Executive Summary

Q4 FY2024 (quarter ended January 31, 2025) delivered $158.2M net sales, $17.6M gross profit, and $0.63 diluted EPS; profitability declined YoY on lower pricing but remained positive, with cash/short-term investments of $359.1M and no bank debt .
Management extended the One Earth ethanol expansion timeline beyond mid‑2025 and raised combined project budget to $220–$230M, citing equipment upgrades to support higher future capacity; EPA Class VI well permit for CCS was expected October 2025 per EPA timeline .
The Board authorized a new 1.5M‑share buyback (in addition to prior authorization), with 654,276 shares repurchased since December 2024 through Q1 FY2025; later increased post 2‑for‑1 stock split .
Near‑term narrative hinges on weaker crush spreads and potential export tariff risks (Canada DDG/Mexico ethanol), offset by operational efficiency, disciplined repurchases, and anticipated benefits from 45Z/45Q once CCS is permitted .
Trend: Q3 FY2024 was exceptionally strong ($1.38 diluted EPS), followed by a softer Q4; Q1–Q2 FY2025 remained profitable with $0.51 and $0.43 diluted EPS respectively as pricing pressure persisted .

What Went Well and What Went Wrong

What Went Well

Strong balance sheet: $359.1M cash/short‑term investments, no bank debt at FY year‑end; continued interest income ($4.2M in Q4) supporting earnings .
Shareholder returns: FY2024 repurchased ~372,567 shares ($15.5M); subsequent ~281,709 shares ($11.9M) in Q1 FY2025; new authorization for up to 1.5M additional shares approved Mar 25, 2025 .
Operational steadiness: Q4 ethanol volumes rose to 74.7M gallons vs 72.1M in Q4 FY2023; management emphasized “18th consecutive profitable quarter” and efficiency focus despite weaker spreads .

What Went Wrong

Pricing headwinds: Q4 net sales fell to $158.2M from $187.6M YoY; gross profit declined to $17.6M from $30.4M YoY on lower selling prices (partially offset by lower corn/nat gas) .
Margin compression: Q4 income before taxes dropped to $17.9M from $32.5M YoY; diluted EPS down to $0.63 from $1.16 YoY .
Project delays/capex increase: Ethanol expansion timeline extended beyond mid‑2025; combined expansion+CCS budget raised from $165–$175M (Q3 FY2024) to $220–$230M due to equipment upgrades and inflation .

Financial Results

Metric	Q4 FY2023	Q3 FY2024	Q4 FY2024
Net sales and revenue ($USD Millions)	$187.6	$174.9	$158.2
Gross profit ($USD Millions)	$30.4	$39.7	$17.6
Interest & other income ($USD Millions)	$4.8	$4.6	$4.2
Income before taxes & NCI ($USD Millions)	$32.5	$39.5	$17.9
Net income attributable to REX ($USD Millions)	$20.6	$24.5	$11.1
Diluted EPS ($USD)	$1.16	$1.38	$0.63

KPIs

KPI	Q4 FY2023	Q3 FY2024	Q4 FY2024	FY2024
Ethanol sales volumes (million gallons)	72.1	75.5	74.7	289.7
Avg ethanol selling price ($/gal)	—	—	$1.64	$1.71
DDG volumes (000 tons)	~170.0	—	~166.0	632.0
Avg DDG selling price ($/ton)	—	—	$143.81	$160.37
Modified DG volumes (000 tons)	—	—	~19.5	70.0
Avg Modified DG price ($/ton)	—	—	$72.84	$69.93
Corn oil volumes (million lbs)	~22.0	—	~23.5	88.1
Avg corn oil price ($/lb)	—	—	~$0.44	~$0.44

Balance Sheet Snapshot

Metric	FY2024 Year‑End (Jan 31, 2025)
Cash & equivalents ($USD Millions)	$196.3
Short‑term investments ($USD Millions)	$162.8
Total cash + ST investments ($USD Millions)	$359.1
Bank debt	None

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
One Earth ethanol expansion completion	Q3 FY2024 → Q4 FY2024 → FY2025	Mid‑2025 completion to 175 mgpy; permitting for 200 mgpy thereafter	Timeline extended beyond mid‑2025; undergoing technical review	Lowered/Delayed
One Earth ethanol expansion completion	FY2025 (updates)	Extended beyond mid‑2025	Completion anticipated in 2026	Further delay
CCS Class VI well permit timing (EPA)	Q4 FY2024	Expected October 2025 per EPA timeline	Dialogue with EPA resumed; expected Oct 2025 per call; later updated to Jan 2026 (Q1) and March 2026 (Q2)	Slipped to 2026
Combined expansion + CCS budget	Q3 FY2024	$165–$175M	$220–$230M (budgeted)	Raised
Share repurchase authorization	Q4 FY2024	222,510 shares remaining under prior authorization	New authorization up to additional 1.5M shares	Raised
Share repurchase authorization (post split)	Q2 FY2025	+1.5M shares authorized	Authorization increased to 2,357,186 shares after 2‑for‑1 split	Raised via split

