May 23, 2018 - 7:00 AM EDT
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REX American Resources Reports First Quarter Diluted EPS of $1.45

DAYTON, Ohio

REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2018 first quarter (“Q1 ‘18”) ended April 30, 2018. REX management will host a conference call and webcast today at 11:00 a.m. ET.

         

Conference Call:

      (212) 231-2924

Webcast / Replay URL:

www.rexamerican.com/Corp/Page4.aspx

        The webcast will be available for replay for 30 days
 

REX American Resources’ Q1 ‘18 results principally reflect its interests in six ethanol production facilities and its refined coal operation. One Earth Energy, LLC (“One Earth”) and NuGen Energy, LLC (“NuGen”) are consolidated, while those of its four other ethanol plants are reported as equity in income of unconsolidated ethanol affiliates. REX’s financial results also reflect the refined coal entity acquired by the Company in fiscal 2017. The Company reports results for its two business segments as ethanol and by-products, and refined coal.

REX’s Q1 ‘18 net sales and revenue were $120.8 million, compared with $113.1 million in Q1 ‘17, primarily reflecting the increased ethanol gallons sold as well as higher average selling prices for dried and modified distillers grains during the quarter, which offset lower average selling prices for ethanol. The Company’s Q1 ‘18 gross profit for its ethanol and by-products segment increased to $13.5 million, from $12.5 million in the comparable prior year period. Equity in income of unconsolidated ethanol affiliates in Q1 ‘18 was flat at $0.7 million, compared to Q1 ’17. This led to income before income taxes of $11.0 million in Q1 ‘18, compared to $8.9 million in Q1 ‘17 for the ethanol and by-products segment. The Company also recorded a gross loss from its refined coal operation of $2.7 million in Q1 ‘18. While gross profit and income before income taxes were negatively impacted, the Company was able to recognize benefits related to its refined coal operation in the form of a lower effective tax rate. The Company reported income from continuing operations before income taxes and non-controlling interests in Q1 ‘18 of $7.6 million, compared with $8.0 million in Q1 ‘17.

Net income attributable to REX shareholders in Q1 ‘18 more than doubled to $9.5 million, from $4.5 million in Q1 ‘17, primarily reflecting lower tax rates related to the Company’s refined coal operation and the December 2017 passage of the 2017 Tax Cuts and Jobs Act. Q1 ‘18 diluted net income per share attributable to REX common shareholders was $1.45 per share, compared to $0.69 per share in Q1 ‘17.

Per share results in Q1 ‘18 and Q1 ‘17 are based on 6,571,000 and 6,593,000 diluted weighted average shares outstanding, respectively.

     

Segment Income Statement Data:

 

Three Months
Ended

($ in thousands) April 30,
  2018       2017
Net sales and revenue:
Ethanol & By-Products (1) $ 120,680 $ 113,143
Refined coal (2) (3)   140   -
Total net sales and revenues $ 120,820 $ 113,143
 
Gross profit (loss):
Ethanol & By-Products (1) $ 13,546 $ 12,489
Refined coal (2)   (2,695)   -
Total gross profit $ 10,851 $ 12,489
 
Income (loss) before income taxes:
Ethanol & By-Products (1) $ 11,009 $ 8,923
Refined coal (2) (2,859) -
Corporate and other   (501)   (921)
Total income before income taxes $ 7,649 $ 8,002
 
Benefit (provision) for income taxes:
Ethanol & By-Products $ (1,420) $ (2,705)
Refined coal 3,999 -
Corporate and other   124   315
Total benefit (provision) before income taxes $ 2,703 $ (2,390)
 
Segment profit (loss):
Ethanol & By-Products $ 8,589 $ 5,142
Refined coal 1,271 -
Corporate and other   (364)   (598)
Net income attributable to REX common shareholders $ 9,496 $ 4,544

(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, “Ethanol pricing remained pressured in the first quarter based on industry supply levels and legislative uncertainty. However, our consolidated plants increased the volume of ethanol sold by 9% over last year’s first quarter and with the recovery in distillers grain pricing we grew the gross profit in the ethanol and by-products segment by 8.5%. This growth, combined with the benefits of our refined coal operations and other tax reductions enabled REX to more than double its net income and earnings per share in the first quarter of fiscal 2018 versus the same period last year.

