Rentech, Inc. (RTK)
F2Q10 (Qtr End 03/31/10) Earnings Call Transcript
May 7, 2010 1:00 pm ET
Julie Dawoodjee – VP of IR and Communications
Hunt Ramsbottom – President & CEO
Dan Cohrs – EVP & CFO
Burt Chao – Simmons
Matt Farwell – Imperial Capital
Jeremy Sussman – Brean Murray
David Neuhauser – Livermore Partners
Previous Statements by RTK
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Thank you. I would like to welcome all of you to Rentech's 2010 fiscal second quarter conference call for the period ended March 31, 2010. Before we begin our prepared remarks I would like to cover some administrative aspects of this conference call.
During this call, Hunt Ramsbottom, President and CEO of Rentech, will provide opening remarks highlighting our Company’s progress during the fiscal quarter. DAN Cohrs, our Chief Financial Officer, will give a financial review of the second quarter and provide comments on Rentech’s financial position. We will then open the lines for questions and ask that you limit yourself to one question so that we may get to as many 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 terminology 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 May 7th, 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.
Thank you, Julie, good morning everyone and thank you for joining us today. Last Friday, Rentech made history when the United Airlines flew the first commercial flight in the United States on synthetic fuel produced by Rentech, which is certified for commercial aviation. This was the culmination of years of hard work by our employee and was a thrill to see our fuels in use.
I was honored to be on that flight and I can tell you first hand that both the Rentech and United passengers on the flight were equally excited to see a U.S. commercial aircraft take-off on clean synthetic jet fuel. Synthetic fuels, including RenJet, are the only alternative fuel types certified for use in commercial aviation.
Our flight was fuelled with a 40:60 blend of RenJet and traditional Jet A, and confirms that our fuel performs on a commercial aircraft as well as traditional jet fuel. United Airlines and other commercial carriers have been strong proponents of a domestic alternative fuels industry with a lower carbon footprint.
In August of last year, eight airlines signed an unprecedented multi-year agreement with Rentech for up to 1.5 million gallons per year of renewable synthetic diesel from our Rialto project. The fuel will power ground service equipment at Los Angeles international airport.
In December 2009, 13 carriers signed an MOU that is serving as a framework for definitive supply agreement for approximately 250 million gallons per year of certified synthetic jet fuel from our Natchez project. The customer agreement we are pursuing with the airlines validate the considerable market demand for synthetic fuels produced by the Rentech Process.
There is significant market opportunity for our technologies in the 28 states with renewable power requirements and in some of the 45 countries which feed entire programs to simulate renewable power production. There is also many states and countries with low carbon on renewable fuel requirements that should allow us to sell our low carbon fuels at a premium. In addition, we are promoting our technology for products – projects in locations with under utilized fossil resources to replace imported oil.
The renewable power produced from our Rentech-SilvaGas gasifier is base load, 24/7, renewable power, requires no back-up power generation, and can be placed close to existing transmission lines. Because of this, our projects compare favorably to wind and solar as sources of renewable power.
The synthetic fuels produced using the Rentech process are ready for commercialization. They are drop in high value jet and diesel fuels that can be produced economically and at large scale. We are the only alternative fuel type certified for commercial aviation and also the United States Military. Use low-cost feedstock that do not compete with food, and have lower carbon – have a lower regulated emissions and carbon footprint than petroleum based fuels.
Since the acquisition of SilvaGas, we’ve developed four distinct product offerings through project development in North America, and licensings worldwide. Product number one, what we call repowering boilers, a Rentech-SilvaGas gas product that replaced the coal input at existing coal-fired boilers to produce renewable power, helping producers meet their renewable mandates and reduce emission.