Ethanol Production and Revenue - As of October 31, 2025, the company holds majority ownership interests in two ethanol entities: One Earth Energy, LLC (76.1%) and NuGen Energy, LLC (99.7%) [107] - The company expects its ethanol plants to produce approximately 2.9 gallons of denatured ethanol for each bushel of corn processed, with the realized yield being critical for cash flow sustainability [108] - Ethanol revenue decreased by 2% in Q3 2025 compared to Q3 2024, attributed to a 5% decrease in selling price per gallon, despite a 4% increase in gallons sold [136] - Average selling price per gallon of ethanol (net of hedging) was $1.73 in Q3 2025, down from $1.83 in Q3 2024 [135] Financial Performance - Net sales and revenue for the three months ended October 31, 2025, were $175.6 million, a slight increase from $174.9 million in the same period of 2024 [134] - Gross profit for Q3 2025 decreased by approximately $3.5 million compared to Q3 2024, totaling $36.1 million [141] - Income before income taxes was approximately $35.5 million for Q3 2025, down from $39.5 million in Q3 2024 [147] - Net income for Q3 FY2025 was approximately $27.5 million, a decrease of 8.6% from $30.1 million in Q3 FY2024 [149] - Net income attributable to REX common shareholders for the first nine months of FY2025 was approximately $39.2 million, down 16.6% from $47.1 million in the same period of FY2024 [151] Capital Expenditures and Investments - The company has budgeted capital expenditures for expansion and carbon sequestration projects at One Earth to be approximately $220 million to $230 million, with $58.1 million already spent on the carbon sequestration project as of October 31, 2025 [117] - The company plans to spend an additional $25 million to $35 million on projects during the remainder of FY2025 [160] - Capital expenditures for FY2025 are expected to be between $220 million and $230 million, with $58.1 million already spent on the carbon sequestration project [160] Carbon Sequestration Initiatives - One Earth Energy, LLC is developing a carbon sequestration project and expects the EPA to prepare a draft permit by February 2026 and make a final decision by June 2026 [111] - The company has secured land easements for the construction of a CO2 pipeline for carbon sequestration, with capacity sufficient for an estimated 15 years [112] Market and Regulatory Environment - The IRA created a Clean Fuel Production Credit under Section 45Z, allowing tax credits between $0.02 and $0.20 per gallon based on GHG reduction, with the first two or ten cents earned upon achieving a CI score below 47.5 [116] - The EPA has issued Renewable Volume Obligations (RVOs) for 2023-2025, maintaining conventional biofuels volumes at 15.0 billion gallons for each year [125] Operational Metrics - Cost of sales increased by 3% in Q3 2025, with corn accounting for approximately 75% ($104.2 million) of total costs [140] - Dried distillers grains revenue fell by 11% in Q3 2025 compared to Q3 2024, due to a 6% decrease in tons sold and a 5% decrease in average price per ton [137] - Distillers corn oil revenue surged approximately 60% in Q3 2025 compared to Q3 2024, driven by a 36% increase in selling price per pound and a 17% increase in pounds sold [138] Cash Flow and Working Capital - Net cash provided by operating activities increased to $64.0 million in the first nine months of FY2025, compared to $39.1 million in the prior year [153] - Net cash provided by investing activities was $47.5 million in the first nine months of FY2025, up from $37.6 million in FY2024 [156] - Net cash used in financing activities was $35.8 million in the first nine months of FY2025, primarily for stock repurchases [158] - The current ratio as of October 31, 2025, was 7.2x, down from 8.6x in the previous year [152] - As of October 31, 2025, working capital was $354.2 million [159] Tax Credits and Audits - The company plans to vigorously defend approximately $24.5 million in research and experimentation tax credits under IRS audit [131] - Estimated decrease in pre-tax income from a 10% adverse change in ethanol prices is $47.1 million [165]