“With our healthy balance sheet, including cash and short-term investments of $176 million and working capital of $220 million, we remain well positioned in our continued efforts to build value for our shareholders.”

Balance Sheet and Share Repurchase Program

At April 30, 2018, REX had cash and cash equivalents and short-term investments of $175.7 million, $60.0 million of which was at the parent company, and $115.7 million of which was at its consolidated production facilities. This compares with cash and cash equivalents at January 31, 2018, of $191.0 million, $74.1 million of which was at the parent company, and $116.9 million of which was at its consolidated ethanol production facilities.

On March 20, 2018, REX’s Board of Directors approved an increase in the Company’s share repurchase program providing the Company with the authority to repurchase up to an additional 500,000 shares of its common stock. During the first quarter of fiscal 2018, the Company purchased 126,141 shares at an average cost of $72.36. Reflecting the balance of the Company’s prior repurchase authorization, REX is now authorized to repurchase up to 525,732 shares of its common stock. The Company had 6,440,628 shares outstanding at April 30, 2018.

Repurchases by the Company will be subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors. Share repurchases may be made from time to time in open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements. There is no minimum number of shares that the Company is required to repurchase and the repurchase program may be suspended or discontinued at any time without prior notice. All shares purchased will be held in the Company’s treasury for possible future use.

     

The following table summarizes select data related to the
Company’s consolidated Ethanol and By-Products interests:

         

Three Months
Ended

April 30,

2018

   

2017

Average selling price per gallon of ethanol $ 1.33 $ 1.44
Average selling price per ton of dried distillers grains $ 137.75 $ 100.06
Average selling price per pound of non-food grade corn oil $ 0.25 $ 0.28
Average selling price per ton of modified distillers grains $ 70.29 $ 41.91
Average cost per bushel of grain $ 3.50 $ 3.47
Average cost of natural gas (per mmbtu)       $ 3.46     $ 3.74
 
 

Supplemental Data Related to REX’s Ethanol and By-Products Interests:

 

REX American Resources Corporation
Ethanol Ownership Interests/Effective Annual Gallons Shipped as of April 30, 2018
(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)

    127.3     75.1%     95.6
NuGen Energy, LLC

(Marion, SD)

    134.5     99.5%     133.8
Big River Resources West Burlington, LLC (West Burlington, IA)     108.3     10.3%     11.2
Big River Resources Galva, LLC

(Galva, IL)

    127.8     10.3%     13.2
Big River United Energy, LLC

(Dyersville, IA)

    129.6     5.7%     7.4
Big River Resources Boyceville, LLC

(Boyceville, WI)

    56.9     10.3%     5.9
Total     684.4     n/a     267.1
           

First Quarter Conference Call

REX will host a conference call at 11:00 a.m. ET today. Senior management will discuss the financial results and host a question and answer session. The dial in number for the audio conference call is 212/231-2924 (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 684 million gallons of ethanol over the twelve month period ended April 30, 2018. REX’s effective ownership of the trailing twelve month gallons shipped (for the twelve months ended April 30, 2018) by the ethanol production facilities in which it has ownership interests was approximately 267 million gallons. In addition, in fiscal 2017 the Company acquired a refined coal operation. 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 impact of legislative changes, the price volatility and availability of corn, dried and modified distillers grains, ethanol, 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 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

April 30,

2018

   

2017

Net sales and revenue $ 120,820 $ 113,143

Cost of sales

 

109,969

 

100,654

Gross profit

10,851

12,489

Selling, general and administrative expenses

(4,553)

