See notes to consolidated financial statements.
See notes to consolidated financial statements.
See notes to consolidated financial statements.
See notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Principles of Consolidation
– The accompanying financial statements consolidate the operating results and financial position of REX American
Resources Corporation and its wholly-owned and majority owned subsidiaries (the “Company” or “REX”). All
intercompany balances and transactions have been eliminated. As of January 31, 2023, the Company owns interests in three operating
entities – two are consolidated and one is accounted for using the equity method of accounting. The results of One Earth
are included on a delayed basis of one month lag as One Earth has a fiscal year end of December 31. The other consolidated entity
has the same fiscal year end as the parent company.
Stock Split –
On June 21, 2022, the Board of Directors of the Company adopted resolutions declaring a three-for-one split of the Company’s
Common Stock to be effectuated in the form of a 200% stock dividend, payable on August 5, 2022 to stockholders of record at the
close of business on July 29, 2022. The stock split has been retroactively reflected in the accompanying consolidated financial
statements.
Fiscal Year – All
references in these consolidated financial statements to a particular fiscal year are to the Company’s fiscal year ended
January 31. The Company refers to its fiscal year by reference to the year immediately preceding the January 31 fiscal year end
date. For example, “fiscal year 2022” means the period February 1, 2022 to January 31, 2023.
Segments –
Beginning in the third quarter of 2021, the Company has one reportable segment, ethanol and by-products. Within the ethanol and
by-products segment, the Company has equity investments in three ethanol limited liability companies, two of which are majority
ownership interests. Prior period amounts have been reclassified to conform to current segment reporting.
In applying the criteria set forth
in ASC 280, the Company determined that based on the nature of the products and production process and the expected financial results,
the Company’s operations at its ethanol plants are aggregated into one reporting segment.
Use of Estimates –
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash Equivalents –
Cash equivalents are principally short-term investments with original maturities of three months or less. The carrying
amount of cash equivalents approximates fair value.
Concentrations of Risk –The
Company maintains cash and cash equivalents in accounts with financial institutions which exceed federally insured limits. The
Company has not experienced any losses in such accounts. The Company does not believe there is significant credit risk related
to its cash and cash equivalents.
The Company sells its products
to a limited number of larger commercial buyers, which may increase the chance of loss due to non-performance by a counterparty.
Eight (fiscal year 2022), nine (fiscal year 2021), and seven (fiscal year 2020) customers accounted for approximately 90%, 85%,
and 89% of the
Company’s net sales and revenue
during fiscal years 2022, 2021, and 2020, respectively. At January 31, 2023 and 2022, four and five customers represented approximately
81% and 82%, respectively, of the Company’s accounts receivable balance. The Company has not experienced any significant
losses in such accounts.
Inventory –
Inventories are carried at the lower of cost or net realizable value. Cost for all inventories is determined using the first-in,
first-out method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonable predictable
costs of completion, disposal and transportation. Inventory includes direct production costs and certain overhead costs such as
depreciation, property taxes and utilities related to producing ethanol and related by-products and refined coal. Inventory is
permanently written down for instances when cost exceeds estimated net realizable value; such write-downs are based primarily upon
commodity prices as the market value of inventory is often dependent upon changes in commodity prices. The company recorded approximately
$0.7 and $0.5 million of inventory write-downs in cost of sales at January 31, 2023 and January 31, 2022, respectively. Fluctuations
in the write-down of inventory generally relate to the levels and composition of such inventory at a given point in time and commodity
prices. The components of inventory are as follows (amounts in thousands):
| |
January 31, | |
| |
2023 | | |
2022 | |
Ethanol and other finished goods | |
$ | 12,695 | | |
$ | 13,158 | |
Work in process | |
| 10,194 | | |
| 5,473 | |
Grain and other raw materials | |
| 25,855 | | |
| 23,594 | |
| |
| | | |
| | |
Total | |
$ | 48,744 | | |
$ | 42,225 | |
Property and Equipment –
Property and equipment is recorded at cost or the fair value on the date of acquisition (for property and equipment acquired
in a business combination). Depreciation is computed using the straight-line method. Estimated useful lives are 15 to 40 years
for buildings and improvements, and 3 to 20 years for fixtures and equipment. The components of property and equipment are as follows
(amounts in thousands):
| |
January 31, | |
| |
2023 | | |
2022 | |
Land and improvements | |
$ | 30,194 | | |
$ | 27,329 | |
Buildings and improvements | |
| 23,707 | | |
| 23,617 | |
Machinery, equipment and fixtures | |
| 299,665 | | |
| 296,243 | |
Construction in progress | |
| 10,255 | | |
| 1,515 | |
| |
| | | |
| | |
| |
| 363,821 | | |
| 348,704 | |
Less: accumulated depreciation | |
| (228,324 | ) | |
| (211,150 | ) |
| |
| | | |
| | |
Total | |
$ | 135,497 | | |
$ | 137,554 | |
In accordance with ASC 360-05 “Impairment
or Disposal of Long-Lived Assets”, the carrying value of long-lived assets is assessed for recoverability by management
when changes in circumstances indicate that the carrying amount may not be recoverable.
Impairment of Long-Lived Assets
The Company reviews its long-lived
assets, consisting of property and equipment, equity method investments and operating lease right-of-use assets, for impairment
whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. The Company assesses
long-lived assets for impairment by first determining the forecasted, undiscounted cash flows the asset group is expected to generate.
If this total is less than the carrying value of the asset, the Company will then determine the fair value of the asset group.
An impairment loss would be recognized in the amount by which the carrying amount of the asset exceeded the fair value of the asset.
Significant management judgement is required to determine the fair value of long-lived assets, which includes discounted cash flows.
Such estimates could be significantly affected by future changes in market conditions. The Company recorded no impairment charges
in fiscal years 2022, 2021, and 2020. During fiscal year 2020, the Company concluded the impact of the COVID-19 pandemic on the
ethanol industry and the Company’s operating results was an indicator that impairment may exist related to certain of its
long-lived assets. As a result, the Company performed a recoverability test and determined that there was no impairment.
Depreciation expense was approximately
$18.0 million, $18.0 million, and $18.1 million in fiscal years 2022, 2021, and 2020, respectively.
