Good morning and welcome to the RECS American Resources second quarter fiscal 2026 conference call. As a reminder, today's call is being recorded and at this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. I would now like to turn the call over to Mr. Doug Bruggeman, Chief Financial Officer of RECS American. Please go ahead, sir.

Good morning, and thank you for joining RECS American Resources Q2 2026 conference call. With me on our call today are Stuart Rose, RECS Executive Chairman, and Zafar Rizvi, RECS Chief Executive Officer. We'll get to our presentation and comments momentarily, as well as your questions. But first, I will 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 Security 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 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'd now like to turn the call over to our Executive Chairman, Stuart Rose.

Good morning, and thank you all for being here. The second quarter of fiscal 2026 was another strong period for Rex American Resources. We posted the highest second quarter net income per share in our company's history at $1.06 per share. Results like these reflect the discipline of our operating teams, the strength of our commercial execution, and the benefits of the policy and market tailwinds that have been building for some time. Two developments, one during and one subsequent to the quarter stand out, is real markers of progress against our long-term growth agenda. First, our ethanol production expansion at the One Earth facility remains on schedule, and we continue to expect the added capacity to come online before the end of 2026. Second, and Zafar will cover this in much more detail, we reported more 45Z credits, and we reached an important Regulatory Milestone on our carbon capture and sequestration project in August, with the project receiving draft class six well permits from the US EPA. Our balance sheet remains a genuine source of strength. We closed the quarter with no bank debt and substantial cash in short-term investments, which gives us the flexibility to fund our growth initiatives internally while we continue to evaluate the best uses of our capital going forward. I want to thank our employees across every facility for the consistency and care they bring to this business each day, shows up directly in these results. I will now turn things over to our Chief Executive Officer, Zafar Rizvi, to walk through our operational progress in more detail.

Thank you, Stuart. Our expansion project at the One Earth Energy facility in Gibson City continues to progress on schedule. We remain on track to complete construction of the additional ethanol production capacity by the end of 2026. This expanded capacity will strengthen our operating platform and enhance our ability to capture additional value under the 45Z production tax credit program. Turning to our carbon capture and sequestration project, we reached an important milestone just two weeks ago. On August 17th, the U.S. Environmental Protection Agency issued draft permits for three class six injection wells associated with our One Earth Carbon Capture Project. The EPA is now accepting public comment on those draft permits and we continue to work closely with the agency as we move toward final approval. The issues of these draft permits represent a major step forward for the project. And we are encouraged by the continued engagement and progress with our regulatory partners. At the state level, the Illinois moratorium on carbon sequestration expired on July 1st. The Illinois Commerce Commission has initiated its rulemaking process and the Illinois Environment Protection Agency has also begun its permitting application process. We plan to submit our application for the approximately five mile connector pipeline as well as the required Illinois EPA application as soon as possible. We will continue working closely with state and local regulators to obtain the remaining approvals necessary to move the project forward. On the policy side, 45Z production tax credit continues to make a meaningful contribution to our results. During the second quarter, We recognize approximately 18.4 million in Section 45Z production tax credit income, bringing the year-to-date total to approximately 26 million. The tax credit benefits flow directly through gross profit. We believe our carbon capture project, once fully permitted and operational, has the potential to further improve our carbon intensity score and Chris Rizvi, we can capture under the 45Z program. From a capital investment viewpoint, our combined investment in the ethanol expansion and carbon capture projects totaled approximately 191.2 million through the end of the second quarter. I will now turn the call over to Doug Bruggeman to discuss our financial results in greater detail.

Thank you, Zafar. For information on this quarter's operational results, including production volumes and selling prices, please refer to our press release issued this morning. Net sales and revenue for the second quarter were $168.5 million compared to $158.6 million in the second quarter of 2025, reflecting improved pricing across our product mix. Gross profit for the second quarter was $53.3 million compared to $14.3 million in the same period last year. This improvement reflects stronger crush margins together with the $18.4 million of production tax credit income during the quarter, as Zafar mentioned. Even absent the benefit of 45Z tax credits, our gross profit grew approximately 144% year over year. selling general and administrative expenses were $15.6 million for the quarter versus $6.2 million in the second quarter of 2025. The increase primarily relates to higher incentive compensation tied to the strength of our results and restricted stock awards issued during the quarter. Equity and income of unconsolidated affiliates was $7.2 million per quarter compared to $900,000 in the second quarter of 2025. also benefiting from stronger industry dynamics and production tax credit contributions at our non-consolidated facilities. Interest and other income was $3.2 million for the quarter, essentially in line with the $3.1 million in the second quarter of 2025. Income before income taxes and non-controlling interest was $48.1 million for the quarter compared to $12.1 million in the second quarter of 2025. Net income attributable to REC shareholders was $34.9 million, or $1.06 per diluted share, compared to $7.1 million, or $0.22 per diluted share, in the second quarter of 2025. We ended the quarter with $379.5 million in cash, cash equivalents, and short-term investments, and we continue to carry no bank debt. We continue to fund our growth projects entirely from our own balance sheet. I will now turn things back over to Zafar.

