Ethanol and By-Products
At April 30, 2021, investments in our ethanol business include equity
investments in three ethanol limited liability companies, two of which we have a
majority ownership interest in. The following table is a summary of ethanol
gallons shipped at our plants:
Trailing 12 REX's Current Effective
Months Current Ownership of
Ethanol Effective Trailing 12
Gallons Ownership Months Ethanol
Entity Shipped Interest Gallons Shipped
One Earth Energy, LLC 119.2 M 75.5% 90.0 M
NuGen Energy, LLC 119.6 M 99.5% 119.0 M
Big River Resources, LLC:
Big River Resources W Burlington, LLC 97.3 M 10.3% 10.0 M
Big River Resources Galva, LLC 111.5 M 10.3% 11.5 M
Big River United Energy, LLC 113.8 M 5.7% 6.5 M
Big River Resources Boyceville, LLC 55.8 M 10.3% 5.7 M
Total 617.2 M 242.7 M
Our ethanol operations and the results thereof are highly dependent on commodity
prices, especially prices for corn, ethanol, distillers grains, non-food grade
corn oil and natural gas and availability of corn. As a result of price
volatility for these commodities, our operating results can fluctuate
substantially. The price and availability of corn is subject to significant
fluctuations depending upon several factors that affect commodity prices in
general, including crop conditions, the amount of corn stored on farms, weather,
federal policy and foreign trade. Because the market prices of ethanol and
distillers grains are not always directly related to corn prices (for example,
demand for crude and other energy and related prices, the
20
export market demand for ethanol and distillers grains and the results of
federal policy decisions and trade negotiations can impact ethanol and
distillers grains prices), at times ethanol and distillers grains prices may not
follow movements in corn prices and, in an environment of higher corn prices or
lower ethanol or distillers grains prices, reduce the overall margin structure
at the plants. As a result, at times, we may operate our plants at negative or
minimally positive operating margins.
We expect our ethanol plants to produce approximately 2.8 gallons of denatured
ethanol for each bushel of grain processed in the production cycle. We refer to
the actual gallons of denatured ethanol produced per bushel of grain processed
as the realized yield. We refer to the difference between the price per gallon
of ethanol and the price per bushel of grain (divided by the realized yield) as
the "crush spread". Should the crush spread decline, it is possible that our
ethanol plants will generate operating results that do not provide adequate cash
flows for sustained periods of time. In such cases, production at the ethanol
plants may be reduced or stopped altogether in order to minimize variable costs
at individual plants.
We attempt to manage the risk related to the volatility of commodity prices by
utilizing forward grain purchase, forward ethanol, distillers grains and corn
oil sale contracts and commodity futures agreements, as management deems
appropriate. We attempt to match quantities of these sale contracts with an
appropriate quantity of grain purchase contracts over a given period of time
when we can obtain an adequate gross margin resulting from the crush spread
inherent in the contracts we have executed. However, the market for future
ethanol sales contracts generally lags the spot market with respect to ethanol
price. Consequently, we generally execute fixed price contracts for no more than
four months into the future at any given time and we may lock in our corn or
ethanol price without having a corresponding locked in ethanol or corn price for
short durations of time. As a result of the relatively short period of time our
fixed price contracts cover, we generally cannot predict the future movements in
our realized crush spread for more than four months; thus, we are unable to
predict the likelihood or amounts of future income or loss from the operations
of our ethanol facilities. We utilize derivative financial instruments,
primarily exchange traded commodity future contracts, in conjunction with
certain of our grain procurement activities.
Refined Coal
On August 10, 2017, we purchased the entire ownership interest of an entity that
owns a refined coal facility, through a 95.35% owned subsidiary, for
approximately $12.0 million. We began operating the refined coal facility
immediately after the acquisition. We expect that the revenues from the sale of
refined coal produced in the facility will be subsidized by federal production
tax credits through November 18, 2021, subject to meeting qualified emissions
reductions as governed by Section 45 of the Internal Revenue Code. In order to
maintain compliance with Section 45 of the Internal Revenue Code, we are
required to test the effectiveness of our process with respect to emissions
reductions every six months through an independent laboratory. Annually, the IRS
publishes the amount of federal income tax credit earned per ton of refined coal
produced and sold. We expect to earn credits at the rate of approximately $7.38
per ton of refined coal produced and sold during calendar year 2021. The tax
credits can be earned for refined coal produced and sold by our facility through
November 18, 2021. Absent the tax credits, our refined coal operations would not
be profitable.