Investments – The
method of accounting applied to long-term investments, whether consolidated, equity or cost, involves an evaluation of the significant
terms of each investment that explicitly grant or suggest evidence of control or influence over the operations of the investee
and also includes the identification of any variable interests in which the Company is the primary beneficiary. The Company accounts
for investments in limited liability companies in which it may have a less than 20% ownership interest, using the equity method
of accounting when the factors discussed in ASC 323 “Investments-Equity Method and Joint Ventures” are met.
The excess of the carrying value over the underlying equity in the net assets of equity method investees is allocated to specific
assets and liabilities. Investments in businesses that the Company does not control but for which it has the ability to exercise
significant influence over operating and financial matters are accounted for using the equity method. The Company accounts for
its investment in Big River using the equity method of accounting and includes the results of Big River on a delayed basis of one
month as it has a fiscal year end of December 31.
The Company periodically evaluates
its investments for impairment due to declines in market value considered to be other than temporary. Such impairment evaluations
include, in addition to persistent, declining market prices, general economic and company-specific evaluations. If the Company
determines that a decline in market value is other than temporary, then a charge to earnings is recorded in the Consolidated Statements
of Operations and a new cost basis in the investment is established.
Short-term investments, consisting of U.S. government
obligations and certificates of deposit, are considered held-to-maturity, and therefore are carried at amortized historical cost.
Revenue Recognition
– The Company recognizes sales of ethanol, distillers grains and non-food grade corn oil when obligations under the terms
of the respective contracts with customers are satisfied; this occurs with the transfer of control of products, generally upon
shipment from the ethanol plant or upon loading of the rail car used to transport the products.
Cost of Sales – Cost
of sales includes depreciation, costs of raw materials, inbound freight charges, purchasing and receiving costs, inspection costs,
other distribution expenses, warehousing costs, plant repair and maintenance costs, plant management, certain compensation costs
and general facility overhead charges.
SG&A Expenses –
The Company includes non-production related costs such as professional fees, outbound freight charges, selling charges
and certain payroll in SG&A expenses. Outbound freight charges were approximately $6,901,000, $7,321,000, and $3,482,000 in
fiscal years 2022, 2021, and 2020, respectively.
Financial Instruments
– Certain of the forward grain purchase and ethanol, distillers grains and non-food grade corn oil sale contracts are accounted
for under the “normal purchases and normal sales” scope exemption of ASC 815, because these arrangements are for purchases
of grain that will be delivered in quantities expected to be used and sales of ethanol, distillers grains and non-food grade corn
oil that will be produced in quantities expected to be sold by us over a reasonable period of time in the normal course of business.
During fiscal years 2022, 2021, and 2020 there were no material settlements of forward contracts that were recorded at fair value.
The Company recorded an asset and liability of $0.1 million and $0.4 million, respectively, associated with contracts not accounted
for under the “normal purchases and normal sales” scope exception of ASC 815 at January 31, 2023. The Company recorded
an asset of approximately $1.0 million at January 31, 2022 associated with contracts not accounted for under the “normal
purchases and normal sales” scope exemption of ASC 815.
The Company uses derivative financial
instruments (exchange-traded futures contracts and swaps) to manage a portion of the risk associated with changes in commodity
prices, primarily related to corn and ethanol. The Company monitors and manages this exposure as part of its overall risk management
policy. As such, the Company seeks to reduce the potentially adverse effects that the volatility of these markets may have on its
operating results. The Company may take hedging positions in these commodities as one way to mitigate risk. While the Company attempts
to link its hedging activities to purchase and sale activities, there are situations in which these hedging activities can themselves
result in losses. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. The
changes in fair value of these derivative financial instruments are recognized in current period earnings as the Company does not
use hedge accounting.
Stock Compensation –
The Company has a stock-based compensation plan, approved by its shareholders, which reserved a total of 1,650,000 shares of common
stock for issuance pursuant to its terms. The plan provides for the granting of shares of stock, including options to purchase
shares of common stock, stock appreciation rights tied to the value of common stock, restricted stock, and restricted stock unit
awards to eligible employees, non-employee directors and consultants. The Company measures share-based compensation grants at fair
value on the grant date, adjusted for estimated forfeitures. The Company records noncash compensation expense related to equity
and liability awards in its consolidated financial statements over the requisite service period on a straight-line basis. See Note
10 for a further discussion of restricted stock.
Other Income –
As part of the Coronavirus Aid, Relief, and Economic Security Act, passed in
2020, $700 million in funds were made available to the U.S. Department of Agriculture to distribute to impacted producers of ethanol,
biodiesel, and other renewable fuels under the Biofuel Producer Program. The U.S. Department of Agriculture (“USDA”)
distributed funds to applicants in May 2022. Our consolidated plants received a total of approximately $7.8 million from this program,
which was recorded within “Interest and other income, net” in the Consolidated Statements of Operations for fiscal
year 2022. The Company has no further reporting or other obligations related to the receipt of these funds.
Income Taxes –
The Company provides for deferred tax liabilities and assets for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and
tax credit carryforwards. The Company provides for a valuation allowance if, based on the weight of available positive and negative
evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company’s annual
effective tax rate includes the impact of research and experimentation credits.
Comprehensive Income
– The Company has no components of other comprehensive income, and therefore, comprehensive income equals net income.
New Accounting Pronouncements
– In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
(“ASU”) 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”, which simplifies
the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The Company adopted this
update effective February 1, 2021. The adoption of this update did not impact the consolidated financial statements.
In November 2021, the FASB issued
ASU 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance”, which
increases the transparency of government assistance received by businesses by expanding the disclosure requirements for annual
reporting periods. The Company adopted this update effective February 1, 2022 by providing all disclosures required related to
government assistance. The adoption of this update did not materially impact the consolidated financial statements.
The Company recognizes sales of
products when obligations under the terms of the respective contracts with customers are satisfied. This occurs with the transfer
of control of products, generally upon shipment from the ethanol plant or upon loading of the rail car used to transport the products.
Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods. Sales, value added
and other taxes the Company collects concurrent with revenue producing activities are excluded from net sales and revenue.
