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What changed in REX AMERICAN RESOURCES Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of REX AMERICAN RESOURCES Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+269 added−218 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-29)

Top changes in REX AMERICAN RESOURCES Corp's 2025 10-K

269 paragraphs added · 218 removed · 189 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

42 edited+20 added−8 removed24 unchanged
Biggest changeThe two largest drivers of ethanol profitability are corn and ethanol pricing, both of which experienced significant volatility within the year. Chicago Board of Trade corn prices per bushel ranged from a low of $4.40 in January 2024 to a high of $6.85 in February 2023.
Biggest changeOur ethanol business had decreased profits in fiscal 2024 compared to fiscal 2023 primarily as a result of lower selling prices, offset partially by a decrease in corn and natural gas prices. The two largest drivers of ethanol profitability are corn and ethanol pricing, both of which experienced significant volatility within the year.
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, and international disruptions caused by wars or conflicts.
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.
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, trade negotiations, and tariffs 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.
Ethanol is used by gasoline suppliers as an octane enhancer both for producing regular grade gasoline from lower octane blending stocks and for upgrading regular gasoline to premium grades. 7 Legislation The United States ethanol industry is highly dependent upon federal and state legislation. See Item 1A. Risk Factors for a discussion of legislation affecting the U.S. ethanol industry.
Ethanol is used by gasoline suppliers as an octane enhancer both for producing regular grade gasoline from lower octane blending stocks and for upgrading regular gasoline to premium grades. Legislation The United States ethanol industry is highly dependent upon federal and state legislation. See Item 1A. Risk Factors for a discussion of legislation affecting the U.S. ethanol industry.
As a result, at times, we may operate our plants at negative or minimally positive operating margins. 4 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.
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.
The federal government mandates the use of renewable fuels under Renewable Fuel Standard II (“RFS II”), established in October 2010. Corn-based ethanol is considered a conventional biofuel. There were mandated volumes established as part of the RFS II for conventional and advanced biofuels through the year 2022.
The federal government mandates the use of renewable fuels under Renewable Fuel Standard II (“RFS II”), established in October 2010. Corn-based ethanol is considered a conventional biofuel. There were mandated volumes established as part of the RFS II for conventional and advanced biofuels through 6 the year 2022.
The EPA, 6 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, 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.
We own a majority interest in One Earth and NuGen. We also own a majority interest in an entity that owned and, until November 18, 2021, operated a refined coal facility. As we have 3 ceased operating the refined coal facility, we began classifying the financial results of the operating segment as discontinued operations.
We own a majority interest in One Earth and NuGen. We also own a majority interest in an entity that owned and, until November 18, 2021, operated a refined coal facility; as we have ceased operating the refined coal facility, we began classifying the financial results of the operating segment as discontinued operations.
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.
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 4 resulting from the crush spread inherent in the contracts we have executed.
Finally, we continue to work to identify ways to reduce our carbon intensity (“CI”) score at the One Earth plant with the intention of maximizing tax credits available under the Inflation Reduction Act.
Finally, we continue to work to identify ways to reduce our carbon intensity (“CI”) score at the One Earth plant with the intention of maximizing tax credits available under the Inflation Reduction Act (“IRA”).
Simon Sandstone was encountered, which is the geological formation that is the region’s primary carbon storage resource. Three-dimensional seismic testing has been performed, as well as geological modeling for predicting the movement of injected carbon and the plume area to determine maximum injection pressure, reservoir quality and storage capacity for the potential wells.
Simon Sandstone, which is the geological formation that is the region’s primary carbon storage resource. Three-dimensional seismic testing has been performed, as well as geological modeling for predicting the movement of injected carbon and the plume area to determine maximum injection pressure, reservoir quality and storage capacity for the potential wells.
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 Energy ethanol plant. A test well has been drilled to a total depth of approximately 7,100 feet, in which almost 2,000 feet of Mt.
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 Energy ethanol plant. A test well has been drilled to a total depth of approximately 7,100 feet, in which was encountered almost 2,000 feet of Mt.
According to the RFA, the United States ethanol industry consists of 198 plants in 24 states with an annual capacity of approximately 18.0 billion gallons of ethanol production. Domestic demand for ethanol is highly dependent upon federal and state legislation and regulations.
According to the RFA, the United States ethanol industry consists of 198 plants in 24 states with an annual capacity of approximately 18.3 billion gallons of ethanol production. Domestic demand for ethanol is highly dependent upon federal and state legislation and regulations.
The following table is a summary of our ethanol entity ownership interests at January 31, 2024: Entity Location REX's Current Ownership Interest One Earth Energy, LLC Gibson City, IL 75.8% 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.
The following table is a summary of our ethanol entity ownership interests at January 31, 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.
We refer to our fiscal year by reference to the year immediately preceding the January 31 fiscal year end date. For example, “fiscal year 2023” means the period February 1, 2023 to January 31, 2024. Corporate History and Background REX was incorporated in Delaware in 1984 as a holding company.
We refer to our fiscal year by reference to the year immediately preceding the January 31 fiscal year end date. For example, “fiscal year 2024” means the period February 1, 2024 to January 31, 2025. Corporate History and Background REX was incorporated in Delaware in 1984 as a holding company.
Burlington, IA Galva, IL Dyersville, IA Boyceville, WI 10.3% 10.3% 5.7% 10.3% The three entities own a total of six ethanol production facilities, which in aggregate shipped approximately 716 million gallons of ethanol over the twelve-month period ended January 31, 2024.
Burlington, IA Galva, IL Dyersville, IA Boyceville, WI 10.3% 10.3% 5.7% 10.3% The three entities own a total of six ethanol production facilities, which in aggregate shipped approximately 727 million gallons of ethanol over the twelve-month period ended January 31, 2025.
Previously, the EPA had not granted E-15 the same Reid vapor pressure (“RVP”) waiver as E-10 so it could only be sold from September 16 through May 31 for those vehicles in most markets. The EPA issued emergency waivers to allow the sale of E-15 for the summer months in both 2022 and 2023.
Previously, the EPA had not granted E-15 the same Reid vapor pressure (“RVP”) waiver as E-10 so it could only be sold from September 16 through May 31 for those vehicles in most markets. The EPA issued emergency waivers to allow the sale of E-15 for the summer months in the years 2022 through 2024.
According to the Renewable Fuels Association (“RFA”), the United States ethanol industry produced an estimated 15.6 billion gallons of ethanol in 2023, compared to 15.4 billion gallons in 2022. Approximately 1.4 billion gallons were estimated to have been exported from the United States in 2023.
According to the Renewable Fuels Association (“RFA”), the United States ethanol industry produced an estimated 16.1 billion gallons of ethanol in 2024, compared to 15.6 billion gallons in 2023. Approximately 1.9 billion gallons were estimated to have been exported from the United States in 2024.
If the carbon sequestration project is successful, we believe we would qualify for tax credits under section 45Q of the Internal Revenue Code (“45Q”), based on tons of carbon sequestered, and section 45Z of the Internal Revenue Code (“45Z”), based on gallons of ethanol produced, as outlined in the Inflation Reduction Act.
If the carbon sequestration project is successful, we believe we will qualify for tax credits under section 45Q of the Internal Revenue Code (“45Q”), based on tons of carbon sequestered, and section 45Z of the Internal Revenue Code (“45Z”), based on gallons of ethanol produced, as outlined in the IRA.
The Inflation Reduction Act 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 5 point reduction below a 50 CI score threshold to incentivize further increases in plant efficiencies within the industry.
The IRA created a new Clean Fuel Production Credit, available for calendar years 2025 – 2027, 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.
NuGen Energy, LLC, our majority owned ethanol plant in Marion, South Dakota, signed an agreement to be part of Summit Carbon Solutions’ carbon capture and storage pipeline.
In May 2023, NuGen Energy, LLC, our majority owned ethanol plant in Marion, South Dakota, signed an agreement to be part of Summit Carbon Solutions’ carbon capture and storage pipeline network, with storage planned to be in North Dakota.
As of January 31, 2024, we had spent $12.8 million since inception and were contractually committed to spend an additional $12.3 million toward plant capacity expansion and ongoing efforts to reduce our CI scoring.
As of January 31, 2025, we had spent $59.9 million since inception and were contractually committed to spend an additional $8.7 million toward plant capacity expansion and ongoing efforts to reduce our CI scoring.
We believe we offer market competitive compensation and benefit programs for our employees. In addition to competitive base wages, all employees are eligible for an incentive compensation program, a Company matched 401(k) plan, healthcare benefits, and paid time off. 8 Service Marks We have registered the service marks “REX” and “Farmer’s Energy” with the United States Patent and Trademark Office.
In addition to competitive base wages, all employees are eligible for an incentive compensation program, a Company matched 401(k) plan, healthcare benefits, and paid time off. Service Marks We have registered the service marks “REX” and “Farmer’s Energy” with the United States Patent and Trademark Office. We are not aware of any adverse claims concerning our service marks.
We recently received a permit 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, planned for the first quarter of 2025, we intend to apply for a 200 million gallon per year permit from the EPA.
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 200 million gallons per year.
The EPA has not granted any small refinery waivers for 2019-2022 and has continued that stance in the proposed volumes for 2023-2025. There remain multiple ongoing legal challenges to how the EPA has handled the small refinery waivers, including on November 22, 2023, a ruling by the Fifth U.S.
The EPA has not granted any small refinery waivers for 2019-2022 and has continued that stance in the proposed volumes for 2023-2025. There remain multiple ongoing legal challenges to how the EPA has handled the small refinery waivers. In July 2024, the U.S.
REX’s effective ownership of gallons shipped, for the twelve-month period ended January 31, 2024, by the ethanol production facilities in which we have ownership interests was approximately 290 million gallons. 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.
REX’s effective ownership of ethanol gallons shipped for the twelve-month period ended January 31, 2025, was approximately 294 million gallons. 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.
Oxygenated gasoline is used to help meet certain federal and air emission standards. Octane enhancer. Ethanol increases the octane rating of gasoline with which it is blended. Octane is a measure of fuel performance.
Ethanol contains 35% oxygen, which results in more complete combustion of the fuel in the engine cylinder. Oxygenated gasoline is used to help meet certain federal and air emission standards. 7 Octane enhancer. Ethanol increases the octane rating of gasoline with which it is blended. Octane is a measure of fuel performance.
Eight Midwest states (Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin) petitioned the EPA to allow year-round sales of E-15 in their states. The EPA has approved this request beginning in 2025. Clean air additive.
Eight Midwest states (Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin) petitioned the EPA to allow year-round sales of E-15 in their states. The EPA has approved this request beginning in 2025 but will consider requests from individual states to delay implementation by one year.
We plan to seek and evaluate various investment opportunities including energy related, carbon sequestration, agricultural and 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.
We plan to seek and evaluate various investment opportunities including energy related, carbon sequestration, agricultural and 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. We have a stock buyback program with an authorization level of an additional 504,219 shares at January 31, 2025.
Additionally, in 2023, the EPA restored 250 million gallons previously waived. 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 acquire and submit renewable identification numbers (“RINs”).
The new administration has not yet provided an updated timeline for these rules. 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 acquire and submit renewable identification numbers (“RINs”).
We also own our corporate headquarters office building, consisting of approximately 7,500 square feet, located in Dayton, Ohio. Human Capital Resources The attraction, retention and development of employees is critical to our success. We accomplish these objectives through a variety of actions, including our competitive compensation policies, discretionary stock award programs, training initiatives, and growth opportunities within our Company.
Human Capital Resources The attraction, retention and development of employees is critical to our success. We accomplish these objectives through a variety of actions, including our competitive compensation policies, discretionary stock award programs, training initiatives, and growth opportunities within our Company. At January 31, 2025, we had 122 employees at our two consolidated ethanol plants and at our corporate headquarters.
Ethanol is employed by the refining industry as a fuel oxygenate, which when blended with gasoline, allows engines to combust fuel more completely than gasoline that has not been oxygenated and thus reduce emissions from motor vehicles. Ethanol contains 35% oxygen, which results in more complete combustion of the fuel in the engine cylinder.
To date, Ohio and South Dakota have requested a one-year delay, which the EPA has now approved. Clean air additive. Ethanol is employed by the refining industry as a fuel oxygenate, which when blended with gasoline, allows engines to combust fuel more completely than gasoline that has not been oxygenated and thus reduce emissions from motor vehicles.
