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REX American Resources Reports Second Quarter Diluted EPS of $0.45
DAYTON, Ohio–(BUSINESS WIRE)–REX American Resources Corporation (NYSE American: REX) today reported
financial results for its fiscal 2017 second quarter (“Q2 ‘17”) ended
July 31, 2017. REX management will host a conference call and webcast
today at 11:00 a.m. ET to review the results.
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Conference Call: |
(303) 223-2685 |
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Webcast / Replay URL: |
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The webcast will be available for replay for 30 days |
REX American Resources’ Q2 ‘17 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.
REX’s Q2 ‘17 net sales and revenue decreased 6.0% to $108.7 million,
compared with $115.7 million in Q2 ‘16, primarily reflecting 29.2%
decline in the average sales price per ton of dried distillers grains as
well as a 2.7% decrease in the average sales price per gallon of
ethanol. This led to a decrease in gross profit of 37.6% to $10.8
million, compared to $17.3 million during the prior year period.
Equity in income of unconsolidated ethanol affiliates in Q2 ‘17
decreased to $0.1 million, from $1.2 million in Q2 ’16. As a result,
income from continuing operations before income taxes and
non-controlling interests in Q2 ‘17 decreased 52.2% to $6.5 million,
compared with $13.5 million in Q2 ‘16.
Net income attributable to REX shareholders in Q2 ‘17 was $2.9 million,
compared with $8.2 million in Q2 ‘16, while Q2 ‘17 diluted net income
per share attributable to REX common shareholders was $0.45 per share,
compared to $1.24 per share in Q2 ‘16. Per share results in Q2 ‘17 and
Q2 ‘16 are based on 6,593,000 and 6,586,000 diluted weighted average
shares outstanding, respectively.
REX American Resources’ Chief Executive Officer, Zafar Rizvi, commented,
“The second quarter presented a challenging operating environment as
both ethanol and distillers grains prices experienced declines, which
was partially offset by more favorable corn prices. In spite of these
challenges, we were able to generate over $2.9 million of net income to
REX shareholders, or $0.45 earnings per share, reflecting our
disciplined operating approach and the commitment of our entire team.”
Balance Sheet and Capital Allocation
On August 10, 2017, REX, through a 95.35% owned subsidiary, purchased
100% of a refined coal facility for $12 million in cash (excluding
transaction costs) in a transaction that is expected to be immediately
accretive to REX’s earnings per share. The facility is in operation and
will be included in REX’s financial results beginning in the third
quarter of fiscal 2017. REX expects that the revenues from the sale of
refined coal produced in the facility will be subsidized by federal
production tax credits, subject to meeting qualified emissions
reductions as governed by Section 45 of the Internal Revenue Code.
At July 31, 2017, REX had cash and cash equivalents of $186.0 million,
$76.2 million of which was at the parent company and $109.8 million of
which was at its consolidated ethanol production facilities. This
compares with cash and cash equivalents of $188.6 million at January 31,
2017, $79.5 million of which was at the parent company and $109.1
million of which was at its consolidated ethanol production facilities.
