REX AMERICAN RESOURCES Corp 10-Q for FY2026 Q1
REX AMERICAN RESOURCES Corp (REX)
About this 10-Q
REX AMERICAN RESOURCES Corp filed this 10-Q on June 4, 2025, covering the quarter ended April 30, 2025 (FY2026 Q1).
Headline figures
Quarter ended April 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $158.34M
- down 1.8% from $161.23M a year earlier
- Net income
- $10.67M
- down 13.0% from net income of $12.27M a year earlier
- Diluted EPS
- $0.51
- down 12.1% from $0.58 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
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(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or
for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Accelerated filer ☐ | |
| Non-accelerated filer ☐ (Do not check if a smaller reporting company) | Smaller reporting company |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
At the close of business on June 3, 2025,
the registrant had
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
INDEX
Page
| 2 |
Commonly Used Defined Terms
| |
| Corporate Structure: | |
| REX/the Company | REX American Resources Corporation, and its majority and wholly owned subsidiaries |
| NuGen | NuGen Energy, LLC – REX owns 99.7% |
| One Earth | One Earth Energy, LLC and subsidiaries – REX owns 75.9% |
| Big River | Big River, LLC, and subsidiaries – REX owns 10.3% |
| Industry Terms: | |
| CI | Carbon Intensity |
| CSA | Climate-smart Agriculture |
| E-10 | Gasoline blended with up to 10% ethanol by volume |
| E-15 | Gasoline blended with up to 15% ethanol by volume |
| EPA | United States Environmental Protection Agency |
| IRA | Inflation Reduction Act |
| IRC | Internal Revenue Code of 1986, as amended |
| IRC Section 41 | Internal Revenue Code § 41 - Credit for Increasing Research Activities |
| IRC Section 45/Section 45 | Internal Revenue Code § 45 - Electricity Produced from Certain Renewable Resources, etc. |
| IRS | Internal Revenue Service |
| PHMSA | Pipeline and Hazardous Materials Safety Administration |
| RFS II | Renewable Fuel Standard II |
| RIN(s) | Renewable Identification Number(s) |
| RVOs | Renewable Volume Obligations |
| Section 45Q/45Q | Section 45Q of the Internal Revenue Code |
| Section 45Z/45Z | Section 45Z of the Internal Revenue Code |
| SB | Illinois Senate Bill |
| SRE(s) | Small Refinery Exemption(s) |
| USDA | United States Department of Agriculture |
| Accounting and General Business Terms: | |
| ASC | Accounting Standards Codification |
| ASC 280 | ASC 280, “Segment Reporting” |
| ASC 815 | ASC 815, “Derivatives and Hedging” |
| ASC 820 | ASC 820, “Fair Value Measurements and Disclosures” |
| ASU | Accounting Standards Update |
| FASB | Financial Accounting Standards Board |
| SG&A | Selling, general, and administrative |
| TSR | Total shareholder return |
| 3 |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
Unaudited
| (In Thousands) | April 30, 2025 | January 31, 2025 | ||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term investments | ||||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Refundable income taxes | ||||||||
| Prepaid expenses and other | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Finance lease right-of-use assets | ||||||||
| Other assets | ||||||||
| Equity method investment | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable – trade (includes $ | $ | $ | ||||||
| Current operating lease liabilities | ||||||||
| Current finance lease liabilities | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Deferred taxes | ||||||||
| Long-term operating lease liabilities | ||||||||
| Long-term finance lease liabilities | ||||||||
| Long-term taxes payable | ||||||||
| Other long-term liabilities | ||||||||
| Total long-term liabilities | ||||||||
| Equity | ||||||||
| REX shareholders’ equity: | ||||||||
| Common stock | ||||||||
| Paid-in capital | ||||||||
| Retained earnings | ||||||||
| Treasury stock | ( | ( | ||||||
| Total REX shareholders’ equity | ||||||||
| Non-controlling interests | ||||||||
| Total equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 4 |
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Unaudited
| (In Thousands, Except Per Share Amounts) | Three Months Ended April 30, | |||||||
| 2025 | 2024 | |||||||
| Net sales and revenue | $ | $ | ||||||
| Cost of sales (includes $ | ||||||||
| Gross profit | ||||||||
| Selling, general and administrative expenses | ( | ( | ||||||
| Equity in income of unconsolidated affiliates | ||||||||
| Interest and other income, net | ||||||||
| Income before income taxes | ||||||||
| Provision for income taxes | ( | ( | ||||||
| Net income | ||||||||
| Net income attributable to non-controlling interests | ( | ( | ||||||
| Net income attributable to REX common shareholders | $ | $ | ||||||
| Weighted average shares outstanding – basic | ||||||||
| Basic net income per share attributable to REX common shareholders | $ | $ | ||||||
| Weighted average shares outstanding – diluted | ||||||||
| Diluted net income per share attributable to REX common shareholders | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 5 |
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Equity
For the Three Months Ended April 30, 2025 and 2024
Unaudited
(In Thousands)
| REX Shareholders | ||||||||||||||||||||||||||||||||
| Common Shares Issued | Treasury | Paid-in | Retained | Non-controlling | Total | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Earnings | Interests | Equity | |||||||||||||||||||||||||
| Balance at January 31, 2025 | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||
| Treasury stock acquired | ( | ( | ||||||||||||||||||||||||||||||
| Non-controlling interests distribution and other | ( | ( | ||||||||||||||||||||||||||||||
| Issuance of equity awards and stock-based compensation expense | ( | |||||||||||||||||||||||||||||||
| Balance at April 30, 2025 | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||
| Balance at January 31, 2024 | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||
| Non-controlling interests distribution and other | ( | ( | ||||||||||||||||||||||||||||||
| Issuance of equity awards and stock-based compensation expense | ||||||||||||||||||||||||||||||||
| Balance at April 30, 2024 | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
| 6 |
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Unaudited
| (In Thousands) | Three Months Ended April 30, | |||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income including non-controlling interests | $ | $ | ||||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization of operating lease right-of-use assets | ||||||||
| Income from equity method investments | ( | ( | ||||||
| Interest income from investments | ( | ( | ||||||
| Deferred income tax | ||||||||
| Stock-based compensation expense | ||||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | ( | |||||||
| Inventories | ( | |||||||
| Refundable income taxes | ( | |||||||
| Other assets | ( | |||||||
| Accounts payable, trade | ( | ( | ||||||
| Long-term taxes payable | ||||||||
| Other liabilities | ( | ( | ||||||
| Net cash used in operating activities | ( | ( | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | ( | ( | ||||||
| Purchase of short-term investments | ( | ( | ||||||
| Maturity of short-term investments | ||||||||
| Deposits | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Treasury stock acquired | ( | |||||||
| Payments to non-controlling interests holders | ( | ( | ||||||
| Net cash used in financing activities | ( | ( | ||||||
| Net (decrease) increase in cash and cash equivalents | ( | |||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Non-cash investing activities – Accrued capital expenditures | $ | $ | ||||||
| Non-cash investing activities – Capital additions transferred from prepaid expense | $ | $ | ||||||
| Non-cash financing activities – Stock awards accrued | $ | $ | ||||||
| Non-cash financing activities – Stock repurchases accrued | $ | $ | ||||||
| Non-cash financing activities – Excise tax on stock repurchases accrued | $ | $ | ||||||
| Prepaid lease payment, prior to lease commencement | $ | $ | ||||||
| Operating right-of-use assets acquired and liabilities incurred upon lease execution | $ | $ | ||||||
| Finance right-of-use assets acquired and liabilities incurred upon lease execution | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 7 |
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2025
Note 1. Consolidated Financial Statements
References to the Company – References to “REX” or the “Company” in the consolidated financial statements and in these notes to the consolidated financial statements refer to REX American Resources Corporation, a Delaware corporation, and its majority and wholly owned subsidiaries.
The consolidated financial statements included in this report have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and include, in the opinion of management, all adjustments necessary to state fairly the information set forth therein. Any such adjustments were of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. Financial information as of January 31, 2025 included in these financial statements has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2025 (fiscal year 2024). These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2025. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the year.
Basis of Consolidation – The consolidated financial statements in this report include the operating results and financial position of the Company. All intercompany balances and transactions have been eliminated. The Company consolidates the results of its wholly owned and majority owned subsidiaries. The Company includes the results of operations of One Earth Energy, LLC in its Consolidated Statements of Operations on a delayed basis of one month as One Earth has a fiscal year end of December 31.
