REX

LLM Evaluations

Transcript Summary

REX American Resources delivered a record-breaking fiscal 2025, reporting an all-time high EPS of $2.50 and net income of $83 million. The company's performance was bolstered by record ethanol sales volumes of 290 million gallons and the strategic recognition of $28 million in 45Z tax credits. REX is nearing completion of its One Earth Energy facility expansion, which will boost annual capacity to 200 million gallons by fiscal 2026. While the physical infrastructure for its carbon capture and storage (CCS) project is complete, the company is currently awaiting final Class VI well permits from the EPA, now anticipated around September 2025. REX maintains a pristine balance sheet with over $375 million in cash and no bank debt, providing ample liquidity for ongoing capital projects and shareholder returns. Management remains highly optimistic about 2026, citing strong export demand, favorable corn pricing, and the competitive advantage of low-carbon intensity fuel. Although a national E15 mandate remains politically challenging, REX expects continued growth in ethanol blending at the retail level. The company’s focus remains on its 'three P’s': profit, position, and policy, to drive sustained growth.

5-year share-count history (top 10 holders by peak, incl. exited) + price

Revenue Segments

Filing Risk Scores

REX American Resources: Tax Credit Arbitrage and IRS Settlements Mask Flat Operational Growth

Full Earnings Call Transcript — Q4 • 2026-03-26

Operator: Good morning, and welcome to the REX American Resources Corporation Fourth Quarter and Full Fiscal Year 2025 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 Doug Bruggeman, Chief Financial Officer of REX American Resources Corporation. Please go ahead.
Doug Bruggeman: Good morning, and thank you for joining this morning's call. I have joining me on the call today Stuart Rose, REX Executive Chairman, and Zafar Rizvi, our Chief Executive Officer. We will 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 risks and uncertainties within the meaning of the Private Securities 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 risks 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 Forms 10-K and 10-Q. REX American Resources Corporation assumes no obligation to publicly update or revise any forward-looking statements. I would now like to turn the call over to Stuart Rose, our Executive Chairman. 
Stuart Rose: Good morning, and thank you to everyone for joining us today. Fiscal 2025 was an exceptional year for REX American Resources Corporation, highlighted by outstanding operational performance and meaningful progress on our strategic growth initiatives. We demonstrated not only the resilience and scalability of our business model, but also the strength and capability of our team. Our ethanol sales volume reached record levels in 2025, driven by strong export demand and favorable industry conditions. In a dynamic commodity pricing environment, our team's operational excellence and market expertise enabled us to deliver strong financial results while maintaining our leadership position in the industry. While we expect these conditions to persist in the near term, our long-term success is rooted in discipline, execution, efficiency, and, most importantly, teamwork—qualities that allow us to perform consistently even in more challenging environments. On the strategic front, 2025 was a transformative year. We are encouraged by the initial implementation of the 45Z tax credit with its impact on fiscal 2025 and expect it to positively impact our results going forward. We also made significant progress on our capacity expansion at the One Earth Energy facility, which is nearing completion and will allow for increased annual production capacity to 200,000,000 gallons. In addition, we continue to work diligently on our carbon capture and storage initiative at the One Earth facility, reinforcing our commitment to sustainability and long-term value creation. Our financial position remains exceptionally strong after reporting record EPS for fiscal 2025. We concluded the year with a solid balance sheet, substantial cash reserves, and no bank debt. This financial flexibility, combined with our operational strength, positions us well to pursue continued growth and deliver enhanced shareholder value. Looking ahead to the remainder of 2026 and beyond, we are confident in our ability to build on this momentum. Our expanded capacity, tax credit eligibility, and strong financial foundation provide multiple avenues for sustained growth. As always, our success is driven by our people. The dedication, market insight, and attention to detail demonstrated by the REX team truly set us apart. Whether operating our facilities at peak efficiency or strategically managing our commodity positions, our employees continue to perform at the highest level. With that, I will turn the call over to CEO Zafar Rizvi, who will provide additional details of our operations, achievements, and strategic initiatives.
