REX American Resources Reports Fiscal 2020 Fourth Quarter Results

March 25, 2021

DAYTON, Ohio--()--REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2020 fourth quarter (“Q4 ‘20”) ended January 31, 2021. REX management will host a conference call and webcast today at 11:00 a.m. ET.

Conference Call:

212/231-2920

Webcast / Replay URL:

www.rexamerican.com/Corp/Page4.aspx

 

The webcast will be available for replay for 30 days.

 

REX American Resources’ Q4 ‘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 Q4 ‘20 net sales and revenue were $126.0 million, compared with $120.9 million in Q4 ‘19. The year-over-year net sales and revenue increase was primarily due to higher pricing of dried distillers grains and modified distillers grains, as well as higher ethanol production levels, which more than offset lower ethanol pricing. Primarily reflecting these factors, Q4 ‘20 gross profit for the Company’s ethanol and by-products segment increased to $8.3 million, compared with $8.1 million in Q4 ‘19. As a result, the ethanol and by-products segment had income before income taxes of $5.3 million in Q4 ‘20, compared to income of $5.0 million in Q4 ‘19. The Company’s refined coal operation incurred a $1.4 million gross loss and a $1.6 million loss before income taxes in Q4 ‘20, compared to a $1.5 million gross loss and a loss before income taxes of $1.4 million in Q4 ‘19. REX reported Q4 ‘20 income before income taxes and non-controlling interests of $3.2 million, compared with income before income taxes and non-controlling interests of $2.8 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 $1.7 million and $1.5 million for Q4 ‘20 and Q4 ‘19, respectively.

Net income attributable to REX shareholders in Q4 ‘20 was $3.5 million, compared to net income of $4.4 million in Q4 ‘19. Q4 ‘20 basic and diluted net income per share attributable to REX common shareholders was $0.59, compared to net income per share of $0.70 in Q4 ‘19. Per share results in Q4 ‘20 and Q4 ‘19 are based on 6,008,000 and 6,320,000 diluted weighted average shares outstanding, respectively.

Segment Income Statement Data:

       

 

Three Months

Ended

 

Twelve Months

Ended

($ in thousands)

January 31,

 

January 31,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Net sales and revenue:

 

 

 

 

 

 

 

Ethanol & By-Products (1)

$

125,970

 

 

$

120,874

 

 

$

372,664

 

 

$

417,700

 

Refined coal (2) (3)

 

48

 

 

 

46

 

 

 

182

 

 

 

334

 

Total net sales and revenue

$

126,018

 

 

$

120,920

 

 

$

372,846

 

 

$

418,034

 

 

 

 

 

 

 

 

 

Gross profit (loss):

 

 

 

 

 

 

 

Ethanol & By-Products (1)

$

8,274

 

 

$

8,090

 

 

$

19,533

 

 

$

20,402

 

Refined coal (2)

 

(1,431

)

 

 

(1,497

)

 

 

(5,672

)

 

 

(7,917

)

Total gross profit

$

6,843

 

 

$

6,593

 

 

$

13,861

 

 

$

12,485

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes:

 

 

 

 

 

 

 

Ethanol & By-Products (1)

$

5,299

 

 

$

4,979

 

 

$

6,696

 

 

$

8,469

 

Refined coal (2)

 

(1,591

)

 

 

(1,428

)

 

 

(5,826

)

 

 

(7,778

)

Corporate and other

 

(479

)

 

 

(714

)

 

 

(2,352

)

 

 

(1,860

)

Total income (loss) before income taxes

$

3,229

 

 

$

2,837

 

 

$

(1,482

)

 

$

(1,169

)

Benefit (provision) for income taxes:

 

 

 

 

 

 

 

Ethanol & By-Products

$

(14

)

 

$

1,688

 

$

(31

)

 

$

1,528

Refined coal

 

1,691

 

 

 

1,546

 

 

6,554

 

 

 

10,828

Corporate and other

 

116

 

 

 

178

 

 

577

 

 

 

457

Total benefit for income taxes

$

1,793

 

 

$

3,412

 

$

7,100

 

 

$

12,813

Segment profit (loss):

 

 

 

 

 

 

 

Ethanol & By-Products

$

3,739

 

 

$

4,756

 

 

$

3,788

 

 

$

5,439

 

Refined coal

 

167

 

 

 

182

 

 

 

988

 

 

 

3,391

 

Corporate and other

 

(363

)

 

 

(536

)

 

 

(1,775

)

 

 

(1,403

)

Net income attributable to REX common shareholders

$

3,543

 

 

$

4,402

 

 

$

3,001

 

 

$

7,427

 

   

(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, “Fiscal 2020 proved to be a challenging year with the impact of Covid, however we are pleased to report earnings per share of $0.59 for the fourth quarter on the back of a profitable third quarter, reflecting the resiliency of our business and the efficiency of our plants and operations.”

