REX American Resources Fiscal Third Quarter Diluted EPS Rise to $1.21 as Net Income Increases to $9.9 Million from $0.4 Million

- Fiscal 2013 Year-to-Date Diluted EPS Increase to $2.34 on Year-to-Date Net Income of $19.2 Million -

DAYTON, Ohio--()--REX American Resources Corporation (NYSE:REX) today reported strong financial results for its fiscal 2013 third quarter (“Q3 ‘13”) ended October 31, 2013. REX management will host a conference call and webcast today at 11:00 a.m. ET.

           
Conference Call:     (212) 231-2929
 
Webcast / Replay URL:

www.rexamerican.com/Corp/Page4.aspx

 
      The webcast will be available for replay for 30 days
 

REX American Resources’ Q3 ‘13 results principally reflect its alternative energy segment interests in seven ethanol production facilities. The operations of One Earth Energy, LLC (“One Earth”) and NuGen Energy, LLC (“NuGen”) are consolidated, while those of its five other plants are reported as equity in income of unconsolidated ethanol affiliates.

REX’s Q3 ‘13 net sales and revenue were $166.5 million compared with $178.8 million in Q3 ’12. Primarily reflecting significantly higher ethanol crush spread margins in Q3’ 13, the Company’s gross profit rose 386% to $18.2 million from $3.7 million in the prior year period. Reflecting the improved industry environment, Q3 ‘13 equity in income of unconsolidated ethanol affiliates more than doubled to $3.3 million, compared with $1.5 million in Q3 ‘12. The substantial rise in the gross profit and income of unconsolidated ethanol affiliates drove a $15.0 million increase in net income from continuing operations before income taxes and non-controlling interests to $16.0 million in Q3 ’13, compared with $1.0 million in Q3 ’12.

Net income attributable to REX shareholders in Q3 ’13 rose to $9.9 million, compared with $0.4 million in Q3 ‘12, while Q3 ’13 diluted net income per share attributable to REX common shareholders rose to $1.21 per share, from $0.05 per share in Q3 ’12. Per share results in Q3 ‘13 and Q3 ‘12 are based on 8,179,000 and 8,258,000 diluted weighted average shares outstanding, respectively.

Net sales and revenue for the nine months ended October 31, 2013 rose 8% to $520.9 million, from $482.9 million in the comparable fiscal 2012 period, while gross profit for the first nine months of fiscal 2013 increased 136% to $38.3 million versus the comparable prior year period. Equity in income of unconsolidated ethanol affiliates increased by 536% to $9.6 million, compared with $1.5 million in the same prior year period. These factors resulted in fiscal 2013 year-to-date income from continuing operations before income taxes and non-controlling interests of $32.4 million, or a $27.8 million increase over $4.5 million in the first nine months of fiscal 2012.

This growth drove a 794% increase in net income attributable to REX shareholders to $19.2 million for the first nine months of fiscal 2013, compared with $2.1 million in fiscal 2012, while diluted net income per share attributable to REX common shareholders rose to $2.34 in the first nine months of fiscal 2013, compared to $0.26 in the comparable period of 2012. Per share results for the nine months ended October 31, 2013 and October 31, 2012, are based on 8,197,000 and 8,361,000 diluted weighted average shares outstanding, respectively.

REX CEO, Stuart Rose, commented, “Our strong third quarter results highlight the efficiency of our plants and the benefit of the recovery in U.S. corn production. Our interests in ethanol plants across the corn belt, all of which were built by Fagen, Inc. utilizing ICM, Inc. technology, continue to position REX as a leader in the ethanol industry going forward. As our fiscal 2013 third quarter corn pricing dropped approximately 22% from year-ago levels, we generated significant improvements in our operating results. The strong corn harvest combined with ethanol’s discount to gasoline supports our expectation that REX will again achieve significant year-over-year earnings growth in the fiscal 2013 fourth quarter.