Zafar Rizvi: Thank you, Stuart. Fiscal 2025 was a landmark year for REX American Resources Corporation, highlighted by exceptional execution across all aspects of our business and meaningful progress against our growth strategy. I am pleased to report that we are making strong progress toward completing the capacity expansion project at our One Earth Energy ethanol production facility, which will increase capacity to 200,000,000 gallons per year. We expect testing and commissioning to begin upon completion, with the facility becoming fully operational in fiscal 2026. In addition to increasing potential sales volume, this expanded capacity positions us to capture greater market share and benefit from the strong export demand environment that characterized 2025 and continues into 2026. This additional production also enhances our ability to maximize benefits under the 45B tax credit program. Turning to the 45Z program, as Stuart mentioned, we successfully positioned REX to capitalize on near-term opportunities under the 45Z tax credit program during 2025. We completed assessments with multiple independent experts to establish carbon intensity scores across our facilities. As anticipated, our score came in below the required threshold with the purchase of energy credits, enabling us to qualify for and begin recognizing 45Z tax credit benefits. Looking ahead, our carbon capture facility would further reduce our CI scores. This would allow us to qualify for higher credits, potentially increasing the financial benefits from the program. Our carbon capture and sequestration projects continue to await permitting for the Class VI well and associated carbon dioxide connector pipeline. We remain actively engaged with the EPA and the Illinois Commerce Commission throughout this process. As of fiscal year-end 2025, we have invested approximately $166,000,000 in our carbon capture and ethanol expansion projects combined, and currently remain within our previously stated total budget range of $220,000,000 to $230,000,000. I will now turn the call over to our CFO, Doug Bruggeman, to discuss our operational and financial results.
Doug Bruggeman: Thank you, Zafar. I will begin with our operational results. REX ethanol sales volumes during fiscal year 2025 were 290,000,000 gallons, a slight increase over fiscal year 2024 sales volumes of 289,700,000 gallons, and represented an all-time high for REX. Volumes in 2025 were 70,100,000 gallons versus 74,600,000 gallons in 2024. Average selling price for our consolidated ethanol volumes was approximately $1.74 per gallon for the full fiscal year 2025 and $1.72 for the fourth quarter. Dry distillers grain sales volumes during fiscal 2025 totaled 612,000 tons, a 3% decrease over fiscal 2024 volumes of 632,000 tons. Volumes during the fourth quarter were approximately 151,000 tons, a decrease of approximately 9% over 2024. Average selling price for dry distillers grains was approximately $144.06 per ton for the full year and $147.25 per ton for the fourth quarter. Modified distillers grain sales volumes were 81,900 tons in fiscal 2025 compared with approximately 70,000 tons in fiscal year 2024. For the fourth quarter, modified distillers grain volumes totaled approximately 19,700 tons, an increase of approximately 1% over the same period in 2024. The average selling price for modified distillers grain was approximately $65.82 per ton for the full year and $67.92 per ton for the fourth quarter. Corn oil sales volumes in fiscal year 2025 were particularly strong, coming in at approximately 97,000,000 pounds compared to 88,100,000 pounds sold in fiscal year 2024, an increase of approximately 10%. For the fourth quarter, corn oil sales volumes totaled approximately 25,200,000 pounds, an increase of 7% over fourth quarter 2024. Average selling price for REX’s corn oil product was approximately $0.54 per pound for the full year 2025. Gross profit for fiscal year 2025 was $93,700,000 versus gross profit of approximately $91,500,000 for fiscal year 2024. Gross profit in Q4 2025 was $28,900,000 compared to $17,600,000 in Q4 2024. The fourth quarter benefited from both improved ethanol pricing and reduced corn cost, the two largest drivers of gross profit. Our SG&A expense increased to $32,600,000 for fiscal year 2025 versus $27,100,000 in 2024. SG&A in the fourth quarter increased to approximately $12,300,000 versus $6,200,000 in 2024. The fourth quarter increase was primarily due to increased incentive bonus based on company profitability levels. Interest and other income was $15,000,000 in 2025, down from $19,200,000 in fiscal year 2024. We reported interest and other income for the fourth quarter of approximately $4,500,000 versus $4,200,000 for the same period in 2024. Income before taxes and noncontrolling interest for 2025 was approximately $88,600,000, a 5% decrease from $92,900,000 in 2024. During the fourth quarter, we reported approximately $27,400,000 in this metric versus $17,900,000 during the same period in the previous year. Net income attributable to REX shareholders for the year was $83,000,000 compared to $58,200,000 in fiscal year 2024. For the fourth quarter 2025, this equaled $43,700,000 compared with $11,100,000 for the fourth quarter 2024. The fourth quarter benefited from the recognition of approximately $28,000,000 in 45Z tax credits as the regulations became more clear. On a per share diluted basis for the full year, this amounts to an all-time high of $2.50 per share of net income in 2025 compared to $1.65 per share in 2024. And for the fourth quarter 2025, diluted net income per share was $1.32 compared to $0.31 per share for the same period the previous year. We ended the fiscal year with total cash, cash equivalents, and short-term investments of $375,800,000 compared with $359,100,000 for fiscal year-end 2024. This net build in cash was primarily due to cash from operations offset by capital expenditures primarily related to the plant expansion project at the One Earth Energy facility. REX American Resources Corporation ended the year without any bank debt. I would now like to turn things back to Zafar. Thank you.