Earnings Call Themes & Trends

Topic	Previous Mentions (Q‑2 and Q‑1)	Current Period (Q4 FY2024)	Trend
Crush spreads & pricing	Q3 FY2024: Gross profit resilient on lower input costs	“Weaker crush spread environment” in Q4 and into Q1 FY2025	Weaker spreads QoQ
Ethanol expansion (capacity)	Q3 FY2024: Mid‑2025 completion to 175 mgpy; permit toward 200 mgpy without material capex	Technical review; timeline extended beyond mid‑2025 ; rationale: equipment upgrades to support future higher capacity	Delay; scope optimized
CCS permitting (Class VI)	Q3 FY2024: Awaiting EPA approval; IL pipeline moratorium noted	EPA timeline Oct 2025; communications resumed under new administration per Q&A	Process advancing; timing uncertain
Share repurchases	Q1 FY2025: 822k shares repurchased ($32.7M); 6.8% since Dec 2024	Q4 FY2024: ~373k shares ($15.5M); Q1 FY2025: ~282k ($11.9M); new 1.5M authorization	Accelerated return
Policy risks (tariffs, E15)	—	Monitoring potential tariffs on ethanol/DDG exports (Canada, Mexico); support for year‑round E15	Heightened focus
Tax credits (45Z/45Q)	Q2 FY2025: Positive impact from legislative extension	CCS expected to benefit REX via 45Z/45Q once permitted/operational	Beneficial tailwind post‑permit

Management Commentary

“During Fiscal Year 2024, REX American continued to provide value to shareholders… This is especially important in a weaker crush spread environment like we saw during the fourth quarter, and which has continued into first quarter 2025.” — CEO Zafar Rizvi .
“Our two growth projects at our One Earth facility are progressing… The technical review underway at our ethanol expansion project is in line with our philosophy of prioritizing efficiency.” — CEO Zafar Rizvi .
“Volumes in the fourth quarter of 2024 were 74.7 million gallons… Average selling prices for our consolidated ethanol volumes were approximately $1.64 for the fourth quarter.” — CFO Doug Bruggeman .
“Q1 is already off to a good start and we are expecting a profitable Q1, which would be our 19th consecutive profitable quarter.” — CEO Zafar Rizvi .
“We are closely monitoring potential action… year‑round E15 blending… would be beneficial not just to ethanol producer, but to U.S. consumer as well.” — CEO Zafar Rizvi .

Q&A Highlights

Capex/budget increase rationale: Management chose more robust, energy‑efficient equipment to accommodate future production increases (positioning for potential 200–225M gallons), driving the budget higher and lengthening the timeline .
Regulatory engagement: Communications with EPA on Class VI permitting restarted under the new administration; timeline responsiveness noted versus prior period .
Policy backdrop: Discussion of PHMSA rulemaking status and potential changes under the new administration, with management “watching all these policies very closely” .

Estimates Context

How results compared to Wall Street consensus (S&P Global):

Metric	Period	Consensus*	Actual
Primary EPS Consensus Mean	Q4 FY2024	$0.36*	$0.63
Revenue Consensus Mean ($USD Millions)	Q4 FY2024	$170.0*	$158.2
Primary EPS – # of Estimates	Q4 FY2024	1*	—
Revenue – # of Estimates	Q4 FY2024	1*	—

Values retrieved from S&P Global*.
Interpretation: REX posted an EPS beat vs consensus, while revenue was below the single‑analyst estimate. Given low coverage (one estimate), revisions may be limited but directionally EPS outperform and revenue underperform warrant attention.

For trend: Q1 FY2025 and Q2 FY2025 EPS/Revenue consensuses were modest and outcomes remained profitable ($0.51/$0.43 diluted EPS; $158.3M/$158.6M revenue) amid pricing pressure . Consensus (single‑analyst) was $0.16/$0.35 EPS and $140.0M/$149.0M revenue respectively*, implying mixed beats/misses across subsequent quarters.

Key Takeaways for Investors

Balance sheet strength (no debt, $359.1M liquidity) provides flexibility to fund the $220–$230M expansion+CCS while supporting buybacks; this underpins downside protection amid pricing volatility .
Expansion timeline pushed to 2026 with a larger budget; the trade‑off is improved plant efficiency and capacity headroom, which could enhance earnings power post‑completion .
CCS permitting remains a key catalyst; 45Z/45Q credits could materially benefit margins once operational, but timing has slipped to 2026 per updated EPA timeline .
Operational KPIs show resilient volumes (Q4 ethanol 74.7M gallons), yet lower selling prices compressed profitability; watch crush spreads and DDG/corn oil pricing to gauge near‑term EPS trajectory .
Shareholder return policy is active: new 1.5M authorization plus repurchases in Q4 and Q1; post‑split authorization increased, signaling ongoing return of capital .
Policy risks (export tariffs; E15) are a swing factor for demand/pricing; management is engaged and monitoring developments in Canada/Mexico and U.S. blending policy .
Near‑term: Expect continued profitability but subdued margins until pricing recovers or CCS/expansion milestones de‑risk; medium‑term: capacity/CCS could reset earnings power higher once commissioned .

REX AMERICAN RESOURCES Corp (REX)·Q4 2025 Earnings Summary