Financial Performance - Revenues for the three months ended October 31, 2025, decreased by $110 million (6%) to $1,866 million compared to the same period in the prior year, primarily due to a ramp down in volume on existing contracts and contract completions [139]. - Operating income for the three months ended October 31, 2025, was $128 million, representing a decrease of 20% from the prior year, with operating income as a percentage of revenues falling to 6.9% [139]. - Revenues for the Defense and Intelligence segment decreased by $76 million (5%) to $1,439 million for the three months ended October 31, 2025, compared to $1,515 million in the prior year [147]. - Revenues for the Civilian segment decreased by $34 million (7%) to $427 million for the three months ended October 31, 2025, compared to $461 million in the prior year [149]. - Consolidated adjusted operating income for the three months ended October 31, 2025, was $183 million, a decrease from $195 million in the same period last year [156]. - EBITDA for the three months ended October 31, 2025, was $168 million, down from $197 million in the same period last year, representing 9.0% of revenues [158]. - Adjusted EBITDA for the three months ended October 31, 2025, was $185 million, compared to $197 million in the same period last year, representing 9.9% of revenues [158]. Government Contracts and Revenue Sources - The company generated 98% of its revenues from contracts with the U.S. government during the three and nine months ended October 31, 2025 [125]. - For the three months ended October 31, 2025, 80% of revenues in the Defense and Intelligence segment were derived from cost reimbursement contracts, while 4% came from civilian contracts [167]. - The company is positioned to benefit from increased government spending and has a strong history of serving the U.S. government, which provides a competitive advantage [134]. Acquisitions and Investments - The acquisition of SilverEdge Government Solutions was completed on October 15, 2025, for a preliminary purchase price of $203 million, aimed at enhancing mission-focused, IP-based solutions [124]. - Cash used in investing activities increased by $222 million to $237 million for the nine months ended October 31, 2025, primarily due to the acquisition of SilverEdge [173]. Tax and Regulatory Impact - The effective income tax rate for the three months ended October 31, 2025, was 16.7%, an increase from 15.6% in the same period last year, primarily due to the One Big Beautiful Bill Act [143]. - The company anticipates that the OECD's 15% global minimum tax framework will not have a significant impact on its effective tax rate or financial results [146]. Backlog and Future Revenue Potential - As of October 31, 2025, the total backlog is estimated at $23.788 billion, with a funded backlog of $3.823 billion and a negotiated unfunded backlog of $19.965 billion [165]. - Net bookings for the three months ended October 31, 2025, were approximately $2.2 billion, and for the nine months, they totaled $7.2 billion [165]. Operating Cash Flow and Liquidity - Cash provided by operating activities for the nine months ended October 31, 2025, was $351 million, a decrease of $28 million compared to the prior year [172]. - The company expects to fund ongoing working capital and commitments with cash on hand, future operating cash flows, and borrowings under its $1.0 billion Revolving Credit Facility [168]. - The company believes existing cash, future operating cash flows, and access to financing will meet short-term liquidity and long-term capital needs [170]. Cost Structure and Expenses - Selling, general and administrative expenses increased by 22% to $101 million for the three months ended October 31, 2025, compared to $83 million in the prior year [139]. - The company’s cost of revenues as a percentage of revenues was 87.8% for the three months ended October 31, 2025, compared to 88.0% in the prior year [139]. - The labor-related cost of revenues for the three months ended October 31, 2025, was 57% in the Defense and Intelligence segment, while subcontractor-related costs accounted for 28% [167]. Strategic Focus and Market Position - The company is focused on enhancing its competitive position through strategic sourcing and developing repeatable offerings sold "as a service" to improve pricing competitiveness [135]. - The company operates with approximately 1,700 active contracts and employs around 24,000 individuals [117].

