8-K
REX AMERICAN RESOURCES Corp (REX)
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): March 26, 2020
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: (937) 276-3931
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o 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 o
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. o
| Item 2.02. Results of Operations and Financial Condition |
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On March 26, 2020, REX American Resources Corporation issued a press release announcing financial results for the three-month and twelve month periods ended January 31, 2020. 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:<br><br> <br><br><br> <br>99 Press Release dated March 26, 2020 |
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: March 26, 2020 | By: | /s/ DOUGLAS L. BRUGGEMAN |
| ---------------------------------------------------- | ||
| Name: Douglas L. Bruggeman | ||
| Title: Vice President - Finance, | ||
| Chief Financial Officer | ||
| and Treasurer |
Exhibit 99
| News Announcement | For Immediate Release |
|---|
REX AMERICAN RESOURCES REPORTS
FOURTH QUARTER DILUTED EPS OF $0.70
Full Year Diluted EPS of $1.18
Dayton, Ohio, (March 26, 2020) -- REX American Resources Corporation (NYSE: REX) (“REX” or “the Company”) today reported financial results for its fiscal 2019 fourth quarter (“Q4 ‘19”) ended January 31, 2020. REX management will host a conference call and webcast today at 11:00 a.m. ET.
| Conference Call:<br><br> <br>Webcast / Replay URL: | 212/231-2904<br><br> <br>www.rexamerican.com/Corp/Page4.aspx<br><br> <br>The webcast will be available for<br> replay for 30 days. |
|---|
REX American Resources’ Q4 ‘19 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 Q4 ‘19 net sales and revenue rose to $120.9 million, compared with $113.3 million in Q4 ‘18. The year-over-year net sales and revenue increase was primarily due to higher ethanol pricing on a year-to-year basis, which more than offset lower dried distillers grains pricing as well as a 9.2% decrease in ethanol gallons sold. Primarily reflecting these factors, which offset a 14.4% year-over-year increase in corn prices, Q4 ‘19 gross profit for the Company’s ethanol and by-products segment rose to $8.1 million, compared with $5.4 million in Q4 ‘18. As a result, the ethanol and by-products segment income before income taxes increased to $5.0 million in Q4 ‘19, compared to $1.4 million in Q4 ‘18. The Company’s refined coal operation incurred a $1.5 million gross loss and a $1.4 million loss before income taxes in Q4 ‘19, compared to a $3.2 million gross loss and a loss before income taxes of $3.3 million in Q4 ‘18. REX reported a Q4 ‘19 income before income taxes and non-controlling interests of $2.8 million, compared with a loss before income taxes and non-controlling interests of $1.7 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 $1.5 million and $4.8 million for Q4 ’19 and Q4 ‘18, respectively.
Net income attributable to REX shareholders in Q4 ‘19 increased to $4.4 million, compared to $1.1 million in Q4 ‘18. Q4 ‘19 basic and diluted net income per share attributable to REX common shareholders was $0.70, compared to net income per share of $0.17 in Q4 ‘18. Per share results in Q4 ‘19 and Q4 ‘18 are based on 6,320,000 and 6,341,000 diluted weighted average shares outstanding, respectively.
-more-
| REX American Resources Q4 ’19 Results, 3/26/20 | page 2 |
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Segment Income Statement Data:
| Three Months<br> <br>Ended | Twelve Months<br> <br>Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | January 31, | January 31, | ||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net sales and revenue: | ||||||||||||
| Ethanol & By-Products ^(1)^ | $ | 120,874 | $ | 113,168 | $ | 417,700 | $ | 485,885 | ||||
| Refined coal ^(2) (3)^ | 46 | 176 | 334 | 786 | ||||||||
