DAYTON, Ohio--(BUSINESS WIRE)--REX American Resources Corporation (NYSE: REX) today reported financial results for its fiscal 2015 second quarter (“Q2 ‘15”) ended July 31, 2015. 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: |
(212) 231-2930 | ||||
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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 ‘15 results principally reflect its 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. During the fiscal 2015 second quarter the Company recorded a $10.4 million pre-tax gain related to the June sale of its 26.6% interest in Patriot Holdings, LLC (“Patriot”). As such, equity in income of unconsolidated ethanol affiliates for the quarter ended July 31, 2015 includes two months’ contribution from REX’s prior interest in Patriot.
REX’s Q2 ‘15 net sales and revenue totaled $113.5 million, compared with $150.2 million in Q2 ‘14, principally reflecting reduced ethanol and distillers grains pricing. As a result of the tightening of ethanol crush spread margins and decline in distiller grains pricing, the Company’s Q2 ’15 gross profit was $18.3 million, compared with $38.8 million in the prior year period. Again reflecting the current operating environment, Q2 ‘15 equity in income of unconsolidated ethanol affiliates was $5.1 million, compared with $7.2 million in Q2 ’14. As a result, income from continuing operations before income taxes and non-controlling interests in Q2 ‘15 were $27.4 million, compared with $40.7 million in Q2 ‘14.
Net income attributable to REX shareholders in Q2 ‘15 was $16.4 million, compared with $21.9 million in Q2 ‘14, while Q2 ‘15 diluted net income per share attributable to REX common shareholders was $2.16 per share, compared to $2.68 per share in Q2 ‘14. Per share results in Q2 ‘15 and Q2 ‘14 are based on 7,580,000 and 8,182,000 diluted weighted average shares outstanding, respectively.
REX’s Executive Chairman of the Board, Stuart Rose, commented, “The second quarter operating environment improved from earlier in the year, yet remained challenging as we continued to experience lower production margins compared to last year. REX again leveraged the strategic location of our plants and our overall business model to continue to generate profitable operating results.
“Additionally, in June we received approximately $45 million representing the cash consideration related to our interest in the Patriot plant following its sale. We allocated after-tax proceeds and cash to repurchase approximately 998,000 REX shares in fiscal 2015 to date.”
During the Company’s fiscal second quarter, REX purchased 764,339 shares of its common stock (at an average price of $60.43 per share). Subsequent to the end of the fiscal second quarter, the Company repurchased an additional 233,243 shares (at an average price of $49.78 per share), thus completing the previously announced share repurchase program. Reflecting all purchases to date, REX presently has 6,905,193 shares of common stock outstanding.
In addition, on August 26, 2015, REX’s Board of Directors approved a new share repurchase plan providing the Company with the authority to repurchase up to 500,000 shares of its common stock. Share repurchases will be made from time to time in open market or private transactions at prevailing market prices, and all shares purchased will be held in the Company’s treasury for possible future use.
Balance Sheet
At July 31, 2015, REX had cash and cash equivalents of $138.1 million, $68.5 million of which was at the parent company and $69.6 million of which was at its consolidated ethanol production facilities. This compares with cash and cash equivalents of $137.7 million at January 31, 2015, $82.9 million of which was at the parent company and $54.8 million of which was at its consolidated ethanol production facilities.
The following table summarizes select data related to the Company’s consolidated alternative energy interests:
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Three Months
Ended |
Six Months
Ended |
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| July 31, | July 31, | ||||||||||||||||
|
2015 |
2014 |
2015 |
2014 |
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| Average selling price per gallon of ethanol |
$ |
1.50 |
$ |
2.18 |
$ |
1.46 |
$ |
2.16 |
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| Average selling price per ton of dried distillers grains |
$ |
169.31 |
$ |
192.77 |
$ |
156.16 |
$ |
201.57 |
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| Average selling price per pound of non-food grade corn oil |
$ |
0.28 |
$ |
0.36 |
$ |
0.28 |
$ |
0.34 |
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| Average selling price per ton of modified distillers grains |
$ |
73.95 |
$ |
68.49 |
$ |
78.48 |
$ |
81.88 |
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| Average cost per bushel of grain | $ | 3.64 | $ | 4.47 | $ | 3.65 | $ | 4.41 | |||||||||
| Average cost of natural gas (per mmbtu) |
$ |
3.42 |
$ |
5.14 |
$ |
4.13 |
$ |
7.27 |
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Supplemental Data Related to REX’s Alternative Energy Interests:
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REX American Resources Corporation Ethanol Ownership Interests/Effective Annual Gallons Shipped as of July 31, 2015 (gallons in millions) |
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Entity |
Trailing |
Current |
REX’s Current Effective |
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One Earth Energy, LLC |
112.7 | 74.6% | 84.1 | ||||||
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NuGen Energy, LLC |
117.3 | 99.5% | 116.7 | ||||||
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Big River Resources West Burlington, LLC |
105.8 | 9.7% | 10.3 | ||||||
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Big River Resources Galva, LLC |
115.9 | 9.7% | 11.2 | ||||||
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Big River United Energy, LLC |
123.8 | 4.9% | 6.1 | ||||||
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Big River Resources Boyceville, LLC |
57.7 | 9.7% | 5.6 | ||||||
| Total | 633.2 | n/a | 234.0 | ||||||
About REX American Resources Corporation
REX American Resources has interests in six ethanol production facilities, which in aggregate shipped approximately 633 million gallons of ethanol over the twelve month period ended July 31, 2015. REX’s effective ownership of the trailing twelve month gallons shipped (for the twelve months ended July 31, 2015) by the ethanol production facilities in which it currently has ownership interests was approximately 234 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, transportation delays, 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.
