Business Wire | Aug 26, 2020 09:15AM EDT

CORRECTING and REPLACING REX American Resources Reports Fiscal 2020 Second Quarter Results

Aug. 26, 2020

DAYTON, Ohio--(BUSINESS WIRE)--Aug. 26, 2020--In table "Consolidated Balance Sheets," first column header should read July 31, 2020 and second column header should read January 31, 2020.

The updated release reads:

REX AMERICAN RESOURCES REPORTS FISCAL 2020 SECOND QUARTER RESULTS

REX American Resources Corporation (NYSE: REX) ("REX" or "the Company") today reported financial results for its fiscal 2020 second quarter ("Q2 '20") ended July 31, 2020. REX management will host a conference call and webcast today at 11:00 a.m. ET.

Conference Call: 212/231-2900

Webcast / Replay URL: www.rexamerican.com/Corp/Page4.aspx

The webcast will be available for replay for 30 days.

REX American Resources' Q2 '20 results principally reflect its interests in six ethanol production facilities and its refined coal operation. The One Earth Energy, LLC ("One Earth") and NuGen Energy, LLC ("NuGen") ethanol production facilities are consolidated, as is the refined coal entity, while those of its four other ethanol plants are reported as equity in income of unconsolidated ethanol affiliates. The Company reports results for its two business segments as ethanol and by-products, and refined coal.

REX's Q2 '20 net sales and revenue were $39.3 million, compared with $105.9 million in Q2 '19. The year-over-year net sales and revenue decline was primarily due to lower ethanol production levels as the Company temporarily idled its NuGen Energy and One Earth Energy plants, which led to a 56% decrease in ethanol gallons sold. The Q2 '20 net sales and revenue also reflects an 11% decline in ethanol pricing on a year-over-year basis. Primarily reflecting these factors, Q2 '20 gross profit for the Company's ethanol and by-products segment declined to $0.6 million, compared with $6.2 million in Q2 '19. As a result, the ethanol and by-products segment incurred a loss before income taxes of $3.3 million in Q2 '20, compared to income of $3.1 million in Q2 '19. The Company's refined coal operation incurred a $1.9 million gross loss and a $2.1 million loss before income taxes in Q2 '20, compared to a $2.2 million gross loss and a loss before income taxes of $2.0 million in Q2 '19. REX reported a Q2 '20 loss before income taxes and non-controlling interests of $6.1 million, compared with income before income taxes and non-controlling interests of $0.7 million in the comparable year ago period. While the refined coal operation negatively impacted gross profit and income before income taxes, it contributed a tax benefit of $2.9 million and $3.2 million for Q2 '20 and Q2 '19, respectively.

Net loss attributable to REX shareholders in Q2 '20 was $1.7 million, compared to net income of $2.3 million in Q2 '19. Q2 '20 basic and diluted net loss per share attributable to REX common shareholders was $0.28, compared to net income per share of $0.36 in Q2 '19. Per share results in Q2 '20 and Q2 '19 are based on 6,216,000 and 6,318,000 diluted weighted average shares outstanding, respectively.

Segment Income Statement Data:

Three Months Six Months Ended Ended

($ in thousands) July 31, July 31,

2020 2019 2020 2019

Net sales and revenue:

Ethanol & By-Products ^(1) $ 39,242 $ 105,770 $ 122,477 $ 210,223

Refined coal ^(2) (3) 85 98 100 220

Total net sales and revenue $ 39,327 $ 105,868 $ 122,577 $ 210,443



Gross (loss) profit:

Ethanol & By-Products ^(1) $ 553 $ 6,169 $ (7,670) $ 12,284

Refined coal ^(2) (1,884) (2,165) (2,991) (4,634)

Total gross (loss) profit $ (1,331) $ 4,004 $ (10,661) $ 7,650



(Loss) income before income taxes:

Ethanol & By-Products ^(1) $ (3,259) $ 3,111 $ (15,610) $ 6,313

Refined coal ^(2) (2,118) (2,028) (2,965) (4,703)

Corporate and other (702) (352) (1,247) (712)

Total (loss) income before $ (6,079) $ 731 $ (19,822) $ 898income taxes

Benefit (provision) for income taxes:

Ethanol & By-Products $ 893 $ (619) $ 5,054 $ (1,105)

Refined coal 2,919 3,155 3,878 7,101

Corporate and other 234 86 427 174

Total benefit for income taxes $ 4,046 $ 2,622 $ 9,359 $ 6,170

Segment (loss) profit:

Ethanol & By-Products $ (2,178) $ 1,305 $ (9,611) $ 3,014

Refined coal 898 1,216 1,048 2,602

Corporate and other (468) (265) (820) (539)

Net (loss) income attributable $ (1,748) $ 2,256 $ (9,383) $ 5,077to REX common shareholders

(1) Includes results attributable to non-controlling interests of approximately 25% for One Earth and approximately 1% for NuGen.