| Total net sales and revenue | $ | 120,920 | $ | 113,344 | $ | 418,034 | $ | 486,671 | ||||
| Gross (loss) profit: | ||||||||||||
| Ethanol & By-Products ^(1)^ | $ | 8,090 | $ | 5,381 | $ | 20,402 | $ | 43,856 | ||||
| Refined coal ^(2)^ | (1,497 | ) | (3,163 | ) | (7,917 | ) | (13,641 | ) | ||||
| Total gross profit | $ | 6,593 | $ | 2,218 | $ | 12,485 | $ | 30,215 | ||||
| Income (loss) before income taxes: | ||||||||||||
| Ethanol & By-Products ^(1)^ | $ | 4,979 | $ | 1,354 | $ | 8,469 | $ | 31,545 | ||||
| Refined coal ^(2)^ | (1,428 | ) | (3,317 | ) | (7,778 | ) | (15,204 | ) | ||||
| Corporate and other | (714 | ) | 288 | (1,860 | ) | (1,753 | ) | |||||
| Total income (loss) before income taxes | $ | 2,837 | $ | (1,675 | ) | $ | (1,169 | ) | $ | 14,588 | ||
| Benefit (provision) for income taxes: | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Ethanol & By-Products | $ | 1,688 | $ | (539 | ) | $ | 1,528 | $ | (2,343 | ) | ||
| Refined coal | 1,546 | 4,759 | 10,828 | 24,674 | ||||||||
| Corporate and other | 178 | 354 | 457 | 591 | ||||||||
| Total benefit for income taxes | $ | 3,412 | $ | 4,574 | $ | 12,813 | $ | 22,922 | ||||
| Segment (loss) profit: | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Ethanol & By-Products | $ | 4,756 | $ | (450 | ) | $ | 5,439 | $ | 23,346 | |||
| Refined coal | 182 | 1,597 | 3,391 | 10,148 | ||||||||
| Corporate and other | (536 | ) | (90 | ) | (1,403 | ) | (1,849 | ) | ||||
| Net (loss) income attributable to REX common shareholders | $ | 4,402 | $ | 1,057 | $ | 7,427 | $ | 31,645 | ||||
| (1) | Includes resultsattributable to non-controlling interests of approximately 25% for One Earth and approximately 1% for NuGen. | |||||||||||
| --- | --- | |||||||||||
| (2) | Includes resultsattributable to non-controlling interests of approximately 5%. | |||||||||||
| --- | --- | |||||||||||
| (3) | Refined coal salesare reported net of the cost of coal. | |||||||||||
| --- | --- |
REX American Resources’ Chief Executive Officer, Zafar Rizvi, commented, “The fourth quarter of fiscal 2019 saw the crush spread improve over the year-ago period primarily due to higher ethanol pricing. As a result, we were able to improve the ethanol and by-products segment gross profit by 50%, allowing us to generate $0.70 of income per share. That brings fiscal full year 2019 income per share to $1.18, marking yet another profitable year for the Company.
“We entered fiscal 2020 facing continued challenges, including the recent decline in the crude market and the advent of the COVID-19 pandemic and its impact on fuel demand and the economy at large. These challenges led to further declines in recent crush spread levels which has led to the recent idling of our NuGen plant and which may warrant similar actions at the One Earth plant to help preserve our financial liquidity and flexibility. While the operating environment remains severely challenged at this time, we remain focused on creating shareholder value through our disciplined operating approach, the strength and health of our balance sheet, which includes cash and cash equivalents in excess of $205 million and working capital of $239.5 million, no bank debt and the ongoing authorization from the Board of Directors to purchase up to 350,000 common shares.”
-more-
| REX American Resources Q4 ’19 Results, 3/26/20 | page 3 |
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Balance Sheet
At January 31, 2020, REX had cash and cash equivalents and short-term investment of $205.7 million, $62.3 million of which was at the parent company, and $143.4 million of which was at its consolidated production facilities. This compares with cash, cash equivalents and short-term investments at January 31, 2019, of $203.5 million, $54.8 million of which was at the parent company, and $148.7 million of which was at its consolidated ethanol production facilities.
