Business Wire | Dec 3, 2020 07:00AM EST

REX American Resources Reports Fiscal 2020 Third Quarter EPS of $1.44

Dec. 03, 2020

DAYTON, Ohio--(BUSINESS WIRE)--Dec. 03, 2020--REX American Resources Corporation (NYSE: REX) ("REX" or "the Company") today reported financial results for its fiscal 2020 third quarter ("Q3 '20") ended October 31, 2020. REX management will host a conference call and webcast today at 11:00 a.m. ET.

Conference Call: 212/231-2912

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

The webcast will be available for replay for 30 days.

REX American Resources' Q3 '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 Q3 '20 net sales and revenue rose 43.4% to $124.3 million, compared with $86.7 million in Q3 '19. The year-over-year net sales and revenue increase was primarily due to higher ethanol production levels, which led to a 56.7% increase in ethanol gallons sold and more than offset a small year-over-year decline in the average selling price per gallon of ethanol. Primarily reflecting these factors and an improved crush spread, Q3 '20 gross profit for the Company's ethanol and by-products segment rose to $18.9 million, from $0.03 million in Q3 '19. As a result, the ethanol and by-products segment generated a profit before income taxes of $17.0 million in Q3 '20, compared to a loss of $2.8 million in Q3 '19. The Company's refined coal operation incurred a $1.3 million gross loss and a $1.3 million loss before income taxes in Q3 '20, compared to a $1.8 million gross loss and a loss before income taxes of $1.6 million in Q3 '19. REX reported a Q3 '20 profit before income taxes and non-controlling interests of $15.1 million, compared with a loss before income taxes and non-controlling interests of $4.9 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 $1.0 million and $2.2 million for Q3 '20 and Q3 '19, respectively.

Net income attributable to REX shareholders in Q3 '20 was $8.8 million, compared to a net loss of $2.1 million in Q3 '19. Q3 '20 basic and diluted net income per share attributable to REX common shareholders was $1.44, compared to a net loss per share of $0.32 in Q3 '19. Per share results in Q3 '20 and Q3 '19 are based on 6,143,000 and 6,319,000 diluted weighted average shares outstanding, respectively.

Segment Income Statement Data:

Three Months Nine Months Ended Ended

($ in thousands) October 31, October 31,

2020 2019 2020 2019

Net sales and revenue:

Ethanol & By-Products ^(1) $ 124,217 $ 86,603 $ 246,694 $ 296,826

Refined coal ^(2) (3) 34 68 134 288

Total net sales and revenue $ 124,251 $ 86,671 $ 246,828 $ 297,114



Gross profit (loss):

Ethanol & By-Products ^(1) $ 18,929 $ 28 $ 11,259 $ 12,312

Refined coal ^(2) (1,250) (1,786) (4,241) (6,420)

Total gross profit (loss) $ 17,679 $ (1,758) $ 7,018 $ 5,892



Income (loss) before income taxes:

Ethanol & By-Products ^(1) $ 17,007 $ (2,822) $ 1,397 $ 3,491

Refined coal ^(2) (1,270) (1,648) (4,235) (6,351)

Corporate and other (626) (434) (1,873) (1,146)

Total income (loss) before $ 15,111 $ (4,904) $ (4,711) $ (4,006)income taxes

(Provision) benefit for income taxes:

Ethanol & By-Products $ (5,071) $ 945 $ (17) $ (160)

Refined coal 985 2,181 4,863 9,282

Corporate and other 34 105 461 279

Total (provision) benefit for $ (4,052) $ 3,231 $ 5,307 $ 9,401income taxes

Segment profit (loss):

Ethanol & By-Products $ 9,660 $ (2,330) $ 49 $ 684

Refined coal (227) 607 821 3,209

Corporate and other (592) (329) (1,412) (868)

Net income (loss) attributable $ 8,841 $ (2,052) $ (542) $ 3,025to 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, "The strength of our third quarter results highlight the resiliency and adaptability of our teams and the efficiency of our plants as our two consolidated plants returned to production during the second quarter.

