On March 26, 2025, REX American Resources Corp (REX, Financial) released its 8-K filing, detailing its financial performance for the fourth quarter and full fiscal year 2024. REX, a holding company engaged in alternative energy and ethanol production, operates through its Ethanol and By-Products segments, offering products such as dried distillers grains and non-food grade corn oil.
Performance Overview and Challenges
REX American Resources Corp reported net sales and revenue of $158.2 million for Q4 2024, exceeding the analyst estimate of $151.54 million. For the full fiscal year 2024, the company reported net sales and revenue of $642.5 million, which also exceeded the annual estimate of $635.80 million. The decrease in revenue compared to the previous year was primarily due to reduced pricing for ethanol and co-products, reflecting a challenging market environment.
Financial Achievements and Industry Context
Despite the revenue decline, REX achieved a gross profit of $91.5 million for the full fiscal year 2024, with a gross profit margin increase to 14% from 12% in the previous year. This improvement was attributed to decreased corn and natural gas prices and increased ethanol production levels. Such financial achievements are crucial for companies in the chemicals industry, where cost management and production efficiency are key to maintaining profitability.
Income Statement Highlights
For Q4 2024, REX reported a gross profit of $17.6 million, down from $30.4 million in Q4 2023. The net income attributable to REX shareholders for the quarter was $11.1 million, translating to a diluted net income per share of $0.63, which exceeded the quarterly estimate of $0.28. For the full fiscal year, net income attributable to REX shareholders was $58.2 million, with a diluted net income per share of $3.30, surpassing the annual estimate of $2.96.
Balance Sheet and Cash Flow Insights
As of January 31, 2025, REX reported $359.1 million in cash, cash equivalents, and short-term investments, with no bank debt, indicating a strong liquidity position. The company also repurchased approximately 372,567 shares during fiscal year 2024, with an additional 281,709 shares repurchased after January 31, 2025. The Board of Directors authorized an additional 1.5 million share buyback program, reflecting confidence in the company's financial stability.
Operational Developments and Future Outlook
REX is advancing its ethanol production expansion and carbon capture projects at the One Earth facility. The construction of utility substation and interconnection equipment has been completed, and the carbon capture project is progressing with the EPA Class VI injection well permitting process expected to conclude by October 2025. However, a moratorium on new carbon dioxide pipelines in Illinois may impact project timelines.
“During Fiscal Year 2024, REX American continued to provide value to shareholders in the form of profitable operations, properly positioning our growth strategy, and closely monitoring of policy at both the state and Federal levels,” said Zafar Rizvi, REX Chief Executive Officer.
Analysis and Conclusion
REX American Resources Corp's financial performance in fiscal year 2024 reflects the challenges of a volatile market environment, with reduced product pricing impacting revenue. However, the company's ability to maintain profitability through cost management and strategic investments in growth projects positions it well for future opportunities. The ongoing share repurchase program and strong balance sheet further underscore REX's commitment to delivering shareholder value.
Explore the complete 8-K earnings release (here) from REX American Resources Corp for further details.
