REX American Resources Corporation (REX) Q4 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call and Q&A indicate positive sentiment, driven by increased net income, improved gross profit, and promising future tax credits. The strategic expansion plans and anticipated record ethanol exports add to the optimism. Despite some uncertainties, such as the CCS project's impact and regulatory timelines, the overall outlook is positive due to strong financial performance and future growth prospects.
Key Financial Performance
Ethanol Sales Volume 290 million gallons in fiscal year 2025, a slight increase from 289.7 million gallons in fiscal year 2024. The increase was driven by strong export demand and favorable industry conditions.
Ethanol Sales Volume (Q4) 70.1 million gallons in Q4 2025, a decrease from 74.6 million gallons in Q4 2024. No specific reason for the decrease was mentioned.
Average Selling Price of Ethanol $1.74 per gallon for fiscal year 2025 and $1.72 for Q4 2025. No year-over-year comparison or reasons for change were provided.
Dried Distiller Grain Sales Volume 612,000 tons in fiscal year 2025, a 3% decrease from 632,000 tons in fiscal year 2024. No specific reason for the decrease was mentioned.
Dried Distiller Grain Sales Volume (Q4) 151,000 tons in Q4 2025, a 9% decrease from Q4 2024. No specific reason for the decrease was mentioned.
Modified Distiller Grain Sales Volume 81,900 tons in fiscal year 2025, an increase from 70,000 tons in fiscal year 2024. No specific reason for the increase was mentioned.
Modified Distiller Grain Sales Volume (Q4) 19,700 tons in Q4 2025, a 1% increase from Q4 2024. No specific reason for the increase was mentioned.
Corn Oil Sales Volume 97 million pounds in fiscal year 2025, a 10% increase from 88.1 million pounds in fiscal year 2024. The increase was attributed to strong demand.
Corn Oil Sales Volume (Q4) 25.2 million pounds in Q4 2025, a 7% increase from Q4 2024. No specific reason for the increase was mentioned.
Average Selling Price of Corn Oil $0.54 per pound for fiscal year 2025 and Q4 2025. No year-over-year comparison or reasons for change were provided.
Gross Profit $93.7 million in fiscal year 2025, an increase from $91.5 million in fiscal year 2024. The increase was driven by improved ethanol pricing and reduced corn costs.
Gross Profit (Q4) $28.9 million in Q4 2025, an increase from $17.6 million in Q4 2024. The increase was driven by improved ethanol pricing and reduced corn costs.
SG&A Expense $32.6 million in fiscal year 2025, an increase from $27.1 million in fiscal year 2024. The increase was primarily due to increased incentive bonuses based on company profitability levels.
SG&A Expense (Q4) $12.3 million in Q4 2025, an increase from $6.2 million in Q4 2024. The increase was primarily due to increased incentive bonuses based on company profitability levels.
Interest and Other Income $15 million in fiscal year 2025, a decrease from $19.2 million in fiscal year 2024. No specific reason for the decrease was mentioned.
Interest and Other Income (Q4) $4.5 million in Q4 2025, an increase from $4.2 million in Q4 2024. No specific reason for the increase was mentioned.
Income Before Taxes and Noncontrolling Interest $88.6 million in fiscal year 2025, a 5% decrease from $92.9 million in fiscal year 2024. No specific reason for the decrease was mentioned.
Income Before Taxes and Noncontrolling Interest (Q4) $27.4 million in Q4 2025, an increase from $17.9 million in Q4 2024. No specific reason for the increase was mentioned.
Net Income Attributable to Shareholders $83 million in fiscal year 2025, an increase from $58.2 million in fiscal year 2024. The increase was driven by the recognition of approximately $28 million in 45Z tax credits.
Net Income Attributable to Shareholders (Q4) $43.7 million in Q4 2025, an increase from $11.1 million in Q4 2024. The increase was driven by the recognition of approximately $28 million in 45Z tax credits.
Diluted Net Income Per Share $2.50 per share in fiscal year 2025, an increase from $1.65 per share in fiscal year 2024. The increase was driven by the recognition of approximately $28 million in 45Z tax credits.
Diluted Net Income Per Share (Q4) $1.32 per share in Q4 2025, an increase from $0.31 per share in Q4 2024. The increase was driven by the recognition of approximately $28 million in 45Z tax credits.
Cash, Cash Equivalents, and Short-Term Investments $375.8 million at fiscal year-end 2025, an increase from $359.1 million at fiscal year-end 2024. The increase was primarily due to cash from operations, offset by capital expenditures related to the plant expansion project.
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Operating Highlights
Ethanol Sales Volume: Reached a record level of 290 million gallons in 2025, driven by strong export demand and favorable industry conditions.
Carbon Capture and Storage Initiative: Progress made at the One Earth facility, reinforcing commitment to sustainability and long-term value creation.
Export Demand: Ethanol export demand remained exceptionally strong throughout 2025, with U.S. exports reaching record levels.
Capacity Expansion: Expansion at the One Earth Energy facility nearing completion, increasing annual production capacity to 200 million gallons.
Operational Efficiency: Achieved 22 consecutive quarters of profitability, demonstrating operational excellence and market expertise.
45Z Tax Credit: Successfully positioned to capitalize on the 45Z tax credit program, with benefits recognized in 2025 and further opportunities expected with carbon capture initiatives.
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Risk or Challenges
Carbon Capture and Sequestration Permitting Delays: The carbon capture and sequestration projects are awaiting permits from the EPA and Illinois Commerce Commission, which could delay the project's completion and associated financial benefits.