"Reflecting our solid balance sheet and long-term commitment to enhance shareholder value, during the quarter we repurchased 198,173 REX shares and in fiscal 2020 to date, we have returned over $19 million to shareholders through the repurchase of 316,349 shares. We ended the fiscal 2020 third quarter in a strong financial and liquidity position with cash and cash equivalents and short-term investments in excess of $202 million and working capital of $226 million and no bank debt."

Balance Sheet

At October 31, 2020, REX had cash, cash equivalents and short-term investments of $202.3 million, $42.4 million of which was at the parent company, and $159.9 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.

During the fiscal third quarter ended October 31, 2020 the Company repurchased 198,173 shares of its common stock at a cost $13.3 million, and subsequent to the end of the third quarter the Company purchased an additional 9,500 shares. As a result, the Company can repurchase approximately 33,512 additional shares under its current repurchase authorization. Reflecting all purchases to date, REX presently has approximately 5,992,002 shares of common stock outstanding.

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

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

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

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

REX American Resources' Chief Executive Officer, Zafar Rizvi, commented, "The strength of our third quarter results highlight the resiliency and adaptability of our teams and the efficiency of our plants as our two consolidated plants returned to production during the second quarter.

"Reflecting our solid balance sheet and long-term commitment to enhance shareholder value, during the quarter we repurchased 198,173 REX shares and in fiscal 2020 to date, we have returned over $19 million to shareholders through the repurchase of 316,349 shares. We ended the fiscal 2020 third quarter in a strong financial and liquidity position with cash and cash equivalents and short-term investments in excess of $202 million and working capital of $226 million and no bank debt."

Balance Sheet

At October 31, 2020, REX had cash, cash equivalents and short-term investments of $202.3 million, $42.4 million of which was at the parent company, and $159.9 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.

During the fiscal third quarter ended October 31, 2020 the Company repurchased 198,173 shares of its common stock at a cost $13.3 million, and subsequent to the end of the third quarter the Company purchased an additional 9,500 shares. As a result, the Company can repurchase approximately 33,512 additional shares under its current repurchase authorization. Reflecting all purchases to date, REX presently has approximately 5,992,002 shares of common stock outstanding.

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

Three Months Nine Months Ended Ended

October 31, October 31,

2020 2019 2020 2019

Average selling price per gallon of $ 1.31 $ 1.39 $ 1.28 $ 1.34ethanol

Average selling price per ton of $ 129.38 $ 134.57 $ 136.49 $ 137.48dried distillers grains

Average selling price per pound of $ 0.24 $ 0.26 $ 0.25 $ 0.25non-food grade corn oil

Average selling price per ton of $ 56.68 $ 56.56 $ 52.44 $ 59.67modified distillers grains

Average cost per bushel of grain $ 3.28 $ 4.15 $ 3.57 $ 3.79

Average cost of natural gas (per $ 2.09 $ 2.51 $ 2.87 $ 2.98MmBtu)

Supplemental data related to REX's alternative energy interests:

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

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

One Earth Energy, LLC 119.5 75.3% 90.0Gibson City, IL

NuGen Energy, LLC 95.9 99.5% 95.4Marion, SD

Big River Resources WestBurlington, LLC 103.1 10.3% 10.6West Burlington, IA

Big River Resources Galva, LLC 113.7 10.3% 11.7Galva, IL

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

Big River Resources Boyceville, LLC 55.2 10.3% 5.7Boyceville, WI

Total 605.3 n/a 220.1

Third 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 212/231-2912 (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 605 million gallons of ethanol over the twelve-month period ended October 31, 2020. REX's effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended October 31, 2020) by the ethanol production facilities in which it has ownership interests was approximately 220 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 Nine Months Ended Ended

October 31, October 31,

2020 2019 2020 2019

Net sales and revenue $ 124,251 $ 86,671 $ 246,828 $ 297,114

Cost of sales 106,572 88,429 239,810 291,222

Gross profit (loss) 17,679 (1,758) 7,018 5,892

Selling, general and (4,257) (4,133) (13,300) (13,629)administrative expenses

Equity in income (loss) ofunconsolidated ethanol 1,152 (15) 168 350affiliates

Interest and other income, 537 1,002 1,403 3,381net

Income (loss) before income taxes and 15,111 (4,904) (4,711) (4,006)non-controlling interests

