RSC Rex American Resources Corp

REX Stores Corporation (NYSE: RSC) today announced financial results for its fiscal 2009 fourth quarter (“Q4 ‘09”) ended January 31, 2010. REX will host a conference call and webcast today at 11:00 a.m. ET to review the results:

     

Conference Call Dial-In:

    212/231-2915  

Webcast / Replay URL:

www.rextv.com/Corp/Page4.aspx

The webcast will be available for replay for 30 days  

REX plans to change the Company’s name to REX American Resources Corporation and its stock trading symbol to “REX.” The name change will be subject to shareholder approval at REX’s Annual Meeting on June 9 and, if approved, the symbol change will occur thereafter.

Summary Consolidated Operating Results and Balance Sheet Review

REX reported net sales and revenue of $77.2 million in Q4 ’09 compared with net sales and revenue of $19.9 million in Q4 ‘08. For Q4 ‘09, REX recorded income from continuing operations before income taxes and non-controlling interests of $13.2 million compared with a $5.3 million loss in the comparable prior year period. The pre-tax income from continuing operations is inclusive of a $0.9 million and $4.3 million loss on derivative financial instruments in Q4 ’09 and Q4 ‘08, respectively. In the quarter ended January 31, 2010, REX generated income from continuing operations net of taxes and non-controlling interests of $5.2 million, or $0.54 per diluted share, compared with a loss net of taxes and non-controlling interests of $2.5 million, or $0.26 per diluted share, in the comparable prior year period.

For Q4 ‘09 REX generated net income attributable to common shareholders of $7.3 million, or $0.75 per diluted share, versus a net loss attributable to common shareholders of $5.4 million, or a $0.57 per diluted share loss, in Q4 ‘08. Per share results are based on 9,707,000 and 9,516,000 diluted weighted average shares outstanding for the Q4 ’09 and Q4 ’08 quarters, respectively.

REX reported fiscal 2009 net sales and revenue of $170.3 million compared with net sales and revenue of $68.6 million in fiscal 2008. For fiscal 2009 REX generated net income attributable to common shareholders of $8.6 million, or $0.91 per diluted share, versus a net loss attributable to common shareholders of $3.3 million, or a $0.32 per diluted share loss, in fiscal 2008. Per share results are based on 9,551,000 and 10,170,000 diluted weighted average shares outstanding for the fiscal 2009 and fiscal 2008, respectively.

At January 31, 2010, REX had cash and cash equivalents of $100.4 million, including $82.5 million of cash at the parent company (exclusive of approximately $17.9 million of cash at consolidated ethanol production facilities), compared with cash and cash equivalents of $92.0 million at January 31, 2009 including $90.0 million of cash at the parent company (exclusive of approximately $2.0 million of cash at consolidated ethanol production facilities).

REX repurchased 597,000 shares and 62,000 shares of its common stock in open market transactions in fiscal 2009 and Q4 ’09, respectively. Reflecting its current repurchase authorization, REX is presently authorized to repurchase up to 481,000 shares of its common stock.

Segment Income Statement Data

REX’s financial results primarily reflect its interests in six ethanol production facilities, including the consolidation of its investments in two ethanol affiliates, Levelland Hockley County Ethanol, LLC (“Levelland Hockley”) and One Earth Energy, LLC (“One Earth”).

At January 31, 2010, REX had lease or sub-lease agreements, as landlord for all or parts of 10 former retail store locations (including one property that REX leases and sub-leases). REX also has 31 former retail stores and one former distribution center that were vacant at January 31, 2010 which it is marketing to lease or sell. In addition one former distribution center is partially leased, partially occupied for the REX corporate office and partially vacant. The Q4 ‘09 real estate revenue reflects rental income derived from these sites.

REX exited its retail operations earlier in fiscal 2009 and the retail operations results are classified as discontinued operations. Certain amounts differ from those previously reported as a result of retail operations and certain real estate assets being reclassified as discontinued operations.

In Q4 ’09 REX recorded $0.8 million of income from discontinued operations, net of tax compared with a $3.0 million loss from discontinued operations, net of tax in Q4’08. In Q4 ’09 REX recorded $1.3 million of income, net of tax related to gains on the disposal of discontinued operations, primarily related to the disposal of three properties formerly used in its retail operations compared with $0.1 million of income, net of tax related to the disposal of discontinued operations in the same period last fiscal year.

The table below summarizes net sales and revenue from REX’s alternative energy and real estate segments and income (loss) from continuing operations for the three and twelve month periods ended January 31, 2010 and January 31, 2009.