Nature of Operations – The
Company has
In applying the criteria set forth in ASC 280, the Company determined that based on the nature of the products and production process and the expected financial results, the Company’s operations at its ethanol plants are aggregated into one reporting segment.
Note 2. Accounting Policies
The interim consolidated financial statements have been prepared in accordance with the accounting policies described in the notes to the consolidated financial statements included in the Company’s fiscal year 2024 Annual Report on Form 10-K. While management believes that the procedures followed in the preparation of interim financial information are reasonable, the accuracy of some estimated amounts is dependent upon facts that will exist or calculations that will be accomplished at fiscal year-end.
| 8 |
Examples of such estimates include accrued liabilities, such as management bonuses, and the provision for income taxes. Any adjustments pursuant to such estimates during the quarter were of a normal recurring nature. Actual results could differ from those estimates.
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents includes bank deposits as well as short-term, highly liquid investments with original maturities of three months or less.
Revenue Recognition
The Company recognizes sales of ethanol, distillers grains and distillers corn oil when obligations under the terms of the respective contracts with customers are satisfied; this occurs with the transfer of control of products, generally upon shipment from the ethanol plant or upon loading of the rail car used to transport the products.
Cost of Sales
Cost of sales includes depreciation, costs of raw materials, third-party freight charges, purchasing and receiving costs, inspection costs, other distribution expenses, warehousing costs, plant repair and maintenance costs, production labor and related payroll costs, and general facility overhead charges.
Selling, General and Administrative Expenses
The Company includes non-production related costs such as professional fees, selling charges, operating lease expense, and certain payroll in SG&A expenses.
Financial Instruments
Certain of the forward corn and natural gas purchase contracts and ethanol, distillers grains and distillers corn oil sale contracts are accounted for under the “normal purchases and normal sales” scope exemption of ASC 815 because these arrangements are for purchases of corn that will be delivered in quantities expected to be used by the Company and sales of ethanol, distillers grains and distillers corn oil in quantities expected to be produced by the Company over a reasonable period of time in the normal course of business.
The Company uses derivative financial instruments (exchange-traded futures contracts and swaps) to manage a portion of the risk associated with changes in commodity prices, primarily related to corn. The
| 9 |
Company monitors and manages this exposure as part of its overall risk management policy. As such, the Company seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results. The Company may take hedging positions in these commodities as one way to mitigate risk. While the Company attempts to link its hedging activities to purchase and sales activities, there are situations in which these hedging activities can themselves result in losses. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. The changes in fair value of these derivative financial instruments are recognized in current period earnings as the Company does not use hedge accounting.
Income Taxes
The Company applies an effective tax rate
to interim periods that is consistent with the Company’s estimated annual tax rate as adjusted for discrete items impacting
the interim periods. The Company provides for deferred tax liabilities and assets for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis
and operating loss and tax credit carryforwards. The Company provides for a valuation allowance if, based on the weight of available
positive and negative evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The
Company paid income taxes of approximately $
As of April 30, 2025, and January 31, 2025,
total unrecognized tax benefits were approximately $
Inventory
Inventories are carried at the lower of cost or net realizable value. Cost for all inventories is determined using the first-in, first-out method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonable predictable costs of completion, disposal, and transportation. Inventory includes direct production costs and certain overhead costs such as depreciation, property taxes and utilities related to producing ethanol and related by-products. Inventory is permanently written down in instances when cost exceeds estimated net realizable value; such write-downs are based primarily upon commodity prices as the market value of inventory is often dependent upon changes in commodity prices. The Company did not record any inventory write-downs at April 30, 2025. The Company recorded approximately $0.1 million of inventory write-downs in cost of sales at January 31, 2025. Fluctuations in the write-down of inventory generally relate to the levels and composition of such inventory and changes in commodity prices at a given point in time.
| 10 |
The components of inventory are as follows as of the dates presented (amounts in thousands):
| April
30, 2025 | January 31, 2025 | |||||||
| Ethanol and other finished goods | $ | $ | ||||||
| Work in process | ||||||||
| Corn and other raw materials | ||||||||
| Total | $ | $ | ||||||
Property and Equipment
Property and equipment is recorded at cost
or the fair value on the date of acquisition (for property and equipment acquired in a business combination).
In accordance with ASC 360-10 “Impairment or Disposal of Long-Lived Assets”, the carrying value of long-lived assets is assessed for recoverability by management when changes in circumstances indicate that the carrying amount may not be recoverable. The Company did not identify any indicators of impairment or record any impairment charges during the first three months of fiscal year 2025 or 2024.
The Company tests for recoverability of an asset group by comparing its carrying amount to its estimated undiscounted future cash flows. If the carrying amount exceeds its estimated undiscounted future cash flows, the Company recognizes an impairment charge for the amount by which the asset group’s carrying amount exceeds its fair value, if any.
Investments
The method of accounting applied to long-term
investments, whether consolidated, equity or cost, involves an evaluation of the significant terms of each investment that explicitly
grant or suggest evidence of control or influence over the operations of the investee and also includes the identification of any
variable interests in which the Company is the primary beneficiary. The Company accounts for investments in a limited liability
company in which it has a less than
The Company periodically evaluates its investments for impairment due to declines in market value considered to be other than temporary. Such impairment evaluations include general economic and company-specific evaluations. If the Company determines that a decline in market value is other than temporary, then a charge to earnings is recorded in the Consolidated Statements of Operations and a new cost basis in the investment is established.
| 11 |
Short-term investments, consisting of U.S. government obligations, are considered held to maturity, and therefore are carried at amortized historical cost.
Recently Issued Accounting Standards
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, to enhance the transparency and decision usefulness of annual income tax disclosures. This ASU is effective for all entities that are subject to Topic 740 for annual reporting periods beginning after December 15, 2024. Early adoption and retrospective application are permitted, but not required. The Company is currently evaluating the impact of this ASU.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)”, which provides clarity in assessing an entity’s performance and prospects for future cash flows by disclosure of more detailed information about the types of expenses in commonly presented expense captions. This ASU is effective for the company’s fiscal year-ended January 31, 2028. Early adoption is permitted, but not required. The Company is currently evaluating the impact of this ASU.
Note 3. Net Sales and Revenue
The Company recognizes sales of products when obligations under the terms of the respective contracts with customers are satisfied. This occurs with the transfer of control of products, generally upon shipment from the ethanol plant or upon loading of the rail car or truck used to transport the products. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods. Sales, value added and other taxes the Company collects concurrent with revenue producing activities are excluded from net sales and revenue.
The majority of the Company’s sales have payment terms ranging from 5 to 10 days after transfer of control. The Company has determined that sales contracts do not generally include a significant financing component. The Company has not historically entered into sales contracts in which payment is due from a customer prior to transferring product to the customer. Thus, the Company does not record unearned revenue.
The following tables shows disaggregated revenue by product (amounts in thousands):
| Three Months Ended April 30, | ||||||||
| 2025 | 2024 | |||||||
| Ethanol | $ | $ | ||||||
| Dried distillers grains | ||||||||
| Distillers corn oil | ||||||||
| Modified distillers grains | ||||||||
| Derivative financial instrument gains | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
| 12 |
Note 4. Leases
Operating Leases
At April 30, 2025, the Company had lease agreements, as lessee, for railcars. All of the leases are accounted for as operating leases. The lease agreements do not contain a specified implicit interest rate; therefore, the Company’s estimated incremental borrowing rate was used to determine the present value of future minimum lease payments. The lease term for all of the Company’s leases includes the noncancelable period of the lease and any periods covered by renewal options that the Company is reasonably certain to exercise. Certain leases include rent escalations pre-set in the agreements, which are factored into the lease payment stream.
