REX American Resources (REX) Financials

REX American Resources’ second-quarter 2026 results show a significant improvement in profitability and operating cash flow. Revenue increased 6.3% year over year to $168.5 million and 7.7% from the first quarter. Gross profit reached $53.3 million, up from $14.3 million in Q2 2025, while the gross margin expanded to approximately 31.6% from 9.0%. Operating income rose to $19.3 million, compared with $8.1 million a year earlier.

Net income attributable to common shareholders increased to $34.9 million, or $1.06 per diluted share, versus $7.1 million, or $0.22 per share, in Q2 2025. The year-over-year improvement reflects stronger gross profitability, higher investment income and improved operating leverage. However, interest and investment income contributed $10.4 million, meaning a meaningful portion of quarterly earnings came from outside the core operating business.

Cash generation also improved. Operating cash flow was $40.1 million in Q2 2026, compared with $14.5 million in the prior-year quarter and negative $2.1 million in Q1 2026. Still, investing activity consumed $62.6 million, primarily because of $229.2 million in investment purchases that were only partially offset by $190.0 million of investment maturities or sales, along with $23.3 million of capital expenditures.

The balance sheet remains conservative. Cash and short-term investments totaled $381.5 million at July 31, 2026, while total liabilities were $84.9 million. REX reported $771.6 million of total equity and noncontrolling interests, and its current assets of $458.1 million substantially exceeded current liabilities of $66.5 million. Net plant, property and equipment has increased steadily, reaching $294.0 million from $190.2 million two years earlier, indicating continued investment in productive assets.

• Profitability accelerated: Q2 2026 gross profit increased 272% year over year, and the gross margin expanded to approximately 31.6%.
• EPS growth was substantial: Diluted EPS rose to $1.06 from $0.22 in Q2 2025 and $0.56 in Q1 2026.
• Operating cash flow rebounded: Cash from operations improved to $40.1 million from negative $2.1 million in Q1 2026 and $14.5 million in Q2 2025.
• Strong liquidity: Cash plus short-term investments totaled approximately $381.5 million, while the current ratio was about 6.9.
• Limited leverage: Total liabilities were only about 9.9% of total assets, with capital lease obligations of $10.3 million representing the primary reported long-term financing obligation.
• Asset investment continues: Net property, plant and equipment increased to $294.0 million from $232.4 million in Q2 2025, suggesting ongoing capacity or modernization spending.
• Investment income remains important: REX generated $10.4 million of interest and investment income in Q2 2026, providing support to earnings but making results more sensitive to portfolio size, yields and market conditions.
• Capital allocation was shareholder-friendly: The company paid $2.2 million in dividends and repurchased $1.6 million of common stock during the quarter, although these distributions were modest relative to liquidity.
• Cash declined during the quarter: Cash and equivalents fell to $91.3 million from $117.7 million at the end of Q1, and total cash decreased by $26.3 million despite positive operating cash flow.
• Investment activity creates volatility: Q2 investment purchases and sales were large relative to operating cash flow, and continued capital expenditures could pressure free cash flow if operating performance weakens.

Overall, the latest quarter points to stronger margins, earnings and operating cash generation, supported by a well-capitalized balance sheet. Investors should nevertheless monitor whether the margin improvement is sustained by core operations and how much future earnings continue to depend on investment income and portfolio activity.