            Three Months Ended       Twelve Months Ended ($ in thousands) January 31, January 31, 2010     2009       2010     2009 Net sales and revenue:         Alternative energy (1) $76,879 $19,755 $169,175 $68,223 Real estate 295 111 1,089 415 Total net sales and revenues $77,174 $19,866 $170,264 $68,638   Segment gross profit (loss): Alternative energy (1) $ 14,691 $2,560 $21,923 $807 Real estate (1,806) 111 (2,190) 398 Total gross profit $12,885 $2,671 $19,733 $1,205   Segment profit (loss): Alternative energy (1) $15,604 $(5,223) $17,811 $(8,992) Real estate (1,877) 50 (2,373) 116 Corporate expense (491) (438) (1,721) (2,038) Interest expense (59) (96) (369) (387) Interest income 33 433 263 1,788

Income from synthetic fuel investments

- - - 691

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

$13,210

$(5,274)

$13,611

$(8,822)

 

(1)

Includes results attributable to non-controlling interest of approximately 44% for Levelland Hockley and 26% for One Earth Energy.

                     

Supplemental Data Related to REX’s Alternative Energy Interests

At January 31, 2010 REX had interests in the following ethanol production facilities:

 

 

Entity

   

REX’s

Capital

Investment

($ in

millions)

   

 

REX’s

Ownership

Interest

   

 

Debt

Investment

($ in millions)

   

Production

Nameplate

Capacity

(millions of

gallons)

   

Contingent

Commitment

($ in

millions)

Levelland Hockley County Ethanol, LLC     $16.5     56%     $6.3     40     $1.5 Patriot Renewable Fuels, LLC     $16.0     23%     $1.0     100     - One Earth Energy, LLC     $50.8     74%     -     100     - Big River Resources, LLC-W. Burlington

Big River Resources, LLC-Galva

Big River United Energy, LLC (Dyersville) (1)

$20.0

10%     -     92     - 10%     -     100     -         5%     -     100     - (1)   In August 2009, Big River Resources acquired a 50.5% interest in an ethanol production facility in Dyersville, Iowa. Reflecting REX’s 10% ownership interest in Big River Resources, LLC, REX has an ownership interest in this entity.  

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

      Three Months Ended       Twelve Months Ended ($ in thousands) January 31, January 31,

2010

       

2009

   

2010

       

2009

    Sales of Products:

Alternative Energy Segment

Ethanol $65,335 85% $15,633 79% $140,443 83% $55,989 82% Dried distiller grains 9,314 12% 1,839 10% 20,223 12% 6,478 10% Wet distiller grains 2,092 3% 2,127 11% 7,953 5% 5,449 8% Other 138 -% 156 -% 556 -% 307 -% TOTAL ALTERNATIVE ENERGY SALES

$76,879

100%

$19,755

100%

$169,175

100%

$68,223

100%

 

The following table summarizes selected operating data from Levelland Hockley and One Earth, the Company’s consolidated ethanol production facilities:

      Three Months Ended       Twelve Months Ended January 31, January 31,

2010

   

2009

2010

 

2009

Average selling price per gallon of ethanol $ 1.80 $ 1.79 $ 1.68 $ 2.14 Average selling price per ton of dried distiller grains $ 111.16 $ 170.93 $ 112.29 $ 180.42 Average selling price per ton of wet distiller grains $ 31.26 $ 54.24 $ 41.53 $ 51.74 Average cost per bushel of grain $ 3.53 $ 3.81 $ 3.58 $ 4.82 Average cost of natural gas (per mmbtu) $ 4.42 $ 6.64 $ 4.28 $ 9.01  

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, sorghum, dried distiller grains, ethanol, gasoline and natural gas, ethanol plants operating efficiently and according to forecasts and projections, changes in the national or regional economies, weather, the effects of terrorism or acts of war, changes in real estate market conditions 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 STORES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Operations

(in thousands, except per share amounts)