The components of lease expense, classified as SG&A expenses on the Consolidated Statement of Operations are as follows (amounts in thousands):
| Three Months Ended April 30, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease expense | $ | $ | ||||||
| Variable lease expense | ||||||||
| Total lease expense | $ | $ | ||||||
Total cash paid for amounts included in the
measurement of lease liabilities was $
The following table is a summary of future minimum rentals on such leases at April 30, 2025 (amounts in thousands):
| Years Ended January 31, | Minimum Rentals | |||
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | ||||
| Less: present value discount | ||||
| Operating lease liabilities | $ | |||
At April 30, 2025, the weighted average
remaining lease term is
| 13 |
At January 31, 2025, the weighted average remaining
lease term was
Finance Leases
At April 30, 2025, the Company had one lease
agreement that was classified as a finance lease for an electrical substation facility. Prepayments totaling $
The weighted average remaining lease term
for the finance lease is
The following table is a summary of future minimum rentals on such leases at April 30, 2025 (amounts in thousands):
| Years Ended January 31, | Minimum Rentals | |||
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | ||||
| Less: present value discount | ||||
| Operating lease liabilities | $ | |||
Note 5. Fair Value
The Company applies ASC 820, which provides a framework for measuring fair value under accounting principles generally accepted in the United States of America. This accounting standard defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
The Company determines the fair market values of its financial instruments based on the fair value hierarchy established by ASC 820 which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values which are provided below. The Company carries certain cash equivalents, investments, and derivative instruments at fair value.
| 14 |
The fair values of derivative assets and liabilities traded in the over-the-counter market are determined using quantitative models that require the use of multiple market inputs including interest rates, prices and indices to generate pricing and volatility factors, which are used to value the position. The predominance of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. Estimation risk is greater for derivative asset and liability positions that are either option-based or have longer maturity dates where observable market inputs are less readily available or are unobservable, in which case interest rate, price or index scenarios are extrapolated in order to determine the fair value. The fair values of derivative assets and liabilities include adjustments for market liquidity, counterparty credit quality, the Company’s own credit standing and other specific factors, where appropriate.
To ensure the prudent application of estimates and management judgment in determining the fair value of derivative assets and liabilities, investments and property and equipment, various processes and controls have been adopted, which include: (i) model validation that requires a review and approval for pricing, financial statement fair value determination and risk quantification; and (ii) periodic review and substantiation of profit and loss reporting for all derivative instruments.
Financial assets and liabilities measured at fair value on a recurring basis at April 30, 2025 are summarized below (amounts in thousands):
| Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
| Forward purchase contracts asset (1) | $ | $ | $ | $ | ||||||||||||
| Commodity futures asset (2) | ||||||||||||||||
| Total assets | $ | $ | $ | $ | ||||||||||||
| Forward purchase contracts liability (3) | $ | $ | $ | $ | ||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis at January 31, 2025 are summarized below (amounts in thousands):
| Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
| Forward purchase contracts asset (1) | $ | $ | $ | $ | ||||||||||||
| Commodity futures (2) | ( | ( | ||||||||||||||
| Total assets | $ | ( | $ | $ | $ | ( | ||||||||||
| Forward purchase contracts liability (3) | $ | $ | $ | $ | ||||||||||||
| (1) |
| (2) |
| (3) |
| 15 |
Note 6. Property and Equipment
The components of property and equipment are as follows for the periods presented (amounts in thousands):
| April
30, 2025 | January 31, 2025 | |||||||
| Land and improvements | $ | $ | ||||||
| Buildings and improvements | ||||||||
| Machinery, equipment, and fixtures | ||||||||
| Construction in progress | ||||||||
| Total property and equipment | ||||||||
| Less: Accumulated depreciation | ( | ( | ||||||
| Total | $ | $ | ||||||
Note 7. Other Assets
The components of other assets are as follows for the periods presented (amounts in thousands):
| April
30, 2025 | January 31, 2025 | |||||||
| Prepaid utility lease | $ | $ | ||||||
| Other | ||||||||
| Total | $ | $ | ||||||
Note 8. Accrued Expenses and Other Current Liabilities
The components of accrued expenses and other current liabilities are as follows for the periods presented (amounts in thousands):
| April
30, 2025 | January 31, 2025 | |||||||
| Accrued payroll and related items | $ | $ | ||||||
| Accrued utility charges | ||||||||
| Accrued transportation related items | ||||||||
| Accrued real estate taxes | ||||||||
| Forward purchase contracts | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
| 16 |
Note 9. Derivative Financial Instruments
The Company is exposed to various market risks, including changes in commodity prices (raw materials and finished goods). To manage risks associated with the volatility of these natural business exposures, the Company enters into commodity agreements (exchange-traded futures contracts and swaps) and forward purchase (corn) and sale (ethanol, distillers grains and distillers corn oil) contracts. The Company does not purchase or sell derivative financial instruments for trading or speculative purposes. The Company does not purchase or sell derivative financial instruments for which a lack of marketplace quotations would require the use of fair value estimation techniques. The changes in fair value of these derivative financial instruments are recognized in current period earnings as the Company does not use hedge accounting.
The following table provides information about the fair values of the Company’s derivative financial instruments (that are not accounted for under the “normal purchases and normal sales” scope exemption of ASC 815) and the line items on the Consolidated Balance Sheets in which the fair values are reflected (in thousands):
| Asset Derivatives Fair Value | Liability Derivatives Fair Value | |||||||||||||||
| April
30, 2025 | January 31, 2025 | April
30, 2025 | January 31, 2025 | |||||||||||||
| Forward purchase contracts (1) | $ | $ | $ | $ | ||||||||||||
| Cash collateral balance (3) | $ | $ | $ | $ | ||||||||||||
| Commodity futures (2) | ( | |||||||||||||||
| Net position with broker | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| (1) | Forward purchase contracts assets are included in “Prepaid expenses and other” on the accompanying Consolidated
Balance Sheets. These contracts are for purchases of approximately |
Forward purchase contracts liabilities are included
in “Accrued expenses and other current liabilities” on the accompanying Consolidated Balance Sheets. These contracts
are for purchases of approximately
| (2) |
| 17 |
| (3) | As of April 30, 2025 and January 31, 2025, all of the derivative financial instruments held by the Company were subject to enforceable master netting arrangements. The Company’s accounting policy is to offset position amounts owed or owing with the same counterparty. Depending on the amount of unrealized gains and losses on derivative contracts held by the Company, the counterparty may require collateral to secure the Company’s derivative contract positions. As of April 30, 2025 and January 31, 2025, the Company recorded this collateral balance within “Prepaid expenses and other” on the accompanying Consolidated Balance Sheets. |
See Note 5 which contains fair value information related to derivative financial instruments.
The following table provides information about gains recognized in income on the Company’s derivative financial instruments and the line items on the accompanying Consolidated Statements of Operations in which the fair values are reflected for the three months ended April 30, 2025 and 2024 (amounts in thousands):
| Three Months Ended April 30, | ||||||||
| 2025 | 2024 | |||||||
| Net sales | $ | $ | ||||||
| Cost of sales | $ | $ | ||||||
Note 10. Investments
Equity Method Investment in Big River
The following table summarizes the Company’s equity method investment at April 30, 2025 and January 31, 2025 (dollars in thousands):
| Carrying Amount | ||||||||||||
| Entity | Ownership Percentage | April 30, 2025 | January 31, 2025 | |||||||||
| Big River | $ | $ | ||||||||||
Undistributed earnings of the Company’s
equity method investee totaled approximately $
| 18 |
Summarized financial information for the Company’s equity method investee is presented in the following table for the periods presented (amounts in thousands):
| Three Months Ended April 30, | ||||||||
| 2025 | 2024 | |||||||
| Net sales and revenue | $ | $ | ||||||
| Gross profit | $ | $ | ||||||
| Depreciation expense | $ | $ | ||||||
| Net income | $ | $ | ||||||
| Net income attributable to members | $ | $ | ||||||
Short-term Investments
At April 30, 2025, the Company owned United
States Treasury Bills (classified as short-term investments) that had an amortized cost, or carrying value, of approximately $
At January 31, 2025, the Company owned United
States Treasury Bills (classified as short-term investments) that had an amortized cost, or carrying value, of approximately $
11. Employee Benefits
The Company maintains the
REX 2015 Incentive Plan, approved by its shareholders, which reserves a total of
Restricted Stock Awards
As a component of their compensation, restricted stock has been granted to directors and certain employees at the closing market price of REX common stock on the grant date. In addition, one quarter of executives’ incentive compensation is payable by an award of restricted stock based on the then closing market price of REX common stock on the grant date. The Company’s board of directors has determined
| 19 |
that the grant date will be June 15th, or the next business day if June 15th is not a business day, for all grants of restricted stock.
