REX - Earnings call transcript Q2 2025 | REX American Resources Corporation

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Operator

Good morning, and welcome to the REX American Resources Second Quarter 2024 Conference Call.

As a reminder, today's call is being recorded. [Operator Instructions] I would now like to turn the call over to Mr. Doug Bruggeman, Chief Financial Officer of Rex American. Please go ahead.

Douglas Bruggeman

you REX thank XXXX Resources and Call. Conference morning, for American joining QX Good our comments presentation as to get We'll and your momentarily questions. well as But I will the harbor first, review disclosure. safe

conditions, that involve and facts statements historical Private to of the risks call Act Securities addition statements of Litigation uncertainties In Reform current forward-looking contain today's meaning or the within conference XXXX. of

of reflect and beliefs not guarantees expectations the but current future company's statements forward-looking Such performance. are

uncertainties from As in the American associated on update such, REX the Resources XX-Q. and revise results Commission, The actual reports forward-looking in the announcement the XX-K Exchange including publicly with with or any materially statements news expectations. assumes described vary filings are Securities no forward-looking and and to statements. Form company's risks may today's company's obligation

turn to call the our over Rose. Stuart Executive like now I'd Chairman, to

Stuart Rose

again joining and everyone morning, Good to you thank for us.

year X in in the the remainder made excellent During progress the I American Resources quarter, goals for second last call. that the laid REX of our out

reminder, ethanol million a and further expansion construction profitable carbon toward operations, Earth One and to these to facility of Earth compression permitting continue year facility the facility, our of One Energy our complete million capture the the gallons. phase of to gallons to capacity planned per XXX production XXX complete were move As the to

entirely were quarter. profitable very had goal, operations the REX first comparable successful. prior to the year's we To relative

goals emphasize eyes production, well have produce X industry-leading where XXXX, more to for X% over the income second continue future, quarter gross first allowed Net results margin than quarter quarter produce strong consistent of second improved nearly And ethanol of which improved second XXXX. over the share business XX% core Our the over shareholders. also XX% per we we accomplish on us our more our quarter first as team our the has quarter XX% by and by in over than to XXXX.

us allowed the to debt. has with business any core this of company burdening grow success The without

and to I them efforts capture complete at Our project [ goal Earth ] One CCS exits City, to say team this our to SKUs the their Illinois. Gibson want level of day, quarter. second Energy And construction, the in thank every compression and you a high for

will We make the in this project continue to progress. call. Zafar later discuss in detail

Our expansion third goal our gallons the Earth million track prepare ability quarter returns. expansion XXX per per improve for to is on to One first further year gallons complete will to production further levels production construction ethanol for of permitting XXX the XXXX. realize This to strong million year of of capacity

We are very excited and for what our it for the expansion means business.

in We all of REX progress and goals now have on the over are success preparing long term. to our both making American and

on CCS give updates I'd Rizvi, now our things our CEO, Zafar and over like to capacity to production projects. One expansion further Earth ethanol Energy turn to

Zafar Rizvi

Thanks, Stuart.

Our carbon to continue City, capture and sequestration progress. Illinois project in Gibson

of Illinois, see this updated picture to in of by to moratorium on the capture the a the which morning. in and can imposed posted is second Due regulatory compression of state You our investor our COX was carbon quarter facility presentation pipeline. which website of action the construction July portion

the us spending by to extra to to monitor both We and compression of of believe period a capture most later shorter the have year the and portion between We this construction completing mean initial testing on schedule the Operationally, accelerated is the path, construction perspective, project. the of completion be first facility, the cost that potential more quarter taking interconnection without XXXX. will the prospects. adjusted completed the and is closely measured prudent a our of the planned financial construction from which facility of to deadline. for in utility of our will budgetary portion meet From allow end the require a incurring more operational

permitting the portion is ongoing path. this of Given this way project we confident the in several new are right the pursuing that reality,

is pipeline by a is permit While ] And worked our in Illinois XXXX well we permit in with still issued application drop permitting out, process. [ being injection being anticipate Class under year-end. U.S. EPA X