“With respect to the Environmental Protection Agency's (EPA) recently proposed reductions to the 2014 Renewable Fuel Standard (RFS) targets, we believe that the industry has clearly demonstrated that the RFS has greatly reduced our country’s dependence on foreign oil, helped with the balance of trade and boosted employment and the economy overall. Regardless of the final EPA ruling, we believe the industry will benefit from a strong corn harvest resulting in lower production costs for ethanol.”

Balance Sheet and Share Repurchase Program

At October 31, 2013, REX had cash and cash equivalents of $93.4 million, of which $46.0 million was at the parent company and $47.4 million was at its consolidated ethanol production facilities. This compares with cash and cash equivalents of $69.1 million at January 31, 2013, $47.8 million of which was at the parent and $21.3 million of which was at its consolidated ethanol production facilities.

Bank debt decreased to $88.4 million, compared to $106.9 million at January 31, 2013, while REX shareholders’ equity increased to $263.3 million at October 31, 2013, compared to $246.4 million at January 31, 2013.

REX repurchased 76,457 shares of its common stock via open market transactions during Q3 ‘13 at an average price per share of $29.07. The Company is currently authorized to repurchase up to an additional 280,006 shares of common stock. Taking into account all share repurchases to date, REX has 8,077,746 shares outstanding.

At October 31, 2013, REX had lease agreements, as landlord, for four former retail store locations. REX has five former retail store locations that are vacant and two which had seasonal leases at October 31, 2013, all of which are being marketed for sale or lease. During the third fiscal quarter REX sold four former retail store locations and one former distribution center was sold in November 2013 for total sales proceeds of $8.2 million. The current net book value for the Company’s remaining real estate holdings is approximately $4.7 million. The real estate segment revenue is primarily comprised of rental income derived from these sites.

       

Segment Income Statement Data:

Three Months

Nine Months

Ended

Ended
($ in thousands) October 31, October 31,
  2013         2012         2013         2012  
Net sales and revenue:        
Alternative energy (1) $ 166,039 $ 178,495 $ 519,653 $ 481,938
Real estate   466     354     1,214     974  
Total net sales and revenues $ 166,505   $ 178,849   $ 520,867   $ 482,912  
 
Gross profit (loss):
Alternative energy (1) $ 18,002 $ 3,686 $ 37,918 $ 16,224
Real estate   176     55     340     (21 )
Total gross profit $ 18,178   $ 3,741   $ 38,258   $ 16,203  
 
Segment profit (loss):
Alternative energy segment (1) $ 16,491 $ 1,586 $ 34,231 $ 6,478
Real estate segment 115 (6 ) 157 (218 )
Corporate expense, net   (608 )   (601 )   (2,023 )   (1,717 )
Income from continuing operations before income taxes and non-controlling interests

$

15,998

 

$

979

 

$

32,365

 

$

4,543

 
 

(1)

 

Includes results attributable to non-controlling interests of approximately 26% for One Earth, and approximately 1% for NuGen.

 

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

   

Three Months

    Nine Months

Ended

Ended
October 31, October 31,

2013

   

2012

2013

   

2012

Average selling price per gallon of ethanol $ 2.25 $ 2.38 $ 2.32 $ 2.21
Average selling price per ton of dried distillers grains

$

228.00

$

267.63

$

244.29

$

227.07

Average selling price per ton of modified distillers grains

$

93.50

$

134.66

$

117.47

$

112.87

Average cost per bushel of grain $ 6.24 $ 7.95 $ 6.95 $ 6.96
Average cost of natural gas (per mmbtu) $ 4.02 $ 3.47 $ 4.24 $ 3.63
 
             

Segment Balance Sheet Data:

 
October 31, 2013 January 31, 2013
Assets:
Alternative energy $ 354,152 $ 337,857
Real estate 9,650 13,326
Corporate   46,903   54,147
Total assets $ 410,705 $ 405,330
 
 

Supplemental Data Related to REX’s Alternative Energy Interests:

REX American Resources Corporation

Ethanol Ownership Interests/Effective Annual Gallons Shipped as of October 31, 2013

(gallons in millions)