21
The refined coal facility is located at the site of a utility-owned electrical
generating power station, which is our refined coal operation's sole customer.
Refined coal production and sales vary depending on fluctuations in demand from
the site host utility, which generally changes based upon weather conditions in
the geographic markets the utility serves and competing energy prices and
supplies and the state of the economy. We have contracted with an experienced
third party to operate and maintain the refined coal facility and to provide us
with management reporting and operating data as required. We do not have any
employees on site at the refined coal facility.
Future Energy
During fiscal year 2013, we entered into a joint venture with Hytken HPGP, LLC
("Hytken") to file and defend patents for eSteam technology relating to heavy
oil and oil sands production methods, and to commercially exploit the technology
to generate license fees, royalty income and development opportunities. The
patented technology is an enhanced method of heavy oil recovery involving zero
emissions downhole steam generation. We own 60% and Hytken owns 40% of the
entity named Future Energy, LLC ("Future Energy").
We have agreed to fund direct patent expenses relating to patent applications
and defense, annual annuity fees and maintenance on a country by country basis,
with the right to terminate funding and transfer related patent rights to
Hytken. We have funded all costs relating to new intellectual property,
consultants, research and development, pilot field tests and equipment purchases
with respect to the proposed commercialization stage of the technology. To date,
we have paid and expensed approximately $2.5 million cumulatively to purchase
our ownership interest and fund patent and other expenses. We have not yet
tested or proven the commercial feasibility of the technology.
Critical Accounting Policies and Estimates
During the three months ended April 30, 2021, we did not change any of our
critical accounting policies as disclosed in our 2020 Annual Report on Form 10-K
as filed with the Securities and Exchange Commission on April 12, 2021.
Fiscal Year
All references in this report to a particular fiscal year are to REX's fiscal
year ended January 31. For example, "fiscal year 2021" means the period February
1, 2021 to January 31, 2022.
Results of Operations
Trends and Uncertainties
In recent years, operating results in our ethanol and by-products segment have
been, at times affected by a weak margin environment including such factors as
higher costs for corn, lower availability of local corn, lower ethanol demand
and the EPA granting small refiner waivers.
22
During the early months of 2020, COVID-19 spread into the United States and
other countries. In an effort to contain the spread of this virus, there were
various government mandated restrictions, in addition to voluntary privately
implemented restrictions, including limiting public gatherings, retail store
closures, restrictions on employees working and the quarantining of people who
may have been exposed to the virus. This led to reduced demand for gasoline and
ethanol, and consequently, historically low ethanol pricing. As a result, we
idled our NuGen and One Earth ethanol plants in March of 2020. In May of 2020,
businesses and other activities slowly began to reopen, which led to an increase
in demand for gasoline and ethanol, and in related prices. As a result, we
resumed production operations at the One Earth ethanol plant in late May of 2020
and at NuGen in late June of 2020. In addition, actions by the Federal Reserve
related to the COVID-19 outbreak, reduced interest rates. Given the amount of
cash and short-term investments we have, this could significantly reduce our
interest income in future periods, depending on the length of time interest
rates remain at these levels. The impacts of the COVID-19 outbreak on our
business operations, including the duration and impact on ethanol demand, cannot
be reasonably estimated at this time, although a prolonged production stoppage
at our plants would have a material adverse impact on our results of operations,
financial condition and cash flows in future periods.
Congress passed the CARES Act in March 2020, which provided the United States
department of Agriculture ("USDA") with additional funding for the "Commodity
Credit Corporation ("CCC"). The USDA is using this additional funding to provide
direct payments to farmers, including farmers that we purchase corn from. Such
direct payments to farmers could cause them to delay marketing decisions.
Consequently, this could reduce the supply of corn and result in a price
increase for what we pay for corn. In addition, China has been purchasing large
quantities of corn, which has led to higher prices for corn. We have experienced
an increase in the local basis paid for corn during the first quarter of fiscal
year 2021.
