REX REX American Resources Corporation

REX American Resources Corporation (NYSE:REX) today reported financial results for its fiscal 2016 third quarter (“Q3 ‘16”) ended October 31, 2016. REX management will host a conference call and webcast today at 11:00 a.m. ET. to review the results.

         

Conference Call:

      (312) 429-1274

Webcast / Replay URL:

     

www.rexamerican.com/Corp/Page4.aspxThe webcast will be available for replay for 30 days

 

REX American Resources’ Q3 ‘16 results principally reflect its interests in six ethanol production facilities. The operations of One Earth Energy, LLC (“One Earth”) and NuGen Energy, LLC (“NuGen”) are consolidated, while those of its four remaining plants are reported as equity in income of unconsolidated ethanol affiliates. During the fiscal 2015 second quarter the Company sold its interest in Patriot Holdings, LLC (“Patriot”). As such, subsequent to June 1, 2015, equity in income of unconsolidated ethanol affiliates includes contributions from four ethanol production facilities, compared with five in the comparable year-ago period.

REX’s Q3 ‘16 net sales and revenue were $116.3 million, compared with $110.6 million in Q3 ‘15, principally reflecting volume increases in both ethanol and dried distillers grains (“DDGS”), which was partially offset by a decrease in the average selling price of DDGS. Primarily due to the year-over-year decrease in grain costs and increased ethanol production, the Company’s Q3 ’16 gross profit increased to $20.2 million, from $14.3 million in the prior year period. Equity in income of unconsolidated ethanol affiliates in Q3 ‘16 totaled $1.8 million, compared with $1.3 million in Q3 ’15. The above contributed to income before income taxes and non-controlling interests in Q3 ‘16 of $17.2 million, compared with $11.1 million in Q3 ’15.

Net income attributable to REX shareholders in Q3 ‘16 was $8.9 million, compared with $7.5 million in Q3 ‘15, while Q3 ‘16 diluted net income per share attributable to REX common shareholders was $1.36 per share, compared to $1.08 per share in Q3 ‘15.

Per share results in Q3 ‘16 and Q3 ‘15 are based on 6,590,000 and 6,915,000 diluted weighted average shares outstanding, respectively.

REX Chief Executive Officer, Zafar Rizvi, commented, “We are pleased with our results for the third quarter, including a 26% increase in earnings per share, on the back of improved industry crush spreads and the positive impact of our capital investment projects to further expand production at our consolidated plants. Given our highly capable employees, the capital improvements at our plants and our operating disciplines, we were able to increase the number of gallons of ethanol produced by approximately 10% versus the prior year period.”

Balance Sheet

At October 31, 2016, REX had cash and cash equivalents of $162.8 million, $61.8 million of which was at the parent company and $101.0 million of which was at its consolidated ethanol production facilities. This compares with cash and cash equivalents of $135.8 million at January 31, 2016, $57.2 million of which was at the parent company and $78.6 million of which was at its consolidated ethanol production facilities.

The Company is currently authorized to repurchase up to an additional 155,334 shares of common stock and has 6,582,029 shares outstanding.

The following table summarizes select data related to the Company’s consolidated operations:

                  Three Months

Ended

    Nine Months

Ended

October 31, October 31,

2016

   

2015

2016

   

2015

Average selling price per gallon of ethanol

$

1.44

$

1.44

$

1.42

$

1.45

  Average selling price per ton of dried distillers grains

$

122.34

$

146.64

$

127.27

$

152.69

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

$

0.29

$

0.26

$

0.27

$

0.27

Average selling price per ton of modified distillers grains

 

$

 

45.17

 

$

 

56.40

 

$

 

54.49

 

$

 

70.99

  Average cost per bushel of grain $ 3.30 $ 3.62 $ 3.51 $ 3.64   Average cost of natural gas

(per mmbtu)

   

$

3.31

   

$

3.21

   

$

3.08

   

$

3.82

 

Supplemental Data Related to REX’s Ethanol Interests:

  REX American Resources CorporationEthanol Ownership Interests/Effective Annual Gallons Shipped as of October 31, 2016

(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 .1     75.0%     89 .3 NuGen Energy, LLC

(Marion, SD)

    124 .5     99.5%     123 .9

Big River Resources West Burlington, LLC(West Burlington, IA)

    107 .1     9.7%     10 .4 Big River Resources Galva, LLC

(Galva, IL)

    126 .1     9.7%     12 .2 Big River United Energy, LLC

(Dyersville, IA)

    126 .9     5.4%     6 .9 Big River Resources Boyceville, LLC

(Boyceville, WI)

    57 .6     9.7%     5 .6 Total     661 .3     n/a     248 .3

About REX American Resources Corporation

REX American Resources has interests in six ethanol production facilities, which in aggregate shipped approximately 661 million gallons of ethanol over the twelve month period ended October 31, 2016. REX’s effective ownership of the trailing twelve month gallons shipped (for the twelve months ended October 31, 2016) by the ethanol production facilities in which it has ownership interests was approximately 248 million gallons. 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 plants operating efficiently and according to forecasts and projections, changes in the international, national or regional economies, weather, the effects of terrorism or acts of war and the impact of Internal Revenue Service audits. The Company does not intend to update publicly any forward-looking statements except as required by law.

