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Greetings, and welcome to the REX American Resources Corporation's First Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to introduce Doug Bruggeman, Chief Financial Officer. Please go ahead, sir.

Good morning, and thank you for joining REX American Resources' Q1 2025 conference call. With me on our call today are Stuart Rose, Executive Chairman, and

Good morning, and thank you to everyone for joining us today. The first quarter of 2025 demonstrated REX's continued operational excellence and strategic execution. We maintained our position as one of the industry's most resilient in the face of uncertain and evolving regulatory and market conditions. During the quarter, we saw stable ethanol demand and managed our production as we have in the past to capitalize on market conditions as we see them. The strength of our balance sheet continues to provide us with flexibility to pursue strategic opportunities while maintaining our disciplined approach to capital allocation. As always, we continue to evaluate potential acquisition opportunities that meet our strict operational and financial criteria. Both of our organic growth initiatives, carbon capture, and expansion of ethanol production capacity at One Earth continued to progress. For the remainder of the year, we anticipate moving these projects forward, controlling what we can. Beyond operations, one of the duties we take very seriously at REX is delivering consistent value to our shareholders. To this end, we have continued the share buybacks that we've talked about on our last call. During the first quarter, we repurchased approximately 822,000 shares for total consideration of $32.7 million during a period when our share price, we believe, was undervalued. The average purchase price for the repurchased shares was $39.80. This brings our buyback activity to approximately 6.8% of our shares since reinitiating purchases in December 2024. Currently, we have approximately 1,182,000 shares remaining on the buyback authorization, which represents an additional approximately 7% of our shares. We plan to continue executing on the remaining share purchase authorization when and where we see value. I'll now turn the call over to our CEO,

Thank you, Stuart. Regarding our ethanol facility expansion in Gibson City, we are continuing a technical review of several key project components. This ongoing evaluation has already yielded valuable insights that we believe will enhance the long-term operational efficiencies of the expanded facility when materialized. During the first quarter, we maintained close coordination with the EPA regarding our Class VI injection well permit. The EPA currently anticipates issuing a final permitting decision on our application by January 2026. In parallel, we are closely monitoring potential changes to the Inflation Reduction Act, particularly regarding tax credit provisions for carbon capture projects, specifically 45Q and 45

Thanks,

Thank you, Doug. The REX team continues to execute on the three P's I discussed on our last call. First, profit. Our ongoing goal is to run a profitable business despite market ups and downs. Our team has consistently demonstrated their ability to overcome challenges and deliver strong financial results quarter after quarter for our shareholders. Notably, the first quarter marked REX's nineteenth consecutive profitable quarter. Second, position. We have strategically positioned ourselves for organic growth funded entirely by our own strong balance sheet, our ethanol expansion, and carbon capture and sequestration projects. We are focusing on what we can control and making investments to optimize our future operations. We are committed to building REX's long-term strength. Finally, policy. On the policy front, we continue to monitor developments closely at both the federal and state levels. While many outcomes remain uncertain and outside our control, we believe we are well-informed and well-prepared to respond to any policy shifts that do arise. Our overall market conditions, particularly those that supported the ethanol sector in 2024, remain favorable. Ethanol exports in March 2025 were up 23% compared to March 2024. Cumulatively, US ethanol exports through March 2025 were nearly 19% higher than during the same period in 2024, according to the Renewable Fuel Association. Following a strong first quarter, we are seeing stable performance in the second quarter and expect another profitable result. Now I would like to open things up for questions. Operator?

Thank you. It may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. And our first question comes from the line of Peter Dastreich with Water Tower Research. Please proceed.

Good morning, gentlemen, and thanks for taking my questions. It's great to hear the progress on the share repurchase program. For starters, congratulations on your results and on your nineteenth consecutive quarter of profitability. That consistent profitability is something that has eluded some of your peers, and it's not just profit. You've been generating superior returns on capital as well. I'd just like to ask what drives REX's ability to consistently deliver this performance, and could you please discuss what it is about your strategy? Is it the cost control, logistics, or other factors at play? Thank you.

You want me to answer that? Our CEO has a lot to do with this. We have the top CEO, in my opinion—this is Stuart talking—in the industry who watches everything very, very closely. He watches the corn prices. He watches the ethanol. Very few CEOs, very few people at his level, get down to the details that he does. Then on top of that, we have good locations and very, very good people that we have set up in each of our plants that have, I think, separated us from the pack. Let

Yes, I agree. I think the big difference is our people. We have a team that communicates well. We exactly know what's happening day to day. We have spreadsheets to monitor how the market is moving up and down, and we try to reach our targets. We try to lock in profit. That's basically it, but I think we cannot be successful without the great people and without the great team. And we are very fortunate that we have those people who support us, our ideology, and mission, and we continue to produce for our shareholders.

Okay. Thank you. My second question is a regulatory question. Could you talk about what specific deregulation measures you'd like to see from the Trump administration that could help to smooth your runway, for example? Now, where are we on federal pipeline regulations or other relevant areas?

You want to answer that, or do you want me to? You know the answer? I don't know. I think we're—

I'll answer it, but everything's in limbo right now until this bill passes. We've worked with—we definitely have contacts in Washington that we're working with, and we have very, very good contacts in Illinois. But right now, we're trying to know exactly what the target is. It's a moving target every day with what's going on in Washington, so I can't—it's very hard right now to give anyone any indication of when a ref will ever—or when—and hopefully, it's not if, but it could be if we ever get our carbon cap project going. Things in Washington are in great limbo right now.

But I think I add to that is the big bill at this time stage still includes 45Q and 45

Okay. Thank you. Yeah. That sounds generally like some good momentum on the regulatory side. Just a final—

The other thing that you should remember is no matter what, we are expanding our plant. And it's a great plant already. And we're adding roughly 33% once we finish greater capacity in that plant. So no matter what, we will be growing.

Okay. That's great. Thank you very much. Just one final question, just a macro question. It'd be great to hear your thoughts on the industry fundamentals. Where are ethanol margins trending as we approach this summer, and what are the drivers and outlook there? Thank you.

I think we cautiously see that the ethanol margins are still very positive. And for the first second quarter, we see it still is positive, as I mentioned in our prepared remarks, and we expect the record corn is expected this year, thanks to strong planting in states like South Dakota and Illinois and good weather so far. If this continues, it could boost our profit for the rest of the year. We are also pleased with our export at this time, ethanol, as I mentioned previously, it's approximately 19% up compared to last year. And also, if the dust settles with Canada and Mexico, and there is no tariff, then we believe that the Trump administration's will may help us to eliminate those tariffs on the different countries, which they have on ethanol or DDGs. And if that market opens up, we believe that will be great for the ethanol industry. But at the same time, we're cautiously looking at natural gas. If natural gas is exported greater than we expect, then it can negatively affect our business. But because natural gas and corn and those are the major expenses we have in our ethanol business, so we are monitoring very closely, but we believe at this time, there is a positive outlook for 2025.

Okay. Thank you very much. Appreciate it. I'll get back in the queue.

Thank you.

Thank you. There are no further questions at this time. I'd like to turn the call back to Stuart Rose for closing remarks.

Okay. I'd like to thank everyone for listening. Again, we feel we have among the best plants in the industry. We have great locations in the Corn Belt. We have what we feel is the best technology. But most importantly, as I said during the call, we, in my opinion, have the best people in the industry, and that's what sets us apart. We have very, very high hopes that these same people and the other people that we've hired will do the exact same thing in carbon capture that we've done in ethanol. Very much look forward to the future. Thank you very much for listening, and we'll talk to you at the end of next—or the conference call for next quarter. Thank you. Bye.