“As we move forward into 2021 with all of our plants in operation, we remain optimistic for improved ethanol demand as we emerge from the impact of the pandemic and continue to be focused on creating additional shareholder value through our disciplined operating approach and strategic use of our strong balance sheet and liquidity position.”

Balance Sheet

At January 31, 2021, REX had cash and cash equivalents and short-term investments of $180.7 million, $48.2 million of which was at the parent company, and $132.5 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

Ended

 

Twelve Months

Ended

 

January 31,

 

January 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

Average selling price per gallon of ethanol

$

1.36

 

$

1.43

 

$

1.30

 

$

1.37

Average selling price per ton of dried distillers grains

$

161.42

 

$

138.19

 

$

144.73

 

$

137.68

Average selling price per pound of non-food

grade corn oil

 

$

 

0.27

 

 

$

 

0.24

 

 

$

 

0.26

 

 

$

 

0.25

Average selling price per ton of modified distillers grains

$

81.76

 

$

59.62

 

$

64.80

 

$

59.66

Average cost per bushel of grain

$

4.04

 

$

3.90

 

$

3.73

 

$

3.82

Average cost of natural gas (per MmBtu)

$

3.25

 

$

3.17

 

$

3.00

 

$

3.04

Supplemental data related to REX’s ethanol interests:

REX American Resources Corporation
Ethanol Ownership Interests/Effective Annual Gallons Shipped as of January 31, 2021

(gallons in millions)

 

Entity

Trailing
Twelve
Months
Gallons
Shipped

Current
REX
Ownership
Interest

REX’s Current Effective
Ownership of Trailing Twelve
Month Gallons Shipped

One Earth Energy, LLC

Gibson City, IL

118.6

75.4%

89.4

NuGen Energy, LLC

Marion, SD

98.5

99.5%

98.0

Big River Resources West Burlington, LLC

West Burlington, IA

101.0

10.3%

10.4

Big River Resources Galva, LLC

Galva, IL

115.3

10.3%

11.9

Big River United Energy, LLC

Dyersville, IA

116.1

5.7%

6.6

Big River Resources Boyceville, LLC

Boyceville, WI

55.3

10.3%

5.7

Total

604.8

n/a

222.0

Fourth 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 212/231-2920 (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 January 31, 2021. REX’s effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended January 31, 2021) by the ethanol production facilities in which it has ownership interests was approximately 222 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

Ended

 

Twelve Months

Ended

 

January 31,

 

January 31,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Net sales and revenue

$

126,018

 

 

$

120,920

 

 

$

372,846

 

 

$

418,034

 

Cost of sales

 

119,175

 

 

 

114,327

 

 

 

358,985

 

 

 

405,549

 

Gross profit

 

6,843

 

 

 

6,593

 

 

 

13,861

 

 

 

12,485

 

Selling, general and administrative expenses

 

(4,361

)

 

 

(5,629

)

 

 

(17,661

)

 

 

(19,258

)

Equity in income of unconsolidated ethanol affiliates

 

332

 

 

 

1,042

 

 

 

500

 

 

 

1,392

 

Interest and other income, net

 

415

 

 

 

831

 

 

 

1,818

 

 

 

4,212

 

Income (loss) before income taxes and

non-controlling interests

 

 

 

3,229

 

 

 

 

 

 

2,837

 

 

 

 

 

 

(1,482

 

)

 

 

 

 

(1,169

 

)

Benefit for income taxes

 

1,793

 

 

 

3,412

 

 

 

7,100

 

 

 

12,813

 

Net income including non-controlling interests

 

5,022

 

 

 

6,249

 

 

 

5,618

 

 

 

11,644

 

Net income attributable to non-controlling interests

 

(1,479

)

 

 

(1,847

)

 

 

(2,617

)

 

 

(4,217

)

Net income attributable to REX common shareholders

$

3,543

 

 

$

4,402

 

 

$

3,001

 

 

$

7,427

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – basic and diluted

 

6,008

 

 

 

6,320

 

 

 

6,167

 

 

 

6,318

 

 

 

 

 

 

 

 

 

Basic and diluted net income per share attributable to REX common shareholders

$

0.59

 

 

$

0.70

 

 

$

0.49

 

 

$

1.18

 

 

 

 

 

 

 

 

 

- balance sheets follow -

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

Unaudited

       
 

January 31,

 

January 31,

ASSETS

 

2021

 

 

 

2020

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

144,501

 

 

$

179,658

 

Short-term investments

 

36,194

 

 

 

26,073

 

Restricted cash

 

1,657

 

 

 

1,113

 