(Provision) benefit for (4,052) 3,231 5,307 9,401income taxes

Net income (loss) including 11,059 (1,673) 596 5,395non-controlling interests

Net income attributable to (2,218) (379) (1,138) (2,370)non-controlling interests

Net income (loss)attributable to REX common $ 8,841 $ (2,052) $ (542) $ 3,025shareholders



Weighted average sharesoutstanding - basic and 6,143 6,319 6,221 6,318diluted



Basic and diluted net income(loss) per share $ 1.44 ($ 0.32) ($ 0.09) $ 0.48attributable to REX commonshareholders

- balance sheets follow -

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

Unaudited

October 31, January 31,

ASSETS 2020 2020

CURRENT ASSETS:

Cash and cash equivalents $ 173,075 $ 179,658

Short-term investments 29,216 26,073

Restricted cash 884 1,113

Accounts receivable 12,496 12,969

Inventory 21,616 35,634

Refundable income taxes 5,947 6,029

Prepaid expenses and other 9,771 9,659

Total current assets 253,005 271,135

Property and equipment-net 154,401 163,327

Operating lease right-of-use assets 14,054 16,173

Deferred taxes 22,297 17,061

Other assets 1,278 342

Equity method investment 30,126 32,464

TOTAL ASSETS $ 475,161 $ 500,502

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Accounts payable - trade $ 15,588 $ 18,900

Current operating lease liabilities 5,105 4,935

Accrued expenses and other current liabilities 6,049 7,764

Total current liabilities 26,742 31,599

LONG TERM LIABILITIES:

Deferred taxes 4,138 4,334

Long-term operating lease liabilities 8,548 10,688

Other long-term liabilities 282 275

Total long-term liabilities 12,968 15,297

COMMITMENTS AND CONTINGENCIES

EQUITY:

REX shareholders' equity:

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

Paid in capital 149,077 148,789

Retained earnings 586,443 586,985

Treasury stock, 23,852 and 23,561 shares, (353,910) (335,066)respectively

Total REX shareholders' equity 381,909 401,007

Non-controlling interests 53,542 52,599

Total equity 435,451 453,606

TOTAL LIABILITIES AND EQUITY $ 475,161 $ 500,502

- statements of cash flows follow -

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

Unaudited

Nine Months Ended

October 31,

2020 2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 596 $ 5,395

Adjustments to reconcile net income to net cash

provided by (used in) operating activities:

Depreciation 15,697 17,682

Amortization of operating lease right-of-use assets 3,982 4,648

Income from equity method investments (168) (350)

Dividends received from equity method investments 2,506 1,003

Interest income from investments (200) (25)

Deferred income tax (5,431) (9,828)

Stock based compensation expense 122 215

Gain on disposal of property and equipment (58) -

Changes in assets and liabilities:

Accounts receivable 473 (5,013)

Inventory 14,018 (12,561)

Refundable income taxes 82 473

Prepaid expenses and other assets (517) (583)

Accounts payable-trade (4,302) 5,618

Other liabilities (5,301) (9,010)

Net cash provided by (used in) operating activities 21,499 (2,336)

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures (6,610) (2,643)

Purchases of short-term investments (68,225) -

Sales of short-term investments 65,282 15,000

Other (474) 369

Net cash (used in) provided by investing activities (10,027) 12,726

CASH FLOWS FROM FINANCING ACTIVITIES:

Treasury stock acquired (18,089) -

Payments to noncontrolling interests holders (283) (2,598)

Capital contributions from minority investor 88 258

Net cash used in financing activities (18,284) (2,340)

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS

AND RESTRICTED CASH (6,812) 8,050

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

CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of $ 173,959 $ 196,862period

Non cash investing activities - Accrued capital $ 198 $ 272expenditures

Non cash financing activities - Stock awards accrued $ - $ 99

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



Initial operating lease right-of-use assets and liabilities recorded

upon adoption of ASC 842 $ - $ 20,918

Operating lease right-of-use assets acquired and liabilities assumed

upon lease execution $ 1,863 $ 432

View source version on businesswire.com: https://www.businesswire.com/news/home/20201203005167/en/

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

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