Files Class VI Permit Application Related to
Carbon Sequestration Project
REX American Resources Corporation (NYSE: REX) (“REX” or “the
Company”) today reported financial results for its fiscal 2022
third quarter (“Q3 ‘22”) ended October 31, 2022. REX management
will host a conference call and webcast today at 11:00 a.m. ET.
Conference Call:
212/231-2910
Webcast / Replay URL:
www.rexamerican.com
The webcast will be available for replay
for 30 days.
REX American Resources’ Q3 ‘22 results principally reflect its
interests in six ethanol production facilities. The One Earth
Energy, LLC (“One Earth”) and NuGen Energy, LLC (“NuGen”) ethanol
production facilities are consolidated, while the four other
ethanol plants are reported as equity in income of unconsolidated
ethanol affiliates. The Company reports results for its ethanol and
by-products component as continuing operations and beginning in the
third quarter of fiscal 2021 its refined coal component as
discontinued operations as operations have now ceased.
REX’s Q3 ‘22 net sales and revenue were $220.3 million, compared
with $203.1 million in Q3 ‘21. The year-over-year net sales and
revenue increase primarily reflects higher pricing for ethanol,
dried distillers grains, non-food grade corn oil and modified
distillers grains. Q3 ‘22 gross profit for the Company’s continuing
operations decreased to $11.3 million, compared with $25.2 million
in Q3 ‘21 as the higher net sales and revenue were offset by
significant increases in corn and natural gas prices. This led to
Q3 ‘22 income before income taxes and non-controlling interests of
$6.1 million, compared with $19.2 million in the comparable year
ago period.
Net income attributable to REX shareholders from continuing
operations in Q3 ‘22 was $3.2 million, compared to $13.3 million in
Q3 ‘21. Q3 ‘22 basic and diluted net income per share attributable
to REX common shareholders from continuing operations was $0.18,
compared to $0.74 per share in Q3 ‘21. Per share results for Q3 ‘22
and Q3 ‘21 are based on 17,591,000 and 17,890,000 diluted weighted
average shares outstanding, respectively, reflecting the Company’s
3-for-1 common stock split effected August 5, 2022.
REX American Resources’ Chief Executive Officer, Zafar Rizvi,
commented, “The third quarter marked a difficult operating
environment as we faced significant price increases in our two
largest inputs – corn and natural gas – as well as ongoing
logistical constraints. Despite these challenges, we were able to
post our ninth consecutive quarter of positive income along with
income per share for the first nine months of fiscal 2022 of $1.10.
We have maintained our robust balance sheet and liquidity position
which at quarter end included approximately $290 million in cash
and short-term investments and no debt. We remain confident our
strong capital structure positions REX to continue to benefit our
shareholders and support our ethanol businesses while strategically
investing in initiatives that can yield attractive returns for our
employees, partners and shareholders.
“In this regard, our team remains very excited about our carbon
capture and sequestration project and is making meaningful progress
on this front. We filed a Class VI injection well permit
application for three wells to allow us to inject carbon dioxide
into deep rock formations and recently signed a contract for a
carbon compression facility for our One Earth Energy ethanol plant.
The language and opportunities in the Inflation Reduction Act are
encouraging, including the new clean fuel production credit under
section 45Z and an increase in the 45Q credit to $85 per ton. We
believe this can bring significant financial benefits to our carbon
capture and sequestration initiatives and to the ethanol industry
as a whole.”
Balance Sheet
As of October 31, 2022, REX had cash and cash equivalents and
short-term investments of $289.8 million, $30.5 million of which
was at the parent company, and $259.3 million of which was at its
consolidated production facilities. This compares with cash, cash
equivalents and short-term investments at January 31, 2022, of
$255.7 million, $42.9 million of which was at the parent company,
and $212.8 million of which was at its consolidated ethanol
production facilities.
During the fiscal third quarter ended October 31, 2022, the
Company repurchased 249,570 shares of its common stock at a cost of
approximately $6.8 million. The Company is currently authorized to
repurchase up to an additional 876,786 shares of common stock and
has approximately 17,390,469 shares of common stock
outstanding.