Accounts receivable

 

19,713

 

 

 

12,969

 

Inventory

 

37,880

 

 

 

35,634

 

Refundable income taxes

 

6,020

 

 

 

6,029

 

Prepaid expenses and other

 

12,785

 

 

 

9,659

 

Total current assets

 

258,750

 

 

 

271,135

 

Property and equipment-net

 

153,186

 

 

 

163,327

 

Operating lease right-of-use assets

 

12,678

 

 

 

16,173

 

Other assets

 

25,275

 

 

 

17,403

 

Equity method investment

 

29,456

 

 

 

32,464

 

TOTAL ASSETS

$

479,345

 

 

$

500,502

 

LIABILITIES AND EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable – trade

$

16,907

 

 

$

18,900

 

Current operating lease liabilities

 

4,875

 

 

 

4,935

 

Accrued expenses and other current liabilities

 

8,955

 

 

 

7,764

 

Total current liabilities

 

30,737

 

 

 

31,599

 

LONG TERM LIABILITIES:

 

 

 

Deferred taxes

 

3,713

 

 

 

4,334

 

Long-term operating lease liabilities

 

7,439

 

 

 

10,688

 

Other long-term liabilities

 

273

 

 

 

275

 

Total long-term liabilities

 

11,425

 

 

 

15,297

 

COMMITMENTS AND CONTINGENCIES

 

 

 

EQUITY:

 

 

 

REX shareholders’ equity:

 

 

 

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

 

299

 

 

 

299

 

Paid in capital

 

149,110

 

 

 

148,789

 

Retained earnings

 

589,986

 

 

 

586,985

 

Treasury stock, 23,861 and 23,561 shares, respectively

 

(354,612

)

 

 

(335,066

)

Total REX shareholders’ equity

 

384,783

 

 

 

401,007

 

Non-controlling interests

 

52,400

 

 

 

52,599

 

Total equity

 

437,183

 

 

 

453,606

 

TOTAL LIABILITIES AND EQUITY

$

479,345

 

 

$

500,502

 

- statements of cash flows follow -

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

Unaudited

   
 

Twelve Months Ended

 

January 31,

 

 

2021

 

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net income

$

5,618

 

 

$

11,644

 

Adjustments to reconcile net income to net cash

 

 

 

provided by operating activities:

 

 

 

Depreciation

 

20,906

 

 

 

23,007

 

Amortization of operating lease right-of-use assets

 

5,358

 

 

 

6,304

 

Stock based compensation expense

 

264

 

 

 

397

 

Income from equity method investments

 

(500

)

 

 

(1,392

)

Dividends received from equity method investments

 

3,508

 

 

 

1,003

 

Interest income from investments

 

(216

)

 

 

(73

)

Deferred income tax

 

(7,949

)

 

 

(11,070

)

Gain on disposal of property and equipment

 

(58

)

 

 

-

 

Changes in assets and liabilities:

 

 

 

Accounts receivable

 

(6,744

)

 

 

(1,591

)

Inventory

 

(2,246

)

 

 

(17,157

)

Prepaid expenses and other assets

 

(3,138

)

 

 

(752

)

Income taxes refundable

 

9

 

 

 

1,666

 

Accounts payable-trade

 

(2,346

)

 

 

11,400

 

Other liabilities

 

(3,843

)

 

 

(13,043

)

Net cash provided by operating activities

 

8,623

 

 

 

10,343

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Capital expenditures

 

(10,412

)

 

 

(3,776

)

Purchases of short-term investments

 

(96,233

)

 

 

(26,025

)

Sales of short-term investments

 

86,328

 

 

 

15,000

 

Loan receivable repayments

 

-

 

 

 

369

 

Proceeds from sale of real estate and property and equipment

 

58

 

 

 

-

 

Restricted deposits

 

(532

)

 

 

-

 

Net cash used in investing activities

 

(20,791

)

 

 

(14,432

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Treasury stock acquired

 

(19,629

)

 

 

-

 

Payments to noncontrolling interests holders

 

(2,928

)

 

 

(4,264

)

Capital contributions from minority investor

 

112

 

 

 

312

 

Net cash used in financing activities

 

(22,445

)

 

 

(3,952

)

NET DECREASE IN CASH, CASH EQUIVALENTS

 

 

 

AND RESTRICTED CASH

 

(34,613

)

 

 

(8,041

)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of period

 

180,771

 

 

 

188,812

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of period

$

146,158

 

 

$

180,771

 

Non cash financing activities – Equity awards issued

$

241

 

 

$

487

 

Non cash financing activities – Equity awards accrued

$

99

 

 

$

241

 

Non cash investing activities – Accrued capital expenditures

$

390

 

 

$

37

 

 

 

 

 

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

 

 

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