Financial Performance - Net sales for the three months ended October 31, 2025, were $935.4 million, an increase of $35.3 million, or 3.9%, compared to $900.1 million for the same period in 2024[103] - Gross profit for the three months ended October 31, 2025, was $328.8 million, representing a gross margin of 35.2%, down from 35.5% in the prior year[103][108] - Net earnings for the three months ended October 31, 2025, were $113.9 million, an increase of $14.9 million, or 15.1%, compared to $99.0 million for the same period in 2024[115] Segment Performance - The Mobile Solutions segment reported net sales of $598.3 million for the three months ended October 31, 2025, an increase of $25.9 million, or 4.5%, from $572.4 million in 2024[120] - The Industrial Solutions segment achieved net sales of $257.8 million, slightly up from $257.6 million in the prior year[116] - The Life Sciences segment reported net sales of $79.3 million, an increase of $9.2 million, or 13.1%, compared to $70.1 million in 2024[116] - Aftermarket net sales increased by $29.1 million due to market share gains, while On-Road net sales decreased by $8.7 million due to a decline in global truck production[121] - Mobile Solutions segment earnings before income taxes for the three months ended October 31, 2025 were $111.3 million, or 18.6% of net sales, an increase from 18.3% in the same period of 2024[122] - Industrial Solutions segment net sales for the three months ended October 31, 2025 were $257.8 million, a slight increase of $0.2 million or 0.1% compared to $257.6 million in 2024[126] - Life Sciences segment net sales increased by $9.2 million, or 13.1%, reaching $79.3 million for the three months ended October 31, 2025, driven by strong sales in Food and Beverage and Disk Drive[131] Expenses and Taxation - Research and development expenses decreased to $19.2 million, or 2.1% of net sales, down from $22.7 million, or 2.5% of net sales, in the prior year[111] - Selling, general and administrative expenses were $169.6 million, or 18.1% of net sales, compared to $166.1 million, or 18.5% of net sales, in the previous year[109] - The effective tax rate for the three months ended October 31, 2025, was 22.8%, down from 24.2% in the same period of 2024[114] Cash Flow and Debt - Cash provided by operating activities for the three months ended October 31, 2025 was $125.4 million, an increase of $52.5 million from $72.9 million in 2024[135] - Cash used in investing activities decreased significantly to $3.4 million in the three months ended October 31, 2025, down from $96.0 million in 2024, primarily due to reduced equity investments[136] - Cash used in financing activities was $93.1 million for the three months ended October 31, 2025, a decrease of $102.9 million compared to cash provided of $9.8 million in 2024[137] - Total debt as of October 31, 2025 represented 31.0% of total capitalization, a slight decrease from 31.5% as of July 31, 2025[141] - Cash and cash equivalents increased to $210.7 million as of October 31, 2025, compared to $180.4 million as of July 31, 2025[139] Foreign Currency and Interest Rates - The estimated impact of foreign currency translation for the three months ended October 31, 2025 resulted in an increase in reported net sales of $11.9 million and an increase in reported net earnings of $1.7 million[152] - The total notional amount of foreign currency forward contracts designated as hedges was $55.5 million as of October 31, 2025, up from $35.7 million on July 31, 2025[154] - The total notional amount of foreign currency forward contracts not designated as hedges was $199.5 million as of October 31, 2025, compared to $189.6 million on July 31, 2025[154] - The total notional amount of net investment hedges was €80 million (approximately $88.8 million) as of October 31, 2025[155] - A 10% appreciation of the U.S. dollar compared to the Euro would result in a net gain of $8.7 million in the fair value of net investment hedges[156] - A hypothetical 0.5 percentage point increase in short-term interest rates would increase interest expense by approximately $0.5 million for the three months ended October 31, 2025[157] - The estimated fair values of fixed interest rate long-term debt were $252.5 million compared to carrying values of $275.0 million as of October 31, 2025[157] Commodity Price Exposure - The Company is exposed to fluctuating prices of commodity raw materials, which could result in lower gross profit if prices increase[159] - The Company strives to recover material cost increases through price adjustments to customers and cost reduction initiatives[159]

Research Growth, AI Momentum, and Margin Expansion Highlight Wiley's Second Quarter 2026 December 4, 2025 - Hoboken, NJ – Wiley (NYSE: WLY), a global leader in authoritative content and research intelligence for the advancement of scientific discovery, innovation, and learning, today reported results for the second quarter ended October 31, 2025. SECOND QUARTER SUMMARY MANAGEMENT COMMENTARY "We continue to deliver strong performance in Research and accelerating momentum in AI as we capitalize on record rese ...

