REX American Resources Corporation (NYSE:REX) today reported financial results for its fiscal 2016 third quarter (“Q3 ‘16”) ended October 31, 2016. REX management will host a conference call and webcast today at 11:00 a.m. ET. to review the results.
Conference Call: | (312) 429-1274 | |||
Webcast / Replay URL: | www.rexamerican.com/Corp/Page4.aspx | |||
REX American Resources’ Q3 ‘16 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. During the fiscal 2015 second quarter the Company sold its interest in Patriot Holdings, LLC (“Patriot”). As such, subsequent to June 1, 2015, equity in income of unconsolidated ethanol affiliates includes contributions from four ethanol production facilities, compared with five in the comparable year-ago period.
REX’s Q3 ‘16 net sales and revenue were $116.3 million, compared with $110.6 million in Q3 ‘15, principally reflecting volume increases in both ethanol and dried distillers grains (“DDGS”), which was partially offset by a decrease in the average selling price of DDGS. Primarily due to the year-over-year decrease in grain costs and increased ethanol production, the Company’s Q3 ’16 gross profit increased to $20.2 million, from $14.3 million in the prior year period. Equity in income of unconsolidated ethanol affiliates in Q3 ‘16 totaled $1.8 million, compared with $1.3 million in Q3 ’15. The above contributed to income before income taxes and non-controlling interests in Q3 ‘16 of $17.2 million, compared with $11.1 million in Q3 ’15.
Net income attributable to REX shareholders in Q3 ‘16 was $8.9 million, compared with $7.5 million in Q3 ‘15, while Q3 ‘16 diluted net income per share attributable to REX common shareholders was $1.36 per share, compared to $1.08 per share in Q3 ‘15.
Per share results in Q3 ‘16 and Q3 ‘15 are based on 6,590,000 and 6,915,000 diluted weighted average shares outstanding, respectively.
REX Chief Executive Officer, Zafar Rizvi, commented, “We are pleased with our results for the third quarter, including a 26% increase in earnings per share, on the back of improved industry crush spreads and the positive impact of our capital investment projects to further expand production at our consolidated plants. Given our highly capable employees, the capital improvements at our plants and our operating disciplines, we were able to increase the number of gallons of ethanol produced by approximately 10% versus the prior year period.”
Balance Sheet
At October 31, 2016, REX had cash and cash equivalents of $162.8 million, $61.8 million of which was at the parent company and $101.0 million of which was at its consolidated ethanol production facilities. This compares with cash and cash equivalents of $135.8 million at January 31, 2016, $57.2 million of which was at the parent company and $78.6 million of which was at its consolidated ethanol production facilities.
The Company is currently authorized to repurchase up to an additional 155,334 shares of common stock and has 6,582,029 shares outstanding.
The following table summarizes select data related to the Company’s consolidated operations:
| Three Months Ended | Nine Months Ended | |||||||||||||||
| October 31, | October 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
| Average selling price per gallon of ethanol | $ | 1.44 | $ | 1.44 | $ | 1.42 | $ | 1.45 | ||||||||
| Average selling price per ton of dried distillers grains | $ | 122.34 | $ | 146.64 | $ | 127.27 | $ | 152.69 | ||||||||
| Average selling price per pound of non-food grade corn oil | $ | 0.29 | $ | 0.26 | $ | 0.27 | $ | 0.27 | ||||||||
Average selling price per ton of modified distillers grains | $ | 45.17 | $ | 56.40 | $ | 54.49 | $ | 70.99 | ||||||||
| Average cost per bushel of grain | $ | 3.30 | $ | 3.62 | $ | 3.51 | $ | 3.64 | ||||||||
|
Average cost of natural gas