In October 2022, we applied for a Class VI injection well permit for three wells with the U.S. Environmental Protection Agency (“EPA”). In addition, we have begun construction of a facility to capture, dehydrate, and compress carbon dioxide from the One Earth Energy ethanol plant to a state suitable for sequestration.
In 2022, we began construction of a facility to capture, dehydrate, and compress carbon dioxide from the One Earth Energy ethanol plant to a state suitable for sequestration.
We conduct regularly scheduled safety meetings and require all employees to go through safety training. We evaluate employee safety incidents monthly and investigate such incidents promptly. In addition, we conduct periodic safety audits performed by an independent third party. A portion of our incentive compensation plan rewards employees for attaining certain safety goals.
In addition, we conduct periodic safety audits performed by an independent third party. A portion of our incentive compensation plan rewards employees for attaining certain safety goals. We believe we offer market competitive compensation and benefit programs for our employees.
We continue to pursue obtaining a county special-use zoning permit. Although we have made meaningful progress and significant investments in this project, we continue to complete required documentation for various government agencies and obtain permits and other approvals with no assurances of ultimate success. We also intend to concurrently expand the One Earth ethanol plant.
Although we have made meaningful progress and significant investments in the carbon sequestration project at One Earth Energy, 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.
We now have one reportable segment, ethanol and by-products. General Overview We reported net income attributable to REX common shareholders of $60.9 million in fiscal 2023 compared to approximately $27.7 million in fiscal 2022. Our ethanol business had increased profits in fiscal 2023 compared to fiscal 2022 as a result of higher crush spreads in fiscal 2023.
The federal production tax credits received through operation of this facility remain under IRS audit. We now have one reportable segment, ethanol and by-products. 3 General Overview We reported net income attributable to REX common shareholders of $58.2 million in fiscal 2024 compared to approximately $60.9 million in fiscal 2023.
We generally participate in the oversight of our projects through our membership on the board of managers of the limited liability companies that own the plants. We provide management oversight and direction with respect to most aspects of plant operations for our consolidated ethanol companies.
The form and structure of our ethanol investments are tailored to the specific needs and goals of each project and the local farmer group or investor with whom we partner. We generally participate in the oversight of our projects through our membership on the board of managers of the limited liability companies that own the plants.
At January 31, 2024, we had 117 employees at our two consolidated ethanol plants and at our corporate headquarters. None of our employees are represented by a labor union. We expect this employment level to remain relatively stable. We consider our relationship with our employees to be good .
None of our employees are represented by a labor union. We expect this employment level to remain relatively stable. We consider our relationship with our employees to be good . We conduct regularly scheduled safety meetings and require all employees to go through safety training. We evaluate employee safety incidents monthly and investigate such incidents promptly.
We expect the total cost of these projects to be approximately $165 million to $175 million, which we currently plan to pay from our available cash. As of January 31, 2024, we had spent $25.8 million since inception and were contractually committed to spend an additional $22.6 million toward the carbon sequestration project.
As of January 31, 2025, we had spent $55.7 million since inception and were contractually committed to spend an additional $0.9 million toward the carbon sequestration project.
We have equity investments in three entities engaged in the production of ethanol as of January 31, 2024.
We provide management oversight and direction with respect to most aspects of plant operations for our consolidated ethanol companies. We have equity investments in three entities engaged in the production of ethanol as of January 31, 2025.
We expect to complete construction by July 31, 2024, at which time testing of the facility could commence, upon completion of other infrastructure. In October 2023, we submitted an application with the Illinois Commerce Commission to build a short pipeline to deliver carbon dioxide from the ethanol plant to the sequestration site.
In October 2023, we submitted an application to the Illinois Commerce Commission (“ICC”) for a certificate of authority under the state’s Carbon Dioxide Transportation and Sequestration Act (the “CO 2 Act”) to build a short pipeline to deliver carbon dioxide from the One Earth Energy ethanol plant to the proposed sequestration site.
The federal production tax credits received through ownership of this facility remain under IRS audit. Facilities As of our fiscal year end, our consolidated ethanol entities owned a combined 1,477 acres of land and two facilities that shipped a combined quantity of approximately 286 million gallons of ethanol in fiscal year 2023.
Facilities As of our fiscal year end, our consolidated ethanol entities owned a combined 1,591 acres of land and two facilities that shipped a combined quantity of approximately 290 million gallons of ethanol in fiscal year 2024. We also own our corporate headquarters office building, consisting of approximately 7,500 square feet, located in Dayton, Ohio.
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S&P Global Platts ethanol pricing per gallon ranged from a low of $1.52 in January 2024 to a high of $2.67 in June 2023. The form and structure of our ethanol investments are tailored to the specific needs and goals of each project and the local farmer group or investor with whom we partner.
Added
Chicago Board of Trade corn prices per bushel ranged from a low of $3.62 in August 2024 to a high of $4.97 in January 2025. S&P Global Platts ethanol pricing per gallon ranged from a low of $1.38 in February 2024 to a high of $2.12 in June 2024.
Removed
On August 10, 2017, we purchased, through a 95.35% owned subsidiary, for approximately $12.0 million, the entire ownership interest of an entity that owned a refined coal facility. We began operating the refined coal facility immediately after the acquisition.
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In October 2022, we applied for a Class VI injection well permit for three wells with the U.S. Environmental Protection Agency (“EPA”), and we continue to provide information to the EPA during the technical review of our application upon request.
Removed
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. We began classifying this operation as discontinued operations in the third quarter of fiscal 2021.
Added
We currently expect the EPA to prepare a draft permit by the second quarter of 2025 and make a final permit decision by late in the third quarter of 2025, according to the EPA’s Class VI Permit Tracker Dashboard on their website.
Removed
Circuit Court of Appeals (the “Court”) against the EPA on six SREs the EPA had previously denied. The Court remanded those six petitions back to the EPA and each refinery will continue to operate under temporary SREs granted to them by the Court.
Added
We have now secured sufficient subsurface easements for the proposed first injection well to allow for sequestration of all the carbon emissions from the One Earth Energy ethanol plant for a minimum of 15 years. We also need to obtain a county special-use zoning permit for the sequestration site.
Removed
We ceased operating the facility on November 18, 2021 and subsequently sold the facility. We began to report these results as discontinued operations in the third quarter of 2021.
Added
While we have completed the construction of the capture and compression facility, testing has not yet been completed and we cannot begin construction of the pipeline or sequestration well until further permits and approvals are received.
Removed
Section 45 of the IRC was created by Congress to encourage the development and use of environmentally sound solutions to control harmful emissions during energy production and to facilitate and move the United States towards better compliance with global environmental energy standards.
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We have obtained easements from all of the necessary landowners for the use of their land for the pipeline for the first two wells. On May 26, 2024, however, 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.
Removed
The American Jobs Creation Act of 2004 amended Section 45 of the IRC by adding provisions to incentivize the production of emission reducing refined coal. To qualify for tax credits under Section 45 of the IRC, a process must reduce coal emissions of nitrogen oxide by 20% and either sulfur dioxide or mercury by 40%.
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The new legislation imposes additional safety, environmental and other requirements on obtaining permits and approvals for carbon capture and sequestration facilities in Illinois, including CO 2 pipelines.
Removed
We are not aware of any adverse claims concerning our service marks.
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Further, the new legislation imposes a moratorium on the issuance of new certificates of authority for the construction of CO 2 pipelines until the earlier of the date federal CO 2 pipeline safety standards are finalized by the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) or, subject to certain other conditions, July 1, 2026.
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As a result of this legislation, the ICC dismissed our application without prejudice, and we will be required to resubmit an application after rules are finalized or subsequent to July 1, 2026.
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Also see the discussion under “Trends and Uncertainties” on pages 25 and 26 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.
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Department of the Treasury has not yet issued final rules on qualification for 45Z tax credits. 5 The Company is reviewing certain aspects of the expansion portion of the project and its impact on the previously reported expected project costs.
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Due to this, along with permitting delays and the impact of inflation, we have increased the budget for both projects to approximately $220 million to $230 million, subject to further refinement as we move forward. We plan to pay for all costs from available cash.
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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.
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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 Energy facility more difficult to materialize.
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Subsequent to January 31, 2025 the Company repurchased 281,709 shares for approximately $11.9 million through open market transactions. After these repurchases, a total of 222,510 shares remained available to purchase under existing board authorization.
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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.
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We typically repurchase our common stock when our stock price is trading at prices we deem to be a discount to the underlying value of our net assets.
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Additionally, in 2023, the EPA restored 250 million gallons previously waived. The EPA was required to propose Renewable Volume Obligations (“RVO”s) for 2026 by November 2024, but the administration, at that time, indicated on July 8, 2024 an intention to propose RVOs for 2026 and beyond in March 2025, and finalize them in December 2025.
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Court of Appeals for the District of Columbia Circuit vacated many of the EPA’s 2022 Small Refinery Exemption (“SRE”) denials. The EPA had denied 105 SREs in 2022. As a result of this Court ruling, the EPA has voluntarily moved to rescind the agency’s 2023 denial of 26 SREs. As of March 2025, there were 156 SRE waivers pending.
Added
We ceased operating the facility on November 18, 2021 and subsequently sold the facility. The federal production tax credits received through ownership of this facility, approximately $58.2 million, remain under IRS audit.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

61 edited+16 added−9 removed89 unchanged
Biggest changeRisks Related to our Ethanol and By-Products Business The ethanol industry is changing rapidly which could result in unexpected developments that could negatively impact our operations. According to the RFA, the ethanol industry grew from approximately 1.5 billion gallons of domestic annual ethanol production in 1999 to a peak of approximately 16.1 billion gallons in 2018.
Biggest changeAccording to the RFA, the ethanol industry grew from approximately 1.5 billion gallons of domestic annual ethanol production in 1999 to a peak of approximately 16.1 billion gallons in 2018, which it matched in 2024. In 2023 and 2022, the industry produced approximately 15.6 and 15.4 billion gallons, respectively, reflecting industry conditions and reduced demand.
The price of corn is influenced by weather conditions and other factors affecting crop yields, transportation costs, farmer planting decisions, exports, foreign production, the value of the U.S. dollar, and general domestic 9 and foreign economic, market and regulatory factors, including, but not limited to, the impacts from the Russian-Ukraine conflict as well as other conflicts and political unrest, both foreign and domestic.
The price of corn is influenced by weather conditions and other factors affecting crop yields, transportation costs, farmer planting decisions, exports, foreign production, the value of the U.S. dollar, and general domestic and foreign economic, market and regulatory factors, including, but not limited to, the impacts from the Russian-Ukraine conflict as well as other conflicts and political unrest, both foreign and domestic.
Potential business disruption in available transportation due to natural disasters, severe weather conditions, the outbreak of a pandemic disease, significant track damage resulting from a train derailment, strikes or other interruptions by our transportation providers could result in delays in procuring and supplying raw materials 18 to our ethanol facilities, or transporting ethanol and distillers grains to our customers.
Potential business disruption in available transportation due to natural disasters, severe weather conditions, the outbreak of a pandemic disease, significant track damage resulting from a train derailment, strikes or other interruptions by our transportation providers could result in delays in procuring and supplying raw materials to our ethanol facilities, or transporting ethanol and distillers grains to our customers.
As a result, ethanol prices are influenced by the supply and demand for gasoline, and our ethanol plants’ results of operations and financial position may be materially adversely affected if gasoline demand decreases or the price of gasoline declines making ethanol less economical. 10 Distillers grains compete with other protein-based animal feed products.
As a result, ethanol prices are influenced by the supply and demand for gasoline, and our ethanol plants’ results of operations and financial position may be materially adversely affected if gasoline demand decreases or the price of gasoline declines making ethanol less economical. Distillers grains compete with other protein-based animal feed products.
We are exposed to potential business disruption from factors outside our control, including natural disasters, severe weather conditions, accidents, pandemic diseases, international disputes, and unforeseen operational failures any of which could negatively affect our transportation operations and could adversely affect our cash flows and operating results.
