Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Rentech, Inc. (NASDAQ:RTK)

F4Q2010 Earnings Call Transcript

December 15, 2010 1:00 pm ET

Executives

Julie Dawoodjee – VP, IR and Communications

Hunt Ramsbottom – CEO and President

Dan Cohrs – EVP and CFO

Analysts

Jeremy Sussman – Brean Murray

John Bridges – JP Morgan

Pavel Molchanov – Raymond James

Matt Farwell – Imperial Capital

Jeff Nansi [ph] – Green Finance Partners [ph]

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Rentech fourth quarter and fiscal 2010 year-end earnings 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, Wednesday, December 15, 2010. I would now like to turn the conference over to Julie Dawoodjee, Vice President of Investor Relations for Rentech. Please go ahead, ma’am.

Julie Dawoodjee

Thank you. Welcome to Rentech's 2010 fiscal fourth quarter and year-end conference call for the period ended September 30, 2010. During this call, Hunt Ramsbottom, President and CEO of Rentech, will summarize our company’s progress during the fiscal year. Dan Cohrs, our Chief Financial Officer, will give a financial review of the fiscal period and provide comments on Rentech's financial position. We will then open the lines for questions. We ask that you limit yourself to one question so that we may get to as many of your questions as possible.

Please be advised that certain information discussed on this conference call will contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. They can be identified by the use of terminologies such as may, will, expect, believe and other comparable terms.

You are cautioned that while forward-looking statements reflect our good faith belief and best judgment based upon current information, they are not guarantees of future performance and are subject to known and unknown risks and uncertainties and risk factors detailed from time to time in the company’s periodic reports and registration statements filed with the Securities and Exchange Commission.

The forward-looking statements in this call are made as of December 15, 2010, and Rentech does not undertake to revise or update these forward-looking statements except to the extent that it is required to do so under applicable law.

Now I would like to turn the call over to Hunt Ramsbottom, President and CEO of Rentech.

Hunt Ramsbottom

Thank you, Julie. Good morning, everyone, and thank you for joining us today. This year, we made significant progress on the Rialto project. We are preparing to conclude the development efforts on the project so that we can close on financing in 2011. We’ve achieved significant progress on other business development efforts to commercialize our technologies in various regions. We enhanced our suite of technologies, and we demonstrated that our drop in synthetic fuels performed flawlessly in real world conditions, in commercial aircraft and on-road diesel vehicles.

I’ll start first with our commercial projects. Our Rialto project is designed to deploy our Rentech-SilvaGas biomass gasification and Fischer-Tropsch technologies. The project would process green waste diverted from landfills to produce approximately 35 megawatts of renewable base-load power and 640 barrels per day of primarily renewable synthetic RenDiesel fuel. Commercial scale energy facilities, such as our Rialto Project, are complex undertakings. And I want to spend some time walking you through the various dimensions of this project.

This past year we completed the following milestones on schedule and on budget. We completed feasibility engineering. Jacobs Engineering provided design work and cost us 90% of the project’s equipment. We completed an initial detailed cost estimate. Larkspur Associates completed the project’s detailed construction estimate, building on Jacobs’ feasibility work.

All major permit applications were filed, and we are in frequent contact with the major permitting authorities, including the South Coast Air Quality Management District. The technical impact studies have been completed along with the initial study report and noticed the preparation for the California Environmental Quality Act. The air permit work and all other permitting activities are on schedule.

We signed option agreements to secure approximately 40 acres of land and easements needed to build the facility. We are negotiating additional LOIs with multiple day scholars, which would provide 100% of the facility’s feedstock requirements. We’re currently in exclusive negotiations for power purchase agreement for all of the project’s renewable power production. We are also in discussions for the sale of the remaining 80% of the project’s synthetic diesel fuel output with fleets, other diesel users, as well as refiners and fuel brokers.

