REX REX American Resources Corporation

• Generated $1.16 and $3.47 of net income per share in Q4 and Full Fiscal Year ‘23, respectively; Full Fiscal Year net income per share was the second highest in company history
• Reported gross profit of $30.4 million and $98.2 million for Q4 and Full Fiscal Year ‘23, respectively, an increase of more than 100% over each of the respective periods for 2022
• Reported net sales and revenue of $187.6 million and $833.4 million for Q4 and Full Fiscal Year ’23, respectively, a decrease of approximately 6% and 3% from each of the respective periods for 2022
• Reported consolidated ethanol sales volumes of 72.1 million gallons and 285.9 million gallons for Q4 and Full Fiscal Year ’23, respectively, an increase of approximately 13% and 8% over each of the respective periods for 2022
• Commenced site construction on the One Earth Energy carbon capture facility at the Gibson City, Illinois facility during Q3; expect completion of the compression facility during Q2 ‘24

REX American Resources Corporation (“REX” or the “Company”) (NYSE: REX), a leading ethanol production company, today announced financial and operational results for the Company’s full year and fiscal fourth quarter 2023.

REX American Resources’ Q4 and full fiscal year 2023 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.

Full Fiscal Year 2023 Results

For the full fiscal year 2023, REX reported net sales and revenue of $833.4 million, compared with $855.0 million for full fiscal year 2022. The year-over-year net sales and revenue decrease primarily reflects reduced pricing for ethanol and co-products. Full fiscal year 2023 gross profit for the Company was $98.2 million, compared with $48.6 million in full fiscal year 2022, reflecting decreased corn and natural gas prices and increased production levels. This led to full fiscal year 2023 income before income taxes and non-controlling interests of $98.5 million, compared with $47.5 million in the prior year period.

Net income attributable to REX shareholders in full fiscal year 2023 was $60.9 million, compared to $27.7 million in full fiscal year 2022. Full fiscal year diluted net income per share attributable to REX common shareholders was $3.47, compared to $1.57 per share in full fiscal year 2022. Per share results for full fiscal years 2023 and 2022 are based on 17,576,000 and 17,638,000 diluted weighted average shares outstanding, respectively, reflecting the Company’s 3-for-1 common stock split effected August 5, 2022.

Fourth Quarter 2023 Results

REX reported Q4 ’23 net sales and revenue of $187.6 million, compared to Q4 ‘22 net sales and revenue of $200.2 million. The year-over-year net sales and revenue decrease primarily reflects lower product pricing. Q4 ‘23 gross profit for the Company was $30.4 million, compared with $13.3 million in Q4 ’22, a result of decreases in corn and natural gas prices, and increased production levels. This led to Q4 ‘23 income before income taxes and non-controlling interests of $32.5 million, compared with $13.3 million in Q4 ’22.

Net income attributable to REX shareholders in Q4 ‘23 was $20.6 million, compared to $8.2 million in Q4 ’22. Q4 ‘23 diluted net income per share attributable to REX common shareholders was $1.16, compared to $0.47 per share in Q4 ’22. Per share results for Q4 ’23 and Q4 ’22 are based on 17,657,000 and 17,416,000 diluted weighted average shares outstanding, respectively, reflecting the Company’s 3-for-1 common stock split effected August 5, 2022.

One Earth Energy Carbon Capture Project

REX commenced site construction operations for its One Earth Energy carbon capture and sequestration project during Q3 2023, at the Company’s Gibson City, Illinois location. Construction of the capture and compression facility is expected to be completed during the second quarter of 2024.

The Environmental Protection Agency (EPA) Class VI injection well permitting process is ongoing. Approval of REX’s Class VI injection well application is necessary to begin construction on the sequestration portion of the project and to begin operations. Permitting for a 6-mile carbon transport pipeline to deliver carbon from the compression facility to the sequestration facility, is also ongoing with the Illinois Commerce Commission.

To-date capital expenditures related to the One Earth Energy carbon capture and sequestration project and related expansion of ethanol production capacity at the Gibson City location total $38.6 million. The Company is currently budgeting $165-$175 million for this project.

Balance Sheet

At the end of fiscal year 2023 on January 31, 2024, REX had $378.7 million of cash, cash equivalents, and short-term investments available and no bank debt.

