Files Class VI Permit Application Related to Carbon Sequestration Project

REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2022 third quarter (“Q3 ‘22”) ended October 31, 2022. REX management will host a conference call and webcast today at 11:00 a.m. ET.

REX American Resources’ Q3 ‘22 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. The Company reports results for its ethanol and by-products component as continuing operations and beginning in the third quarter of fiscal 2021 its refined coal component as discontinued operations as operations have now ceased.

REX’s Q3 ‘22 net sales and revenue were $220.3 million, compared with $203.1 million in Q3 ‘21. The year-over-year net sales and revenue increase primarily reflects higher pricing for ethanol, dried distillers grains, non-food grade corn oil and modified distillers grains. Q3 ‘22 gross profit for the Company’s continuing operations decreased to $11.3 million, compared with $25.2 million in Q3 ‘21 as the higher net sales and revenue were offset by significant increases in corn and natural gas prices. This led to Q3 ‘22 income before income taxes and non-controlling interests of $6.1 million, compared with $19.2 million in the comparable year ago period.

Net income attributable to REX shareholders from continuing operations in Q3 ‘22 was $3.2 million, compared to $13.3 million in Q3 ‘21. Q3 ‘22 basic and diluted net income per share attributable to REX common shareholders from continuing operations was $0.18, compared to $0.74 per share in Q3 ‘21. Per share results for Q3 ‘22 and Q3 ‘21 are based on 17,591,000 and 17,890,000 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, “The third quarter marked a difficult operating environment as we faced significant price increases in our two largest inputs – corn and natural gas – as well as ongoing logistical constraints. Despite these challenges, we were able to post our ninth consecutive quarter of positive income along with income per share for the first nine months of fiscal 2022 of $1.10. We have maintained our robust balance sheet and liquidity position which at quarter end included approximately $290 million in cash and short-term investments and no debt. We remain confident our strong capital structure positions REX to continue to benefit our shareholders and support our ethanol businesses while strategically investing in initiatives that can yield attractive returns for our employees, partners and shareholders.

“In this regard, our team remains very excited about our carbon capture and sequestration project and is making meaningful progress on this front. We filed a Class VI injection well permit application for three wells to allow us to inject carbon dioxide into deep rock formations and recently signed a contract for a carbon compression facility for our One Earth Energy ethanol plant. The language and opportunities in the Inflation Reduction Act are encouraging, including the new clean fuel production credit under section 45Z and an increase in the 45Q credit to $85 per ton. We believe this can bring significant financial benefits to our carbon capture and sequestration initiatives and to the ethanol industry as a whole.”

Balance Sheet

As of October 31, 2022, REX had cash and cash equivalents and short-term investments of $289.8 million, $30.5 million of which was at the parent company, and $259.3 million of which was at its consolidated production facilities. This compares with cash, cash equivalents and short-term investments at January 31, 2022, of $255.7 million, $42.9 million of which was at the parent company, and $212.8 million of which was at its consolidated ethanol production facilities.

During the fiscal third quarter ended October 31, 2022, the Company repurchased 249,570 shares of its common stock at a cost of approximately $6.8 million. The Company is currently authorized to repurchase up to an additional 876,786 shares of common stock and has approximately 17,390,469 shares of common stock outstanding.

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

Third 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 212/231-2910 (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 699 million gallons of ethanol over the twelve-month period ended October 31, 2022. REX’s effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended October 31, 2022) by the ethanol production facilities in which it has ownership interests was approximately 277 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, non-food grade 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

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