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The following table summarizes select data related to the |
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Three Months |
Six Months |
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| 2017 | 2016 | 2017 | 2016 | |||||
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Average selling price per gallon of |
$ | 1.45 | $ | 1.49 | $ | 1.45 | $ | 1.41 |
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Average selling price per ton of |
$ | 95.39 | $ | 134.81 | $ | 97.81 | $ | 130.12 |
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Average selling price per pound of |
$ | 0.29 | $ | 0.29 | $ | 0.28 | $ | 0.27 |
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Average selling price per ton of |
$ | 41.00 | $ | 56.60 | $ | 41.47 | $ | 58.54 |
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Average cost per bushel of grain |
$ | 3.38 | $ | 3.73 | $ | 3.47 | $ | 3.63 |
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Average cost of natural gas (per |
$ | 3.30 | $ | 2.71 | $ | 3.52 | $ | 2.96 |
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Supplemental Data Related to REX’s Alternative Energy Interests: |
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REX American Resources Corporation |
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Entity |
Trailing |
Current |
REX’s Current |
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One Earth Energy, LLC |
120.5 | 75.0% | 90.4 |
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NuGen Energy, LLC |
131.4 | 99.5% | 130.7 |
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Big River Resources West Burlington, LLC |
107.1 | 9.7% | 10.4 |
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Big River Resources Galva, LLC |
123.7 | 9.7% | 12.0 |
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Big River United Energy, LLC |
129.2 | 5.4% | 7.0 |
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Big River Resources Boyceville, LLC |
57.2 | 9.7% | 5.5 |
| Total | 669.1 | n/a | 256.0 |
About REX American Resources Corporation
REX American Resources has interests in six ethanol production
facilities, which in aggregate shipped approximately 669 million gallons
of ethanol over the twelve month period ended July 31, 2017. REX’s
effective ownership of the trailing twelve month gallons shipped (for
the twelve months ended July 31, 2017) by the ethanol production
facilities in which it has ownership interests was approximately 256
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, results of income tax audits,
changes in income tax laws or regulations 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.
| REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES | ||||||||
| Consolidated Statements of Operations | ||||||||
| (in thousands, except per share amounts) | ||||||||
| Unaudited | ||||||||
|
Three Months |
Six Months |
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| July 31, | July 31, | |||||||
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2017 |
2016 |
2017 |
2016 |
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| Net sales and revenue | $ | 108,744 | $ | 115,707 | $ | 221,887 | $ | 215,929 |
| Cost of sales | 97,963 | 98,423 | 198,617 | 190,223 | ||||
| Gross profit | 10,781 | 17,284 | 23,270 | 25,706 | ||||
| Selling, general and administrative expenses | (4,779) | (5,206) | (10,181) | (9,233) | ||||
| Equity in income of unconsolidated ethanol affiliates | 137 | 1,186 | 837 | 1,419 | ||||
| (Loss) gain on sale of investment | (13) | – | (13) | 192 | ||||
| Gain on disposal of property and equipment, net | 13 | 185 | 13 | 185 | ||||
| Interest and other income | 334 | 97 | 549 | 257 | ||||
| Income before income taxes | 6,473 | 13,546 | 14,475 | 18,526 | ||||
| Provision for income taxes | (2,302) | (4,517) | (4,692) | (6,031) | ||||
| Net income | 4,171 | 9,029 | 9,783 | 12,495 | ||||
| Net income attributable to non-controlling interests | (1,230) | (853) | (2,298) | (1,481) | ||||
| Net income attributable to REX common shareholders | $ | 2,941 | $ | 8,176 | $ | 7,485 | $ | 11,014 |
| Weighted average shares outstanding – basic and diluted | 6,593 | 6,586 | 6,592 | 6,590 | ||||
|
Basic and diluted net income per share attributable to |
$ |
0.45 |
$ |
1.24 |
$ |
1.14 |
$ |
1.67 |
| REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES | ||||
| Consolidated Balance Sheets | ||||