An engineering report from RW Beck is the independent engineer validated the individual technologies we use in the project, the integration of all the technologies, the plant’s production capabilities, and the project’s initial capital cost estimates. Front-End Engineering and Design, or FEED, work is on schedule, nearing completion and on budget.

Fluor has completed about 80% of FEED, and all process design packages, or PDPs, are complete. The completed PDPs are being integrated into the remaining FEED work relating to the facility layout, sizing and specifications of all equipment. All drawn reviews are expected to be completed by early January with the equipment specifications and detailed cost estimates to follow.

We are in act of dialog with the Department of Energy, and we continue to be a candidate for the DOE loan guarantee program under Section 1705. We are providing updates to the DOE as progress is made on certain milestones. We are currently finalizing our EPC contract strategy to enable us to issue a notice to proceed to our selected contractor in the summer of 2011 when we anticipate construction will commence on the site.

Now turning to our Natchez Project, our property in Mississippi continues to be a variable development asset. It is accessed in the Mississippi river for barge transport of feedstock and product. It’s close to rail, pipeline and power connections, and it’s close to a CO2 pipeline owned by Denbury Resources, which provides a ready solution for CO2 sequestration.

We’ve been developing that site for a large coal-bed project, which may be possible with the right combination of partners, government supports, and political and regulatory environment for coal-based projects. We are also evaluating some alternative configurations that would make the project more feasible in the near-term, given the current environment.

We are reviewing multiple feedstock options using various combinations of biomass, pet coke, coal, and natural gas. These configurations would have lower lifecycle carbon footprint and be smaller scale with reduced capital requirements in the original project design of 30,000 barrels per day. We are now in detailed discussions with large-scale owners of timber, residuals, petroleum coke and coal, and also natural gas.

Widespread between the value of natural gas and transportation fuels makes the economics of a gas to liquids plant more attractive now than we’ve ever seen. The large natural gas companies are interested in converting low-cost gas into high-value fuels. The size of a reconfigured project would likely be utmost half the size of original design.

The product mix may also vary from that of the original designs, potentially include renewable power in a fairly high proportion of high-value specialty chemicals and waxes along with synthetic fuels, each of which depend on project economics, product demand, and pricing forecasts.

The leading option we are evaluating would allow us to use both the biomass gasification and Fischer-Tropsch technologies. A reduced CapEx project would expand our financing options. With CO2 sequestration in Denbury agreement, a mixed biomass and fossil [ph] project would have a very attractive carbon profile.

In addition to Rialto and Natchez, we are making good progress in other projects and licensing opportunities. Several renewable development and licensing projects have moved into the scoping pre-feasibility phases in Canada and in Europe. We are working on the commercial arrangements as well as financial support from government programs for these projects.

We recently signed a letter of intent with Solena Group for the use of our Fischer-Tropsch technology in what is anticipated to be Europe’s first sustainable renewable jet fuel facility. We’ve already completed a preliminary engineering study to help facilitate the integration of our technology into the project.

The GreenSky Project is being developed by Solena is designed to process waste diverted from landfills to produce approximately 1,850 barrels per day of primarily renewable jet and net export of 20 megawatts of renewable power. Solena has signed a letter of intent to sell renewable jet fuel to British Airways. This project represents our entry into the UK market. There are significant deployment opportunities for our technologies to help airlines reduce the carbon footprint of their fleets to meet the requirements of the EU Emissions Trading Scheme.

Renewable jet fuel produced by our process is one of the few options airlines have to provide solutions to produce the financial and environmental impact of this legislation on the airline industry. We are also exploring renewable power projects opportunities in the UK, as the region has significant incentives for renewable gasification power production.

These activities would be led by Tom Samson who recently joined the company in the newly created position of Chief Development Officer. Under Tom, we are consolidating project development and construction, technology licensing, and commercial affairs. Tom has 20 years of experience in development and management of power and utility projects. The majority of his career has been spent at Marubeni Corporation in the US, Europe, the Caribbean and Abu Dhabi.