(5,402)

Equity in income of unconsolidated ethanol affiliates

697

700

Interest and other income

 

654

 

215

Income from continuing operations before income taxes and non-controlling interests

7,649

8,002

Benefit (provision) for income taxes

 

2,703

 

(2,390)

Net income including non-controlling interests

10,352

5,612

Net income attributable to non-controlling interests

 

(856)

 

(1,068)

Net income attributable to REX common shareholders

$

9,496

$

4,544

 
Weighted average shares outstanding – basic and diluted   6,571   6,593
 
Basic and diluted net income per share attributable to REX common shareholders $ 1.45 $ 0.69
 
 

- balance sheets follow -

         
 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands) Unaudited

 

April 30,

January 31,

ASSETS:

2018

2018

CURRENT ASSETS:
Cash and cash equivalents $ 64,246 $ 190,988
Short-term investments 111,495 -
Restricted cash 896 354
Accounts receivable 21,263 12,913
Inventory 26,088 20,755
Refundable income taxes 7,861 6,612
Prepaid expenses and other   8,056   7,412
Total current assets 239,905 239,034
Property and equipment-net 193,969 197,827
Other assets 7,444 7,454
Equity method investments   35,246   34,549
TOTAL ASSETS $ 476,564 $ 478,864
 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable – trade $ 8,803 $ 8,149
Accrued expenses and other current liabilities   10,956   13,716
Total current liabilities   19,759   21,865
LONG TERM LIABILITIES:
Deferred taxes 19,435 21,706
Other long term liabilities   4,039   3,367
Total long term liabilities   23,474   25,073
COMMITMENTS AND CONTINGENCIES
EQUITY:
REX shareholders’ equity:
Common stock, 45,000 shares authorized, 29,853 shares issued at par 299 299
Paid in capital 146,981 146,923
Retained earnings 557,409 547,913
Treasury stock, 23,413 and 23,287 shares, respectively   (322,758)   (313,643)
Total REX shareholders’ equity 381,931 381,492
Non-controlling interests   51,400   50,434
Total equity   433,331   431,926
TOTAL LIABILITIES AND EQUITY $ 476,564 $ 478,864
 

- statements of cash flows follow -

         
 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands) Unaudited

 

Three Months Ended
April 30,

2018

2017

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 10,352 $ 5,612
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation 5,920 4,934
Income from equity method investments (697) (700)
Accrued interest income (341) -
Deferred income tax (2,271) 3
Stock based compensation expense 71 196
Gain on disposal of real estate and property and equipment (8) -
Changes in assets and liabilities:
Accounts receivable (8,350) 2,705
Inventory (5,333) (3,370)
Other assets (1,894) (30)
Accounts payable-trade 1,011 (1,308)
Other liabilities   (1,980)   723
Net cash (used in) provided by operating activities   (3,520)   8,765
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (3,061) (5,905)
Purchase of short-term investment (111,154) -
Restricted investments and deposits 5 51
Other   6   6
Net cash used in investing activities   (114,204)   (5,848)
CASH FLOWS FROM FINANCING ACTIVITIES:
Treasury stock acquired (8,586) -
Capital contributions from minority investor   110   -
Net cash used in financing activities   (8,476)   -
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND
RESTRICTED CASH (126,200) 2,917
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of period   191,342   188,706
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of period $ 65,142 $ 191,623
 
Non cash investing activities – Accrued capital expenditures $ 142 $ 1,284
Non cash financing activities – Stock awards accrued $ - $ 167
Non cash financing activities – Accrued common stock repurchases $ 542 $ -

REX American Resources Corporation
Douglas Bruggeman, 937-276-3931
Chief Financial Officer
or
JCIR
Joseph Jaffoni, Norberto Aja, 212-835-8500
[email protected]


Source: Business Wire (May 23, 2018 - 7:00 AM EDT)

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