REX AMERICAN RESOURCES Corp (REX)·Q1 2026 Earnings Summary

Executive Summary

• Q1 2026 revenue was $158.34M, down 1% sequentially and 9% below Q3 2025; diluted EPS was $0.51 versus $0.63 in Q4 2025 and $1.38 in Q3 2025, driven by lower interest income and softer DDG pricing, while ethanol pricing improved .
• The company delivered its 19th consecutive profitable quarter; management highlighted continued strength in core ethanol operations and active capital allocation with 822K shares repurchased for $32.7M (~4.7% of shares) in Q1 2026 .
• Project updates: One Earth expansion completion targeted for 2026 (vs prior mid-2025), and EPA Class VI injection well permitting timeline extended from Oct 2025 to Jan 2026, with call commentary indicating a further extension to April 2026; combined capex budget held at $220–$230M .
• Balance sheet remains strong with $315.9M in cash, cash equivalents, and short-term investments and no bank debt, providing flexibility to fund growth and buybacks .
• Near-term stock catalysts: buyback continuation, clarity on EPA permit timeline and Illinois pipeline moratorium, ethanol export momentum; potential risk from natural gas and DDG pricing volatility .

What Went Well and What Went Wrong

What Went Well

• “We achieved our 19th consecutive quarter of positive earnings in our core ethanol business,” reinforcing operational consistency despite market variability .
• Ethanol pricing improved YoY, supporting gross profit stability ($14.3M in Q1 2026 vs $14.5M in Q1 2025); ethanol volumes were 70.9M gallons and ASP was $1.76/gal .
• Shareholder returns: repurchased ~822K shares for $32.7M at ~$39.80 average price, with 1.18M shares remaining authorized (~7% of outstanding) .

What Went Wrong

• DDG pricing weakness pressured gross profit; dry DDG ASP was ~$145.65/ton, down YoY, and equity income fell; net income declined to $8.7M vs $10.2M in Q1 2025 .
• Interest and other income decreased to $4.2M from $5.9M YoY, a key driver of lower EPS despite stable operations .
• Project timelines extended: One Earth expansion shifted to 2026 and EPA Class VI permit timeline moved out, introducing execution/permit risk dependencies .

Financial Results

Values with asterisk retrieved from S&P Global.*

Margins (S&P Global)

Values retrieved from S&P Global.*

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We achieved our 19th consecutive quarter of positive earnings… repurchased more than 822,000 shares, and continued evaluating how best to advance our growth initiatives… This commitment… lays the groundwork for long-term success.” — Zafar Rizvi, CEO .
• “Average purchase price for the repurchased shares was $39.80… approximately 6.8% of our outstanding shares since reinitiating purchases in December 2024.” — Stuart Rose, Executive Chairman .
• “EPA currently anticipates issuing a final permitting decision… by January 2026… Illinois SB 1723… our proposed injection well sites… are ~6 miles outside the aquifer boundary… a positive development.” — Zafar Rizvi, CEO .
• “The reduction [in EPS] was primarily attributable to lower cash balances and interest income rather than operations.” — Doug Bruggeman, CFO .

Q&A Highlights

• Consistent profitability drivers: granular management oversight of corn and ethanol markets, strong plant locations, and team execution; locking in profits when targets are met .
• Regulatory outlook: ongoing uncertainty; 45Q and 45Z supportive; Illinois SB 1723 viewed positively; EPA permit date extended intra-day from Jan to Apr 2026, highlighting dependency on government timelines .
• Macro/industry: cautiously positive ethanol margins into summer; potential record corn harvest and rising exports supportive; watch for natural gas export-driven cost pressure; tariffs resolution with Canada/Mexico could be a tailwind .

Estimates Context

• S&P Global consensus was unavailable for Q1 2026 EPS and revenue; as such, we cannot definitively assess beat/miss versus Street. Values retrieved from S&P Global.*
• Actuals: Revenue $158.34M and diluted EPS $0.51 .

Values retrieved from S&P Global.*

Key Takeaways for Investors

• Earnings quality remained solid with 19th straight profitable quarter; EPS compression versus Q4 driven more by financial income than core operations, suggesting operating resilience .
• Active capital return via buybacks continues and is likely to support per-share metrics and stock liquidity near-term; remaining authorization is meaningful .
• Project timing is extended but within budget; clarity on EPA Class VI permit and Illinois pipeline framework remains a major catalyst—permit slippage warrants monitoring and could shift timelines .
• Ethanol fundamentals constructive: higher exports and potential record corn harvest support margins; DDG pricing is a watch item, while corn oil trends are favorable .
• Balance sheet strength (no bank debt; $315.9M in cash/STI) provides optionality to fund growth and opportunistic repurchases without external financing risk .
• Near-term trading setup: headline sensitivity to regulatory updates (EPA permit date changes, Illinois moratorium developments), export/tariff news, and energy input costs (natural gas) .
• Medium-term thesis: scaled, efficient ethanol operations plus CCS optionality and capacity expansion to 175M/200M gpy at One Earth can lift earnings power if permitting and policy tailwinds materialize .

Notes:

• No formal quantitative guidance was provided (revenue/EPS/tax rate). Management expects continued profitability and stable Q2 performance .
• No non-GAAP adjustments were disclosed; reported figures are GAAP.
• Consolidated operations include One Earth and NuGen, with equity income from four other plants .