(per mmbtu) | $ | 3.31 | $ | 3.21 | $ | 3.08 | $ | 3.82 | ||||||||
Supplemental Data Related to REX’s Ethanol Interests:
| REX American Resources Corporation Ethanol Ownership Interests/Effective Annual Gallons Shipped as of October 31, 2016 (gallons in millions) | |||||||||||
Entity | Trailing | Current REX | REX’s Current | ||||||||
| One Earth Energy, LLC (Gibson City, IL) | 119 | .1 | 75.0% | 89 | .3 | ||||||
| NuGen Energy, LLC (Marion, SD) | 124 | .5 | 99.5% | 123 | .9 | ||||||
Big River Resources West Burlington, LLC | 107 | .1 | 9.7% | 10 | .4 | ||||||
| Big River Resources Galva, LLC (Galva, IL) | 126 | .1 | 9.7% | 12 | .2 | ||||||
| Big River United Energy, LLC (Dyersville, IA) | 126 | .9 | 5.4% | 6 | .9 | ||||||
| Big River Resources Boyceville, LLC (Boyceville, WI) | 57 | .6 | 9.7% | 5 | .6 | ||||||
| Total | 661 | .3 | n/a | 248 | .3 | ||||||
About REX American Resources Corporation
REX American Resources has interests in six ethanol production facilities, which in aggregate shipped approximately 661 million gallons of ethanol over the twelve month period ended October 31, 2016. REX’s effective ownership of the trailing twelve month gallons shipped (for the twelve months ended October 31, 2016) by the ethanol production facilities in which it has ownership interests was approximately 248 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, the effects of terrorism or acts of war and the impact of Internal Revenue Service audits. The Company does not intend to update publicly any forward-looking statements except as required by law.
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Operations (in thousands, except per share amounts) Unaudited | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
October 31, | October 31, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Net sales and revenue | $ | 116,283 | $ | 110,584 | $ | 332,212 | $ | 329,261 | |||||||||
| Cost of sales | 96,121 | 96,311 | 286,344 | 287,585 | |||||||||||||
| Gross profit | 20,162 | 14,273 | 45,868 | 41,676 | |||||||||||||
| Selling, general and administrative expenses | (5,082) | (4,720) | (14,315) | (15,629) | |||||||||||||
| Equity in income of unconsolidated ethanol affiliates | 1,838 | 1,314 | 3,257 | 7,857 | |||||||||||||
| Gain on sale of investment | - | - | 192 | 10,385 | |||||||||||||
| Gain on disposal of property and equipment, net | 179 | 1 | 364 | 496 | |||||||||||||
| Interest and other income | 117 | 199 | 374 | 524 | |||||||||||||
| Income before income taxes | 17,214 | 11,067 | 35,740 | 45,309 | |||||||||||||
| Provision for income taxes | (5,740) | (1,634) | (11,771) | (12,726) | |||||||||||||
| Net income | 11,474 | 9,433 | 23,969 | 32,583 | |||||||||||||
| Net income attributable to non-controlling interests | (2,536) | (1,977) | (4,017) | (4,833) | |||||||||||||
| Net income attributable to REX common shareholders | $ | 8,938 | $ | 7,456 | $ | 19,952 | $ | 27,750 | |||||||||
| Weighted average shares outstanding – basic and diluted | 6,590 | 6,915 | 6,591 | 7,460 | |||||||||||||
| Basic and diluted net income per share attributable to REX common shareholders | $ | 1.36 | $ | 1.08 | $ | 3.03 | $ | 3.72 | |||||||||
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES Consolidated Condensed Balance Sheets (in thousands) Unaudited | ||||||||||
| ASSETS: | October 31, | January 31, | ||||||||
2016 | 2016 | |||||||||
| CURRENT ASSETS: | ||||||||||
| Cash and cash equivalents | $ | 162,753 | $ | 135,765 | ||||||
| Restricted cash | 46 | 54 | ||||||||
| Accounts receivable | 13,269 | 13,666 | ||||||||
| Inventory | 19,483 | 17,178 | ||||||||
| Refundable income taxes | 1,956 | 5,254 | ||||||||
| Prepaid expenses and other | 6,680 | 6,407 | ||||||||
| Deferred taxes-net | 1,537 | 1,036 | ||||||||
| Total current assets | 205,724 | 179,360 | ||||||||
| Property and equipment-net | 186,219 | 189,976 | ||||||||