On by EPA anticipate of the XXXX. itself, then second project final we time would line approval estimated currently the of the in the quarter

the squared the Energy to us easement quarter, XX our pipeline. as and for neighbor eventual As a of of sequester of the plant carbon our the capacity next allow #X all which completely reminder, of on eminent subsurface the farmers enough of avoid last us use domain years, squared in delivery One well had to allow REX Earth from easement also to construction area X, our will for emission for and carbon

we our expansion year of Energy first ethanol commissioning million After further levels, Final expect utility. year. per facility to Earth track the in to XXX facility, of the ethanol million testing per One XXX is production predication on the electric the completion for gallons permitting Earth The quarter from interconnection local of then on XXXX. and of One increased emission allow it the produce necessary from gallons the our planned of production depends to begin completion

gallons efficient ] This to or capital This XX the expected. in enable profitability business our production and XXX ethanol is current only our profitable is our in expansion XX expand and necessary already eventual capacity expect to and [ added million for us year the highly no additional and line. additional expanded permitting on core we capacity to facility our spending allow step million to per construction will gallons

quarter carbon the production expansion. capture and approximately the ethanol $XX.X carbon for invested end, second Spending As capacity sequestration at $XX of stood projects end. as million associated of into quarter Earth we and million capture project One have

combined While expenditure on the million date. to project expansion amount CCS million Gibson City. production and stood the of of ethanol This for as at $XX.X budget million $XXX same total expansion compared to at ethanol the $XXX both

our to and the CFO, call to discuss Doug I hand Bruggeman, results. would our operational Doug? to now like financial

Douglas Bruggeman

volume sales quarter Average our XXXX ethanol quarter our million quarter REX for XXXX per second of XX.X the with the price reduction second Zafar. gallon per consolidated volume for to results. $X.XX gallon selling of Thanks, was versus compared second second the X% XX.X XXXX. during volumes $X.XX gallons. begin sales in approximately were ethanol gallons, a of million quarter I'll operational

Distillers Dry the Grain of X% XXXX totaled sales volume during XXXX over a quarter second tons, XXX,XXX second quarter decrease volumes.

second XXXX second per approximately compared the quarter with the price Grain Average XX,XXX selling for $XXX.XX $XX.XX The of the quarter Average XXXX. in Distillers sales sold Grain to was selling pounds XX.X price approximately in quarter ton in Grain Corn ton Distillers DDGs pounds the sales quarter were XX,XXX volumes for tons quarter second XXXX. the to of per second per second were $XXX.XX Distiller for XXXX XXXX. XXXX million the were was quarter of Modified Modified for second second compared average Modified the ton volumes the in tons of XXXX compared quarter approximately million oil $XXX. the for second quarter. selling XX.X price in in

of million second The $X.XX was $XX.X average profit XXXX quarter product of oil the compared Gross selling for the second in price for second XXXX. XXXX pound pound REX's to per for for second versus quarter profit of approximately the XXXX. quarter the was $XX.X million gross per corn quarter $X.XX

was gas corn achieved all products, prices. lower The average selling than despite prices natural gross and more for was X% which by increase in offset lower input profit

$X.X grants in which not year, year. quarter in with of expenses selling, income expensing decrease XXXX the second approximately of $X.X XXXX. second the due quarter quarter Our totaled $X.X the $X.X second quarter million executive this to partly recur general and of second and of prior The of for versus million in to decreased was other did million administrative XXXX the the compared for the Interest million XXXX. stock

per any per XXXX. quarter January uses projects bank and at of short-term entered with $XXX.X XXXX. second This income and quarter investments better cash quarter second of quarter higher noncontrolling ended $X.XX REX Income basis quarter million, reflects was income interest per taxes to for our over than also equivalents in cash first $XX.X second short-term primarily compared second as approximately related share for $XXX second Energy earnings The for an Net on of XX% the $XX.X the cash, to of the XX, this compared to second million increase XXXX. cash American the more were in ongoing without XXXX quarter of diluted total quarter before and balances our of debt. million second and of We net the facility. Earth Rex was quarter share amounts million investments. half of XXXX, the a the compared $X.X with the to the of On $X.XX XXXX. during shareholders construction share attributable the to million One

I'd now to call like the back to Zafar. turn

Zafar Rizvi

give year. progressing would see some the to how color through I Doug. you, Thank now we of the like remainder market

year. to quarter, exceeds With third continue second see we of this, we the this result expect strong the expect to play sporting and the quarter point year the out. corn we see quarter to to was the drivers market For this that of same to off the third are those start, in a of

a had we which across year industry. the at regarding export, a for than XX.X% the impact USDA basis point believe positive on through ethanol same have volume June increasing to were last Additionally, the higher

a strong, plants anticipating a lead toward bumper harvest farm robust we to corn pricing. with and the in harvest, inputs our continued crop, corn own Midwest, our inventories, consolidated conditions we coupled to in time, be what for X expected corn is favorable crop As input the at near looking are to current are be the will our the the expected current are

or despite that evidenced pricing every plants profitability Above a is to performance ethanol who on us over are. live sold. we gross the successful all, as focused in profitable are our by It it this volumes this day production people numbers focus our margin make and company quarter improved pricing and product lower continue we

to like questions. Now up the I would open things Operator? to

Operator

[Operator Instructions]

first of line Our Levy from question Securities. Truist Jordan with comes the

Jordan Levy

on wanted of just talk things. first capture the carbon sequestration side I to

the when you release out forces going you're did job through think that guys a various good You this to calling kind through have the external process. in press of

and just help you then event the build necessary can at about you you the pipeline talk get the in the approval timeline the that any us equipment assuming need, of permit frame out that point. think remaining in time maybe do But the to around just that

Stuart Rose

Zafar?