    Trailing        
Twelve Current REX REX’s Current Effective
Entity Months Ownership Ownership of Trailing Twelve
Gallons Interest Month Gallons Shipped
      Shipped            
One Earth Energy, LLC (Gibson City, IL)     111.6     74%     82.7
NuGen Energy, LLC (Marion, SD)     113.4     99%     112.7
Patriot Holdings, LLC (Annawan, IL)     119.8     27%     31.8
Big River Resources West Burlington, LLC (West Burlington, IA)     100.2     10%     9.7
Big River Resources Galva, LLC (Galva, IL)     107.9     10%     10.5
Big River United Energy, LLC (Dyersville, IA)     111.2     5%     5.5

Big River Resources Boyceville, LLC (Boyceville, WI)

    60.2     10%     5.8
Total     724.3     n/a     258.7
 

About REX American Resources Corporation

REX American Resources has interests in seven ethanol production facilities which in aggregate shipped approximately 724 million gallons of ethanol over the twelve month period ended October 31, 2013. REX’s effective ownership of the trailing twelve month gallons shipped (for the twelve months ended October 31, 2013) by the ethanol production facilities in which it has ownership interests was approximately 259 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 national or regional economies, weather, the effects of terrorism or acts of war, changes in real estate market conditions 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.

- statement of operations follow -

       

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,
  2013         2012     2013         2012  
Net sales and revenue $ 166,505 $ 178,849 $ 520,867 $ 482,912
Cost of sales   148,327     175,108     482,609     466,709  
Gross profit 18,178 3,741 38,258 16,203
Selling, general and administrative expenses (4,589 ) (3,002 ) (12,529 ) (9,197 )
Equity in income of unconsolidated ethanol affiliates 3,331 1,542 9,558 1,503
Interest and other income 69 35 158 102
Interest expense (968 ) (1,197 ) (3,051 ) (3,702 )
Losses on derivative financial instruments, net   (23 )   (140 )   (29 )   (366 )
Income from continuing operations before income taxes 15,998 979 32,365 4,543
Provision for income taxes   (5,318 )   (170 )   (11,160 )   (1,256 )
Income from continuing operations 10,680 809 21,205 3,287
Income from discontinued operations, net of tax 198 53 359 303
Gain on disposal of discontinued operations, net of tax   600     31     732     84  
Net income 11,478 893 22,296 3,674
Net income attributable to non-controlling interests   (1,611 )   (484 )   (3,097 )   (1,526 )
Net income attributable to REX common shareholders $ 9,867   $ 409   $ 19,199   $ 2,148  
 
Weighted average shares outstanding – basic   8,140     8,226     8,154     8,311  
 

Basic income per share from continuing operations attributable to REX common shareholders*

$

1.11

$

0.04

$

2.22

$

0.21

Basic income per share from discontinued operations attributable to REX common shareholders*

0.03

0.01

0.04

0.04

Basic income per share on disposal of discontinued operations attributable to REX common shareholders*

 

0.07

   

-

   

0.09

   

0.01

 

Basic net income per share attributable to REX common shareholders*

$

1.21

 

$

0.05

 

$

2.35

 

$

0.26

 
 
Weighted average shares outstanding – diluted   8,179     8,258     8,197     8,361  
 

Diluted income per share from continuing operations attributable to REX common shareholders*

$

1.11

$

0.04

$

2.21

$

0.21

Diluted income per share from discontinued operations attributable to REX common shareholders*

0.03

0.01

0.04

0.04

Diluted income per share on disposal of discontinued operations attributable to REX common shareholders*

 

0.07

   

-

   

0.09

   

0.01

 

Diluted net income per share attributable to REX common shareholders

$

1.21

 

$

0.05

 

$

2.34

 

$

0.26

 
 
Amounts attributable to REX common shareholders:
Income from continuing operations, net of tax $ 9,069 $ 325 $ 18,108 $ 1,761
Income from discontinued operations, net of tax   798     84     1,091     387  
Net income $ 9,867   $ 409   $ 19,199   $ 2,148  

*Certain amounts differ from those previously reported as a result of certain real estate assets being reclassified as discontinued operations.

