Exhibit 99

 

 

 

News Announcement For Immediate Release

 

REX AMERICAN RESOURCES SECOND QUARTER

DILUTED EPS RISE 218% TO $1.43

 

Dayton, Ohio, (August 28, 2018) -- REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2018 second quarter (“Q2 ‘18”) ended July 31, 2018. REX management will host a conference call and webcast today at 11:00 a.m. ET.

 

Conference Call: (212) 231-2910
   
Webcast / Replay URL: www.rexamerican.com/Corp/Page4.aspx
   
  The webcast will be available for replay for 30 days

 

REX American Resources’ Q2 ‘18 results principally reflect its interests in six ethanol production facilities and its refined coal operation. One Earth Energy, LLC (“One Earth”) and NuGen Energy, LLC (“NuGen”) are consolidated, while those of its four other ethanol plants are reported as equity in income of unconsolidated ethanol affiliates. REX consolidates the refined coal entity acquired by the Company in fiscal 2017. The Company reports results for its two business segments as ethanol and by-products, and refined coal.

 

REX’s Q2 ‘18 net sales and revenue were $128.8 million, compared with $108.7 million in Q2 ‘17, primarily reflecting higher volumes of ethanol gallons sold as well as higher average selling prices for dried and modified distillers grains during the quarter, which more than offset lower average selling prices for ethanol. The Company’s Q2 ‘18 gross profit for its ethanol and by-products segment increased to $13.7 million, from $10.8 million in the comparable prior year period. In Q2 ‘18, equity in income of unconsolidated ethanol affiliates rose to $0.9 million, from $0.1 million in Q2 ‘17. As a result, the ethanol and by-products segment income before income taxes rose to $10.1 million in Q2 ‘18, compared to $7.3 million in Q2 ‘17. The Company’s refined coal operation incurred a $4.3 million gross loss and a $4.8 million loss before income taxes in Q2 ‘18 (the Company did not own the refined coal entity in Q2’ 17). As a result, REX reported income from continuing operations before income taxes and non-controlling interests in Q2 ‘18 of $4.9 million, compared with $6.5 million in Q2 ‘17. While the refined coal operation impacted gross profit and income before income taxes, the Company recognized a lower effective tax rate related to its refined coal operation.

 

Net income attributable to REX shareholders in Q2 ‘18 rose more than three-fold to $9.2 million, from $2.9 million in Q2 ‘17, primarily reflecting the year-over-year profit improvement in the ethanol and by-products segment as well as lower tax rates related to the Company’s refined coal operation and the December 2017 passage of the 2017 Tax Cuts and Jobs Act. Q2 ‘18 basic and diluted net income per share attributable to REX common shareholders was $1.43 per share, compared to $0.45 per share in Q2 ‘17.

 

-more-

 
REX American Resources Q2 ‘18 Results, 8/28/18 page 2

 

Per share results in Q2 ‘18 and Q2 ‘17 are based on 6,466,000 and 6,593,000 diluted weighted average shares outstanding, respectively.

 

Segment Income Statement Data:

 

   Three Months
Ended
   Six Months
Ended
 
($ in thousands)  July 31,   July 31, 
   2018   2017   2018   2017 
Net sales and revenue:                    
Ethanol & By-Products (1)  $128,491   $108,744   $249,171   $221,887 
Refined coal (2) (3)   266    -    406    - 
Total net sales and revenues  $128,757   $108,744   $249,577   $221,887 
                     
Gross profit (loss):                    
Ethanol & By-Products (1)  $13,669   $10,781   $27,215   $23,270 
Refined coal (2)   (4,270)    -    (6,965)    - 
Total gross profit  $9,399   $10,781   $20,250   $23,270 
                     
Income (loss) before income taxes:                    
Ethanol & By-Products (1)  $10,077   $7,330   $21,086   $16,253 
Refined coal (2)   (4,788)    -    (7,647)    - 
Corporate and other   (430)    (857)    (931)    (1,778) 
Total income (loss) before income taxes  $4,859   $6,473   $12,508   $14,475 
                     
Benefit (provision) for income taxes:                    
Ethanol & By-Products  $(2,029)   $(2,675)   $(3,449)   $(5,380) 
Refined coal   7,597    -    11,596    - 
Corporate and other   63    373    187    688 
Total benefit (provision) for income taxes  $5,631   $(2,302)   $8,334   $(4,692) 
                     
Segment profit (loss):                    
Ethanol & By-Products  $6,561   $3,419   $15,150   $8,561 
Refined coal   3,018    -    4,289    - 
Corporate and other   (362)    (478)    (726)    (1,076) 
Net income attributable to REX common shareholders  $9,217   $2,941   $18,713   $7,485 
                     
(1)Includes results attributable to non-controlling interests of approximately 25% for One Earth and approximately 1% for NuGen.
(2)Includes results attributable to non-controlling interests of approximately 5%.
(3)Refined coal sales are reported net of the cost of coal.