We are exposed to potential business disruption from factors outside our control, including natural disasters, severe weather conditions, accidents, pandemic diseases, international disputes, tariffs, and unforeseen operational failures any of which could negatively affect our transportation operations and could adversely affect our cash flows and operating results.
International demand for corn could also result in higher corn prices. Our ethanol plants may also have difficulty, from time to time, in physically sourcing corn on economic terms due to regional supply shortages, transportation issues, delays in farmer marketing decisions or unfavorable local pricing.
International demand for corn could also result in higher or lower corn prices. Our ethanol plants may also have difficulty, from time to time, in physically sourcing corn on economic terms due to regional supply shortages, transportation issues, delays in farmer marketing decisions or unfavorable local pricing.
The financial impact of these risk management activities is dependent upon, among other items, the prices involved and our ability to receive or deliver the commodities involved. Risk management activities can result in financial loss when positions are purchased in a declining market or when positions are sold in an increasing market.
The financial impact of these risk management activities is dependent upon, among other items, the prices involved and our ability to receive or deliver the commodities 9 involved. Risk management activities can result in financial loss when positions are purchased in a declining market or when positions are sold in an increasing market.
Unfavorable changes in legislation or regulations could materially and adversely affect our results of operations and financial position. 14 The inability to generate or obtain RINs could adversely affect our operating results . Virtually all our ethanol is sold with RINs that are used by customers to comply with RFS II.
Unfavorable changes in legislation or regulations could materially and adversely affect our results of operations and financial position. The inability to generate or obtain RINs could adversely affect our operating results . Virtually all our ethanol is sold with RINs that are used by customers to comply with RFS II.
In addition, foreign ethanol producers may 17 be able to produce ethanol at costs lower than ours. These risks could have significant adverse effects on our financial performance. We are exposed to credit risk from our sales of ethanol and distillers grains to customers.
In addition, foreign ethanol producers may be able to produce ethanol at costs lower than ours. These risks could have significant adverse effects on our financial performance. We are exposed to credit risk from our sales of ethanol and distillers grains to customers.
This could have a material adverse effect on our results of operations. 16 Our revenue from the sale of distillers grains depends upon its continued market acceptance as an animal feed. Distillers grains is a by-product from the fermentation of corn to produce ethanol.
This could have a material adverse effect on our results of operations. Our revenue from the sale of distillers grains depends upon its continued market acceptance as an animal feed. Distillers grains is a by-product from the fermentation of corn to produce ethanol.
Failure to do so could have a negative impact on our financial results at individual plants. Our plants depend on an uninterrupted supply of energy and water to operate. Unforeseen plant shutdowns could harm our business. Our plants require a significant and uninterrupted supply of natural gas, electricity and water to operate.
Failure to do so could have a negative impact on our financial results at individual plants. 16 Our plants depend on an uninterrupted supply of energy and water to operate. Unforeseen plant shutdowns could harm our business. Our plants require a significant and uninterrupted supply of natural gas, electricity and water to operate.
If the public became concerned about the impact of distillers grains in the food supply or as an acceptable animal feed, the market for distillers grains could be negatively impacted, which would have a negative impact on our results of operations.
If the public became concerned about the impact of distillers grains in the food supply or as an acceptable animal feed, the market for distillers grains could be negatively impacted, which would 15 have a negative impact on our results of operations.
As part of the operations, we paid a license fee for patented technology. If our third-party operator is subject to patent infringement claims, we may incur legal fees to defend our position and be subject to additional costs and fees.
We used patented technology. As part of the operations, we paid a license fee for patented technology. If our third-party operator is subject to patent infringement claims, we may incur legal fees to defend our position and be subject to additional costs and fees.
These factors include government policies and subsidies with respect to agriculture and international trade and global and local demand and supply. The significance and relative effect of these factors on the price of corn is difficult to predict.
These factors include government policies and subsidies with respect to agriculture, international trade and tariffs, and global and local demand and supply. The significance and relative effect of these factors on the price of corn is difficult to predict.
In February 2010, the EPA released its final regulations on the Renewable Fuel Standard program. We believe our plants are grandfathered up to certain operating capacity, but plant expansion requires us to 15 meet a 20% threshold reduction in greenhouse gas (GHG) emissions from a 2005 baseline measurement to produce ethanol eligible for the RFS II mandate.
In February 2010, the EPA released its final regulations on the Renewable Fuel Standard program. We believe our plants are grandfathered up to 14 certain operating capacity, but plant expansion requires us to meet a 20% threshold reduction in greenhouse gas (GHG) emissions from a 2005 baseline measurement to produce ethanol eligible for the RFS II mandate.
Any changes to existing laws and regulations, or new laws and regulations, including voluntary measures taken by the rail industry, could result in higher shipping costs, or new requirements for the design, construction or operation of tank cars that transport hazard materials, such as ethanol.
Any changes to existing laws and regulations, or new laws and regulations, including voluntary measures taken by the rail industry, could result in higher shipping costs, or new requirements for the design, construction or operation of tank cars that transport hazardous materials, such as ethanol.
In extreme cases, we could lose our cash deposits entirely. This would negatively impact our liquidity and results of operations. 20 We may fail to realize the anticipated benefits of mergers, acquisitions, or other investments. We intend to continue seeking growth opportunities.
In extreme cases, we could lose our cash deposits entirely. This would negatively impact our liquidity and results of operations. 18 We may fail to realize the anticipated benefits of mergers, acquisitions, or other investments. We intend to continue seeking growth opportunities.
Our ability to claim tax credits under IRC Section 45 depends upon our refined coal operation satisfying certain conditions set forth in IRC Section 45. The IRS could ultimately determine that our refined coal facility and/or its operations did not satisfy the conditions set forth in IRC Section 45.
Availability of the tax credits under IRC Section 45. Our ability to claim tax credits under IRC Section 45 depends upon our refined coal operation satisfying certain conditions set forth in IRC Section 45. The IRS could ultimately determine that our refined coal facility and/or its operations did not satisfy the conditions set forth in IRC Section 45.
Such declines could have a material adverse effect on our results of operations. Pricing of distillers corn oil is primarily driven by the demand from renewable diesel, biodiesel, and to some extent, sustainable aviation fuel markets.
Such declines could have a material adverse effect on our results of operations. Pricing of distillers corn oil is primarily driven by the demand from renewable diesel, biodiesel, and to some extent, synthetic aviation fuel markets.
Many of our competitors are larger and have greater financial resources and name recognition than we do. We must compete for investment opportunities based on our strategy of supporting and enhancing local development of ethanol plant opportunities. We may not be successful in competing for investment opportunities based on our strategy.
Many of our competitors are larger and may have greater financial resources than we do. We must compete for investment opportunities based on our strategy of supporting and enhancing local development of ethanol plant opportunities. We may not be successful in competing for investment opportunities based on our strategy.
The 12 limitations on our ability to control day-to-day plant operations could adversely affect plant results of operations. We may not successfully acquire or develop additional ethanol investments. The growth of our ethanol business depends on our ability to identify and develop new ethanol investments.
The limitations on our ability to control day-to-day plant operations could adversely affect plant results of operations. We may not successfully acquire or develop additional ethanol investments or expansion. The growth of our ethanol business depends on our ability to identify and develop new ethanol investments.
The price of distillers grains may decrease when the prices of competing feed products decrease. The prices of competing animal feed products are based in part on the prices of the commodities from which these products are made. Historically, sales prices for distillers grains have tracked along with the price of corn.
The price of distillers grains may decrease when the prices of competing feed products decrease. The prices of competing animal feed products are based in part on the prices of the commodities from which these products are made. Historically, sales prices for distillers grains have tracked along with the price of corn and soybean meal.
We may not be able to obtain a suitable replacement for antibiotics, should this be required, which would also negatively impact the market for distillers grains. An estimated 34% of distillers grains produced in the United States were exported in 2023. The price of distillers grains has benefitted from the exports of the product.
We may not be able to obtain a suitable replacement for antibiotics, should this be required, which would also negatively impact the market for distillers grains. An estimated 37% of distillers grains produced in the United States were exported in 2024. The price of distillers grains has benefitted from the exports of the product.
Distillers corn oil is marketed as a low-carbon feedstock to be used in these markets which may see expanded demand due to the extended blending tax credit, credits included in the Inflation Reduction Act and growing Low Carbon Fuel Standard (“LCFS”) markets, resulting in an impact to distillers corn oil demand.
Distillers corn oil is marketed as a low-carbon feedstock to be used in these markets which may see expanded demand due to the extended blending tax credit, credits included in the IRA and growing Low Carbon Fuel Standard (“LCFS”) markets, resulting in an impact to distillers corn oil demand.
If we are unable to reduce our CI score, we may not be able to participate in the state and federal clean fuel programs, including federal tax credits outlined in the Inflation Reduction Act. Carbon capture and sequestration projects are subject to federal, state, and local regulations.
If we are unable to reduce our CI score, we may not be able to participate in the state and federal clean fuel programs, including federal tax credits outlined in the IRA. Carbon capture and sequestration projects are subject to federal, state, and local regulations.
Acquisitions and similar transactions involve many risks that could harm our business, which include: ● The anticipated benefits of these transactions may not be fully realized, or take longer to realize than expected, ● Future acquisitions could result in operating losses or loss of investment, ● Future acquisitions may involve incurring debt to complete these transactions, which could have a material adverse effect on our financial condition, ● Future acquisitions may require us to invest a significant portion of our excess cash, which could have a material adverse effect on our financial condition, and ● Our carbon sequestration investment may not be successful.
Acquisitions and similar transactions involve many risks that could harm our business, which include: ● The anticipated benefits of these transactions may not be fully realized, or take longer to realize than expected, ● Future acquisitions could result in operating losses or loss of investment, ● Future acquisitions may involve incurring debt to complete these transactions, which could have a material adverse effect on our financial condition, ● Future acquisitions may require us to invest a significant portion of our excess cash, which could have a material adverse effect on our financial condition, ● Our carbon sequestration investment may not be successful, and ● Our projects to reduce the carbon intensity scores at our ethanol plants may not prove to be successful.
Any delays in obtaining additional financing, or our inability to do so, could have a material adverse impact on our financial results. During the early months of 2020, a new strain of COVID-19 spread into the United States and other countries.
Any delays in obtaining additional financing, or our inability to do so, could have a material adverse impact on our financial results. 17 There is a risk of a pandemic that could spread into the United States and other countries. During the early months of 2020, a new strain of COVID-19 spread into the United States and other countries.
RINs are attached to renewable fuels by producers and detached when the renewable fuel is blended with transportation fuel or traded in the open market. The market price of detached RINs affects the price of ethanol in certain markets and influences the purchasing decisions by obligated parties.
Obligated parties use RINs to show compliance with RFS-mandated volumes. RINs are attached to renewable fuels by producers and detached when the renewable fuel is blended with transportation fuel or traded in the open market. The market price of detached RINs affects the price of ethanol in certain markets and influences the purchasing decisions by obligated parties.
Reduced demand for ethanol could cause our results of operations to be materially adversely affected. The U.S. ethanol industry is highly dependent upon a myriad of federal and state legislation and regulation and any changes in legislation or regulation could materially and adversely affect our results of operations and financial position.
The U.S. ethanol industry is highly dependent upon a myriad of federal and state legislation and regulation and any changes in legislation or regulation could materially and adversely affect our results of operations and financial position.
Reduced gasoline consumption could occur as a result of increased prices for gasoline or crude oil, which could cause businesses and consumers to reduce driving or acquire vehicles with more favorable gasoline mileage or acquire non-gasoline powered vehicles.
Reduced gasoline consumption could occur as a result of increased prices for gasoline or crude oil, which could cause businesses and consumers to reduce driving or acquire vehicles with more favorable gasoline mileage or acquire non-gasoline powered vehicles. In addition, decreased overall economic activity could also lead to reduced gasoline consumption.
As a result of fluctuations in RINs pricing, certain obligated parties have petitioned the EPA and filed court actions to change the point of obligation or to seek relief from their obligation. The EPA granted 88 total Small Refinery Exemptions (“SREs”) for 2016 through 2018 totaling approximately 4.3 billion gallons.
As a result of fluctuations in RINs pricing, certain obligated parties have petitioned the EPA and filed court actions to change the point of obligation or to seek relief from their obligation. The EPA granted 88 total SREs for 2016 through 2018 totaling approximately 4.3 billion gallons. In recent years, the EPA had largely denied small refiner waivers.