Based on retirement eligibility
provisions, a portion of restricted stock grants are expensed at grant date, based on grant date fair value, thus considered vested
for accounting purposes. At April 30, 2025,
The following tables summarize legally non-vested restricted stock award activity for the periods presented:
| Three Months Ended April 30, 2025 | ||||||||||||
| Non-Vested Shares | Weighted Average Grant Date Fair Value (000’s) | Weighted Average Remaining Vesting Term (in years) | ||||||||||
| Non-Vested at January 31, 2025 | $ | |||||||||||
| Granted | ||||||||||||
| Forfeited | ||||||||||||
| Vested | ||||||||||||
| Non-Vested at April 30, 2025 | $ | |||||||||||
| Three Months Ended April 30, 2024 | ||||||||||||
| Non-Vested Shares | Weighted Average Grant Date Fair Value (000’s) | Weighted Average Remaining Vesting Term (in years) | ||||||||||
| Non-Vested at January 31, 2024 | $ | |||||||||||
| Granted | ||||||||||||
| Forfeited | ||||||||||||
| Vested | ||||||||||||
| Non-Vested at April 30, 2024 | $ | |||||||||||
Restricted Stock Units
In May 2022, the Company
issued a total of
| 20 |
two-hundred percent and
was determined based on how the Company’s TSR compared to the TSR of companies that comprised the Russell 2000 Index during
the performance period ending December 31, 2024. The calculated payout of the units that vested was
The Company did not recognize
any compensation cost related to RSUs in the three-month period ended April 30, 2025. The Company recognized compensation cost
related to RSUs of approximately $
For the three-month period ended April 30, 2024, we calculated the diluted weighted average shares as follows (amounts in thousands):
| Three Months Ended April 30, 2024 | ||||
| Weighted average shares – basic | ||||
| Dilutive effect of RSUs | ||||
| Weighted average shares – diluted | ||||
Note 12. Income Taxes
The Company’s income tax provision
was approximately $
The Company assessed all available positive and negative evidence to determine whether it expects sufficient future taxable income will be generated to allow for the realization of existing federal deferred tax assets. There is sufficient objectively verifiable income for management to conclude that it is more likely than not that the Company will utilize available federal deferred tax assets prior to their expiration.
The Company files a U.S. federal income tax return and various state income tax returns. In general, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years ended January 31, 2014 and prior. The Company is currently undergoing a federal income tax examination for the years ended January 31, 2015 through January 31, 2022 related to refined coal production tax credits pursuant to IRC Section 45 and research and experimentation credits pursuant to IRC Section 41 claimed during those years.
On a quarterly and annual basis, the Company accrues for the effects of open uncertain tax positions and the related potential penalties and interest. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12 months; however, the Company does not expect the change to have a material effect on results of operations or financial position.
| 21 |
A reconciliation of the beginning and ending amount of unrecognized tax benefits, including interest and penalties, for the three-month periods ended April 30, 2025 and 2024, is as follows (amounts in thousands):
| Three Months Ended April 30, | ||||||||
| 2025 | 2024 | |||||||
| Unrecognized tax benefits, beginning of period | $ | $ | ||||||
| Changes for prior years’ tax positions | ||||||||
| Changes for current year tax positions | ||||||||
| Unrecognized tax benefits, end of period | $ | $ | ||||||
At April 30, 2025 and January 31, 2025 the unrecognized tax benefits were included within the following lines on the accompanying Consolidated Balance Sheets (amounts in thousands):
| April 30, 2025 | January 31, 2025 | |||||||
| Refundable income taxes | $ | $ | ||||||
| Deferred taxes | ||||||||
| Long-term taxes payable | ||||||||
| Other long-term liabilities | ||||||||
| Unrecognized tax benefits, end of period | $ | $ | ||||||
Note 13. Commitments and Contingencies
The Company may be involved in various legal actions arising in the normal course of business, from time to time. After taking into consideration legal counsel’s evaluations of any such action(s), management is of the opinion that their outcome will not have a material adverse effect on the Company’s Consolidated Financial Statements. There were no material liabilities recorded for legal actions at April 30, 2025 and January 31, 2025, as the Company did not believe that there was a probable and reasonably estimable significant loss associated with any legal contingencies.
At April 30, 2025, One Earth and NuGen had
combined forward purchase contracts for approximately
At April 30, 2025, One Earth and NuGen had
combined sales commitments for approximately
One Earth has entered into a 10-year agreement
in 2009 with an unrelated party for the use of a portion of that party’s natural gas pipeline. A new 15-year agreement, with
monthly payments of $
| 22 |
was effective February 1, 2019. One Earth paid approximately
$
At April 30, 2025, One Earth had signed non-cancelable
contracts for capital projects with approximately $
Note 14. Related-Party Transactions
During the first quarters of fiscal year
2025 and 2024, One Earth and NuGen purchased approximately $
Note 15. Segment Reporting
The Company has
The Company’s chief operating decision maker is the Executive Committee that includes the Executive Chairman of the Board and the Chief Executive Officer. The chief operating decision maker uses net income generated from operating segments in determining the allocation of resources and making assessment of Company performance.
In applying the criteria set forth in ASC 280, the Company determined that based on the nature of the products and production process and the expected financial results, the Company’s operations at its ethanol plants are aggregated into one reporting segment, each of which is reviewed in the same manner by the chief operating decision maker. Aggregation into one reporting segment is appropriate based upon the similarity of economic characteristics of the operating segments, including the markets for identical revenue sources and the primary input, corn. The plants in all locations operate in a similar manner to produce ethanol and by-products. The types of customers and how the products are distributed to the customers are similar across each operating entity, consisting of a combination of rail and truck shipments. Finally, the regulatory environment is largely impacted by guidance from the federal level, impacting each operating segment the same.
The measure of segment assets is reported on the balance sheet as total consolidated assets.
| 23 |
The following tables set forth certain financial data for the Company’s reportable segment for the three-month periods ended April 30, 2025 and 2024 (in thousands):
| Three Months Ended April 30, | ||||||||
| 2025 | 2024 | |||||||
| Net sales and revenue | ||||||||
| Ethanol and by-products | $ | $ | ||||||
| Reconciling Item: Equity method ethanol investment | ( | ) | ( | ) | ||||
| Total consolidated net sales and revenue | $ | $ | ||||||
| Cost of sales | ||||||||
| Ethanol and by-products: | ||||||||
| Cost of corn | $ | $ | ||||||
| Other cost of sales (1) | ||||||||
| Reconciling Item: Equity method ethanol investment | ( | ) | ( | ) | ||||
| Total cost of sales | $ | $ | ||||||
| Gross profit | ||||||||
| Ethanol and by-products | $ | $ | ||||||
| Reconciling Item: Equity method ethanol investment | ( | ) | ( | ) | ||||
| Total consolidated gross profit | $ | $ | ||||||
| Depreciation and amortization expense | ||||||||
| Ethanol and by-products | $ | $ | ||||||
| Reconciling Item: Equity method ethanol investment | ( | ) | ( | ) | ||||
| Total consolidated depreciation and amortization expense | $ | $ | ||||||
| Income before taxes | ||||||||
| Ethanol and by-products | $ | $ | ||||||
| Reconciling Item: Equity method ethanol investment | ( | ) | ( | ) | ||||
| Total consolidated income before income taxes | ||||||||
| Provision for income taxes | ( | ) | ( | ) | ||||
| Total consolidated net income | $ | $ | ||||||
| (1) | Expenses within “Other cost of sales” consist primarily of depreciation, other raw materials, third-party freight charges, purchasing and receiving costs, inspection costs, other distribution expenses, warehousing costs, plant repair and maintenance costs, production labor and related payroll costs, and general facility overhead charges. |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Ethanol and By-Products
At April 30, 2025, we had investments in three ethanol limited liability companies, in two of which we have a majority ownership interest. The following table is a summary of ethanol entity ownership interests at April 30, 2025:
| Entity | Location | REX’s Current Ownership Interest | |
| One Earth Energy, LLC | Gibson City, IL | 75.9% | |
| NuGen Energy, LLC | Marion, SD | 99.7% | |
Big River Resources, LLC: Big River Resources W Burlington, LLC Big River Resources Galva, LLC Big River United Energy, LLC Big River Resources Boyceville, LLC |
W. Burlington, IA Galva, IL Dyersville, IA Boyceville, WI |
10.3% 10.3% 5.7% 10.3% |
Our ethanol operations are highly dependent on commodity prices, especially prices for corn, ethanol, distillers grains, distillers corn oil and natural gas, and availability of corn. As a result of price volatility for these commodities, our operating results can fluctuate substantially. The price and availability of corn is subject to significant fluctuations depending upon several factors that affect commodity prices in general, including crop conditions, the amount of corn stored on farms, weather, federal policy, foreign trade, tariffs, and international disruptions caused by wars or conflicts. Because the market prices of ethanol and distillers grains are not always directly related to corn prices (for example, demand for crude and other energy and related prices, the export market demand for ethanol and distillers grains, soybean meal prices, and the results of federal policy decisions and trade negotiations can impact ethanol and distillers grains prices), at times ethanol and distillers grains prices may not follow movements in corn prices and, in an environment of higher corn prices or lower ethanol or distillers grains prices, reduce the overall margin structure at the plants. As a result, at times, we may operate our plants at negative or minimally positive operating margins.
