REX American Resources Corporation (NYSE American: REX) today
reported financial results for its fiscal 2017 second quarter (“Q2
‘17”) ended July 31, 2017. REX management will host a conference
call and webcast today at 11:00 a.m. ET to review the results.
Conference Call:
(303) 223-2685
Webcast / Replay URL:
www.rexamerican.com/Corp/Page4.aspx
The webcast will be available for replay
for 30 days
REX American Resources’ Q2 ‘17 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 Q2 ‘17 net sales and revenue decreased 6.0% to $108.7
million, compared with $115.7 million in Q2 ‘16, primarily
reflecting 29.2% decline in the average sales price per ton of
dried distillers grains as well as a 2.7% decrease in the average
sales price per gallon of ethanol. This led to a decrease in gross
profit of 37.6% to $10.8 million, compared to $17.3 million during
the prior year period.
Equity in income of unconsolidated ethanol affiliates in Q2 ‘17
decreased to $0.1 million, from $1.2 million in Q2 ’16. As a
result, income from continuing operations before income taxes and
non-controlling interests in Q2 ‘17 decreased 52.2% to $6.5
million, compared with $13.5 million in Q2 ‘16.
Net income attributable to REX shareholders in Q2 ‘17 was $2.9
million, compared with $8.2 million in Q2 ‘16, while Q2 ‘17 diluted
net income per share attributable to REX common shareholders was
$0.45 per share, compared to $1.24 per share in Q2 ‘16. Per share
results in Q2 ‘17 and Q2 ‘16 are based on 6,593,000 and 6,586,000
diluted weighted average shares outstanding, respectively.
REX American Resources’ Chief Executive Officer, Zafar Rizvi,
commented, “The second quarter presented a challenging operating
environment as both ethanol and distillers grains prices
experienced declines, which was partially offset by more favorable
corn prices. In spite of these challenges, we were able to generate
over $2.9 million of net income to REX shareholders, or $0.45
earnings per share, reflecting our disciplined operating approach
and the commitment of our entire team.”
Balance Sheet and Capital Allocation
On August 10, 2017, REX, through a 95.35% owned subsidiary,
purchased 100% of a refined coal facility for $12 million in cash
(excluding transaction costs) in a transaction that is expected to
be immediately accretive to REX’s earnings per share. The facility
is in operation and will be included in REX’s financial results
beginning in the third quarter of fiscal 2017. REX expects that the
revenues from the sale of refined coal produced in the facility
will be subsidized by federal production tax credits, subject to
meeting qualified emissions reductions as governed by Section 45 of
the Internal Revenue Code.
At July 31, 2017, REX had cash and cash equivalents of $186.0
million, $76.2 million of which was at the parent company and
$109.8 million of which was at its consolidated ethanol production
facilities. This compares with cash and cash equivalents of $188.6
million at January 31, 2017, $79.5 million of which was at the
parent company and $109.1 million of which was at its consolidated
ethanol production facilities.
The following table summarizes select
data related to the Company’s consolidatedalternative energy
interests:
Three MonthsEnded July
31,
Six MonthsEnded July 31,
2017 2016 2017
2016
Average selling price per gallon
ofethanol
$ 1.45 $ 1.49 $ 1.45 $ 1.41
Average selling price per ton ofdried
distillers grains
$ 95.39 $ 134.81 $ 97.81 $ 130.12
Average selling price per pound ofnon-food
grade corn oil
$ 0.29 $ 0.29 $ 0.28 $ 0.27
Average selling price per ton ofmodified
distillers grains
$ 41.00 $ 56.60 $ 41.47 $ 58.54
Average cost per bushel of grain
$ 3.38 $ 3.73 $ 3.47 $ 3.63
Average cost of natural gas (permmbtu)
$ 3.30 $ 2.71 $ 3.52 $ 2.96
Supplemental Data Related to REX’s
Alternative Energy Interests:
REX American Resources
CorporationEthanol Ownership Interests/Effective Annual
Gallons Shipped as of July 31, 2017(gallons in
millions)
Entity
TrailingTwelveMonthsGallonsShipped
CurrentREXOwnershipInterest
REX’s CurrentEffective
Ownershipof Trailing TwelveMonth
GallonsShipped
One Earth Energy, LLC(Gibson City,
IL)
120.5 75.0% 90.4
NuGen Energy, LLC(Marion, SD)
131.4 99.5% 130.7
Big River Resources West Burlington,
LLC(West Burlington, IA)
107.1 9.7% 10.4
Big River Resources Galva,
LLC(Galva, IL)
123.7 9.7% 12.0
Big River United Energy, LLC
(Dyersville, IA)
129.2 5.4% 7.0
Big River Resources Boyceville,
LLC(Boyceville, WI)
57.2 9.7% 5.5
Total 669.1
n/a 256.0
About REX American Resources Corporation
REX American Resources has interests in six ethanol production
facilities, which in aggregate shipped approximately 669 million
gallons of ethanol over the twelve month period ended July 31,
2017. REX’s effective ownership of the trailing twelve month
gallons shipped (for the twelve months ended July 31, 2017) by the
ethanol production facilities in which it has ownership interests
was approximately 256 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, 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.