I’ll now turn our focus to technology. Our joint bio-refinery project with ClearFuels demonstrate their technology in our PDU was recently approved to receive the remaining funding on their $23 million DOE grant for construction, integration and operation of the biomass gas fire. We have executed procurement contracts for all major pieces of the equipment, including the gas fire.

We expect all equipment to be delivered to the PDU during the second half of 2011, and we anticipate the PDU to begin producing renewable synthetic jet fuel and diesel fuels from biomass at the end of calendar year 2011. Under the agreement with the DOE, the gas fire will first run for a period of time on wood ways diverted from landfills, then on sugarcane bagasse, and then on a mixture of the two feedstocks.

ClearFuels is pursuing project development opportunities using our joint technologies for renewable synthetic fuels production in Hawaii and other regions. The PDU has been successfully operating during a series of campaigns since August 2008, producing in excess of the 40,000 gallons of certified synthetic jet and diesel fuels, naphtha and waxes.

We recently completed our ninth and longest operating campaign. We continue to utilize the production runs to improve our capital and operating expenses. We’ve achieved significant improvements in the overall wax/catalyst separation system, lowering our operating cost due to greater recycling of the catalyst in the Fischer-Tropsch process. This improved separation system will be deployed in our Rialto Project.

This year, our synthetic fuels produced in the PDU were demonstrated in applications in the air and on the ground. In April, our synthetic RenJet fuel powered the first US commercial flight on certified alternative fuel. The United Airlines flew on a 40/60 blend of RenJet and traditional Jet A, confirming that our fuel performs in a commercial aircraft as well as traditional jet fuel.

In October, two Audi A3 TDIs ran flawlessly on 100% synthetic RenDiesel during the first ever extended use of our fuel. No modifications were made to the vehicle. The 1,000-mile endurance drive on 100% RenDiesel demonstrated the potential of our clean burning synthetic diesel in standard diesel engines to improve emissions, whereas the Audis ran on a 100% synthetic RenDiesel, Audi only allows up to 5% blend of traditional biodiesel in its vehicles.

Now turn our focus to our fertilizer facility. REMC continued to be a valuable asset, providing us with approximately $87 million of non-dilutive capital this calendar year to fund alternative energy business. Market fundamentals have improved significantly, contributing to what we believe will be an exceptionally strong fiscal 2011 for REMC.

The margins we’ve locked in to date exceed the margins realized in the entire fiscal year of 2010. This provides us with the confidence to project REMC’s EBITDA for the fiscal year 2011 to be at least $60 million. REMC’s team continues to do an excellent job managing the plant efficiently and safely, securing sales at optimum prices and margins.

Dan will now provide more details on REMC and our financial performance for the period. Dan?

Dan Cohrs

Thank you, Hunt. Good morning, everyone. As Hunt said, REMC’s outlook for fiscal year 2011 is strong. We expect REMC to deliver at least $60 million of EBITDA compared to $32 million in 2010. We’re seeing a significant rebound in fertilizer prices, with ammonia prices approaching $700 per ton and UAN prices are nearing $340 per ton for recent sales. These favorable prices will show up in our revenue in fiscal 2011, as we deliver the product.

In fiscal 2010, we delivered product sold during the low point in the pricing cycle. So the delivered price comparison to 2009 suffered. The higher price of the product delivered in fiscal 2009 had been set when much of that product was sold in late 2008 when prices were at all time record high. We shipped more tons in fiscal 2010, which partially offset the lower product prices.

For the fourth quarter, year-over-year fourth quarter comparisons are as follows. Revenues were up in the most recent quarter by $8.7 million over the year early quarter from $25.8 million up to $34.5 million. That was due to higher fertilizer shipments. The price comparisons in those two quarters were mixed.