We expect our ethanol plants to produce approximately 2.9 gallons of denatured ethanol for each bushel of corn processed in the production cycle. We refer to the actual gallons of denatured ethanol produced per bushel of corn processed as the realized yield. We refer to the difference between the price per gallon of ethanol and the price per bushel of corn (divided by the realized yield) as the “crush spread”. Should the crush spread decline, it is possible that our ethanol plants will generate operating results that do not provide adequate cash flows for sustained periods of time. In such cases, production at the ethanol plants may be reduced or stopped altogether in order to minimize variable costs at individual plants.
We attempt to manage the risk related to the volatility of commodity prices by utilizing forward corn and natural gas purchase contracts, forward ethanol, distillers grains and distillers corn oil sale contracts, and commodity futures agreements, as management deems appropriate. We attempt to match quantities of these sales contracts with an appropriate quantity of corn purchase contracts over a given period of time when we can obtain an adequate gross margin resulting from the crush spread inherent in the contracts we have executed. However, the market for future ethanol sales contracts generally lags the spot
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market with respect to ethanol prices. Consequently, we generally execute fixed price contracts for no more than four months into the future at any given time and we may lock in our corn or ethanol price without having a corresponding locked in ethanol or corn price for short durations of time. As a result of the relatively short period of time our fixed price contracts cover, we generally cannot predict the future movements in our realized crush spread for more than four months; thus, we are unable to predict the likelihood or amounts of future income or loss from the operations of our ethanol facilities.
One Earth Energy, LLC Carbon Sequestration and Plant Expansion
One Earth Sequestration, LLC, a wholly owned subsidiary of One Earth Energy, LLC, is in the developmental stage of a carbon sequestration project near the One Earth ethanol plant. In October 2022, we applied for a Class VI injection well permit for three wells with the EPA, and we continue to provide information to the EPA upon request during the technical review of our application. We currently expect the EPA to prepare a draft permit by November 2025 and make a final permit decision by April 2026, according to the EPA’s Class VI Permit Tracker Dashboard on their website. We also need to obtain a county special-use zoning permit for the sequestration site. We have completed the construction of the capture and compression facility to capture, dehydrate, and compress carbon dioxide from the One Earth ethanol plant to a state suitable for sequestration. Testing has not yet been completed and we cannot begin construction of the pipeline or sequestration well until further permits and approvals are received.
We have secured land easements from all necessary landowners to allow the construction of a pipeline on their land to the first two injection wells. We also have landowner subsurface easements for the first injection well with the capacity to allow for carbon sequestration for our One Earth plant for 15 years. The Illinois General Assembly passed the Safety and Aid for the Environment in Carbon Capture and Sequestration Act (Senate Bill 1289), which was signed by the Governor in July 2024. The new legislation imposes additional safety, environmental and other requirements on obtaining permits and approvals for carbon capture and sequestration facilities in Illinois, including CO2 pipelines. Further, the new legislation imposes a moratorium on the issuance of new certificates of authority for the construction of CO2 pipelines until the earlier of the date federal CO2 pipeline safety standards are finalized by the federal PHMSA or, subject to certain other conditions, July 1, 2026.
Although we have made meaningful progress and significant investments in the carbon sequestration project at One Earth, we continue to work with the various government agencies involved to obtain all required permits and approvals, with no assurance of the ultimate success or timing of the project. Also see the discussion under “Trends and Uncertainties” of certain recently proposed legislation that, if enacted, could impact our carbon sequestration project.
We also intend to concurrently expand the One Earth ethanol plant. We received a construction permit from the EPA to increase production from 150 million gallons of ethanol per year to 175 million gallons of ethanol per year. Once we achieve that level of production, we intend to apply for another permit to increase production to 200 million gallons per year.
We continue to work to identify ways to reduce our CI score at the One Earth plant with the intention of maximizing tax credits available under the IRA. The IRA created a new Clean Fuel Production Credit, available for calendar years 2025 – 2027, which established a credit of approximately $0.02 per ethanol gallon per CI point reduction below a 50 CI score threshold to incentivize further increases in plant efficiencies within the industry. The U.S. Department of the Treasury has not yet issued final rules on qualification for 45Z tax credits.
| 26 |
We currently budget capital expenditures for both projects to be approximately $220 million to $230 million, subject to further refinement as we move forward. We plan to pay for all expenditures from available cash. As of April 30, 2025, we had spent $56.3 million since inception and were contractually committed to spend an additional $0.9 million toward the carbon sequestration project. If the carbon sequestration project is successful, we believe we will qualify for tax credits under section 45Q, based on tons of carbon sequestered, and section 45Z, based on gallons of ethanol produced, as outlined in the IRA. However, 45Z credits are only available for calendar years 2025 – 2027 and the regulations have not yet been finalized by the U.S. Department of the Treasury. Companies may elect either the 45Q credit or the 45Z credit in periods in which both tax credits are available. As of April 30, 2025, we had spent $66.4 million since inception and were contractually committed to spend an additional $8.3 million toward plant capacity expansion and ongoing efforts to reduce our CI scoring.
In May 2023, NuGen, our majority owned ethanol plant in Marion, South Dakota, signed an agreement to be part of Summit Carbon Solutions’ carbon capture and storage pipeline. Should Summit Carbon Solutions be able to obtain all necessary permits and approvals, the agreement would allow NuGen to share in the economic benefits of tax credits through the sale of the carbon dioxide output of its ethanol production facility for sequestration, as well as reduce its net carbon emissions. In March 2025, South Dakota signed a bill into law that bans the use of eminent domain in connection with carbon dioxide pipelines. This act could make the sequestration project for the NuGen facility more difficult to complete.
We plan to seek and evaluate various investment opportunities including ethanol and/or energy related, carbon sequestration, agricultural or other ventures we believe fit our investment criteria. We can make no assurances that we will be successful in our efforts to find such opportunities.
Refined Coal
On August 10, 2017, we purchased, through a 95.35% owned subsidiary, the entire ownership interest of an entity that owned a refined coal facility. We began operating the refined coal facility immediately after the acquisition. Using licensed technology, our plant applied two separate chemicals to convert feedstock coal into refined coal, which was sold to the end user of the refined coal. The refined coal operating results were subsidized by federal production tax credits through November 18, 2021, subject to meeting qualified emissions reductions as governed by Section 45 of the IRC. We ceased operating the facility on November 18, 2021 and subsequently sold the facility. The approximately $58.2 million of federal production tax credits received through the ownership of this facility remain under IRS audit.
Critical Accounting Policies and Estimates
During the three months ended April 30, 2025, we did not change any of our critical accounting policies as disclosed in our 2024 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 28, 2025.
| 27 |
Fiscal Year
All references in this report to a particular fiscal year are to REX’s fiscal year ended January 31. The Company refers to its fiscal year by reference to the year immediately preceding the January 31 fiscal year end date. For example, “fiscal year 2025” means the period February 1, 2025 to January 31, 2026. The Company includes the results of operations of One Earth in its Consolidated Statements of Operations on a delayed basis of one month as One Earth has a fiscal year end of December 31.
Results of Operations
Trends and Uncertainties
Renewable Fuel Standard II, established in October 2010, has been an important factor in the growth of ethanol usage in the United States. In recent years, there has been much uncertainty in the enforcement of RFS II. When it was originally established, RFS II required the volume of “conventional” or corn derived ethanol to be blended with gasoline to increase each year until it reached 15.0 billion gallons in 2015 and required that it remain at that level through 2022. There are no established congressional target volumes beginning in 2023. The EPA has the authority to waive the biofuel mandate, in whole or in part, if there is inadequate domestic renewable fuel supply or the requirement severely harms the domestic economy or environment. In addition, under RFS II, a small refiner that processes less than 75,000 barrels of oil per day can petition the EPA for a waiver of their requirement to submit RINs. The EPA, through consultation with the Department of Energy and the Department of Agriculture, can grant the refiner a full or partial waiver, or deny the waiver. The EPA issued 88 refinery exemptions for 2016-2018 compliance years, undercutting the statutory renewable fuel volumes by a total of 4.3 billion gallons. The EPA has not granted any small refinery waivers for 2019-2022. There remain multiple ongoing legal challenges on how the EPA has handled the small refinery waivers. In July 2024, the U.S. Court of Appeals for the District of Columbia Circuit vacated many of the EPA’s 2022 SRE denials. The EPA had denied 105 SREs in 2022. As a result of this Court ruling, the EPA voluntarily moved to rescind the agency’s 2023 denial of 26 SREs. During the previous Trump administration, the EPA granted more SREs than under other administrations. These and additional SREs could lead to decreased RIN values and ethanol pricing. As of May 2025, there were 169 SRE petitions pending.