Revenue Performance - Q2 2026 revenue of $422 million, down 1% year-over-year, with operating income of $73 million, up 14%, and diluted EPS of $0.84, also up 14%[7] - Total revenue for the three months ended October 31, 2025, was $421.8 million, a slight decrease of 1% compared to $426.6 million in 2024[30] - Total revenue for the six months ended October 31, 2025, was $818,551,000, a decrease of 1% compared to $830,404,000 in the same period of 2024[34] Segment Performance - Research revenue for Q2 was $279 million, up 6% as reported, driven by 7% growth in Research Publishing, including $5 million from AI revenue; article submissions rose by 28%[8] - Learning revenue for Q2 was $143 million, down 11% due to market-related softness, with professional and academic segments down 16% and 8%, respectively[8] - Research Publishing revenue for the three months ended October 31, 2025, was $241.4 million, an 8% increase from $222.7 million in 2024[30] - Learning segment revenue decreased by 10% to $258,345,000, with Academic revenue down 8% and Professional revenue down 12%[34] Profitability Metrics - Adjusted EBITDA for Q2 was $93 million, up 14%, with a margin of 33.5%, compared to 31.3% in the prior year[8] - Non-GAAP Adjusted EBITDA for the six months ended October 31, 2025, was $185.5 million, compared to $178.2 million in 2024, indicating a 4.7% increase[27] - The Adjusted EBITDA margin for the three months ended October 31, 2025, was 27.3%, up from 24.9% in the same period of 2024[27] - Non-GAAP adjusted operating income for the six months ended October 31, 2025, was $113,137,000, reflecting a 9% increase from $104,181,000 in 2024[34] Cash Flow and Capital Management - Year-to-date operating cash flow improved by 19%, and free cash flow improved by 17%[7] - Free cash flow usage improved to $108 million from $130 million in the prior year, largely due to higher cash earnings and lower capex[16] - Net cash used in operating activities was $(76,505,000) for the six months ended October 31, 2025, compared to $(93,992,000) in 2024[39] - Free cash flow less product development spending was $(107,926,000) for the six months ended October 31, 2025, compared to $(130,149,000) in 2024[40] Shareholder Returns - Share repurchases increased by 69% year-over-year to $21 million, with a dividend yield around 3.9%[7] - Full-year outlook for adjusted EBITDA margin is 25.5% to 26.5%, with adjusted EPS guidance of $3.90 to $4.35[12] - Adjusted EPS, Adjusted Revenue, Adjusted Operating Income, and margin are key metrics used by shareholders to evaluate the company's performance[50] Debt and Financial Position - Net debt-to-EBITDA ratio improved to 2.0 from 2.2 in the prior year, with $120 million of divestiture proceeds used to reduce debt[16] - Total assets decreased to $2,466,739,000 as of October 31, 2025, from $2,691,466,000 as of April 30, 2025[36] - Total liabilities decreased to $1,726,550,000 as of October 31, 2025, from $1,939,260,000 as of April 30, 2025[36] - Cash and cash equivalents at the end of the period were $67,454,000, down from $75,586,000 at the end of the previous year[39] Income Metrics - For the three months ended October 31, 2025, the diluted US GAAP Earnings Per Share (EPS) was $0.84, compared to $0.74 for the same period in 2024, representing a 13.5% increase[23] - Non-GAAP Adjusted EPS for the same period was $1.10, up from $0.97 in 2024, reflecting a 13.4% increase[23] - US GAAP Income Before Taxes for the three months ended October 31, 2025, was $58.01 million, compared to $48.94 million in 2024, marking an 18.5% increase[24] - Non-GAAP Adjusted Income Before Taxes for the same period was $78.60 million, up from $69.14 million in 2024, reflecting a 13.5% increase[24] Currency Impact - Results on a constant currency basis provide better comparability of business trends by removing the effects of foreign currency movements[50]