(2) Includes results attributable to non-controlling interests of approximately 5%.

(3) Refined coal sales are reported net of the cost of coal.

REX American Resources' Chief Executive Officer, Zafar Rizvi, commented, "As we indicated at the time we reported the fiscal 2020 first quarter, the second quarter saw a continuation of the challenging operating environment due to the severe disruptions related to the COVID-19 pandemic and its impact on fuel demand and the economy at large. In order to preserve our financial liquidity and flexibility, we made the strategic decision to temporarily idle our two consolidated plants thus significantly reducing our ethanol output while mitigating operating losses.

"As we enter the second half of fiscal 2020, the operating environment has improved and we've re-opened the NuGen Energy and One Earth Energy plants based on the increase in ethanol demand. However, we expect ethanol crush spread margins and distillers grains pricing to remain volatile."

Balance Sheet

At July 31, 2020, REX had cash and cash equivalents and short-term investments of $185.4 million, $55.9 million of which was at the parent company, and $129.5 million of which was at its consolidated production facilities. This compares with cash, cash equivalents and short-term investments at January 31, 2020, of $205.7 million, $62.3 million of which was at the parent company, and $143.4 million of which was at its consolidated ethanol production facilities.

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

Three Months Six Months Ended Ended

July 31, July 31,

2020 2019 2020 2019

Average selling price per gallon $ 1.23 $ 1.38 $ 1.25 $ 1.32of ethanol

Average selling price per ton of $ 135.54 $ 135.46 $ 143.24 $ 138.92dried distillers grains

Average selling price per pound of $ 0.24 $ 0.25 $ 0.25 $ 0.25non-food grade corn oil

Average selling price per ton of $ 31.87 $ 53.01 $ 49.32 $ 60.12modified distillers grains

Average cost per bushel of grain $ 3.63 $ 3.80 $ 3.86 $ 3.65

Average cost of natural gas (per $ 2.92 $ 2.63 $ 3.60 $ 3.16mnbtu)

Supplemental data related to REX's alternative energy interests:

REX American Resources CorporationEthanol Ownership Interests/Effective Annual Gallons Shipped as of July 31,2020(gallons in millions)

Trailing Current REX's Current Effective Twelve REX Ownership of TrailingEntity Months Ownership Twelve Gallons Interest Month Gallons Shipped Shipped

One Earth Energy, LLC 115.7 75.3% 87.1Gibson City, IL

NuGen Energy, LLC 72.6 99.5% 72.2Marion, SD

Big River Resources WestBurlington, LLC 103.8 10.3% 10.7West Burlington, IA

Big River Resources Galva, LLC 112.0 10.3% 11.5Galva, IL

Big River United Energy, LLC 117.9 5.7% 6.7Dyersville, IA

Big River Resources Boyceville, LLC 54.3 10.3% 5.6Boyceville, WI

Total 576.3 n/a 193.8

Second Quarter Conference Call

REX will host a conference call at 11:00 a.m. ET today. Senior management will discuss the quarterly financial results and host a question and answer session. The dial in number for the audio conference call is 212/231-2900 (domestic and international callers).

Participants can also listen to a live webcast of the call on the Company's website, www.rexamerican.com/Corp/Page4.aspx. A webcast replay will be available for 30 days following the live event at www.rexamerican.com/Corp/Page4.aspx.

About REX American Resources Corporation

REX American Resources has interests in six ethanol production facilities, which in aggregate shipped approximately 576 million gallons of ethanol over the twelve-month period ended July 31, 2020. REX's effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended April 30, 2020) by the ethanol production facilities in which it has ownership interests was approximately 194 million gallons. In addition, the Company acquired a refined coal operation in August 2017. 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, gasoline and natural gas, ethanol and refined coal 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, 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.

