Full Year Diluted EPS of $1.18

REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2019 fourth quarter (“Q4 ‘19”) ended January 31, 2020. REX management will host a conference call and webcast today at 11:00 a.m. ET.

Conference Call:

212/231-2904

Webcast / Replay URL:

www.rexamerican.com/Corp/Page4.aspx

The webcast will be available for replay for 30 days

REX American Resources’ Q4 ‘19 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 Q4 ‘19 net sales and revenue rose to $120.9 million, compared with $113.3 million in Q4 ‘18. The year-over-year net sales and revenue increase was primarily due to higher ethanol pricing on a year-to-year basis, which more than offset lower dried distillers grains pricing as well as a 9.2% decrease in ethanol gallons sold. Primarily reflecting these factors, which offset a 14.4% year-over-year increase in corn prices, Q4 ‘19 gross profit for the Company’s ethanol and by-products segment rose to $8.1 million, compared with $5.4 million in Q4 ‘18. As a result, the ethanol and by-products segment income before income taxes increased to $5.0 million in Q4 ‘19, compared to $1.4 million in Q4 ‘18. The Company’s refined coal operation incurred a $1.5 million gross loss and a $1.4 million loss before income taxes in Q4 ‘19, compared to a $3.2 million gross loss and a loss before income taxes of $3.3 million in Q4 ‘18. REX reported a Q4 ‘19 income before income taxes and non-controlling interests of $2.8 million, compared with a loss before income taxes and non-controlling interests of $1.7 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 $1.5 million and $4.8 million for Q4 ’19 and Q4 ‘18, respectively.

Net income attributable to REX shareholders in Q4 ‘19 increased to $4.4 million, compared to $1.1 million in Q4 ‘18. Q4 ‘19 basic and diluted net income per share attributable to REX common shareholders was $0.70, compared to net income per share of $0.17 in Q4 ‘18. Per share results in Q4 ‘19 and Q4 ‘18 are based on 6,320,000 and 6,341,000 diluted weighted average shares outstanding, respectively.

 

Segment Income Statement Data:

 

 

Three Months

 

Twelve Months

Ended

 

Ended

($ in thousands)

January 31,

 

January 31,

 

2020

 

2019

 

2020

 

2019

Net sales and revenue:

 

 

 

 

Ethanol & By-Products (1)

$

120,874

$

113,168

$

417,700

$

485,885

Refined coal (2) (3)

 

46

 

176

 

334

 

786

Total net sales and revenue

$

120,920

$

113,344

$

418,034

$

486,671

 

 

 

 

 

Gross (loss) profit:

 

 

 

 

Ethanol & By-Products (1)

$

8,090

$

5,381

$

20,402

$

43,856

Refined coal (2)

 

(1,497)

 

(3,163)

 

(7,917)

 

(13,641)

Total gross profit

$

6,593

$

2,218

$

12,485

$

30,215

 

 

 

 

 

Income (loss) before income taxes:

 

 

 

 

Ethanol & By-Products (1)

$

4,979

$

1,354

$

8,469

$

31,545

Refined coal (2)

 

(1,428)

 

(3,317)

 

(7,778)

 

(15,204)

Corporate and other

 

(714)

 

288

 

(1,860)

 

(1,753)

Total income (loss) before income taxes

$

2,837

$

(1,675)

$

(1,169)

$

14,588

 

Benefit (provision) for income taxes:

 

 

 

 

Ethanol & By-Products

$

1,688

$

(539)

$

1,528

$

(2,343)

Refined coal

 

1,546

 

4,759

 

10,828

 

24,674

Corporate and other

 

178

 

354

 

457

 

591

Total benefit for income taxes

$

3,412

$

4,574

$

12,813

$

22,922

 

 

 

 

 

Segment (loss) profit:

Ethanol & By-Products

$

4,756

$

(450)

$

5,439

$

23,346

Refined coal

 

182

 

1,597

 

3,391

 

10,148

Corporate and other

 

(536)

 

(90)

 

(1,403)

 

(1,849)

Net (loss) income attributable to REX common shareholders

$

4,402

$

1,057

$

7,427

$

31,645

 

(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 fourth quarter of fiscal 2019 saw the crush spread improve over the year-ago period primarily due to higher ethanol pricing. As a result, we were able to improve the ethanol and by-products segment gross profit by 50%, allowing us to generate $0.70 of income per share. That brings fiscal full year 2019 income per share to $1.18, marking yet another profitable year for the Company.

