REX American Resources Reports Fiscal 2020 Third Quarter EPS of $1.44

REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2020 third quarter (“Q3 ‘20”) ended October 31, 2020. REX management will host a conference call and webcast today at 11:00 a.m. ET.

Conference Call:

212/231-2912

Webcast / Replay URL:

www.rexamerican.com/Corp/Page4.aspx

The webcast will be available for replay for 30 days.

REX American Resources’ Q3 ‘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 Q3 ‘20 net sales and revenue rose 43.4% to $124.3 million, compared with $86.7 million in Q3 ‘19. The year-over-year net sales and revenue increase was primarily due to higher ethanol production levels, which led to a 56.7% increase in ethanol gallons sold and more than offset a small year-over-year decline in the average selling price per gallon of ethanol. Primarily reflecting these factors and an improved crush spread, Q3 ‘20 gross profit for the Company’s ethanol and by-products segment rose to $18.9 million, from $0.03 million in Q3 ‘19. As a result, the ethanol and by-products segment generated a profit before income taxes of $17.0 million in Q3 ‘20, compared to a loss of $2.8 million in Q3 ‘19. The Company’s refined coal operation incurred a $1.3 million gross loss and a $1.3 million loss before income taxes in Q3 ‘20, compared to a $1.8 million gross loss and a loss before income taxes of $1.6 million in Q3 ‘19. REX reported a Q3 ‘20 profit before income taxes and non-controlling interests of $15.1 million, compared with a loss before income taxes and non-controlling interests of $4.9 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 $1.0 million and $2.2 million for Q3 ‘20 and Q3 ‘19, respectively.

Net income attributable to REX shareholders in Q3 ‘20 was $8.8 million, compared to a net loss of $2.1 million in Q3 ‘19. Q3 ‘20 basic and diluted net income per share attributable to REX common shareholders was $1.44, compared to a net loss per share of $0.32 in Q3 ‘19. Per share results in Q3 ‘20 and Q3 ‘19 are based on 6,143,000 and 6,319,000 diluted weighted average shares outstanding, respectively.

Segment Income Statement Data:

Three Months
Ended

Nine Months
Ended

($ in thousands)

October 31,

October 31,

2020

2019

2020

2019

Net sales and revenue:

Ethanol & By-Products (1)

$

124,217

$

86,603

$

246,694

$

296,826

Refined coal (2) (3)

34

68

134

288

Total net sales and revenue

$

124,251

$

86,671

$

246,828

$

297,114

Gross profit (loss):

Ethanol & By-Products (1)

$

18,929

$

28

$

11,259

$

12,312

Refined coal (2)

(1,250)

(1,786)

(4,241)

(6,420)

Total gross profit (loss)

$

17,679

$

(1,758)

$

7,018

$

5,892

Income (loss) before income taxes:

Ethanol & By-Products (1)

$

17,007

$

(2,822)

$

1,397

$

3,491

Refined coal (2)

(1,270)

(1,648)

(4,235)

(6,351)

Corporate and other

(626)

(434)

(1,873)

(1,146)

Total income (loss) before income taxes

$

15,111

$

(4,904)

$

(4,711)

$

(4,006)

 

(Provision) benefit for income taxes:

Ethanol & By-Products

$

(5,071)

$

945

$

(17)

$

(160)

Refined coal

985

2,181

4,863

9,282

Corporate and other

34

105

461

279

Total (provision) benefit for income taxes

$

(4,052)

$

3,231

$

5,307

$

9,401

 

Segment profit (loss):

Ethanol & By-Products

$

9,660

$

(2,330)

$

49

$

684

Refined coal

(227)

607

821

3,209

Corporate and other

(592)

(329)

(1,412)

(868)

Net income (loss) attributable to REX common shareholders

$

8,841

$

(2,052)

$

(542)

$

3,025

(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, “The strength of our third quarter results highlight the resiliency and adaptability of our teams and the efficiency of our plants as our two consolidated plants returned to production during the second quarter.

“Reflecting our solid balance sheet and long-term commitment to enhance shareholder value, during the quarter we repurchased 198,173 REX shares and in fiscal 2020 to date, we have returned over $19 million to shareholders through the repurchase of 316,349 shares. We ended the fiscal 2020 third quarter in a strong financial and liquidity position with cash and cash equivalents and short-term investments in excess of $202 million and working capital of $226 million and no bank debt.”

Balance Sheet

At October 31, 2020, REX had cash, cash equivalents and short-term investments of $202.3 million, $42.4 million of which was at the parent company, and $159.9 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.

During the fiscal third quarter ended October 31, 2020 the Company repurchased 198,173 shares of its common stock at a cost $13.3 million, and subsequent to the end of the third quarter the Company purchased an additional 9,500 shares. As a result, the Company can repurchase approximately 33,512 additional shares under its current repurchase authorization. Reflecting all purchases to date, REX presently has approximately 5,992,002 shares of common stock outstanding.