The industry has experienced various trade policy disputes, tariffs and investigations in foreign countries that have adversely impacted the international demand for our products. Reduced international demand could lead to further oversupply and reduce pricing. Future demand for ethanol is uncertain and changes in overall consumer demand for transportation fuel could affect demand.
The industry has experienced various trade policy disputes, tariffs and investigations in foreign countries that have adversely impacted the international demand for our products. Reduced international demand could lead to further oversupply and reduce pricing.
Climate change is also thought by some to be the cause for an increase in extreme weather events such as increased intensity of storms, rising sea levels, as well as heavy rains or droughts in areas historically less prone to those events.
In addition, legislation promoting alternatives to combustion engine vehicles could reduce the demand for our products. Climate change is also thought by some to be the cause for an increase in extreme weather events such as increased intensity of storms, rising sea levels, as well as heavy rains or droughts in areas historically less prone to those events.
This operation is currently under audit by the IRS and if we were to lose these tax credits, it could have a material adverse impact on our results of operations. 19 Our refined coal operation and its by-products may result in environmental and product liability claims and environmental compliance costs.
The federal production tax credits received through ownership of this facility, approximately $58.2 million, remain under IRS audit, and if we were to lose these tax credits, it could have a material adverse impact on our results of operations. Our refined coal operation and its by-products may result in environmental and product liability claims and environmental compliance costs.
The EPA has set conventional renewable fuel volumes of 15.0 billion gallons for 2023 through 2025. In addition, for 2023 they restored 250 million gallons previously waived. The implied excess capacity over the EPA proposed volumes could have an adverse effect on the results of our operations.
In addition, for 2023 they restored 250 million gallons previously waived. The implied excess capacity over the EPA proposed volumes could have an adverse effect on the results of our operations.
We depend on our partners to operate certain of our ethanol investments . Our investments currently represent both majority and minority equity positions. Day-to-day operating control of minority owned plants generally remains with the local investor group.
This act could make the sequestration project for the NuGen Energy facility more difficult to materialize. We depend on our partners to operate certain of our ethanol investments . Our investments currently represent both majority and minority equity positions. Day-to-day operating control of minority owned plants generally remains with the local investor group.
In addition, advances in the development of alternatives to ethanol could significantly reduce demand for or eliminate the need for ethanol. 13 Any advances in technology which require significant unanticipated capital expenditures to remain competitive or which reduce demand or prices for ethanol would have a material adverse effect on the results of our ethanol operations.
Any advances in technology which require significant unanticipated capital expenditures to remain competitive or which reduce demand or prices for ethanol would have a material adverse effect on the results of our ethanol operations. In addition, alternative fuels, additives and oxygenates are continually under development.
In addition, decreased overall economic activity could also lead to reduced gasoline consumption. 11 In addition, because ethanol production produces distillers grains and distillers corn oil as by-products, increased ethanol production will also lead to increased supplies of distillers grains and distillers corn oil.
In addition, because ethanol production produces distillers grains and distillers corn oil as by-products, increased ethanol production will also lead to increased supplies of distillers grains and distillers corn oil.
In addition, alternative fuels, additives and oxygenates are continually under development. Alternative fuel additives that can replace ethanol may be developed, which may decrease the demand for ethanol. It is also possible that technological advances in engine and exhaust system design and performance could reduce the use of oxygenates, which would lower the demand for ethanol.
Alternative fuel additives that can replace ethanol may be developed, which may decrease the demand for ethanol. It is also possible that technological advances in engine and exhaust system design and performance could reduce the use of oxygenates, which would lower the demand for ethanol. Reduced demand for ethanol could cause our results of operations to be materially adversely affected.
The EPA has set conventional renewable fuel volumes of 15.0 billion gallons for 2023 through 2025 Additionally, for 2023, the EPA restored 250 million gallons previously waived. Obligated parties use RINs to show compliance with RFS-mandated volumes.
The EPA has set conventional renewable fuel volumes of 15.0 billion gallons for 2023 through 2025 Additionally, for 2023, the EPA restored 250 million gallons previously waived.
The price of ethanol and distillers grains may decline as a result of trade restrictions or duties on ethanol and distillers grains exports from the United States or from unfavorable foreign currency exchange rates.
The price of ethanol and distillers grains may decline as a result of trade restrictions, duties or tariffs on ethanol and distillers grains exports from the United States or from unfavorable foreign currency exchange rates. Ethanol and other products that we produce are sold into various other countries with trade agreements with the United States.
According to the RFA, domestic ethanol production capacity is approximately 18.0 billion gallons per year. Under RFS II, there were mandated volumes through 2022 for conventional and advanced biofuels. After 2022, RFS volumes are to be determined by the EPA in coordination with the Secretaries of Energy and Agriculture.
Under RFS II, there were mandated volumes through 2022 for conventional and advanced biofuels. After 2022, RFS volumes are to be determined by the EPA in coordination with the Secretaries of Energy and Agriculture. The EPA has set conventional renewable fuel volumes of 15.0 billion gallons for 2023 through 2025.
In recent years, automobile manufactures have lowered the production of FFVs for the U.S. Any change in CAFE preferences could reduce the growth of E-85 markets and result in lower ethanol prices.
High blend ethanol fuels such as E-85 result 13 in lower fuel efficiencies. Absent the CAFE preferences, car makers would not likely build flexible-fuel vehicles. In recent years, automobile manufactures have lowered the production of FFVs for the U.S. Any change in CAFE preferences could reduce the growth of E-85 markets and result in lower ethanol prices.
In 2023 and 2022, the industry produced approximately 15.6 and 15.4 billion gallons, respectively, with the reduction from the peak year reflecting industry conditions and reduced demand. Thus, there have been significant changes in the supply and demand of ethanol over a relatively short period of time which could lead to difficulty in maintaining profitable operations at our ethanol plants.
Thus, there have been significant changes in the supply and demand of ethanol over a relatively short period of time which could lead to difficulty in maintaining profitable operations at our ethanol plants.
There are limited markets for ethanol other than what is federally mandated. Increased consumer acceptance of E15 and E85 fuel is likely necessary in order for ethanol to achieve significant market share growth beyond federal mandate levels. Consumer demand for gasoline may be impacted by emerging transportation trends, such as hybrid and electric vehicles.
Increased consumer acceptance of E15 and E85 fuel is likely necessary in order for ethanol to achieve significant market share growth beyond federal mandate levels. 11 Consumer demand for gasoline may be impacted by emerging transportation trends, such as hybrid and electric vehicles. Numerous automobile manufacturers have announced plans to phase out internal combustion engine production by the mid-2030s.
We cannot predict when, or if, new technologies may become available, the rate of acceptance of new technologies by competitors or the costs associated with new technologies.
We cannot predict when, or if, new technologies may become available, the rate of acceptance of new technologies by competitors or the costs associated with new technologies. In addition, advances in the development of alternatives to ethanol could significantly reduce demand for or eliminate the need for ethanol.
If one or more of these events do occur, our results of operations, financial condition or cash flows could be materially adversely affected. In this instance, the trading price of REX stock could decline, and investors might lose all or part of their investment.
If one or more of these events do occur, our results of operations, financial condition or cash flows could be materially adversely affected.
Global climate change continues to receive significant attention from the public and the scientific community concerning the impacts from human activity, particularly the impact of greenhouse gas emissions, such as those from carbon dioxide and methane. The current federal administration’s focus on environmental issues has added pressure to take action domestically where there was already a heavier focus internationally.
Global climate change continues to receive significant attention from the public and the scientific community concerning the impacts from human activity, particularly the impact of greenhouse gas emissions, such as those from carbon dioxide and methane. Added requirements to reduce greenhouse gas emissions may increase our production costs.
Numerous automobile manufacturers have announced plans to phase out internal combustion engine production by the mid-2030s. There also have been pledges to ban the sale of internal combustion engines in countries such as Japan and the United Kingdom by 2035, as well as a statewide ban in California, which several states are imitating.
There also have been pledges to ban the sale of internal combustion engines in countries such as Japan and the United Kingdom by 2035, as well as a statewide ban in California, which several states are imitating. If realized, these bans would accelerate the decline of liquid fuel demand and by extension demand for ethanol, biodiesel and renewable diesel.
The completion and start-up of this project requires numerous government and landowner approvals. If we are not successful in obtaining all these approvals, we may not be able to complete this project and could result in a significant write off of our commitments and investments.
If we are not successful in obtaining all these approvals, we may not be able to complete this project and could result in a significant write off of our commitments and investment, which totals approximately $55.7 million as of our most recent year-end. Recent delays in permitting could result in increased costs to complete the project.
A decline in the price of distillers grains or distillers corn oil could have a material adverse effect on the results of our business, financial condition, and results of operations.
A decline in the price of distillers grains or distillers corn oil could have a material adverse effect on the results of our business, financial condition, and results of operations. Future demand for ethanol is uncertain and changes in overall consumer demand for transportation fuel could affect demand. There are limited markets for ethanol other than what is federally mandated.
As a result, inflation and higher prices could negatively impact our results of operations. Increased ethanol production or decreases in demand for ethanol may result in excess production capacity in the ethanol industry, which may cause the price of ethanol, distillers grains and distillers corn oil to decrease.
Increased ethanol production or decreases in demand for ethanol may result in excess production capacity in the ethanol industry, which may cause the price of ethanol, distillers grains and distillers corn oil to decrease. According to the RFA, domestic ethanol production capacity is approximately 18.3 billion gallons per year.
Our ethanol plants may be adversely affected by technological advances and efforts to anticipate and employ such technological advances may prove unsuccessful. The development and implementation of new technologies may result in a significant reduction in the costs of ethanol production.
The development and implementation of new technologies may result in a significant reduction in the costs of ethanol production.
This could result in material additional income tax payments we would have to make and higher income tax expense in future periods.
We are currently undergoing a federal income examination related to tax credits claimed for the years ended January 31, 2015 through 2022. This could result in material additional income tax payments we would have to make and higher income tax expense in future periods.
If the United States were to withdraw from or materially modify certain international trade agreements, our business, financial condition and results of operations could be materially adversely affected. Ethanol and other products that we produce are sold into various other countries with trade agreements with the United States.
If the United States were to withdraw from or materially modify certain international trade agreements, our business, financial condition and results of operations could be materially adversely affected. In addition, there have been increased threats of tariffs on imports by the current Trump administration.
This may also result in a reduction of available capital funding for potential development projects, further impacting our future financial results. Federal, state and local jurisdictions may challenge our tax return positions. We use significant judgments, estimates and interpretation and application of complex tax laws in preparing the tax returns we file, and the positions contained therein.
Federal, state and local jurisdictions may challenge our tax return positions. We use significant judgments, estimates and interpretation and application of complex tax laws in preparing the tax returns we file, and the positions contained therein. We believe that our tax return positions are fully supportable. However, certain positions may be successfully challenged by federal, state and local jurisdictions.
In 2023 and 2022, an estimated 10.8 and 11.4 million metric tons, respectively, of distillers grains were exported, which represented approximately 34% of U.S production each year. If producers and exporters of ethanol and distillers grains are subject to trade restrictions, or additional duties are imposed on exports, it may make it uneconomical to export these products.
If producers and exporters of ethanol and distillers grains are subjected to trade restrictions, or additional duties or tariffs are imposed on U.S. exports, particularly by Canada and Mexico, it may make it uneconomical to export these products.
If realized, these bans would accelerate the decline of liquid fuel demand and by extension demand for ethanol, biodiesel and renewable diesel. Recent federal legislation seeks to address the ever-increasing demand for electric vehicle infrastructure. Reduced demand for ethanol could cause our results of operations to be materially impacted.
Recent federal legislation seeks to address the ever-increasing demand for electric vehicle infrastructure. Reduced demand for ethanol could cause our results of operations to be materially impacted. We may not successfully develop our planned carbon sequestration facility near the One Earth Energy ethanol plant.
Our ability to avoid write-offs in connection with this investment is subject to various risks and uncertainties. These include, but are not limited to, the risks and uncertainties as set forth below. Availability of the tax credits under IRC Section 45.
