REX American Resources Reports Fiscal 2023 Second Quarter Net Income Per Share Attributable to REX Common Shareholders of $0.52

REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2023 second quarter (“Q2 ‘23”) ended July 31, 2023. 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

The webcast will be available for replay for 30 days.

REX American Resources’ Q2 ‘23 results principally reflect its interests in six ethanol production facilities. The One Earth Energy, LLC (“One Earth”) and NuGen Energy, LLC (“NuGen”) ethanol production facilities are consolidated, while the four other ethanol plants are reported as equity in income of unconsolidated ethanol affiliates.

REX’s Q2 ‘23 net sales and revenue were $212.0 million compared with $240.3 million in Q2 ‘22. The year-over-year net sales and revenue decline primarily reflects a reduction in the quantities sold of ethanol, as well as lower prices for ethanol, dried and modified distillers grains, and corn oil. Q2 ‘23 gross profit increased 30.1% to $18.4 million, from $14.1 million in Q2 ‘22, primarily reflecting lower corn and natural gas pricing. Income before income taxes and non-controlling interests was $16.1 million, compared with $19.2 million in the comparable year-ago period; however, excluding the benefit of COVID-19 relief grants received in Q2 '22 income before income taxes and noncontrolling interest increased 64.3% to $16.1 million in Q2 '23 from $9.8 million in Q2 '22. Q2 ‘22 benefited as the Company’s two consolidated plants received COVID-19 relief grants from the U.S.D.A. totaling approximately $7.8 million recorded as other income, and approximately $1.6 million recorded as equity income in unconsolidated affiliates.

Net income attributable to REX shareholders was $9.1 million in Q2 ‘23 compared with $11.2 million in Q2 ‘22. Q2 ‘23 basic and diluted net income per share attributable to REX common shareholders was $0.52, compared to $0.63 per share in Q2 ‘22. Per share results for the Q2 ‘23 and Q2 ‘22 periods are based on 17,460,000 and 17,772,000 diluted weighted average shares outstanding, respectively, reflecting the Company’s 3-for-1 common stock split effected August 5, 2022.

REX American Resources’ Chief Executive Officer, Zafar Rizvi, commented, “Our focus on operational efficiency resulted in REX delivering its twelfth consecutive quarter of profitability. During the quarter we continued our efforts on the One Earth Energy carbon capture project. We believe the One Earth project has the potential to deliver compelling financial returns and will position REX to play an important role in reducing greenhouse gas emissions. Earlier this year, our NuGen Energy facility reached an agreement to be part of Summit Carbon Solutions’ carbon capture and storage pipeline, which we believe will also advance our sustainability goals. In addition, Big River Resources previously entered into an agreement with Navigator CO2 whereby Navigator is to provide Big River with turnkey carbon capture, utilization and storage services.

“Our solid financial position and balance sheet flexibility, combined with our company-wide focus on operational excellence, allows us to continue to make return-focused investments to further strengthen our plants and their operational efficiency while also moving our carbon capture and sequestration initiatives forward.”

Balance Sheet

As of July 31, 2023, REX had cash and cash equivalents and short-term investments of $284.4 million, $31.2 million of which was at the parent company and $253.2 million of which was at its consolidated production facilities. This compares with cash, cash equivalents and short-term investments at January 31, 2023, of $280.9 million, $42.1 million of which was at the parent company and $238.8 million of which was at its consolidated production facilities.

The following table summarizes select data related to REX’s
consolidated alternative energy interests:

	Three Months Ended
	April 30,
	2023				2022
Net sales and revenue	$	212,714			$	194,228
Cost of sales		197,685				182,316
Gross profit		15,029				11,912
Selling, general and administrative expenses		(10,632	)			(5,203	)
Equity in income of unconsolidated ethanol affiliates		1,490				1,951
Interest and other income, net		2,801				174

Change in Accounting Principles

For the quarter ended July 31, 2023 the Company made a change in the method of accounting to begin classifying shipping and handling costs as cost of sales, instead of within selling, general and administrative expenses (SG&A), as historically presented, in order to improve the comparability of gross profit and SG&A reported. The Company has applied a retrospective application of the new accounting policy.

The following table summarizes the impact of the Company’s
retrospective change in accounting principle:

			Three Months Ended
			April 30, 2023
			As Previously Reported				Effect of Change				As Currently Reported
	Cost of sales		$	197,685			$	4,863			$	202,548
	Gross profit		$	15,029			$	(4,863	)		$	10,166
	Selling, general and administrative expenses		$	(10,632	)		$	4,863			$	(5,769	)

		Three Months Ended												Six Months Ended
		July 31, 2022												July 31, 2022
		As Previously Reported				Effect of Change				As Currently Reported				As Previously Reported				Effect of Change				As Currently Reported
Cost of sales		$	223,744			$	2,481			$	226,225			$	406,060			$	2,485			$	408,545
Gross profit		$	16,584			$	(2,481	)		$	14,103			$	28,496			$	(2,485	)		$	26,011
Selling, general and administrative expenses		$	(9,148	)		$	2,481			$	(6,667	)		$	(14,351	)		$	2,485			$	(11,866	)

Second Quarter Conference Call

REX will host a conference call at 11:00 a.m. ET today to discuss the quarterly results and will 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 at, www.rexamerican.com. A webcast replay will be available for 30 days following the live event.