Due to other factors, the net loss increased by $1.9 million from a loss of $7.2 million last year to $9.1 million in the most recent quarter. $1 million of that increase was due to the write-off of land option expense. In those two quarters, the year-over-year comparisons of the fourth quarter, SG&A increased by $1.7 million from $5.4 million, up to $7.1 million. That’s due to the increase in employee expense and consulting expense for people that were brought on to push forward with our project development activities as well as an increase in non-cash compensation expense.

R&D expense in those two quarters increased by $1.5 million, $4.8 million last year, up to $6.3 million in the most recent quarter. All of that was due to increased spending as we build the ClearFuel gasifier as well as the modifications to the PDU for inventorization [ph] and other modifications.

For the full year comparisons, revenue was down substantially from ’09 to 2010, $187 million last year, down to $131 million this year. That was all due to a reduction in prices for fertilizer products that was partially offset by higher sales volume for delivered product. The net loss last year was very small, only $21,000. That increased to a net loss of $42 million this year primarily due to the lower margins in the fertilizer business, but also due to a number of other factors.

For the full year, SG&A was up $4.3 million year-over-year. There were several factors that led to that. One with the retention of SilvaGas’s key employee is SilvaGas was acquired in the middle of 2009. The additional employees, consultants that I already mentioned in the quarterly comparisons, increased the non-cash expense as well as the accrual of a severance arrangement of a former officer.

R&D expense actually decreased year-over-year, but that was due to a one-time accrual last year in 2009 of $2.9 million for sales and use taxes associated with the PDU. And because they were at the PDU, they ran through the R&D line.

We finished the year with cash at $54 million, but that balance on September 30th did not reflect the incremental term loan of $52 million and the $20 million pre-payments made by REMC, which I’ll discuss later. REMC’s performance for the year was in line with what we expected, with $32 million of EBITDA. Although prices for product delivered in the full year were down significantly from the historical highs a year earlier, they were in line with our budget.

For the delivered tons this year, we saw ammonia prices average $375 compared to $726 in 2009. For UAN, this year’s average delivered price was $178 per ton compared to $267 per ton in 2009. The current product sales are approaching $700 per ton for ammonia and $340 for UAN. Prices have improved significantly as high grain prices and good weather led the strong ammonia application this fall.

We expect nitrogen fertilizer supplies to be tight in 2011, anticipating a strong spring season. In addition to the strong market fundamentals, we are seeing sustained low natural gas prices. We’ve locked in more than 50% of our product sales in natural gas supplies for fiscal 2011.

This year we raised about $87 million in net non-dilutive debt capital to fund the alternative energy segment. In three transactions, we borrowed at REMC, dividended the cash up to Rentech, modified covenants, and then repaid principal at REMC. The result for REMC is still a healthy cash balance and leverage was very manageable, given the strong outlook for EBITDA.

With the most recent incremental loan of $52 million, which we completed in November, our budgeted activities for fiscal year 2011 are already fully financed. These activities include REMC’s ongoing operations and capital improvements, completion of FEED for the Rialto project, continued development of the Natchez Project as well as other projects, operation of the PDU, continued research and development of the Rentech technologies, and funding of general working capital need.

And I’ll turn back to Hunt for questions.

Hunt Ramsbottom

Thanks, Dan. And now I’ll turn it back to the operator for questions.

Question-and-Answer Session

Operator

Thank you. (Operator instructions)

Hunt Ramsbottom

Hello?

Operator

One moment, please. (Operator instructions) And our first question comes from the line of Jeremy Sussman from Brean Murray. Please proceed with your question.

Jeremy Sussman – Brean Murray

Hello, Hunt, and thanks very much for the update.

Hunt Ramsbottom

Hey, Jeremy. First question I have is, given that in 2012, as you mentioned, the airlines are going to be included in the European Union carbon trading scheme. Can you give us a sense of maybe how some discussions outside of obviously the ones you’ve had with Solena, are going with either various parties or whatnot?