The following table summarizes select data
related to REX’s consolidated alternative energy
interests:
Three Months Ended Nine Months Ended
October 31, October 31,
2022
2021
2022
2021
Average selling price per gallon of ethanol
$
2.49
$
2.31
$
2.48
$
2.12
Average selling price per ton of dried distillers grains
$
230.29
$
184.85
$
232.51
$
200.02
Average selling price per pound of non-food grade corn oil
$
0.74
$
0.59
$
0.70
$
0.47
Average selling price per ton of modified distillers grains
$
116.49
$
92.10
$
120.23
$
83.97
Average cost per bushel of grain
$
7.52
$
6.45
$
7.28
$
6.05
Average cost of natural gas (per MmBtu)
$
7.15
$
4.58
$
6.69
$
3.69
Third Quarter Conference Call REX will
host a conference call at 11:00 a.m. ET today to discuss the
quarterly results and will host a question and answer session. The
dial in number for the audio conference call is 212/231-2910
(domestic and international callers). Participants can also listen
to a live webcast of the call on the Company’s website at,
www.rexamerican.com. A webcast replay will be available for 30 days
following the live event.
About REX American Resources Corporation REX American
Resources has interests in six ethanol production facilities, which
in aggregate shipped approximately 699 million gallons of ethanol
over the twelve-month period ended October 31, 2022. REX’s
effective ownership of the trailing twelve-month gallons shipped
(for the twelve months ended October 31, 2022) by the ethanol
production facilities in which it has ownership interests was
approximately 277 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 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, commodity market risk, gasoline and natural gas,
ethanol plants operating efficiently and according to forecasts and
projections, logistical interruptions, changes in the
international, national or regional economies, the impact of
inflation, the ability to attract employees, 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.
REX AMERICAN RESOURCES CORPORATION AND
SUBSIDIARIES Consolidated Statements of Operations
(in thousands, except per share amounts)
Unaudited
Three Months Ended Nine Months Ended October
31, October 31,
2022
2021
2022
2021
Net sales and revenue
$
220,277
$
203,066
$
654,833
$
562,786
Cost of sales
208,941
177,914
615,001
504,003
Gross profit
11,336
25,152
39,832
58,783
Selling, general and administrative expenses
(7,886
)
(6,310
)
(22,237
)
(22,444
)
Equity in income of unconsolidated ethanol affiliates
661
349
6,210
2,763
Interest and other income, net
1,983
35
10,338
117
Income before income taxes and noncontrolling interests
6,094
19,226
34,143
39,219
Provision for income taxes
(1,196
)
(4,338
)
(7,374
)
(8,329
)
Net income from continuing operations
4,898
14,888
26,769
30,890
Net income attributable to noncontrolling interests (continuing
operations)
(1,714
)
(1,562
)
(7,233
)
(4,585
)
Net income attributable to REX common shareholders (continuing
operations)
3,184
13,326
19,536
26,305
Net income from discontinued operations, net of tax
-
1,815
-
4,263
Net loss attributable to noncontrolling interests (discontinued
operations)
-
137
-
370
Net income attributable to REX common shareholders (discontinued
operations)
-
1,952
-
4,633
Net income attributable to REX common shareholders
$
3,184
$
15,278
$
19,536
$
30,938
Weighted average shares outstanding - basic and diluted
17,591
17,890
17,714
17,983
Basic and diluted net income per share from continuing
operations attributable to REX common shareholders
$
0.18
$
0.74
$
1.10
$
1.46
Basic and diluted net income per share from discontinued operations
attributable to REX common shareholders
-
0.11
-
0.26
Basic and diluted net income per share attributable to REX common
shareholders
$
0.18
$
0.85
$
1.10
$
1.72
- balance sheets follow -
REX AMERICAN RESOURCES CORPORATION AND
SUBSIDIARIES Consolidated Balance Sheets (in
thousands) Unaudited
October 31, January 31, ASSETS:
2022
2022
CURRENT ASSETS: Cash and cash equivalents
$
135,986
$
229,846
Short-term investments
153,819
25,877
Restricted cash
1,308
2,222
Accounts receivable
22,675
25,821
Inventory
42,045
42,225
Refundable income taxes
6,611
6,677
Prepaid expenses and other
11,576
12,499
Total current assets
374,020
345,167
Property and equipment, net
131,235
137,554
Operating lease right-of-use assets
14,748
11,221
Deferred taxes and other assets
21,267
25,853
Equity method investment
33,769
30,566
TOTAL ASSETS
$
575,039
$
550,361
LIABILITIES AND EQUITY: CURRENT LIABILITIES: Accounts payable -
trade
$
40,271
$
32,266
Current operating lease liabilities
4,902
4,600
Accrued expenses and other current liabilities
12,109
13,617
Total current liabilities
57,282
50,483
LONG-TERM LIABILITIES: Deferred taxes
3,132
3,132
Long-term operating lease liabilities
9,883
6,390
Other long-term liabilities
2,997
2,794
Total long-term liabilities
16,012
12,316
EQUITY: REX shareholders' equity: Common stock
299
299
Paid-in capital
278
-
Retained earnings
632,665
611,607
Treasury stock
(193,770
)
(181,114
)
Total REX shareholders' equity
439,472
430,792
Noncontrolling interests
62,273
56,770
Total equity
501,745
487,562
TOTAL LIABILITIES AND EQUITY
$
575,039
$
550,361
- statements of cash flows follow -
REX AMERICAN RESOURCES CORPORATION AND
SUBSIDIARIES Consolidated Statements of Cash Flows
(in thousands) Unaudited
Nine Months Ended October 31,
2022
2021
CASH FLOWS FROM OPERATING ACTIVITIES Net income including
noncontrolling interests
$
26,769
$
35,153
Net income from discontinued operations, net of tax
-
4,263
Net income from continuing operations
26,769
30,890
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation
13,503
13,505
Amortization of operating lease right-of-use assets
4,105
4,128
Income from equity method investments
(6,210
)
(2,763
)
Dividends received from equity method investments
3,007
1,504
Interest income from investments
(1,098
)
(36
)
Deferred income taxes
4,964
5,840
Stock based compensation expense
1,295
1,100
Gain on sale of property and equipment - net
(91
)
(1
)
Changes in assets and liabilities: Accounts receivable
3,146
(20,313
)
Inventories
180
7,673
Refundable income taxes
66
(332
)
Other assets
649
1,912
Accounts payable - trade
7,990
10,916
Other liabilities
(4,281
)
2,776
Net cash provided by operating activities from continuing
operations
53,994
56,799
Net cash used in operating activities from discontinued operations
-
(6,368
)
Net cash provided by operating activities
53,994
50,431
CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures
(7,182
)
(4,245
)
Purchase of short-term investments
(307,371
)
(67,412
)
Sale of short-term investments
180,527
82,022
Other
-
40
Net cash (used in) provided by investing activities
(134,026
)
10,405
CASH FLOWS FROM FINANCING ACTIVITIES: Treasury stock acquired
(13,012
)
(6,627
)
Payments to noncontrolling interests holders
(1,730
)
(1,515
)
Net cash used in financing activities from continuing operations
(14,742
)
(8,142
)
Net cash provided by financing activities from discontinued
operations
-
280
Net cash used in financing activities
(14,742
)
(7,862
)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED
CASH
(94,774
)
52,974
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - Beginning of period
232,068
146,158
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - End of period
$
137,294
$
199,132
Non-cash financing activities - Stock awards accrued
$
679
$
972
Non-cash financing activities - Stock awards issued
$
1,539
$
100
Non-cash investing activities - Accrued capital expenditures
$
93
$
34
Right-of-use assets acquired and liabilities incurred upon lease
execution
$
7,632
$
3,267
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221201005197/en/
Douglas Bruggeman Chief Financial Officer (937) 276‑3931
Joseph Jaffoni, Norberto Aja JCIR (212) 835-8500 /
rex@jcir.com
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