Fuel Forward: The Digest’s 2019 Enhanced Multi-Slide Guide to Renewable Energy Group

Chad Stone: Total revenues were basically flat versus 2018. Revenues benefited from 20% increase in gallons sold and an increase in LCFS revenues of $27 million. These increases were offset by a 17% lower average selling price primarily due to lower RIN prices as well as lower revenues from sales of separated RINs. Our margins were challenged in the quarter, as CJ mentioned. We continued to run at a positive contribution margin with upside potential from the BTC reinstatement. And this is similar to other years when the BTC was not in effect.

We remain focused on a lean and efficient organizational structure. Operating expenses were down primarily due to lower employee-related compensation. SG&A expenses as a percent of revenue were 5% in the quarter, which is consistent with prior years. Our adjusted EBITDA for the first quarter was negative $27 million pre-BTC. If the BTC is reinstated, the adjusted EBITDA would be a positive $28 million. The net benefit of a retroactive reinstatement of the BTC would result in an increase in our adjusted EBITDA of $55 million and $43 million for the respective first quarter for 2019 and 2018.