REX REX American Resources Corporation

REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2023 third quarter (“Q3 ‘23”) ended October 31, 2023. REX management will host a conference call and webcast today at 11:00 a.m. ET.

Conference Call:

212/231-2938

 

Webcast / Replay URL:

www.rexamerican.com

 

The webcast will be available for replay for 30 days.

REX American Resources’ Q3 ‘23 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.

REX’s Q3 ‘23 net sales and revenue were $221.1 million, compared with $220.3 million in Q3 ‘22. The year-over-year net sales and revenue increase primarily reflects a 10.4% increase in the quantities of ethanol sold, partially offset by lower prices for ethanol, dried and modified distillers grains, and corn oil. Q3 ‘23 gross profit increased 323.7% to $39.3 million, from $9.3 million in Q3 ‘22, primarily reflecting decreased input costs, including lower corn and natural gas pricing. As a result, income before income taxes and non-controlling interests was $41.3 million, compared with $6.1 million in the comparable year-ago period.

Net income attributable to REX common shareholders was $26.1 million in Q3 ‘23 compared with $3.2 million in Q3 ‘22. This led to Q3 ‘23 basic and diluted net income per share attributable to REX common shareholders of $1.49, an all time quarterly record, compared to $0.18 per share in Q3 ‘22. Per share results for the Q3 ‘23 and Q3 ‘22 periods are based on 17,531,000 and 17,591,000 diluted weighted average shares outstanding, respectively.

REX American Resources’ Chief Executive Officer, Zafar Rizvi, commented, “Our fiscal third quarter results mark the best quarterly net income and earnings per share results in our 39 year history as a public company and highlights the strength of our ethanol operations. The substantial increase in income before taxes to $41.3 million underscores the efficiency of our operations and our ability to capitalize on favorable industry conditions.

“REX remains committed to a sustainable future by fully embracing the power of ethanol. We continue to make progress on our cutting-edge carbon sequestration initiatives including beginning construction on a carbon capture facility, implementing carbon intensity (CI) score reduction projects and expanding capacity from 150 to 175 million gallons, with the ultimate goal being annual production capacity of 200 million gallons all at the One Earth plant location.

“As we look ahead, we are confident in our ability to extend our long track record of leading ethanol industry operating results, and advancing our carbon capture and sequestration initiatives, while growing our capacity. With a disciplined operating approach and focus on profitability, we expect these initiatives will lead to incremental cash generation and added shareholder value creation.”

Balance Sheet

As of October 31, 2023, REX had cash and cash equivalents and short-term investments of $332.0 million, $34.1 million of which was at the parent company and $297.9 million of which was at its consolidated production facilities. This compares with cash, cash equivalents and short-term investments at January 31, 2023, of $280.9 million, $42.1 million of which was at the parent company and $238.8 million of which was at its consolidated production facilities.

 

The following table summarizes select data related to REX’s consolidated alternative energy interests:

   

 

Three Months Ended

 

Nine Months Ended

 

October 31,

 

October 31,

 

2023

 

2022

 

 

 

2023

 

2022

Average selling price per gallon of ethanol

$

2.32

$

2.49

 

$

2.32

$

2.48

 

Average selling price per ton of dried distillers grains

$

194.94

$

230.29

 

$

220.92

$

232.51

 

Average selling price per pound of distillers corn oil

$

0.61

$

0.74

 

$

0.60

$

0.70

 

Average selling price per ton of modified distillers grain

$

85.86

$

116.49

 

$

104.94

$

120.23

 

 

 

 

 

 

Ethanol gallons sold (in millions)

 

73.2

 

66.3

 

 

213.8

 

202.1

 

Change in Accounting Principles

In the previous quarter ended July 31, 2023 the Company made a change in the method of accounting to begin classifying shipping and handling costs as cost of sales, instead of within selling, general and administrative expenses (SG&A), as historically presented, in order to improve the comparability of gross profit and SG&A reported. The Company has applied a retrospective application of the new accounting policy.