The majority of the Company’s
sales have payment terms ranging from 5 to 10 days after transfer of control. The Company has determined that sales contracts do
not generally include a significant financing component. The Company has not historically, and does not intend to, enter sales
contracts in which payment is due from a customer prior to transferring product to the customer. Thus, the Company does not record
unearned revenue.
The following table shows disaggregated
revenue by product (amounts in thousands):
| |
Fiscal Year | |
| |
2022 | | |
2021 | | |
2020 | |
Sales of products, continuing
operations: | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
Ethanol | |
$ | 649,501 | | |
$ | 613,597 | | |
$ | 284,191 | |
Dried distillers grains | |
| 139,118 | | |
| 125,009 | | |
| 71,774 | |
Non-food grade corn oil | |
| 55,595 | | |
| 38,852 | | |
| 15,066 | |
Modified distillers grains | |
| 11,579 | | |
| 9,104 | | |
| 2,626 | |
Derivative financial instruments losses | |
| (1,024) | | |
| (12,109) | | |
| (1,167) | |
Other | |
| 231 | | |
| 349 | | |
| 174 | |
Total sales | |
$ | 855,000 | | |
$ | 774,802 | | |
$ | 372,664 | |
| |
| | | |
| | | |
| | |
Sales of products, discontinued
operations: | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
Refined coal1 | |
$ | - | | |
$ | 400 | | |
$ | 182 | |
1 Refined coal sales were recorded net of the
cost of coal as the Company purchased the coal feedstock from the same customer to which the processed refined coal was sold.
Equity Method Investment in
Big River
The Company’s equity method
investment in Big River is accounted for under ASC 323. The following table summarizes the investment (amounts in thousands):
| |
January 31, | |
| |
2023 | | |
2022 | |
| |
| | | |
| | |
Carrying amount | |
$ | 33,045 | | |
$ | 30,566 | |
| |
| | | |
| | |
Ownership percentage | |
| 10.3% | | |
| 10.3% | |
The Company invested approximately
$20.0 million in Big River which is a holding company for several entities. Big River, through its various entities (both wholly
and partially owned), operates four ethanol manufacturing facilities, that combined shipped approximately 425.4 million gallons
of ethanol in the twelve months ended January 31, 2023. The Company recorded income of approximately $8.7 million, $6.6 million,
and $0.5 million as its share of earnings from Big River during fiscal years 2022, 2021, and 2020, respectively. The Company received
dividends of approximately $6.3 million, $5.5 million, and $3.5 million from Big River during fiscal years 2022, 2021, and 2020,
respectively. At January 31, 2023, the carrying value of the investment in Big River was approximately $33.0 million; the amount
of underlying equity in the net assets of Big River was approximately $31.5 million.
Summarized financial information
for the Company’s equity method investee as of and for its fiscal year end is presented in the following tables (amounts
in thousands):
| |
December 31, | |
| |
2022 | | |
2021 | |
| |
| | |
| |
Current assets | |
$ | 319,367 | | |
$ | 310,411 | |
Non current assets | |
| 151,039 | | |
| 146,384 | |
Total assets | |
$ | 470,406 | | |
$ | 456,795 | |
Current liabilities | |
$ | 118,946 | | |
$ | 131,317 | |
Long-term liabilities | |
| 8,686 | | |
| - | |
Total liabilities | |
$ | 127,632 | | |
$ | 131,317 | |
Noncontrolling interests | |
$ | 37,326 | | |
$ | 36,786 | |
| |
Years Ended December 31, | |
| |
2022 | | |
2021 | | |
2020 | |
| |
| | |
| | |
| |
Net sales and revenue | |
$ | 1,509,406 | | |
$ | 1,332,555 | | |
$ | 736,225 | |
Gross profit | |
$ | 94,106 | | |
$ | 85,401 | | |
$ | 18,858 | |
Income from continuing operations | |
$ | 84,814 | | |
$ | 64,243 | | |
$ | 4,850 | |
Net income | |
$ | 84,814 | | |
$ | 64,243 | | |
$ | 4,850 | |
Big River has debt agreements that
limit and restrict amounts the entity can pay in the form of dividends or advances to owners. The restricted net assets of Big
River at January 31, 2023 are approximately $113.4 million; the Company’s proportionate share of restricted net assets of
Big River is approximately $11.7 million.
Short-term Investments
At January 31, 2023, the Company
owned United States Treasury Bills (classified as short-term investments) that had an amortized cost, or carrying value, of approximately
$211.3 million. The contractual maturity of these investments was less than one year. The yield to maturity rate was approximately
3.9%. Unrealized gains or losses were insignificant.
At January 31, 2022, the Company
owned certificates of deposit (classified as short-term investments) that had an amortized cost, or carrying value, of approximately
$25.9 million. The contractual maturity of these investments was less than one year. The yield to maturity rate was approximately
0.1%. Unrealized gains or losses were insignificant.
The Company applies ASC 820, “Fair
Value Measurements and Disclosures” (“ASC 820”) which defines fair value as the exchange price that would
be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset
or liability in an orderly transaction between market participants on the measurement date.
The Company determines the fair
market values of its financial instruments based on the fair value hierarchy established by ASC 820, which requires an entity to
maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes
three levels of inputs that may be used to measure fair values which are provided below. The Company carries certain cash equivalents,
investments and derivative financial instruments at fair value.
Level 1 –
Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities
and derivative contracts that are traded in an active exchange market, as well as certain U.S. Treasury securities that are highly
liquid and are actively traded in over-the-counter markets.
Level 2 –
Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that
are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full
term of the assets or liabilities. Level 2 assets and liabilities include derivative contracts whose value is determined using
a pricing model with inputs that are observable in the market or can be derived principally or corroborated by observable market
data.
Level 3 –
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets
or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted
cash flow methods, or similar techniques, as well as instruments for which the determination of fair value requires significant
management judgment or estimation. Unobservable inputs are developed based on the best information available, which may include
the Company’s own data.
