REX AMERICAN RESOURCES Corp SEC 10-Q Report
REX AMERICAN RESOURCES Corp, a leading player in the ethanol production industry, has released its Form 10-Q report for the second quarter of fiscal year 2025. The report highlights the company's financial performance, operational achievements, and strategic initiatives aimed at enhancing production capabilities and sustainability efforts.
Financial Highlights
Net Sales and Revenue: The company reported net sales and revenue of $158.6 million for the three months ended July 31, 2025, marking a 7% increase compared to the prior year second quarter. This growth was primarily driven by higher ethanol sales volume.
Gross Profit: Gross profit for the quarter was $14.3 million, a decrease from $19.8 million in the prior year second quarter. The decline was mainly due to increased cost of sales.
Income Before Income Taxes: Income before income taxes stood at $12.1 million, down from $19.5 million in the prior year second quarter, reflecting lower gross profit and reduced interest income.
Net Income: The company reported a net income of $9.3 million for the three months ended July 31, 2025, compared to $15.0 million in the prior year second quarter. The decrease was impacted by decreased gross profit and higher cost of sales.
Net Income Attributable to REX Common Shareholders: Net income attributable to REX common shareholders was $7.1 million, compared to $12.4 million in the prior year second quarter.
Basic Net Income Per Share Attributable to REX Common Shareholders: Basic net income per share was $0.43, compared to $0.71 in the prior year second quarter, reflecting lower net income.
Diluted Net Income Per Share Attributable to REX Common Shareholders: Diluted net income per share was $0.43, compared to $0.70 in the prior year second quarter.
Business Highlights
Revenue Segments: Ethanol revenue increased by 6% in the second quarter of fiscal year 2025 compared to the same period in 2024, driven by an 8% increase in gallons sold, despite a 2% decrease in the selling price per gallon. Distillers corn oil revenue saw a significant increase of approximately 46% due to a 26% rise in selling price per pound and a 14% increase in pounds sold.
Sales Units: The company sold 70.6 million gallons of ethanol in the second quarter of 2025, up from 65.1 million gallons in the same period of 2024. Additionally, 148,017 tons of dried distillers grains were sold, marking an 11% increase from the previous year.
New Production Launches: One Earth Energy, LLC is expanding its ethanol plant capacity from 150 million gallons per year to 175 million gallons, with plans to further increase to 200 million gallons per year. This expansion is part of ongoing efforts to enhance production capabilities.
Future Outlook: The company is actively pursuing carbon sequestration projects, with One Earth Sequestration, LLC in the developmental stage of a project near the One Earth ethanol plant. The company expects to receive a draft permit from the EPA by November 2025 and a final decision by March 2026.
Operational Challenges: The company faces challenges related to commodity price volatility, particularly for corn, ethanol, and distillers grains, which can significantly impact operating margins. The company attempts to manage these risks through forward contracts and hedging strategies.
Geographical Performance: The company’s ethanol operations are primarily located in the Midwest, with significant investments in Illinois and South Dakota. The geographical location provides strategic advantages in terms of corn supply and distribution logistics.
Regulatory Environment: The company is navigating a complex regulatory environment, including the Renewable Fuel Standard II and recent legislative changes such as the Inflation Reduction Act and the One Big Beautiful Bill Act, which impact tax credits and operational strategies.
Carbon Sequestration Initiatives: The company is investing in carbon sequestration projects to reduce carbon intensity scores and qualify for tax credits under sections 45Q and 45Z. These initiatives are expected to enhance the company’s environmental sustainability and financial performance.
SEC Filing: REX AMERICAN RESOURCES Corp [ REX ] - 10-Q - Sep. 02, 2025