 

REX American Resources’ Chief Executive Officer, Zafar Rizvi, commented, “Although challenging ethanol crush spread trends prevailed in the fiscal second quarter, we generated 18.2% year-over-year growth in net sales and revenue, a 26.8% rise in gross profit and a 37.5% increase in income before taxes from our ethanol and by-products segment. These gains reflect an increase in distillers grain pricing, the quality and efficiencies of our plants and people, and our investments in expanding the output of our consolidated plants which enabled us to increase the volume of ethanol sold by 18.6% over last year’s second quarter. The growth of our ethanol and by-products segment, combined with tax benefits related to our refined coal operations and the enactment of the Tax Cuts and Jobs Act, resulted in 213.4% growth in fiscal 2018 second quarter net income attributable to REX common shareholders and a 217.8% rise in EPS attributable to REX common shareholders.

 

“The fiscal second quarter again demonstrated the value of our ethanol operations and disciplined operating practices and we remain confident that our refined coal investment will continue to benefit our financial results. With our debt-free balance sheet and healthy liquidity position, including cash and short-term investments of $185.7 million, we allocated approximately $7.5 million to share repurchases during the quarter and we continue to evaluate other near- and long-term opportunities to enhance shareholder value.”

 

-more-

 
REX American Resources Q2 ‘18 Results, 8/28/18 page 3

 

Balance Sheet and Share Repurchase Program

At July 31, 2018, REX had cash and cash equivalents and short-term investments of $185.7 million, $54.0 million of which was at the parent company, and $131.7 million of which was at its consolidated production facilities. This compares with cash and cash equivalents at January 31, 2018, of $191.0 million, $74.1 million of which was at the parent company, and $116.9 million of which was at its consolidated ethanol production facilities.

 

On March 20, 2018, REX’s Board of Directors approved an increase in the share repurchase plan providing the Company with the authority to repurchase up to an additional 500,000 shares of its common stock. During the second quarter of fiscal 2018, the Company purchased 102,012 shares at an average cost of $73.72. REX is now authorized to repurchase up to 427,181 shares of its common stock. The Company had 6,351,739 shares outstanding at July 31, 2018.

 

Repurchases by the Company will be subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors. Share repurchases may be made from time to time in open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements. There is no minimum number of shares that the Company is required to repurchase and the repurchase program may be suspended or discontinued at any time without prior notice. All shares purchased will be held in the Company’s treasury for possible future use.

 

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

 

   Three Months
Ended
   Six Months
Ended
 
   July 31,   July 31, 
   2018   2017   2018   2017 
Average selling price per gallon of ethanol  $1.38   $1.45   $1.35   $1.45 
Average selling price per ton of dried distillers grains  $148.98   $95.39   $143.28   $97.81 
Average selling price per pound of non-food grade corn oil  $0.24   $0.29   $0.24   $0.28 
Average selling price per ton of modified distillers grains  $63.72   $41.00   $67.81   $41.47 
Average cost per bushel of grain  $3.60   $3.38   $3.55   $3.47 
Average cost of natural gas (per mmbtu)  $2.86   $3.30   $3.16   $3.52 

 

-more-

 
REX American Resources Q2 ‘18 Results, 8/28/18 page 4

 

Supplemental Data Related to REX’s Alternative Energy Interests:

 

REX American Resources Corporation
Ethanol Ownership Interests/Effective Annual Gallons Shipped as of July 31, 2018
(gallons in millions)
Entity    Trailing Twelve
Months Gallons
Shipped
    Current
REX
Ownership
Interest
    REX’s Current Effective
Ownership of Trailing Twelve
Month Gallons Shipped
One Earth Energy, LLC
(Gibson City, IL)
   134.8    75.1%   101.2 
NuGen Energy, LLC
(Marion, SD)
   138.4    99.5%   137.7 
Big River Resources West Burlington, LLC
(West Burlington, IA)
   108.6    10.3%   11.2 
Big River Resources Galva, LLC
(Galva, IL)
   128.5    10.3%   13.2 
Big River United Energy, LLC
(Dyersville, IA)
   129.8    5.7%   7.4 
Big River Resources Boyceville, LLC
(Boyceville, WI)
   57.3    10.3%   5.9 
Total   697.4    n/a   276.6 

 

Second Quarter Conference Call

REX will host a conference call at 11:00 a.m. ET today. Senior management will discuss the financial results and 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, www.rexamerican.com/Corp/Page4.aspx. A webcast replay will be available for 30 days following the live event at www.rexamerican.com/Corp/Page4.aspx.

 

About REX American Resources Corporation

REX American Resources has interests in six ethanol production facilities, which in aggregate shipped approximately 697 million gallons of ethanol over the twelve month period ended July 31, 2018. REX’s effective ownership of the trailing twelve month gallons shipped (for the twelve months ended July 31, 2018) by the ethanol production facilities in which it has ownership interests was approximately 277 million gallons. In addition, the Company acquired a refined coal operation on August 10, 2017. 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 and refined coal plants operating efficiently and according to forecasts and projections, changes in the international, national or regional economies, weather, results of income tax audits, changes in income tax laws or regulations 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.

