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 theCompany’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
CorporationEthanol Ownership Interests/Effective Annual
Gallons Shipped as of April 30, 2018(gallons in millions)
Entity
Trailing TwelveMonths
GallonsShipped
CurrentREXOwnershipInterest
REX’s Current EffectiveOwnership
of Trailing TwelveMonth 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
SUBSIDIARIESConsolidated 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
SUBSIDIARIESConsolidated 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
SUBSIDIARIESConsolidated Statements of Cash Flows(in
thousands) Unaudited
Three Months EndedApril
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 $ -
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180523005285/en/
REX American Resources CorporationDouglas Bruggeman,
937-276-3931Chief Financial OfficerorJCIRJoseph Jaffoni, Norberto
Aja, 212-835-8500rex@jcir.com
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