Hunt Ramsbottom

Yes. Generally speaking, I think they all pushed that over the last year or so to try to get this start off. And it looks like it’s going to be enacted. So where there is a European-based airline or a US-based airline or international, anybody that flies in and out of the EU is going to be affected. The numbers start off fairly significantly for airline. And I don’t think they are discussing them publicly, so therefore I can’t. But we know the numbers. They are going to impact them on an annual basis. So I think it certainly has allowed us to work not only in the US here with airlines, but in other airlines in North America to make sure that we produce some renewable fuels for them or clean and burning fuels. But the numbers annually for each airline is fairly significant. I think you could probably find it there yourself. I just don’t think I’m permitted to talk about it. So it certainly has pushed them up on the radar internally at their companies.

Jeremy Sussman – Brean Murray

Fair enough, and appreciate that. And just as a follow-up, in terms of timing, can you give us a sense of a couple of projects that you talked about, Natchez versus GreenSky? Maybe does one take priority over the other after Rialto or as you are working on Rialto I should say?

Hunt Ramsbottom

I think – you know, take Natchez first and we’ve been very clear about that, that as soon as we lock down this configuration, we’ll be able to put a timeline in. But I think I’d say safely that there are a number of opportunities that may jump in right behind Rialto that are much smaller scale on both the power and the fuel side. And I think that you’ll hear more about in the next quarter too. So I think – as everybody knows, Natchez is large. We continue to work it, and there are smaller scale projects, both jet fuel and power that we’re working on that would certainly, I think, fall right behind Rialto.

Jeremy Sussman – Brean Murray

Great. Appreciate it. Thank you, Hunt.

Hunt Ramsbottom

Yes.

Operator

Our next question comes from the line of John Bridges with JP Morgan. Please proceed with your question.

John Bridges – JP Morgan

Hi, morning, Hunt and everybody.

Hunt Ramsbottom

Hi, John.

John Bridges – JP Morgan

Just wanted to – hi. The air permit, you say, is proceeding along the plan. What’s – could you sort of give us more detail on that?

Hunt Ramsbottom

Yes, as much as we probably can. We are very encouraged with our dialog with (inaudible). I know that’s been one of your hot buttons, and certainly everybody questioned developing a project here in Southern California. But what I can say – that the permitting authority is very excited about the project. It has been so far a very good process, both with us and I think with them. And I think they understand the benefits of this technology. They understand the benefits of these fuels in the basin. They understand the benefits of the renewable power, and they want to see this project built. And they have been very proactive, both with us and the federal government in terms of moving this project forward. So we’ve had a very good experience contrary to what others were telling us going into this. I don’t know if that gives you enough clarity, but we do have a timeframe with them and they said they’ll hit our timeframe.

John Bridges – JP Morgan

And you are planning to be building by September of next year?

Hunt Ramsbottom

Correct.

John Bridges – JP Morgan

Okay. And the re-planning of Natchez, how presumably that’s a sizable exercise?

Hunt Ramsbottom

Yes.

John Bridges – JP Morgan

Use the different fuel. What sort of timeline would we have on that?

Hunt Ramsbottom

I think my current view, we have a lot – some discussion today, said in the script with some large feedstock suppliers, off-takers, and I think we’ll have a lot more clarity in this next coming quarter on timeframe and who will be involved. And that’s probably the best I can do. If it goes as planned, we should be able to get things rolling on that by summertime probably of this year. And then I think we’ve always said it would be about three years after we started the feasibility again.

John Bridges – JP Morgan

Okay. And then in order for us to get a better fix on that margin on the REMC Project, have you changed the sort of hedging plans for the natural gas input cost?

Dan Cohrs

No, our plants are still – this is Dan. Our plants are still the same, John. As we lock in the pre-sale contracts on the product, we put the natural gas under contract to go along with the production required to fulfill those contracts. So we’re pretty well matched for gas against the pre-sale contracts.

John Bridges – JP Morgan

So you look in the gas for six months time?