Management Commentary

“REX American’s strong results for 2023 reflect our company’s ongoing commitment to efficient operations and a laser focus on profitability,” said Mr. Zafar Rizvi, REX Chief Executive Officer. “Achieving the second highest net income per share in the Company’s history in 2023 is an incredible outcome, and one which we are very proud of. Day in and day out, our team evaluates our outlook for the ethanol market, monitoring and managing our exposure to meet our goals. We plan to continue this focus on profitable, sustainable operations through all market conditions, and as we grow our operations into additional areas, like carbon capture and sequestration.

“We continue to make progress on our One Earth Energy CCS project at the Gibson City facility, with installation of the compression facility still slated for completion in the second quarter of 2024. We are at the same time working on the previously announced expansion of ethanol production at our Gibson City facility to 200 million gallons per year. While we await all required approvals, we expect both of these projects will be additive to REX’s bottom line, and support continued profitable operations,” concluded Mr. Rizvi.

Change in Accounting Principles

As previously discussed, during the fiscal 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.

Conference Call Information

To access the conference call, interested parties may dial (877) 269-7751 (US) or (201) 389-0908 (international). Participants can also view an updated presentation, as well as listen to a live webcast of the call by going to the Investors section on the REX website at www.rexamerican.com. A replay will be available shortly after the live conference call and can be accessed by dialing (844) 512-2921 (US) or (412) 317-6671 (international). The passcode for the replay is 13745209. The replay will be available for 30 days after the call.

About REX American Resources Corporation

REX American Resources Corporation has interests in six ethanol production facilities, which in aggregate have production capacity totaling approximately 730 million gallons per year. REX’s effective ownership of annual volumes is approximately 300 million gallons. Further information about REX is available at www.rexamerican.com.

Forward-Looking Statements

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

 

Year Ended

 

January 31,

 

January 31,

 

2024

2023

2024

2023

Net sales and revenue

$

187,614

$

200,167

 

$

833,384

$

855,000

Cost of sales

 

157,204

 

186,849

 

735,166

 

806,398

Gross profit

 

30,410

 

13,318

 

 

98,218

 

48,602

Selling, general and administrative expenses

 

(7,383)

 

(5,138)

 

 

(29,379)

 

(22,827)

Equity in income of unconsolidated ethanol affiliates

 

4,646

 

2,535

 

 

13,921

 

8,745

Interest and other income, net

 

4,789

 

2,621

 

15,724

 

12,959

Income before income taxes and noncontrolling interests

 

32,462

 

13,336

 

 

98,484

 

47,479

Provision for income taxes

 

(7,164)

 

(2,168)

 

(22,560)

 

(9,542)

Net Income

 

25,298

 

11,168

 

 

75,924

 

37,937

Net Income attributable to noncontrolling interests

 

(4,730)

 

(3,007)

 

(14,989)

 

(10,240)

Net income attributable to REX common shareholders

$

20,568

$

8,161

$

60,935

$

27,697

 

 

 

 

 

 

Weighted average shares outstanding – basic

 

17,548

 

17,416

 

17,482

 

17,638

 

 

 

 

 

 

Basic net income per share attributable to REX common shareholders

$

1.17

$

0.47

$

3.49

$

1.57

 

Weighted average shares outstanding – diluted

 

17,657

 

17,416

 

17,576

 

17,638

 

Diluted net income per share attributable to REX common shareholders

$

1.16

$

0.47

$

3.47

$

1.57

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

Unaudited

 

 

January 31,

 

January 31,

 

2024

2023

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

223,397

 

$

69,612

Short-term investments

 

155,260

 

 

211,331

Restricted cash

 

-

 

 

1,735

Accounts receivable

 

23,185

 

 

25,162

Inventory

 

26,984

 

 

48,744

Refundable income taxes

 

5,728

 

 

2,962

Prepaid expenses and other

 

17,549

 

13,098

Total current assets

 

452,103

 

 

372,644

Property and equipment, net

 

155,587

 

 

135,497

Operating lease right-of-use assets

 

13,038

 

 

15,214

Other assets

 

9,138

 

 

23,179

Equity method investment

 

34,936

 

33,045

TOTAL ASSETS

$

664,802

$

579,579

LIABILITIES AND EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable – trade

$

42,073

 

$

34,091

Current operating lease liabilities

 

4,469

 

 

5,180

Accrued expenses and other current liabilities

 

19,717

 

15,328

Total current liabilities

 

