REX (REX) came out with quarterly earnings of $0.63 per share, beating the Zacks Consensus Estimate of $0.27 per share. This compares to earnings of $1.16 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 133.33%. A quarter ago, it was expected that this ethanol producer would post earnings of $0.72 per share when it actually produced earnings of $1.38, delivering a surprise of 91.67%.Over the last four quarters, the company has ...

Financial Performance - For the full fiscal year 2024, REX reported net sales and revenue of $642.5 million, a decrease of 23% from $833.4 million in fiscal year 2023[3] - Full fiscal year 2024 gross profit was $91.5 million, down from $98.2 million in the prior year, with a gross profit margin increase to 14% from 12%[3] - Net income attributable to REX shareholders for fiscal year 2024 was $58.2 million, compared to $60.9 million in fiscal year 2023, resulting in diluted net income per share of $3.30, down from $3.47[4] - In Q4 2024, REX reported net sales and revenue of $158.2 million, a decline from $187.6 million in Q4 2023, primarily due to lower product pricing[5] - Q4 2024 gross profit was $17.6 million, compared to $30.4 million in Q4 2023, leading to income before income taxes of $17.9 million, down from $32.5 million[5] Cash and Investments - As of January 31, 2025, REX had $359.1 million in cash, cash equivalents, and short-term investments, with no bank debt[14] - Cash and cash equivalents at the end of the year were $196,255 million, down from $223,397 million at the beginning of the year[27] - Net cash provided by operating activities decreased to $64,192 million from $127,970 million, reflecting a decline of 49.9%[27] - Net cash used in investing activities was $(72,860) million, a shift from net cash provided of $28,402 million in the prior year[27] Capital Expenditures and Share Repurchase - REX is progressing on the expansion of ethanol production at the One Earth facility, with capital expenditures totaling $115.6 million related to this project[11] - Capital expenditures increased significantly to $71,318 million compared to $37,663 million in the previous year, representing an increase of 89.5%[27] - The company has authorized an additional share repurchase program of up to 1.5 million shares, following the repurchase of approximately 372,567 shares for $15.5 million in fiscal year 2024[12][13] - Treasury stock acquired amounted to $14,741 million, indicating a new strategy in capital management[27] Production and Capacity - REX's effective ownership of annual ethanol production volumes is approximately 300 million gallons, with a total production capacity of about 730 million gallons per year across its facilities[19] Tax and Other Financial Metrics - Long-term taxes payable increased to $4,334 million, reflecting changes in tax strategy[27] - The company reported a loss on disposal of property and equipment of $50 million, down from $243 million[27] - Non-cash investing activities included accrued capital expenditures of $1,152 million, up from $918 million[28] - Stock awards issued totaled $2,172 million, compared to $965 million in the previous year, indicating increased compensation strategies[28] Ongoing Projects - The permitting process for the carbon capture and sequestration project is ongoing, with final permitting expected to be completed by October 2025[9]

