Release Details

REX American Resources’ Q1 ’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 Q1 ’20 net sales and revenue were $83.3 million, compared with $104.6 million in Q1 ’19. The year-over-year net sales and revenue decline was primarily due to a decrease in ethanol gallons sold and overall lower production due to the temporary idling of the NuGen plant. Primarily reflecting these factors, as well as an 11.3% year-over-year increase in corn prices and a lower of cost or net realizable value inventory valuation adjustment of approximately $9.1 million, partially offset by a $3.1 million hedge gain, the Company recorded a gross loss for its ethanol and by-products segment in Q1 ’20 of $8.2 million, compared with a gross profit of $6.1 million in Q1 ’19. As a result, the ethanol and by-products segment loss before income taxes was $12.4 million in Q1 ’20, compared to income of $3.2 million in Q1 ’19. The Company’s refined coal operation incurred a $1.1 million gross loss and a $0.8 million loss before income taxes in Q1 ’20, compared to a $2.5 million gross loss and a loss before income taxes of $2.7 million in Q1 ’19. REX reported a Q1 ’20 loss before income taxes and non-controlling interests of $13.7 million, compared with income before income taxes and non-controlling interests of $0.2 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 $3.9 million for Q1 ’20 and Q1 ’19, respectively. The year-over-year decline in the refined coal gross loss, loss before taxes and reduced year-over-year tax benefits are related to lower production levels.

Net loss attributable to REX shareholders in Q1 20 was $7.6 million, compared to net income attributable to REX shareholders of $2.8 million in Q1 ’19. Q1 ’20 basic and diluted net loss per share attributable to REX common shareholders was $1.21, compared to net income per share of $0.45 in Q1 ’19. Per share results in Q1 ‘20 and Q1 ’19 are based on 6,304,000 and 6,315,000 diluted weighted average shares outstanding, respectively.

Segment Income Statement Data:

(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 first quarter of fiscal 2020 marked one of the more challenging periods we have encountered in ethanol production as the onset of the Covid-19 pandemic, decline in ethanol pricing and corn supply shortages had a significant impact on our business and ability to operate certain production facilities. As such, we made the strategic decision to temporarily idle operations at our NuGen and One Earth plants in order to help preserve our strong financial and liquidity position.

“I am pleased to report that while we continue to face a challenging operating environment, conditions have improved as Covid-19 restrictions have begun to be lifted and ethanol pricing has begun to recover. As a result, we are now in the process of reopening the One Earth plant. As we move forward, we will remain disciplined in our operating approach and focus on adapting our resources to this fluid and uncertain operating dynamic to ensure that we operate as efficiently as possible, including bringing our NuGen plant back online when appropriate. We are well positioned to leverage near- and long-term opportunities to enhance shareholder value, including recent repurchases of over 108,000 REX common shares. We believe our robust balance sheet, including cash, cash equivalents and short-term investments in excess of $196 million, working capital of $227 million and no bank debt positions REX well to emerge strongly as economic and industry conditions improve.”

Balance Sheet
At April 30, 2020, REX had cash and cash equivalents and short-term investments of $196.4 million, $59.0 million of which was at the parent company, and $137.4 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 first quarter of fiscal 2020, the Company purchased 78,140 shares at an average cost of $50.20. Subsequent to quarter end, the Company bought an additional 30,536 at an average cost of $54.60. REX is now authorized to repurchase up to 241,185 shares of its common stock. The Company currently has 6,184,646 shares outstanding.

First 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 212/271-4615 (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 650 million gallons of ethanol over the twelve-month period ended April 30, 2020. REX’s effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended January 31, 2020) by the ethanol production facilities in which it has ownership interests was approximately 226 million gallons. In addition, the Company acquired a refined coal operation on August 10, 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.

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