The EPA has issued Renewable Fuel Standard volume obligations for calendar years 2023-2025. The volumes from conventional biofuels (which includes corn-based ethanol) were 15.0 billion gallons for 2023 through 2025. Additionally, in 2023, the EPA restored 250 million gallons previously waived. The EPA was required to propose RVOs for 2026 by November 2024, but that deadline was missed. The EPA delivered the proposed 2026 RVOs to the White House Office of Management and Budget on May 14, 2025, which is the final step before being released to the public for comments.
The EPA has issued emergency waivers for the sale of E-15 gasoline for the 2025 summer months. This is the fourth consecutive year for these emergency waivers. The EPA has not granted E-15 the same Reid vapor pressure waiver as E-10, so absent the emergency waivers, E-15 may not be sold in most states from June 1 to September 15.
The IRA may impact our business by creating a new Clean Fuel Production Credit, section 45Z, available for years 2025 to 2027. The Clean Fuel Production Credit is established at approximately $0.02
| 28 |
per ethanol gallon per CI point reduction below a 50 CI score threshold. The Act also raises the carbon capture tax credit from $50 per metric ton to $85 per metric ton, under section 45Q. Taxpayers may elect to be treated as making a payment against tax for 100% of the value of the 45Q credit (“direct pay”) for the first five years, starting with the year a qualifying carbon sequestration facility is placed in service, but not beyond December 31, 2032. Companies may elect either the 45Q credit or the 45Z credit in periods in which both tax credits are available. Other potential impacts include (a) extending the biodiesel tax credit, which could impact our renewable corn oil values, as this co-product serves as a low-carbon feedstock for renewable diesel and biomass based diesel production; (b) creating a new tax credit for synthetic aviation fuel; (c) funding biofuel refueling infrastructure which could impact the availability of higher level ethanol blended fuel; and (d) provision for production and purchase credits for electric vehicles, which could impact the amount of internal combustion engines on the road over time, and ultimately reduce the demand for gasoline, diesel fuels and ethanol.
The U.S. Congress is considering a budget and policy bill which, as initially passed by the House of Representatives, includes proposed amendments to the Inflation and Reduction Act. While there is no certainty at this time as to what will be included in any final legislation that actually becomes law, we are closely monitoring any changes to sections 45Q and 45Z of the Internal Revenue Code that could impact the economics of our carbon capture and sequestration project.
In January 2025, the USDA released an interim rule on 45Z tax credits titled “Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks”, or “CSA rule”. The rule helps to connect CSA practices used in the production of feedstock crops with reductions in the carbon footprint of the biofuels industries, laying out how practices that reduce greenhouse gas emissions or sequester carbon will be scored, on a county-by-county basis. These practices include no-till planting, cover crops and nitrogen inhibitors, which may be measured individually, rather than requiring bundling of practices. The interim rule is subject to a 60-day comment period with final resolution to be determined by the Trump administration.
Illinois Senate Bill 3968 was introduced during the 2024 legislative session and assigned to the Senate Executive Committee. The bill proposed banning carbon sequestration projects located over, under, or through a sole-source aquifer, including the three adjacent watersheds that make up the Mahomet Sole Source Aquifer Project Review Area, a designation established by the EPA in March 2015. However, SB 3968 did not advance and was not enacted during that session. In the 2025 legislative session, Senate Bill 1723 was introduced with an amendment that defined the term “sole-source aquifer” to specifically refer to the Mahomet Sole Source Aquifer Area, as defined by the EPA. Under this definition, SB 1723 would prohibit carbon sequestration activities over, under, or through the aquifer as defined in the bill. The Illinois Senate passed SB 1723 on April 10, 2025 and on May 20, 2025, the Illinois House of Representatives approved the bill. The legislation now awaits the Governor’s consideration and potential signature into law. The first proposed injection well for our carbon sequestration project is located in the northern portion of the Sangamon River near Fisher Upstream Area watershed, and it lies outside the mapped boundary of the Mahomet Sole Source Aquifer as defined in SB 1723, approximately five miles north of the Sangamon River and about six miles beyond the aquifer’s mapped boundary. The second and third proposed injection well sites are also located outside the areas designated as part of the Mahomet Sole Source Aquifer Project Review Area. The Company continues to closely monitor the progress of SB 1723 and is actively evaluating any potential implications it may have for the development and permitting of our carbon sequestration project.
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Additionally, see “One Earth Energy, LLC Carbon Sequestration and Plant Expansion” above for a discussion of certain other uncertainties associated with our Illinois carbon sequestration and plant expansion projects.
On August 10, 2017, we purchased, through a 95.35% owned subsidiary, the entire ownership interest of an entity that owned a refined coal facility. We began operating the refined coal facility immediately after the acquisition. As the plant was no longer eligible to receive federal production tax credits beginning on November 18, 2021, we ceased operations on that date and subsequently sold the facility. The approximately $58.2 million of federal production tax credits received through ownership of this facility remain under IRS audit.
The United States exported an estimated 1.9 billion gallons of ethanol in 2024, up from approximately 1.4 and 1.3 billion gallons in 2023 and 2022, respectively. In 2024 and 2023, an estimated 12.2 and 10.8 million metric tons, respectively, of distillers grains were exported from the United States, which represented approximately 37% and 34% in 2024 and 2023, respectively, of U.S production. There has been much discussion around proposed and recently enacted tariffs by the United States and counter-tariffs and other trade restriction involving countries which have been large purchasers from our industry in the United States which could affect future demand for these products.
The trends and uncertainties mentioned above could impact our future operating results in both positive and negative ways.
Comparison of Three Months Ended April 30, 2025 and 2024
The following table summarizes our results from operations (amounts in thousands):
| Three Months Ended April 30, | |||||
| 2025 | 2024 | ||||
| Net sales and revenue | $ | 158,340 | $ | 161,231 | |
| Cost of sales | 143,998 | 146,780 | |||
| Gross profit | $ | 14,342 | $ | 14,451 | |
| Income before income taxes | $ | 13,626 |
$ | 15,963 | |
| Provision for income taxes | $ | (2,954) | $ | (3,690) | |
| Net income attributable to REX common shareholders | $ | 8,678 |
$ | 10,191 | |
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The following table summarizes net sales and revenue by product group (amounts in thousands):
| Three Months Ended April 30, | |||||
| 2025 | 2024 | ||||
| Ethanol | $ | 124,397 | $ | 119,427 | |
| Dried distillers grains | 22,286 | 30,686 | |||
| Distillers corn oil | 9,879 | 9,805 | |||
| Modified distillers grains | 1,623 | 1,197 | |||
| Derivative financial instruments gains | 17 | - | |||
| Other | 138 | 116 | |||
| Total | $ | 158,340 | $ | 161,231 | |
The following table summarizes selected operating data:
| Three Months Ended April 30, | ||||||||
| 2025 | 2024 | |||||||
| Average selling price per gallon of ethanol (net of hedging) | $ | 1.76 | $ | 1.60 | ||||
| Gallons of ethanol sold (in millions) | 70.9 | 74.5 | ||||||
| Average selling price per ton of dried distillers grains | $ | 145.65 | $ | 187.64 | ||||
| Tons of dried distillers grains sold | 153,010 | 163,533 | ||||||
| Average selling price per pound of distillers corn oil | $ | 0.46 | $ | 0.47 | ||||
| Pounds of distillers corn oil sold (in millions) | 21.4 | 21.0 | ||||||
| Average selling price per ton of modified distillers grains | $ | 73.44 | $ | 82.52 | ||||
| Tons of modified distillers grains sold | 22,094 | 14,510 | ||||||
Net sales and revenue in the quarter ended April 30, 2025 decreased 2% compared to the prior year first quarter.
Ethanol revenue increased 4% in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 as the selling price per gallon sold increased 10% during the first quarter of fiscal year 2025 compared to the prior year comparable period, partially offset by a 5% decrease in gallons of ethanol sold, impacted by lower production levels. The ethanol pricing increase was primarily driven by overall market supply and demand.