The following table summarizes select datarelated to REX’s
consolidated alternative energy interests:
| Three Months<br> <br>Ended | Twelve Months<br> <br>Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| January 31, | January 31, | |||||||
| 2020 | 2019 | 2020 | 2019 | |||||
| Average selling price per gallon of ethanol | $ | 1.43 | $ | 1.17 | $ | 1.37 | $ | 1.29 |
| Average selling price per ton of dried distillers grains | $ | 138.19 | $ | 143.20 | $ | 137.68 | $ | 142.20 |
| Average selling price per pound of non-food <br>grade corn oil | $ | 0.24 | $ | 0.25 | $ | 0.25 | $ | 0.25 |
| Average selling price per ton of modified distillers grains | $ | 59.62 | $ | 58.30 | $ | 59.66 | $ | 59.42 |
| Average cost per bushel of grain | $ | 3.90 | $ | 3.41 | $ | 3.82 | $ | 3.46 |
| Average cost of natural gas (per mnbtu) | $ | 3.17 | $ | 4.07 | $ | 3.04 | $ | 3.33 |
Supplemental data related to REX’salternative energy interests:
| REXAmerican Resources Corporation Ethanol Ownership Interests/Effective Annual Gallons Shipped as of January 31, 2020<br> <br>(gallons in millions) | |||||||
|---|---|---|---|---|---|---|---|
| ****<br><br>Entity | Trailing <br><br>Twelve <br><br>Months <br><br>Gallons <br><br>Shipped | Current<br><br><br><br>REX<br><br><br><br>Ownership<br><br><br>Interest | REX’s Current Effective Ownership of Trailing Twelve Month Gallons Shipped | ||||
| One Earth Energy, LLC (Gibson City, IL) | 140.5 | 75.2 | % | 105.7 | |||
| NuGen Energy, LLC (Marion, SD) | 94.8 | 99.5 | % | 94.3 | |||
| Big River Resources West Burlington, LLC (West Burlington, IA) | 111.6 | 10.3 | % | 11.5 | |||
| Big River Resources Galva, LLC (Galva, IL) | 121.2 | 10.3 | % | 12.5 | |||
| Big River United Energy, LLC (Dyersville, IA) | 131.8 | 5.7 | % | 7.5 | |||
| Big River Resources Boyceville, LLC<br> <br>(Boyceville, WI) | 60.1 | 10.3 | % | 6.2 | |||
| Total | 660.0 | n/a | 237.7 |
-more-
| REX American Resources Q4 ’19 Results, 3/26/20 | page 4 |
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Fourth 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 212/231-2904 (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 660 million gallons of ethanol over the twelve-month period ended January 31, 2020. REX’s effective ownership of the trailing twelve-month gallons shipped (for the twelve months ended January 31, 2020) by the ethanol production facilities in which it has ownership interests was approximately 238 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 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<br><br> <br>Chief Financial Officer<br><br> <br>(937) 276-3931 | Joseph Jaffoni, Norberto Aja<br><br> <br>JCIR<br><br> <br>(212) 835-8500<br><br> <br>[email protected] |
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- statements of operations follow -
| REX American Resources Q4 ’19 Results, 3/26/20 | page 5 |
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REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share amounts)
Unaudited
| Three Months<br> <br>Ended | Twelve Months<br> <br>Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| January 31, | January 31, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net sales and revenue | $ | 120,920 | $ | 113,344 | $ | 418,034 | $ | 486,671 | ||||
| Cost of sales | 114,327 | 111,126 | 405,549 | 456,456 | ||||||||
| Gross profit | 6,593 | 2,218 | 12,485 | 30,215 | ||||||||
| Selling, general and administrative expenses | (5,629 | ) | (4,476 | ) | (19,258 | ) | (20,551 | ) | ||||
| Equity in income (loss) of unconsolidated ethanol affiliates | 1,042 | (646 | ) | 1,392 | 1,536 | |||||||
| Interest and other income, net | 831 | 1,229 | 4,212 | 3,388 | ||||||||
| Income (loss) before income taxes and non-controlling interests | 2,837 | (1,675 | ) | (1,169 | ) | 14,588 | ||||||
| Benefit for income taxes | 3,412 | 4,574 | 12,813 | 22,922 | ||||||||
| Net income including non-controlling interests | 6,249 | 2,899 | 11,644 | 37,510 | ||||||||
| Net income attributable to non-controlling interests | (1,847 | ) | (1,842 | ) | (4,217 | ) | (5,865 | ) | ||||
| Net income attributable to REX common shareholders | $ | 4,402 | $ | 1,057 | $ | 7,427 | $ | 31,645 | ||||
| Weighted average shares outstanding – basic and diluted | 6,320 | 6,341 | 6,318 | 6,440 | ||||||||
| Basic and diluted net income per share attributable to REX common shareholders | $ | 0.70 | $ | 0.17 | $ | 1.18 | $ | 4.91 |
- balance sheets follow -
| REX American Resources Q4 ’19 Results, 3/26/20 | page 6 |
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REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
Unaudited
| ASSETS**** | January 31,<br> 2020 | January 31,<br> 2019 | ||||
