REX American Resources (REX) 3 Dec 242025 Q3 Earnings call transcript

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

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

you REX thank XXXX Resources and Call. Conference morning, for American joining QX Good our are call Executive on me With today Zafar the Chairman; Stuart Rizvi, REX CEO. and REX Rose, as our and to your get We'll comments momentarily questions. well presentation as safe But disclosure. harbor first, review will I the

forward-looking historical the contains company's meaning Act Private Litigation that addition of conference to current of today's and beliefs, but of and guarantees Reform forward-looking expectations the or the current facts In involve statements XXXX. of risks statements conditions, not call statements within reflect performance. Such uncertainties Securities are future

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

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

quarter, third our success setting into our for progress company the goals for During American XXXX, Resources X the future. the well up REX continued on

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

history the of third quarter XXXX. only second most The third quarter the REX was profitable behind quarter in Resources' company's American

corn over X% in was of Gross per an by pricing. XXXX quarter principally share the margin despite better reflecting of XX% reduction product a Our net quarter revenue. over improved third of income the XXXX, second of improvement $X.XX XX%

serve and the among ethanol lean personnel their believe, they awareness the will industry, we believe and focus best said, quarter of which REX's consistently as is Earth to strategic next core detail are our forward business have in part facilities REX a proved we we The freedom of quarter Once expansion to our business, in maintain profit markets. As through One running and additive operations plant in and that future after year. the efficient attention on has levels. move is up debt-free, for projects. growth this grow basis increases It and independently with the substantially allowed

day. for say in of we portion efforts Gibson Earth thank As this the to capture the team quarter City, CCS Energy to One our our you construction and second do, I goal compression always to and want complete every And of Illinois. project the

with discuss specifics We regard realized our let the I'll project this of have substantially in CEO, later Zafar the this Rizvi, the call. to remainder goal.

is XXXX on third further Our production certain necessary Right Earth of that per production the components. middle One for completion we delivery track per the goal year. for and year lines delays based million of gallons facility permitting XXX time prepare now, ethanol gallons levels was XXX in to capacity to upon construction the million to estimate complete of in for expansion

forward successfully. As growth can efforts near- see, long-term support our you and to moving

turn strong give projects. At CEO, to Rizvi, our like the which quarter, current continues a to year's time, trails was now the updates things on fourth quarter. profitable, last to I'd fourth over to very our be quarter but further historically major Zafar

from middle utility be and extended the our ethanol to One Earth our of XXX should electric ahead Currently, of complete is gallons year local Thank Energy The facility you, per interconnection to be million estimated of the complete production expansion Stuart. is by completion moving XXXX. target for delivery from of quarter XXXX suppliers one The first to XXXX. equipment middle due our components. has to of the line for necessary by recently been our delays of of ethanol communicated previous expansion several time by the of production

After expect allow the begin completion the further ethanol it and of Earth facility permitting XXX to certification, gallons of to year. One emission planned we to expansion million then the produce per

additional As I the XXX no million additional steps our to capacity regulatory highly receiving allow Gibson only City. sell is expansion the plant capital have an from major earnings said expected. The gallons step spending expanded from or allow for us XXX efficient give as construction permit necessary to will additional product before, in more to is the REX power, million consolidated

well even greater will provide We as ability projects. the expect to and future shareholders our benefit growth to that as expansion ongoing self-fund

said, Stuart project of in carbon substantially Gibson Earth our capture previously Energy compression is Illinois, portion One As City, the complete. and

are excited to reaching are we about these portion and the We looking milestones, of forward other project.

completion power One of add the work Just are to operation further with site, Earth expansion ethanol of interconnection supply at utility facilities project. to the in our the to subject capture the and compression testing the and

power, Beyond regulatory wait be continue issues resolved. we waiting for to on to several

with the Our under slated wells are anticipated EPA. permit review Class injection for approval July application X XXXX final still for according to

and expenditure light challenges result compression project in the in line we project related to time capture to and the these maintain a complete, of for substantially and within portion to spend near-term plan projects are stay budgetary manage as major approval. order the As of flexibility of the capital CCS

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

operational compared our and total discuss and would is same stood hand at million to quarter both Gibson carbon ethanol our million end, as carbon City. of while ethanol and of quarter budgeted on production at results. amount expenditure call million $XX.X million as sequestration $XXX third have million for into expansion project Earth $XX.X ethanol financial to approximately to I of project end, the As capture the Bruggeman, date. to One and invested stood the $XXX CCS at the the This of combined Doug like capacity Spending projects production expansion for the we capture $XXX combined. CFO, to expansion

