Q2 2026 REX American Resources Corporation Earnings Call Transcript
Key Points
- Record second-quarter net income per share of $1.06, the highest in company history.
- Gross profit surged to $53.3 million from $14.3 million year-over-year, driven by stronger crush margins and $18.4 million in 45Z tax credits.
- Received draft Class VI well permits from the EPA for the carbon capture project, a major regulatory milestone.
- Ethanol expansion at One Earth Energy remains on schedule, with capacity expected to increase to 175 million gallons and potentially 200 million gallons by early next year.
- Strong balance sheet with $379.5 million in cash and no bank debt, providing flexibility for growth and capital returns.
- 24th consecutive profitable quarter, with expectations for Q3 2026 results to exceed the prior year.
- Record ethanol export demand and potential E15 approval in California support positive market fundamentals.
- SG&A expenses increased significantly to $15.6 million from $6.2 million, due to higher incentive compensation and restricted stock awards.
- Uncertainty regarding the timeline for Illinois state permits for the carbon capture pipeline, which could delay the project.
- Potential negative impact on RIN credits from recent news on exemptions, though management sees limited effect on ethanol sales.
- Carbon capture project's full benefits depend on final regulatory approvals, which remain uncertain.
- No imminent third-party agreements for excess carbon capture capacity, limiting near-term revenue diversification.
- Expansion project requires step-by-step regulatory approvals for capacity increases, potentially slowing production growth.
Good morning, and welcome to the REX American Resources second quarter fiscal 2026 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, sir.
Good morning and thank you for joining REX American Resources Q2 2026 conference call. With me on our call today are Stuart Rose, REX' Executive Chairman; and Zafar Rizvi, REX's Chief Executive Officer. We'll get to our presentation and comments momentarily as well as your questions. But first, I will review the Safe Harbor disclosure.
In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements reflect the company's
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