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REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES |
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Three Months
Ended |
Six Months
Ended |
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July 31, |
July 31, |
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2015 |
2014 |
2015 |
2014 |
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| Net sales and revenue | $ | 113,480 | $ | 150,231 | $ | 218,677 | $ | 306,156 | |||||||||||||
| Cost of sales | 95,204 | 111,391 | 191,274 | 230,681 | |||||||||||||||||
| Gross profit | 18,276 | 38,840 | 27,403 | 75,475 | |||||||||||||||||
| Selling, general and administrative expenses | (6,456 | ) | (4,839 | ) | (10,909 | ) | (11,010 | ) | |||||||||||||
| Gain on sale of investment | 10,385 | - | 10,385 | - | |||||||||||||||||
| Equity in income of unconsolidated ethanol affiliates | 5,063 | 7,245 | 6,543 | 15,542 | |||||||||||||||||
| Gain on disposal of property and equipment, net | 12 | - | 495 | - | |||||||||||||||||
| Interest and other income | 107 | 87 | 325 | 135 | |||||||||||||||||
| Interest expense | - | (591 | ) | - | (1,283 | ) | |||||||||||||||
| Income from continuing operations before income taxes and non-controlling interests |
27,387 |
40,742 |
34,242 |
78,859 |
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| Provision for income taxes | (8,676 | ) | (14,017 | ) | (11,092 | ) | (27,937 | ) | |||||||||||||
| Income from continuing operations including non-controlling interests |
18,711 |
26,725 |
23,150 |
50,922 |
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| Loss from discontinued operations, net of tax | - | (12 | ) | - | (9 | ) | |||||||||||||||
| Gain on disposal of discontinued operations, net of tax |
- |
5 |
- | 5 | |||||||||||||||||
| Net income including non-controlling interests | 18,711 | 26,718 | 23,150 | 50,918 | |||||||||||||||||
| Net income attributable to non-controlling interests | (2,344 | ) | (4,811 | ) | (2,856 | ) | (7,269 | ) | |||||||||||||
| Net income attributable to REX common shareholders | $ | 16,367 | $ | 21,907 | $ | 20,294 | $ | 43,649 | |||||||||||||
| Weighted average shares outstanding – basic | 7,580 | 8,182 | 7,737 | 8,150 | |||||||||||||||||
| Basic net income per share attributable to REX common shareholders |
$ |
2.16 |
$ |
2.68 |
$ |
2.62 |
$ |
5.36 |
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| Weighted average shares outstanding – diluted | 7,580 | 8,182 | 7,737 | 8,166 | |||||||||||||||||
| Diluted net income per share attributable to REX common shareholders |
$ |
2.16 |
$ |
2.68 |
$ |
2.62 |
$ |
5.35 |
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| Amounts attributable to REX common shareholders: | |||||||||||||||||||||
| Income from continuing operations, net of tax | $ | 16,367 | $ | 21,914 | $ | 20,294 | $ | 43,653 | |||||||||||||
| Loss from discontinued operations, net of tax |
- |
(7 |
) |
- | (4 | ) | |||||||||||||||
| Net income | $ | 16,367 | $ | 21,907 | $ | 20,294 | $ | 43,649 | |||||||||||||
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REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES |
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ASSETS: |
July 31, |
January 31, |
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| CURRENT ASSETS: | |||||||||||
| Cash and cash equivalents | $ | 138,107 | $ | 137,697 | |||||||
| Restricted cash | 203 | - | |||||||||
| Accounts receivable | 13,736 | 8,794 | |||||||||
| Inventory | 23,250 | 18,062 | |||||||||
| Refundable income taxes | 2,958 | 3,019 | |||||||||
| Prepaid expenses and other | 5,854 | 5,810 | |||||||||
| Deferred taxes-net |
2,363 |
2,363 |
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| Total current assets | 186,471 | 175,745 | |||||||||
| Property and equipment-net | 189,056 | 194,447 | |||||||||
| Other assets | 8,118 | 6,366 | |||||||||
| Equity method investments | 41,778 | 80,389 | |||||||||
