Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 22, 2024

 

REX AMERICAN RESOURCES CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware		001-09097		31-1095548
(State or other jurisdiction		(Commission File No.)		(IRS Employer Identification No.)
of incorporation)

 

7720 Paragon Road Dayton, Ohio		45459
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: [phone]

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Commons stock, $0.01 par value	REX	New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company    ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Item 2.02. Results of Operations and Financial Condition

 

On May 22, 2024, REX American Resources Corporation issued a press release announcing financial results for the three-month period ended April 30, 2024. The press release is furnished as Exhibit 99 to this report.

 

Item 9.01. Financial Statements and Exhibits

 

		(c)	Exhibits. The following exhibits are furnished with this report:
			99   Press Release dated May 22, 2024
			104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	REX AMERICAN RESOURCES CORPORATION
Date: May 22, 2024	By:	/s/ DOUGLAS L. BRUGGEMAN
		Name:	Douglas L. Bruggeman
		Title:	Vice President - Finance,
			Chief Financial Officer
			and Treasurer

Exhibit 99

 

 

REX American Resources Reports Fiscal 2024 First Quarter Net Income Per Share Attributable to REX Common Shareholders of $0.58

 

Construction phase of carbon capture and compression facility scheduled for completion in July

 

Announces securing of 100% of rights of way for carbon capture pipeline

 

§

Generated $0.58 of net income per share in Fiscal Q1 ‘24, the second best first quarter result in Company history

§

Reported gross profit of $14.5 million for Fiscal Q1 ‘24, an increase of more than 42% over the same period in Fiscal 2023

§

Reported net sales and revenue of $161.2 million for Fiscal Q1 ‘24, a decrease of approximately 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

 

Dayton, OH - Wednesday, May 22, 2024 - REX American Resources Corporation (“REX” or the “Company”) (NYSE: REX), a leading ethanol production company, today announced financial and operational results for the Company’s fiscal first quarter 2024.

 

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 $161.2 million, compared with $212.7 million for fiscal first quarter 2023. The year-over-year net sales and revenue decrease primarily reflects reduced pricing for ethanol and co-products. Fiscal first quarter 2024 gross profit for the Company was $14.5 million, compared with $10.2 million in fiscal first quarter 2023, reflecting decreased corn and natural gas prices and increased production levels. Interest and other income for the first fiscal quarter 2024 was $5.9 million, compared to $2.8 million for first fiscal quarter 2023. These increases led to higher fiscal first quarter 2024 income before income taxes and non-controlling interests of $16.0 million, compared with $8.7 million in the prior year period.

 

Net income attributable to REX shareholders in fiscal first quarter 2024 was $10.2 million, compared to $5.2 million in fiscal first quarter 2023. Fiscal first quarter 2024 diluted net income per share attributable to REX common shareholders was $0.58, compared to $0.30 per share in fiscal first quarter 2023. Per share results for fiscal first quarters 2024 and 2023 are based on 17,664,000 and 17,439,000 diluted weighted average shares outstanding, respectively.

 

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 100% of the necessary rights of way for the planned 6-mile carbon transport pipeline, which would carry captured CO₂ from the capture and compression facility to the planned injection wells. Permitting for the carbon transport pipeline is ongoing with the Illinois Commerce Commission.

 

REX has also secured easements for more than 100% of the subsurface area around the first planned injection well, necessary to allow the Company to sequester all carbon emissions from the One Earth Energy facility over the next 15 years, at a minimum, based on modeling.

 

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 $78.1 million. The Company is currently budgeting $165-$175 million for this project.

 

Balance Sheet

 

At the end of fiscal first quarter 2024 on April 30, 2024, REX had $351.8 million of cash, cash equivalents, and short-term investments available and no bank debt.

 

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 100% of the land for our carbon pipeline rights of way, as well as the necessary subsurface easements to allow our first injection well to sequester all the carbon emissions from our One Earth ethanol operations for 15 years, are major achievements, and ones in which we were able to partner with our neighbors. We look forward to continuing these partnerships as we attempt to move toward project completion,” concluded Mr. Rizvi.

 

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 [phone] (US) or [phone] (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 [phone] (US) or [phone] (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 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.

 

Investor Contacts

Douglas Bruggeman
Chief Financial Officer

 

Caldwell Bailey
ICR, Inc.
[e-mail]

 

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 Reported					Effect of Change					As Currently Reported
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)

 

Source: REX American Resources Corporation

Document And Entity Information	May 22, 2024
Document Information Line Items
Entity Registrant Name	REX AMERICAN RESOURCES CORPORATION
Trading Symbol	REX
Document Type	8-K
Amendment Flag	false
Entity Central Index Key	0000744187
Document Period End Date	May 22, 2024
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	DE
Entity File Number	001-09097
Entity Tax Identification Number	31-1095548
Entity Address, Address Line One	7720 Paragon Road
Entity Address, City or Town	Dayton
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	45459
City Area Code	937
Local Phone Number	276-3931
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Commons stock, $0.01 par value
Security Exchange Name	NYSE

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