Ethanol Production and Capacity - As of October 31, 2024, the company holds majority ownership interests in two ethanol entities, with One Earth Energy, LLC at 75.9% and NuGen Energy, LLC at 99.7%[110] - The company expects its ethanol plants to produce approximately 2.9 gallons of denatured ethanol per bushel of corn processed, with the realized yield being critical for cash flow sustainability[111] - The company received a construction permit to increase ethanol production from 150 million gallons per year to 175 million gallons per year, with plans to apply for a further increase to 200 million gallons[119] - The Renewable Fuel Standard volume obligations for conventional biofuels are set at 15.0 billion gallons for each year from 2023 to 2025[128] - The company is facing uncertainties regarding the enforcement of the Renewable Fuel Standard II, which may impact future ethanol production volumes[126] Financial Performance - Net sales and revenue for the three months ended October 31, 2024, decreased by 21% to $174.9 million compared to $221.1 million in the same period of 2023[136] - Ethanol revenue decreased by 19% in Q3 2024, driven by a 21% decrease in average selling price, despite a 3% increase in gallons sold[139] - Dried distillers grains revenue fell by 28% in Q3 2024, attributed to a 25% decrease in average selling price and a 5% decrease in tons sold[140] - Distillers corn oil revenue decreased approximately 31% in Q3 2024, with a 28% drop in average price per pound sold[141] - Gross profit for Q3 2024 increased by approximately $0.4 million compared to Q3 2023, totaling $39.7 million[146] - Income before income taxes for Q3 2024 was approximately $39.5 million, compared to $41.3 million in Q3 2023[153] - Net income for Q3 FY 2024 was approximately $30.1 million, a decrease from $31.6 million in Q3 FY 2023, while net income for the first nine months of FY 2024 was approximately $57.4 million, up from $50.6 million in the same period last year[156] - Net income attributable to REX common shareholders for Q3 FY 2024 was approximately $24.5 million, compared to $26.1 million in Q3 FY 2023, with a nine-month total of approximately $47.1 million, up from $40.4 million[158] Expenses and Costs - Cost of sales decreased approximately 26% in Q3 2024, with corn accounting for 76% of the cost, down from 80% in Q3 2023[145] - SG&A expenses for Q3 2024 were approximately $8.4 million, an increase from $7.6 million in Q3 2023, primarily due to higher railcar lease expenses[150] - The company recognized income from its equity investment in Big River of approximately $3.6 million in Q3 2024, down from $4.7 million in Q3 2023[151] Cash Flow and Capital Expenditures - Net cash provided by operating activities for the first nine months of FY 2024 was approximately $39.1 million, down from $65.5 million in the same period of FY 2023[159] - Capital expenditures for the first nine months of FY 2024 were approximately $55.4 million, primarily for projects at consolidated ethanol plants, including $24.5 million for expansion and CI scoring reduction at One Earth[163] - The company plans total capital expenditures of approximately $165 million to $175 million for construction at One Earth facilities, including ongoing carbon sequestration and capacity expansion projects[167] Carbon Sequestration and Environmental Initiatives - The total cost for the carbon sequestration and plant expansion projects is estimated to be between $165 million and $175 million, with $52.9 million already spent as of October 31, 2024[121] - The company is working on a carbon sequestration project, with a test well drilled to approximately 7,100 feet and a Class VI injection well permit application submitted to the EPA[115] - The Illinois General Assembly passed legislation imposing additional requirements for carbon capture and sequestration facilities, affecting the company's project timelines[116] - The Inflation Reduction Act introduces a Clean Fuel Production Credit of approximately $0.02 per ethanol gallon per carbon intensity point reduction, applicable from 2025 to 2027[129] Shareholder Returns and Dividends - The company has a stock buyback program with 876,786 shares remaining authorized as of October 31, 2024[168] - The company received dividends from Big River of approximately $3.0 million in FY 2024, down from $5.5 million in FY 2023[161] Working Capital and Financial Position - Working capital as of October 31, 2024, was approximately $392.5 million, an increase from $385.8 million at January 31, 2024, with a current assets to current liabilities ratio of 9.9 to 1[162] - A decrease in accounts payable used cash of approximately $21.6 million in FY 2024, primarily due to timing of inventory receipts and vendor payments[159] Future Projections - Estimated total volume for ethanol for the next 12 months is 300,000 gallons, with a potential decrease in pre-tax income of $49,091 from a 10% adverse price change[172]

