REX American Resources Corp. has released first quarter financial results, reporting net sales and revenue of $105.2 million, down from $155.9 million during the same quarter of the prior year. The decrease is primarily attributed to reduced ethanol and distillers grains pricing.
As a result of ethanol crush spread margins and distillers grains pricing declines, the company&rsquo;s gross profit was $9.1 million, compared to $36.6 million during the first quarter of 2014. First quarter equity in income of unconsolidated ethanol facilities was $1.5 million, compared to $8.3 million during the first quarter of the previous year. Net income from continuing operations before income taxes and non-controlling interests was $6.9 million, compared to $38.1 million during the same three months of 2014.
Net income attributable to REX shareholders was $3.9 million, down from $21.7 million for the first quarter of 2014. First quarter diluted net income per share attributable to REX common shareholders was 50 cents per share during the first quarter of this year, compared to $2.67 per share during the same period of last year.
&ldquo;The first quarter was a challenging period for the ethanol industry, as high ethanol inventory levels and volatile energy markets resulted in lower production margins,&rdquo; said Stuart Rose, CEO of REX. &ldquo;In spite of these challenges, REX was able to partially offset these headwinds by leveraging the strategic location of our plants, our operating disciplines and overall business model to continue to generate profitable operating results.&rdquo;
While many other public companies lost money during the first quarter, Rose stressed that REX did show some profit. Moving into the second quarter, he indicated crush spreads have stabilized and are improving. Is also noted that low oil prices are putting pressure on E85 sales throughout the industry and briefly discussed the impacts of high ethanol inventory levels and the U.S. EPA&rsquo;s delays with regard to setting renewable volume requirements (RVOs) under the renewable fuel standard (RFS). However, he also added that low gas prices are increasing gasoline demand, which is expected to increase ethanol demand.
In terms of big events that took place during the first quarter, Rose highlighted REX&rsquo;s decision to sell its minority interest in Patriot Holdings LLC. Earlier this year, Patriot&rsquo;s board of directors approved a merger agreement with a subsidiary of CHS Inc. that is expected to result in CHS acquiring 100 percent of the ownership interest in Patriot. According Rose, REX is expected to receive approximately $44 million for its minority interest in Patriot. He also noted that REX was one of the bidders on the transaction and hoped to possibly purchase Patriot, but was outbid. He added that the selling price REX&rsquo;s minority interest was actually higher than the price REX was willing to pay for the whole Patriot plant.
Regarding expansion plans, Rose said REX continues to be explore the possibility of purchasing existing ethanol plants and is also exploring the option of building a new plant. In addition, the company is considering other alternative energy investments.&nbsp;
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REX American Resources Corp. has released first quarter financial results, reporting net sales and revenue of $105.2 million, down from $155.9 million during the same quarter of the prior year. The company did, however, report a profitable quarter. 

REX reports profitable first quarter

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