Unaudited

            Three Months Ended Twelve Months Ended January 31, January 31, 2010     2009       2010     2009 Net sales and revenue $ 77,174     $ 19,866 $ 170,264     $ 68,638 Costs of sales   64,289         17,195           150,531         67,433   Gross profit 12,885 2,671 19,733 1,205 Selling, general and administrative expenses (2,210 ) (867 ) (6,025 ) (6,640 ) Interest income 89 438 445 2,044 Interest expense (1,494 ) (1,117 ) (4,741 ) (3,174 ) Other income (18 ) - 748 - Loss on early termination of debt - - (89 ) - Equity in income of unconsolidated ethanol affiliates 4,883 (2,117 ) 6,027 849 Income from synthetic fuel investments - - - 691 Losses on derivative financial instruments   (925 )       (4,282 )         (2,487 )       (3,797 ) Income (loss) from continuing operations before income taxes, and non-controlling interests 13,210 (5,274 ) 13,611 (8,822 ) (Provision) benefit for income taxes   (4,274 )       2,049           (4,553 )       2,747   Income (loss) from continuing operations including non-controlling interests 8,936 (3,225 ) 9,058 (6,075 ) Income (loss) from discontinued operations, net of tax 791 (3,014 ) 2,120 (2,176 ) Gains on disposal of discontinued operations, net of tax   1,251         135           1,374         1,798   Net income (loss) including non-controlling interests 10,978 (6,104 ) 12,552 (6,453 ) Net (income) loss attributable to non-controlling interests   (3,705 )       725           (3,900 )       3,156   Net income (loss) attributable to REX common shareholders $ 7,273       $ (5,379 )       $ 8,652       $ (3,297 ) Weighted average shares outstanding - basic   9,326         9,516           9,254         10,170   Basic income (loss) per share from continuing operations* $ 0.56 $ (0.26 ) $ 0.55 $ (0.29 ) Basic income (loss) per share from discontinued operations* 0.09 (0.32 ) 0.23 (0.21 ) Basic income per share on disposal of discontinued operations*   0.13         0.01           0.15         0.18   Basic net income (loss) per share attributable to REX common shareholders $ 0.78       $ (0.57 )       $ 0.93       $ (0.32 ) Weighted average shares outstanding – diluted   9,707         9,516           9,551         10,170   Diluted income (loss) per share from continuing operations* $ 0.54 $ (0.26 ) $ 0.54 $ (0.29 ) Diluted income (loss) per share from discontinued operations* 0.08 (0.32 ) 0.22 (0.21 ) Diluted income per share on disposal of discontinued operations*   0.13         0.01           0.15         0.18   Diluted net income (loss) per share attributable to REX common shareholders $ 0.75       $ (0.57 )       $ 0.91       $ (0.32 )  

* Attributable to REX common shareholders

Amounts differ from those previously reported as a result of retail operations and certain real estate assets being reclassified as discontinued operations.

 

REX STORES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Balance Sheets

(in thousands) Unaudited

              January 31, January 31, January 31, 2010 2009 2008 ASSETS Current assets: Cash and cash equivalents $ 100,398 $ 91,991 $ 127,716 Accounts receivable-net 9,123 4,197 1,877 Inventory-net 8,698 24,374 49,933 Refundable income taxes 12,813 7,790 1,522 Prepaid expenses and other 2,691 1,063 1,543 Deferred taxes-net   6,375     13,230     10,599   Total current assets 140,098 142,645 193,190 Property and equipment-net 246,874 235,454 136,505 Other assets 8,880 12,414 14,803 Goodwill - - 1,322 Deferred taxes-net 8,468 18,697 21,929 Equity method investments 44,071 38,861 38,748 Investment in debt instruments 1,014 933 - Restricted investments   2,100     2,284     2,481   Total assets $ 451,505   $ 451,288   $ 408,978   LIABILITIES AND SHAREHOLDERS' EQUITY: Current Liabilities: Current portion of long-term debt and capital lease obligations-alternative energy $ 12,935 $ 5,898 $ 1,790 Current portion of long-term debt-other 371 1,576 2,311 Accounts payable - trade 6,976 24,917 27,253 Deferred income - extended warranties 7,818 11,952 14,448 Accrued restructuring charges 511 4,171 - Deferred gain on sale and leaseback - 1,558 1,436 Derivative financial instruments 1,829 1,996 293 Accrued real estate taxes 2,968 1,002 709 Other current liabilities   5,442     5,199     12,908   Total current liabilities   38,850     58,269     61,148   Long Term Liabilities Long-term mortgage debt and capital lease obligations-alternative energy 124,093 94,003 22,072 Long-term mortgage debt and capital lease obligations 2,596 9,936 13,152 Deferred income - extended warranties 6,396 13,796 17,172 Deferred gain on sale and leaseback - 3,467 4,493 Derivative financial instruments 4,055 4,032 2,308 Other   419     4,152     4,313   Total long-term liabilities   137,559     129,386     63,510   SHAREHOLDERS' EQUITY: Common stock 299 299 298 Paid-in capital 141,698 142,486 141,357 Retained earnings 290,984 282,332 285,629 Treasury stock (186,407 ) (186,057 ) (170,693 ) Accumulated other comprehensive income, net of tax   49     -     -   Total REX shareholders' equity 246,623 239,060 256,591 Non-controlling interests   28,473     24,573     27,729   Total equity   275,096     263,633     284,320   Total liabilities and shareholders' equity $ 451,505   $ 451,288   $ 408,978