Exhibit 99

 

 

 

News Announcement For Immediate Release

 

REX AMERICAN RESOURCES REPORTS FISCAL 2020
SECOND QUARTER RESULTS

 

Dayton, Ohio, (August 26, 2020) -- REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2020 second quarter (“Q2 ’20”) ended July 31, 2020. REX management will host a conference call and webcast today at 11:00 a.m. ET.

 

Conference Call: 212/231-2900
   
Webcast / Replay URL: www.rexamerican.com/Corp/Page4.aspx
   
  The webcast will be available for replay for 30 days.

 

REX American Resources’ Q2 ’20 results principally reflect its interests in six ethanol production facilities and its refined coal operation. The One Earth Energy, LLC (“One Earth”) and NuGen Energy, LLC (“NuGen”) ethanol production facilities are consolidated, as is the refined coal entity, while those of its four other ethanol plants are reported as equity in income of unconsolidated ethanol affiliates. The Company reports results for its two business segments as ethanol and by-products, and refined coal.

 

REX’s Q2 ’20 net sales and revenue were $39.3 million, compared with $105.9 million in Q2 ’19. The year-over-year net sales and revenue decline was primarily due to lower ethanol production levels as the Company temporarily idled its NuGen Energy and One Earth Energy plants, which led to a 56% decrease in ethanol gallons sold. The Q2 ’20 net sales and revenue also reflects an 11% decline in ethanol pricing on a year-over-year basis. Primarily reflecting these factors, Q2 ’20 gross profit for the Company’s ethanol and by-products segment declined to $0.6 million, compared with $6.2 million in Q2 ’19. As a result, the ethanol and by-products segment incurred a loss before income taxes of $3.3 million in Q2 ’20, compared to income of $3.1 million in Q2 ’19. The Company’s refined coal operation incurred a $1.9 million gross loss and a $2.1 million loss before income taxes in Q2 ’20, compared to a $2.2 million gross loss and a loss before income taxes of $2.0 million in Q2 ’19. REX reported a Q2 ’20 loss before income taxes and non-controlling interests of $6.1 million, compared with income before income taxes and non-controlling interests of $0.7 million in the comparable year ago period. While the refined coal operation negatively impacted gross profit and income before income taxes, it contributed a tax benefit of $2.9 million and $3.2 million for Q2 ’20 and Q2 ’19, respectively.

 

Net loss attributable to REX shareholders in Q2 ’20 was $1.7 million, compared to net income of $2.3 million in Q2 ’19. Q2 ’20 basic and diluted net loss per share attributable to REX common shareholders was $0.28, compared to net income per share of $0.36 in Q2 ’19. Per share results in Q2 ’20 and Q2 ’19 are based on 6,216,000 and 6,318,000 diluted weighted average shares outstanding, respectively.

 

-more-

 
REX American Resources Q2 ’20 Results, 8/26/20 page 2

 

Segment Income Statement Data:

   Three Months
Ended
   Six Months
Ended
 
($ in thousands)  July 31,   July 31, 
   2020   2019   2020   2019 
Net sales and revenue:                    
Ethanol & By-Products (1)  $39,242   $105,770   $122,477   $210,223 
Refined coal (2) (3)   85    98    100    220 
Total net sales and revenue  $39,327   $105,868   $122,577   $210,443 
                     
Gross (loss) profit:                    
Ethanol & By-Products (1)  $553   $6,169   $(7,670)   $12,284 
Refined coal (2)   (1,884)    (2,165)    (2,991)    (4,634) 
Total gross (loss) profit  $(1,331)   $4,004   $(10,661)   $7,650 
                     
(Loss) income before income taxes:                    
Ethanol & By-Products (1)  $(3,259)   $3,111   $(15,610)   $6,313 
Refined coal (2)   (2,118)    (2,028)    (2,965)    (4,703) 
Corporate and other   (702)    (352)    (1,247)    (712) 
Total (loss) income before income taxes  $(6,079)   $731   $(19,822)   $898 
                     
Benefit (provision) for income taxes:                    
Ethanol & By-Products  $893   $(619)   $5,054   $(1,105) 
Refined coal   2,919    3,155    3,878    7,101 
Corporate and other   234    86    427    174 
Total benefit for income taxes  $4,046   $2,622   $9,359   $6,170 
                     
Segment (loss) profit:                    
Ethanol & By-Products  $(2,178)   $1,305   $(9,611)   $3,014 
Refined coal   898    1,216    1,048    2,602 
Corporate and other   (468)    (265)    (820)    (539) 
Net (loss) income attributable to REX common shareholders  $(1,748)   $2,256   $(9,383)   $5,077 

 

 

  (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, “As we indicated at the time we reported the fiscal 2020 first quarter, the second quarter saw a continuation of the challenging operating environment due to the severe disruptions related to the COVID-19 pandemic and its impact on fuel demand and the economy at large. In order to preserve our financial liquidity and flexibility, we made the strategic decision to temporarily idle our two consolidated plants thus significantly reducing our ethanol output while mitigating operating losses.