The fair values of derivative assets
and liabilities traded in the over-the-counter market are determined using quantitative models that require the use of multiple
market inputs including interest rates, prices and indices to generate pricing and volatility factors, which are used to value
the position. The predominance of market inputs are actively quoted and can be validated through external sources, including brokers,
market transactions and third-party pricing services. Estimation risk is greater for derivative asset and liability positions that
are either option-based or have longer maturity dates where observable market inputs are less readily available or are unobservable,
in which case interest rate, price or index scenarios are extrapolated in order to determine the fair value. The fair values of
derivative assets and liabilities include adjustments for market liquidity, counterparty credit quality, the Company’s own
credit standing and other specific factors, where appropriate. The fair values of property and equipment are determined by using
various models that discount future expected cash flows.
To ensure the prudent application
of estimates and management judgment in determining the fair value of derivative assets and liabilities and property and equipment,
various processes and controls have been adopted, which include: (i) model validation that requires a review and approval for pricing,
financial statement fair value determination and risk quantification; and (ii) periodic review and substantiation of profit and
loss reporting for all derivative instruments.
Financial assets and liabilities
measured at fair value at January 31, 2023 on a recurring basis are summarized below (amounts in thousands):
| |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total
Fair
Value | |
| |
| | |
| | |
| | |
| |
Forward purchase contracts asset (1) | |
$ | - | | |
$ | 105 | | |
$ | - | | |
$ | 105 | |
Commodity futures (4) | |
| - | | |
| 80 | | |
| - | | |
| 80 | |
Investment in cooperative (2) | |
| - | | |
| - | | |
| 354 | | |
| 354 | |
Total assets | |
$ | - | | |
$ | 185 | | |
$ | 354 | | |
$ | 539 | |
| |
| | | |
| | | |
| | | |
| | |
Forward purchase contracts liability (5) | |
| - | | |
| 355 | | |
| - | | |
| 355 | |
Commodity futures (3) | |
| - | | |
| 67 | | |
| - | | |
| 67 | |
Total liabilities | |
$ | - | | |
$ | 422 | | |
$ | - | | |
$ | 422 | |
Financial assets and liabilities measured
at fair value at January 31, 2022 on a recurring basis are summarized below (amounts in thousands):
| |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total
Fair
Value | |
| |
| | |
| | |
| | |
| |
Forward purchase contracts asset (1) | |
$ | - | | |
$ | 993 | | |
$ | - | | |
$ | 993 | |
Investment in cooperative (2) | |
| - | | |
| - | | |
| 354 | | |
| 354 | |
Total assets | |
$ | - | | |
$ | 993 | | |
$ | 354 | | |
$ | 1,347 | |
| |
| | | |
| | | |
| | | |
| | |
Commodity futures (3) | |
$ | - | | |
$ | 933 | | |
$ | - | | |
$ | 933 | |
| (1) | The forward purchase contracts asset is included in “Prepaid
expenses and other” on the accompanying Consolidated Balance Sheets. |
| | |
| (2) | The investment in cooperative is included in “Other assets”
on the accompanying Consolidated Balance Sheets. |
| | |
| (3) | The commodity futures liability is included in “Accrued expenses
and other current liabilities” on the accompanying Consolidated Balance Sheets. |
| | |
| (4) | The commodity futures asset is included in “Prepaid expenses
and other” on the accompanying Consolidated Balance Sheets. |
| | |
| (5) | The forward purchase contracts liability is included in “Accrued
expenses and other current liabilities” on the accompanying Consolidated Balance Sheets. |
The
Company determined the fair value of the investment in cooperative by using a discounted cash flow analysis on the expected cash
flows. Inputs used in the analysis include the face value of the allocated equity amount, the projected term for repayment based
upon a historical trend, and a risk adjusted discount rate based on the expected compensation participants would demand because
of the uncertainty of the future cash flows. The inherent risk and uncertainty associated with unobservable inputs could have a
significant effect on the actual fair value of the investment. The changes in the balances of the investment in cooperative represent
the change in the fair value.
No
other financial instruments were elected to be measured at fair value in accordance with ASC 470-20-25-21.
There were no assets measured at
fair value at January 31, 2023 and 2022 on a non-recurring basis.
The components of other noncurrent assets are as follows
(amounts in thousands):
| |
January 31, | |
| |
2023 | | |
2022 | |
| |
| | |
| |
Deferred taxes | |
$ | 21,964 | | |
$ | 24,914 | |
Other | |
| 1,215 | | |
| 939 | |
| |
| | | |
| | |
Total | |
$ | 23,179 | | |
$ | 25,853 | |
| 6. | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
The components of accrued expenses and other current
liabilities are as follows (amounts in thousands):
| |
January 31, | |
| |
2023 | | |
2022 | |
| |
| | |
| |
Accrued payroll and related items | |
$ | 4,428 | | |
$ | 5,407 | |
Accrued utility charges | |
| 4,116 | | |
| 4,297 | |
Accrued transportation related items | |
| 1,311 | | |
| 593 | |
Commodity futures | |
| 67 | | |
| 933 | |
Forward purchase contracts | |
| 355 | | |
| - | |
Accrued real estate taxes | |
| 1,850 | | |
| 1,857 | |
Accrued income taxes | |
| 2,049 | | |
| 95 | |
Other | |
| 1,152 | | |
| 435 | |
| |
| | | |
| | |
Total | |
$ | 15,328 | | |
$ | 13,617 | |
The Company elected the practical
expedient, available pursuant to ASC 842, for lessees to include both lease and non-lease components as a single component and
account for it as a lease. In general, certain maintenance costs are the responsibility of the Company under its railcar leases.
These maintenance costs are a non-lease component which the Company elected to combine with rental payments and account for the
total amount as operating lease expense.
At January 31, 2023, the Company
has lease agreements, as lessee, for railcars. All the leases are accounted for as operating leases. The lease agreements do not
contain a specified implicit interest rate; therefore, the Company’s estimated incremental borrowing rate was used to determine
the present value of future minimum lease payments. The lease term for all the Company’s leases includes the noncancelable
period of the lease and any periods covered by renewal options that the Company is reasonably certain to exercise. Certain leases
include rent escalations pre-set in the agreements, which are factored into the lease payment stream.