Zafar Rizvi: Thank you, Doug. I would now like to provide additional context around our priorities for 2026 and the key factors expected to influence our business throughout the year. We are well positioned as we enter fiscal 2026 with expanded production capacity expected to come online this year, contribution from the 45G tax credit expected to benefit our bottom line, and favorable market tailwinds so far. We anticipate another year of strong performance and continued growth. Our strategy and execution remain guided by our three P’s: profit, position, and policy. Profit: We have now delivered 22 consecutive quarters of profitability, a testament to our team's discipline, operational excellence, and market expertise. We expect a profitable first quarter. Earnings of 2026 are expected to benefit from expanded capacity, a continued laser focus on our core business, and expected contribution from the 45Z tax credit. Position: We expect to complete the Monarch Energy expansion this year while continuing to advance our carbon capture initiative. These projects will enable us to increase production at lower carbon intensity and enhance our comparative position, allowing us to capture additional value from both the 45Z tax credit and our core business. Policy: The policy environment remains favorable. The 45G tax credit program provides meaningful near-term benefits, which would further increase with our carbon capture facility at One Earth. We also continue to monitor developments related to year-round E15 blending, which could drive incremental ethanol demand while reducing gasoline prices and emissions. Ethanol export demand remained exceptionally strong throughout 2025, with U.S. exports reaching record levels once again. We expect this strength to continue into 2026, bolstered by growing global demand for lower-carbon fuel, increased fuel blending, and the cost competitiveness of U.S. production. On the input side, corn supplies remain favorable, which should support manageable input cost and expected healthy gross margin. Looking ahead, as we progress through 2026, we remain focused on maximizing the performance of our core business, capturing the benefits of expanded production capacity, and continued efforts on our carbon capture facility. At the same time, we will continue to drive operational excellence across all aspects of our business. Our strong balance sheet, zero bank debt, and multiple growth drivers position us well for another year of value creation for our shareholders. In closing, I would like to thank our dedicated team for their hard work, innovation, and commitment to excellence, which continue to drive our success. We are excited about the opportunities ahead and confident in our ability to deliver sustained strong performance. Thank you to all of our stakeholders for your continued support. With that, I will turn it over for questions. Operator?
Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would 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 keys. One moment while we poll for questions. Thank you. Our first question comes from the line of Peter Dastreich with Water Tower Research. Please proceed with your question.
Peter Dastreich: Thank you. So, good morning, gentlemen, and congratulations on yet another quarter of better-than-expected results at REX. It is also great to see the One Earth expansion fully on track, and you have continued with the strong share buybacks. But my first questions are regarding 45Z. For that $28,000,000, is that just for Q4, or does that represent a catch-up on previous periods? And also, how should we think about 45Z in terms of the future run rate?
Doug Bruggeman: That is for the full fiscal year of 2025. You know, going forward, this is good through 2029. So we remain optimistic that we will continue to be able to claim these 45Z tax credits in the future years.
Stuart Rose: Also, if we get the carbon capture project completed, that will significantly increase the amount of 45Z credits that we will receive over and above this.
Peter Dastreich: Okay. Great. And just to follow up on that, are you able to disclose by how much that would improve your CI score with the CCS?
Zafar Rizvi: I think at this time we have not disclosed that publicly. Maybe in the future, if it is required, we will. It will be significant. Let us just leave it that it will be significant if we can get it. That is why we are working so hard on it.
Peter Dastreich: Okay. Great. Very good. And regarding the CCS permitting, so the Illinois pipeline moratorium, I believe, was set to expire July 1. Just wanted to confirm where we are on the Class VI injection permit. I recall it was expected to be finalized in June. Is that still the case?
Zafar Rizvi: Yes. We have several—
Doug Bruggeman: It has been moved to September on the EPA website at this point.
Zafar Rizvi: It has moved on the website, but we have had several different conversations with the EPA over the last few months and even the last few weeks, and we are at the final stage of technical review at this time. We have all the documents which they requested; we have provided them. But, as you know, government agencies move a little bit slower than expected, and that is what they posted on their website, but that does not mean that will be the latest we will get. We are having regular meetings with them.
Peter Dastreich: Okay. Great. Thank you. Just a couple of questions before I get back in the queue. Just regarding tariffs and the geopolitical situation. So, the first one on tariffs: How would you characterize the impact that tariffs are having on your operations for both ethanol and corn oil in the fourth quarter and looking into this year?
