REX REX American Resources Corporation

-Full Year Diluted EPS Rise 14% to $4.91-

REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2016 fourth quarter (“Q4 ‘16”) and fiscal year ended January 31, 2017. REX management will host a conference call and webcast today at 11:00 a.m. ET.

 

Conference Call:

        (303) 223-4370

Webcast / Replay URL:

www.rexamerican.com/Corp/Page4.aspx

          The webcast will be available for replay for 30 days  

REX American Resources’ Q4 ‘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.

REX’s Q4 ‘16 net sales and revenue were $121.6 million, compared with $107.2 million in Q4 ‘15. Primarily reflecting higher average prices for ethanol and lower corn prices during the quarter, which resulted in more favorable ethanol crush spread margins as well as REX’s initiatives to increase plant-level production, the Company’s Q4 ’16 gross profit rose to $25.2 million, from $9.2 million in the prior year period. Equity in income of unconsolidated ethanol affiliates in Q4 ‘16 increased to $2.9 million, from $1.1 million in Q4 ’15 primarily as a result of the more favorable ethanol crush spread margins during the quarter. As a result, income from continuing operations before income taxes and non-controlling interests in Q4 ‘16 grew to $21.2 million, compared with $6.2 million in Q4 ‘15.

Net income attributable to REX shareholders in Q4 ‘16 rose to $12.4 million, from $3.7 million in Q4 ‘15, while Q4 ‘16 diluted net income per share attributable to REX common shareholders was $1.88 per share, compared to $0.54 per share in Q4 ‘15. Per share results in Q4 ‘16 and Q4 ‘15 are based on 6,591,000 and 6,832,000 diluted weighted average shares outstanding, respectively.

Net sales and revenue for the twelve months ended January 31, 2017 were $453.8 million, compared to $436.5 million in fiscal 2015, while gross profit for fiscal 2016 was $71.0 million, compared to $50.8 million in fiscal 2015. Fiscal 2016 equity in income of unconsolidated ethanol affiliates was $6.1 million, compared with $9.0 million in fiscal 2015, which benefited from a $2.9 million contribution from Patriot Holdings, LLC (“Patriot”) prior to REX’s June 2015 sale of the Company’s 26.6% interest in the Patriot ethanol production facility. In addition, results for the fiscal year ended January 31, 2016 benefited from a $10.4 million pre-tax gain related to the sale of the Company’s Patriot interest.

For fiscal 2016, REX reported net income attributable to REX shareholders of $32.3 million, compared with $31.4 million in fiscal 2015, while diluted net income per share attributable to REX common shareholders was $4.91 in fiscal 2016, compared to $4.30 per share in fiscal 2015. Per share results for the fiscal year ended January 31, 2017 and January 31, 2016, are based on 6,587,000 and 7,307,000 diluted weighted average shares outstanding, respectively.

REX American Resources’ Chief Executive Officer, Zafar Rizvi, commented, “We concluded our very successful 2016 fiscal year with our strongest quarter of the year. The Company’s strong fourth quarter financial results again highlight our ability to manage our business in a highly efficient manner, through the efforts of our highly capable employees and the support of the communities in which we operate. Specifically, our fourth quarter and full year results reflect our ability to leverage our assets, which includes the strategic location, efficiency of our plants and our disciplined operating approach at the plant and corporate level. Our operating initiatives and favorable industry fundamentals led to significant fourth quarter growth in our key financial metrics, including gross profit, net income, diluted earnings per share and free cash flow generation.”

“Looking ahead, we continue to focus on disciplined management of our assets, while working to strategically grow our business through capital investment projects to further expand production at our consolidated plants. In this regard, our balance sheet and liquidity position remain strong and with our performance in fiscal 2016, we ended the year with cash and cash equivalents of $188.6 million and working capital of $204 million.”

Balance Sheet and Share Repurchase Program

At January 31, 2017, REX had cash and cash equivalents of $188.6 million, $79.5 million of which was at the parent company, and $109.1 million of which was at its consolidated ethanol production facilities. This compares with cash and cash equivalents at January 31, 2016, of $135.8 million, $57.2 million of which was at the parent company, and $78.6 million of which was at its consolidated ethanol production facilities.

During fiscal 2016, REX repurchased 87,904 of its common shares at an average price of $49.52 per share. The Company is currently authorized to repurchase up to an additional 155,334 shares of common stock and has 6,558,679 shares outstanding.

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

                 

Three MonthsEnded

   

Twelve MonthsEnded

January 31, January 31,

2017

 

2016

2017

 

2016

Average selling price per gallon of ethanol $ 1.54 $ 1.39 $ 1.45 $ 1.44 Average selling price per ton of dried distillers grains $ 113.50 $ 123.21 $ 123.97 $ 145.50

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

$

0.28

$

0.23

$

0.28

$

0.26

Average selling price per ton of modified distillers grains

$ 43.85 $ 57.67 $ 50.10 $ 66.17 Average cost per bushel of grain $ 3.28 $ 3.56 $ 3.45 $ 3.62 Average cost of natural gas (per mmbtu)     $ 3.69   $ 3.38     $ 3.24   $ 3.71  

Supplemental Data Related to REX’s Alternative Energy Interests:

  REX American Resources Corporation Ethanol Ownership Interests/Effective Annual Gallons Shipped as of January 31, 2017 (gallons in millions)

Entity

 

TrailingTwelveMonthsGallonsShipped

 

CurrentREXOwnershipInterest

 

 