Risks Related to our Refined Coal Operations We believe our refined coal production company qualified to earn tax credits under IRC Section 45 through November 18, 2021. Although this operation has ceased, it remains subject to various risks and uncertainties. These include, but are not limited to, the risks and uncertainties as set forth below.
If tariffs were raised on the foreign-sourced goods that lead to retaliatory actions, it could have material adverse effect on our business, financial condition and results of operations. The United States exported an estimated 1.4 billion gallons of ethanol in 2023, up from approximately 1.3 and approximately 1.2 billion gallons in 2022 and 2021, respectively.
If tariffs lead to retaliatory actions by countries that are markets for our products, it could have material adverse effect on our business, financial condition and results of operations.
In addition, failure to adequately manage the risks associated with additional ethanol investments could have a material adverse effect on our business. We may not successfully develop our planned carbon sequestration facility near the One Earth Energy ethanol plant. The Company has committed significant time and resources towards a carbon sequestration project near the One Earth Energy ethanol plant.
In addition, failure to adequately manage the risks associated with additional ethanol investments could have a material adverse effect on our business. 12 Our ethanol plants may be adversely affected by technological advances and efforts to anticipate and employ such technological advances may prove unsuccessful.
Removed
In recent years, the EPA had largely denied small refiner waivers. However, on November 22, 2023, the Fifth U.S. Circuit Court of Appeals (the “Court”) ruled against the EPA on six SREs the EPA had previously denied.
Added
In this instance, the trading price of REX stock could decline, and investors might lose all or part of their investment. 8 Risks Related to our Ethanol and By-Products Business The ethanol industry is changing rapidly which could result in unexpected developments that could negatively impact our operations.
Removed
The Court remanded those six petitions back to the EPA and each refinery will continue to operate under temporary SREs granted to them by the Court. These and further SREs could lead to decreased RIN values and ethanol pricing.
Added
As a result, inflation and higher prices could negatively impact our results of operations. 10 We are currently working on carbon sequestration and plant expansion projects at the One Earth plant. We have experienced permitting delays which could lead to inflationary pricing increases on the construction.
Removed
Flexible fuel vehicles (“FFVs”) receive preferential treatment in meeting federally mandated corporate average fuel economy (“CAFE”) standards for automobiles manufactured by car makers. High blend ethanol fuels such as E-85 result in lower fuel efficiencies. Absent the CAFE preferences, car makers would not likely build flexible-fuel vehicles.
Added
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. 36% of the 2024 exports of ethanol were sold in Canada.
Removed
We idled our NuGen and One Earth ethanol plants for portions of fiscal year 2020, largely due to the impact of the pandemic. Risks Related to our Refined Coal Operations We believe our refined coal production company qualified to earn tax credits under IRC Section 45 through November 18, 2021.
Added
Further, in 2024 and 2023, an estimated 12.2 and 10.8 million metric tons, respectively, of distillers grains were exported by the United States, which represented approximately 37% and 34% in 2024 and 2023, respectively, of U.S production. Of the total United States exports of distillers grains in 2024, 21% were exported to Mexico.
Removed
We will have to generate taxable income to utilize the Section 45 federal production tax credits. If we do not generate sufficient taxable income to utilize the tax credits earned by our refined coal operation, we could incur write-offs of the related tax attributes which could adversely affect our results of operations and financial condition. We used patented technology.
Added
The Company has committed significant time and resources towards a carbon sequestration project near the One Earth Energy ethanol plant. The completion and start-up of this project requires numerous government approvals.
Removed
International, national, and local regulations are likely to increase in the coming years. Added requirements to reduce greenhouse gas emissions may increase our production costs. In addition, legislation promoting alternatives to combustion engine vehicles could reduce the demand for our products.
Added
In July 2024, the governor of Illinois signed the Safety and Aid for the Environment in Carbon Capture and Sequestration Act. This legislation imposes additional safety, environmental and other requirements on obtaining permits and approvals for carbon capture and sequestration facilities in Illinois, including CO2 pipelines.
Removed
Incremental to legislative and regulatory pressure, institutional investors have continued to adopt environmental, social and governance guidelines (ESG).
Added
Further, the 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 Pipeline and Hazardous Materials Safety Administration (PHMSA) or, subject to certain other conditions, July 1, 2026.
Removed
Some investors, including certain public and private fund management firms, pension funds, university endowments and family offices, have in recent years, begun adding stated policies to reduce or eliminate fossil fuel equities and encouraging additional consideration of ESG practices in a manner that could negatively impact our stock price.
Added
As a result of this legislation, the ICC dismissed our pipeline application without prejudice, and we will be required to resubmit an application after rules are finalized or subsequent to July 1, 2026. The delays and additional requirements imposed as a result of this act could have an adverse impact on the cost and completion of our project.
Removed
We believe that our tax return positions are fully supportable. However, certain positions may be successfully challenged by federal, state and local jurisdictions. We are currently undergoing a federal income examination related to tax credits claimed for the years ended January 31, 2015 through 2022.
Added
There is currently legislation being debated in the Illinois General Assembly that would, if eventually enacted, ban carbon sequestration projects if they overlie, underlie, or pass through as sole-source aquifer, including the aquifer’s upstream areas that are part of the project review area, as identified by the U.S. EPA.
Added
The first well for our proposed carbon sequestration project is located inside, but near the edge of, the Mahomet Sole Source Aquifer Project Review Area, within the Sangamon River near Fisher Upstream Area.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhile we have taken what we believe are appropriate precautions to protect our systems, and to date, we have not experienced any material adverse events related to a security breach or cyber-attack, the failure of these systems to operate effectively, the failure of our personnel to follow established procedures, problems with transitioning to upgraded or replacement systems, or a breach in security of these systems through a cyber-attack or otherwise could cause delays and/or interruptions in plant operations, product sales, reduced efficiency of our operations and delays in reporting our financial results.
Biggest changeWhile we have taken what we believe are appropriate precautions to protect our systems, and to date, we have not experienced any material adverse events related to a security breach or cyber-attack, the failure of these systems to operate effectively, the failure of our personnel to follow established procedures, problems with transitioning to upgraded or replacement systems, or a breach in security of these systems 19 through a cyber-attack or otherwise could cause delays and/or interruptions in plant operations, product sales, reduced efficiency of our operations and delays in reporting our financial results.
The audit committee will report any significant matters to the Board of Directors. As of January 31, 2024, we had not identified an indication of a cybersecurity incident that would have a material impact on our business and consolidated financial statements.
The audit committee will report any significant matters to the Board of Directors. As of January 31, 2025, we had not identified an indication of a cybersecurity incident that would have a material impact on our business and consolidated financial statements.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. 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. 22
Biggest changeItem 3. 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 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeRose had served as our Chairman of the Board and Chief Executive Officer since our incorporation in 1984 as a holding company. Prior to 1984, Mr. Rose was Chairman of the Board and Chief Executive Officer of Rex Radio and Television, Inc., which he founded in 1980 to acquire the stock of a corporation which operated four retail stores.
Biggest changeRose was Chairman of the Board and Chief Executive Officer of Rex Radio and Television, Inc., which he founded in 1980 to acquire the stock of a corporation which operated four retail stores. 20 Zafar Rizvi was elected Chief Executive Officer in 2015. Mr.
Zafar Rizvi was elected Chief Executive Officer in 2015. Mr. Rizvi has been our President and Chief Operating Officer since 2010, was Vice President from 2006 to 2010. From 1991 to 2006, Mr. Rizvi was our Vice President – Loss Prevention. Douglas Bruggeman has been our Vice President–Finance and Treasurer since 1989 and was elected Chief Financial Officer in 2003.
Rizvi has been our President and Chief Operating Officer since 2010, was Vice President from 2006 to 2010, and from 1991 to 2006, Mr. Rizvi was our Vice President – Loss Prevention. Douglas Bruggeman has been our Vice President–Finance and Treasurer since 1989 and was elected Chief Financial Officer in 2003. From 1987 to 1989, Mr.
Name Age Position Stuart Rose 69 Executive Chairman of the Board* Zafar Rizvi 74 Chief Executive Officer and President* Douglas Bruggeman 63 Vice President-Finance, Chief Financial Officer and Treasurer Edward Kress 74 Secretary* *Also serves as a director. Stuart Rose was elected our Executive Chairman of the Board in 2015. Mr.
Name Age Position Stuart Rose 70 Executive Chairman of the Board* Zafar Rizvi 75 Chief Executive Officer and President* Douglas Bruggeman 64 Vice President-Finance, Chief Financial Officer and Treasurer Edward Kress 75 Secretary* *Also serves as a director. Stuart Rose was elected our Executive Chairman of the Board in 2015. Mr.
From 1987 to 1989, Mr. Bruggeman was our Manager of Corporate Accounting. Mr. Bruggeman was employed with the accounting firm of Ernst & Young prior to joining us in 1986. Edward Kress has been our Secretary since 1984. Mr.
Bruggeman was our Manager of Corporate Accounting. Mr. Bruggeman was employed with the accounting firm of Ernst & Young prior to joining us in 1986. Edward Kress has been our Secretary since 1984. Mr. Kress has been a partner of the law firm of Dinsmore & Shohl LLP (formerly Chernesky, Heyman & Kress P.L.L.), our legal counsel, since 1988. Mr.
Kress has been a partner of the law firm of Dinsmore & Shohl LLP (formerly Chernesky, Heyman & Kress P.L.L.), our legal counsel, since 1988. Mr. Kress has practiced law in Dayton, Ohio since 1974. PART II
Kress has practiced law in Dayton, Ohio since 1974. PART II
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Rose had served as our Chairman of the Board and Chief Executive Officer since our incorporation in 1984 as a holding company. Prior to 1984, Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividend Policy The Company has no history of paying cash dividends on our common stock. 23 Issuer Purchases of Equity Securities On August 31, 2021, our Board of Directors increased our share repurchase authorization by an additional 1,500,000 shares (split-adjusted). At January 31, 2024, a total of 876,786 shares remained available to purchase under this authorization.
Biggest changeIssuer Purchases of Equity Securities 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) November 1-30, 2024 - $ - - 876,786 December 1-31, 2024 134,843 41.01 134,843 741,943 January 1-31, 2025 237,724 42.03 237,724 504,219 Total 372,567 $ 41.66 372,567 504,219 (1) On August 31, 2021, our Board of Directors increased our share repurchase authorization by an additional 1,500,000 shares (split-adjusted).
Performance Graph The following graph compares the yearly percentage change in the cumulative total shareholder return on our Common Stock against the cumulative total return of the S&P 500 Stock Index and a peer group comprised of Alto Ingredients, Inc. and Green Plains, Inc. for the period commencing January 31, 2019 and ended January 31, 2024.
Performance Graph The following graph compares the yearly percentage change in the cumulative total shareholder return on our Common Stock against the cumulative total return of the S&P 500 Stock Index and a peer group comprised of Alto Ingredients, Inc. and Green Plains, Inc. for the period commencing January 31, 2020 and ended January 31, 2025.
The graph assumes an investment of $100 in our Common Stock and each index on January 31, 2019 and reinvestment of all dividends. Comparison of 5 Year Cumulative Total Return Assumes Initial Investment of $100 January 2024
The graph assumes an investment of $100 in our Common Stock and each index on January 31, 2020 and reinvestment of all dividends.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Shareholder Information Our common stock is traded on the New York Stock Exchange under the symbol REX. As of March 28, 2024, there were 70 holders of record of our common stock, including shares held in nominee or street name by brokers.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Shareholder Information Our common stock is traded on the New York Stock Exchange under the symbol REX.
There were no share repurchases in the fourth quarter of fiscal year 2023. Equity Compensation Plans Refer to Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for information regarding shares authorized for issuance under equity compensation plans.
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. 21 Equity Compensation Plans Refer to Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for information regarding shares authorized for issuance under equity compensation plans.
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As of March 27, 2025, there were 62 holders of record of our common stock, including shares held in nominee or street name by brokers which, in turn, hold shares of stock for numerous beneficial owners. Dividend Policy The Company has no history of paying cash dividends on our common stock.