Zafar Rizvi: As far as tariff impact, we are pleased to see that there is no impact on our exports of ethanol. As you know, last year, 2025 export was the best export ever, and even though we have a great relationship with Canada at this time, Canada imported approximately 792,000,000 gallons, and so there seems to be no impact whatsoever at this time. Actually, the tariffs may help us to really export because we can see that Brazil is back in the business now. Last year, they only exported 49,600,000 gallons, and this year, first month of the year—it is January 2026—they imported about 36,400,000. Also, the export for January was the best five months since a long time. So we certainly see the export is increasing, and there is no other impact whatsoever on our business at this time.
Stuart Rose: Adding on to that, the high oil prices that we are currently experiencing should only be good for our business, both export and domestically. We are much greater value than we ever were, as far as I can recall anyway. The differential between the price of ethanol and the price of gasoline made from oil is significant. So, assuming that oil prices stay high, that should be very, very good for the ethanol business.
Peter Dastreich: Okay. That is great. Actually, that was exactly what my fourth question was going to be about. Thank you very much, and I will get back in the queue.
Stuart Rose: Thank you. Thanks for the question.
Operator: As a reminder, if you would like to ask a question, please press 1. Our next question comes from the line of Mason Born with AWH Capital. Please proceed with your question.
Mason Born: Good morning. A couple of questions from me. I guess to start on 45Z, a nice surprise there. Could you talk about, on a per-gallon basis, what you are recognizing now? It seems like it is roughly $0.10 per gallon if you think about it in terms of your total gallons. But is there mix within that where some are more, some are less than what you are currently working?
Doug Bruggeman: Your estimate is correct at this time.
Mason Born: Okay. So it is $0.10 on all of your gallons.
Doug Bruggeman: Correct.
Mason Born: Okay. And then are there other things within 45Z outside of carbon capture that you view as opportunities for increased credits, or is it mainly just carbon capture?
Zafar Rizvi: I think, as you can see, and as Stuart mentioned, once the carbon capture facility is completed, that will reduce further our CI score at least 30 to 35 points more, so that will really make a significant effect on our—
Mason Born: Do you still view the full $1 as achievable on any of your plants, or is that more aspirational?
Zafar Rizvi: I think it is possible, once we have the carbon sequestration facilities completed and our construction is completed at the One Earth Energy level, that we may be able to achieve $1 a gallon at that location.
Mason Born: It seems like your language and your commentary around carbon capture being operational in 2026 is maybe different than last time. So are you more optimistic now? Is that fair to say as you have gotten further into discussions with EPA?
Zafar Rizvi: No. I think my conversation is about the completing of the construction of our facility at One Earth Energy. You know, carbon capture facility is already complete. It all depends on the permits when we receive them from EPA and IEPA and ICC, Illinois Commerce Commission. So it depends on the permits. But as far as the facility for the carbon capture, it is complete. But to be clear, we do not—
Doug Bruggeman: —expect to capture 45Z credits due to carbon capture in 2026. If that was construed that way, that would not be correct.
Mason Born: Okay. I guess just the last thing for me. On the E15, there has been a lot of commentary there or speculation that maybe you could see some progress. I know there is a waiver just, I think, this week on a temporary basis. But what are your thoughts higher level on the likelihood of a nationwide E15 in a more sustainable manner?
Stuart Rose: Nationwide E15 would be great, but I do not expect that to happen. The oil companies are too powerful. But I do expect more and more independents to put in E15 pumps, and the E15, at least in our areas—I think in the whole country—significantly lessens the price to the consumer, significantly less than E10. Also, the retailers have a chance to make more money. So I expect that to happen. It should happen, and with more pumps of E15, I believe more consumers will use them, and it will benefit us in that way. I do not expect nationwide E15. That would be great, but I do not think that is going to happen.
Mason Born: Great. Thank you.
Operator: Thank you. It appears we have no further questions at this time. Mr. Rose, I would like to turn the floor back over to you for closing comments.
Stuart Rose: I would like to thank everyone for listening. As always, I would like to attribute our record year—and it is a record year in both earnings per share and after-tax earnings—to having the very, very best people, starting with our CEOs of our REX team and all the way down to the plant level. We just have excellent people, and our results speak to that. I think we are among the top, if not the top, in the industry, and it is truly due to having the best people. We feel we have the best people in the industry. Again, I would like to thank everyone for listening, and we will talk to you next quarter. Bye.
Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.