 

“As we enter the second half of fiscal 2020, the operating environment has improved and we’ve re-opened the NuGen Energy and One Earth Energy plants based on the increase in ethanol demand. However, we expect ethanol crush spread margins and distillers grains pricing to remain volatile.”

 

-more-

 
REX American Resources Q2 ’20 Results, 8/26/20 page 3

 

Balance Sheet

At July 31, 2020, REX had cash and cash equivalents and short-term investments of $185.4 million, $55.9 million of which was at the parent company, and $129.5 million of which was at its consolidated production facilities. This compares with cash, cash equivalents and short-term investments at January 31, 2020, of $205.7 million, $62.3 million of which was at the parent company, and $143.4 million of which was at its consolidated ethanol production facilities.

 

The following table summarizes select data related to REX’s

consolidated alternative energy interests:

 

   Three Months
Ended
   Six Months
Ended
 
   July 31,   July 31, 
   2020   2019   2020   2019 
Average selling price per gallon of ethanol  $1.23   $1.38   $1.25   $1.32 
Average selling price per ton of dried distillers grains  $135.54   $135.46   $143.24   $138.92 
Average selling price per pound of non-food grade corn oil  $0.24   $0.25   $0.25   $0.25 
Average selling price per ton of modified distillers grains  $31.87   $53.01   $49.32   $60.12 
Average cost per bushel of grain  $3.63   $3.80   $3.86   $3.65 
Average cost of natural gas (per mnbtu)  $2.92   $2.63   $3.60   $3.16 

 

Supplemental data related to REX’s alternative energy interests:

 

REX American Resources Corporation
Ethanol Ownership Interests/Effective Annual Gallons Shipped as of July 31, 2020
(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
   115.7   75.3%  87.1 
NuGen Energy, LLC
Marion, SD
   72.6   99.5%  72.2 
Big River Resources West Burlington, LLC
West Burlington, IA
   103.8   10.3%  10.7 
Big River Resources Galva, LLC
Galva, IL
   112.0   10.3%  11.5 
Big River United Energy, LLC
Dyersville, IA
   117.9   5.7%  6.7 
Big River Resources Boyceville, LLC
Boyceville, WI
   54.3   10.3%  5.6 
Total   576.3   n/a   193.8 

 

-more-

 
REX American Resources Q2 ’20 Results, 8/26/20 page 4

 

Second Quarter Conference Call

REX will host a conference call at 11:00 a.m. ET today. Senior management will discuss the quarterly financial results and host a question and answer session. The dial in number for the audio conference call is 212/231-2900 (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 576 million gallons of ethanol over the twelve-month period ended July 31, 2020. REX’s effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended April 30, 2020) by the ethanol production facilities in which it has ownership interests was approximately 194 million gallons. In addition, the Company acquired a refined coal operation in August 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 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, 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, 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.

 

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 ’20 Results, 8/26/20 page 5

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per share amounts)

Unaudited

 

   Three Months
Ended
July 31,
   Six Months
Ended
July 31,
 
   2020   2019   2020   2019 
Net sales and revenue  $39,327   $105,868   $122,577   $210,443 
Cost of sales   40,658    101,864    133,238    202,793 
Gross (loss) profit   (1,331)    4,004    (10,661)    7,650 
Selling, general and administrative expenses   (4,438)    (4,764)    (9,043)    (9,496) 
Equity in (loss) income of unconsolidated ethanol affiliates   (507)    239    (984)    365 
Interest and other income, net   197    1,252    866    2,379 
(Loss) income before income taxes and non-controlling interests   (6,079)    731    (19,822)    898 
Benefit for income taxes   4,046    2,622    9,359    6,170 
Net (loss) income including non-controlling interests   (2,033)    3,353    (10,463)    7,068 
Net loss (income) attributable to non-controlling interests   285    (1,097)    1,080    (1,991) 
Net (loss) income attributable to REX common shareholders  $(1,748)   $2,256   ($9,383)   $5,077 
                     
