REX American Resources Reports Fiscal 2024 First Quarter Net Income Per Share Attributable to REX Common Shareholders of $0.58
REX American Resources reported net income per share of $0.58 for fiscal Q1 2024, marking their second-best Q1 in history.
Gross profit surged by over 42% to $14.5 million, driven by lower corn and natural gas prices.
Net sales and revenue decreased by 24% to $161.2 million due to reduced ethanol pricing.
Ethanol sales volumes increased by 4% to 74.5 million gallons.
REX advanced their One Earth Energy carbon capture project, securing agreements for 100% of the required rights of way and the subsurface area for injection wells.
Completion of the construction phase is scheduled for July 2024.
Capital expenditures for the project amounted to $78.1 million, with a budget of $165-$175 million.
REX ended the quarter with $351.8 million in cash and no debt.
- Net income per share increased to $0.58 in Q1 2024 from $0.30 in Q1 2023.
- Gross profit surged over 42% to $14.5 million.
- Interest and other income increased from $2.8 million to $5.9 million.
- Ethanol sales volumes increased by approximately 4% to 74.5 million gallons.
- Capital expenditures totaled $78.1 million, indicating substantial investment in growth.
- Secured agreements for 100% rights of way for the carbon pipeline.
- Completed agreements for subsurface easements for injection wells.
- No bank debt with $351.8 million in cash and equivalents.
- Net sales and revenue decreased by approximately 24% to $161.2 million.
- Reduced pricing for ethanol and co-products impacted revenue.
- High capital expenditure budget of $165-$175 million for the carbon capture project.
Insights
The fiscal first quarter results for REX American Resources exhibit a mixed performance. While the net sales and revenue showed a notable decline of
Moreover, the net income per share saw substantial growth, rising from
However, the decrease in net sales and revenue should not be overlooked. This drop can be concerning as it might reflect underlying market challenges, such as reduced demand or lower pricing power in the ethanol market. Investors should monitor whether REX can sustain its profitability improvements and navigate the macroeconomic factors impacting its sales.
The company's strong balance sheet with
Rating: 1
The operational progress concerning the One Earth Energy carbon capture and sequestration project is noteworthy. Securing 100% of the rights of way for the carbon transport pipeline and subsurface easements for injection wells without the need for eminent domain is a significant achievement. This progress minimizes potential legal and logistical hurdles, which can often delay or derail such projects.
The anticipated completion of the capture and compression facility in July 2024 aligns with the company's strategic vision to enhance its sustainability profile. By being able to sequester all carbon emissions from their operations for at least 15 years, REX positions itself favorably in the increasingly regulatory-conscious energy market. This also reflects positively on their commitment to environmental stewardship, which can attract ESG-focused investors.
Furthermore, the expansion of the One Earth Energy ethanol production facility, aimed at increasing capacity from 150 million to 175 million gallons per year and eventually to 200 million gallons, indicates a strategic plan to scale operations efficiently. The fact that no additional capital expenditure is required for the final phase of this expansion shows prudent financial planning.
Investors should keep an eye on the ongoing permitting process with the Illinois Commerce Commission and the EPA. Regulatory approvals are important for the project's success and any delays or setbacks could affect the stock performance. Nonetheless, the proactive steps taken by REX suggest a forward-looking approach that could yield long-term benefits in a decarbonizing economy.
Rating: 1
Construction phase of carbon capture and compression facility scheduled for completion in July
Announces securing of
-
Generated
$0.58 -
Reported gross profit of
$14.5 million 42% over the same period in Fiscal 2023 -
Reported net sales and revenue of
$161.2 million 24% over the same period in Fiscal 2023 -
Reported consolidated ethanol sales volumes of 74.5 million gallons for Fiscal Q1 ‘24, an increase of approximately
4% over the same period in Fiscal 2023 -
Reached agreement with
100% of landowners for rights of way for the planned carbon pipeline, which would connect the One Earth Energy carbon capture facility to injection wells; agreements eliminate the need to use eminent domain - Completion of the construction phase of the One Earth Energy carbon capture and compression facility remains scheduled for July
REX American Resources’ fiscal first quarter 2024 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.