Financial Data and Key Metrics Changes - REX American Resources reported a net income per share of $1.38, a 97% improvement over the second quarter of 2024, marking the second most profitable quarter in the company's history [7][26] - Gross margin improved by 1% compared to the third quarter of 2023, despite a 21% reduction in product revenue [8] - Gross profit for the third quarter of 2024 was $39.7 million, slightly up from $39.3 million in the same quarter of 2023 [23][24] - Total cash, cash equivalents, and short-term investments at the end of the quarter were $365.1 million, down from $378.7 million at the beginning of the fiscal year [27] Business Line Data and Key Metrics Changes - Ethanol sales volume increased by approximately 3% to 75.5 million gallons compared to 73.2 million gallons in the third quarter of 2023 [21] - Average selling price for ethanol decreased to $1.83 per gallon from $2.32 per gallon in the prior year [21] - Dry distillers grain sales volume decreased by 5% to 170,116 tons, with average selling price dropping from $194.94 per ton to $147.14 per ton [22] - Corn oil sales volume was approximately 23.4 million pounds, down from 24.1 million pounds, with average selling price decreasing from $0.61 per pound to $0.44 per pound [23] Market Data and Key Metrics Changes - Ethanol exports were approximately 33% higher in the first nine months of the calendar year compared to the same period in 2023, returning to pre-pandemic levels [30] - Corn input prices have improved due to a bumper crop in the Midwest, ensuring adequate supply for the plants [29] Company Strategy and Development Direction - The company aims to complete the construction of its One Earth Energy carbon capture and compression facility and expand its ethanol production capacity to 175 million gallons per year, with plans to further permit for 200 million gallons [6][11] - The company is focused on maintaining strategic freedom and pursuing additive growth projects while remaining debt-free [9] - Future projects may include sustainable aviation fuel and third-party carbon sequestration [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain profitability despite challenges in the regulatory environment and potential changes in federal policy [28][31] - The anticipated completion of the ethanol production expansion is expected to enhance profitability [31] - Management remains cautious about the impact of potential changes in the 45Z tax credit and the incoming administration's policies [36][50] Other Important Information - The company has invested approximately $103 million into the One Earth carbon capture project and ethanol production capacity expansion combined, with spending on the CCS project at $52.9 million and ethanol expansion at $50.2 million [18] Q&A Session Summary Question: Thoughts on Biden administration not finalizing 45Z guidance - Management expressed uncertainty about the implications of the incoming administration on growth initiatives related to 45Z and emphasized the difficulty in benefiting from it without finalized regulations [36][37] Question: Areas of opportunity for deploying cash - Management highlighted potential share buybacks and opportunities in new ethanol plants, although current prices are above their willingness to pay [45][46] Question: Decisions on carbon capture project pending clarity on 45Q - Management indicated that they would likely continue with the carbon capture project regardless of 45Q's status, citing market opportunities for low-carbon products [50][51]

Core Viewpoint - REX reported quarterly earnings of $1.38 per share, significantly exceeding the Zacks Consensus Estimate of $0.72 per share, marking an earnings surprise of 91.67% [1][2] Financial Performance - REX's revenues for the quarter ended October 2024 were $174.88 million, surpassing the Zacks Consensus Estimate by 9.99%, although this represents a decline from $221.08 million in the same quarter last year [2] - The company has consistently outperformed consensus EPS estimates over the last four quarters [2] Stock Performance - REX shares have declined approximately 8.1% since the beginning of the year, contrasting with the S&P 500's gain of 26.8% [4] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.61 on revenues of $159 million, and for the current fiscal year, it is $2.60 on revenues of $627 million [8] - The estimate revisions trend for REX is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [7] Industry Context - The Biofuels industry, to which REX belongs, is currently ranked in the bottom 25% of over 250 Zacks industries, suggesting potential challenges ahead [9]

Financial Data and Key Metrics Changes - REX American Resources reported a net income per share improvement of more than 20% over Q1 2024 and more than 35% over Q2 2023 [4][13] - Gross profit for Q2 2024 was $19.8 million, an increase of 8% compared to approximately $18.4 million in Q2 2023 [12] - Total cash, cash equivalents, and short-term investments at the end of Q2 2024 were $346 million, down from $378.7 million as of January 31, 2024 [14] Business Line Data and Key Metrics Changes - Ethanol sales volume decreased by approximately 6% to 65.1 million gallons in Q2 2024 compared to 69.1 million gallons in Q2 2023 [11] - Average selling price for ethanol was $1.79 per gallon in Q2 2024, down from $2.42 per gallon in Q2 2023 [11] - Dry distillers grain sales volume decreased by 6% to 132,850 tons in Q2 2024, with an average selling price of $164.45 per ton, down from $226.48 per ton in Q2 2023 [11] Market Data and Key Metrics Changes - Ethanol exports increased by 36.5% through June compared to the same period last year, positively impacting the industry [15] - Corn crop conditions in the Midwest are expected to be strong, leading to favorable corn input pricing [15] Company Strategy and Development Direction - The company aims to complete the construction of the One Earth carbon capture and compression facility and expand ethanol production capacity to 175 million gallons per year, with plans for further permitting to reach 200 million gallons [4][5] - REX American Resources focuses on profitability over product pricing or production numbers, as evidenced by improved gross margin performance despite lower ethanol pricing [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong results in Q3 2024, expecting to exceed Q2 performance due to favorable market conditions [15] - The company is focused on maintaining profitability and has not incurred any debt, allowing for continued investment in core operations [4][14] Other Important Information - As of the end of Q2 2024, REX had invested approximately $91 million into the One Earth carbon capture project and associated ethanol production capacity expansion [10] - The company ended the quarter without any bank debt, reflecting a strong financial position [14] Q&A Session Summary Question: Timeline for carbon capture and pipeline build-out - Management indicated that the EPA permit is expected in Q2 2025, with construction of the carbon sequestration facility progressing [17][20] Question: Allocation of cash reserves - The first priority for cash allocation is the carbon capture and expansion of the Gibson City plant, with potential expansion of the South Dakota plant as a second priority [29] Question: Thoughts on sustainable aviation fuel - Management stated that low carbon fuel production is necessary, and they are awaiting clear guidelines for tax credits before proceeding [31] Question: Capital expenditures compared to budget - Management confirmed that capital expenditures are on track and no major increases are anticipated at this time [32]