|---|---|---|---|---|---|---|
| CURRENT ASSETS: | ||||||
| Cash and cash equivalents | $ | 179,658 | $ | 188,531 | ||
| Restricted cash | 1,113 | 281 | ||||
| Short-term investments | 26,073 | 14,975 | ||||
| Accounts receivable | 12,969 | 11,378 | ||||
| Inventory | 35,634 | 18,477 | ||||
| Refundable income taxes | 6,029 | 7,695 | ||||
| Prepaid expenses and other | 9,659 | 9,284 | ||||
| Total current assets | 271,135 | 250,621 | ||||
| Property and equipment-net | 163,327 | 182,521 | ||||
| Operating lease right-of-use assets | 16,173 | — | ||||
| Other assets | 17,403 | 6,176 | ||||
| Equity method investment | 32,464 | 32,075 | ||||
| TOTAL ASSETS | $ | 500,502 | $ | 471,393 | ||
| LIABILITIES AND EQUITY | ||||||
| CURRENT LIABILITIES: | ||||||
| Accounts payable – trade | $ | 18,900 | $ | 7,463 | ||
| Current operating lease liabilities | 4,935 | — | ||||
| Accrued expenses and other current liabilities | 7,764 | 9,546 | ||||
| Total current liabilities | 31,599 | 17,009 | ||||
| LONG TERM LIABILITIES: | ||||||
| Deferred taxes | 4,334 | 4,185 | ||||
| Long-term operating lease liabilities | 10,688 | — | ||||
| Other long-term liabilities | 275 | 4,928 | ||||
| Total long-term liabilities | 15,297 | 9,113 | ||||
| COMMITMENTS AND CONTINGENCIES EQUITY: | ||||||
| REX shareholders’ equity: | ||||||
| Common stock, 45,000 shares authorized, 29,853 shares issued at par | 299 | 299 | ||||
| Paid in capital | 148,789 | 148,273 | ||||
| Retained earnings | 586,985 | 579,558 | ||||
| Treasury stock, 23,561 and 23,580 shares, respectively | (335,066 | ) | (335,193 | ) | ||
| Total REX shareholders’ equity | 401,007 | 392,937 | ||||
| Non-controlling interests | 52,599 | 52,334 | ||||
| Total equity | 453,606 | 445,271 | ||||
| TOTAL LIABILITIES AND EQUITY | $ | 500,502 | $ | 471,393 |
- statements of cash flows follow -
| REX American Resources Q4 ’19 Results, 3/26/20 | page 7 |
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REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
Unaudited
| Fiscal Years Ended <br> January 31, | ||||||
|---|---|---|---|---|---|---|
| 2020 | 2019 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
| Net income | $ | 11,644 | $ | 37,510 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation | 23,007 | 24,828 | ||||
| Amortization of operating lease right-of-use assets | 6,304 | — | ||||
| Stock based compensation expense | 397 | 669 | ||||
| Income from equity method investments | (1,392 | ) | (1,536 | ) | ||
| Dividends received from equity method investments | 1,003 | 4,010 | ||||
| Interest income from investments | (73 | ) | (1,077 | ) | ||
| Deferred income tax | (11,070 | ) | (23,364 | ) | ||
| Loss on disposal of property and equipment | — | 104 | ||||
| Changes in assets and liabilities: | ||||||
| Accounts receivable | (1,591 | ) | 1,535 | |||
| Inventory | (17,157 | ) | 2,278 | |||
| Prepaid expenses and other assets | (752 | ) | 5,217 | |||
| Income taxes refundable | 1,666 | (1,083 | ) | |||
| Accounts payable-trade | 11,400 | 339 | ||||
| Other liabilities | (13,043 | ) | (1,499 | ) | ||
| Net cash provided by operating activities | 10,343 | 47,931 | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
| Capital expenditures | (3,776 | ) | (10,775 | ) | ||
| Purchases of short-term investments | (26,025 | ) | (125,989 | ) | ||
| Sales of short-term investments | 15,000 | 112,091 | ||||
| Restricted investments and deposits | — | 5 | ||||
| Loan receivable repayments | 369 | 27 | ||||
| Net cash used in investing activities | (14,432 | ) | (24,641 | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
| Treasury stock acquired | — | (21,855 | ) | |||
| Payments to noncontrolling interests holders | (4,264 | ) | (4,489 | ) | ||
| Capital contributions from minority investor | 312 | 524 | ||||
| Net cash used in financing activities | (3,952 | ) | (25,820 | ) | ||
| NET DECREASE IN CASH, CASH EQUIVALENTS <br> AND RESTRICTED CASH | (8,041 | ) | (2,530 | ) | ||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of period | 188,812 | 191,342 | ||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of period | $ | 180,771 | $ | 188,812 | ||
| Non cash financing activities – Stock awards issued | $ | 487 | $ | 1,473 | ||
| Non cash financing activities – Stock awards accrued | $ | 241 | $ | 487 | ||
| Non cash investing activities – Accrued capital expenditures | $ | 37 | $ | — | ||
| Initial operating lease right-of-use assets and liabilities recorded upon adoption of ASC 842 | $ | 20,918 | $ | — | ||
| Operating lease right-of-use<br> assets acquired and liabilities assumed upon lease execution | $ | 432 | $ | — |