For fiscal years 2022 and 2021,
the components of lease expense, classified as SG&A expenses on the Consolidated Statement of Operations are as follows (amounts
in thousands):
| |
Fiscal Year | |
| |
2022 | | |
2021 | |
| |
| | | |
| | |
Operating lease expense | |
$ | 7,360 | | |
$ | 6,346 | |
Variable lease expense | |
| 399 | | |
| 1,907 | |
Total lease expense | |
$ | 7,759 | | |
$ | 8,253 | |
The following table is a summary
of future minimum rentals on such leases at January 31, 2023 (amounts in thousands):
Years Ended January 31, |
|
Minimum
Rentals | |
|
|
| |
2024 |
|
$ | 5,639 | |
2025 |
|
| 4,450 | |
2026 |
|
| 2,277 | |
2027 |
|
| 2,229 | |
2028 |
|
| 1,799 | |
Thereafter |
|
| 617 | |
Total |
|
| 17,011 | |
Less: present value discount |
|
| 1,976 | |
Operating lease liabilities |
|
$ | 15,035 | |
At January 31, 2023, the weighted
average remaining lease term was 3.7 years, and the weighted average discount rate was 5.51% for the above leases.
At January 31, 2022, the weighted
average remaining lease term was 2.5 years and the weighted average discount rate was 4.85%.
On June 21, 2022, the Board of
Directors of the Company adopted resolutions declaring a three-for-one split of the Company’s Common Stock to be effectuated
in the form of a 200% stock dividend, payable on August 5, 2022 to stockholders of record at the close of business on July 29,
2022. The stock split has been retroactively reflected in the accompanying consolidated financial statements.
During fiscal years 2022, 2021,
and 2020 the Company purchased approximately 472,000 shares, 252,000 shares, and 949,000 shares of its common stock for approximately
$13.0 million, $6.6 million, and $19.6 million, respectively. At January 31, 2023, the Company had prior authorization by its Board
of Directors to purchase, in open market transactions, an additional approximately 877,000 shares of its common stock.
Information regarding the Company’s
common stock is as follows (amounts in thousands):
|
| |
January 31, | |
|
| |
2023 | | |
2022 | |
|
| |
| | |
| |
|
Authorized shares | |
| 45,000 | | |
| 45,000 | |
|
Issued shares | |
| 29,853 | | |
| 29,853 | |
|
Outstanding shares | |
| 17,390 | | |
| 17,761 | |
| 9. | DERIVATIVE FINANCIAL INSTRUMENTS |
The Company is exposed to various market risks, including
changes in commodity prices (raw materials and finished goods). To manage risks associated with the volatility of these natural
business exposures, the Company enters into commodity agreements (exchange-traded futures contracts and swaps) and forward purchase
(corn) and sale (ethanol, distillers grains and non-food grade corn oil) contracts. The Company does not purchase or sell derivative
financial instruments for trading or speculative purposes. The Company does not purchase or sell derivative financial instruments
for which a lack of marketplace quotations would require the use of fair value estimation techniques. The changes in fair value
of these derivative financial instruments are recognized in current period earnings as the Company does not use hedge accounting.
The following table provides information about the fair
values of the Company’s derivative financial instruments and the line items on the Consolidated Balance Sheets in which the
fair values are reflected (in thousands):
| |
Asset Derivatives | | |
Liability Derivatives | |
| |
Fair Value at January 31, | | |
Fair Value at January 31, | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| |
| | |
| | |
| | |
| |
Commodity futures (1) | |
$ | 80 | | |
$ | - | | |
$ | 67 | | |
$ | 933 | |
Forward purchase contracts (2) | |
$ | 105 | | |
$ | 993 | | |
$ | 355 | | |
$ | - | |
| (1) | Commodity futures assets are included in prepaid expenses and other.
These contracts included short/sell positions and long/buy positions for approximately 3.2 million bushels and 725,000 bushels,
respectively at January 31, 2023. Commodity futures liabilities are included in accrued expenses and other current liabilities.
These contracts are short/sell positions for approximately 1.4 million bushels and 7.4 million bushels of corn at January 31, 2023
and 2022, respectively. |
| | |
| (2) | Forward purchase contracts assets are included in prepaid expenses
and other. These contracts are for purchases of approximately 5.2 million bushels and 19.2 million bushels of corn at January 31,
2023 and 2022, respectively. Forward purchase contracts liabilities are included in accrued |
| | expenses and other current liabilities. These contracts are for purchases of approximately 12.8 million bushels of corn at January 31, 2023 |
As of January 31, 2023, and 2022,
all of the derivative financial instruments held by the Company were subject to enforceable master netting arrangements with the
counterparty. The Company’s accounting policy is to offset positions owed or owing with the same counterparty. As of January
31, 2023, and 2022 the gross positions of the enforceable master netting agreements are not significantly different from the net
positions presented in the table above. Depending on the amount of unrealized gains and losses on derivative contracts held by
the Company, the counterparty may require collateral to secure the Company’s derivative contract positions. As of January
31, 2023, and 2022, the Company was required to maintain collateral with the counterparty in the amount of approximately $1,735,000
and $2,222,000, respectively, to secure the Company’s derivative liability position, which has been recorded on the balance
sheet as restricted cash. See Note 4 which contains fair value information related to derivative financial instruments.
The Company recognized losses (included in cost of sales)
on corn and natural gas derivative financial instruments of approximately $12,714,000, $3,427,000, and $5,552,000 in fiscal years
2022, 2021, and 2020, respectively.
The Company recognized losses (included in net sales
and revenue) on ethanol derivative financial instruments of $1,024,000, $12,109,000 and $1,167,000 in fiscal years 2022, 2021, and
2020, respectively.
The Company maintains the REX American
Resources Corporation 2015 Incentive Plan, approved by its shareholders, which reserved a total of 1,650,000 shares of common stock
for issuance pursuant to its terms. The plan provides for the granting of shares of stock, including options to purchase shares
of common stock, stock appreciation rights tied to the value of common stock, restricted stock, and restricted stock unit awards
to eligible employees, non-employee directors and consultants. Until the current year, the Company had only granted restricted
stock awards. In May 2022, the Company issued restricted stock units to certain officers of the Company which vest based on the
Company’s Total Shareholder Return (TSR) compared to the TSRs of companies that comprise the Russell 2000 Index over a three-year
performance period. The Company measures share-based compensation grants at fair value on the grant date, adjusted for estimated
forfeitures. The Company records noncash compensation expense related to liability and equity awards in its consolidated financial
statements over the requisite service period on a straight-line basis. 1,342,842 shares remain available for issuance under the
Plan at January 31, 2023.
