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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 4, 2019

 

REX AMERICAN RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)

 

Delaware   001-09097   31-1095548
(State or other jurisdiction   (Commission File No.)   (IRS Employer Identification No.)
of incorporation)        
     
 7720 Paragon Road Dayton, Ohio   45459
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (937) 276-3931

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class   Trading symbol   Name of each exchange on which registered
Commons stock, $0.01 par value   REX   New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.          o

 

Item 2.02.  Results of Operations and Financial Condition

 

On December 4, 2019, REX American Resources Corporation issued a press release announcing financial results for the three-month period ended October 31, 2019. The press release is furnished as Exhibit 99 to this report.

 

Item 9.01.  Financial Statements and Exhibits

    (c) Exhibits. The following exhibits are furnished with this report:
       
      99  Press Release dated December 4, 2019
 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  REX AMERICAN RESOURCES CORPORATION
   
Date: December 4, 2019 By: /s/ DOUGLAS L. BRUGGEMAN
    Name:  Douglas L. Bruggeman
    Title: Vice President - Finance,
      Chief Financial Officer and Treasurer
 

Exhibit 99

 

 

News Announcement For Immediate Release

 

REX AMERICAN RESOURCES REPORTS
THIRD QUARTER DILUTED EPS LOSS OF $0.32

 

Dayton, Ohio, (December 4, 2019) -- REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2019 third quarter (“Q3 ’19”) ended October 31, 2019. REX management will host a conference call and webcast today at 11:00 a.m. ET.

 

Conference Call: 212/231-2932
   
Webcast / Replay URL: www.rexamerican.com/Corp/Page4.aspx
   
  The webcast will be available for replay for 30 days.

 

REX American Resources’ Q3 ’19 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 ’19 net sales and revenue were $86.7 million, compared with $123.8 million in Q3 ’18. Although ethanol and corn oil pricing strengthened on a year-to-year basis, lower Q3 ’19 ethanol production and lower distiller grain pricing resulted in a year-over-year decline in net sales and revenue. Primarily reflecting these factors and a significant year-over-year increase in corn prices, Q3 ’19 gross profit for the Company’s ethanol and by-products segment was $28,000, compared with $11.3 million in Q3 ’18. As a result, the ethanol and by-products segment loss before income taxes was $2.8 million in Q3 ’19, compared to income of $8.4 million in Q3 ’18. The Company’s refined coal operation incurred a $1.8 million gross loss and a $1.6 million loss before income taxes in Q3 ’19, compared to a $3.5 million gross loss and a loss before income taxes of $4.2 million in Q3 ’18. REX reported a Q3 ’19 loss before income taxes and non-controlling interests of $4.9 million, compared with income before income taxes and non-controlling interests of $3.8 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 $2.2 million and $8.3 million for Q3 ’19 and Q3 ’18, 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 Q3 ’19 was $2.1 million, compared to net income of $11.9 million in Q3 ’18. Q3 ’19 basic and diluted net loss per share attributable to REX common shareholders was $0.32, compared to net income per share of $1.86 in Q3 ’18. Per share results in Q3 ’19 and Q2 ’18 are based on 6,319,000 and 6,388,000 diluted weighted average shares outstanding, respectively.

 

-more-

 
REX American Resources Q3 ’19 Results, 12/4/19 page 2

 

Segment Income Statement Data:

   Three Months
Ended		   Nine Months
Ended		 
($ in thousands)  October 31,   October 31, 
   2019   2018   2019   2018 
Net sales and revenue:                    
Ethanol & By-Products (1)  $86,603   $123,546   $296,826   $372,717 
Refined coal (2) (3)   68    204    288    610 
Total net sales and revenue  $86,671   $123,750   $297,114   $373,327 
                     
Gross (loss) profit:                    
Ethanol & By-Products (1)  $28   $11,260   $12,312   $38,475 
Refined coal (2)   (1,786)   (3,513)   (6,420)   (10,478)
Total gross (loss) profit  $(1,758)  $7,747   $5,892   $27,997 
                     
(Loss) income before income taxes:                    
Ethanol & By-Products (1)  $(2,822)  $8,405   $3,491   $29,491 
Refined coal (2)   (1,648)   (4,240)   (6,351)   (11,887)
Corporate and other   (434)    (410)   (1,146)   (1,341)
Total (loss) income before income taxes  $(4,904)  $3,755   $(4,006)  $16,263 
                     