Financial Performance - Total revenues for Q4 fiscal 2025 were $817.9 million, down from $979.6 million in Q4 fiscal 2024, while total revenues for the year were $2.98 billion compared to $3.00 billion in fiscal 2024[3]. - The net loss for Q4 fiscal 2025 was $0.7 million, or $0.51 per diluted share, compared to net income of $94.3 million, or $12.79 per diluted share, in the same period last year[4]. - Adjusted EBITDA for Q4 fiscal 2025 was $88.6 million, exceeding the high end of guidance, compared to $159.0 million in Q4 fiscal 2024[4]. - Total revenues for the three months ended October 31, 2025, were $817.9 million, a decrease from $979.6 million for the same period in 2024, representing a decline of approximately 16.5%[25]. - The company reported a net loss of $0.7 million for the three months ended October 31, 2025, compared to a net income of $94.3 million for the same period in 2024[25]. - Adjusted EBITDA for the year ended October 31, 2025, was $299,050,000, a decrease from $455,563,000 in 2024, reflecting a decline of approximately 34.4%[30]. - The company experienced a loss on extinguishment of debt of $33.5 million for the three months ended October 31, 2025, compared to no such loss in the same period of 2024[25]. - Interest expense for the three months ended October 31, 2025, increased to $34,443,000 from $31,120,000 in the same period of 2024, representing an increase of 10.6%[30]. Home Sales and Deliveries - Domestic unconsolidated joint ventures' home sales revenues increased by 27.3% to $180.4 million in Q4 fiscal 2025, with 285 homes sold, compared to $141.7 million from 235 homes in Q4 fiscal 2024[3]. - Consolidated contracts decreased by 10.8% to 1,209 homes in Q4 fiscal 2025, with a dollar value of $629.2 million, compared to 1,355 homes valued at $705.6 million in Q4 fiscal 2024[4]. - Total home deliveries decreased by 10.8% to 1,209 homes in the three months ended October 31, 2025, compared to 1,355 homes in the same period of 2024[46]. - Total home deliveries decreased by 3.1% to 5,023 units compared to 5,186 units in the previous year[51]. - The Northeast segment saw a 19.6% increase in deliveries to 1,968 units, while revenue decreased by 11.7% to $983,961 thousand[51]. - The Southeast segment experienced a 23.6% increase in contracts to 639 units, with revenue rising by 16.1% to $324,393 thousand[51]. - The West segment reported a 9.5% decrease in contracts to 2,589 units, with revenue declining by 5.6% to $1,290,351 thousand[51]. Margins and Expenses - Homebuilding gross margin percentage for Q4 fiscal 2025 was 10.7%, down from 18.0% in Q4 fiscal 2024, with 2.5% attributable to land charges[3]. - Total SG&A expenses were $91.5 million, or 11.2% of total revenues, in Q4 fiscal 2025, compared to $87.7 million, or 9.0% of total revenues, in Q4 fiscal 2024[3]. - Homebuilding gross margin for the three months ended October 31, 2025, was $83.9 million, down from $167.2 million in 2024, resulting in a gross margin percentage of 10.7%, compared to 18.0% in the prior year[27]. - Homebuilding revenues for Q4 2025 were $789.8 million, a decrease of 17.5% from $956.9 million in Q4 2024[44]. - Cost of sales for homebuilding in Q4 2025 was $702.8 million, down from $769.3 million in Q4 2024, a reduction of 8.7%[44]. Liquidity and Assets - Total liquidity as of October 31, 2025, was $404.1 million, significantly above the target range of $170 million to $245 million[8]. - Total assets increased to $2.63 billion in 2025 from $2.61 billion in 2024, reflecting a growth of 1.3%[42]. - Total liabilities decreased slightly to $1.80 billion in 2025 from $1.81 billion in 2024[42]. - The company reported a total equity of $830.9 million in 2025, up from $800.3 million in 2024, indicating a growth of 3.8%[42]. Inventory and Impairments - Total inventories as of October 31, 2025, were $1,637,470,000, down from $1,692,932,000 as of July 31, 2025, indicating a decrease of approximately 3.3%[37]. - The company recorded inventory impairments and land option write-offs of $39,571,000 for the year ended October 31, 2025, compared to $11,556,000 in 2024, reflecting a significant increase[30]. - The company experienced an inventory impairment loss of $19.4 million in Q4 2025, compared to $7.9 million in Q4 2024[44]. Future Outlook - For Q1 fiscal 2026, the company expects total revenues between $550 million and $650 million, with adjusted homebuilding gross margin between 13.0% and 14.0%[10]. - The company anticipates challenges related to demand for homes, mortgage rates, and inflation, which may impact future financial performance[23]. - The company plans to consolidate remaining assets and liabilities from joint ventures, impacting future financial reporting[56].

