil that’s used to make gasoline, which if prices were higher, we would expect a larger export business. We continue to generate large amounts of cash, we are looking for other opportunities both in the ethanol business and the commodity manufacturing, other commodities where we can use our manufacturing expertise. Heavy oil remain something that we are spending a little bit of money on, we are working towards a pilot plant, but with the low oil prices today, we have no high expectations for that be a profitable business any time in the future. Again, tell people not to buy our stock based on that, but it is something we continue to work on. The biggest opportunities are expanding our ethanol plants, Zafar Rizvi will give you an overview of how that’s going along and what we are doing to better our ethanol plants. Zafar is our CEO and I turn the call over to him.

Good morning, everybody. Boding the financial year 2015 and until now, we made capital investments of approximately $16 million to increase production. We have completed almost all capital investment projects at our consolidated plants. We continue to focus on improving operational efficiencies, managing cost of production, increasing ethanol yields and resolving other bottlenecks. As we increase our production to-date of 135 million gallons or more for our new NuGen plant. We expect capital spending of $3 million to $5 million for at least the remainder of this year. We have received final pathway approval for EPA for NuGen. Although it is still pending for one-off synergy, NuGen now has a permit to produce up to 150 million gallons. We will continue to monitor crush margin, while we bring the plants to higher rate. Our plants continued to be cash flow positive currently we are producing at almost full capacity. Thank you. Stuart.

In conclusion, we are running at a rate during the quarter, we are currently in, which is our third quarter that's slightly better than the previous year's corresponding quarter on a pre-tax basis. We continue to drastically outperform most other companies in our industry and we think there is few reasons for that good plant locations that are expandable as we are doing with our South Dakota plant and attempting to do with our Illinois plant. Good rail, good corn supply in our markets for the most part, and again most importantly, we feel we have the best people in the industry. They been with us almost from the very, very beginning and again we think our people are as good or better than anyone else in the industry and we think that's the real secret that allows to do so much better. I'll now leave the call open to questions.

Thank you [Operator Instructions]. Thank you. All right. Our first question comes from the line of [indiscernible]. Please may proceed.

Hi guys thanks for taking the question. The issue of RINs has been gaining a lot of attention in the press, it has even made its way into the election campaign, obviously RIN values are at historically higher levels right now. So may be two things, one is why do you think they are as high as they are and do you anticipate its sustaining itself kind of into 2017 or is this more of a seasonal issue?

The RIN values are only high, the only people that have to buy RINs are people that don't blend enough at the refineries, they don't blend enough ethanol to meet the standards. The people that are complaining that are buying RINs they could save - If I were running their business I could save a lot of money just by buying more ethanol. So, I really don’t understand that in terms of the political situation, both of the presidential candidates have come out in favor of ethanol business, whether they change the RINs. The movement today is to change the RINs where the blenders are responsible instead of the refiners. I don’t think that would make much difference to our business, we did not get paid on the RINs. We just sell the ethanol within that price. So if the blender was responsible then they would have to buy more ethanol theoretically. So I don’t really look at that as our issue, I do hear the refiners complaining but, to be honest with you, from day one the oil industry has complained about our business, because we are a good a competitor. We are lessening our dependence on foreign oil. We are taking some of their market share and we are growing. So I think it's always going to be a little bit of battle with them, but in terms of what we do in keeping our country energy independent, I think at least both presidential candidates recognized it and appreciate our industry for doing that.

Thanks for that. Let me also ask about the recent headlines in terms of M&A in the ethanol production space just as we saw the Abengoa plants getting sold. And I realize you guys are not directly involved in that transaction, so I thought maybe I would ask kind of what is your independent perspective on how valuation looked and what you think of this consolidation?

These were plants previously and I’m sure they will be redone and be better plants, have never bought by a very good companies at least three of them and now they are better with them, but these were previously plants that did not very well that did not make money. Well they historically didn't make money it went bankrupt, while the industry has done great over the last ten years. So our feeling is we want to stick with premium plants with Fagen, ICM plants, but if these plants are going to be bought and reopened, they need to be in stronger hands. I think it will be in stringer hands and it's probably a lot healthier for the industry and for the farmers to have someone buying their corn that can pay their bills and I think that what is going to happen. It's not our strategy to try and turnaround broken plants, but we certainly understand the strategy, we certainly have looked at the Abengoa plants and again we understand the strategy and its they are better off and good - and they are better off in strong hands than we can and I think that’s where they are going.

All right, I appreciate it guys.

Sure.

Thank you. Our next question comes from line of Paul Resnik with Resnik Asset Management. Please proceed.

Good morning.

Hi Paul.

Hi. Two questions, one beyond the RIN collection, is there any other political development taking place, I mean there always discussion that you think is worth commenting on here?

The refiners and oil companies are networking with [indiscernible] and so they always have a strong [indiscernible] with NIN respected from the senators and Congress men in their states. But I think as far as the ethanol business being an established business, we don’t believe there will be any great changes, maybe minor changes, but any great changes during the next four years.

Very good and secondly, I know I could look to this, but you indicated pre-tax will be better this year than a year ago.