Zafar Rizvi

Yes.

is to that look I quarter meantime, second our be in in time provided, you some in the But XXXX. EPA in we of which full think the is if information at swing. permit expected construction

it, by the CFS to We the and connection, care facility, which end will interconnection facility. sequestration the taking on to that this year, also of of utility carbon utility are depending be provide already ready to ethanol

facility ethanol to Energy, utility So once this possible. construction facility start ethanol soon be of received on the Earth completed, to have we're as then is going we and One as concentrate

As you once not last has facility. important money. can complete that know, confidence. that profit the years, produce to year, they is One with over forward a will moving single better XX -- produced lost Earth very facility and that Energy location And us, ethanol say much that No I we

the connected, permits and and then we possible we as work do electric completed. to we start the as will construction certainly to receive as once testing. continue And the connection when ICC construction And try is permit permits reach these soon will we'll other received second, will and be and all

So we of the permit will I once construction will start from the the say EPA, receive we well. sometime, probably,

in permits otherwise, September August we on operation. next -- So for say we we year, we all be But or of waiting that's to are those should depending receive, permits. those just will all sometime expected probably

on facilities... But it -- So but permits. depends the

Stuart Rose

will it as on is for We but building we the was it we your permits. is long pipeline permit, answer not waiting your permits. itself And for wait not question, the think as to call give is a which that's a not once the X-mile biggest -- the not hole gave time is but just and schedule -- are the And delay pipeline, you permits, building take. that. these X-, it's question as which Illinois nearly pretty how That a further the -- Zafar consuming itself. be permit will us good But I to waiting get connector, to for a in of nearly Jordan time pipe and long as really easy. have receiving that,

Jordan Levy

-- how appreciate much I you all an able on just certainly, all to your details. you And own. the of impressive done question, No. And And waiting -- been been ... now Absolutely. on on done maybe job have just those clarifying once the you've a pipeline. get

Stuart Rose

more there's the -- pipeline, the than Pipeline not which is... on we're EPA, may be also waiting

Zafar Rizvi

Yes, EPA permits -- exactly.

Stuart Rose

lots of involved permit There's there. a local And lot too. of permits

Zafar Rizvi

facilities does thing ethanol ethanol which construction any the on XXXX, depending million towards move facility swing million-gallon think wanted we is from pipeline. the of a to are XXX million of emphasize that first XXX the utility connections. then need I itself should And XXX quarter providing and by full electric I completed really be in facility. on to main But And the the a not

the facilities, last continue core Energy is business. of once to And able to our of on to have that, results it's that will So we very kind of years. know, -- rate. as all great we the produce Earth student produce core be at profit completed, facility our our is XX And produced our is you that also will we important business ethanol One that as from star us, and produced and hope that

Stuart Rose

other hope our that that -- -- we is Jordan plants it's that hope plans our CI One Zafar and we expand to thing our -- and will the is our construction mentioning, score. also with lower are not

told in the itself -- depending but We on CI have how lower hope our in to by that score the not it, federal measure will But exactly we CI government. that, been we they score construction. measure

Jordan Levy

Yes. That's to just Stuart, Zafar. be follow-up question, which actually a is good going

with to for the main CCUS it items Your election still ethanol. relates thoughts into outstanding of some -- and going the guidance as

to Just there. thoughts high-level get wanted your

Stuart Rose

will some other. certain I do bipartisan bipartisan. one that affect extend My don't there capture happens the are opinion be there or other or What out the a if party to issue, carbon And will party is the proposals its law. by was that -- that one think CC and current may a things. affected

from it's are thing. I that certainly credit good the expanding out understands otherwise, He's The is a or that state a state and think other the an really -- has But a I Democrats don't farm tax on from firm stand ethanol Vice Minnesota nominated party there. for it President. really CCS issue. a taken one think the amounts person

Operator

next Our of Raymond the Molchanov question Pavel comes James. with from line

Pavel Molchanov

cash you and cash be putting particularly the So the is have. even even already the million beyond of suppose, that with for in I capture balance already carbon you you more allocation? even going current more on the What going $XXX be amount that stockpiling, kind sizable slowdown are you're to with What's of our, the priority construction, that using to have the on? sheet

Stuart Rose

and priority is First the the of carbon capture expansion Gibson City plant.