 

Contact:  
Douglas Bruggeman Joseph Jaffoni, Norberto Aja
Chief Financial Officer JCIR
(937) 276-3931 (212) 835-8500
  rex@jcir.com

 

- statements of operations follow -

 
REX American Resources Q2 ‘18 Results, 8/28/18 page 5

 

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, 
   2018   2017   2018   2017 
Net sales and revenue  $128,757   $108,744   $249,577   $221,887 
Cost of sales   119,358    97,963    229,327    198,617 
Gross profit   9,399    10,781    20,250    23,270 
Selling, general and administrative expenses   (6,110)    (4,779)    (10,663)    (10,181) 
Equity in income of unconsolidated ethanol affiliates   874    137    1,571    837 
Interest and other income   696    334    1,350    549 
Income from continuing operations before income taxes and non-controlling interests   4,859    6,473    12,508    14,475 
Benefit (provision) for income taxes   5,631    (2,302)    8,334    (4,692) 
Net income including non-controlling interests   10,490    4,171    20,842    9,783 
Net income attributable to non-controlling interests   (1,273)    (1,230)    (2,129)    (2,298) 
Net income attributable to REX common shareholders  $9,217   $2,941   $18,713   $7,485 
                     
Weighted average shares outstanding – basic and diluted   6,466    6,593    6,517    6,592 
                     
Basic and diluted net income per share attributable to REX common shareholders   $1.43    $0.45    $2.87    $1.14 

 

- balance sheets follow -

 
REX American Resources Q2 ‘18 Results, 8/28/18 page 6

 

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

 

   July 31,   Jan. 31, 
   2018   2018 
ASSETS:          
CURRENT ASSETS:          
Cash and cash equivalents  $73,761   $190,988 
Short-term investments   111,969    - 
Restricted cash   778    354 
Accounts receivable   14,648    12,913 
Inventory   25,171    20,755 
Refundable income taxes   8,371    6,612 
Prepaid expenses and other   7,716    7,412 
Total current assets   242,414    239,034 
Property and equipment-net   190,823    197,827 
Other assets   7,816    7,454 
Equity method investments   35,117    34,549 
TOTAL ASSETS  $476,170   $478,864 
LIABILITIES AND EQUITY          
CURRENT LIABILITIES:          
Accounts payable – trade  $11,595   $8,149 
Accrued expenses and other current liabilities   10,555    13,716 
Total current liabilities   22,150    21,865 
LONG TERM LIABILITIES:          
Deferred taxes   13,768    21,706 
Other long term liabilities   4,004    3,367 
Total long term liabilities   17,772    25,073 
COMMITMENTS AND CONTINGENCIES          
EQUITY:          
REX shareholders’ equity:          
Common stock, 45,000 shares authorized, 29,853 shares issued at par   299    299 
Paid in capital   148,212    146,923 
Retained earnings   566,626    547,913 
Treasury stock, 23,502 and 23,287 shares, respectively   (329,999)    (313,643) 
Total REX shareholders’ equity   385,138    381,492 
Non-controlling interests   51,110    50,434 
Total equity   436,248    431,926 
TOTAL LIABILITIES AND EQUITY  $476,170   $478,864 

 

- statements of cash flows follow -

 
REX American Resources Q2 ‘18 Results, 8/28/18 page 7

 

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

 

   Six Months Ended July 31, 
   2018   2017 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net income  $20,842   $9,783 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation   12,033    9,955 
Income from equity method investments   (1,571)    (837) 
Dividends received from equity method investments   1,003    2,005 
Accrued interest income   (815)    - 
Deferred income tax   (7,938)    537 
Stock based compensation expense   443    350 
Loss (gain) on disposal of property and equipment   104    (13) 
Loss on sale of investment   -    13 
Changes in assets and liabilities:          
Accounts receivable   (1,735)    886 
Inventory   (4,416)    (5,034) 
Other assets   (2,443)    (953) 
Accounts payable-trade   4,002    1,678 
Other liabilities   (1,262)    (4,828) 
Net cash provided by operating activities   18,247    13,542 
CASH FLOWS FROM INVESTING ACTIVITIES:          
Capital expenditures   (5,813)    (14,366) 
Purchase of short-term investments   (111,154)    - 
Other   18    219 
Net cash used in investing activities   (116,949)    (14,147) 
CASH FLOWS FROM FINANCING ACTIVITIES:          
Treasury stock acquired   (16,648)    - 
Payments to non-controlling interests holders   (1,699)    (1,725) 
Capital contributions from minority investor   246    - 
Net cash used in financing activities   (18,101)    (1,725) 
NET DECREASE  IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH   (116,803)    (2,330) 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of year   191,342    188,706 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of year  $74,539   $186,376 
Non cash investing activities – Accrued capital expenditures  $469   $744 
Non cash financing activities – Stock awards accrued  $335   $281 
Non cash investing activities – Stock awards issued  $1,473   $1,195 

 

# # #

 

The following information was filed by Rex American Resources Corp (REX) on Tuesday, August 28, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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