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REX American Resources Reports Second Quarter Diluted EPS of $1.24

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DAYTON, Ohio--(BUSINESS WIRE)--

REX American Resources Corporation (NYSE: REX) today reported financial results for its fiscal 2016 second quarter ("Q2 ‘16") ended July 31, 2016. REX management will host a conference call and webcast today at 11:00 a.m. ET. to review the results.

             
   

Conference Call:

      (303) 223-2697
 

Webcast / Replay URL:

www.rexamerican.com/Corp/Page4.aspx

            The webcast will be available for replay for 30 days

REX American Resources' Q2 ‘16 results principally reflect its interests in six ethanol production facilities. The operations of One Earth Energy, LLC ("One Earth") and NuGen Energy, LLC ("NuGen") are consolidated, while those of its four remaining plants are reported as equity in income of unconsolidated ethanol affiliates. During the fiscal 2015 second quarter the Company sold its interest in Patriot Holdings, LLC ("Patriot"). As such, subsequent to June 1, 2015, equity in income of unconsolidated ethanol affiliates includes contributions from four ethanol production facilities, compared with five in the comparable year-ago period.

REX's Q2 ‘16 net sales and revenue were $115.7 million, compared with $113.5 million in Q2 ‘15, principally reflecting volume increases in ethanol and dried distillers grains ("DDG"), which was partially offset by a decrease in their average selling prices. Primarily due to the decrease in DDG pricing and year-over-year increase in grain costs, the Company's Q2 '16 gross profit was $17.3 million, compared with $18.3 million in the prior year period.

Equity in income of unconsolidated ethanol affiliates in Q2 ‘16 was $1.2 million, compared with $5.1 million in Q2 '15, partially as a result of a $2.5 million pre-tax contribution from the Company's interest in Patriot that did not recur this quarter. In addition, during the year ago period the Company recorded a $10.4 million pre-tax gain related to the June 2015 sale of its 26.6% interest in Patriot. Reflecting the factors above, income before income taxes and non-controlling interests in Q2 ‘16 totaled $13.5 million, compared with $27.4 million in Q2 ‘15. Excluding Patriot's Q2 '15 contribution to income of unconsolidated ethanol affiliates, REX's gain on the sale of its interest in Patriot and related items, income before income taxes and non-controlling interests in Q2 ‘15 totaled $15.4 million versus the aforementioned $13.5 million in the current year.

Net income attributable to REX shareholders in Q2 ‘16 was $8.2 million, compared with $16.4 million in Q2 ‘15, while Q2 ‘16 diluted net income per share attributable to REX common shareholders was $1.24 per share, compared to $2.16 per share in Q2 ‘15.

Per share results in Q2 ‘16 and Q2 ‘15 are based on 6,586,000 and 7,580,000 diluted weighted average shares outstanding, respectively.

REX Chief Executive Officer, Zafar Rizvi, commented, "Industry fundamentals improved during the second quarter and our employees did a great job efficiently operating and increasing the production at our ethanol plants, leading to a 5% increase in the number of gallons of ethanol sold during the quarter. In addition, during the quarter we neared the completion of our capital investment projects to further expand production at our consolidated plants which will leave us better positioned for future ethanol demand."

Balance Sheet

At July 31, 2016, REX had cash and cash equivalents of $134.7 million, $63.5 million of which was at the parent company and $71.2 million of which was at its consolidated ethanol production facilities. This compares with cash and cash equivalents of $135.8 million at January 31, 2016, $57.2 million of which was at the parent company and $78.6 million of which was at its consolidated ethanol production facilities.

The Company is currently authorized to repurchase up to an additional 155,334 shares of common stock and has 6,582,029 shares outstanding.

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

           
    Three Months

Ended

  Six Months

Ended

July 31, July 31,

2016

 

2015

2016

 

2015

Average selling price per gallon of ethanol

$

1.49

$

1.50

$

1.41

$

1.46

 
Average selling price per ton of dried distillers grains

$

134.81

$

169.31

$

130.12

$

156.16

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

$

0.29

$

0.28

$

0.27

$

0.28

Average selling price per ton of modified distillers grains

 

$

 

56.60

 

$

 

73.95

 

$

 

58.54

 

$

 

78.48

 
Average cost per bushel of grain $ 3.73 $ 3.64 $ 3.63 $ 3.65
 
Average cost of natural gas (per mmbtu)    

$

2.71

 

$

3.42

 

$

2.96

 

$

4.13

 
 

Supplemental Data Related to REX's Alternative Energy Interests:

REX American Resources Corporation
Ethanol Ownership Interests/Effective Annual Gallons Shipped as of July 31, 2016
(gallons in millions)
  Trailing   Current   REX's Current
Twelve Months REX Effective Ownership
Gallons Ownership of Trailing Twelve
Entity   Shipped   Interest   Month Gallons Shipped
One Earth Energy, LLC

(Gibson City, IL)

  117.0   75.0%   87.8
NuGen Energy, LLC

(Marion, SD)

  121.1   99.5%   120.5
Big River Resources West Burlington, LLC (West Burlington, IA)   107.7   9.7%   10.4
Big River Resources Galva, LLC

(Galva, IL)

  125.0   9.7%   12.1
Big River United Energy, LLC

(Dyersville, IA)

  126.1   5.4%   6.8
Big River Resources Boyceville, LLC

(Boyceville, WI)

  57.9   9.7%   5.6
Total   654.8   n/a   243.2
 
 