Financial Performance - REX reported net income attributable to shareholders of $12.4 million for Fiscal Q2 '24, a 37% increase from $9.1 million in Fiscal Q2 '23[1][4] - Diluted net income per share for Fiscal Q2 '24 was $0.70, up from $0.52 in the same quarter last year, based on 17,671,000 diluted shares outstanding[1][4] - Gross profit for Fiscal Q2 '24 was $19.8 million, reflecting a more than 7% increase compared to $18.4 million in Fiscal Q2 '23[1][3] - Net income for the period ending July 31, 2024, was $27,280,000, up from $18,984,000 in the same period last year, representing a year-over-year increase of approximately 43.5%[17] - The company reported a net cash increase of $37,643,000 for the period, compared to $30,819,000 in the prior year[17] Revenue and Sales - Net sales and revenue decreased to $148.2 million in Fiscal Q2 '24 from $212.0 million in Fiscal Q2 '23, primarily due to reduced pricing for ethanol and co-products[1][3] - REX's consolidated ethanol sales volumes were 65.1 million gallons in Fiscal Q2 '24, a decrease of approximately 6% compared to the same period in Fiscal 2023[1][1] Assets and Liabilities - Total assets increased to $680,009,000 as of July 31, 2024, compared to $664,802,000 on January 31, 2024, reflecting a growth of approximately 2.0%[16] - Total current liabilities decreased to $51,909,000 from $66,259,000, a reduction of approximately 21.6%[16] - Total equity increased to $616,186,000 from $587,597,000, reflecting a growth of approximately 4.9%[16] - The company’s retained earnings rose to $724,330,000 from $701,761,000, an increase of about 3.2%[16] Cash Flow and Investments - Cash and cash equivalents rose to $261,040,000 from $223,397,000, marking an increase of about 16.9%[17] - Net cash provided by operating activities was $5,708,000, slightly down from $6,628,000 year-over-year[17] - Capital expenditures for the period were $40,219,000, significantly higher than $8,173,000 in the previous year, indicating increased investment in assets[17] - Capital expenditures for the One Earth Energy carbon capture project totaled $49.1 million, while expenditures for ethanol production expansion reached $41.7 million, totaling $90.8 million[1][8] Future Projects and Plans - The expansion of the One Earth Energy ethanol production facility is expected to increase capacity from 150 million to 175 million gallons per year by the end of Q1 2025[1][7] - The EPA is projected to issue a draft permit for the carbon capture project by the end of 2024, with a final decision expected in Q2 2025[1][5] Management Focus - Management emphasized a focus on managing expenses and capitalizing on opportunities in the corn market to deliver positive returns for shareholders[1][10] Non-Cash Activities - Non-cash financing activities included stock awards accrued totaling $798,000, up from $570,000 in the previous year[17]

Company Performance - REX reported quarterly earnings of $0.70 per share, exceeding the Zacks Consensus Estimate of $0.44 per share, and up from $0.52 per share a year ago, representing an earnings surprise of 59.09% [1] - The company posted revenues of $148.16 million for the quarter ended July 2024, surpassing the Zacks Consensus Estimate by 1.48%, but down from year-ago revenues of $211.98 million [2] - REX has surpassed consensus EPS estimates for the last four quarters and has topped consensus revenue estimates four times over the same period [2] Future Outlook - The sustainability of REX's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3] - Current consensus EPS estimate for the coming quarter is $0.47 on revenues of $159 million, and for the current fiscal year, it is $1.79 on revenues of $622 million [7] - The estimate revisions trend for REX is currently mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Biofuels industry, to which REX belongs, is currently ranked in the bottom 24% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact REX's stock performance [5]