Benefit (provision) for income taxes:                    
Ethanol & By-Products  $945   $1,643   $(160)  $(1,806)
Refined coal   2,181    8,318    9,282    19,914 
Corporate and other   105    53    279    240 
Total benefit for income taxes  $3,231   $10,014   $9,401   $18,348 
                     
Segment (loss) profit:                    
Ethanol & By-Products  $(2,330)  $7,946   $684   $23,096 
Refined coal   607    4,260    3,209    8,549 
Corporate and other   (329)   (331)   (868)   (1,057)
Net (loss) income attributable to REX common shareholders  $(2,052)  $11,875   $3,025   $30,588 

 

  (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, “Net sales for the quarter declined approximately 30%, primarily due to reduced ethanol gallons sold as the NuGen Energy facility in South Dakota faced difficulties sourcing corn. Also, the crush spread declined as our consolidated corn costs increased approximately 25% compared to the prior year as demand outstripped reduced supply levels related to the heavy rain and floods, which delayed or prevented spring planting. In addition, we experienced lower distiller grain pricing on a year-over-year basis.

 

“Notwithstanding the challenges faced year-to-date, our balance sheet remains strong and includes cash and cash equivalents in excess of $196 million and working capital of $236.1 million. Given the quality of our plants, we remain confident in our disciplined operating approach and in the value of ethanol’s octane, carbon and costs benefits as a worldwide fuel supply.”

 

-more-

 
REX American Resources Q3 ’19 Results, 12/4/19 page 3

 

Balance Sheet

At October 31, 2019, REX had cash and cash equivalents of $196.3 million, $59.1 million of which was at the parent company, and $137.2 million of which was at its consolidated production facilities. This compares with cash, cash equivalents and short-term investments at January 31, 2019, of $203.5 million, $54.8 million of which was at the parent company, and $148.7 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		   Nine Months
Ended		 
   October 31,   October 31, 
   2019   2018   2019   2018 
Average selling price per gallon of ethanol  $1.39   $1.28   $1.34   $1.33 
Average selling price per ton of dried distillers grains  $134.57   $139.67   $137.48   $141.90 
Average selling price per pound of non-food grade corn oil  $0.26   $0.25   $0.25   $0.24 
Average selling price per ton of modified distillers grains  $56.56   $46.67   $59.67   $59.96 
Average cost per bushel of grain  $4.15   $3.32   $3.79   $3.47 
Average cost of natural gas (per mmbtu)  $2.51   $2.90   $2.98   $3.07 

 

Supplemental data related to REX’s alternative energy interests:

 

REX American Resources Corporation
Ethanol Ownership Interests/Effective Annual Gallons Shipped as of October 31, 2019
(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) 140.0 75.2%     105.3  
NuGen Energy, LLC (Marion, SD) 101.9 99.5% 101.4  
Big River Resources West Burlington, LLC (West Burlington, IA) 111.4 10.3% 11.5  
Big River Resources Galva, LLC (Galva, IL) 126.7 10.3% 13.1  
Big River United Energy, LLC (Dyersville, IA) 132.6 5.7% 7.6  
Big River Resources Boyceville, LLC (Boyceville, WI) 59.0 10.3% 6.1  
Total 671.6 n/a 245.0  

 

-more-

 
REX American Resources Q3 ’19 Results, 12/4/19 page 4

 

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 212/231-2932 (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 672 million gallons of ethanol over the twelve month period ended October 31, 2019. REX’s effective ownership of the trailing twelve month gallons shipped (for the twelve months ended October 31, 2019) by the ethanol production facilities in which it has ownership interests was approximately 245 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 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.

 

Contact:

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

 

- statements of operations follow -

 
REX American Resources Q3 ’19 Results, 12/4/19 page 5

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share amounts)
Unaudited

 

   Three Months
Ended		   Nine Months
Ended		 
   October 31,   October 31, 
   2019   2018   2019   2018 
Net sales and revenue  $86,671   $123,750   $297,114   $373,327 
Cost of sales   88,429    116,003    291,222    345,330 
Gross (loss) profit   (1,758)   7,747    5,892    27,997 
Selling, general and administrative expenses   (4,133)    (5,412)    (13,629)    (16,075) 
Equity in (loss) income of unconsolidated ethanol affiliates   (15)    611    350    2,182 
Interest and other income, net   1,002    809    3,381    2,159 
(Loss) income before income taxes and non-controlling interests   (4,904)    3,755    (4,006)    16,263 
Benefit for income taxes   3,231    10,014    9,401    18,348 
Net (loss) income including non-controlling interests   (1,673)    13,769    5,395    34,611 
Net income attributable to non-controlling interests   (379)    (1,894)    (2,370)    (4,023) 
Net (loss) income attributable to REX common shareholders  $(2,052)   $11,875   $3,025   $30,588 
                     