“We entered fiscal 2020 facing continued challenges, including the recent decline in the crude market and the advent of the COVID-19 pandemic and its impact on fuel demand and the economy at large. These challenges led to further declines in recent crush spread levels which has led to the recent idling of our NuGen plant and which may warrant similar actions at the One Earth plant to help preserve our financial liquidity and flexibility. While the operating environment remains severely challenged at this time, we remain focused on creating shareholder value through our disciplined operating approach, the strength and health of our balance sheet, which includes cash and cash equivalents in excess of $205 million and working capital of $239.5 million, no bank debt and the ongoing authorization from the Board of Directors to purchase up to 350,000 common shares.”

Balance Sheet

At January 31, 2020, REX had cash and cash equivalents and short-term investment of $205.7 million, $62.3 million of which was at the parent company, and $143.4 million of which was at its consolidated production facilities. This compares with cash, cash equivalents and short-term investments at January 31, 2019, of $203.5 million, $54.8 million of which was at the parent company, and $148.7 million of which was at its consolidated ethanol production facilities.

 

The following table summarizes select data related to REX’s

consolidated alternative energy interests:

 

 

Three Months

 

Twelve Months

Ended

 

Ended

 

January 31,

 

January 31,

 

2020

 

2019

 

2020

 

2019

Average selling price per gallon of ethanol

$

1.43

$

1.17

$

1.37

$

1.29

Average selling price per ton of dried distillers grains

$

138.19

$

143.20

$

137.68

$

142.20

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

$

0.24

$

0.25

$

0.25

$

0.25

Average selling price per ton of modified distillers grains

$

59.62

$

58.30

$

59.66

$

59.42

Average cost per bushel of grain

$

3.90

$

3.41

$

3.82

$

3.46

Average cost of natural gas (per mnbtu)

$

3.17

$

4.07

$

3.04

$

3.33

 

Supplemental data related to REX’s alternative energy interests:

REX American Resources Corporation

Ethanol Ownership Interests/Effective Annual Gallons Shipped as of January 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)

140.5

 

75.2%

 

105.7

NuGen Energy, LLC (Marion, SD)

94.8

 

99.5%

 

94.3

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

111.6

 

10.3%

 

11.5

Big River Resources Galva, LLC (Galva, IL)

121.2

 

10.3%

 

12.5

Big River United Energy, LLC (Dyersville, IA)

131.8

 

5.7%

 

7.5

Big River Resources Boyceville, LLC (Boyceville, WI)

60.1

 

10.3%

 

6.2

Total

660.0

 

n/a

 

237.7

 

Fourth 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 212/231-2904 (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 660 million gallons of ethanol over the twelve-month period ended January 31, 2020. REX’s effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended January 31, 2020) by the ethanol production facilities in which it has ownership interests was approximately 238 million gallons. In addition, the Company acquired a refined coal operation on August 10, 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

 

Twelve Months

Ended

 

Ended

 

January 31,

 

January 31,

 

2020

 

2019

 

2020

 

2019

Net sales and revenue

$

120,920

$

113,344

$

418,034

$

486,671

Cost of sales

 

114,327

 

111,126

 

405,549

 

456,456

Gross profit

 

6,593

 

2,218

 

12,485

 

30,215

Selling, general and administrative expenses

 

(5,629)

 

(4,476)

 

(19,258)

 

(20,551)

Equity in income (loss) of unconsolidated ethanol affiliates

 

1,042

 

(646)

 

1,392

 

1,536

Interest and other income, net

 

831

 

1,229

 

4,212

 

3,388

Income (loss) before income taxes and non-controlling interests

 

2,837

 

(1,675)

 

(1,169)

 

14,588

Benefit for income taxes

 

3,412

 

4,574

 

12,813

 

22,922

Net income including non-controlling interests

 

6,249

 

2,899

 

11,644

 

37,510

Net income attributable to non-controlling interests

 

(1,847)

 

(1,842)

 

(4,217)

 

(5,865)

Net income attributable to REX common shareholders

$

4,402

$

1,057

$

7,427

$

31,645

 

 

 

 

 

Weighted average shares outstanding – basic and diluted

 

6,320

 

6,341

 

6,318

 

6,440

 

 

 

 

 

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

$

0.70

$

0.17

$

1.18

$

4.91

 

 

 

 

 

- balance sheets follow -

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

Unaudited

 