Revenue Performance - Total revenues for Q4 fiscal 2025 were $817.9 million, down from $979.6 million in Q4 fiscal 2024, while total revenues for the year were $2.98 billion compared to $3.00 billion in fiscal 2024[3] - Total revenues for the three months ended October 31, 2025, were $817.9 million, a decrease from $979.6 million in the same period of 2024, representing a decline of approximately 16.5%[25] - Total revenues for the year ended October 31, 2025, were $2.98 billion, down 0.9% from $3.00 billion in 2024[44] - Financial services revenues for the year ended October 31, 2025, were $95.0 million, an increase of 28.2% from $74.1 million in 2024[44] Home Sales and Deliveries - Domestic unconsolidated joint ventures home sales revenues increased 27.3% to $180.4 million in Q4 fiscal 2025, with 285 homes sold, compared to $141.7 million from 235 homes in Q4 fiscal 2024[3] - Total home deliveries decreased by 10.8% to 1,209 homes in the three months ended October 31, 2025, compared to 1,355 homes in the same period of 2024[46] - Total home deliveries decreased by 3.1% to 5,023 units compared to 5,186 units in the previous year[51] - Overall, unconsolidated joint ventures reported a 12.7% increase in home contracts to 241 homes, with revenues increasing 12.7% to $157.9 million[59] Profitability and Margins - Homebuilding gross margin percentage for Q4 fiscal 2025 was 10.7%, down from 18.0% in Q4 fiscal 2024, with 2.5% attributable to land charges[3] - Homebuilding gross margin for the three months ended October 31, 2025, was $83.9 million, down from $167.2 million in the same period of 2024, reflecting a decrease of about 49.9%[27] - Adjusted income before income taxes for the three months ended October 31, 2025, was $48.8 million, compared to $125.8 million in the same period of 2024, a decrease of approximately 61.2%[26] - The company reported a net loss of $0.7 million for the three months ended October 31, 2025, compared to a net income of $94.3 million in the same period of 2024[25] Financial Position and Liquidity - Total liquidity as of October 31, 2025, was $404.1 million, significantly above the target range of $170 million to $245 million[8] - Cash and cash equivalents rose to $272.8 million in 2025, up 29.9% from $210.0 million in 2024[42] - Total assets increased to $2.63 billion in 2025 from $2.61 billion in 2024, reflecting a growth of 1.3%[42] - Total liabilities decreased slightly to $1.80 billion in 2025 from $1.81 billion in 2024[42] Debt and Interest Expenses - The company successfully completed a $900 million unsecured debt refinancing, extending maturities to 2031 and 2033, resulting in a $12 million decrease in annual interest incurred[8] - Interest expense for the three months ended October 31, 2025, increased to $34,443,000 from $31,120,000 in the same period of 2024, marking an increase of 10.6%[30] - The company incurred a loss on extinguishment of debt of $33.5 million for the three months ended October 31, 2025, compared to no such loss in the same period of 2024[25] Market Outlook and Challenges - The company anticipates challenges in the homebuilding market due to factors such as inflation, mortgage rates, and supply chain issues, which may impact future performance[23] - The backlog of contracts as of October 31, 2025, was $163.2 million, reflecting a 23.1% decrease compared to the previous year[59] Segment Performance - In the Northeast segment, home deliveries decreased by 4.5% to 442 homes, with revenue dropping by 12.4% to $244.5 million[46] - The Southeast segment saw a significant increase in home deliveries, up 38.0% to 178 homes, with revenue rising by 17.1% to $85.2 million[46] - The West segment experienced a decline in home deliveries by 22.8% to 589 homes, with revenue decreasing by 15.3% to $299.5 million[46]