Restricted Stock Awards
As a component of their compensation,
restricted stock has been granted to directors and certain employees at the market price of REX common stock on the date of the
grant. In addition, one-quarter (one-third prior to 2022) of executives’ incentive compensation is payable by an award of
restricted stock based on the then market price of REX common stock. The Company’s board of directors has determined that
the grant date will be June 15th, or the next business day, for all grants of restricted stock.
At January 31, 2023 and 2022, unrecognized
compensation cost related to nonvested restricted stock was approximately $450,000 and $97,000.
The following table summarizes
non-vested restricted stock award activity for fiscal years 2022, 2021, and 2020:
| |
2022 | |
| |
| | |
Weighted | | |
Weighted | |
| |
| | |
Average Grant | | |
Average Remaining | |
| |
Non-Vested | | |
Date Fair Value | | |
Vesting Term | |
| |
Shares | | |
(000’s) | | |
(in years) | |
| |
| | |
| | |
| |
Non-Vested at January 31, 2022 | |
| 30,167 | | |
$ | 773 | | |
| 1 | |
Granted | |
| 70,689 | | |
| 2,032 | | |
| | |
Forfeited | |
| 450 | | |
| 13 | | |
| | |
Vested | |
| 19,142 | | |
| 472 | | |
| | |
| |
| | | |
| | | |
| | |
Non-Vested at January 31, 2023 | |
| 81,264 | | |
$ | 2,320 | | |
| 2 | |
| |
| | | |
| | | |
| | |
| |
2021 | |
| |
| | | |
Weighted | | |
Weighted | |
| |
| | | |
Average Grant | | |
Average Remaining | |
| |
Non-Vested | | |
Date Fair Value | | |
Vesting Term | |
| |
Shares | | |
(000’s) | | |
(in years) | |
| |
| | | |
| | | |
| | |
Non-Vested at January 31, 2021 | |
| 59,102 | | |
$ | 1,398 | | |
| 1 | |
Granted | |
| 8,409 | | |
| 275 | | |
| | |
Forfeited | |
| - | | |
| - | | |
| | |
Vested | |
| 37,344 | | |
| 900 | | |
| | |
| |
| | | |
| | | |
| | |
Non-Vested at January 31, 2022 | |
| 30,167 | | |
$ | 773 | | |
| 1 | |
| |
| | | |
| | | |
| | |
| |
2020 | |
| |
| | | |
Weighted | | |
Weighted | |
| |
| | | |
Average Grant | | |
Average Remaining | |
| |
Non-Vested | | |
Date Fair Value | | |
Vesting Term | |
| |
Shares | | |
(000’s) | | |
(in years) | |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
Non-Vested at January 31, 2020 | |
| 85,970 | | |
$ | 2,193 | | |
| 2 | |
Granted | |
| 18,474 | | |
| 416 | | |
| | |
Forfeited | |
| - | | |
| - | | |
| | |
Vested | |
| 45,342 | | |
| 1,211 | | |
| | |
| |
| | | |
| | | |
| | |
Non-Vested at January 31, 2021 | |
| 59,102 | | |
$ | 1,398 | | |
| 1 | |
Restricted Stock Units (RSUs)
In May 2022, the Company issued a total
of 67,500 RSUs to certain officers. The number of RSUs eligible to vest will be determined based on how the Company’s TSR
compares to the TSR of companies that comprise the Russell 2000 Index during the three-year performance period ending December 31,
2024. The number of RSUs eligible to vest ranges from zero percent to two hundred percent, depending on actual performance during
the performance period. At grant date, the fair value of the RSUs was approximately $2.7 million based on a Monte-Carlo simulation
model.
At January 31, 2023, unrecognized
compensation cost related to nonvested RSUs was approximately $2.0 million.
At January 31, 2023, One Earth
and NuGen had combined forward purchase contracts for approximately 18.0 million bushels of corn, the principal raw material for
their ethanol plants and they had combined forward purchase contracts for approximately 2.7 MmBtu of natural gas.
At January 31, 2023, One Earth
and NuGen had combined sales commitments for approximately 46.5 million gallons of ethanol, 101,000 tons of distillers grains and
9.9 million pounds of non-food grade corn oil.
At January 31, 2023, One Earth had
signed contracts in place for capital projects of approximately $29.3 million.
One Earth has entered into a 10-year
agreement in 2009 with an unrelated party for the use of a portion of that party’s natural gas pipeline. A new 15-year agreement,
with monthly payments of $29,250 was effective February 1, 2019. One Earth paid approximately $351,000 in fiscal years 2022, 2021,
and 2020 pursuant to the agreement.
One Earth and NuGen each have a
contract with an unrelated party (“Distillers Grains Marketers”) for distillers grains marketing services. Under the
terms of the contracts, the Distillers Grains Marketers will purchase all of One Earth’s and NuGen’s distillers grains
production during the term of the contracts. The contracts call for One Earth and NuGen to pay a fee per ton of distillers grains
sold for the Distillers Grains Marketers’ services. The terms of the agreements are for one year and renew automatically
for additional one-year terms, unless either party sends notice to the other party of its intent to terminate the agreement at
least 90 days prior to the expiration of the then current term of the agreement. One Earth and NuGen combined incurred fees of
approximately $1,159,000, $1,190,000, and $841,000 in fiscal years 2022, 2021, and 2020, respectively, for these marketing services.
The refined coal entity had various
agreements (site license, operating agreements, etc.) containing payment terms based upon production of refined coal under which
the Company was required to pay various fees. These fees totaled approximately $5,404,000 and $2,500,000 in fiscal years 2021 and
2020.