| Other assets | 6,432 | 6,642 | ||||||||
| Equity method investments | 37,954 | 38,707 | ||||||||
| TOTAL ASSETS | $ | 436,329 | $ | 414,685 | ||||||
| LIABILITIES AND EQUITY | ||||||||||
| CURRENT LIABILITIES: | ||||||||||
| Accounts payable – trade | $ | 10,999 | $ | 10,212 | ||||||
| Accrued expenses and other current liabilities | 10,875 | 9,423 | ||||||||
| Total current liabilities | 21,874 | 19,635 | ||||||||
| LONG TERM LIABILITIES: | ||||||||||
| Deferred taxes | 37,786 | 38,304 | ||||||||
| Other long term liabilities | 2,227 | 987 | ||||||||
| Total long term liabilities | 40,013 | 39,291 | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||
| EQUITY: | ||||||||||
| REX shareholders’ equity: | ||||||||||
| Common stock, 45,000 shares authorized, 29,853 shares issued at par | 299 | 299 | ||||||||
| Paid in capital | 145,744 | 144,844 | ||||||||
| Retained earnings | 495,826 | 475,874 | ||||||||
| Treasury stock, 23,270 and 23,204 shares, respectively | (313,844) | (309,754) | ||||||||
| Total REX shareholders’ equity | 328,025 | 311,263 | ||||||||
| Non-controlling interests | 46,417 | 44,496 | ||||||||
| Total equity | 374,442 | 355,759 | ||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 436,329 | $ | 414,685 | ||||||
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Cash Flows (in thousands) Unaudited | |||||||||
Nine Months Ended October 31, | |||||||||
2016 | 2015 | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
| Net income | $ | 23,969 | $ | 32,583 | |||||
| Adjustments to reconcile net income to net cash | |||||||||
| provided by operating activities: | |||||||||
| Depreciation, impairment charges and amortization | 14,567 | 14,193 | |||||||
| Income from equity method investments | (3,257) | (7,857) | |||||||
| Gain on disposal of real estate and property and equipment | (364) | (496) | |||||||
| Dividends received from equity method investments | 4,010 | 7,643 | |||||||
| Gain on sale of investment | (192) | (10,385) | |||||||
| Deferred income tax | (1,019) | (8,078) | |||||||
| Stock based compensation expense | 68 | 23 | |||||||
| Changes in assets and liabilities: | |||||||||
| Accounts receivable | (1,686) | (2,307) | |||||||
| Inventories | (2,305) | (5,494) | |||||||
| Other assets | 2,758 | (51) | |||||||
| Accounts payable-trade | 1,653 | 4,913 | |||||||
| Other liabilities | 3,157 | (2,849) | |||||||
| Net cash provided by operating activities | 41,359 | 21,838 | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
| Capital expenditures | (11,836) | (9,852) | |||||||
| Restricted cash | 8 | (20) | |||||||
| Restricted investments and deposits | 460 | 250 | |||||||
| Proceeds from sale of investment | 2,275 | 45,476 | |||||||
| Proceeds from sale of property and equipment | 1,510 | 1,936 | |||||||
| Other | 17 | 17 | |||||||
| Net cash (used in) provided by investing activities | (7,566) | 37,807 | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
|
Dividend payments to and purchases of stock from non-controlling
interests holders
Loan | (2,096) | (605) | |||||||
| Treasury stock acquired | (4,709) | (60,111) | |||||||
| Net cash used in financing activities | (6,805) | (60,716) | |||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 26,988 | (1,071) | |||||||
| CASH AND CASH EQUIVALENTS-Beginning of period | 135,765 | 137,697 | |||||||
| CASH AND CASH EQUIVALENTS-End of period | $ | 162,753 | $ | 136,626 | |||||
| Non cash investing activities – Accrued capital expenditures | $ | 1,183 | $ | 1,216 | |||||
| Non cash financing activities – Equity awards issued | $ | 1,095 | $ | - | |||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20161129005318/en/
Contacts:
Douglas Bruggeman, 937-276-3931
Chief
Financial Officer
or
JCIR
Joseph Jaffoni, Norberto Aja
212-835-8500
rex@jcir.com