Zafar. third were gallons. XXX,XXX volumes. increase for million Distiller of operational price a average of $XXX.XX compared gallons, quarter year XX.X in the selling was of quarter the in volume quarter the with in sales sales per The quarter. Corn of Thanks, products to XXXX third average the increase XXXX compared approximately of third were the profit X% gross our for results. versus Gross was selling our lower XX.X gallon quarter quarter gallon third third XXXX. was gas the per million prices were per third million ethanol Grain XX.X for were all which quarter than selling quarter XXXX Distillers pounds compared tons quarter selling with to oil prices. begin XX,XXX X% third XXXX versus approximately decrease lower REX's in for third corn for third for over in achieved XXXX for quarter ton Dry quarter in quarter versus sold sales natural profit was per quarter per $XX.X XXXX consolidated profit ton offset The an to third third gross third sales was quarter totaled million corn volume $X.XX XXXX tons $XX.X $X.XX Distiller quarter quarter volume Grain XX.X $X.XX Modified volume of compared despite per during the pound tons, prior XXXX. $XX XXXX. Modified $XX.XX ton $X.XX million XXXX. volume XXXX. REX's per the quarter the compared for to oil for of the quarter the price in Average pound $XXX.XX of during the input price million selling I'll third in for ethanol volumes the the the products, Average sales price third average XXXX. XXXX Grain third the approximately by third third Distiller for of more third XXXX in Grain XX,XXX and of The pounds X% was Dry of

One for and the COVID-related to for On grants third donations XXXX. of for amounts income, of $XX.X quarter due the share $XX.X was quarter only general third results XXXX in leasing $X.X the the $X.XX for XXXX. to generated of increase with XXXX REX million share XXXX of million responders million expenses related totaled compared million versus USDA. the administrative $XX.X Net $X.X third attributable net local The to third of included net million million the quarter per third in to quarter Earth the to second exceeded million for the the of selling, in third certain quarter company, third to income other in the and a was quarter and per the XXXX, quarter third diluted for third quarter quarter increases of taxes Our XXXX. at the before to increased $XXX,XXX capture amounts noncontrolling the in carbon income XXXX. first from third XXXX. compared basis $XX.X income $X.X this by interest $X.X best quarter of of was compared cost the million facility. Interest to of railcar of history the shareholders of the Income year Prior primarily and approximately

year X XX, uses ended as American quarter ongoing the of months any ended projects to were of of during things with investments Energy construction to without also The now I'd million equivalents the our $XXX.X $XXX.X short-term million Zafar. cash cash, to the REX cash like and first We total with fiscal the third the January at Earth primarily compared debt. of XXXX. back related quarter facility. One bank turn

the like Thanks, the I see year of we how shaping discuss now up. fiscal Doug. to would end

into Corn ago. run we compared given of corn season. adequate but plants of supply our Midwest, As fourth to last a prices in quarter, for the continue year's And the the plants input bumper level earlier, the expect year Stuart our growing this positive crop with quarter. earnings to fourth not have for at stated improved

pace calendar volumes. high ethanol of same export market. U.S. the XX% Administration. according Ethanol Currently, puts This the higher point U.S. sporting export export. to the to XXXX all-time on and levels level Information U.S. As in mentioned approximately exceed for to we pricing returns export the year XXXX the months year calendar we pre-pandemic the first their Energy for at exports through do were have for see the than before, dynamics X

to profitability ahead are ethanol the this XXXX, for. and production anticipated allow Looking increase our will expansion completion excited particularly of we about in

permit still We X approval we additional from of continue which to facility, once in on making expect expect near bring CCS the our Class will would in the profitability EPA our operation. and progress term

we aviation potential growth sequestration. working third-party further the for the are road, sustainable Looking further on carbon the into groundwork and down projects laying are today fuel

in confident are We team's rise are and at our excited about grow future every as we challenges turn. the ability the to organically to

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

[Operator Levy Instructions] Our first question Jordan comes with Truist. from of line the

Congratulations from inauguration. XXZ your the an on just administration was the I There that won't ahead was January get thoughts saying solid Reuters wanted quarter. I article finalize the here. saw Biden of to guidance

I to slip relates broadly? initiatives on that to your -- all the the this how effort of think more it expansion or want should the How under and about you look let the to as side. and do XXZ administration thinking XXZ growth finalize CCUS kind So to fail the does get just on it incoming

the we My opinion can finalize and XX know I'll But end the also Q don't XXZ feelings administration and Z. by know period, if Stuart. up. answer on we we the won't believe Zafar of or they their what first will term, do, don't -- is Trump this follow

from remain we it's regulations and to for XXZ so to going without wary benefit reality, get it's in be be And do. hard they without really know. permit. Right us X an the don't years next EPA will We now, to of really any what in hard to And going XXZ.

benefit we now what not Zafar? but is to going year least be administration finalized we XXZ, know new do. very of at X the they to So because right the difficult get can and going Trump have don't hopefully, it's regulations,

Yes.

corn is we a they other tail as XXZ. basically receive and I and only of they farmers get use you -- also they for XXZ to plan support corn because and from and from different and hope crops, Midwest method have growers. how to the from no looking are which lot see And think they see farmers benefit there's also can and growers can benefit a a because I in the --

XXXX, hand, we the states. some other to to make have XX over support hopefully, see from time, And to knowledge Trump extend we at no administration XXXX So happen. we That on But difference some that some But solid will going really is short. period very to certainly only and all convince that that. the period was see what's exactly movement will when and these take this to able years.