than outside a tax possibly couple acquisitions. lower looking That's of to They ethanol. consider -- energy of ethanol, Dakota year. especially expansion come weren't Second better along get would can but would that priority to this possibility. at nothing's to capture is whats at is our that we never We us, We're South going up. you but a stuff looking for know in think tax the We've and related a come related credits credits carbon be we plant. and always for some our if possibility score looked

field. we So our to stuck

the last We over just in buy at we're been the -- dips, buy know good over the that don't the years, which there. We and and percentage never market where lower thing really, what share really we're the we because you of kings this doing And shares And buyback probably really is count. back the is. didn't important. bought But we and quarter. stock years, shares buy to our we're know we've

successful stock still us. shareholders that's -- have -- still not buyback quarter. at did success and protect strategy have a buy not that's very there. And very, highs, been been we our but that's the buy for we we down used stock it the We lows authorization, when use the don't is We to very in last

Pavel Molchanov

the latest about thinking aviation on your sustainable What's fuel?

Stuart Rose

Zafar?

Zafar Rizvi

no you have to I at will carbon low also, for believe think XXZ we And that that, know, fuel we that time. as certainly produced. location. there's for for at have need this carbon guideline sequestration clear We

is reduce can score move for further certainly to look at XXZ that we SAF. can can the and to we CI believe guideline need our then XXZ it. clearly time, that once credit we tax issued, so But certainly qualify we then So into this toward

Operator

the of comes next Sakai Research. Our from with question Chris line Singular

Joichi Sakai

question capital doing budgeted I you a are to capital amount How expenditures. on your had expenditures? compared for

Stuart Rose

Zafar?

Zafar Rizvi

at are this think we time, we, I on right track.

Joichi Sakai

Are need more you possible spend there? seeing any for -- more to

Zafar Rizvi

see of But No, components depends major not have of is the are in time, budget. -- lot as overall but delay not on future. at we factors at inflation The delay is some of do these this our facilities, time, things main a components right it you that electric of know, completion increase. on any this receiving equipment and we on causing seen we in

Joichi Sakai

then issues And last quarter? Okay. over the weather-related any you have seen

Zafar Rizvi

issue. area, problem. have a any not a were railroad some heavy issue there No, washed in but where track was we days, major few not was some out There for seen Dakota weather-related major South rain, a was there and

Stuart Rose

expecting year. very this good We're crops

Zafar Rizvi

expected good, for Illinois crops Correct. time, Yes. a that same which South crops XX% at bumper be record the record is The is also to crop area. very will only in the near excellent crops good this is Dakota crops, very year. to Illinois. expecting which not is And

Operator

question Truist Jordan from of the Securities. comes Levy next line Our with

Jordan Levy

to kind you else whether the some potential a Just Summit worn mentioned Pavel's follow-up it what Maybe that for ] need to you'd relates see me. think future. on for order in investment. to the or talk something [ it at Stuart, there in expansion of was point to Zafar, I maybe question, just or

Stuart Rose

It this opinion, South this pipeline. opinion, Summit to be because has issues. -- not my may Summit, at this ] time, comment is Dakota main the but my At [ time, the would investment in be of later,

in some would it just next the it we invest we be corn because supports consider the -- will would And pipeline we efficient it larger advantage being but so have an were so more if do to a probably year, it. would And hope it, to if be the not in plant. day, -- we would it Summit

So that's whether the biggest would It's prices. corn the raise issue. always plant bigger corn a

very have we to on So that. be careful

but the below can involved. CI is are lower there thing some credits tax XX, have if regulations, third XXZ score our they The we

start score. below that -- what expand the we our do One it same So make and we XX and were simultaneously, in, best it CI doing -- And plant, to our even that it and the out qualify regulations. the CI make capturing qualify our bring pipeline. we we're will pipeline when would invest know to is bring we comes But defines maybe down. CI in it goal try don't the the get we will or CI then of just score does or not get we we At ], and come score sure too as for bigger Earth, bring that for would XXQ your our be [ time, have down when -- again, XXZ. They probably without if

Operator

We back closing the end remarks. have I'll for reached call of the Stuart turn the Rose session. now to over question-and-answer

Stuart Rose

All right. everyone now. good are to Again, listening right crops in. thank for corn I'd like

currently As better second -- a to Things Zafar said, seem our quarter. we're along carbon moving rate project. with running capture going than be at the

than and the doing people better separates and ahead in down have reason industry, the we're that the line, we you in the talk most and ethanol people, in we'll everyone good We as we're carbon thing the capture listening, and very and virtually it that us. feel next great people have we Again, way biggest our have Bye. doing, of really locations, but the plants, work we that great best we that's CEO, thank what and and to very, includes all for the everyone them quarter. have for people includes

Operator

Thank you. conference. This today's concludes

your you disconnect lines You time. your participation. We may thank for at this

REX American Resources (REX) 27 Aug 242025 Q2 Earnings call transcript