Highwater Ethanol Swings to $5.6M Net Income in Q1 2026

Highwater Ethanol, LLC, a Minnesota-based ethanol producer, reported net income of $5.61 million for the three months ending January 31, 2026, a dramatic swing from net income of just $8,308 in the year-ago quarter. The result marks a turnaround driven by improved margins despite higher operating expenses. Read more earnings reports.

Revenue climbed 3.6% to $34.40 million from $33.22 million in the prior-year period. Ethanol sales accounted for $25.78 million of total revenue, up from $25.09 million a year earlier. Distillers grains revenue rose to $3.76 million from $3.83 million, while corn oil sales declined to $1.55 million from $1.68 million.

Cost of goods sold decreased to $30.88 million from $32.25 million, driving gross profit to $3.52 million compared to $970,393 in the same quarter last year. Operating expenses increased to $1.44 million from $1.29 million, but the company still posted operating income of $2.08 million versus an operating loss of $323,832 in the prior-year quarter.

Balance Sheet and Cash Position

Total assets declined to $87.40 million as of January 31, 2026, from $89.94 million three months earlier. Cash and cash equivalents fell to $19.78 million from $23.45 million at the end of October 2025, though the balance remained higher than the $15.44 million reported a year earlier.

Inventory decreased to $14.70 million from $16.83 million at the prior quarter-end. Accounts receivable edged up to $1.99 million from $1.89 million. The company reported no long-term debt as of January 31, 2026.

Current liabilities stood at $10.11 million, down from $11.57 million three months prior. Accounts payable declined to $9.15 million from $10.26 million.

Cash Flow

Cash from operations totaled $4.27 million for the quarter, a sharp reversal from negative $9.71 million in the same period last year. Cash used in investing activities was $1.25 million, primarily for capital expenditures, compared to $555,144 a year earlier.

Cash used in financing activities was $6.69 million, compared to $8.12 million in the prior-year quarter.

Per Share Results

Basic and diluted earnings per share came in at $1,180.54, up sharply from $1.75 in the year-ago quarter. The company had 4,752 weighted average shares outstanding during the quarter, virtually unchanged from 4,753 shares a year earlier. Total shares outstanding stood at 4,750 as of January 31, 2026.