Weighted average shares outstanding – basic and diluted   6,216    6,318    6,261    6,317 
                     
Basic and diluted net (loss) income per share attributable to REX common shareholders  $(0.28)   $0.36   ($1.50)   $0.80 

 

- balance sheets follow -

   
REX American Resources Q2 ’20 Results, 8/26/20 page 6

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

Unaudited

 

ASSETS  July 31,
2020
   January 31,
2020
 
CURRENT ASSETS:          
Cash and cash equivalents  $152,708   $179,658 
Restricted cash   950    1,113 
Short-term investments   32,656    26,073 
Accounts receivable   9,744    12,969 
Inventory   30,383    35,634 
Refundable income taxes   10,620    6,029 
Prepaid expenses and other   9,878    9,659 
Total current assets   246,939    271,135 
Property and equipment-net   158,513    163,327 
Operating lease right-of-use assets   15,345    16,173 
Deferred taxes   21,182    17,061 
Other assets   884    342 
Equity method investment   29,475    32,464 
TOTAL ASSETS  $472,338   $500,502 
LIABILITIES AND EQUITY          
CURRENT LIABILITIES:          
Accounts payable – trade  $8,584   $18,900 
Current operating lease liabilities   5,310    4,935 
Accrued expenses and other current liabilities   7,295    7,764 
Total current liabilities   21,189    31,599 
LONG TERM LIABILITIES:          
Deferred taxes   3,670    4,334 
Long-term operating lease liabilities   9,600    10,688 
Other long-term liabilities   140    275 
Total long-term liabilities   13,410    15,297 
COMMITMENTS AND CONTINGENCIES          
EQUITY:          
REX shareholders’ equity:          
Common stock, 45,000 shares authorized, 29,853 shares issued at par   299    299 
Paid in capital   149,044    148,789 
Retained earnings   577,602    586,985 
Treasury stock, 23,655 and 23,561 shares, respectively   (340,591)    (335,066) 
Total REX shareholders’ equity   386,354    401,007 
Non-controlling interests   51,385    52,599 
Total equity   437,739    453,606 
TOTAL LIABILITIES AND EQUITY  $472,338   $500,502 

 

- statements of cash flows follow -

   
REX American Resources Q2 ’20 Results, 8/26/20 page 7

 

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

Unaudited

 

   Six Months Ended
July 31,
 
   2020   2019 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net (loss) income  $(10,463)   $7,068 
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:          
Depreciation   10,491    12,425 
Amortization of operating lease right-of-use assets   2,691    2,992 
Stock based compensation expense   80    248 
Loss (income) from equity method investments   984    (365) 
Dividends received from equity method investments   2,005     
Interest income from investments   (179)    (25) 
Deferred income tax   (4,784)    (6,294) 
Gain on disposal of property and equipment   (22)     
Changes in assets and liabilities:          
Accounts receivable   3,225    3,696 
Inventory   5,251    (3,594) 
Refundable income taxes   (4,591)    12 
Prepaid expenses and other assets   (481)    (153) 
Accounts payable-trade   (10,301)    1,409 
Other liabilities   (2,940)    (4,927) 
Net cash (used in) provided by operating activities   (9,034)    12,492 
CASH FLOWS FROM INVESTING ACTIVITIES:          
Capital expenditures   (5,692)    (1,449) 
Purchases of short-term investments   (45,450)     
Sales of short-term investments   39,046    15,000 
Other   (259)    12 
Net cash (used in) provided by investing activities   (12,355)    13,563 
CASH FLOWS FROM FINANCING ACTIVITIES:          
Treasury stock acquired   (5,590)     
Payments to noncontrolling interests holders   (157)    (2,598) 
Capital contributions from minority investor   23    185 
Net cash used in financing activities   (5,724)    (2,413) 
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH   (27,113)    23,642 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of period   180,771    188,812 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of period  $153,658   $212,454 
Non cash financing activities – Stock awards issued  $240   $487 
Non cash financing activities – Stock awards accrued  $   $171 
Non cash investing activities – Accrued capital expenditures  $22   $5 
Initial operating lease right-of-use assets and liabilities recorded upon adoption of ASC 842  $   $20,918 
Operating lease right-of-use assets acquired and liabilities assumed upon lease execution  $1,863   $432 

 

# # #

   

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