 

The following table summarizes the impact of the Company’s retrospective change in accounting principle:

   

 

Three Months Ended

 

October 31, 2022

 

As Previously Reported

 

Effect of Change

 

As Currently Reported

Cost of Sales

$

208,941

 

 

$

2,063

 

 

$

211,004

 

 

 

 

 

 

 

Gross Profit

$

11,336

 

 

$

(2,063

)

 

$

9,273

 

 

 

 

 

 

 

Selling, general and administrative expenses

$

(7,886

)

 

$

2,063

 

 

$

(5,823

)

 

 

Nine Months Ended

 

October 31, 2022

 

As Previously Reported

 

Effect of Change

 

As Currently Reported

Cost of Sales

$

615,001

 

 

$

4,548

 

 

$

619,549

 

 

 

 

 

 

 

Gross Profit

$

39,832

 

 

$

(4,548

)

 

$

35,284

 

 

 

 

 

 

 

Selling, general and administrative expenses

$

(22,237

)

 

$

4,548

 

 

$

(17,689

)

 

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 212/231-2938 (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 704 million gallons of ethanol over the twelve-month period ended October 31, 2023. REX’s effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended October 31, 2023) by the ethanol production facilities in which it has ownership interests was approximately 282 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, distillers corn oil, commodity market risk, gasoline and natural gas, ethanol plants operating efficiently and according to forecasts and projections, logistical interruptions, success in permitting and developing the planned carbon sequestration facility near the One Earth Energy ethanol plant, 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,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net sales and revenue

$

221,079

 

$

220,277

 

 

$

645,770

 

$

654,833

 

Cost of sales

 

181,789

 

 

211,004

 

 

577,962

 

 

619,549

 

Gross profit

 

39,290

 

 

9,273

 

 

 

67,808

 

 

35,284

 

Selling, general and administrative expenses

 

(7,609

)

 

(5,823

)

 

 

(21,996

)

 

(17,689

)

Equity in income of unconsolidated ethanol affiliates

 

4,738

 

 

661

 

 

 

9,275

 

 

6,210

 

Interest and other income, net

 

4,863

 

 

1,983

 

 

10,935

 

 

10,338

 

Income before income taxes and noncontrolling interests

 

41,282

 

 

6,094

 

 

 

66,022

 

 

34,143

 

Provision for income taxes

 

(9,640

)

 

(1,196

)

 

(15,396

)

 

(7,374

)

Net Income

 

31,642

 

 

4,898

 

 

 

50,626

 

 

26,769

 

Net Income attributable to noncontrolling interests

 

(5,566

)

 

(1,714

)

 

(10,259

)

 

(7,233

)

Net income attributable to REX common shareholders

$

26,076

 

$

3,184

 

$

40,367

 

$

19,536

 

 

 

 

 

 

 

Weighted average shares outstanding – basic and diluted

 

17,531

 

 

17,591

 

 

17,461

 

 

17,714

 

 

 

 

 

 

 

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

$

1.49

 

$

0.18

 

$

2.31

 

$

1.10

 

   

- balance sheets follow -

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (in thousands) Unaudited

   

 

October 31,

 

January 31,

 

2023

2023

ASSETS:

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

72,828

 

 

$

69,612

 

Short-term investments

 

259,172

 

 

 

211,331

 

Restricted cash

 

1,728

 

 

 

1,735

 

Accounts receivable

 

30,138

 

 

 

25,162

 

Inventory

 

37,515

 

 

 

48,744

 

Refundable income taxes

 

4,448

 

 

 

2,962

 

Prepaid expenses and other

 

12,256

 

 

13,098

 

Total current assets

 

418,085

 

 

 

372,644

 

Property and equipment, net

 

144,567

 

 

 

135,497

 

Operating lease right-of-use assets

 

14,516

 

 

 

15,214

 

Other assets

 

13,589

 

 

 

23,179

 

Equity method investment

 

36,807

 

 

33,045

 

TOTAL ASSETS

$

627,564

 