| TOTAL ASSETS | $ | 425,423 | $ | 456,947 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable – trade | $ | 11,975 | $ | 9,210 | |||||||
| Accrued expenses and other current liabilities |
8,223 |
10,347 |
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| Total current liabilities |
20,198 |
19,557 |
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| LONG TERM LIABILITIES: | |||||||||||
| Deferred taxes | 34,999 | 42,768 | |||||||||
| Other long term liabilities | 797 | 1,658 | |||||||||
| Total long term liabilities |
35,796 |
44,426 |
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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 | 144,801 | 144,791 | |||||||||
| Retained earnings | 464,732 | 444,438 | |||||||||
| Treasury stock, 22,715 shares |
(285,745 |
) |
(239,557 |
) |
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| Total REX shareholders’ equity | 324,087 | 349,971 | |||||||||
| Non-controlling interests | 45,342 | 42,993 | |||||||||
| Total equity |
369,429 |
392,964 |
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| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 425,423 | $ | 456,947 | |||||||
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REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES |
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|
Six Months Ended |
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|
2015 |
2014 |
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| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income | $ | 23,150 | $ | 50,918 | |||||||
| Adjustments to reconcile net income to net cash | |||||||||||
| provided by operating activities: | |||||||||||
| Depreciation, impairment charges and amortization | 9,430 | 8,350 | |||||||||
| Income from equity method investments | (6,543 | ) | (15,542 | ) | |||||||
| Gain on sale of investment | (10,385 | ) | - | ||||||||
| Gain on disposal of property and equipment, net | (495 | ) | (3 | ) | |||||||
| Dividends received from equity method investments | 5,638 | 8,592 | |||||||||
| Derivative financial instruments | - | (770 | ) | ||||||||
| Deferred income tax | (8,644 | ) | 5,323 | ||||||||
| Stock based compensation expense | 10 | - | |||||||||
| Excess tax benefit from stock option exercises | - | (441 | ) | ||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | (2,754 | ) | 2,494 | ||||||||
| Inventories | (5,188 | ) | 2,083 | ||||||||
| Other assets | 192 | 463 | |||||||||
| Accounts payable-trade | 261 | (198 | ) | ||||||||
| Other liabilities | (2,110 | ) | 353 | ||||||||
| Net cash provided by operating activities | 2,562 | 61,622 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Capital expenditures | (5,865 | ) | (3,402 | ) | |||||||
| Restricted cash | (203 | ) | 500 | ||||||||
| Restricted investment and deposits | 250 | 273 | |||||||||
| Proceeds from sale of investment | 45,476 | - | |||||||||
| Proceeds from sale of real estate and property and equipment, net | 1,935 | 487 | |||||||||
| Other | 12 | - | |||||||||
| Net cash provided by (used in) investing activities | 41,605 | (2,142 | ) | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
|
Payments of long term debt |
- | (13,726 | ) | ||||||||
| Stock options exercised | - | 931 | |||||||||
| Payments to noncontrolling interests holders | (507 | ) | (39 | ) | |||||||
| Excess tax benefit from stock option exercises | - | 441 | |||||||||
| Treasury stock acquired | (43,250 | ) | - | ||||||||
| Net cash used in financing activities | (43,757 | ) | (12,393 | ) | |||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 410 | 47,087 | |||||||||
| CASH AND CASH EQUIVALENTS-Beginning of year | 137,697 | 105,149 | |||||||||
| CASH AND CASH EQUIVALENTS-End of year | $ | 138,107 | $ | 152,236 | |||||||
| Non cash investing activities – Accrued capital expenditures | $ | 370 | $ | 239 | |||||||
| Non cash financing activities – Accrued treasury stock purchases | $ | 2,938 | $ | - | |||||||
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