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

Three Months
Ended

Nine Months
Ended

October 31,

October 31,

2020

2019

2020

2019

Average selling price per gallon of ethanol

$

1.31

$

1.39

$

1.28

$

1.34

Average selling price per ton of dried distillers grains

$

129.38

$

134.57

$

136.49

$

137.48

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

$

0.24

$

0.26

$

0.25

$

0.25

Average selling price per ton of modified distillers grains

$

56.68

$

56.56

$

52.44

$

59.67

Average cost per bushel of grain

$

3.28

$

4.15

$

3.57

$

3.79

Average cost of natural gas (per MmBtu)

$

2.09

$

2.51

$

2.87

$

2.98

Supplemental data related to REX’s alternative energy interests:

REX American Resources Corporation
Ethanol Ownership Interests/Effective Annual Gallons Shipped as of October 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

119.5

75.3%

90.0

NuGen Energy, LLC
Marion, SD

95.9

99.5%

95.4

Big River Resources West Burlington, LLC
West Burlington, IA

103.1

10.3%

10.6

Big River Resources Galva, LLC
Galva, IL

113.7

10.3%

11.7

Big River United Energy, LLC
Dyersville, IA

117.9

5.7%

6.7

Big River Resources Boyceville, LLC
Boyceville, WI

55.2

10.3%

5.7

Total

605.3

n/a

220.1

Third 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 212/231-2912 (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 605 million gallons of ethanol over the twelve-month period ended October 31, 2020. REX’s effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended October 31, 2020) by the ethanol production facilities in which it has ownership interests was approximately 220 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

Nine Months
Ended

October 31,

October 31,

2020

2019

2020

2019

Net sales and revenue

$

124,251

$

86,671

$

246,828

$

297,114

Cost of sales

106,572

88,429

239,810

291,222

Gross profit (loss)

17,679

(1,758)

7,018

5,892

Selling, general and administrative expenses

(4,257)

(4,133)

(13,300)

(13,629)

Equity in income (loss) of unconsolidated ethanol affiliates

1,152

(15)

168

350

Interest and other income, net

537

1,002

1,403

3,381

Income (loss) before income taxes and

non-controlling interests

15,111

(4,904)

(4,711)

(4,006)

(Provision) benefit for income taxes

(4,052)

3,231

5,307

9,401

Net income (loss) including non-controlling interests

11,059

(1,673)

596

5,395

Net income attributable to non-controlling interests

(2,218)

(379)

(1,138)

(2,370)

Net income (loss) attributable to REX common shareholders

$

8,841

$

(2,052)

$

(542)

$

3,025

Weighted average shares outstanding – basic and diluted

6,143

6,319

6,221

6,318

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

$

1.44

($

0.32)

($

0.09)

$

0.48

 

- balance sheets follow -

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

Unaudited

 

October 31,

January 31,

ASSETS

2020

2020

CURRENT ASSETS:

Cash and cash equivalents

$

173,075

$

179,658

Short-term investments

29,216

26,073

Restricted cash

884

1,113

Accounts receivable

12,496

12,969

Inventory

21,616

35,634

Refundable income taxes

5,947

6,029

Prepaid expenses and other

9,771

9,659

Total current assets

253,005

271,135

Property and equipment-net

154,401

163,327

Operating lease right-of-use assets

14,054

16,173

Deferred taxes

22,297

17,061

Other assets

1,278

342

Equity method investment

30,126

32,464

TOTAL ASSETS

$

475,161

$

500,502

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Accounts payable – trade

$

15,588

$

18,900

Current operating lease liabilities

5,105

4,935

Accrued expenses and other current liabilities

6,049

7,764

Total current liabilities

26,742

31,599

LONG TERM LIABILITIES:

Deferred taxes

4,138

4,334

Long-term operating lease liabilities

8,548

10,688

Other long-term liabilities

282

275

Total long-term liabilities

12,968

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

149,077

148,789

Retained earnings

586,443

586,985

Treasury stock, 23,852 and 23,561 shares, respectively

(353,910)

(335,066)

Total REX shareholders’ equity

381,909

401,007

Non-controlling interests

53,542

52,599

Total equity

435,451

453,606

TOTAL LIABILITIES AND EQUITY

$

475,161

$

500,502

 

- statements of cash flows follow -

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

Unaudited

 

Nine Months Ended

October 31,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

596

$

5,395

Adjustments to reconcile net income to net cash

provided by (used in) operating activities:

Depreciation

15,697

17,682

Amortization of operating lease right-of-use assets

3,982

4,648

Income from equity method investments

(168)

(350)

Dividends received from equity method investments

2,506

1,003

Interest income from investments

(200)

(25)

Deferred income tax

(5,431)

(9,828)

Stock based compensation expense

122

215

Gain on disposal of property and equipment

(58)

-

Changes in assets and liabilities:

Accounts receivable

473

(5,013)

Inventory

14,018

(12,561)

Refundable income taxes

82

473

Prepaid expenses and other assets

(517)

(583)

Accounts payable-trade

(4,302)

5,618

Other liabilities

(5,301)

(9,010)

Net cash provided by (used in) operating activities

21,499

(2,336)

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(6,610)

(2,643)

Purchases of short-term investments

(68,225)

-

Sales of short-term investments

65,282

15,000

Other

(474)

369

Net cash (used in) provided by investing activities

(10,027)

12,726

CASH FLOWS FROM FINANCING ACTIVITIES:

Treasury stock acquired

(18,089)

-

Payments to noncontrolling interests holders

(283)

(2,598)

Capital contributions from minority investor

88

258

Net cash used in financing activities

(18,284)

(2,340)

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS

AND RESTRICTED CASH

(6,812)

8,050

CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of period

180,771

188,812

CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of period

$

173,959

$

196,862

Non cash investing activities – Accrued capital expenditures

$

198

$

272

Non cash financing activities – Stock awards accrued

$

-

$

99

Non cash financing activities – Stock awards issued

$

240

$

487

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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