REX American Resources (REX) Q2 2025 earnings summary

Executive summary

• Net income attributable to shareholders rose 37% year-over-year to $12.4 million in Q2 2024, with EPS up to $0.70 from $0.52, and gross profit increased to $19.8 million despite a 30% drop in net sales and revenue to $148.2 million.

• Achieved sixteen consecutive quarters of positive earnings and maintained a debt-free balance sheet with $346 million in cash, cash equivalents, and short-term investments as of July 31, 2024.

• Progressed on carbon capture and ethanol plant expansion projects, with $90.8 million invested to date and a total budget of $165–$175 million.

• Six ethanol facilities in the Midwest with total production capacity of 730 million gallons/year; effective ownership of 300 million gallons/year.

• Focused on profitable execution, carbon capture initiatives, and shareholder value.

Financial highlights

• Q2 2024 net sales and revenue were $148.2 million, down 30% year-over-year; gross profit was $19.8 million, up from $18.4 million.

• Net income attributable to shareholders was $12.4 million, or $0.70 per diluted share, up from $9.1 million ($0.52 per share) in Q2 2023.

• Cash, cash equivalents, and short-term investments totaled $346 million as of July 31, 2024; working capital was $367 million.

• Interest and other income rose to $4.4 million from $3.3 million year-over-year.

• No bank debt at quarter end; only debt relates to right-of-use agreements for railcars.

Outlook and guidance

• One Earth Energy ethanol production expansion to 175 million gallons/year is on track for Q1 2025, with future permitting for 200 million gallons/year planned.

• Carbon capture project construction continues, with utility interconnection expected by Q1 2025 and EPA draft permit by end of 2024; Illinois moratorium delays pipeline completion until at least July 2026 or new federal rules.

• Company expects to spend $50–$60 million on capital projects in the remainder of fiscal 2024, mainly for carbon sequestration and plant expansion.

• All major projects are planned to be funded from available cash.

• Potential to earn up to $36 million annually from 45Q tax credits and up to $150 million annually from 45Z credits during 2025–2027.