About REX American Resources Corporation

REX American Resources has interests in six ethanol production facilities, which in aggregate shipped approximately 695 million gallons of ethanol over the twelve-month period ended July 31, 2023. REX’s effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended July 31, 2023) by the ethanol production facilities in which it has ownership interests was approximately 275 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 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, distillers corn oil, commodity market risk, gasoline and natural gas, ethanol plants operating efficiently and according to forecasts and projections, logistical interruptions, changes in the international, national or regional economies, the impact of inflation, the ability to attract employees, 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.

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

		Three Months Ended								Six Months Ended
		July 31,								July 31,
		2023				2022				2023				2022
Net sales and revenue		$	211,977			$	240,328			$	424,691			$	434,556
Cost of sales			193,625				226,225				396,173				408,545
Gross profit			18,352				14,103				28,518				26,011
Selling, general and administrative expenses			(8,618	)			(6,667	)			(14,387	)			(11,866	)
Equity in income of unconsolidated ethanol affiliates			3,047				3,598				4,537				5,549
Interest and other income, net			3,271				8,181				6,072				8,355
Income before income taxes and noncontrolling interests			16,052				19,215				24,740				28,049
Provision for income taxes			(3,768	)			(4,330	)			(5,756	)			(6,178	)
Net income			12,284				14,885				18,984				21,871
Net income attributable to noncontrolling interests			(3,229	)			(3,715	)			(4,693	)			(5,519	)
Net income attributable to REX common shareholders		$	9,055			$	11,170			$	14,291			$	16,352
Weighted average shares outstanding - basic and diluted			17,460				17,772				17,427				17,777
Basic and diluted net income per share attributable to REX common shareholders		$	0.52			$	0.63			$	0.82			$	0.92

- balance sheets follow -

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

				July 31,				January 31,
ASSETS:				2023				2023
CURRENT ASSETS:
	Cash and cash equivalents			$	102,166			$	69,612
	Short-term investments				182,209				211,331
	Restricted cash				2,009				1,735
	Accounts receivable				31,998				25,162
	Inventory				45,960				48,744
	Refundable income taxes				5,654				2,962
	Prepaid expenses and other				17,947				13,098
		Total current assets			387,943				372,644
Property and equipment, net					135,144				135,497
Operating lease right-of-use assets					12,713				15,214
Other assets					19,554				23,179
Equity method investment					37,582				33,045
TOTAL ASSETS				$	592,936			$	579,579
LIABILITIES AND EQUITY:
CURRENT LIABILITIES:
	Accounts payable - trade			$	22,100			$	34,091
	Current operating lease liabilities				5,095				5,180
	Accrued expenses and other current liabilities				20,346				15,328
		Total current liabilities			47,541				54,599
LONG-TERM LIABILITIES:
	Deferred taxes				1,097				1,097
	Long-term operating lease liabilities				7,605				9,855
	Other long-term liabilities				3,144				3,034
		Total long-term liabilities			11,846				13,986
EQUITY:
REX shareholders' equity:
	Common stock				299				299
	Paid-in capital				3,181				578
	Retained earnings				655,117				640,826
	Treasury stock				(192,037	)			(193,721	)
		Total REX shareholders' equity			466,560				447,982
Noncontrolling interests					66,989				63,012
		Total equity			533,549				510,994
TOTAL LIABILITIES AND EQUITY				$	592,936			$	579,579

- statements of cash flows follow -

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

		Six Months Ended
		July 31,
		2023				2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including noncontrolling interests		$	18,984			$	21,871
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation		8,915				8,984
	Amortization of operating lease right-of-use assets		2,671				2,835
	Income from equity method investments		(4,537	)			(5,549	)
	Interest income from investments		(3,967	)			(488	)
	Deferred income taxes		3,947				4,153
	Stock based compensation expense		3,892				856
	Loss on sale of property and equipment - net		205				5
Changes in assets and liabilities:
	Accounts receivable		(6,836	)			(12,738	)
	Inventories		2,784				(7,703	)
	Refundable income taxes		(2,692	)			779
	Other assets		(5,153	)			(2,153	)
	Accounts payable - trade		(12,595	)			(11,254	)
	Other liabilities		3,019				1,173
Net cash provided by operating activities			8,637				771
CASH FLOWS FROM INVESTING ACTIVITIES:
	Capital Expenditures		(8,173	)			(2,936	)
	Purchase of short-term investments		(194,400	)			(189,988	)
	Sale of short-term investments		227,490				25,882
	Deposits		(20	)			-
	Proceeds from sale of real estate and property and equipment		10				-
Net cash provided by (used in) investing activities			24,907				(167,042	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Treasury stock acquired		-				(6,193	)
	Payments to noncontrolling interests holders		(716	)			(1,633	)
Net cash used in financing activities			(716	)			(7,826	)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH			32,828				(174,097	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - Beginning of period			71,347				232,068
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - End of period		$	104,175			$	57,971
Non-cash financing activities - Stock awards accrued		$	570			$	563
Non-cash financing activities - Stock awards issued		$	965			$	1,539
Non-cash investing activities - Accrued capital expenditures		$	1,029			$	260
Right-of-use assets acquired and liabilities incurred upon lease execution		$	312			$	4,507

 

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The REX American Resources Stock at the time of publication of the news with a raise of +0,26 % to 38,10EUR on Lang & Schwarz stock exchange (30. August 2023, 13:04 Uhr).