Again, I was saying we are running at a rate we certainly are going with the quarters, not even one month into the quarter. So but it’s looking good, running at a rate better, pre-tax is running in a rate better than last year’s third quarter.

Yes. Could you remind me, what were the number of shares outstanding in the quarter or a year ago?

Dough do you have that number?

Yes. All for the second or third quarter?

So just for the October quarter.

Our quarter was based upon 6.9 million shares outstanding.

Last year?

Correct.

Okay. Thank you. Okay. That’s all I have. Again, things are looking pretty good.

Thank you.

Thanks Paul.

Thank you. Our next question comes from the line of [indiscernible]. Please proceed.

Good morning. Just quick, could you expand a little on your concerns about South Dakota? I would assume it’s not a very big concern, because the yield expectations don’t let horrible, they just look a little soft. Is that a fair assessment?

At this point in time they haven’t had as much rain, the corn crop nationally is going to be fantastic. South Dakota where it’s going to be terrible, but we don’t know what it’s going to be yet. They have had less rain than the rest of the country. So at this point, we are just monitoring it, we are still buying our corn at the below basis, we are still buying at below basis, so let’s see what happens.

Okay.

Illinois on the other looks like it’s going - to most of where we own minority interest plants, it looks like they are going to have great harvest, so let’s see happens.

How do you think about when you look at the periodic spending as it looks like it will off of this drop. How were you guys thinking about planting next year in the areas where your plants and affiliates are located?

Well again that’s not our area of expertise, I don’t know Zafar do you have any comments on that. I couldn’t try to guess what the farmers will do next year, but maybe Zafar knows a little bit maybe you can comment a little more on that.

As you know, it’s hard to predict, but most farmers don’t like to plant corn-on-corn. So it depends on what will happen next year, but this year as you know according to USDA report, it will be about 175 bushels per acres and about 15.1 billion or close to that will be production and carries also increased. So I think yes, earlier Stuart mentioned about South Dakota. As you know South Dakota, according to the report, USDA shows 53% compared to 76% last year at this time. But we recently had some rain and it looks some [indiscernible] gone around that area and they reviewed. That looks at the corn, it’s a little bit better than actually USDA reported earlier. So it’s getting little bit better, but it’s not as good as it was last year.

Yes. I think they are saying it’s a mid-140s yield, the pro forma. So not really that bad in my opinion. So, thank you.

No, no, exactly this is much better than what USDA was showing.

Great.

Thank you.

Thank you.

[Operator Instructions] Our next question comes from the line of Greg Eisen with Singular Research. Please proceed.

Thanks. Good morning and I apologize I got on the call a little bit late, I was waiting a long time on hold there with the operator. But did I get the number correctly, you said you have invested was it 16 to increase $16 million to increase production so far for completing these projects?

That's correct. Yes, we invested approximately $16 million so far from last year to up-o-date.

Through the end of the quarter and you have $3 million to $5 million of capital spending for the rest of the year, is that correct?

That's correct.

So that’s really just maintenance spending.

Yes that's what we estimate $3 million to $5 million as of the remainder of the year.

For maintenance?

Maintenance and the remainder of whatever needs to be done.

Yes, a little bit of finish up and then maintenance, correct.

Got it, got it. NuGen is now permitted to produce up to a 150 million gallons you said. Remind me again what is the status of One Earth plant in terms of its permitted capacity?

Actually we have applied One Earth Energy also for pathways we have not received and we are applying for EPA to - we already have up to 125 million gallon we produced at One Earth Energy, but we are trying to increase at the slow step there due to some regulation in Illinois. We probably increased 135 and then go further to increase that later on close to 150. But all of these things really we have to wait for up to the time we received the pathway for One Earth Energy to increase further production.

So you are looking to increase the permitted capacity to 135 from 125 in the first step?

Correct.

And then 150 is down the road.

Yes, I think that's the ultimate goal we like to achieve.

Okay. Do you have any guess or estimate as to when you would achieve that 135 million capacity permitting?

I think it's hard to say that because we are trying to make sure that when we are pushing these extra gallons, we want to make sure that we go slow and making sure all the bottlenecks are worked out so that where we don't have any emergency or create some problems. So I think it depends, but I think at the NuGen we are very close to that level, but we are going very slow. So it's really hard to say, but I think early next year is expected.

Early next year for the One Earth.

For the pathways that's right.

For the pathway. Assuming you get that permitting, can you estimate what the capital spending will be to put that in places, is that meaningful?

You mean to 150 or 135 million?

100 to 135.

I think mostly capital investment is already done and may be close to $3 million to $5 million more, but as I said, but we are not pushing hard at One Earth Energy due to the reason we do not have pathway. Up to the time we receive the pathway then we will start pushing [indiscernible]

But we have expanded the capacity, we have put in the infrastructure in place on One Earth as part of that $16 million that we have mentioned.

Yes, that’s correct.

Okay, that’s already paid for the pathway?

We are ready to go if and when we get the pathway, which we expect.

Got it. Okay I'll let someone else go. Thank you.

Thank you, I am showing no further question at this time. Mr. Rose, I will turn the call back to you.

Okay, again I would like to thank everyone for listening and we look forward to talking to you next quarter. Thank you very much. Bye.