REX American Resources (US:REX)2023-05-26 16:44Financial Performance - Net sales and revenue for the quarter ended April 30, 2023, increased approximately 10% to $212.7 million compared to $194.2 million in the same period of 2022[98]. - Gross profit for Q1 FY 2023 increased by approximately $3.1 million compared to Q1 FY 2022[106]. - Net income for Q1 FY 2023 was approximately $6.7 million, compared to approximately $7.0 million in Q1 FY 2022[114]. - Net cash used in operating activities was approximately $10.6 million in Q1 FY 2023, an improvement from approximately $17.7 million in Q1 FY 2022[116]. - Working capital increased to approximately $324.8 million as of April 30, 2023, compared to approximately $318.0 million at January 31, 2023[119]. - Cash provided by investing activities was approximately $21.0 million in Q1 FY 2023, compared to cash used of approximately $142.8 million in Q1 FY 2022[120]. Sales and Revenue Drivers - Ethanol sales increased by 11% in quantity sold, contributing to revenue growth despite a lower average selling price per gallon of ethanol, which was $2.21 compared to $2.28 in the prior year[99][100]. - The average selling price per ton of dried distillers grains increased by 12% to $244.85, with tons sold rising by 11%[101]. - Distillers corn oil sales saw a 16% increase in pounds sold compared to the prior year[102]. - The average selling price per pound of distillers corn oil remained stable at $0.63, with a total of 20.6 million pounds sold[99]. Costs and Expenses - Cost of sales rose approximately 8% to $197.7 million, with corn accounting for about 83% ($163.9 million) of total costs, reflecting higher average corn prices and usage[105]. - SG&A expenses were approximately $10.6 million in Q1 FY 2023, up from approximately $5.2 million in Q1 FY 2022, primarily due to increased outbound freight expenses[108]. Investments and Income - Income from equity investment in Big River was approximately $1.5 million in Q1 FY 2023, down from approximately $2.0 million in Q1 FY 2022[110]. - Interest and other income rose to approximately $2.8 million in Q1 FY 2023 from approximately $0.2 million in Q1 FY 2022, driven by higher interest income[111]. Future Outlook and Projects - The company is in the exploratory stage of a carbon sequestration project, having drilled a test well and applied for a Class VI injection well permit with the EPA[86]. - The Inflation Reduction Act of 2022 may create a new Clean Fuel Production Credit and increase the carbon capture tax credit from $50 to $85 per metric ton, potentially benefiting the company's operations[96]. - The company utilizes forward contracts and commodity futures to manage risks related to commodity price volatility, but cannot predict future realized crush spreads beyond four months[85]. - Capital expenditures for Q1 FY 2023 were approximately $4.2 million, with expectations of $60 million to $70 million for the remainder of the fiscal year[120]. Stock and Shareholder Actions - The company has a stock buyback program with 876,786 shares remaining authorized as of April 30, 2023[123].