$

579,579

 

LIABILITIES AND EQUITY:

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable – trade

$

28,766

 

 

$

34,091

 

Current operating lease liabilities

 

5,082

 

 

 

5,180

 

Accrued expenses and other current liabilities

 

14,842

 

 

15,328

 

Total current liabilities

 

48,690

 

 

54,599

 

LONG-TERM LIABILITIES:

 

 

 

Deferred taxes

 

1,097

 

 

 

1,097

 

Long-term operating lease liabilities

 

9,157

 

 

 

9,855

 

Other long-term liabilities

 

3,072

 

 

3,034

 

Total long-term liabilities

 

13,326

 

 

13,986

 

EQUITY:

 

 

 

REX shareholders’ equity:

 

 

 

Common stock

 

299

 

 

 

299

 

Paid-in capital

 

3,475

 

 

 

578

 

Retained earnings

 

681,193

 

 

 

640,826

 

Treasury stock

 

(191,974

)

 

(193,721

)

Total REX shareholders’ equity

 

492,993

 

 

 

447,982

 

Noncontrolling interests

 

72,555

 

 

63,012

 

Total equity

 

565,548

 

 

510,994

 

TOTAL LIABILITIES AND EQUITY

$

627,564

 

$

579,579

 

   

- statements of cash flows follow -

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) Unaudited

   

 

Nine Months Ended

 

October 31,

 

October 31,

 

2023

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net Income including noncontrolling interest

$

50,626

 

 

$

26,769

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation

 

13,371

 

 

 

13,503

 

Amortization of operating lease right-of-use assets

 

3,766

 

 

 

4,105

 

Income from equity method investments

 

(9,275

)

 

 

(6,210

)

Dividends received from equity method investments

 

5,513

 

 

 

3,007

 

Interest income from investments

 

(6,950

)

 

 

(1,098

)

Deferred income taxes

 

10,048

 

 

 

4,964

 

Stock based compensation expense

 

5,146

 

 

1,295

 

Loss (gain) on sale of property and equipment – net

 

205

 

 

 

(91

)

Changes in assets and liabilities:

 

 

 

Accounts receivable

 

(4,976

)

 

 

3,146

 

Inventories

 

11,229

 

 

 

180

 

Refundable income taxes

 

(1,486

)

 

66

 

Other assets

 

409

 

 

649

 

Accounts payable – trade

 

(5,622

)

 

 

7,990

 

Other liabilities

 

(4,812

)

 

 

(4,281

)

Net cash provided by operating activities

 

67,192

 

 

 

53,994

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Capital expenditures

 

(22,359

)

 

(7,182

)

Purchase of short-term investments

 

(378,381

)

 

(307,371

)

Sale of short-term investments

 

337,490

 

 

 

180,527

 

Deposits

 

(27

)

 

 

-

 

Proceeds from sale of real estate and property and

equipment

 

 

 

10

 

 

 

 

 

 

-

 

 

Net cash used in investing activities

 

(63,267

)

 

(134,026

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

Treasury stock acquired

 

-

 

 

 

(13,012

)

Payments to noncontrolling interests holders

 

(716

)

 

 

(1,730

)

Net cash used in financing activities

 

(716

)

 

 

(14,742

)

 

 

 

 

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

 

3,209

 

 

 

 

 

 

(94,774

 

)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH – Beginning of period

 

 

 

71,347

 

 

 

 

 

232,068

 

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH – End of period

 

$

 

74,556

 

 

 

 

$

 

137,294

 

 

 

 

 

Non-cash financing activities – Stock awards accrued

$

1,467

 

$

679

 

Non-cash financing activities – Stock awards issued

$

965

 

$

1,539

 

Non-cash investing activities – Accrued capital expenditures

$

722

 

$

93

 

Right-of-use assets acquired and liabilities incurred upon lease execution

$

3,210

 

$

7,632

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231130576872/en/

Douglas Bruggeman Chief Financial Officer (937) 276‑3931

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