The plant currently operates in excess of its nameplate capacity due to the approval of an air permit by the Minnesota Pollution Control Agency which allows for 70.2 million gallons of denatured ethanol per 12-month rolling average. Ethanol is produced from corn and other grains and used as an octane enhancer and oxygenated fuel additive, while co-products include distillers grains used as animal feed and corn oil used for biodiesel feedstock. The company demonstrates financial resilience through renewable fuel tax credits and operational efficiency gains.
Cyborg Score Rationale
In Q4 2026 (Q3 ended January 31, 2026), Highwater earned $5.6M net income on $34.4M revenue with improved gross margins (89.76% from 97.08% prior year) and $3.3M in Section 45Z clean fuel tax credits. The company ended the quarter with $19.8M in cash and no outstanding borrowings on $30M of committed credit facilities. Strong cash generation and operational leverage position the company well in the renewable fuels sector.
Top Insights
Q3 2026 earnings jumped to $5.6M net income on $34.4M revenue with gross margins improving to 89.76% from 97.08% a year earlier, reflecting operational efficiency gains and favorable commodity pricing.
Federal Section 45Z clean fuel tax credits totaling $3.3M in Q3 2026 boosted other income and contributed materially to earnings upside.
Ethanol revenue grew 2.8% and corn oil revenue surged 26.8% year-over-year while input costs (corn and natural gas) declined.
The company maintains $19.8M cash, zero debt, and returned $6.7M to members as distributions in Q3 2026.
Named Competitors
Little Sioux Corn Processors — Regional dry mill ethanol producer in Iowa
Big River Resources — Major ethanol and co-product producer in the Midwest
(January 2026) Q3 2026 results showed $5.6M net income on $34.4M revenue with improving margins, boosted by $3.3M federal Section 45Z clean fuel tax credits
(October 2019) Air permit approved by Minnesota Pollution Control Agency allowing plant operation at 70.2 million gallons per 12-month rolling average capacity
(August 2009) Commercial operations commenced at the Lamberton, Minnesota facility
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