| (in thousands) Unaudited | ||||
|
ASSETS: |
July 31, |
January 31, |
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| CURRENT ASSETS: | ||||
| Cash and cash equivalents | $ | 185,997 | $ | 188,576 |
| Restricted cash | 379 | 130 | ||
| Accounts receivable | 10,938 | 11,901 | ||
| Inventory | 22,091 | 17,057 | ||
| Refundable income taxes | 1,527 | 1,070 | ||
| Prepaid expenses and other | 7,535 | 6,959 | ||
| Deferred taxes-net |
– |
824 |
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| Total current assets | 228,467 | 226,517 | ||
| Property and equipment-net | 187,545 | 182,761 | ||
| Other assets | 6,720 | 6,913 | ||
| Equity method investments | 36,665 | 37,833 | ||
| TOTAL ASSETS | $ | 459,397 | $ | 454,024 |
| LIABILITIES AND EQUITY | ||||
| CURRENT LIABILITIES: | ||||
| Accounts payable – trade | $ | 11,251 | $ | 9,171 |
| Accrued expenses and other current liabilities |
7,442 |
13,348 |
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| Total current liabilities |
18,693 |
22,519 |
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| LONG TERM LIABILITIES: | ||||
| Deferred taxes | 40,848 | 41,135 | ||
| Other long term liabilities | 2,260 | 2,096 | ||
| Total long term liabilities |
43,108 |
43,231 |
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| COMMITMENTS AND CONTINGENCIES | ||||
| EQUITY: | ||||
| REX shareholders’ equity: | ||||
| Common stock, 45,000 shares authorized, 29,853 shares issued at par | 299 | 299 | ||
| Paid in capital | 146,851 | 145,767 | ||
| Retained earnings | 515,692 | 508,207 | ||
| Treasury stock, 23,287 and 23,292 shares | (313,658) | (313,838) | ||
| Total REX shareholders’ equity | 349,184 | 340,435 | ||
| Non-controlling interests | 48,412 | 47,839 | ||
| Total equity |
397,596 |
388,274 |
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| TOTAL LIABILITIES AND EQUITY | $ | 459,397 | $ | 454,024 |
| REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES | ||||
| Consolidated Statements of Cash Flows | ||||
| (in thousands) Unaudited | ||||
|
Six Months Ended |
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|
2017 |
2016 |
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| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
| Net income | $ | 9,783 | $ | 12,495 |
| Adjustments to reconcile net income to net cash | ||||
| provided by operating activities: | ||||
| Depreciation and amortization | 9,955 | 9,748 | ||
| Income from equity method investments | (837) | (1,419) | ||
| Dividends received from equity method investments | 2,005 | 1,504 | ||
| Gain on disposal of property and equipment | (13) | (185) | ||
| Loss (gain) on sale of investment | 13 | (192) | ||
| Deferred income tax | 537 | – | ||
| Stock based compensation expense | 350 | 40 | ||
| Changes in assets and liabilities: | ||||
| Accounts receivable | 886 | (4,250) | ||
| Inventories | (5,034) | (6,455) | ||
| Other assets | (953) | 2,989 | ||
| Accounts payable-trade | 1,678 | (3,087) | ||
| Other liabilities | (4,828) | 169 | ||
| Net cash provided by operating activities | 13,542 | 11,357 | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
| Capital expenditures | (14,366) | (9,334) | ||
| Restricted cash | (249) | (56) | ||
| Restricted investments and deposits | 100 | 409 | ||
| Proceeds from sale of investment | 64 | 2,275 | ||
| Proceeds from sale of property and equipment | 42 | 1,028 | ||
| Other | 13 | 12 | ||
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Net cash used in investing activities |
(14,396) | (5,666) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
|
Dividend payments to and purchases of stock from non-controlling |
(1,725) | (2,096) | ||
| Treasury stock acquired | – | (4,709) | ||
| Net cash used in financing activities | (1,725) | (6,805) | ||
| NET DECREASE IN CASH AND CASH EQUIVALENTS | (2,579) | (1,114) | ||
| CASH AND CASH EQUIVALENTS-Beginning of period | 188,576 | 135,765 | ||
| CASH AND CASH EQUIVALENTS-End of period | $ | 185,997 | $ | 134,651 |
| Non cash investing activities – Accrued capital expenditures | $ | 744 | $ | 1,350 |
| Non cash financing activities – Stock awards accrued | $ | 281 | $ | – |
| Non cash financing activities – Stock awards issued | $ | 1,195 | $ | 1,095 |
Contacts
REX American Resources Corporation
Douglas Bruggeman, 937-276-3931
Chief
Financial Officer
or
JCIR
Joseph Jaffoni, Norberto Aja
212-835-8500
[email protected]
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