The provision for income taxes for fiscal
years 2022, 2021, and 2020 consist of the following (amounts in thousands):
| |
| 2022 | | |
| 2021 | | |
| 2020 | |
| |
| | | |
| | | |
| | |
Federal: | |
| | | |
| | | |
| | |
Current | |
$ | 4,485 | | |
$ | 4,450 | | |
$ | 1,323 | |
Deferred | |
| 2,925 | | |
| 12,064 | | |
| (1,850 | ) |
| |
| | | |
| | | |
| | |
| |
| 7,410 | | |
| 16,514 | | |
| (527 | ) |
| |
| | | |
| | | |
| | |
State and Local: | |
| | | |
| | | |
| | |
Current | |
| 4,167 | | |
| 3,098 | | |
| 602 | |
Deferred | |
| (2,035 | ) | |
| (581 | ) | |
| (621 | ) |
| |
| | | |
| | | |
| | |
| |
| 2,132 | | |
| 2,517 | | |
| (19 | ) |
| |
| | | |
| | | |
| | |
Provision (benefit) for income taxes | |
$ | 9,542 | | |
$ | 19,031 | | |
$ | (546 | ) |
The tax effects of significant temporary
differences representing deferred tax assets and liabilities are as follows (amounts in thousands):
| |
January 31, | |
| |
2023 | | |
2022 | |
| |
| | | |
| | |
Assets: | |
| | | |
| | |
General business credit carryforward | |
$ | 26,061 | | |
$ | 39,199 | |
Accrued liabilities | |
| 627 | | |
| 582 | |
State net operating loss carryforward | |
| 244 | | |
| 269 | |
Other items | |
| 240 | | |
| 280 | |
Valuation allowance | |
| (192 | ) | |
| (213 | ) |
| |
| | | |
| | |
Total | |
| 26,980 | | |
| 40,117 | |
Liabilities: | |
| | | |
| | |
Basis in pass through entities, including depreciation | |
| (5,821 | ) | |
| (17,995 | ) |
Other | |
| (292 | ) | |
| (340 | ) |
| |
| | | |
| | |
Total | |
| (6,113 | ) | |
| (18,335 | ) |
Net deferred tax asset | |
$ | 20,867 | | |
$ | 21,782 | |
The Company has a general business credit
carryforward of approximately $26.1 million and $39.2 million at January 31, 2023 and 2022, respectively. The Company can carry
these credits forward for up to twenty years. The carryforward period begins to expire in fiscal year 2038.
The Company has a valuation allowance of approximately $192,000
and $213,000 at January 31, 2023 and 2022, respectively, related to state net operating loss carryforwards. The Company decreased
the
valuation allowance by $21,000 in fiscal year 2022. These adjustments to the valuation allowance are a result of estimates
of realizing certain future state tax benefits.
The Company assessed all available positive and negative evidence
to determine whether it expects sufficient future taxable income will be generated to allow for the realization of existing federal
deferred tax assets. There is sufficient objectively verifiable income for management to conclude that it is more likely than
not that the Company will utilize available federal deferred tax assets prior to their expiration.
Through its refined coal operation, the Company earned production
tax credits pursuant to IRC Section 45. The Company ceased operation of its refined coal business on November 18, 2021. The credits
can be used to reduce future income tax liabilities for up to 20 years. These credits increased the income tax benefit from discontinued
operations by approximately $11.3 million and $5.2 million during fiscal years 2021 and 2020, respectively.
During fiscal years 2022, 2021, and 2020,
the Company recognized an income tax benefit (provision) for federal and state research and experimentation credits (net of uncertain
tax position expense) of approximately $0.4 million, $(3.0) million, and $0.9 million, respectively. The credits can be used to
reduce future income tax liabilities for up to 20 years.
The Company paid income taxes of approximately
$2,795,000, $7,239,000, and $1,274,000 in fiscal years 2022, 2021, and 2020, respectively. The Company received refunds of income
taxes of approximately $655,000 in fiscal year 2020. The Company did not receive any refunds in fiscal years 2022 and 2021.
Reconciliations of the federal statutory
tax and the Company’s income tax (benefit) expense for fiscal years 2022, 2021, and 2020 are as follows (amounts in thousands):
| |
2022 | | |
2021 | | |
2020 | |
| |
| | | |
| | | |
| | |
Federal income tax at statutory rate | |
$ | 9,971 | | |
$ | 15,926 | | |
$ | 885 | |
State and local taxes, net of federal tax benefit | |
| 1,725 | | |
| 2,396 | | |
| 150 | |
Research and experimentation credits | |
| (2,542 | ) | |
| (5,184 | ) | |
| (2,008 | ) |
Uncertain tax positions | |
| 2,281 | | |
| 8,340 | | |
| 1,046 | |
Noncontrolling interest | |
| (2,523 | ) | |
| (2,231 | ) | |
| (707 | ) |
Other | |
| 630 | | |
| (216 | ) | |
| 88 | |
| |
| | | |
| | | |
| | |
Total | |
$ | 9,542 | | |
$ | 19,031 | | |
$ | (546 | ) |
The Company files a U.S. federal income
tax return and income tax returns in various states. In general, the Company is no longer subject to U.S. federal, state or local
income tax examinations by tax authorities for fiscal years ended January 31, 2014 and prior. The Company is currently undergoing
a federal income tax examination for the years ended January 31, 2015 through January 31, 2020.
The Company applies the provisions of
ASC 740-10-25-5 for uncertain tax positions. As of January 31, 2023, total unrecognized tax benefits were approximately $19,033,000,
and accrued penalties and interest were approximately $55,000. If the Company were to prevail on all unrecognized tax benefits
recorded, the provision for income taxes would be reduced by approximately $18,925,000. In addition, the impact
of penalties and
interest would also benefit the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded
within income tax expense.
On a quarterly and annual basis, the Company
accrues for the effects of open uncertain tax positions and the related potential penalties and interest. It is reasonably possible
that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during
the next 12 months; however, the Company does not expect the change to have a material effect on results of operations or financial
position. A reconciliation of the beginning and ending amount of unrecognized tax benefits, including interest and penalties,
is as follows (amounts in thousands):
| |
Fiscal Year | |
| |
2022 | | |
2021 | |
| |
| | | |
| | |
Unrecognized tax benefits, beginning of year | |
$ | 16,781 | | |
$ | 8,400 | |
Changes for tax positions for prior years | |
| 165 | | |
| 3,827 | |
Changes for tax positions for current year | |
| 2,142 | | |
| 4,554 | |
| |
| | | |
| | |
Unrecognized tax benefits, end of year | |
$ | 19,088 | | |
$ | 16,781 | |
The Company is involved in various legal
actions arising in the normal course of business. After taking into consideration legal counsels’ evaluation of such actions,
management is of the opinion that their outcome will not have a material effect on the Company’s consolidated financial
statements. The Company recorded a liability of $250,000 at January 31, 2023 as a probable and reasonably estimable loss associated
with a legal contingency for a patent infringement case involving our refined coal facility which is no longer in operation. There
were no liabilities recorded at January 31, 2022 as the Company did not believe that there was a probable and reasonably estimable
loss associated with any legal contingencies.