Fiscal First Quarter 2024 Results
For fiscal first quarter 2024, REX reported net sales and revenue of
Net income attributable to REX shareholders in fiscal first quarter 2024 was
Update on One Earth Energy Carbon Capture Project
REX has continued to make progress with construction on the capture and compression portion of its One Earth Energy carbon capture and sequestration project. Construction of the capture and compression facility is still expected to be completed in July 2024.
As of April, the Company has secured agreements with landholders for
REX has also secured easements for more than
The Environmental Protection Agency (EPA) Class VI injection well permitting process is ongoing. Approval of REX’s Class VI injection well application is necessary to begin construction on the sequestration portion of the project and to begin operations.
In addition, REX has also made substantial progress on the expansion of its One Earth Energy ethanol production facility. This initial phase will increase the plant’s production capacity from 150 million to 175 million gallons per year. Once achieved, REX plans to move forward with the further permitting of the facility to produce 200 million gallons per year of ethanol, which the Company expects will require no further capital expenditure.
Through the end of fiscal first quarter 2024, capital expenditures related to the One Earth Energy carbon capture and sequestration project and expansion of ethanol production capacity at the Gibson City location total
Balance Sheet
At the end of fiscal first quarter 2024 on April 30, 2024, REX had
Management Commentary
“REX American has continued to turn in industry-leading earnings from our ethanol operations, as well as progressing on our carbon capture and ethanol production expansion projects,” said Zafar Rizvi, REX Chief Executive Officer. “Going forward, we plan to build on these achievements to make REX an even stronger company, with greater opportunity for growth in a decarbonizing economy, as evidenced by the One Earth Energy projects. As I’ve said before, our laser focus is on profitable, sustainable operations, and this remains the most important goal for me and the entire management team.
“The One Earth Energy projects took great steps forward over the past few months. The securing of rights for
Change in Accounting Principles
As previously discussed, during the fiscal quarter ended July 31, 2023 the Company made a change in the method of accounting to begin classifying shipping and handling costs as cost of sales, instead of within selling, general and administrative expenses (SG&A), as historically presented, in order to improve the comparability of gross profit and SG&A reported. The Company has applied a retrospective application of the new accounting policy.
Conference Call Information
REX will host a conference call at 11:00 a.m. ET today to discuss the Company’s quarterly results and will also host a question and answer session. To access the conference call, interested parties may dial (877) 269-7751 (US) or (201) 389-0908 (international). Participants can also view an updated presentation, as well as listen to a live webcast of the call by going to the Investors section on the REX website at www.rexamerican.com. A replay will be available shortly after the live conference call and can be accessed by dialing (844) 512-2921 (US) or (412) 317-6671 (international). The passcode for the replay is 13746658. The replay will be available for 30 days after the call.
About REX American Resources Corporation
REX American Resources Corporation has interests in six ethanol production facilities, which in aggregate have production capacity totaling approximately 730 million gallons per year. REX’s effective ownership of annual volumes is approximately 300 million gallons. Further information about REX is available at www.rexamerican.com.
