CORRECTING and REPLACING REX American Resources Reports Fiscal 2020 Second Quarter Results

In table "Consolidated Balance Sheets," first column header should read July 31, 2020 and second column header should read January 31, 2020.

The updated release reads: 

REX AMERICAN RESOURCES REPORTS FISCAL 2020 SECOND QUARTER RESULTS

REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2020 second quarter (“Q2 ‘20”) ended July 31, 2020. REX management will host a conference call and webcast today at 11:00 a.m. ET.

Conference Call:

212/231-2900

Webcast / Replay URL:

www.rexamerican.com/Corp/Page4.aspx

The webcast will be available for replay for 30 days.

REX American Resources’ Q2 ‘20 results principally reflect its interests in six ethanol production facilities and its refined coal operation. The One Earth Energy, LLC (“One Earth”) and NuGen Energy, LLC (“NuGen”) ethanol production facilities are consolidated, as is the refined coal entity, while those of its four other ethanol plants are reported as equity in income of unconsolidated ethanol affiliates. The Company reports results for its two business segments as ethanol and by-products, and refined coal.

REX’s Q2 ‘20 net sales and revenue were $39.3 million, compared with $105.9 million in Q2 ‘19. The year-over-year net sales and revenue decline was primarily due to lower ethanol production levels as the Company temporarily idled its NuGen Energy and One Earth Energy plants, which led to a 56% decrease in ethanol gallons sold. The Q2 ‘20 net sales and revenue also reflects an 11% decline in ethanol pricing on a year-over-year basis. Primarily reflecting these factors, Q2 ‘20 gross profit for the Company’s ethanol and by-products segment declined to $0.6 million, compared with $6.2 million in Q2 ‘19. As a result, the ethanol and by-products segment incurred a loss before income taxes of $3.3 million in Q2 ‘20, compared to income of $3.1 million in Q2 ‘19. The Company’s refined coal operation incurred a $1.9 million gross loss and a $2.1 million loss before income taxes in Q2 ‘20, compared to a $2.2 million gross loss and a loss before income taxes of $2.0 million in Q2 ‘19. REX reported a Q2 ‘20 loss before income taxes and non-controlling interests of $6.1 million, compared with income before income taxes and non-controlling interests of $0.7 million in the comparable year ago period. While the refined coal operation negatively impacted gross profit and income before income taxes, it contributed a tax benefit of $2.9 million and $3.2 million for Q2 ‘20 and Q2 ‘19, respectively.

Net loss attributable to REX shareholders in Q2 ‘20 was $1.7 million, compared to net income of $2.3 million in Q2 ‘19. Q2 ‘20 basic and diluted net loss per share attributable to REX common shareholders was $0.28, compared to net income per share of $0.36 in Q2 ‘19. Per share results in Q2 ‘20 and Q2 ‘19 are based on 6,216,000 and 6,318,000 diluted weighted average shares outstanding, respectively.

Segment Income Statement Data:

Three Months
Ended

Six Months
Ended

($ in thousands)

July 31,

July 31,

2020

2019

2020

2019

Net sales and revenue:

Ethanol & By-Products (1)

$

39,242

$

105,770

$

122,477

$

210,223

Refined coal (2) (3)

85

98

100

220

Total net sales and revenue

$

39,327

$

105,868

$

122,577

$

210,443

Gross (loss) profit:

Ethanol & By-Products (1)

$

553

$

6,169

$

(7,670)

$

12,284

Refined coal (2)

(1,884)

(2,165)

(2,991)

(4,634)

Total gross (loss) profit

$

(1,331)

$

4,004

$

(10,661)

$

7,650

(Loss) income before income taxes:

Ethanol & By-Products (1)

$

(3,259)

$

3,111

$

(15,610)

$

6,313

Refined coal (2)

(2,118)

(2,028)

(2,965)

(4,703)

Corporate and other

(702)

(352)

(1,247)

(712)

Total (loss) income before income taxes

$

(6,079)

$

731

$

(19,822)

$

898

 

Benefit (provision) for income taxes:

Ethanol & By-Products

$

893

$

(619)

$

5,054

$

(1,105)

Refined coal

2,919

3,155

3,878

7,101

Corporate and other

234

86

427

174

Total benefit for income taxes

$

4,046

$

2,622

$

9,359

$

6,170

 

Segment (loss) profit:

Ethanol & By-Products

$

(2,178)

$

1,305

$

(9,611)

$

3,014

Refined coal

898

1,216

1,048

2,602

Corporate and other

(468)

(265)

(820)

(539)

Net (loss) income attributable to REX common shareholders

$

(1,748)

$

2,256

$

(9,383)

$

5,077

(1)

Includes results attributable to non-controlling interests of approximately 25% for One Earth and approximately 1% for NuGen.

(2)

Includes results attributable to non-controlling interests of approximately 5%.

(3)

Refined coal sales are reported net of the cost of coal.

