SDSYA Net Income Jumps 23% Amid Revenue Dip, Major Plant Expansion

TL;DR

**SDSYA is betting big on future capacity with massive debt-funded construction, but current revenue weakness is a yellow flag.**

AI Summary

SOUTH DAKOTA SOYBEAN PROCESSORS LLC (SDSYA) reported a mixed financial performance for the nine months ended September 30, 2025. Revenues decreased significantly by 16.4% to $358,375,928 from $428,623,435 in the prior year, primarily due to lower sales of soybean meal and hulls, and soybean oil and oil byproducts. Despite this revenue decline, net income attributable to the Company increased by 22.8% to $14,153,735 from $11,528,203, driven by a substantial increase in gross profit to $19,965,530 from $18,174,868, and a reduction in cost of product sold. The company's total assets grew by 34.2% to $727,120,365 from $541,893,618 as of December 31, 2024, largely due to a significant investment in property and equipment, particularly construction in progress which surged to $447,360,385 from $273,036,281. Long-term debt also increased substantially to $216,268,394 from $57,673,180, reflecting financing for the Mitchell, South Dakota facility. Cash and cash equivalents decreased by 68.1% to $12,612,246 from $39,594,084 at the beginning of the period, mainly due to heavy investing activities totaling $158,613,570 for property and equipment.

Why It Matters

SDSYA's substantial investment in the Mitchell, South Dakota facility, with construction in progress reaching $447.4 million, signals a significant strategic expansion aimed at increasing processing capacity and market share. While current revenues are down, the long-term debt increase to $216.3 million to fund this expansion indicates management's confidence in future growth, but also introduces higher financial leverage for investors. The competitive landscape in soybean processing is capital-intensive, and this expansion could position SDSYA more strongly against rivals by enhancing operational scale. For employees, this expansion likely means job creation and stability in the region, while customers could benefit from increased product availability once the facility is operational in Q4 2025.

Risk Assessment

Risk Level: medium — The company's risk level is medium due to a significant increase in long-term debt to $216,268,394 from $57,673,180, primarily to finance the Mitchell, South Dakota facility. This expansion, with construction in progress at $447,360,385, represents a substantial capital commitment. While net income increased, the 16.4% revenue decline for the nine months ended September 30, 2025, from $428,623,435 to $358,375,928, indicates potential market headwinds or operational challenges that could impact the return on this large investment.

Analyst Insight

Investors should monitor the progress and successful commissioning of the Mitchell, South Dakota facility in Q4 2025, as well as future revenue trends. Evaluate if the increased processing capacity translates into higher sales and improved profitability to justify the significant increase in long-term debt and capital expenditures.

Financial Highlights

debt To Equity

0.63

revenue

$358.4M

total Assets

$727.1M

total Debt

$216.3M

net Income

$14.2M

eps

$0.47

gross Margin

4.97%

cash Position

$12.6M

revenue Growth

-16.4%

Revenue Breakdown

Key Numbers

• $358.4M — Revenues (down 16.4% from $428.6M year-over-year for nine months)
• $14.2M — Net Income Attributable to Company (up 22.8% from $11.5M year-over-year for nine months)
• $534.0M — Total Property and Equipment, Net (increased from $359.8M as of December 31, 2024)
• $447.4M — Construction in Progress (increased from $273.0M as of December 31, 2024, for the Mitchell facility)
• $216.3M — Long-Term Debt, Net (increased from $57.7M as of December 31, 2024)
• $12.6M — Cash and Cash Equivalents (decreased from $39.6M as of December 31, 2024)
• $0.47 — Basic and Diluted Earnings Per Capital Unit (increased from $0.38 year-over-year for nine months)
• 30,411,500 — Capital Units Outstanding (consistent for both periods)

Key Players & Entities

• SOUTH DAKOTA SOYBEAN PROCESSORS LLC (company) — registrant
• High Plains Partners, LLC (company) — controlled subsidiary
• HPP SD Holdings, LLC (company) — controlled subsidiary
• High Plains Processing, LLC (company) — controlled subsidiary
• Mitchell, South Dakota (location) — location of new operating facility
• $358,375,928 (dollar_amount) — total revenues for nine months ended September 30, 2025
• $428,623,435 (dollar_amount) — total revenues for nine months ended September 30, 2024
• $14,153,735 (dollar_amount) — net income attributable to Company for nine months ended September 30, 2025
• $216,268,394 (dollar_amount) — long-term debt as of September 30, 2025
• $447,360,385 (dollar_amount) — construction in progress as of September 30, 2025