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Operations

(in thousands, except per share amounts)

Unaudited

          Three Months

Ended

Nine Months

Ended

October 31,

October 31,

2016

   

2015

2016

   

2015

Net sales and revenue $ 116,283 $ 110,584 $ 332,212 $ 329,261 Cost of sales   96,121   96,311   286,344   287,585 Gross profit 20,162 14,273 45,868 41,676 Selling, general and administrative expenses (5,082) (4,720) (14,315) (15,629) Equity in income of unconsolidated ethanol affiliates 1,838 1,314 3,257 7,857 Gain on sale of investment - - 192 10,385 Gain on disposal of property and equipment, net 179 1 364 496 Interest and other income   117   199   374   524 Income before income taxes 17,214 11,067 35,740 45,309 Provision for income taxes   (5,740)   (1,634)   (11,771)   (12,726) Net income 11,474 9,433 23,969 32,583 Net income attributable to non-controlling interests   (2,536)   (1,977)   (4,017)   (4,833) Net income attributable to REX common shareholders $ 8,938 $ 7,456 $ 19,952 $ 27,750   Weighted average shares outstanding – basic and diluted   6,590   6,915   6,591   7,460   Basic and diluted net income per share attributable to REX common shareholders

$

1.36

$

1.08

$

3.03

$

3.72

           

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Balance Sheets

(in thousands) Unaudited

  ASSETS: October 31, January 31,

2016

2016

 

 

CURRENT ASSETS: Cash and cash equivalents $ 162,753 $ 135,765 Restricted cash 46 54 Accounts receivable 13,269 13,666 Inventory 19,483 17,178 Refundable income taxes 1,956 5,254 Prepaid expenses and other 6,680 6,407 Deferred taxes-net

1,537

1,036

Total current assets 205,724 179,360 Property and equipment-net 186,219 189,976 Other assets 6,432 6,642 Equity method investments   37,954   38,707 TOTAL ASSETS $ 436,329 $ 414,685 LIABILITIES AND EQUITY CURRENT LIABILITIES: Accounts payable – trade $ 10,999 $ 10,212 Accrued expenses and other current liabilities

10,875

9,423

Total current liabilities

21,874

19,635

LONG TERM LIABILITIES: Deferred taxes 37,786 38,304 Other long term liabilities   2,227   987 Total long term liabilities   40,013

39,291

COMMITMENTS AND CONTINGENCIES EQUITY: REX shareholders’ equity: Common stock, 45,000 shares authorized, 29,853 shares issued at par 299 299 Paid in capital 145,744 144,844 Retained earnings 495,826 475,874 Treasury stock, 23,270 and 23,204 shares, respectively  

(313,844)

 

(309,754)

Total REX shareholders’ equity 328,025 311,263 Non-controlling interests   46,417   44,496 Total equity

374,442

355,759

TOTAL LIABILITIES AND EQUITY $ 436,329 $ 414,685          

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Cash Flows

(in thousands) Unaudited

Nine Months Ended

October 31,

2016

2015

CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 23,969 $ 32,583 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, impairment charges and amortization 14,567 14,193 Income from equity method investments (3,257) (7,857) Gain on disposal of real estate and property and equipment (364) (496) Dividends received from equity method investments 4,010 7,643 Gain on sale of investment (192)

(10,385)

Deferred income tax (1,019) (8,078) Stock based compensation expense 68 23 Changes in assets and liabilities: Accounts receivable (1,686) (2,307) Inventories (2,305) (5,494) Other assets 2,758 (51) Accounts payable-trade 1,653 4,913 Other liabilities   3,157   (2,849) Net cash provided by operating activities   41,359   21,838 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (11,836) (9,852) Restricted cash 8 (20) Restricted investments and deposits 460 250 Proceeds from sale of investment 2,275 45,476 Proceeds from sale of property and equipment 1,510 1,936 Other   17   17 Net cash (used in) provided by investing activities   (7,566)   37,807 CASH FLOWS FROM FINANCING ACTIVITIES: Dividend payments to and purchases of stock from non-controlling interests holders

Loan

(2,096) (605) Treasury stock acquired   (4,709)   (60,111) Net cash used in financing activities   (6,805)   (60,716) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 26,988 (1,071) CASH AND CASH EQUIVALENTS-Beginning of period   135,765   137,697 CASH AND CASH EQUIVALENTS-End of period $ 162,753 $ 136,626 Non cash investing activities – Accrued capital expenditures $ 1,183 $ 1,216 Non cash financing activities – Equity awards issued $ 1,095 $ -

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REX American Resources CorporationDouglas Bruggeman, 937-276-3931Chief Financial OfficerorJCIRJoseph Jaffoni, Norberto Aja212-835-8500rex@jcir.com