Dried distillers grains revenue decreased 27% in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 as the average price per ton sold decreased 22%, coupled with a 6% decrease in tons sold. The decrease in the dried distillers grains selling price is consistent with recent quarters and reflects an extended period of lower corn pricing as dried distillers grains prices often correlate with corn pricing. The decrease in tons sold was partially offset by an increase in tons of modified distillers grains sold, but also impacted by lower production levels. Our consolidated plants’ decisions to sell modified or dried distillers grains fluctuate from time to time based upon market conditions.
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Distillers corn oil revenue increased approximately 1% in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 as the amount of pounds sold increased 2%, offset by a 2% decrease in the average price per pound. The decrease in the distillers corn oil selling price resulted primarily from fluctuations in demand in the renewable biodiesel market which often reflects the price of soybean oil.
Modified distillers grains revenue increased 36% in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 as the amount of pounds sold increased by 52%, offset partially by a decrease in the average selling price per ton sold of 11%. The decrease in the modified distillers grains selling price resulted primarily from an extended period of lower corn prices as prices tend to move in the same direction. Our consolidated plants’ decisions to sell modified or dried distillers grains fluctuate from time to time based upon market conditions.
Cost of sales decreased 2% in the quarter ended April 30, 2025, compared to the prior year first quarter. Corn accounted for approximately 74% ($106.3 million) of our cost of sales during the first quarter of fiscal year 2025 compared to approximately 75% ($110.6 million) during the first quarter of fiscal year 2024. Natural gas accounted for approximately 6% ($8.1 million) of our cost of sales during the first quarter of fiscal year 2025 and 5% ($7.1 million) in the first quarter of fiscal year 2024.
As a result of the foregoing, gross profit for the first quarter of fiscal year 2025 decreased approximately $0.1 million compared to the prior year first quarter.
We attempt to match quantities of ethanol, distillers grains and distillers corn oil sales contracts with an appropriate quantity of corn purchase contracts over a given time period when we can obtain a satisfactory margin resulting from the crush spread inherent in the contracts we have executed. However, the market for future ethanol sales contracts generally lags the spot market with respect to ethanol price. Consequently, we generally execute fixed price sales contracts for no more than four months into the future at any given time and we may lock in our corn or ethanol price without having a corresponding locked in ethanol or corn price for short durations of time. As a result of the relatively short period of time our contracts cover, we generally cannot predict the future movements in our realized crush spread for more than four months. We utilize derivative financial instruments, primarily exchange traded commodity future contracts and swap contracts, in conjunction with certain of our corn procurement activities and commodity marketing activities.
SG&A expenses were approximately $5.9 million for the first quarter of fiscal year 2025, compared to approximately $6.1 million of expenses for the first quarter of fiscal year 2024. The decreases compared to the prior year first quarter are due primarily to a decrease in performance bonus expense of $0.2 million and a decrease in stock compensation expense of $0.3 million subsequent to the completion of the restricted stock units performance period on December 31, 2024. These decreases were partially offset by an increase in rail car lease expense due to higher rates realized upon lease renewals.
During the first quarter of fiscal year 2025, we recognized income from our equity investment in Big River of approximately $1.0 million compared to income of approximately $1.7 million for the first quarter of fiscal year 2024. Our investment in Big River, which has interests in four ethanol production plants, represents an effective ownership of approximately 39.2 million gallons of ethanol shipped in the trailing twelve months ended April 30, 2025. Due to the inherent volatility of commodity prices within the
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ethanol industry, we cannot predict the likelihood of future operating results from Big River being similar to historical results.
Interest and other income was approximately $4.2 million for the first quarter of fiscal year 2025 versus approximately $5.9 million for the first quarter of fiscal year 2024. The decrease is primarily related to decreased interest income of $1.3 million in the current year based upon lower balances and yields on our excess cash and short-term investments in fiscal year 2025, compared to 2024. One of our consolidated ethanol plants recognized $0.5 million less in patronage income from an investment in a cooperative in the first quarter of 2025 ($0.7 million) compared to the first quarter of 2024 ($1.2 million). We do not expect patronage income from this investment in a cooperative to be significant in future periods.
As a result of the foregoing, income before income taxes was approximately $13.6 million and $16.0 million for the first quarters of fiscal year 2025 and 2024, respectively.
The Company applies an effective tax rate to interim periods that is consistent with the Company’s estimated annual tax rate as adjusted for discrete items impacting the interim periods. Our income tax provision was approximately $3.0 million and $3.7 million for the three months ended April 30, 2025 and 2024, respectively.
As a result of the foregoing, net income was approximately $10.7 million for the first quarter of fiscal year 2025 compared to approximately $12.3 million for the first quarter of fiscal year 2024.
Net income attributable to non-controlling interests was approximately $2.0 million for the first quarter of fiscal year 2025 and $2.1 million for the first quarter of 2024. These amounts represent the other owners’ share of the income of NuGen and One Earth.
As a result of the foregoing, net income attributable to REX common shareholders for the first quarter of fiscal year 2025 was approximately $8.7 million, compared to net income attributable to REX common shareholders of approximately $10.2 million for the first quarter of fiscal year 2024.
Liquidity and Capital Resources
Net cash used in operating activities was approximately $3.5 million for the first quarter of fiscal year 2025, compared to net cash used in operating activities of approximately $2.3 million for the first quarter of fiscal year 2024. For the first quarter of fiscal year 2025, cash was provided by net income of approximately $10.7 million, adjusted upward for non-cash items of approximately $4.4 million, which consisted of depreciation, amortization of operating lease right-of-use assets, income from equity method investments, interest income from short-term investments, the deferred income tax provision, and stock-based compensation expense. An increase in the balance of accounts receivable used cash of approximately $6.5 million, primarily as a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen. Inventories decreased over the first quarter of fiscal year 2025, providing cash of approximately $1.2 million. A decrease in the balance of other assets of approximately $0.1 million primarily related to decreases in prepaid insurance as well as by changes in the carrying value of forward purchase contracts and commodity futures positions recorded at fair value, offset by increases in spare parts inventory and other prepaid balances. An increase in the balance of refundable income taxes of approximately $0.9 million primarily relates to the accrual of the federal taxes currently payable being less
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than estimated federal tax payments made to date. While the Company has tax credits available to offset all amounts owed, the Company is limited to using tax credits for only 75% of federal taxes owed. A decrease in the balance of accounts payable used cash of approximately $8.9 million, which was primarily a result of the timing of inventory receipts and vendor payments. A decrease in the balance of other liabilities used cash of approximately $3.8 million, which was primarily caused by a decrease in accrued payroll which used cash of approximately $5.2 million, due to the timing of annual bonus payments. Additionally, a decrease in the lease liability used cash of $1.5 million based on payments made during the quarter. These decreases are partially offset by an increase in other current liabilities of $3.0 million.
Net cash used in operating activities was
approximately $2.3 million for the first quarter of fiscal year 2024. For the first quarter of fiscal year 2024, cash was provided
by net income of approximately $12.3 million, adjusted upward for non-cash items of approximately $5.6 million, which consisted
of depreciation, amortization of operating lease right-of-use assets, income from equity method investments, interest income from
short-term investments, the deferred income tax provision, and stock-based compensation expense. A decrease in the balance of
accounts receivable provided cash of approximately $1.7 million, primarily a result of the timing of products shipped and the
receipt of customer payments at One Earth and NuGen. Inventories were nearly flat over the first three months of fiscal year 2024.
An increase in the balance of other assets of approximately $3.8 million primarily related to prepayments on certain executed
lease agreements, offset by changes in the carrying value of forward purchase contracts and commodity futures positions recorded
at fair value. A decrease in the balance of refundable income taxes of approximately $1.1 million primarily relates to the accrual
of the federal taxes currently payable for first quarter of 2024. While the Company has tax credits available to offset all amounts
owed, the Company is limited to using tax credits for only 75% of federal taxes owed. A decrease in the balance of accounts payable
used cash of approximately $12.7 million, which was primarily a result of the timing of inventory receipts and vendor payments.
A decrease in the balance of other liabilities used cash of approximately $6.2 million, which was primarily caused by a decrease
in accrued payroll of approximately $5.4 million following the payment of fiscal year 2023 bonuses.
At April 30, 2025, working capital was approximately $356.2 million, compared to $385.4 million at January 31, 2025. The ratio of current assets to current liabilities was 9.4 to 1 at April 30, 2025 and 8.6 to 1 at January 31, 2025.