FAQ

Risk Factors

• Increased Leverage for Facility Expansion [high — financial]: The company has significantly increased its long-term debt from $57.7 million to $216.3 million to finance the expansion of its Mitchell, South Dakota facility. This substantial increase in leverage could heighten financial risk if the new facility does not generate expected returns or if market conditions deteriorate.
• Construction in Progress and Capital Expenditures [medium — operational]: Total assets grew by 34.2% to $727.1 million, driven by a surge in construction in progress to $447.4 million. While this indicates investment in future capacity, large ongoing capital projects carry inherent operational risks, including cost overruns, delays, and integration challenges.
• Commodity Price Volatility [medium — market]: As a soybean processor, SDSYA is exposed to fluctuations in soybean and related product prices. The company utilizes commodity derivative instruments, with balances of $10.6 million (assets) and $2.6 million (liabilities) as of September 30, 2025, to manage some of this risk. However, significant price swings can still impact revenues and profitability.
• Decreased Cash Position [medium — financial]: Cash and cash equivalents have decreased by 68.1% to $12.6 million from $39.6 million, primarily due to substantial investing activities for property and equipment totaling $158.6 million. A lower cash balance could reduce the company's short-term financial flexibility.
• Dependence on Soybean Supply and Demand [medium — operational]: The company's performance is directly tied to the availability and pricing of soybeans, as well as the demand for its processed products like soybean meal, hulls, and oil. Disruptions in the agricultural supply chain or shifts in demand for these products can significantly affect financial results.

Industry Context

The soybean processing industry is characterized by its reliance on agricultural commodity markets, subject to weather patterns, global supply and demand dynamics, and trade policies. Key products include soybean meal for animal feed, soybean oil for food and industrial uses, and byproducts. Competition often centers on processing efficiency, logistics, and risk management capabilities.

Regulatory Implications

Soybean processors operate under various regulations related to food safety, environmental protection, and commodity trading. Compliance with these regulations is crucial to avoid penalties and maintain operational continuity. Changes in agricultural subsidies or trade agreements could also impact the industry's economic landscape.

What Investors Should Do

1. Monitor the progress and cost-effectiveness of the Mitchell facility expansion.
2. Analyze the drivers behind the revenue decline and gross profit increase.
3. Evaluate the company's liquidity and debt management strategy.
4. Assess the impact of commodity price volatility and hedging strategies.

Glossary

Construction in Progress

Costs incurred for construction projects that are not yet completed and placed into service. These costs are capitalized and will be depreciated once the asset is ready for its intended use. (Represents a significant portion of the company's asset growth, indicating major investment in new facilities or expansions, specifically the Mitchell, South Dakota facility.)

Commodity Derivative Instruments

Financial contracts whose value is derived from an underlying commodity (like soybeans or soybean oil). They are used to hedge against price fluctuations. (The company holds these to manage market risk associated with commodity prices, with reported balances of $10.6 million (assets) and $2.6 million (liabilities) as of September 30, 2025.)

Capital Units

Represents ownership interests in a limited liability company (LLC), similar to shares of stock in a corporation. (The number of capital units outstanding remained consistent at 30,411,500, indicating no new issuance or significant buybacks affecting ownership structure.)

Cost of Revenues

The direct costs attributable to the production and sale of goods or services offered by a company. For SDSYA, this includes cost of product sold, production, and freight/rail. (A significant decrease in 'Cost of product sold' contributed to the increase in gross profit, despite lower revenues.)

Non-controlling Interests

The portion of equity in a subsidiary that is not attributable to the parent company. It represents the ownership stake of outside shareholders in consolidated entities. (Represents a substantial portion of the company's equity structure ($156.1 million), indicating significant operations within consolidated entities not fully owned by the parent.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, South Dakota Soybean Processors LLC experienced a significant 16.4% decrease in revenues, falling to $358.4 million from $428.6 million, primarily due to lower sales of key products. Despite this revenue contraction, net income saw a healthy increase of 22.8% to $14.2 million, driven by improved gross profit margins resulting from reduced cost of product sold. The company's balance sheet reflects substantial growth in assets, largely fueled by capital investments in property and equipment, particularly the ongoing construction of the Mitchell facility. This expansion has been financed by a dramatic increase in long-term debt, which surged from $57.7 million to $216.3 million, while cash reserves have diminished considerably due to heavy investing activities.