January 31,

 

January 31,

ASSETS

2020

 

2019

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

179,658

 

$

188,531

Restricted cash

 

1,113

 

 

281

Short-term investments

 

26,073

 

 

14,975

Accounts receivable

 

12,969

 

 

11,378

Inventory

 

35,634

 

 

18,477

Refundable income taxes

 

6,029

 

 

7,695

Prepaid expenses and other

 

9,659

 

 

9,284

Total current assets

 

271,135

 

 

250,621

Property and equipment-net

 

163,327

 

 

182,521

Operating lease right-of-use assets

 

16,173

 

 

-

Other assets

 

17,403

 

 

6,176

Equity method investment

 

32,464

 

 

32,075

TOTAL ASSETS

$

500,502

 

$

471,393

LIABILITIES AND EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable – trade

$

18,900

 

$

7,463

Current operating lease liabilities

 

4,935

 

 

-

Accrued expenses and other current liabilities

 

7,764

 

 

9,546

Total current liabilities

 

31,599

 

 

17,009

LONG TERM LIABILITIES:

 

 

 

Deferred taxes

 

4,334

 

 

4,185

Long-term operating lease liabilities

 

10,688

 

 

-

Other long-term liabilities

 

275

 

 

4,928

Total long-term liabilities

 

15,297

 

 

9,113

COMMITMENTS AND CONTINGENCIES EQUITY:

 

 

 

REX shareholders’ equity:

 

 

 

Common stock, 45,000 shares authorized, 29,853 shares issued at par

 

299

 

 

299

Paid in capital

 

148,789

 

 

148,273

Retained earnings

 

586,985

 

 

579,558

Treasury stock, 23,561 and 23,580 shares, respectively

 

(335,066)

 

 

(335,193)

Total REX shareholders’ equity

 

401,007

 

 

392,937

Non-controlling interests

 

52,599

 

 

52,334

Total equity

 

453,606

 

 

445,271

TOTAL LIABILITIES AND EQUITY

$

500,502

 

$

471,393

 

- statements of cash flows follow -

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

Unaudited

Fiscal Years Ended

January 31,

 

2020

 

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

Net income

$

11,644

$

37,510

Adjustments to reconcile net income to net cash

 

 

provided by operating activities:

 

 

Depreciation

 

23,007

 

24,828

Amortization of operating lease right-of-use assets

 

6,304

 

-

Stock based compensation expense

 

397

 

669

Income from equity method investments

 

(1,392)

 

(1,536)

Dividends received from equity method investments

 

1,003

 

4,010

Interest income from investments

 

(73)

 

(1,077)

Deferred income tax

 

(11,070)

 

(23,364)

Loss on disposal of property and equipment

 

-

 

104

Changes in assets and liabilities:

 

 

Accounts receivable

 

(1,591)

 

1,535

Inventory

 

(17,157)

 

2,278

Prepaid expenses and other assets

 

(752)

 

5,217

Income taxes refundable

 

1,666

 

(1,083)

Accounts payable-trade

 

11,400

 

339

Other liabilities

 

(13,043)

 

(1,499)

Net cash provided by operating activities

 

10,343

 

47,931

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

Capital expenditures

 

(3,776)

 

(10,775)

Purchases of short-term investments

 

(26,025)

 

(125,989)

Sales of short-term investments

 

15,000

 

112,091

Restricted investments and deposits

 

-

 

5

Loan receivable repayments

 

369

 

27

Net cash used in investing activities

 

(14,432)

 

(24,641)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

Treasury stock acquired

 

-

 

(21,855)

Payments to noncontrolling interests holders

 

(4,264)

 

(4,489)

Capital contributions from minority investor

 

312

 

524

Net cash used in financing activities

 

(3,952)

 

(25,820)

NET DECREASE IN CASH, CASH EQUIVALENTS

 

 

AND RESTRICTED CASH

 

(8,041)

 

(2,530)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of period

 

188,812

 

191,342

CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of period

$

180,771

$

188,812

Non cash financing activities – Stock awards issued

$

487

$

1,473

Non cash financing activities – Stock awards accrued

$

241

$

487

Non cash investing activities – Accrued capital expenditures

$

37

$

-

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

$

432

$

-

 

 

Douglas Bruggeman Chief Financial Officer (937) 276‑3931

Joseph Jaffoni, Norberto Aja JCIR (212) 835-8500 rex@jcir.com

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