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At January 31, 2025, a total of 504,219 shares remained available to purchase under this authorization. Subsequent to January 31, 2025 the Company repurchased 281,709 shares for approximately $11.9 million through open market transactions. After these repurchases, a total of 222,510 shares remained available to purchase under existing board authorization.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeShould these trends and uncertainties continue, our future operating results could be impacted. 27 Results of Operations The following table summarizes our results from operations (amounts in thousands): Fiscal Year 2023 2022 Net sales and revenue $ 833,384 $ 855,000 Cost of sales 735,166 806,398 Gross profit $ 98,218 $ 48,602 Income before income taxes $ 98,484 $ 47,479 Provision for income taxes $ (22,560) $ (9,542) Net income attributable to REX common shareholders $ 60,935 $ 27,697 The following table summarizes net sales and revenue by product group (amounts in thousands): Fiscal Year 2023 2022 Ethanol $ 635,420 $ 649,501 Dried distillers grains 139,173 139,118 Distillers corn oil 52,935 55,595 Modified distillers grains 5,584 11,579 Derivative financial instruments losses (37) (1,024) Other 309 231 Total $ 833,384 $ 855,000 The following table summarizes selected operating data: Fiscal Year 2023 2022 Average selling price per gallon of ethanol (net of hedging) $ 2.22 $ 2.44 Gallons of ethanol sold (in millions) 285.9 265.8 Average selling price per ton of dried distillers grains $ 213.55 $ 232.98 Tons of dried distillers grains sold 651,698 597,126 Average selling price per pound of distillers corn oil $ 0.60 $ 0.71 Pounds of distillers corn oil sold (in millions) 87.5 77.8 Average selling price per ton of modified distillers grains $ 103.54 $ 123.66 Tons of modified distillers grains sold 53,936 93,637 28 Comparison of Fiscal Years 2023 and 2022 (Consolidated Results) Net Sales and Revenue – Net sales and revenue in fiscal year 2023 decreased approximately 3% compared to fiscal year 2022.
Biggest changeShould these trends and uncertainties continue, our future operating results could be impacted. 26 Results of Operations The following table summarizes our results from operations (amounts in thousands): Fiscal Year 2024 2023 Net sales and revenue $ 642,491 $ 833,384 Cost of sales 551,014 735,166 Gross profit $ 91,477 $ 98,218 Income before income taxes $ 92,872 $ 98,484 Provision for income taxes $ (21,386) $ (22,560) Net income attributable to REX common shareholders $ 58,167 $ 60,935 The following table summarizes net sales and revenue by product group (amounts in thousands): Fiscal Year 2024 2023 Ethanol $ 496,411 $ 635,420 Dried distillers grains 101,432 139,173 Distillers corn oil 38,999 52,935 Modified distillers grains 4,896 5,584 Derivative financial instruments gains (losses) 424 (37) Other 329 309 Total $ 642,491 $ 833,384 The following table summarizes selected operating data: Fiscal Year 2024 2023 Average selling price per gallon of ethanol (net of hedging) $ 1.71 $ 2.22 Gallons of ethanol sold (in millions) 289.7 285.9 Average selling price per ton of dried distillers grains $ 160.37 $ 213.55 Tons of dried distillers grains sold 632,469 651,698 Average selling price per pound of distillers corn oil $ 0.44 $ 0.60 Pounds of distillers corn oil sold (in millions) 88.1 87.5 Average selling price per ton of modified distillers grains $ 69.93 $ 103.54 Tons of modified distillers grains sold 70,013 53,936 Comparison of Fiscal Years 2024 and 2023 (Consolidated Results) Net Sales and Revenue – Ethanol and distillers corn oil quantities were relatively consistent between periods.
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.
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 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, and international disruptions caused by wars or conflicts.
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.
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 22 higher corn prices or lower ethanol or distillers grains prices, reduce the overall margin structure at the plants.
As a result of the relatively short period of time our fixed price contracts cover, we generally 29 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 swaps, in conjunction with our grain procurement and commodity marketing activities.
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. We utilize derivative financial instruments, primarily exchange traded commodity future contracts and swaps, in conjunction with our grain procurement and commodity marketing activities.
Big River paid dividends to REX of approximately $12.0 million during fiscal year 2023. Accounts receivable decreased approximately $2.0 million, primarily a result of the timing of products shipped and the receipt of 31 customer payments at One Earth and NuGen.
Big River paid dividends to REX of approximately $12.0 million during fiscal year 2023. Accounts receivable decreased approximately $2.0 million, primarily a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen.
However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. Further, if different assumptions, judgments and estimates had been used, the results could have been different and such differences could be material.
However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences 31 could be material. Further, if different assumptions, judgments and estimates had been used, the results could have been different and such differences could be material.
During fiscal year 2023, operating cash flow was provided by net income from continuing operations of approximately $75.9 million and adjustments of approximately $20.2 million, which consisted of depreciation, amortization of operating lease right-of-use assets, stock-based compensation expense, income from equity method investments, interest income from investments, loss on sale of property and equipment, and the deferred income tax provision.
During fiscal year 2023, operating cash flow was provided by net income of approximately $75.9 million and adjustments of approximately $20.2 million, which consisted of depreciation, amortization of operating lease right-of-use assets, stock-based compensation expense, income from equity method investments, interest income from investments, loss on sale of property and equipment, and the deferred income tax provision.
Comparison of Fiscal Years 2022 and 2021 See “Item 7 Management’s discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended January 31, 2023. Liquidity and Capital Resources Our primary sources of cash have been income from operations.
Comparison of Fiscal Years 2023 and 2022 See “Item 7 Management’s discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended January 31, 2024. Liquidity and Capital Resources Our primary sources of cash have been income from operations.
Changes in our current estimates for factors such as unanticipated market conditions and legislative developments could have a material effect on our ability to utilize deferred tax assets. New Accounting Pronouncements For information related to recent accounting pronouncements, see Note 1 of the Notes to the Consolidated Financial Statements. 34
Changes in our current estimates for factors such as unanticipated market conditions and legislative developments could have a material effect on our ability to utilize deferred tax assets. New Accounting Pronouncements For information related to recent accounting pronouncements, see Note 1 of the Notes to the Consolidated Financial Statements. 32
We recorded no impairment charges in fiscal years 2023, 2022, and 2021. Income Taxes – Income taxes are recorded based on the current year amounts payable or refundable, as well as the consequences of events that give rise to deferred tax assets and liabilities based on differences in how those events are treated for tax purposes, net of valuation allowances.
We recorded no impairment charges in fiscal year 2024, 2023, or 2022. Income Taxes – Income taxes are recorded based on the current year amounts payable or refundable, as well as the consequences of events that give rise to deferred tax assets and liabilities based on differences in how those events are treated for tax purposes, net of valuation allowances.
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 sustainable aviation fuel; (c) funding biofuel refueling infrastructure which could impact the availability of higher level ethanol blended fuel; and (d) providing 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.
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 25 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.
NuGen Energy, LLC, our majority owned ethanol plant in Marion, South Dakota, signed an agreement to be part of Summit Carbon Solutions’ carbon capture and storage pipeline.
In May 2023, NuGen Energy, LLC, our majority owned ethanol plant in Marion, South Dakota, signed an agreement to be part of Summit Carbon Solutions’ carbon capture and storage pipeline.
Burlington, IA Galva, IL Dyersville, IA Boyceville, WI 10.3% 10.3% 5.7% 10.3% The three entities own a total of six ethanol production facilities, which in aggregate shipped approximately 716 million gallons of ethanol over the twelve-month period ended January 31, 2024.
Burlington, IA Galva, IL Dyersville, IA Boyceville, WI 10.3% 10.3% 5.7% 10.3% The three entities own a total of six ethanol production facilities, which in aggregate shipped approximately 727 million gallons of ethanol over the twelve-month period ended January 31, 2025.
Accrued expenses and other liabilities decreased approximately $2.8 million, which was primarily a result of operating lease payments of approximately $5.0 million partially offset by an increase in accrued income taxes of approximately $2.0 million.
Accrued expenses and other liabilities decreased approximately $4.5 million, which was primarily a result of operating lease payments of approximately $5.4 million and a decrease in accrued income taxes of $2.0 million, partially offset by an increase in accrued payroll of approximately $3.8 million.
The Inflation Reduction Act of 2022 will likely impact our business by creating a new Clean Fuel Production Credit, section 45Z of the Internal Revenue Code (“45Z”), available for years 2025 to 2027. The Clean Fuel Production Credit is established at approximately $0.02 per ethanol gallon per CI point reduction below a 50 CI score threshold.
The IRA may impact our business by creating a new Clean Fuel Production Credit, section 45Z of the Internal Revenue Code (“45Z”), available for years 2025 to 2027. The Clean Fuel Production Credit is established at approximately $0.02 per ethanol gallon per CI point reduction below a 50 CI score threshold.
Equity in Income of Unconsolidated Ethanol Affiliates – During fiscal years 2023 and 2022, we recognized income of approximately $13.9 million and $8.7 million, respectively, from our equity investment in Big River Resources, LLC (“Big River”).
Equity in Income of Unconsolidated Ethanol Affiliates – During fiscal years 2024 and 2023, we recognized income of approximately $9.4 million and $13.9 million, respectively, from our equity investment in Big River Resources, LLC (“Big River”).
Losses on derivative financial instruments were insignificant during fiscal year 2023, compared to losses of $1.0 million in fiscal year 2022. Losses are related to our risk management activities and were impacted by the price movements and types of contracts entered into at one of our consolidated ethanol plants.
Gains on derivative financial instruments were $0.4 million in fiscal year 2024, compared to insignificant losses in fiscal year 2023. Gains and losses are related to our risk management activities and were impacted by the price movements and types of contracts entered into at our consolidated ethanol plants.
Approximately 2.2% of our net assets are restricted pursuant to the terms of various loan agreements of Big River, our equity method investee, as of January 31, 2024. None of our consolidated subsidiaries or the parent company has restricted net assets at January 31, 2024.
Approximately 2.7% of our net assets are restricted pursuant to the terms of various loan agreements of Big River, our equity method investee, as of January 31, 2025. None of our consolidated subsidiaries or the parent company have restricted net assets related to loan agreements at January 31, 2025.
As of January 31, 2024, we had contracted future purchases of corn, natural gas, natural gas pipeline lease and other contracts for capital expenditures at our ethanol plants valued at approximately $126.3 million, with $123.0 million payable in the next twelve months. Refer to Note 11 – Commitments included in the notes to consolidated financial statements for more information.
As of January 31, 2025, we had contracted future purchases of corn, natural gas, natural gas pipeline lease and other contracts for capital expenditures at our ethanol plants valued at approximately $131.7 million, with $124.4 million payable in the next twelve months. Refer to Note 11 – Commitments included in the notes to consolidated financial statements for more information.
Aggregate minimum lease payments under the operating lease agreements for future fiscal years as of January 31, 2024 totaled $14.7 million, with $5.1 million payable in the next twelve months. Refer to Note 7 – Leases included in the notes to consolidated financial statements for more information.
Aggregate minimum lease payments under the operating lease agreements for future fiscal years as of January 31, 2025 totaled $24.0 million, with $6.8 million payable in the next twelve months. Refer to Note 7 – Leases included in the notes to consolidated financial statements for more information.
Big River paid dividends to REX of approximately $6.3 million during fiscal year 2022. Accounts receivable decreased approximately $0.7 million, primarily a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen.
Big River paid dividends to REX of approximately $8.5 million during fiscal year 2024. Accounts receivable decreased approximately $1.7 million, primarily a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen.
Income Before Income Taxes – As a result of the foregoing, income before income taxes was approximately $98.5 million for fiscal year 2023 versus approximately $47.5 million for fiscal year 2022. Provision for Income Taxes – Our effective tax rate was a provision of 22.9% and 20.1% for fiscal years 2023 and 2022, respectively.
Income Before Income Taxes – As a result of the foregoing, income before income taxes was approximately $92.9 million for fiscal year 2024 versus approximately $98.5 million for fiscal year 2023. Provision for Income Taxes – Our effective tax rate was a provision of 23.0% and 22.9% for fiscal years 2024 and 2023, respectively.
During fiscal year 2023, we used cash of approximately $448.5 million for purchases of short-term investments and received cash of approximately $514.6 million related to the maturity of these types of these investments. Net cash used in investing activities was approximately $198.5 million during fiscal year 2022.