Key Financial Figures

• $85 m — reement, the Company could borrow up to $85 million, and advances on the revolving cr
• $254.0 million — draw term loan provides borrowing up to $254.0 million until March 31, 2026 to finance the con
• $4.50 million — ll make quarterly principal payments of $4.50 million plus interest beginning six months afte
• $1.0 million — pal payments will increase each year by $1.0 million on the anniversary date. The delayed-dr
• $82.7 million — not borrowed. There were approximately $82.7 million available to borrow on the delayed draw
• $40.0 million — oan provides for a maximum borrowing of $40.0 million. The revolving term loan matures on Dec
• $12.6 million — the Davison Regional Railroad Authority $12.6 million for purposes of making improvements to
• $987,500 — l Statements and interest payments of $987,500. These payments will continue through O

Filing Documents

• sdsp-20250930.htm (10-Q) — 689KB
• exhibit31120250930.htm (EX-31.1) — 10KB
• exhibit31220250930.htm (EX-31.2) — 11KB
• exhibit32120250930.htm (EX-32.1) — 6KB
• exhibit32220250930.htm (EX-32.2) — 6KB
• sdsp-20250930_g1.jpg (GRAPHIC) — 12KB
• 0001163609-25-000032.txt ( ) — 4244KB
• sdsp-20250930.xsd (EX-101.SCH) — 29KB
• sdsp-20250930_cal.xml (EX-101.CAL) — 52KB
• sdsp-20250930_def.xml (EX-101.DEF) — 130KB
• sdsp-20250930_lab.xml (EX-101.LAB) — 418KB
• sdsp-20250930_pre.xml (EX-101.PRE) — 293KB
• sdsp-20250930_htm.xml (XML) — 515KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 22 Item 4.

Controls and Procedures

Controls and Procedures 23 Part II. OTHER INFORMATION 23 Item 1.

Legal Proceedings

Legal Proceedings 23 Item 1A.

Risk Factors

Risk Factors 23 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 23 Item 3. Defaults among Senior Securities 23 Item 4. Mine Safety Disclosures 23 Item 5. Other Information 23 Item 6. Exhibits 24

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements South Dakota Soybean Processors, LLC Condensed Consolidated Financial Statements September 30, 2025 and 2024 3 South Dakota Soybean Processors, LLC Condensed Consolidated Balance Sheets September 30, 2025 December 31, 2024 (Unaudited) Assets Current assets Cash and cash equivalents $ 12,612,246 $ 39,594,084 Trade accounts receivable 31,565,359 29,771,609 Inventories 81,905,053 45,078,676 Commodity derivative instruments 10,583,299 9,600,761 Prepaid expenses 1,117,120 2,976,524 Total current assets 137,783,077 127,021,654 Property and equipment 615,091,531 435,335,629 Less accumulated depreciation ( 81,056,117 ) ( 75,554,375 ) Total property and equipment, net 534,035,414 359,781,254 Other assets Investments 19,156,025 18,605,021 Right-of-use lease asset, net 35,163,160 35,829,689 Other assets 982,689 656,000 Total other assets 55,301,874 55,090,710 Total assets $ 727,120,365 $ 541,893,618 (continued on the following page) 4 South Dakota Soybean Processors, LLC Condensed Consolidated Balance Sheets (continued) September 30, 2025 December 31, 2024 (Unaudited) Liabilities and Members' Equity Current liabilities Excess of outstanding checks over bank balance $ 17,512,606 $ 12,972,629 Notes payable - seasonal loans 2,668,134 — Current maturities of long-term debt — 9,000,000 Accounts payable 1,796,985 3,979,895 Accrued commodity purchases 69,024,218 54,412,561 Commodity derivative instruments 2,639,071 3,500,672 Current portion - operating leases 3,901,309 3,512,822 Accrued expenses 5,743,153 4,623,969 Contract liabilities 280,936 10,524,222 Total current liabilities 103,566,412 102,526,770 Long-term liabilities Long-term debt, net 216,268,394 57,673,180 Long-term operating lease liabilities 29,002,923 29,881,151 Other long-term liabilities 37,393,800 15,855,793 Total long-term liabilities 282,665,117 103,410,124 Commitments and contingencies (Notes 4, 5, 6, and 10) Members' equ

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