Thank you, Doug. To summarize the quarter, Rex delivered its 24th consecutive profitable quarter and achieved a record second quarter on an earnings per share basis. We successfully capitalized on favorable market conditions through disciplined margin management will continue to make important progress on our strategic growth initiatives. Looking ahead at this early stage of the third quarter, we expect to remain profitable and anticipate that third quarter results will be better than the same period last year. Operationally, One Earth expansion remains on schedule for completion by the end of 2026. and our carbon capture project has reached an important regulatory milestone with EPA issuing of our draft permit for three class six injection wells. We remain focused on completing the production capacity expansion, advancing the carbon capture permitting process with the EPA and Illinois regulators and maintaining disciplined stewardship of our balance sheet as we evaluate additional opportunities to create long-term value for our shareholders. Market fundamentals remain constructive at this point with continued record export demand supporting the US ethanol industry and the 45G program providing an important contribution to our margins. We appreciate the continued confidence of our shareholders and the hard work and dedication of our teams across all of our facilities. With that, I will turn the call back to the operator for questions. Operator?

Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Mason Bourne with AWH Capital. Please proceed with your question.

Good morning. Thanks for taking the questions. To start, it sounds like you've had good progress on the expansion. When you say online by the end of the year, does that mean all 50 million gallons Do you think that $200 million is the long-term correct level for One Earth, or could you potentially go higher than that eventually?

Good morning. I think we have a step-by-step process, as I have explained several times before. We are producing at this time approximately 150 million gallons, and the next step will be 175 million. Once we accomplish 175 million, then we have to apply for $200 million. That's one of the requirements for IEPA and Illinois EPA is requirements. So we expect hopefully early next year or middle of that will be close to 200 million gallons we will be producing.

So it sounds like you're in discussions with Illinois EPA on that. It's great news to see on your draft permit on Class 6 well. Did you talk about any timeline expectations? The federal EPA process is a little clearer from a timeline perspective, but Illinois, I think, they already have approved wells in the state. So just wondering the clarity or any thoughts you have on the timeline there.

I think our timeline is, this is Stuart speaking, we do not have break clarity on it. The EPA permit we believe will be issued sometime within a reasonable period of time. The biggest thing we're waiting for is approval. We have a little pipeline connector about five miles and we need Illinois we need the Commerce Commission or the Illinois Pipeline Commission to approve that one and that one that just ended as Zafar said they ended the moratorium at the end of June so we're able to apply for a permit but we do not know at this time how long that's going to take and that is the thing that will hold us up I believe the longest.

And then lastly, in your slide presentation, you have a note in there about potential third-party gallons. I wondered if you could talk about that. You have significant excess capacity in your wells when they get online. So is this class six draft permit, is that sort of a clearing event to open up discussions? Because the feasibility of your project has basically been signed off on at this point, hopefully.

We would love to have someone like a direct heir to CO2 project or something, but at this point in time we have nothing imminent. But we will certainly, as you just mentioned, have the capacity to take on those type of projects. But we're mostly concentrated on getting our own project going, which if we deal with the 45Z rules the way they are currently, that would add significantly to our bottom line.

Thank you.

Thank you.

Thank you. As a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad. Our next question comes from the line of David Leffel with DJM Investments. Please proceed with your question.

Yes, thank you. My question is, there's been quite a bit of news this week about the RIN credits. and then exemptions and I was just wondering how that might be impacting your thinking and I guess the cash flows over the next 12 to 18 months.

I think at this time certainly there will be some impact on rents but I'm not sure that will be impacted so much on ethanol sale. as you know that ethanol export has almost 13 percent increase this year for six months and we expect that it will be almost it will continue to increase that increase the export but there is there may be some impact but I don't anticipate the major impact because most of them is what you see is there is also include include biodiesel and also D4 and D6, both of the ranges included in that. So there could be some, but it's not going to be major impact. And also we hope that E15 also will be in California, expected to have almost 695 million gallon consumption, and they fully approve that also at the same time.

Okay, understood. I guess second question, given how close we are to carbon capture being approved, what is your feeling on share buybacks and capital deployment going forward as clearly most of these 45 credits are, you know, essentially based on production and don't have anything to do with the revenue lines?

We've been really, really, I think we're one of the leaders, if not the leader in share buybacks and percentage of all the shares we've had outstanding over the years. We buy on dips and when we buy, we buy whatever we can buy at the price we're buying at and that's been our method of choice in distributing capital and we certainly are doing the fact that we have so much capital just shows how well we're doing and we will look either to distribute the capital that way or again there's other ways to distribute capital and we're always looking and we didn't mention it in the conference call but we're always looking for either other ethanol plants to buy or something in a similar related industry that might make some sense. So again, we're well aware that we're so lucky to have so much capital.

Okay, thank you.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Rose for final comments.

I'd like to thank everyone for listening. Again, we have great locations, very good corn growing areas. We have great plants using industry-leading technology. We just had the best quarter in our company's history. And the most important thing we have going for us, in my opinion, is the best people in the industry, led by our CEOs, Zafar Rizvi, and that includes all of our hardworking employees. I'd like to thank everyone for listening and we look forward to our next conference call at the end of our current quarter. Thank you. Thank you again. Bye.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.