Company: REX
Filing Date: 2025-06-04
Form Type: 10-Q
Source: 0000930413-25-001941
Chunk: 35

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-06-04
Form: 10-Q
Item: Part I, Item 1
Chunk 35
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from time to time based upon market conditions.

31

Distillers corn oil revenue increased approximately
1% in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 as the amount of pounds sold increased
2%, offset by a 2% decrease in the average price per pound. 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.

Modified distillers grains revenue increased
36% in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 as the amount of pounds sold increased
by 52%, offset partially by a decrease in the average selling price per ton sold of 11%. The decrease in the modified distillers
grains selling price resulted primarily from an extended period of lower corn prices as prices tend to move in the same direction.
Our consolidated plants’ decisions to sell modified or dried distillers grains fluctuate from time to time based upon market
conditions.

Cost of sales decreased 2% in the quarter
ended April 30, 2025, compared to the prior year first quarter. Corn accounted for approximately 74% ($106.3 million) of our cost
of sales during the first quarter of fiscal year 2025 compared to approximately 75% ($110.6 million) during the first quarter
of fiscal year 2024. Natural gas accounted for approximately 6% ($8.1 million) of our cost of sales during the first quarter of
fiscal year 2025 and 5% ($7.1 million) in the first quarter of fiscal year 2024.

As a result of the foregoing, gross profit
for the first quarter of fiscal year 2025 decreased approximately $0.1 million compared to the prior year first quarter.

We attempt to match quantities of ethanol,
distillers grains and distillers corn oil sales contracts with an appropriate quantity of corn purchase contracts over a given
time period when we can obtain a satisfactory margin resulting from the crush spread inherent in the contracts we have executed.
However, the market for future ethanol sales contracts generally lags the spot market with respect to ethanol price. Consequently,
we generally execute fixed price sales 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.