REX American Resources’ Chief Executive Officer, Zafar Rizvi, commented, “As we indicated at the time we reported the fiscal 2020 first quarter, the second quarter saw a continuation of the challenging operating environment due to the severe disruptions related to the COVID-19 pandemic and its impact on fuel demand and the economy at large. In order to preserve our financial liquidity and flexibility, we made the strategic decision to temporarily idle our two consolidated plants thus significantly reducing our ethanol output while mitigating operating losses.

“As we enter the second half of fiscal 2020, the operating environment has improved and we’ve re-opened the NuGen Energy and One Earth Energy plants based on the increase in ethanol demand. However, we expect ethanol crush spread margins and distillers grains pricing to remain volatile.“

Balance Sheet

At July 31, 2020, REX had cash and cash equivalents and short-term investments of $185.4 million, $55.9 million of which was at the parent company, and $129.5 million of which was at its consolidated production facilities. This compares with cash, cash equivalents and short-term investments at January 31, 2020, of $205.7 million, $62.3 million of which was at the parent company, and $143.4 million of which was at its consolidated ethanol production facilities.

The following table summarizes select data related to REX’s consolidated alternative energy interests:

Three Months
Ended

Six Months
Ended

 

July 31,

July 31,

 

2020

2019

2020

2019

 

Average selling price per gallon of ethanol

$

1.23

$

1.38

$

1.25

$

1.32

 

Average selling price per ton of dried distillers grains

$

135.54

$

135.46

$

143.24

$

138.92

 

Average selling price per pound of non-food grade corn oil

$

0.24

$

0.25

$

0.25

$

0.25

 

Average selling price per ton of modified distillers grains

$

31.87

$

53.01

$

49.32

$

60.12

 

Average cost per bushel of grain

$

3.63

$

3.80

$

3.86

$

3.65

 

Average cost of natural gas (per mnbtu)

$

2.92

$

2.63

$

3.60

$

3.16

 

Supplemental data related to REX’s alternative energy interests:

REX American Resources Corporation
Ethanol Ownership Interests/Effective Annual Gallons Shipped as of July 31, 2020
(gallons in millions)

Entity

Trailing
Twelve
Months
Gallons
Shipped

Current
REX
Ownership
Interest

REX’s Current Effective
Ownership of Trailing Twelve
Month Gallons Shipped

One Earth Energy, LLC
Gibson City, IL

115.7

75.3%

87.1

NuGen Energy, LLC
Marion, SD

72.6

99.5%

72.2

Big River Resources West Burlington, LLC
West Burlington, IA

103.8

10.3%

10.7

Big River Resources Galva, LLC
Galva, IL

112.0

10.3%

11.5

Big River United Energy, LLC
Dyersville, IA

117.9

5.7%

6.7

Big River Resources Boyceville, LLC
Boyceville, WI

54.3

10.3%

5.6

Total

576.3

n/a

193.8

Second Quarter Conference Call

REX will host a conference call at 11:00 a.m. ET today. Senior management will discuss the quarterly financial results and host a question and answer session. The dial in number for the audio conference call is 212/231-2900 (domestic and international callers).

Participants can also listen to a live webcast of the call on the Company’s website, www.rexamerican.com/Corp/Page4.aspx. A webcast replay will be available for 30 days following the live event at www.rexamerican.com/Corp/Page4.aspx.

About REX American Resources Corporation

REX American Resources has interests in six ethanol production facilities, which in aggregate shipped approximately 576 million gallons of ethanol over the twelve-month period ended July 31, 2020. REX’s effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended April 30, 2020) by the ethanol production facilities in which it has ownership interests was approximately 194 million gallons. In addition, the Company acquired a refined coal operation in August 2017. Further information about REX is available at www.rexamerican.com.

This news announcement contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements can be identified by use of forward-looking terminology such as “may,” “expect,” “believe,” “estimate,” “anticipate” or “continue” or the negative thereof or other variations thereon or comparable terminology. Readers are cautioned that there are risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. These risks and uncertainties include the risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission and include among other things: the effect of pandemics such as COVID-19 on the Company’s business operations, including impacts on supplies, demand, personnel and other factors, the impact of legislative and regulatory changes, the price volatility and availability of corn, distillers grains, ethanol, non-food grade corn oil, gasoline and natural gas, ethanol and refined coal plants operating efficiently and according to forecasts and projections, changes in the international, national or regional economies, weather, results of income tax audits, changes in income tax laws or regulations, the impact of U.S. foreign trade policy, changes in foreign currency exchange rates and the effects of terrorism or acts of war. The Company does not intend to update publicly any forward-looking statements except as required by law.