Cash of approximately $1.8 million was provided by investing activities for the first quarter of fiscal year 2025, compared to cash provided by investing activities of approximately $11.9 million during the first quarter of fiscal year 2024. During the first quarter of fiscal year 2025, the Company had capital expenditures of approximately $6.9 million, primarily for various capital projects at our consolidated ethanol plants, including $5.1 million for expansion and CI scoring reduction projects at the One Earth facility and $0.7 million for the carbon sequestration project. During the first quarter of fiscal year 2025, we purchased short-term U.S. Treasury Bills of approximately $41.4 million, while U.S. Treasury Bills of approximately $50.0 million matured. The U.S Treasury Bills had maturities of less than one year and we classified them as short-term investments. Depending on the investment options available, we may elect to retain the funds, or a portion thereof, in cash, short-term investments or long-term investments.
Cash of approximately $11.9 million was provided by investing activities for the first quarter of fiscal year 2024. During the first quarter of fiscal year 2024, we had capital expenditures of approximately $24.8 million, primarily for various capital projects at our consolidated ethanol plants, including $10.1
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million for expansion and CI scoring reduction projects at the One Earth facility and $11.0 million for the carbon sequestration project. During the first quarter of fiscal year 2024, we purchased U.S. Treasury Bills of approximately $85.0 million. During the first quarter of fiscal year 2024 U.S. Treasury Bills of approximately $121.5 million matured. The U.S Treasury Bills had maturities of less than one year and we classified them as short-term investments.
Cash of approximately $32.7 million was used in financing activities in the first quarter of fiscal year 2025 for the repurchase of the Company’s stock. There were no repurchases of Company stock in the first quarter of 2024. Additionally, $2.0 million was used in the first quarter of fiscal year 2025 for payments to non-controlling interests holders, compared to approximately $1.8 million for the first quarter of fiscal year 2024.
We are investigating various uses for our excess cash and short-term investments. We expect total capital expenditures related to the construction at the One Earth facilities to approximate $220 million to $230 million, inclusive of the carbon sequestration project and plant capacity expansion and ongoing efforts to reduce CI scoring, which we currently plan to pay from our available cash. This estimate is subject to further refinement as the project progresses. As of April 30, 2025, we had spent $56.3 million since inception and were contractually committed to spend an additional $0.9 million toward the carbon sequestration project. As of April 30, 2025, we had spent $66.4 million since inception and were contractually committed to spend an additional $8.3 million toward plant capacity expansion and CI scoring reduction efforts. For all projects, we plan to spend $60 million to $80 million during the remainder of fiscal year 2025.
We have a stock buyback program with 1,181,963 shares remaining authorized at April 30, 2025. We typically repurchase our common stock when our stock price is trading at a price we deem to be a discount to the underlying value of our net assets. We continue to seek investment opportunities, including ethanol and/or energy related, carbon sequestration related, agricultural or other ventures, we believe meet our investment criteria.
Forward-Looking Statements
This Form 10-Q contains or may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements can be identified by use of forward-looking terminology such as “may,” “expect,” “believe,” “estimate,” “anticipate” or “continue” or the negative thereof or other variations thereon or comparable terminology. Readers are cautioned that there are risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. These risks and uncertainties include the risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission and include among other things: the impact of legislative and regulatory changes, the price volatility and availability of corn, distillers grains, ethanol, distillers corn oil, gasoline and natural gas, commodity market risk, ethanol plants operating efficiently and according to forecasts and projections, logistical interruptions, success in permitting and developing the planned carbon sequestration facility near the One Earth Energy ethanol plant, changes in the international, national or regional economies, the impact of inflation, the ability to attract employees, weather, results of income tax audits, changes in income tax laws or regulations, the impact of U.S. foreign trade policy and tariffs, changes in foreign currency exchange rates, the effects of terrorism or acts of war and the effect of pandemics on the Company’s business operations, including
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impacts on supplies, demand, personnel and other factors. The Company does not intend to update publicly any forward-looking statements except as required by law. Other factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2025 (File No. 001-09097).
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to the impact of market fluctuations associated with commodity prices as discussed below.
We manage a portion of our risk with respect to the volatility of commodity prices inherent in the ethanol industry by using forward fixed-price purchase and fixed-price sale contracts and exchange traded commodity futures contracts. Our remaining exposure to market risk, which includes the impact of our risk management activities resulting from our fixed-price purchase and sale contracts and derivatives, is based on the estimated effect on pre-tax income for the twelve months following April 30, 2025 is as follows, assuming normal operating capacity (amounts in thousands):
| Commodity | Estimated
Total Volume for 12 Months | Unit of Measure | Decrease
in Pre-tax Income From a 10% Adverse Change in Price | |||||||||
| Ethanol | 295,000 | Gallons | $ | 51,422 | ||||||||
| Corn | 102,100 | Bushels | $ | 42,626 | ||||||||
| Distillers Grains | 718 | Tons | $ | 8,588 | ||||||||
| Distillers Corn Oil | 85,000 | Pounds | $ | 3,934 | ||||||||
| Natural Gas | 7,400 | MmBtu | $ | 2,329 | ||||||||
Item 4. Controls and Procedures
Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
There were no changes in our internal control
over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are, from time to time, involved in various legal proceedings incidental to the conduct of our business. We believe that any current proceedings will not have a material adverse effect on our financial condition or results of operations.
Item 1A. Risk Factors
There have been no material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended January 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information with respect to the Company’s repurchase of its common stock during the period covered by this report:
| Issuer Purchases of Equity Securities | ||||||||||||||||
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) | ||||||||||||
| February 1-28, 2025 | 281,709 | $ | 42.56 | 281,709 | 222,510 | |||||||||||
| March 1-31, 2025 | 41,307 | 38.61 | 41,307 | 1,681,203 | ||||||||||||
| April 1-30, 2025 | 499,240 | 38.34 | 499,240 | 1,181,963 | ||||||||||||
| Total | 822,256 | $ | 39.80 | 822,256 | 1,181,963 | |||||||||||
| (1) | On January 31, 2025, 504,219 shares remained under a prior authorization by the Board of Directors on August 31, 2021. On March 25, 2025, the Board of Directors authorized the repurchase from time to time of up to an additional 1,500,000 shares through open market transactions, privately negotiated transactions, or transactions by other means in accordance with applicable securities laws. At April 30, 2025, a total of 1,181,963 shares remained available to purchase under this authorization. |
Item 3. Defaults upon Senior Securities
Not Applicable
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Item 4. Mine Safety Disclosures
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits
The following exhibits are filed with this report:
| 31 | Rule 13a-14(a)/15d-14(a) Certifications | |
| 32 | Section 1350 Certifications | |
| 101 | The following information from REX American Resources Corporation Quarterly Report on Form 10-Q for the quarter ended April 30, 2025, formatted in iXBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| REX American Resources Corporation Registrant |
| Signature | Title | Date | |||
/s/ Zafar A. Rizvi (Zafar A. Rizvi) |
Chief Executive Officer and President (Chief Executive Officer) |
June 4, 2025 | |||
/s/ Douglas L. Bruggeman (Douglas L. Bruggeman) |
Vice President, Finance and Treasurer (Chief Financial Officer) |
June 4, 2025 |
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Exhibit 31
CERTIFICATIONS
I, Zafar A. Rizvi, certify that:
1. I have reviewed this quarterly report on Form 10-Q of REX American Resources Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: June 4, 2025 | |
| /s/ Zafar A. Rizvi | |
| Zafar A. Rizvi | |
| Chief Executive Officer and President |
CERTIFICATIONS
I, Douglas L. Bruggeman, certify that:
1. I have reviewed this quarterly report on Form 10-Q of REX American Resources Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: June 4, 2025 | |
| /s/ Douglas L. Bruggeman | |
| Douglas L. Bruggeman | |
| Vice President, Finance, Treasurer and | |
| Chief Financial Officer |
Exhibit 32
REX American Resources Corporation
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned officers of REX American Resources Corporation (the “Company”) hereby certify, to their knowledge, that the Company’s Quarterly Report on Form 10-Q for the period ended April 30, 2025 which this certificate accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained therein fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
/s/ Zafar A. Rizvi
Zafar A. Rizvi
Chief Executive Officer and President
/s/ Douglas L. Bruggeman
Douglas L. Bruggeman
Vice President, Finance, Treasurer and
Chief Financial Officer
Date: June 4, 2025