Weighted average shares outstanding – basic and diluted   6,319    6,388    6,318    6,473 
                     
Basic and diluted net (loss) income per share attributable to REX common shareholders  $(0.32)   $1.86   $0.48   $4.73 

 

- balance sheets follow -

 
REX American Resources Q3 ’19 Results, 12/4/19 page 6

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
Unaudited

 

   October 31,   January 31, 
ASSETS  2019   2019 
CURRENT ASSETS:          
Cash and cash equivalents  $196,339   $188,531 
Restricted cash   523    281 
Short-term investments   -    14,975 
Accounts receivable   16,391    11,378 
Inventory   31,038    18,477 
Refundable income taxes   7,222    7,695 
Prepaid expenses and other   9,017    9,284 
Total current assets   260,530    250,621 
Property and equipment-net   167,754    182,521 
Operating lease right-of-use assets   17,603    - 
Other assets   16,263    6,176 
Equity method investment   31,422    32,075 
TOTAL ASSETS  $493,572   $471,393 
LIABILITIES AND EQUITY          
CURRENT LIABILITIES:          
Accounts payable – trade  $13,122   $7,463 
Current operating lease liabilities   5,080    - 
Accrued expenses and other current liabilities   6,231    9,546 
Total current liabilities   24,433    17,009 
LONG TERM LIABILITIES:          
Deferred taxes   3,963    4,185 
Long-term operating lease liabilities   11,937    - 
Other long-term liabilities   4,310    4,928 
Total long-term liabilities   20,210    9,113 
COMMITMENTS AND CONTINGENCIES EQUITY:          
REX shareholders’ equity:          
Common stock, 45,000 shares authorized, 29,853 shares issued at par   299    299 
Paid in capital   148,756    148,273 
Retained earnings   582,583    579,558 
Treasury stock, 23,561 and 23,580 shares, respectively   (335,073)   (335,193)
Total REX shareholders’ equity   396,565    392,937 
Non-controlling interests   52,364    52,334 
Total equity   448,929    445,271 
TOTAL LIABILITIES AND EQUITY  $493,572   $471,393 

 

- statements of cash flows follow -

 
REX American Resources Q3 ’19 Results, 12/4/19 page 7

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
Unaudited

 

   Nine Month Ended
October 31,		 
   2019   2018 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net income  $5,395   $34,611 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:          
Depreciation   17,682    18,673 
Amortization of operating lease right-of-use assets   4,648    - 
Income from equity method investments   (350)   (2,182) 
Dividends received from equity method investments   1,003    3,007 
Interest income from investments   (25)    (993) 
Deferred income tax   (9,828)    (22,146) 
Stock based compensation expense   215    730 
Loss on disposal of property and equipment   -    104 
Changes in assets and liabilities:          
Accounts receivable   (5,013)    (2,819) 
Inventory   (12,561)    (881) 
Other assets   (110)    (2,996) 
Accounts payable-trade   5,618    1,682 
Other liabilities   (9,010)    2,079 
Net cash (used in) provided by operating activities   (2,336)    28,869 
CASH FLOWS FROM INVESTING ACTIVITIES:          
Capital expenditures   (2,643)    (7,954) 
Purchases of short-term investments   -    (125,989) 
Sales of short-term investments   15,000    112,091 
Loan receivable repayments   369    25 
Net cash provided by (used in) investing activities   12,726    (21,827) 
CASH FLOWS FROM FINANCING ACTIVITIES:          
Treasury stock acquired   -    (18,419) 
Payments to noncontrolling interests holders   (2,598)    (1,734) 
Capital contributions from minority investor   258    432 
Net cash used in financing activities   (2,340)    (19,721) 
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH   8,050    (12,679) 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of period   188,812    191,342 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of period  $196,862   $178,663 
Non cash financing activities – Stock awards issued  $487   $1,473 
Non cash financing activities – Stock awards accrued  $99   $585 
Non cash investing activities – Accrued capital expenditures  $272   $603 
Initial right-of-use assets and liabilities recorded upon adoption of ASC 842  $20,918   $- 
Right-of-use assets acquired and liabilities assumed upon lease execution  $432   $- 

 

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