- statements of operations follow -

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per share amounts)

Unaudited

 

Three Months
Ended

Six Months
Ended

July 31,

July 31,

2020

2019

2020

2019

Net sales and revenue

$39,327

$105,868

$122,577

$210,443

Cost of sales

40,658

101,864

133,238

202,793

Gross (loss) profit

(1,331)

4,004

(10,661)

7,650

Selling, general and administrative expenses

(4,438)

(4,764)

(9,043)

(9,496)

Equity in (loss) income of unconsolidated ethanol affiliates

(507)

239

(984)

365

Interest and other income, net

197

1,252

866

2,379

(Loss) income before income taxes and non-controlling interests

(6,079)

731

(19,822)

898

Benefit for income taxes

4,046

2,622

9,359

6,170

Net (loss) income including non-controlling interests

(2,033)

3,353

(10,463)

7,068

Net loss (income) attributable to non-controlling interests

285

(1,097)

1,080

(1,991)

Net (loss) income attributable to REX common shareholders

$(1,748)

$2,256

($9,383)

$5,077

Weighted average shares outstanding – basic and diluted

6,216

6,318

6,261

6,317

Basic and diluted net (loss) income per share attributable to REX common shareholders

$(0.28)

$0.36

($1.50)

$0.80

- balance sheets follow -

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

Unaudited

  
 

July 31,

January 31,

ASSETS

 

2020

2020

CURRENT ASSETS:

 

Cash and cash equivalents

 

$

152,708

$

179,658

Restricted cash

 

 

950

 

1,113

Short-term investments

 

 

32,656

 

26,073

Accounts receivable

 

 

9,744

 

12,969

Inventory

 

30,383

35,634

Refundable income taxes

 

10,620

6,029

Prepaid expenses and other

 

9,878

9,659

Total current assets

 

246,939

271,135

Property and equipment-net

 

158,513

163,327

Operating lease right-of-use assets

 

 

15,345

 

16,173

Deferred taxes

 

 

21,182

 

17,061

Other assets

 

 

884

 

342

Equity method investment

 

29,475

32,464

TOTAL ASSETS

 

$

472,338

$

500,502

LIABILITIES AND EQUITY 

 

CURRENT LIABILITIES:

 

Accounts payable – trade

 

$

8,584

$

18,900

Current operating lease liabilities

 

5,310

4,935

Accrued expenses and other current liabilities

 

7,295

7,764

Total current liabilities

 

21,189

31,599

LONG TERM LIABILITIES:

 

Deferred taxes

 

3,670

4,334

Long-term operating lease liabilities

 

9,600

10,688

Other long-term liabilities

 

140

275

Total long-term liabilities

 

13,410

15,297

COMMITMENTS AND CONTINGENCIES

 

EQUITY:

 

REX shareholders’ equity:

 

Common stock, 45,000 shares authorized, 29,853 shares issued at par

 

299

299

Paid in capital

 

149,044

148,789

Retained earnings

 

577,602

586,985

Treasury stock, 23,655 and 23,561 shares, respectively

 

(340,591)

(335,066)

Total REX shareholders’ equity

 

386,354

401,007

Non-controlling interests

 

51,385

52,599

Total equity

 

437,739

453,606

TOTAL LIABILITIES AND EQUITY

 

$

472,338

$

500,502

- statements of cash flows follow -

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

Unaudited

 

 

Six Months Ended

 

July 31,

 

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

Net (loss) income

 

$

(10,463)

 

$

7,068

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

 

 

Depreciation

 

10,491

 

12,425

Amortization of operating lease right-of-use assets

 

2,691

 

2,992

Stock based compensation expense

 

80

 

248

Loss (income) from equity method investments

 

984

 

(365)

Dividends received from equity method investments

 

2,005

 

-

Interest income from investments

 

(179)

 

(25)

Deferred income tax

 

(4,784)

 

(6,294)

Gain on disposal of property and equipment

 

(22)

 

-

Changes in assets and liabilities:

 

 

Accounts receivable

 

3,225

 

3,696

Inventory

 

5,251

 

(3,594)

Refundable income taxes

 

(4,591)

 

12

Prepaid expenses and other assets

 

(481)

 

(153)

Accounts payable-trade

 

(10,301)

 

1,409

Other liabilities

 

(2,940)

 

(4,927)

Net cash (used in) provided by operating activities

 

(9,034)

 

12,492

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

Capital expenditures

 

(5,692)

 

(1,449)

Purchases of short-term investments

 

(45,450)

 

-

Sales of short-term investments

 

39,046

 

15,000

Other

 

(259)

 

12

Net cash (used in) provided by investing activities

 

(12,355)

 

13,563

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

Treasury stock acquired

 

(5,590)

 

-

Payments to noncontrolling interests holders

 

(157)

 

(2,598)

Capital contributions from minority investor

 

23

 

185

Net cash used in financing activities

 

(5,724)

 

(2,413)

NET DECREASE IN CASH, CASH EQUIVALENTS  AND RESTRICTED CASH

 

(27,113)

 

23,642

CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of period

 

180,771

 

188,812

CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of period

 

$

153,658

 

$

212,454

Non cash financing activities – Stock awards issued

 

$

240

 

$

487

Non cash financing activities – Stock awards accrued

 

$

-

 

$

171

Non cash investing activities – Accrued capital expenditures

 

$

22

 

$

5

Initial operating lease right-of-use assets and liabilities recorded  upon adoption of ASC 842

 

$

-

 

$

20,918

Operating lease right-of-use assets acquired and liabilities assumed upon lease execution 

 

$

1,863

 

$

432

Contacts:

Douglas Bruggeman
Chief Financial Officer
(937) 276‑3931

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