Forward-Looking Statements
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, distillers corn oil, commodity market risk, gasoline and natural gas, ethanol plants operating efficiently and according to forecasts and projections, logistical interruptions, success in permitting and developing the planned carbon sequestration facility near the One Earth Energy ethanol plant, 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
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES |
||||
Consolidated Statements of Operations |
||||
(in thousands, except per share amounts) |
||||
Unaudited |
||||
|
Three Months Ended |
|||
|
April 30, |
|||
|
|
2024 |
|
2023 |
Net sales and revenue |
$ |
161,231 |
$ |
212,714 |
Cost of sales |
|
146,780 |
|
202,548 |
Gross profit |
|
14,451 |
|
10,166 |
Selling, general and administrative expenses |
|
(6,111) |
|
(5,769) |
Equity in income of unconsolidated ethanol affiliates |
|
1,718 |
|
1,490 |
Interest and other income, net |
|
5,905 |
|
2,801 |
Income before income taxes and noncontrolling interests |
|
15,963 |
|
8,688 |
Provision for income taxes |
|
(3,690) |
|
(1,988) |
Net Income |
|
12,273 |
|
6,700 |
Net Income attributable to noncontrolling interests |
|
(2,082) |
|
(1,464) |
Net income attributable to REX common shareholders |
$ |
10,191 |
$ |
5,236 |
|
|
|
||
Weighted average shares outstanding – basic |
|
17,546 |
|
17,439 |
|
|
|
||
Basic net income per share attributable to REX common shareholders |
$ |
0.58 |
$ |
0.30 |
|
|
|
||
Weighted average shares outstanding – diluted |
|
17,664 |
|
17,439 |
|
|
|
||
Diluted net income per share attributable to REX common shareholders |
$ |
0.58 |
$ |
0.30 |
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES |
|||||
Consolidated Balance Sheets |
|||||
(in thousands) |
|||||
Unaudited |
|||||
|
April 30, |
|
January 31, |
||
|
|
2024 |
|
2024 |
|
ASSETS |
|
|
|
||
CURRENT ASSETS: |
|
|
|
||
Cash and cash equivalents |
$ |
231,200 |
|
$ |
223,397 |
Short-term investments |
|
120,564 |
|
|
155,260 |
Accounts receivable |
|
21,535 |
|
|
23,185 |
Inventory |
|
27,100 |
|
|
26,984 |
Refundable income taxes |
|
4,586 |
|
|
5,728 |
Prepaid expenses and other |
|
16,628 |
|
17,549 |
|
Total current assets |
|
421,613 |
|
|
452,103 |
Property and equipment, net |
|
179,024 |
|
|
155,587 |
Operating lease right-of-use assets |
|
11,561 |
|
|
13,038 |
Other assets |
|
22,167 |
|
|
9,138 |
Equity method investment |
|
36,654 |
|
34,936 |
|
TOTAL ASSETS |
$ |
671,019 |
$ |
664,802 |
|
LIABILITIES AND EQUITY |
|
|
|
||
CURRENT LIABILITIES: |
|
|
|
||
Accounts payable – trade |
$ |
43,216 |
|
$ |
42,073 |
Current operating lease liabilities |
|
3,724 |
|
|
4,469 |
Accrued expenses and other current liabilities |
|
15,760 |
|
19,717 |
|
Total current liabilities |
|
62,700 |
|
66,259 |
|
LONG-TERM LIABILITIES: |
|
|
|
||
Deferred taxes |
|
1,598 |
|
|
1,598 |
Long-term operating lease liabilities |
|
7,729 |
|
|
8,378 |
Other long-term liabilities |
|
593 |
|
970 |
|
Total long-term liabilities |
|
9,920 |
|
10,946 |
|
EQUITY: |
|
|
|
||
REX shareholders’ equity: |
|
|
|
||
Common stock |
|
299 |
|
|
299 |
Paid-in capital |
|
4,064 |
|
|
3,769 |
Retained earnings |
|
711,952 |
|
|
701,761 |
Treasury stock |
|
(191,848) |
|
(191,911) |
|
Total REX shareholders’ equity |
|
524,467 |
|
|
513,918 |
Noncontrolling interests |
|
73,932 |
|
73,679 |
|
Total equity |
|
598,399 |
|
587,597 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
671,019 |
$ |
664,802 |
|
REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES |
|||||
Consolidated Statements of Cash Flows |
|||||
(in thousands) |
|||||
Unaudited |
|||||
|
Three Months Ended |
||||
|
April 30, |
|
April 30, |
||
|
|
2024 |
|
2023 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
||
Net Income including noncontrolling interest |
$ |
12,273 |
|
$ |
6,700 |
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
||
Depreciation |
|
4,414 |
|
|
4,420 |
Amortization of operating lease right-of-use assets |
|
1,478 |
|
|
1,334 |
Income from equity method investments |
|
(1,718) |
|
|
(1,490) |
Interest income from investments |
|
(1,816) |
|
|
(2,052) |
Deferred income taxes |
|
2,479 |
|
|
1,342 |
Stock based compensation expense |
|
716 |
|
612 |
|
Gain on sale of property and equipment – net |
|
- |
|
|
(10) |
Changes in assets and liabilities: |
|
|
|
||
Accounts receivable |
|
1,650 |
|
|
(4,055) |
Inventories |
|
(116) |
|
|
7,445 |
Refundable income taxes |
|
1,142 |
|
(2,021) |
|
Other assets |
|
(3,797) |
|
(6,167) |
|
Accounts payable – trade |
|
(12,733) |
|
|
(16,066) |
Other liabilities |
|
(6,235) |
|
|
(3,998) |
Net cash used in operating activities |
|
(2,263) |
|
|
(14,006) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
||
Capital expenditures |
|
(24,832) |
|
(4,199) |
|
Purchase of short-term investments |
|
(84,978) |
|
(102,348) |
|
Maturity of short-term investments |
|
121,490 |
|
|
127,588 |
Deposits |
|
215 |
|
|
(9) |
Proceeds from sale of real estate and property and equipment |
- |
|
10 |
||
Net cash provided by investing activities: |
|
11,895 |
|
21,042 |
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||
Payments to noncontrolling interests holders |
|
(1,829) |
|
|
(716) |
Net cash used in financing activities |
|
(1,829) |
|
|
(716) |
|
|
|
|
||
NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
7,803 |
|
|
6,320 |
CASH AND CASH EQUIVALENTS – Beginning of period |
|
223,397 |
|
71,347 |
|
CASH AND CASH EQUIVALENTS– End of period |
$ |
231,200 |
|
$ |
77,667 |
|
|||||
Non-cash financing activities – Stock awards accrued |
$ |
358 |
$ |
189 |
|
Non-cash investing activities – Accrued capital expenditures |
$ |
3,938 |
$ |
274 |
|
Prepaid lease payment, prior to lease commencement |
$ |
15,600 |
$ |
- |
|
Right-of-use assets acquired and liabilities incurred upon lease execution |
$ |
- |
$ |
97 |
|
The following table summarizes the impact of the Company’s |
||||||||
retrospective change in accounting principle: |
||||||||
|
Three Months Ended |
|||||||
|
April 30, 2023
|
|||||||
|
As Previously
|
|
Effect of
|
|
As Currently
|
|||
Cost of Sales |
$ |
197,685 |
|
$ |
4,863 |
|
$ |
202,548 |
|
|
|
|
|
|
|||
Gross Profit |
$ |
15,029 |
|
$ |
(4,863) |
|
$ |
10,166 |
|
|
|
|
|
|
|||
Selling, general and administrative expenses |
$ |
(10,632) |
|
$ |
4,863 |
|
$ |
(5,769) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240522575652/en/
Investor
Douglas Bruggeman
Chief Financial Officer
Caldwell Bailey
ICR, Inc.
rexamerican@icrinc.com
Source: REX American Resources Corporation
FAQ
What was REX's net income per share for Q1 2024?
How much did REX's gross profit increase in Q1 2024?
What were REX's net sales and revenue for Q1 2024?
How much did REX's ethanol sales volumes increase in Q1 2024?
When is the construction phase of REX's One Earth Energy carbon capture project scheduled for completion?
What is the budget for REX's One Earth Energy carbon capture project?
How much cash and cash equivalents does REX have?