REX’s Current EffectiveOwnership of Trailing TwelveMonth Gallons Shipped

One Earth Energy, LLC (Gibson City, IL)   119.7   75.0%   89.8 NuGen Energy, LLC (Marion, SD)   127.1   99.5%   126.5 Big River Resources West Burlington, LLC (West Burlington, IA)   106.5   9.7%   10.3 Big River Resources Galva, LLC (Galva, IL)   125.3   9.7%   12.2 Big River United Energy, LLC (Dyersville, IA)   128.3   5.4%   6.9

Big River Resources Boyceville, LLC (Boyceville, WI)

  57.3   9.7%   5.6 Total   664.2   n/a   251.3      

About REX American Resources Corporation

REX American Resources has interests in six ethanol production facilities, which in aggregate shipped approximately 664 million gallons of ethanol over the twelve month period ended January 31, 2017. REX’s effective ownership of the trailing twelve month gallons shipped (for the twelve months ended January 31, 2017) by the ethanol production facilities in which it has ownership interests was approximately 251 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 Statements of Operations

(in thousands, except per share amounts)

Unaudited

     

Three MonthsEnded

   

Twelve MonthsEnded

January 31, January 31,

2017

 

2016

2017

 

2016

Net sales and revenue $ 121,587 $ 107,227 $ 453,799 $ 436,488 Cost of sales   96,416   98,069   382,760   385,654 Gross profit 25,171 9,158 71,039 50,834 Selling, general and administrative expenses (7,073) (4,184) (21,388) (19,813) Equity in income of unconsolidated ethanol affiliates 2,887 1,127 6,144 8,984 Interest and other income 222 101 596 625 Gain on sale of investment - - 192 10,385

(Loss) gain on disposal of real estate and property and equipment, net

 

(36)

 

7

 

328

 

503

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

21,171

6,209

56,911

51,518

Provision for income taxes   (5,622)   (1,382)   (17,393)   (14,108) Net income including non-controlling interests 15,549 4,827 39,518 37,410 Net income attributable to non-controlling interests   (3,168)   (1,141)   (7,185)   (5,974) Net income attributable to REX common shareholders   12,381 $ 3,686 $ 32,333 $ 31,436   Weighted average shares outstanding – basic   6,591   6,813   6,587   7,297   Basic net income per share attributable to REX common shareholders

$

1.88

$

0.54

$

4.91

$

4.31

  Weighted average shares outstanding – diluted   6,591   6,832   6,587   7,307 Diluted net income per share attributable to REX common shareholders

$

1.88

$

0.54

$

4.91

$

4.30

   

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands) Unaudited

     

January 31,

 

2017

     

2016

CURRENT ASSETS: Cash and cash equivalents $ 188,576 $ 135,765 Restricted cash 130 54 Accounts receivable 11,901 13,666 Inventory 17,057 17,178 Refundable income taxes 1,070 5,254 Prepaid expenses and other 6,959 6,407 Deferred taxes-net   824   1,036 Total current assets 226,517 179,360 Property and equipment-net 182,761 189,976 Other assets 6,913 6,642 Equity method investments   37,833   38,707 TOTAL ASSETS $ 454,024 $ 414,685 LIABILITIES AND EQUITY CURRENT LIABILITIES: Accounts payable – trade $ 9,171 $ 10,212 Accrued expenses and other current liabilities   13,348   9,423 Total current liabilities   22,519   19,635 LONG TERM LIABILITIES: Deferred taxes 41,135 38,304 Other long term liabilities   2,096   987 Total long term liabilities   43,231   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 145,767 144,844 Retained earnings 508,207 475,874 Treasury stock, 23,292 and 23,204 shares, respectively   (313,838)  

(309,754)

Total REX shareholders’ equity 340,435 311,263 Non-controlling interests   47,839   44,496 Total equity   388,274   355,759 TOTAL LIABILITIES AND EQUITY $ 454,024 $ 414,685    

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands) Unaudited

     

Years Ended January 31,

2017

   

2016

CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 39,518 $ 37,410 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 19,519 18,639 Impairment charges on real estate - 125 Stock based compensation expense 1,314 64 Income from equity method investments (6,144) (8,984) Dividends received from equity method investments 7,018 11,151 Gain on sale of investment (192) (10,385) Gain on disposal of real estate and property and equipment (328) (503) Deferred income tax 3,043 (4,196) Changes in assets and liabilities: Accounts receivable (2,535) (496) Inventory 121 884 Prepaid expenses and other assets (1,357) (1,135) Income taxes refundable 4,184 (2,235) Accounts payable-trade 36 387 Accrued expenses and other liabilities   4,912   (536) Net cash provided by operating activities   69,109   40,190 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (14,208) (15,495) Repayment of note receivable 24 23 Proceeds from sale of investment 4,492 45,476 Proceeds from sale of real estate and property and equipment 1,511 2,001 Restricted cash (76) (54) Restricted investments and deposits   510   250 Net cash (used in) provided by investing activities   (7,747)   32,201 CASH FLOWS FROM FINANCING ACTIVITIES: Payments to non-controlling interests holders (3,842) (4,471) Treasury stock acquired   (4,709)   (69,852) Net cash used in financing activities   (8,551)   (74,323) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 52,811 (1,932) CASH AND CASH EQUIVALENTS-Beginning of year   135,765   137,697 CASH AND CASH EQUIVALENTS-End of year $ 188,576 $ 135,765 Non cash financing activities – Accrued common stock repurchase $ - $ 356 Non cash financing activities – Equity awards issued $ 1,095 $ - Non cash investing activities – Accrued capital expenditures $ 342 $

1,063

 

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