Revenue and Sales Performance - Ethanol revenue decreased 25% in Q1 FY2024 compared to Q1 FY2023, with average selling price per gallon dropping 28% to $1.60, offset by a 4% increase in gallons sold to 74.5 million gallons[112][113] - Distillers corn oil revenue decreased 25% in Q1 FY2024, with average price per pound dropping 25% to $0.47, partially offset by a 2% increase in pounds sold to 21.0 million pounds[112][115] - Modified distillers grains revenue decreased 24% in Q1 FY2024, with average price per ton dropping 35% to $82.52, partially offset by an 18% increase in tons sold to 14,510 tons[112][116] - Net sales and revenue decreased 24% in Q1 FY2024 compared to Q1 FY2023[112] Capital Expenditures and Projects - The company has spent $41.0 million life-to-date and is contractually committed to spend an additional $9.2 million on the carbon sequestration project, with total expected costs of $165-175 million[100] - The company has spent $37.0 million life-to-date and is contractually committed to spend an additional $5.1 million on the One Earth plant expansion and CI reduction efforts[100] - The company plans to increase One Earth ethanol plant production from 150 million gallons/year to 175 million gallons/year in Q1 FY2025, with further expansion to 200 million gallons/year planned[98] - The company submitted a CO2 pipeline application to the ICC but expects it to be dismissed due to new Illinois legislation, potentially delaying the project until July 1, 2026[96] - Capital expenditures for Q1 FY2024 were $24.8 million, including $10.1 million for expansion and CI scoring reduction at One Earth and $11.0 million for the carbon sequestration project[129] - Total capital expenditures for One Earth facilities are expected to be $165 million to $175 million, with $85 million to $110 million planned for the remainder of FY2024[132] Financial Instruments and Risk Management - The company utilizes derivative financial instruments, primarily exchange-traded commodity futures and swaps, for corn procurement and commodity marketing activities[93][119] - The company is exposed to market fluctuations in commodity prices, which could impact future operating results[137] Operating Expenses and Income - SG&A expenses increased to $6.1 million in Q1 FY2024 from $5.8 million in Q1 FY2023, primarily due to higher performance bonus expenses[120] - Income from equity investment in Big River was $1.7 million in Q1 FY2024, up from $1.5 million in Q1 FY2023, representing an effective ownership of 38.8 million gallons of ethanol shipped in the trailing twelve months[121] - Interest and other income increased to $5.9 million in Q1 FY2024 from $2.8 million in Q1 FY2023, driven by higher yields on excess cash and short-term investments[122] - Income before income taxes rose to $16.0 million in Q1 FY2024 compared to $8.7 million in Q1 FY2023, with an income tax provision of $3.7 million and $2.0 million respectively[123] - Net income attributable to REX common shareholders was $10.2 million in Q1 FY2024, up from $5.2 million in Q1 FY2023[125] Cash Flow and Working Capital - Net cash used in operating activities decreased to $2.3 million in Q1 FY2024 from $14.0 million in Q1 FY2023, with cash provided by net income of $12.3 million and non-cash adjustments of $5.6 million[126] - Working capital stood at $358.9 million as of April 30, 2024, down from $385.8 million at January 31, 2024, with a current assets to current liabilities ratio of 6.7 to 1[128] Shareholder Equity and Buyback Program - The company has a stock buyback program with 876,786 shares remaining authorized as of April 30, 2024[133]

REX American Resources Corporation (NYSE:REX) Q1 2024 Earnings Conference Call May 22, 2024 11:00 AM ET Company Participants Douglas Bruggeman - Chief Financial Officer Stuart Rose - Executive Chairman Zafar Rizvi - Chief Executive Officer Conference Call Participants Pavel Molchanov - Raymond James B.J. Cook - Singular Research Operator Good morning, and welcome to the REX American Resources Fiscal First Quarter 2024 Conference Call. As a reminder, today's call is being recorded. And at this time, all part ...