REX — REX American Resources Corporation

Summary of REX American Resources Corporation Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Ethanol Sales Volume: Reached a record 290 million gallons in FY 2025, slightly up from 289.7 million gallons in FY 2024.
• Gross Profit: Increased to $93.7 million in FY 2025 from $91.5 million in FY 2024. Q4 gross profit was $28.9 million, up from $17.6 million in Q4 2024.
• Net Income: For FY 2025, net income attributable to shareholders was $83 million, compared to $58.2 million in FY 2024. Q4 net income was $43.7 million, up from $11.1 million in Q4 2024.
• Earnings Per Share (EPS): Achieved an all-time high of $2.50 per diluted share for FY 2025, compared to $1.65 in FY 2024. Q4 EPS was $1.32, up from $0.31 in Q4 2024.
• Cash Position: Ended FY 2025 with $375.8 million in cash and equivalents, an increase from $359.1 million in FY 2024, with no bank debt.

2. Strategic Updates and Business Highlights

• Capacity Expansion: Progressing on the One Earth Energy facility expansion, expected to increase production capacity to 200 million gallons annually by FY 2026.
• Tax Credit Programs: Successfully positioned to benefit from the 45Z tax credit, recognizing $28 million in FY 2025. Anticipated further benefits from carbon capture initiatives.
• Sustainability Initiatives: Ongoing work on carbon capture and storage projects, awaiting permitting from the EPA, which is crucial for future tax credit opportunities.

3. Forward Guidance and Outlook

• 2026 Expectations: Anticipate continued strong performance driven by expanded production capacity, favorable market conditions, and contributions from the 45Z tax credit.
• Profitability: Expect to maintain profitability with a focus on operational excellence and maximizing production efficiency.
• Market Demand: Strong export demand for ethanol is expected to persist, supported by favorable corn supply conditions.

4. Bad News, Challenges, or Points of Concern

• Income Before Taxes: Decreased by 5% to approximately $88.6 million in FY 2025 from $92.9 million in FY 2024.
• SG&A Expenses: Increased significantly to $32.6 million in FY 2025 from $27.1 million in FY 2024, primarily due to higher incentive bonuses.
• Carbon Capture Permitting Delays: The permitting process for the carbon capture facility has faced delays, which could impact future tax credit benefits.

5. Notable Q&A Insights

• 45Z Tax Credits: The $28 million recognized in Q4 2025 was for the full fiscal year, with optimism about continuing to claim these credits through 2029.
• Carbon Intensity (CI) Score: Significant improvements expected with the completion of carbon capture facilities, though specific metrics were not disclosed.
• E15 Blending: While nationwide E15 implementation is unlikely due to oil company influence, there is potential for increased adoption at independent retailers, which could benefit REX's market position.

Overall, REX American Resources Corporation reported a strong fiscal year with record earnings and strategic advancements, despite some challenges related to expenses and permitting processes. The outlook for 2026 remains positive, driven by operational growth and favorable market conditions.