SG&A Expense Increase: The SG&A expenses increased significantly in fiscal year 2025, primarily due to incentive bonuses tied to profitability, which could impact overall profitability if not managed effectively.
Decline in Dried Distiller Grain Sales Volumes: Dried distiller grain sales volumes decreased by 3% in fiscal year 2025 compared to 2024, and by 9% in the fourth quarter, which could affect revenue from this product line.
Dependency on 45Z Tax Credit: The company's financial performance is increasingly tied to the 45Z tax credit program. Any changes or delays in this policy could adversely impact profitability.
Corn Supply and Pricing Volatility: While corn supplies are currently favorable, any future volatility in corn pricing could significantly impact input costs and gross margins.
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Guidance & Outlook
Capacity Expansion: The One Earth Energy facility's capacity expansion project is nearing completion and is expected to increase annual production capacity to 200 million gallons. Testing and commissioning are anticipated to begin soon, with full operational status expected in fiscal 2026.
45Z Tax Credit Program: The company expects to benefit from the 45Z tax credit program, with carbon intensity scores already qualifying for credits. Future carbon capture initiatives may further enhance eligibility for higher-tier credits, increasing financial benefits.
Carbon Capture and Storage Initiative: The carbon capture and storage project at the One Earth facility is progressing, with permitting processes ongoing. This initiative aims to reduce carbon intensity and qualify for additional tax credits.
Ethanol Export Demand: Strong ethanol export demand is expected to continue into 2026, driven by global demand for lower-carbon fuels and increased fuel blending.
Market Conditions and Input Costs: Corn supplies are expected to remain favorable, supporting manageable input costs and healthy gross margins in 2026.
Policy Environment: The policy environment remains favorable, with potential benefits from year-round E15 blending and the 45Z tax credit program.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What is the $28 million related to 45Z, and how should we think about its future run rate?
A:The $28 million is for the full fiscal year of 2025, and the 45Z tax credits are expected to continue through 2029. If the carbon capture project is completed, it will significantly increase the amount of 45Z credits.
Q:Can you disclose how much the CCS project would improve your CI score?
A:The company has not disclosed this publicly but mentioned that the improvement would be significant.
Q:What is the status of the Class VI injection permit and the Illinois pipeline moratorium?
A:The permit's expected finalization has been moved to September on the EPA website. The company is in the final stage of technical review and has provided all requested documents to the EPA. Regular meetings with the EPA are ongoing.
Q:How are tariffs and the geopolitical situation impacting operations for ethanol and corn oil?
A:There is no impact on ethanol exports, and exports are increasing. Canada imported approximately 792 million gallons, and Brazil's imports have also increased. High oil prices are beneficial for the ethanol business both domestically and internationally.
Q:What is the per gallon recognition for 45Z credits, and are there opportunities for increased credits?
A:The recognition is approximately $0.10 per gallon. The carbon capture facility, once completed, could reduce the CI score by 30 to 35 points, potentially increasing credits. Achieving $1 per gallon is possible at the One Earth Energy location after construction completion.
Q:Is the company more optimistic about carbon capture being operational in 2026?
A:The carbon capture facility is complete, but operational status depends on permits from EPA, IEPA, and ICC. The company does not expect to capture 45Z credits due to carbon capture in 2026.
Q:What are the thoughts on the possibility of a nationwide E15 adoption?
A:Nationwide E15 adoption is unlikely due to the influence of oil companies. However, more independent retailers are expected to adopt E15 pumps, benefiting consumers and retailers.
Q:Review of Unclear Management Responses
A:The company avoided providing a direct answer regarding the specific improvement in CI score from the CCS project, stating only that it would be significant.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
American bank
CEO detail
CFO Treasurer
CFO result
Chairman Chief
Commission process
Development today
Earth Energy
Energy facility
Finance CFO
Rose
SGA
VP Finance
Volumes
ability
capacity expansion
capacity gallon
commodity
completion
corn oil
credit benefit
credit program
environment
export demand
grain ton
income share
industry condition
level
period
pound increase
price distiller
pricing
progress capacity
project Earth
score
share income
success
ton decrease
volume pound
REX Transcript
REX American Resources Corporation (REX) Q1 2026 Earnings Call Transcript
Neutral6-12
REX American Resources Corporation (REX) Q1 2027 Earnings Call Transcript
Positive5-28
The earnings call presented strong financial performance with revenue and net income growth, improved gross margins, and increased operating cash flow. Although there were concerns about risks in forward-looking statements, the financial results and strategic initiatives like capacity expansion and carbon capture projects suggest a positive outlook. With no major negative factors discussed, a positive stock price movement is likely.
REX American Resources Corporation (REX) Q4 2025 Earnings Call Transcript
Positive3-26
The earnings call reveals strong financial performance with significant increases in net income and EPS driven by 45Z tax credits. The expansion and carbon capture initiatives, despite some uncertainties, suggest future growth. The Q&A indicates optimism about continued tax credits and strong ethanol demand, though some lack of clarity on carbon capture impact. Overall, the positive financial results and future growth prospects outweigh the uncertainties, leading to a positive sentiment.
REX American Resources Corporation (REX) Q4 2026 Earnings Call Transcript
Positive3-26
The earnings call and Q&A indicate positive sentiment, driven by increased net income, improved gross profit, and promising future tax credits. The strategic expansion plans and anticipated record ethanol exports add to the optimism. Despite some uncertainties, such as the CCS project's impact and regulatory timelines, the overall outlook is positive due to strong financial performance and future growth prospects.
REX Report
Frequently Asked Questions
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