Financial Performance - REX reported Q3 '25 net sales and revenue of $175.6 million, a slight increase from $174.9 million in Q3 '24, representing a 0.4% growth[3] - Gross profit for Q3 '25 was $36.1 million, down from $39.7 million in Q3 '24, reflecting a decrease of approximately 8.9% due to lower ethanol and distillers grain pricing[3] - Net income attributable to REX shareholders in Q3 '25 was $23.4 million, compared to $24.5 million in Q3 '24, indicating a decline of 4.5%[4] - Diluted net income per share for Q3 '25 was $0.71, an increase from $0.69 per share in Q3 '24, marking a growth of 2.9%[4] Cash and Investments - REX's cash, cash equivalents, and short-term investments totaled $335.5 million as of October 31, 2025, with no bank debt[9] Expansion and Capital Expenditures - The company is progressing on the expansion of ethanol production at the One Earth facility, with completion expected in 2026[5] - Capital expenditures related to the One Earth carbon capture and sequestration project and ethanol production expansion totaled $155.8 million, with a combined budget of $220-$230 million for completion[7] Sales and Operational Performance - REX achieved consolidated ethanol sales volumes of 78.4 million gallons in Q3 '25[8] - The company has maintained positive earnings for 21 consecutive quarters, indicating strong operational performance[10] Strategic Opportunities - REX is evaluating opportunities to leverage 45Z tax credits to enhance shareholder value as its projects advance[10] Non-Cash Activities - Non-cash investing activities accrued capital expenditures of $5.235 billion, compared to $3.275 billion previously[21] - Non-cash financing activities accrued stock awards amounted to $3.392 billion, up from $1.648 billion[21] - Non-cash financing activities accrued excise taxes on stock repurchases totaled $258 million, with operating right-of-use assets acquired and liabilities incurred upon lease execution at $3.007 billion[21]

Sales Performance - Kroger's total sales for Q3 2025 were $33.9 billion, a 0.9% increase from $33.6 billion in Q3 2024, with identical sales without fuel rising by 2.6%[7][6] - Sales for Q3 2025 reached $33,859 million, a slight increase from $33,634 million in Q3 2024[30] - Identical sales, excluding fuel, for year-to-date 2025 were $30,062 million, reflecting a 2.6% increase from $29,302 million in 2024[45] Earnings and Profitability - The adjusted earnings per share (EPS) for Q3 2025 was $1.05, compared to $0.98 in Q3 2024, while the reported EPS was $(2.02) due to a $2.6 billion impairment charge[4][6] - Operating profit for Q3 2025 was a loss of $1,541 million, compared to a profit of $828 million in Q3 2024[30] - Net earnings attributable to Kroger Co. for Q3 2025 were a loss of $1,320 million, down from a profit of $618 million in Q3 2024, representing a decline of 314%[30] - Year-to-date net earnings for 2025 were $155 million, down from $2,031 million in 2024[52] - Adjusted net earnings excluding items above for Q3 2025 were $697 million, slightly down from $719 million in Q3 2024[52] Financial Position - The net total debt to adjusted EBITDA ratio increased to 1.73 from 1.21 a year ago, with a target range of 2.30 to 2.50[14] - Total current assets decreased to $15,994 million in Q3 2025 from $25,025 million in Q3 2024[38] - Total liabilities decreased to $44,401 million in Q3 2025 from $49,524 million in Q3 2024[38] - Cash and temporary cash investments at the end of Q3 2025 were $3,956 million, down from $13,358 million at the end of Q3 2024[40] - Net total debt decreased to $14,276 million from $22,601 million, a reduction of $4,591 million[48] - Long-term debt, including obligations under finance leases, decreased to $16,081 million from $22,414 million, a reduction of $6,333 million[48] Cash Flow and Investments - Net cash provided by operating activities for year-to-date 2025 was $4,658 million, compared to $4,390 million in 2024[40] - Total capital investments, excluding lease buyouts, were $2,863 million, compared to $2,816 million in the previous year[41] - The company plans to continue its $7.5 billion share repurchase program, having completed a $5 billion accelerated share repurchase in Q3 2025[13] - Kroger's capital allocation strategy includes a commitment to pay dividends and invest in long-term sustainable growth, with expected free cash flow of $2.8 to $3.0 billion for FY25[12][15] Margins and Costs - Kroger's gross margin improved to 22.8% in Q3 2025, up from 22.4% in Q3 2024, primarily due to the sale of Kroger Specialty Pharmacy and lower supply chain costs[8][9] - Gross profit for Q3 2025 was $7,735 million, compared to $7,534 million in Q3 2024, resulting in a gross margin of 22.8%[64] - The company recorded LIFO charges of $44 million in Q3 2025, compared to $4 million in Q3 2024[36] - The company reported a LIFO charge of $176 million for the rolling four quarters ended November 8, 2025, compared to $48 million in the previous year[49] Future Outlook - The company expects to achieve identical sales without fuel in the range of 2.8% to 3.0% for FY25, narrowing from the previous guidance of 2.7% to 3.4%[15][19] - The company expects continued challenges in the market, impacting future earnings guidance[56]