About REX American Resources Corporation

REX American Resources has interests in six ethanol production facilities, which in aggregate shipped approximately 655 million gallons of ethanol over the twelve month period ended July 31, 2016. REX's effective ownership of the trailing twelve month gallons shipped (for the twelve months ended July 31, 2016) by the ethanol production facilities in which it has ownership interests was approximately 243 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 impact of legislative changes, the price volatility and availability of corn, dried and modified distillers grains, ethanol, corn oil, gasoline and natural gas, ethanol plants operating efficiently and according to forecasts and projections, changes in the international, national or regional economies, weather, the effects of terrorism or acts of war 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 AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Operations

(in thousands, except per share amounts)

Unaudited

       
 
Three Months

Ended

Six Months

Ended

July 31,

July 31,

2016

   

2015

2016

   

2015

Net sales and revenue $ 115,707 $ 113,480 $ 215,929 $ 218,677
Cost of sales   98,423     95,204     190,223     191,274  
Gross profit 17,284 18,276 25,706 27,403
Selling, general and administrative expenses (5,206 ) (6,456 ) (9,233 ) (10,909 )
Equity in income of unconsolidated ethanol affiliates 1,186 5,063 1,419 6,543
Gain on sale of investment - 10,385 192 10,385
Gain on disposal of property and equipment, net 185 12 185 495
Interest and other income   97     107     257     325  
Income before income taxes 13,546 27,387 18,526 34,242
Provision for income taxes   (4,517 )   (8,676 )   (6,031 )   (11,092 )
Net income 9,029 18,711 12,495 23,150
Net income attributable to non-controlling interests   (853 )  

(2,344

)

  (1,481 )   (2,856 )
Net income attributable to REX common shareholders $ 8,176   $ 16,367   $ 11,014   $ 20,294  
 
Weighted average shares outstanding – basic and diluted   6,586     7,580     6,590     7,737  
 
Basic and diluted net income per share attributable to REX common shareholders

$

1.24

 

$

2.16

 

$

1.67

 

$

2.62

 
 
 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Balance Sheets

(in thousands) Unaudited

     
 

ASSETS:

July 31,

January 31,

2016

2016

CURRENT ASSETS:
Cash and cash equivalents $ 134,651 $ 135,765
Restricted cash 110 54
Accounts receivable 15,833 13,666
Inventory 23,633 17,178
Refundable income taxes 1,562 5,254
Prepaid expenses and other 6,956 6,407
Deferred taxes-net

1,036

 

1,036

 
Total current assets 183,781 179,360
Property and equipment-net 189,006 189,976
Other assets 6,395 6,642
Equity method investments   38,622     38,707  
TOTAL ASSETS $ 417,804   $ 414,685  
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable – trade $ 7,056 $ 10,212
Accrued expenses and other current liabilities

8,346

 

9,423

 
Total current liabilities

15,402

 

19,635

 
LONG TERM LIABILITIES:
Deferred taxes 38,304 38,304
Other long term liabilities   1,158     987  
Total long term liabilities   39,462  

39,291

 
COMMITMENTS AND CONTINGENCIES
EQUITY:
REX shareholders' equity:
Common stock, 45,000 shares authorized, 29,853 shares issued at par 299 299
Paid in capital 145,721 144,844
Retained earnings 486,888 475,874
Treasury stock, 23,270 and 23,204 shares, respectively  

(313,849

)

 

(309,754

)

Total REX shareholders' equity 319,059 311,263
Non-controlling interests   43,881     44,496  
Total equity

362,940

 

355,759

 
TOTAL LIABILITIES AND EQUITY $ 417,804   $ 414,685  
 
 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Cash Flows

(in thousands) Unaudited

     

Six Months Ended

July 31,

2016

2015

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,495 $ 23,150
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, impairment charges and amortization 9,748 9,430
Income from equity method investments (1,419 ) (6,543 )
Gain on disposal of real estate and property and equipment (185 ) (495 )
Dividends received from equity method investments 1,504 5,638
Gain on sale of investment (192 ) (10,385 )
Deferred income tax - (8,644 )
Stock based compensation expense 40 10
Changes in assets and liabilities:
Accounts receivable (4,250 ) (2,754 )
Inventories (6,455 ) (5,188 )
Other assets 2,989 192
Accounts payable-trade (3,087 ) 261
Other liabilities   169     (2,110 )
Net cash provided by operating activities   11,357     2,562  
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (9,334 ) (5,865 )
Restricted cash (56 ) (203 )
Restricted investments and deposits 409 250
Proceeds from sale of investment 2,275 45,476
Proceeds from sale of property and equipment 1,028 1,935
Other   12     12  
Net cash (used in) provided by investing activities   (5,666 )   41,605  
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend payments to and purchases of stock from non-controlling interests holders

Loan

(2,096 ) (507 )
Treasury stock acquired   (4,709 )   (43,250 )

Net cash used in financing activities

  (6,805 )   (43,757 )
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,114 ) 410
CASH AND CASH EQUIVALENTS-Beginning of period   135,765     137,697  
CASH AND CASH EQUIVALENTS-End of period $ 134,651   $ 138,107  
Non cash investing activities – Accrued capital expenditures $ 1,350   $ 370  
Non cash financing activities – Accrued treasury stock repurchases $ -   $ 2.938  
Non cash financing activities – Equity awards issued $ 1,095   $ -  

REX American Resources Corporation
Douglas Bruggeman, (937) 276-3931
Chief Financial Officer
or
JCIR
Joseph Jaffoni, Norberto Aja
(212) 835-8500
rex@jcir.com

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