Dan Cohrs

Well, at this point, it’s not necessarily six months, but it’s for a little more than half of the product we plan to deliver. I mean, that might work out to roughly six months. But it’s not so much a matter of time; it’s a matter of how much product we sold.

John Bridges – JP Morgan

So you look in half of the gas you need?

Dan Cohrs

No, no. We lock in all of the gas we need for products that we sell under pre-sale contracts. And we’ve sold slightly over half of the products that we plan to deliver next year under pre-sold contracts at this point.

John Bridges – JP Morgan

Okay. That’s good. Many thanks. Best of luck.

Hunt Ramsbottom

Thank you.

Operator

Our next question comes from the line of Pavel Molchanov with Raymond James. Please proceed with your question.

Pavel Molchanov – Raymond James

Thanks for taking my question. First on Rialto, assuming construction starts in mid-2011, are we looking at completion in 2012 or would it be more 2013 at this point?

Hunt Ramsbottom

Right now, the timeline is for startup and commissioning at the end of ’12, early ’13. And that remains our published schedule, and we’re on schedule.

Pavel Molchanov – Raymond James

Okay. Okay, great. And then on GreenSky, can you just give some color on the project economics for Rentech? I guess, in other words, are you participating directly or is it more of a royalty licensing model?

Hunt Ramsbottom

It’s currently configured as a license arrangement. But in that license arrangement, we have the ability to be a project partner, which is – Tom and I were over there recently attending their development meeting. So we have the ability to get more involved from a development standpoint if we so choose. Right now, it stands as a licensing, and we’ll determine that by working with Solena and the other project partners as it goes along whether we feel we want to go more deeply – get more deeply involved.

Pavel Molchanov – Raymond James

And is there any sense of timeline on GreenSky?

Hunt Ramsbottom

I don’t know what they have put up publicly, but I do know that they anticipate getting into FEED in 2011 – early 2011. So – you take it from there. I think it’s a 2014 – 2013, 2014 project. They are on a very aggressive schedule.

Pavel Molchanov – Raymond James

Great. Appreciate it.

Hunt Ramsbottom

Yes.

Operator

(Operator instructions) Our next question comes from the line of Matt Farwell with Imperial Capital. Please proceed with your question.

Matt Farwell – Imperial Capital

Hi, good morning. First question is on Rialto. I’m curious about your CapEx plans for next year. Can you update us on your thinking around the development budget, with or perhaps in the absence of a DOE loan?

Dan Cohrs

You’re talking about 2011?

Matt Farwell – Imperial Capital

Yes, fiscal ’11.

Dan Cohrs

Well, we haven’t put out actual CapEx numbers for the year. I mean, as you know, we’ve put out a total capital estimate for the plant of $430 million of total installed cost. I don’t think we’ve broken that down actually period-by-period. With the DOE loan guarantee, assuming we get that, we would expect to be financing up to 80% of that project cost with DOE-guaranteed debt. If we did not get the DOE loan guarantee, then we think there are other alternatives available, including a new solicitation that we expect to come out from the USDA for loan guarantees as well as commercial financing for waste disposal projects.

Matt Farwell – Imperial Capital

Okay. And so, is it – to what extent – I know you are spending money on FEEDs. To what extent have you completed those required expenditures?

Hunt Ramsbottom

I think on the FEED side, which we’re – that's fully funded in the capital that we’ve raised. So that is – I think we’ve articulated that we were – I think we’ve put –

Dan Cohrs

Yes. Our public statement on FEEDs is then that we – the FEED budget for Rialto is well under $20 million. And it’s well, well under $20 million. We’re coming up towards the end of FEED. We expect FEED to be completed this spring.

Matt Farwell – Imperial Capital

Okay. Good.

Hunt Ramsbottom

And that’s currently funded through the last raise.