66,259

 

54,599

LONG-TERM LIABILITIES:

 

 

 

Deferred taxes

 

1,598

 

 

1,097

Long-term operating lease liabilities

 

8,378

 

 

9,855

Other long-term liabilities

 

970

 

3,034

Total long-term liabilities

 

10,946

 

13,986

EQUITY:

 

 

 

REX shareholders’ equity:

 

 

 

Common stock

 

299

 

 

299

Paid-in capital

 

3,769

 

 

578

Retained earnings

 

701,761

 

 

640,826

Treasury stock

 

(191,911)

 

(193,721)

Total REX shareholders’ equity

 

513,918

 

 

447,982

Noncontrolling interests

 

73,679

 

63,012

Total equity

 

587,597

 

510,994

TOTAL LIABILITIES AND EQUITY

$

664,802

$

579,579

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

Unaudited

 

 

Year Ended

 

January 31,

 

January 31,

 

2024

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net Income including noncontrolling interest

$

75,924

 

$

37,937

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

 

 

 

Depreciation

 

17,794

 

 

17,976

Amortization of operating lease right-of-use assets

 

5,245

 

 

5,328

Income from equity method investments

 

(13,921)

 

 

(8,745)

Dividends received from equity method investments

 

12,030

 

 

6,266

Interest income from investments

 

(10,008)

 

 

(2,839)

Deferred income taxes

 

14,627

 

 

915

Stock based compensation expense

 

6,209

 

 

1,930

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

 

243

 

 

(102)

Changes in assets and liabilities:

 

 

 

Accounts receivable

 

1,977

 

 

659

Inventories

 

21,760

 

 

(6,519)

Income taxes refundable

 

(2,766)

 

3,715

Prepaid expenses and other assets

 

(4,495)

 

(452)

Accounts payable – trade

 

7,868

 

 

1,478

Accrued expense and other liabilities

 

(4,517)

 

 

(2,752)

Net cash provided by operating activities

 

127,970

 

 

54,795

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Capital expenditures

 

(37,663)

 

(15,578)

Purchase of short-term investments

 

(448,507)

 

(399,350)

Maturities of short-term investments

 

514,586

 

 

216,735

Deposits

 

(43)

 

 

(319)

Proceeds from sale of real estate and property and equipment

 

29

 

 

5

Net cash provided by (used in) investing activities

 

28,402

 

(198,507)

CASH FLOWS FROM FINANCING ACTIVITIES:

Treasury stock acquired

 

-

 

 

(13,012)

Capital contributions from minority investor

 

22

 

 

-

Payments to noncontrolling interests holders

 

(4,344)

 

(3,997)

Net cash used in financing activities

 

(4,322)

 

 

(17,009)

 

 

 

 

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

 

152,050

 

 

(160,721)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH – Beginning of year

 

71,347

 

232,068

CASH, CASH EQUIVALENTS AND RESTRICTED CASH – End of year

$

223,397

 

$

71,347

 

Non-cash financing activities – Stock awards accrued

$

2,172

$

965

Non-cash financing activities – Stock awards issued

$

965

$

1,539

Non-cash investing activities – Accrued capital expenditures

$

918

$

425

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

$

3,210

$

9,321

 

The following table summarizes the impact of the Company’s

retrospective change in accounting principle:

 

 

Three Months Ended

 

January 31, 2023

 

 

As Previously

Reported

 

Effect of

Change

 

As Currently

Reported

Cost of Sales

$

185,268

 

$

1,581

 

$

186,849

 

 

 

 

 

 

Gross Profit

$

14,899

 

$

(1,581)

 

$

13,318

 

 

 

 

 

 

Selling, general and administrative expenses

$

(6,719)

 

$

1,581

 

$

(5,138)

 

Year Ended

 

January 31, 2023

 

 

As Previously

Reported

 

Effect of

Change

 

As Currently

Reported

Cost of Sales

$

800,269

 

$

6,129

 

$

806,398

 

 

 

 

 

 

Gross Profit

$

54,731

 

$

(6,129)

 

$

48,602

 

 

 

 

 

 

Selling, general and administrative expenses

$

(28,956)

 

$

6,129

 

$

(22,827)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240328275453/en/

Investor Contacts Douglas Bruggeman Chief Financial Officer

Caldwell Bailey ICR, Inc. rexamerican@icrinc.com