During fiscal year 2023, we used cash of approximately $448.5 million for purchases of short-term investments and received cash of approximately $514.6 million related to the maturity of these types of these investments. Financing Activities – Net cash used in financing activities was approximately $18.5 million during fiscal year 2024 compared to approximately $4.3 million for fiscal year 2023.
REX’s effective ownership of gallons shipped, for the twelve-month period ended January 31, 2024, by the ethanol production facilities in which we have ownership interests was approximately 290 million gallons. 26 Trends and Uncertainties Renewable Fuel Standard II (“RFS II”), established in October 2010, has been an important factor in the growth of ethanol usage in the United States.
REX’s effective ownership of ethanol gallons shipped for the twelve-month period ended January 31, 2025, was approximately 294 million gallons. Trends and Uncertainties Renewable Fuel Standard II (“RFS II”), established in October 2010, has been an important factor in the growth of ethanol usage in the United States.
Investing Activities – Net cash provided by investing activities was approximately $28.4 million during fiscal year 2023 compared to net cash used in investing activities of approximately $198.5 million during fiscal year 2022.
Investing Activities – Net cash used in investing activities was approximately $72.9 million during fiscal year 2024 compared to net cash provided by investing activities of approximately $28.4 million during fiscal year 2023.
The two largest drivers of ethanol profitability are corn and ethanol pricing, both of which experienced significant volatility within the year. Chicago Board of Trade corn prices per bushel ranged from a low of $4.40 in January 2024 to a high of $6.85 25 in February 2023.
The two largest drivers of ethanol profitability are corn and ethanol pricing, both of which experienced significant volatility within the year. Chicago Board of Trade corn prices per bushel ranged from a low of $3.62 in August 2024 to a high of $4.97 in January 2025.
Operating Activities – Net cash provided by operating activities was approximately $128.0 million for fiscal year 2023 compared to approximately $54.8 million in fiscal year 2022.
Operating Activities – Net cash provided by operating activities was approximately $64.2 million for fiscal year 2024 compared to approximately $128.0 million in fiscal year 2023.
Simon Sandstone was encountered, which is the geological formation that is the region’s primary carbon storage resource. Three-dimensional seismic testing has been performed, as well as geological modeling for predicting the movement of injected carbon and the plume area to determine maximum injection pressure, reservoir quality and storage capacity for the potential wells.
Three-dimensional seismic testing has been performed, as well as geological modeling for predicting the movement of injected carbon and the plume area to determine maximum injection pressure, reservoir quality and storage capacity for the potential wells.
Selling, General and Administrative (“SG&A”) Expenses – SG&A expenses for fiscal year 2023 were approximately $29.4 million (3.5% of net sales and revenue), an increase of approximately $6.6 million or 29% from approximately $22.8 million (2.7% of net sales and revenue) for fiscal year 2022.
Selling, General and Administrative (“SG&A”) Expenses – SG&A expenses for fiscal year 2024 were approximately $27.1 million (4.2% of net sales and revenue), a decrease of approximately $2.2 million or 8% from approximately $29.4 million (3.5% of net sales and revenue) for fiscal year 2023.
The following table is a summary of our ethanol entity ownership interests at January 31, 2024: Entity Location REX's Current Ownership Interest One Earth Energy, LLC Gibson City, IL 75.8% 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.
We are invested in three entities as of January 31, 2025, utilizing equity investments. 24 The following table is a summary of our ethanol entity ownership interests at January 31, 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.
Ethanol Investments In fiscal year 2006, we entered the ethanol industry by investing in several entities organized to construct and subsequently operate ethanol producing plants. We are invested in three entities as of January 31, 2024, utilizing equity investments.
Ethanol Investments In fiscal year 2006, we entered the ethanol industry by investing in several entities organized to construct and subsequently operate ethanol producing plants.
During fiscal year 2022, operating cash flow was provided by net income from continuing operations of approximately $37.9 million and adjustments of approximately $14.6 million, which consisted of depreciation, amortization of operating lease right-of-use assets, stock-based compensation expense, income from equity method investments, interest income from investments, and the deferred income tax provision.
During fiscal year 2024, operating cash flow was provided by net income of approximately $71.5 million and adjustments of approximately $20.2 million, which consisted of depreciation, amortization of operating lease right-of-use assets, stock-based compensation expense, income from equity method investments, interest income from investments, loss on sale of property and equipment, and the deferred income tax provision.
The decrease in the dried distillers grains selling price resulted primarily from a decrease in corn prices as dried distillers grains prices often correlate with corn pricing. The increase in tons sold was a result of increased ethanol production during fiscal year 2023.
The decrease in the dried distillers grains selling price resulted primarily from a decrease in corn prices as dried distillers grains prices often correlate with corn pricing. The decrease in tons sold was offset by an increase in tons of modified distillers grains sold.
The EPA has not granted any small refinery waivers for 2019-2022 and has continued that stance in the proposed volumes for 2023-2025. There remain multiple ongoing legal challenges on how the EPA has handled the small refinery waivers, including on November 22, 2023, the Fifth U.S.
The EPA has not granted any small refinery waivers for 2019-2022 and has continued that stance in the proposed volumes for 2023-2025. 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.
Cost of Sales – Cost of sales for fiscal year 2023 decreased approximately $71.2 million, or 9%, over fiscal year 2022. Corn accounted for approximately 80% ($584.2 million) of our cost of sales during fiscal year 2023 compared to approximately 83% ($667.3 million) during fiscal year 2022.
Cost of Sales – Cost of sales for fiscal year 2024 decreased approximately $184.2 million, or 25%, over fiscal year 2023. Corn accounted for approximately 76% ($416.4 million) of our cost of sales during fiscal year 2024 compared to approximately 80% ($584.2 million) during fiscal year 2023.
Accrued expenses and other liabilities decreased approximately $4.5 million, which was primarily a result of operating lease payments of approximately $5.4 million and a decrease in accrued income taxes of $2.0 million, partially offset by an increase in accrued payroll of approximately $3.8 million. Net cash provided by operating activities was approximately $54.8 million for fiscal year 2022.
Accrued expenses and other liabilities decreased approximately $7.0 million, which was primarily a result of operating lease payments of approximately $5.5 million and a decrease in accrued payroll and related items of $0.4 million, and other decreases of approximately $1.1 million. Net cash provided by operating activities was approximately $128.0 million for fiscal year 2023.
We expect the operating experience of Big River to be generally consistent with the trends in crush spread margins described in the “Overview” section as Big River’s results are dependent on the same key drivers as our other ethanol investments (ethanol, corn, dried distillers grains and natural gas pricing).
Our investment in Big River, which has interests in four ethanol production plants, represents an effective ownership of approximately 39.0 million gallons of ethanol shipped in the trailing twelve months ended January 31, 2025. 28 We expect the operating experience of Big River to be generally consistent with the trends in crush spread margins described in the “Overview” section as Big River’s results are dependent on the same key drivers as our other ethanol investments (ethanol, corn, dried distillers grains and natural gas pricing).
Ethanol sales decreased in fiscal year 2023 compared to fiscal year 2022 as the average price per gallon decreased 9%, offset partially by an increase in gallons sold of 8%. The decrease in ethanol selling price resulted primarily from a decrease in commodity prices.
Ethanol sales decreased in fiscal year 2024 compared to fiscal year 2023 as the average price per gallon decreased 23%, offset partially by an increase in gallons sold of 1%.
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.
As of March 2025, there were 156 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.
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. We began classifying this operation as discontinued operations in the third quarter of fiscal 2021.
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 federal production tax credits received through ownership of this facility, approximately $58.2 million, remain under IRS audit.
Financing Activities – Net cash used in financing activities was approximately $4.3 million during fiscal year 2023 compared to approximately $17.0 million for fiscal year 2022. During fiscal year 2023, we used cash of approximately $4.3 million to pay dividends to noncontrolling members of the entities that own One Earth’s and NuGen’s ethanol plants.
Net cash used in financing activities was approximately $4.3 million during fiscal year 2023, which was used to pay dividends to noncontrolling members of the consolidated entities.
One Earth Energy is currently working on a carbon sequestration project and is expected to have related capital expenditure needs. We expect our equity method investee to limit the payment of dividends based upon their working capital and capital expenditure needs. We are investigating various uses of our excess cash.
We expect that One Earth and NuGen will use a majority of their cash for working capital needs, capital expenditures, general corporate purposes and dividend payments. We expect our equity method investee to limit the payment of dividends based upon their working capital and capital expenditure needs. We are investigating various uses of our excess cash.
S&P Global Platts ethanol pricing per gallon ranged from a low of $1.52 in January 2024 to a high of $2.67 in June 2023. 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.
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.
In October 2022, we applied for a Class VI injection well permit for three wells with the U.S. Environmental Protection Agency (“EPA”). In addition, we have begun construction of a facility to capture, dehydrate, and compress carbon dioxide from the One Earth Energy ethanol plant to a state suitable for sequestration.
In 2022, we began construction of a facility to capture, dehydrate, and compress carbon dioxide from the One Earth Energy ethanol plant to a state suitable for sequestration.
Dried distillers grains sales remained nearly flat for fiscal year 2023 compared to fiscal year 2022, increasing $55,000 year-over-year, as the average price per ton sold decreased 8%, offset by an increase in tons sold of 9%.
Modified distillers grains sales decreased 12% in fiscal year 2024 compared to fiscal year 2023 as the average selling price per ton sold decreased 32%, offset partially by an increase in tons sold of 30%.
During fiscal years 2023 and 2022, our effective tax rate increased 2.2% (approximately $2.2 million) and 1.1% (approximately $0.5 million), respectively, as a result of section 162M compensation limitations. During fiscal year 2022, our effective tax rate decreased 5.4% (approximately $2.5 million) from the statutory rate, as a result of research and experimentation credits from our ethanol plants.
During both fiscal years 2024 and 2023, our effective tax rate increased 2.2% (approximately $2.1 million and $2.2 million, respectively), as a result of section 162M compensation limitations. Net Income – As a result of the foregoing, net income was approximately $71.5 million for fiscal year 2024 versus approximately $75.9 million for fiscal year 2023.
Management believes that the following accounting policies are the most critical to aid in fully understanding and evaluating our reported financial results, and they require management’s most difficult, subjective, or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. 33 Revenue Recognition – We recognize 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.
Management believes that the following accounting policies are the most critical to aid in fully understanding and evaluating our reported financial results, and they require management’s most difficult, subjective, or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.
We reported net income attributable to REX common shareholders of $60.9 million in fiscal 2023 compared to approximately $27.7 million in fiscal 2022. Our ethanol business had increased profits in fiscal 2023 compared to fiscal 2022 as a result of higher crush spreads in fiscal 2023.
We reported net income attributable to REX common shareholders of $58.2 million in fiscal 2024 compared to approximately $60.9 million in fiscal 2023. Our ethanol business had decreased profits in fiscal 2024 compared to fiscal 2023 primarily as a result of lower selling prices, offset partially by a decrease in corn and natural gas prices.
Noncontrolling Interests (continuing operations) – Income attributable to noncontrolling interests (continuing operations) was approximately $15.0 million and $10.2 million during fiscal years 2023 and 2022, respectively, and represents the other owners’ share of the income of NuGen and One Earth. 30 Net Income Attributable to REX Common Shareholders (continuing operations) – As a result of the foregoing, net income attributable to REX common shareholders (continuing operations) was approximately $60.9 million for fiscal year 2023 compared to $27.7 million for fiscal year 2022.
Net income Attributable to Noncontrolling Interests – Income attributable to noncontrolling interests was approximately $13.3 million and $15.0 million during fiscal years 2024 and 2023, respectively, and represents the other owners’ share of the income of NuGen and One Earth.
As of January 31, 2024, we have spent $25.8 million since inception and are contractually committed to spend an additional $22.6 million toward the carbon sequestration project. As of January 31, 2024, we have spent $12.8 million since inception and are contractually committed to spend an additional $12.3 million toward plant capacity expansion and CI scoring reduction efforts.
As of January 31, 2025, we had spent $59.9 million since inception and were contractually committed to spend an additional $8.7 million toward plant capacity expansion and ongoing efforts to reduce our CI scoring.