Matt Farwell – Imperial Capital

Okay. And then on REMC, on the pre-sold shipments, was that as of the end of the fiscal year? And can you give us an idea of how you plan to pursue pre-sales going forward or –? Or also, will you be recognizing the pre-sales that you already have randomly throughout the year? Will it come on lump sum?

Dan Cohrs

No, the way this works on a pre-sales is we recognize revenue as the product is shipped. So we sign pre-sale contracts for delivery, perhaps typically it’s three to six months in the future. So we sign the contract. Typically we collect 25% in cash, although that can vary, but typically 25% in cash, and then the balance of the cash is received closer to delivery, but the revenue would not be recognized when the product is shipped. So we continue to be in the market signing pre-sale contracts for spring delivery. The number that we mentioned earlier where we said we’ve already contracted for at least 50% of our deliveries was as of today. So, as of today, we’ve said enough pre-sale contracts to account for more than 50% of all of our deliveries that are planned right now for fiscal 2011.

Matt Farwell – Imperial Capital

Okay. And earlier in the year, you had guidance for EBITDA at REMC well in excess of $30 million. I’m just wondering what – was there a pricing change that happened during the year that caused that number to come down to just above $30 million, or can you help me understand what happened there?

Dan Cohrs

Well, the actual results for REMC with ours was $32 million for fiscal 2010.

Matt Farwell – Imperial Capital

Okay. Okay. Well, good. Thanks for the update.

Dan Cohrs

All right. Thank you.

Hunt Ramsbottom

Thanks for your question.

Operator

And our final question comes from the line of Jeff Nansi [ph] with Green Finance Partners [ph]. Please proceed with your question.

Jeff Nansi – Green Finance Partners

Hey, guys. Hunt, just curious, you have this big source of cash now on REMC, double last year’s to fund all you need. With a lot more projects coming, I’m sure you look at the option of lump sum of cash as opposed to future cash flows from that plan. Can you comment at all in how that option looks now, whether you hold on to the asset under the prices not where you wanted? And I think it will be able to go higher with pricing. What are your thoughts?

Hunt Ramsbottom

As I said, the last three or four years, we continually evaluate the plant and the cash flows and the opportunities in the marketplace. And I think specifically we talked about, I think, in the last call this summer that we had some potential enquiries out there, and we did evaluate those this fall with the Board. And I think where we’ve come out today for a number of reasons is I think there has been a structural change in that business, and a number of folks understand that. You’ve got big changes in natural gas. You’ve got food supply shortages around the globe. And that does affect this plant.

So if you look at our business today and having that operating asset, again, it’s not just about the cash flow; it’s having that operating expertise and that team involved in our company. It’s a very important asset to us. So we did evaluate the offers. And during the fall, things continued to improve with the business. And we like the outlook of that business for the foreseeable future. So I think we will continue to own it. We will from time to time evaluate folks that come our way and do the most prudent thing that we believe to the shareholders and the company at that time. And right now, we believe it’s a hold and build on that asset.

Jeff Nansi – Green Finance Partners

Thank you.

Operator

Mr. Ramsbottom, I will now turn the call back to you. Please continue your presentation or closing remarks.

Hunt Ramsbottom

Great. Thank you. This past year, we made significant progress moving our Rialto Project forward and strengthening our liquidity so that we can continue to execute on budget activities. We believe that the outlook for alternative energy and fertilizer businesses is strong. Rising crude prices will continue to drive demand for our technologies for renewable power and synthetic fuels production. A dramatic improvement in the fertilizer market of the recent lows will support a substantially higher forecast of EBITDA of at least $60 million for this fiscal year. We look forward to sharing more of our commercial progress and REMC’s results with you. We’ll speak with you when we announce our results for the first quarter of fiscal year 2011. Thank you for your time.

Operator

Ladies and gentlemen, that does conclude today’s conference call. We thank you for your participation and ask that you please disconnect your lines.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Rentech CEO Discusses F4Q2010 Results – Earnings Call Transcript
This Transcript
All Transcripts