14. |
DISCONTINUED OPERATIONS |
On November 18, 2021, the Company ceased
operation of its refined coal business as tax credits could no longer be earned on its operation. Beginning in the third quarter
of fiscal year 2021, the results of the operations of the refined coal business have been recognized as discontinued operations.
There were no amounts reclassified as discontinued operations in fiscal year 2022.
Below is a table reflecting certain items
of the Consolidated Condensed Statement of Operations that were reclassified as discontinued operations for fiscal years 2021
and 2020 (amounts in thousands):
| |
2021 | | |
2020 | |
| |
| | | |
| | |
Net sales and revenue1 | |
$ | 400 | | |
$ | 182 | |
Cost of Sales | |
| 8,602 | | |
| 5,854 | |
Gross loss | |
| (8,202) | | |
| (5,672) | |
Selling, general and administrative | |
| 698 | | |
| 22 | |
Loss before income taxes | |
| (8,900) | | |
| (5,694) | |
Benefit for income taxes | |
| 13,295 | | |
| 6,554 | |
Net income from discontinued operations, net of tax | |
| 4,395 | | |
| 860 | |
Net loss attributable to noncontrolling interests2 | |
| 397 | | |
| 261 | |
Net income attributable to REX common shareholders | |
$ | 4,792 | | |
$ | 1,121 | |
1 Refined coal sales were recorded net of the cost
of coal as the Company purchased the coal feedstock from the customer to which the processed refined coal was sold.
2 Net loss attributable to noncontrolling interest
represents the minority investor’s share of the loss before income taxes as noncontrolling interests does not include any
gain from the refined coal tax credits.
As of January 31, 2023 and 2022, there
were no amounts on the balance sheet reclassified to discontinued operations.
15. |
QUARTERLY UNAUDITED INFORMATION |
The following tables set forth the Company’s
net sales and revenue, gross profit, net income and net income per share (basic and diluted) for each quarter during the last
two fiscal years. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included.
| |
Quarters
Ended (In Thousands, Except Per Share Amounts) | |
| |
April
30,
2022 | | |
July
31,
2022 | | |
October
31, 2022 | | |
January
31, 2023 | |
| |
| | |
| | |
| | |
| |
Net sales and revenue | |
$ | 194,228 | | |
$ | 240,328 | | |
$ | 220,277 | | |
$ | 200,167 | |
Gross profit | |
| 11,912 | | |
| 16,584 | | |
| 11,336 | | |
| 14,899 | |
Net income from continuing operations | |
| 6,986 | | |
| 14,885 | | |
| 4,898 | | |
| 11,168 | |
Net income attributable to REX common shareholders | |
| 5,182 | | |
| 11,170 | | |
| 3,184 | | |
| 8,161 | |
Basic and diluted net income per share attributable to REX common shareholders (a) | |
$ | 0.29 | | |
$ | 0.63 | | |
$ | 0.18 | | |
$ | 0.47 | |
| |
| | | |
| | | |
| | | |
| | |
| |
Quarters
Ended (In Thousands, Except Per Share Amounts) | |
| |
April
30,
2021 | | |
July
31,
2021 | | |
October
31, 2021 | | |
January
31, 2022 | |
| |
| | |
| | |
| | |
| |
Net sales and revenue | |
$ | 164,042 | | |
$ | 195,678 | | |
$ | 203,066 | | |
$ | 212,016 | |
Gross profit | |
| 19,477 | | |
| 14,154 | | |
| 25,152 | | |
| 38,777 | |
Net income from continuing operations | |
| 7,963 | | |
| 8,039 | | |
| 14,888 | | |
| 25,917 | |
Net income attributable to REX common shareholders (continuing operations) | |
| 7,269 | | |
| 5,710 | | |
| 13,326 | | |
| 21,267 | |
Net income attributable to REX common shareholders (discontinued operations) | |
| 515 | | |
| 2,166 | | |
| 1,952 | | |
| 159 | |
Net income attributable to REX common shareholders | |
| 7,784 | | |
| 7,876 | | |
| 15,278 | | |
| 21,426 | |
Basic and diluted net income per share attributable to REX common shareholders (continuing operations) (a) | |
| 0.40 | | |
| 0.32 | | |
| 0.74 | | |
| 1.19 | |
Basic and diluted net income per share attributable to REX common shareholders (discontinued operations) (a) | |
| 0.03 | | |
| 0.12 | | |
| 0.11 | | |
| 0.01 | |
Basic and diluted net income per share attributable to REX common shareholders (a) | |
$ | 0.43 | | |
$ | 0.44 | | |
$ | 0.85 | | |
$ | 1.20 | |
| a) | The total of the quarterly net income per share amounts do not equal the annual net income per share amounts due to the impact of varying amounts of shares outstanding during the year. |
During fiscal years 2022, 2021, and 2020,
One Earth and NuGen, combined, purchased approximately $135.4 million, $90.2 million, and $54.8 million, respectively, of corn
and other supplies from minority equity investors. The Company had amounts payable to related parties of approximately $1.5 million
and $0.5 million at January 31, 2023 and 2022, respectively.
During fiscal years 2021 and 2020, the
Company recognized (reduced) commission expense of approximately $0.3 million, $(0.2) million, respectively, payable to the minority
investor in the refined coal entity. The commission expense is associated with the refined coal business, and as such, there was
no commission expense recorded in fiscal year 2022.
During fiscal year 2021, the Company received
approximately $0.3 million in capital contributions from the minority investor in the refined coal entity. The Company did not
receive capital contributions related to the refined coal entity in fiscal year 2022.
* * * * * *