- statements of operations follow -

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per share amounts)

Unaudited

Three Months Six Months Ended Ended

July 31, July 31,

2020 2019 2020 2019

Net sales and revenue $39,327 $105,868 $122,577 $210,443

Cost of sales 40,658 101,864 133,238 202,793

Gross (loss) profit (1,331) 4,004 (10,661) 7,650

Selling, general and administrative (4,438) (4,764) (9,043) (9,496)expenses

Equity in (loss) income of (507) 239 (984) 365unconsolidated ethanol affiliates

Interest and other income, net 197 1,252 866 2,379

(Loss) income before income taxes and (6,079) 731 (19,822) 898non-controlling interests

Benefit for income taxes 4,046 2,622 9,359 6,170

Net (loss) income including (2,033) 3,353 (10,463) 7,068non-controlling interests

Net loss (income) attributable to 285 (1,097) 1,080 (1,991)non-controlling interests

Net (loss) income attributable to REX $ $2,256 ($9,383) $5,077common shareholders (1,748)



Weighted average shares outstanding - 6,216 6,318 6,261 6,317basic and diluted



Basic and diluted net (loss) incomeper share attributable to REX common $(0.28) $0.36 ($1.50) $0.80shareholders



- balance sheets follow -

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

Unaudited

July 31, January 31,

ASSETS 2020 2020

CURRENT ASSETS:

Cash and cash equivalents $ 152,708 $ 179,658

Restricted cash 950 1,113

Short-term investments 32,656 26,073

Accounts receivable 9,744 12,969

Inventory 30,383 35,634

Refundable income taxes 10,620 6,029

Prepaid expenses and other 9,878 9,659

Total current assets 246,939 271,135

Property and equipment-net 158,513 163,327

Operating lease right-of-use assets 15,345 16,173

Deferred taxes 21,182 17,061

Other assets 884 342

Equity method investment 29,475 32,464

TOTAL ASSETS $ 472,338 $ 500,502

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Accounts payable - trade $ 8,584 $ 18,900

Current operating lease liabilities 5,310 4,935

Accrued expenses and other current liabilities 7,295 7,764

Total current liabilities 21,189 31,599

LONG TERM LIABILITIES:

Deferred taxes 3,670 4,334

Long-term operating lease liabilities 9,600 10,688

Other long-term liabilities 140 275

Total long-term liabilities 13,410 15,297

COMMITMENTS AND CONTINGENCIES

EQUITY:

REX shareholders' equity:

Common stock, 45,000 shares authorized, 29,853 299 299shares issued at par

Paid in capital 149,044 148,789

Retained earnings 577,602 586,985

Treasury stock, 23,655 and 23,561 shares, (340,591) (335,066)respectively

Total REX shareholders' equity 386,354 401,007

Non-controlling interests 51,385 52,599

Total equity 437,739 453,606

TOTAL LIABILITIES AND EQUITY $ 472,338 $ 500,502

- statements of cash flows follow -

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

Unaudited



Six Months Ended

July 31,

2020 2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income $ (10,463) $ 7,068

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

Depreciation 10,491 12,425

Amortization of operating lease right-of-use assets 2,691 2,992

Stock based compensation expense 80 248

Loss (income) from equity method investments 984 (365)

Dividends received from equity method investments 2,005 -

Interest income from investments (179) (25)

Deferred income tax (4,784) (6,294)

Gain on disposal of property and equipment (22) -

Changes in assets and liabilities:

Accounts receivable 3,225 3,696

Inventory 5,251 (3,594)

Refundable income taxes (4,591) 12

Prepaid expenses and other assets (481) (153)

Accounts payable-trade (10,301) 1,409

Other liabilities (2,940) (4,927)

Net cash (used in) provided by operating activities (9,034) 12,492

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures (5,692) (1,449)

Purchases of short-term investments (45,450) -

Sales of short-term investments 39,046 15,000

Other (259) 12

Net cash (used in) provided by investing activities (12,355) 13,563

CASH FLOWS FROM FINANCING ACTIVITIES:

Treasury stock acquired (5,590) -

Payments to noncontrolling interests holders (157) (2,598)

Capital contributions from minority investor 23 185

Net cash used in financing activities (5,724) (2,413)

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED (27,113) 23,642CASH

CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning 180,771 188,812of period

CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of $ 153,658 $ 212,454period

Non cash financing activities - Stock awards issued $ 240 $ 487

Non cash financing activities - Stock awards accrued $ - $ 171

Non cash investing activities - Accrued capital $ 22 $ 5expenditures

Initial operating lease right-of-use assets and $ - $ 20,918liabilities recorded upon adoption of ASC 842

Operating lease right-of-use assets acquired and $ 1,863 $ 432liabilities assumed upon lease execution

View source version on businesswire.com: https://www.businesswire.com/news/home/20200826005181/en/

CONTACT: Douglas Bruggeman Chief Financial Officer (937) 276?3931

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