in this thing, cut a at other at that's ton, Jordan, legislatively. One $XX dry passed time, has and that effect, XXQ is and

if get would we very So way the would XXZ a ton, keep we is XXQ, I as $XX our get the that. as nothing long which project law -- written don't today, if make is still which profitable

Yes. And I'd is, as have that servicing I XXXX. that think to to Jordan, you add be know, you by

'XX have so And we actually, enough -- time XXXX.

really to time in expire. was be So before we have only But time X service enough to XXZ years.

can of difference XXZ, that the take between XXQ and we that's So advantage XXQ.

landscape incoming policy whatever on from been and saw very now that sheet always expect a right prudent Got capital. amount all quarter. of you've Zafar the the a looking got Stuart, recognizing for of that uptick allocators it. then incoming at significant you nice balance cash the And a last you have

you the But on of If point? out what side things like. you in kind the look the most do attractive for deploying CCUS opportunity where the allocating at of see you opportunities at of look all cash, areas of cash you managing noted figure this costs think terms you for as things I that

know. done, Well, company drops -- as the We any know, stock to probably more if we've are drops the always percentage-wise ever Jordan, shares stock one keen back bought significantly, thing than when buybacks. we I other you

So that's one thing.

new looking today, to preliminary pay. ethanol anything. people The mean is who if anything willing very but the There are is They're it's for whether doesn't are very, the always thing Generally, and looking above few we at, a plants. what opportunities, we're that prices that other in want will we're way knows happen. stages

are thirdly, that we -- into issue. we're related go that's think either other that's our related sometimes skills business management to afraid to opportunity. work But that even an unrelated And or So with. an always will not things our

We a we're now haven't that retailers and we But ethanol at producers. while. done were time in you as one know,

we're So they comes looking see if that on available. of very great to good become those if of opportunities jumping -- it if we

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

may carbon to XXQ. remain had just Reduction with postpone months, Section Inflation future of include policy. some up Following of decisions X the you going kind months project to moves until example, changes Act, capture be forward on for tax probably clarity the reform, Congress any you discussion kind Are XXQ about It's X you get the to which federal on well going that will in place? before

for continue would is greater time, get ethanol. is a At price a I price decision. get -- Directors' one -- -- only talking. much We this capture much and carbon XXQ we'll we -- we'll else again, -- this we'll my on. this greater But get would on no if far for if as point I because goes is doing with capture, in a doing would Stuart we're away, Pavel, we carbon a not greater believe of It's and what -- Rose Board don't continue

companies And credits I sell still to believe carbon want be to there'll our that neutral. market a become to

my California, Trump So anything I end with administration, be, the this -- and our would don't few think and one good producers. it's get but was for would well definitely market go with jet that is there's don't low still market on project my that. But a end the there help, a we're to on in There's it we government personal in be project. carbon them and be we if project. and personal would of would wouldn't for time, good XX, places. I a low-carbon expect we point possible only don't think aware we we We can few fuel, ethanol, And a would -- continue of at I opinion, but and opinion, the

do on So anything? you that. my with to opinion continue be Zafar, to add would want personal

Yes.

I to think I will add that.

this tax was also that. that no and time, Reduction we was XXXX. administration was in you was $XX Act. credit, credit started approximately At remember, through that Trump And gone project there during tax If it Inflation

that So $X aware this to working are project major for including sequestration, already really also, changes carbon don't facilities on carbon are And billion see to of are there for pipeline. going you be that several I XXQ. the XXQ other $X worth billion to the

is these there's will not don't in projects but So I any of implemented invested XXQ. personally people will project -- changes because sudden changes that have and this lot a can going anticipate in these changes probably money on pipeline to and already be be happen,

on follow-up a ethanol Maybe the Okay. front.

history a perspective on under how between course, Trump's of you managed give EPA the plants, XXXX have some including, ethanol just kind and first long You setting blending and term. went around XXXX the of of mandates Can how operating about historical you that?

was it that Pavel, believe time, required. legislatively that -- law I were the RFS and At set, a the of gallons were was in that number there

that that believe don't If a be they going they he EPA it again, -- that And We they set he a be could level, wants level But forward. set level. really know. can like claims, at the they if independent set to could it issue I want. Nowadays, be problem. energy a wherever that lower if at an could higher

it have idea what they're going they to no they level whatever We the -- but ability I choose. have do, to set believe at today

closing back time. to over I floor would no management have turn to like We for comments. at further questions the this

another -- most, all, listening. we outperforming good the I not if just quarter, had wanted very I of to want again, to thank for everyone industry.

location apart. we we and most that. the project, next importantly, people years, the for great great and in -- a the of which best us sooner we feel we that's locations, couple to implement best really have what in And feel a hopefully have the than hope industry, in carbon even sometime We plants, capture sets

And the with best again, best our I in CEO, people consider with the industry. the

We're call. you I think to the do, much set most listening people well future. up too. very Thank for for other Bye. the

conclude Ladies teleconference. today's and this gentlemen, does

your disconnect day. your at wonderful Thank lines may You have this for a time. you and participation,