Financial Performance - Second quarter net sales decreased 5% to $1.0 billion, with a 2% decline on an organic basis compared to the prior-year period[2] - First half net sales decreased 4% to $2.0 billion, remaining flat on an organic basis compared to the same prior-year period[2] - Operating income for the second quarter decreased 10% to $305 million, with a 9% decline on an organic basis[2] - Operating income decreased by 9% to $565 million from $622 million in the previous year[26] - Net income for the six months was $394 million, reflecting a 13% decline from $453 million in 2024[26] - Earnings per share (diluted) were $0.83, a decrease of 13% compared to $0.96 in the prior year[26] - The company anticipates organic net sales and operating income to decline in the low-single digit range for fiscal 2026[16] Gross Margin and Profitability - Gross margin expanded by 30 basis points to 59.5%, driven by acquisitions and divestitures, despite higher costs[4] - Gross profit for the same period was $1,167 million, down 4% from $1,211 million in 2024[26] - The company’s gross profit increased by 1%, indicating stable profitability despite sales challenges[40] Cash Flow and Capital Expenditures - Cash flows from operations grew by $163 million to $292 million, while free cash flow increased by $179 million to $236 million[4] - Free cash flow for the six months ended October 31, 2025, was $236 million, up from $57 million in the same period last year[41] - The estimated capital expenditures range for fiscal 2026 has been updated to $110 to $120 million[15] Market Performance - Net sales in Emerging markets increased by 10% (+12% organic), led by strong growth in the Jack Daniel's family of brands[8] - In the United States, net sales fell by 9%, while emerging markets saw a 10% increase in net sales[36] - The company experienced a 62% decline in net sales in Canada, while Brazil reported a 22% increase[36] - The emerging market of Mexico reported a 17% increase in net sales, contributing positively to overall performance[36] Inventory and Sales Trends - Estimated net change in distributor inventories in the United States was up by 2%, while developed international markets saw a decrease of 1%[38] - "Depletions" measure volume reflecting consumer demand more accurately than shipments to distributors[62] - Consumer takeaway is a leading indicator of consumer demand trends, derived from retail sales value metrics[62] - Estimated net change in distributor inventories is calculated to understand the impact on organic trends[62] - A positive difference in estimated net change indicates a net increase in distributors' inventories, potentially leading to decreased organic trends[62] - A negative difference suggests a net decrease in distributors' inventories, which could result in increased organic trends as inventories are rebuilt[62] Restructuring and Charges - The company incurred $16 million in restructuring charges related to a workforce reduction of approximately 12%[52] - The operating margin decreased by 150 basis points to 28.9%, primarily due to a decline in gross profit and restructuring initiative impacts[10] Shareholder Returns - The company authorized a $400 million share repurchase program and increased the quarterly cash dividend by 2% to $0.2310 per share[11][12] Assets and Liabilities - Total assets increased to $8,221 million as of October 31, 2025, up from $8,086 million in April 2025[28] - Total liabilities decreased slightly to $4,087 million from $4,093 million in April 2025[28] - The effective tax rate improved to 20.1% from 21.2% in the previous year[26] Other Notable Changes - The Korbel relationship ended effective June 30, 2025[62] - "Rest of Portfolio" includes brands such as Korbel California Champagnes and Finlandia Vodka, which was divested on November 1, 2023[62] - Shipment volumes are used to calculate depletion-based amounts for better inventory management insights[62] - The company recognizes revenue upon shipment or delivery of products to customers[62]