       
 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands) Unaudited

 

October 31,

January 31,

  2013     2013  
Assets
Current assets:
Cash and cash equivalents $ 93,399 $ 69,073
Restricted cash 500 -
Accounts receivable 11,274 11,567
Inventories 16,306 24,919
Refundable income taxes - 1,347
Prepaid expenses and other 4,964 4,091
Deferred taxes, net   -     3,930  
Total current assets 126,443 114,927
Property and equipment, net 210,361 223,180
Other assets 4,690 7,264
Equity method investments   69,211     59,959  
Total assets $ 410,705   $ 405,330  
 
Liabilities and equity

 

Current liabilities:

Current liabilities:
Current portion of long-term debt $ 10,370 $ 15,623
Accounts payable, trade 7,442 4,655
Deferred income 37 627
Accrued real estate taxes 1,174 2,651
Accrued payroll and related items 2,380 302
Derivative financial instruments 1,540 1,859
Deferred taxes 4,467 -
Other current liabilities   3,823     5,742  
Total current liabilities   31,233     31,459  
Long-term liabilities:
Long-term debt 78,039 91,306
Deferred taxes 4,983 7,141
Derivative financial instruments - 930
Other long-term liabilities   2,105     211  
Total long-term liabilities   85,127     99,588  
Equity:
REX shareholders’ equity:
Common stock 299 299
Paid-in capital 143,788 143,575
Retained earnings 341,227 322,028
Treasury stock   (221,992 )   (219,550 )
Total REX shareholders' equity 263,322 246,352
Noncontrolling interests   31,023     27,931  
Total equity   294,345     274,283  
Total liabilities and equity $ 410,705   $ 405,330  
 

- statement of cash flows follow -

   
 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands) Unaudited

 
Nine Months Ended October 31,
  2013         2012  
Cash flows from operating activities:
Net income including noncontrolling interests $ 22,296 $ 3,674
Adjustments to reconcile net income to net cash provided by

operating activities:

Depreciation and amortization 13,178 12,430
Impairment charges and other - 279
Income from equity method investments (9,558 ) (1,503 )
(Gain) loss on disposal of real estate and property and equipment (989 ) 424
Dividends received from equity method investees 200 2,005
Deferred income (590 ) (1,429 )
Derivative financial instruments (1,249 ) (1,009 )
Deferred income tax 8,241 1,111
Changes in assets and liabilities:
Accounts receivable 293 (4,981 )
Inventories 8,613 2,045
Other assets 1,933 1,513
Accounts payable, trade 2,589 3,030
Other liabilities   (1,529 )   (4,357 )
Net cash provided by operating activities   43,428     13,232  
Cash flows from investing activities:
Capital expenditures (2,159 ) (2,533 )
Repayment of loan receivable 681 -
Restricted cash (500 ) -
Restricted investments 280 860
Proceeds from sale of real estate and property and equipment   3,406     2,272  
Net cash provided by investing activities   1,708     599  
Cash flows from financing activities:
Payments of long-term debt (18,520 ) (15,179 )
Stock options exercised 794 358
Noncontrolling interests distribution and other (5 ) (2,085 )
Treasury stock acquired   (3,079 )   (3,833 )
Net cash used in financing activities   (20,810 )   (20,739 )
Net increase (decrease) in cash and cash equivalents 24,326 (6,908 )
Cash and cash equivalents, beginning of period   69,073     75,013  
Cash and cash equivalents, end of period $ 93,399   $ 68,105  
 
Non cash financing activities - Cashless exercise of stock options $ -   $ 1,072  
Non cash financing activities – Accrued capital expenditures $ 198   $ 93  
 

Contacts

REX American Resources Corporation
Douglas Bruggeman, 937-276-3931
Chief Financial Officer
or
JCIR
Joseph Jaffoni, Norberto Aja
212-835-8500
rex@jcir.com

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Contacts

REX American Resources Corporation
Douglas Bruggeman, 937-276-3931
Chief Financial Officer
or
JCIR
Joseph Jaffoni, Norberto Aja
212-835-8500
rex@jcir.com