Gross profit in fiscal year 2023 was 11.8% of net sales and revenue, versus approximately 5.7% of net sales and revenue in fiscal year 2022.
Gross Profit – As a result of the foregoing, gross profit for fiscal year 2024 decreased approximately $6.7 million, or 7%, from fiscal year 2023. Gross profit in fiscal year 2024 was approximately 14.2% of net sales and revenue, versus approximately 11.8% of net sales and revenue in fiscal year 2023.
The increase was primarily related to the increase in performance bonus expense as a result of higher net income in 2023. In addition, the increase was also impacted by restricted stock awards granted to certain executive officers in the second quarter of 2023, which were expensed upon issuance.
The dollar decrease compared to the prior year is primarily related to restricted stock awards granted to certain executive officers in the second quarter of 2023, which were expensed upon issuance.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview We have been an investor in ethanol production facilities beginning in 2006 and were an investor in a refined coal production facility during the period from 2017 through November 2021.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview We have been an investor in ethanol production facilities beginning in 2006. We currently have equity investments in three ethanol production entities, two of which are majority ownership interests.
The natural gas dollar decrease was primarily attributable to a decrease in the cost per unit. Gross Profit – As a result of the foregoing, gross profit for fiscal year 2023 increased approximately $49.6 million, or 102%, over fiscal year 2022.
Natural gas accounted for approximately 4% ($22.6 million) of our cost of sales during fiscal year 2024 compared to approximately 4% ($31.7 million) during fiscal year 2023. The natural gas cost decrease was primarily attributable to a decrease in the cost per unit.
Net Income from Continuing Operations – As a result of the foregoing, net income from continuing operations was approximately $75.9 million for fiscal year 2023 versus approximately $37.9 million for fiscal year 2022.
Net Income Attributable to REX Common Shareholders – As a result of the foregoing, net income attributable to REX common shareholders was approximately $58.2 million for fiscal year 2024 compared to $60.9 million for fiscal year 2023.
We continue to pursue obtaining a county special-use zoning permit. Although we have made meaningful progress and significant investments in this project, we continue to complete required documentation for various government agencies and obtain permits and other approvals with no assurances of ultimate success.
Although we have made meaningful progress and significant investments in the carbon sequestration project at One Earth Energy, 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.
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 Energy ethanol plant. A test well has been drilled to a total depth of approximately 7,100 feet, in which almost 2,000 feet of Mt.
A test well has been drilled to a total depth of approximately 7,100 feet, in which almost 2,000 feet of Mt. Simon Sandstone was encountered, which is the geological formation that is the region’s primary carbon storage resource.
Modified distillers grains sales decreased 52% in fiscal year 2023 compared to fiscal year 2022 as the number of tons sold decreased 42%, coupled with a 16% decrease in the average selling price per ton.
The decrease in ethanol selling price resulted primarily from a decrease in corn prices as the market price for ethanol often correlates with the market price for corn. 27 Dried distillers grains sales decreased in fiscal year 2024 compared to fiscal year 2023, decreasing 27% year-over-year, as the average price per ton sold decreased 25%, as well as a decrease in tons sold of 3%.
During fiscal year 2022, we used cash of approximately $399.4 million for purchases of short-term investments and received cash of approximately $216.7 million related to maturities of these investments as certain of these investments remained outstanding at January 31, 2023.
During fiscal year 2024, we used cash of approximately $372.3 million for purchases of short-term investments and received cash of approximately $370.4 million related to the maturity of these types of these investments. Net cash provided by investing activities was approximately $28.4 million during fiscal year 2023.
Our primary uses of cash have been capital expenditures at our ethanol plants and carbon sequestration project, stock repurchases, payments to noncontrolling interests holders and, in prior years, contributions to fund refined coal operating losses.
Our primary uses of cash have been capital expenditures at our ethanol plants and carbon sequestration project, stock repurchases, and payments to noncontrolling interests holders. Outlook – Our cash and short-term investments balance of approximately $359.1 million at January 31, 2025 included approximately $322.7 million held by One Earth and NuGen.
Interest and Other Income – Interest and other income for fiscal year 2023 was approximately $15.7 million compared to approximately $13.0 million for fiscal year 2022. During the second quarter of 2022, the Company’s consolidated plants received COVID-19 relief grants from the USDA totaling approximately $7.8 million based on reduced production in 2020.
Interest and Other Income – Interest and other income for fiscal year 2024 was approximately $19.2 million compared to approximately $15.7 million for fiscal year 2023. One of our consolidated ethanol plants recognized $1.2 million in patronage income from an investment in a cooperative in the first quarter of 2024.
Capital expenditures in fiscal year 2022 totaled approximately $15.6 million, the majority of which were various projects at One Earth’s and NuGen’s ethanol plants, including approximately $10.6 million related to the carbon sequestration project near the One Earth Energy ethanol plant.
Capital expenditures in fiscal year 2024 totaled approximately $71.3 million, primarily for various capital projects at our consolidated ethanol plants, including $34.9 million for expansion and CI scoring reduction projects at the One Earth 30 facility and $26.6 million for the carbon sequestration project.
Distillers corn oil sales decreased 5% in fiscal year 2023 compared to fiscal year 2022 as the average selling price per pound decreased approximately 15%. The decrease in the distillers corn oil selling price resulted primarily from a decrease in commodity prices. The price decrease was partially offset by an increase in pounds sold of 12%.
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. The price decrease was partially offset by a negligible increase in pounds sold.
Net cash used in financing activities was approximately $17.0 million during fiscal year 2022. During fiscal year 2022, we purchased approximately 471,000 shares of our common stock for approximately $13.0 million 32 in open market transactions.
During fiscal year 2024, we purchased approximately 373,000 shares of our common stock for approximately $15.5 million in open market transactions, of which $0.8 million was paid for subsequent to January 31, 2025. During fiscal year 2024, we used cash of approximately $3.7 million to purchases shares from and pay dividends to noncontrolling members of the consolidated entities.
Accounts payable increased approximately $1.5 million, primarily a result of the timing of inventory receipts and vendor payments. Refundable income taxes decreased $3.7 million as a result of the timing of estimated tax payments.
Prepaid expenses and other assets increased approximately $14.9 million, primarily related to prepayments on certain executed utility equipment agreements, offset by a decrease in property taxes refundable due to the timing of payments, and decreases in spare parts inventory. Accounts payable decreased approximately $14.7 million, primarily a result of the timing of inventory receipts and vendor payments.
We expect to complete construction by July 31, 2024, at which time testing of the facility could commence, upon completion of other infrastructure. In October 2023, we submitted an application with the Illinois Commerce Commission to build a short pipeline to deliver carbon dioxide from the ethanol plant to the sequestration site.
In October 2023, we submitted an application to the ICC for a certificate of authority under the state’s CO 2 Act to build a short pipeline to deliver carbon dioxide from the One Earth Energy ethanol plant to the proposed sequestration site.
Each plant received an additional payment from that program in 2023, combined totaling approximately $1.0 million. The remaining increase is primarily due to an increase in interest income as yields on our excess cash increased during fiscal year 2023 compared to fiscal year 2022.
During 2023, the Company’s consolidated plants received COVID-19 relief grants from the USDA of approximately $1.0 million that did not repeat in 2024. The remaining change between the periods related to increased interest income in the current year based upon higher balances and yields on our excess cash and short-term investments in fiscal year 2024, compared to 2023.
For all projects, we plan to spend $125 million to $150 million during fiscal year 2024. We have a stock buyback program with an authorization level of an additional approximately 877,000 shares at January 31, 2024.
As of January 31, 2025, we have spent $59.9 million since inception and are contractually committed to spend an additional $8.7 million toward plant capacity expansion and CI scoring reduction efforts. For all projects, we plan to spend $50 million to $70 million during fiscal year 2025. We have a stock buyback program in place.
While quantities sold at our consolidated plants during fiscal year 2023 did increase from 2022, weaker pricing across all our products in fiscal year 2023 contributed to the overall decrease in sales between the two fiscal years.
We did have a change in mix between dried and modified distillers grains. However, weaker selling prices across all our products in fiscal year 2024 led to the overall decrease in sales of 23% between the two fiscal years.
Removed
We currently have equity investments in three ethanol production entities, two of which are majority ownership interests. Our refined coal business ceased operations in November 2021 and the facility was subsequently sold. We have classified the refined coal business as discontinued operations.
Added
S&P Global Platts ethanol pricing per gallon ranged from a low of $1.38 in February 2024 to a high of $2.12 in June 2024. 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 Energy ethanol plant.
Removed
Circuit Court of Appeals (the “Court”) ruled against the EPA on six SREs the EPA had previously denied. The Court remanded those six petitions back to the EPA and each refinery will continue to operate under temporary SREs previously offered to them by the Court. The EPA has issued Renewable Fuel Standard volume obligations for calendar years 2023-2025.
Added
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 during the technical review of our application upon request.
Removed
The cost of corn decreased due to lower corn prices, offset by an increase in corn used between the two periods. Natural gas accounted for approximately 4% ($31.7 million) of our cost of sales during fiscal year 2023 compared to approximately 6% ($47.4 million) during fiscal year 2022.
Added
We currently expect the EPA to prepare a draft permit by the second quarter of 2025 and make a final permit decision by late in the third quarter of 2025, according to the EPA’s Class VI Permit Tracker Dashboard on their website.
Removed
Our investment in Big River, which has interests in four ethanol production plants, represents an effective ownership of approximately 38.4 million gallons of ethanol shipped in the trailing twelve months ended January 31, 2024.
Added
We have now secured sufficient subsurface easements for the proposed first injection well to allow for sequestration of all the carbon emissions from the One Earth Energy ethanol plant for a minimum of 15 years. We also need to obtain a county special-use zoning permit for the sequestration site.
Removed
The amount of these credits earned in future periods will vary depending on the level of qualifying research expenditures at our ethanol plants and changes in tax law. We did not perform any qualifying research in fiscal year 2023.
Added
While we have completed the construction of the capture and compression facility, testing has not yet been completed and we cannot begin construction of the pipeline or sequestration well until further permits and approvals are received.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur exposures to market risk, which include the impact of our risk management activities, are based on the estimated effect on pre-tax income starting on January 31, 2024, are as follows (amounts in thousands): Commodity Estimated Total Volume for the Next 12 Months Unit of Measure Decrease in Pre-tax Income From a 10% Adverse Change in Price Ethanol 289,000 Gallons $ 42,203 Corn 100,000 Bushels $ 42,793 Distillers Grains 700 Tons $ 11,042 Distillers Corn Oil 92,000 Pounds $ 3,858 Natural Gas 7,400 MmBtu $ 2,010 35
Biggest changeOur exposures to market risk, which include the impact of our risk management activities, are based on the estimated effect on pre-tax income starting on January 31, 2025, are as follows (amounts in thousands): Commodity Estimated Total Volume for the Next 12 Months Unit of Measure Decrease in Pre-tax Income From a 10% Adverse Change in Price Ethanol 295,000 Gallons $ 48,926 Corn 102,100 Bushels $ 42,270 Distillers Grains 720 Tons $ 8,799 Distillers Corn Oil 88,500 Pounds $ 3,400 Natural Gas 7,400 MmBtu $ 2,784 33
At January 31, 2024, One Earth and NuGen combined had purchase commitments for approximately 17.4 million bushels of corn, the principal raw material for their ethanol plants. At January 31, 2024, One Earth and NuGen combined had purchase commitments for approximately 1.9 million MmBtu of natural gas.
At January 31, 2025, One Earth and NuGen combined had purchase commitments for approximately 24.4 million bushels of corn, the principal raw material for their ethanol plants. At January 31, 2025, One Earth and NuGen combined had purchase commitments for approximately 0.8 million MmBtu of natural gas.
At January 31, 2024, One Earth and NuGen had combined sales commitments for approximately 52.7 million gallons of ethanol, 120,000 tons of distillers grains and 14.9 million pounds of distillers corn oil. Not all of our commitments are at fixed price.
At January 31, 2025, One Earth and NuGen had combined sales commitments for approximately 51.2 million gallons of ethanol, 88,000 tons of distillers grains and 12.0 million pounds of distillers corn oil. Not all of our commitments are at fixed price.

Other REX 10-K year-over-year comparisons