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations (in thousands,
except per share amounts) Unaudited
Three Months Ended
Six Months Ended
July 31, July 31,
2017
2016
2017
2016
Net sales and revenue $ 108,744 $ 115,707 $ 221,887 $ 215,929 Cost
of sales
97,963 98,423
198,617 190,223 Gross
profit 10,781 17,284 23,270 25,706 Selling, general and
administrative expenses (4,779) (5,206) (10,181) (9,233) Equity in
income of unconsolidated ethanol affiliates 137 1,186 837 1,419
(Loss) gain on sale of investment (13) - (13) 192 Gain on disposal
of property and equipment, net 13 185 13 185 Interest and other
income
334 97
549 257 Income before income taxes
6,473 13,546 14,475 18,526 Provision for income taxes
(2,302) (4,517)
(4,692)
(6,031) Net income 4,171
9,029 9,783 12,495 Net income attributable to non-controlling
interests
(1,230) (853)
(2,298) (1,481) Net income
attributable to REX common shareholders
$
2,941 $ 8,176 $
7,485 $ 11,014
Weighted average shares outstanding – basic and diluted
6,593 6,586
6,592 6,590
Basic and diluted net income per share
attributable toREX common shareholders
$
0.45
$
1.24
$
1.14
$
1.67
REX AMERICAN RESOURCES CORPORATION AND
SUBSIDIARIES Consolidated Balance Sheets (in
thousands) Unaudited
ASSETS:
July 31,2017
January 31,2017
CURRENT ASSETS: Cash and cash equivalents $ 185,997 $ 188,576
Restricted cash 379 130 Accounts receivable 10,938 11,901 Inventory
22,091 17,057 Refundable income taxes 1,527 1,070 Prepaid expenses
and other 7,535 6,959 Deferred taxes-net
-
824
Total current assets 228,467 226,517 Property and equipment-net
187,545 182,761 Other assets 6,720 6,913 Equity method investments
36,665 37,833 TOTAL ASSETS
$ 459,397 $
454,024 LIABILITIES AND EQUITY CURRENT
LIABILITIES: Accounts payable – trade $ 11,251 $ 9,171 Accrued
expenses and other current liabilities
7,442
13,348
Total current liabilities
18,693
22,519
LONG TERM LIABILITIES: Deferred taxes 40,848 41,135 Other long term
liabilities
2,260 2,096
Total long term liabilities
43,108
43,231
COMMITMENTS AND CONTINGENCIES EQUITY: REX shareholders’ equity:
Common stock, 45,000 shares authorized, 29,853 shares issued at par
299 299 Paid in capital 146,851 145,767 Retained earnings 515,692
508,207 Treasury stock, 23,287 and 23,292 shares
(313,658) (313,838) Total REX
shareholders’ equity 349,184 340,435 Non-controlling interests
48,412 47,839 Total equity
397,596
388,274
TOTAL LIABILITIES AND EQUITY
$ 459,397
$ 454,024 REX AMERICAN
RESOURCES CORPORATION AND SUBSIDIARIES Consolidated
Statements of Cash Flows (in thousands) Unaudited
Six Months EndedJuly 31,
2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 9,783 $ 12,495
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 9,955 9,748
Income from equity method investments (837) (1,419) Dividends
received from equity method investments 2,005 1,504 Gain on
disposal of property and equipment (13) (185) Loss (gain) on sale
of investment 13 (192) Deferred income tax 537 - Stock based
compensation expense 350 40 Changes in assets and liabilities:
Accounts receivable 886 (4,250) Inventories (5,034) (6,455) Other
assets (953) 2,989 Accounts payable-trade 1,678 (3,087) Other
liabilities
(4,828) 169 Net
cash provided by operating activities
13,542
11,357 CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (14,366) (9,334) Restricted cash (249) (56)
Restricted investments and deposits 100 409 Proceeds from sale of
investment 64 2,275 Proceeds from sale of property and equipment 42
1,028 Other
13 12
Net cash used in investing activities
(14,396) (5,666) CASH FLOWS
FROM FINANCING ACTIVITIES:
Dividend payments to and purchases of
stock from non-controlling interests
(1,725) (2,096) Treasury stock acquired
-
(4,709) Net cash used in financing activities
(1,725) (6,805) NET
DECREASE IN CASH AND CASH EQUIVALENTS (2,579) (1,114) CASH AND CASH
EQUIVALENTS-Beginning of period
188,576
135,765 CASH AND CASH EQUIVALENTS-End of period
$ 185,997 $
134,651 Non cash investing activities – Accrued
capital expenditures
$ 744 $
1,350 Non cash financing activities – Stock awards
accrued
$ 281 $
- Non cash financing activities – Stock awards issued
$ 1,195 $ 1,095
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170830005240/en/
REX American Resources CorporationDouglas Bruggeman,
937-276-3931Chief Financial OfficerorJCIRJoseph Jaffoni, Norberto
Aja212-835-8500rex@jcir.com
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