REX - NYSE

Good morning, welcome to the REX American Resources first quarter 2026 conference call. As a reminder, today's call is being recorded, and at this time, all participants are in a listen-only mode. A brief question and answer session will follow a formal presentation. I would now like to turn the call over to Mr. Douglas Bruggeman, Chief Financial Officer of REX American. Please go ahead.

Good morning, and thank you for joining REX American Resources first quarter 2026 conference call. With me on our call today are Stuart Rose, REX Executive Chairman, and

REX American Resources assumes no obligation to publicly update or revise any forward-looking statements. I'd now like to turn the call over to our Executive Chairman, Stuart Rose.

Good morning, and thank you to everyone for joining us today. First quarter of 2026 continued to showcase REX's operational excellence and strategic discipline. Our team has once again demonstrated the ability to deliver outstanding results while advancing our key growth initiatives. As proof of this, the first quarter of 2026 was the most profitable first quarter on a net income per share basis in our company's history. This consistent approach provides us with the flexibility to pursue value-creating opportunities while maintaining thoughtful approach to capital allocation. Both of our major growth projects, the carbon capture and sequestration initiative and the ethanol production capacity expansion at our One Earth Energy facility, continue to advance. We remain focused on executing what is within our control while adapting to external factors as they evolve. Shareholder value creation remains a top priority.

REX is particularly keen to take advantage of market tailwinds, driven by both domestic policy and international export markets, and to maximize our profit potential. We believe that our team is incredibly well-positioned and prepared to do this. I now turn the call over to our CEO,

Thank you, Stuart. Our ethanol facility expansion at Gibson City continues to progress on schedule, and we remain on track for completion by the end of 2026. This expansion represents an important step in strengthening our production capabilities and positioning the company for long-term growth. We are pleased to announce a record profitable first quarter on a net income per share basis. Regarding our carbon capture and sequestration initiative, we continue to work closely with the EPA on our Class VI injection well permit application. The permitting process remains ongoing, and we are addressing all regulatory requirements to move the project forward efficiently. At the state level, the Illinois moratorium on carbon pipeline permitting is scheduled to expire on July 1st, 2026. We have maintained engagement with the Illinois Commerce Commission and plan to submit our application shortly following the expiration of the moratorium.

We are also closely monitoring ongoing federal policy discussion related to carbon capture incentives under Section 45

Thanks,

Reflecting our change in accounting principles, we now report that as operating income from our consolidated plants. Gross profit for the first quarter was $29.1 million, compared to $14.3 million in Q1 2025. This improvement primarily reflects the benefit of 45

Net income attributable to REX shareholders was $18.5 million, or $0.56 per diluted share, compared to $8.7 million, or $0.26 per diluted share in Q1 2025. This represents our 23rd consecutive profitable quarter. We ended the first quarter with cash equivalents, and short-term investments of $364.3 million. The reduction for the previous quarter primarily reflects our ongoing capital investments in our growth projects. REX continues to maintain its strong financial position with no bank debt. I'll now turn things back to

Thank you, Doug. The REX team continues to execute successfully against our long-term strategic objectives. Our core focus remains on building and operating a consistently profitable business. The first quarter of 2026 marked the strongest first quarter earnings per share in our company's history and represented our 23rd consecutive profitable quarter. This performance reflects our team's ability to capitalize on opportunities, navigate changing market conditions, and consistently deliver value for our shareholders. We continue to position REX for sustainable long-term growth through disciplined organic expansion initiatives, all funded through our strong balance sheet with no debt. Our ethanol production expansion and carbon capture project continue to advance as planned, despite permitting delays and certain regulatory headwinds. We remain focused on optimizing these investments, expecting to drive future operational excellence and enhanced financial performance for our shareholders.

We also plan to continue evaluate the best use of our cash, including investment that complement our existing platform. In addition, we continue to closely monitoring policy developments at both the federal and state levels. The anticipated expiration of the Illinois carbon pipeline moratorium in July represents an important regulatory milestone. While policy outcomes remain outside our control, we believe we are well-informed and working diligently to respond effectively to regulatory developments. Market fundamentals for the ethanol industries remain constructive. Domestic demand continues to be stable while export markets remain strong. According to the Renewable Fuels Association, 2026 ethanol export through March increased by 20% compared to the same period last year. As we move through the second quarter, we continue to see stable operating conditions and remain confident in our ability to deliver another profitable quarter for our shareholders.

With that, I would now like to open the call for questions. Operator?

Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. There are no questions at this time. I would like to hand the floor back over to Stuart Rose for any closing comments.

Thank you. Sorry there's no questions, but I want to reiterate we have great plants, great locations, and I feel the best employees in the business led by our CEO,