REX American Resources (US:REX)2025-06-04 16:11Ethanol Production and Revenue - As of April 30, 2025, the company holds majority ownership interests in two ethanol entities: One Earth Energy, LLC (75.9%) and NuGen Energy, LLC (99.7%) [103] - 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 profitability [104] - Ethanol revenue increased by 4% in the first quarter of fiscal year 2025, driven by a 10% increase in the average selling price per gallon, despite a 5% decrease in gallons sold [133] Capital Expenditures and Investments - The company has budgeted capital expenditures for carbon sequestration and plant expansion projects to be approximately $220 million to $230 million, with $56.3 million already spent as of April 30, 2025 [112] - The company plans to spend $60 million to $80 million on projects during the remainder of FY 2025 [155] - The company is working on a carbon sequestration project and has applied for a Class VI injection well permit, expecting a draft permit by November 2025 and a final decision by April 2026 [107] Financial Performance - Net sales and revenue for the first quarter of fiscal year 2025 were approximately $158.3 million, a decrease of 2% compared to $161.2 million in the first quarter of fiscal year 2024 [131] - Gross profit for the first quarter of fiscal year 2025 was approximately $14.3 million, a slight decrease compared to $14.5 million in the prior year [138] - Net income attributable to REX common shareholders for the first quarter of fiscal year 2025 was approximately $8.7 million, down from approximately $10.2 million in the first quarter of fiscal year 2024 [146] Commodity Prices and Risk Management - Estimated decrease in pre-tax income from a 10% adverse change in commodity prices includes $51,422 for ethanol (295,000 gallons), $42,626 for corn (102,100 bushels), and $8,588 for distillers grains (718 tons) [160] - The company is exposed to market fluctuations associated with commodity prices and manages risk through fixed-price contracts and commodity futures [160] Operational Changes and Challenges - The company ceased operations at its refined coal facility on November 18, 2021, after receiving approximately $58.2 million in federal production tax credits [115] - The EPA has issued Renewable Fuel Standard volume obligations for conventional biofuels at 15.0 billion gallons for 2023 through 2025, with ongoing legal challenges affecting the enforcement of these standards [119] Cash Flow and Investments - Net cash used in operating activities was approximately $3.5 million for the first quarter of fiscal year 2025, compared to $2.3 million in the prior year [147] - Cash provided by investing activities in Q1 FY 2025 was approximately $1.8 million, a decrease from $11.9 million in Q1 FY 2024, with capital expenditures of approximately $6.9 million primarily for ethanol plant projects [151] - The company purchased U.S. Treasury Bills of approximately $41.4 million in Q1 FY 2025, while $50.0 million matured, indicating active management of short-term investments [151] Stock Buyback and Shareholder Returns - The company has a stock buyback program with 1,181,963 shares remaining authorized as of April 30, 2025, and repurchased approximately $32.7 million worth of stock in Q1 FY 2025 [154][156] Revenue from By-products - Dried distillers grains revenue decreased by 27% in the first quarter of fiscal year 2025, with a 22% drop in average price per ton and a 6% decrease in tons sold [134] - Distillers corn oil revenue increased by approximately 1% in the first quarter of fiscal year 2025, with a 2% increase in pounds sold, offset by a 2% decrease in average price per pound [135] - Modified distillers grains revenue increased by 36% in the first quarter of fiscal year 2025, with a 52% increase in pounds sold, despite an 11% decrease in average selling price per ton [136]