Renewable Fuel Standard II ("RFS II"), established in October 2010, has been an
important factor in the growth of ethanol usage in the United States. When it
was originally established, RFS II required the volume of "conventional" or corn
derived ethanol to be blended with gasoline to increase each year until it
reached 15.0 billion gallons in 2015 and was to remain at that level through
2022. There are no established congressional target volumes beginning in 2023.
The EPA has the authority to waive the biofuel mandate, in whole or in part, if
there is inadequate domestic renewable fuel supply or the requirement severely
harms the domestic economy or environment. On December 19, 2019, the EPA
announced the final 2020 renewable volume obligation for conventional ethanol,
which met the 15.0 billion gallons congressional target. The EPA has missed its
deadline and has not yet released a draft renewable volume obligation rule for
the 2021 volumes. On April 15, 2020, five state Governors sent a letter to the
EPA requesting a general waiver from RFS II due to the drop in demand caused by
COVID-19 travel restrictions. On October 21, 2020, 15 U.S. Senators sent a
letter to the EPA requesting a general waiver from RFS II to reduce the 2021
renewable volume obligation, citing the reduced demand for fuels due to
COVID-19. It is unclear when the renewable volume obligation for 2021 will be
released.
Throughout fiscal year 2020 and the first quarter of fiscal year 2021, operating
results in our refined coal segment were affected by inconsistent utility plant
demand (our only customer). We expect to cease these operations and earning the
resulting production tax credits by November 18, 2021.
Should these trends and uncertainties continue, our future operating results are
likely to be negatively impacted.
23
Comparison of Three Months Ended April 30, 2021 and 2020
The following sections discuss the results of operations for each of our
business segments and corporate and other. Amounts in the corporate and other
category include activities that are not separately reportable or related to a
segment. We have two reportable segments: i) ethanol and by-products; and ii)
refined coal. We evaluate the performance of each reportable segment using net
income attributable to REX common shareholders. Segment profitability measures
are determined using the same accounting policies used in the preparation of the
consolidated financial statements. The following tables summarizes segment and
other results (amounts in thousands):
Three Months Ended
April 30,
2021 2020
Net sales and revenue:
Ethanol and by-products $ 164,042 $ 83,235
Refined coal 1 62 15
Total net sales and revenue $ 164,104 $ 83,250
1 We record sales in the refined coal segment net of the cost of coal as we
purchase the coal feedstock from the customer to which refined coal is sold.
Segment gross profit (loss):
Ethanol and by-products $ 19,477 $ (8,223)
Refined coal (1,675) (1,107)
Total gross profit (loss) $ 17,802 $ (9,330)
Income (loss) before income taxes:
Ethanol and by-products $ 11,082 $ (12,351)
Refined coal (1,795) (847)
Corporate and other (860) (545)
Total income (loss) before income taxes $ 8,427 $ (13,743)
(Provision) benefit for income taxes:
Ethanol and by-products $ (2,436) $ 4,161
Refined coal 2,195 959
Corporate and other 212 193
Total (provision) benefit for income taxes $ (29) $ 5,313
24
Three Months Ended
April 30,
2021 2020
Net income (loss) attributable to REX common shareholders:
Ethanol and by-products
$ 7,952 $ (7,433)
Refined coal 480 150
Corporate and other (648) (352)
Net income (loss) attributable to REX common shareholders $ 7,784 $ (7,635)
The following table summarizes net sales and revenue from the ethanol and
by-products segment (amounts in thousands):
Three Months Ended
April 30,
2021 2020
Ethanol $ 126,069 $ 60,597
Dried distillers grains 31,119 18,918
Non-food grade corn oil 5,594 3,188
Modified distillers grains 2,293 457
Derivative financial instruments losses (1,126) -
Other 93 75
Total $ 164,042 $ 83,235
25
The following table summarizes selected data from the ethanol and by-products
segment:
Three Months Ended
April 30,
2021 2020
Average selling price per gallon of ethanol (net of
hedging)
$ 1.79 $ 1.25
Gallons of ethanol sold (in millions) 70.0 48.3
Average selling price per ton of dried distillers
grains $ 208.92 $ 145.64
Tons of dried distillers grains sold 148,951 129,895
Average selling price per pound of non-food grade
corn oil $ 0.33 $ 0.25
Pounds of non-food grade corn oil sold (in millions) 17.1 12.8
Average selling price per ton of modified distillers
grains
$ 71.54 $ 65.82
Tons of modified distillers grains sold 32,060 6,941
Average cost per bushel of grain $ 5.16 $ 3.93
Average cost of natural gas (per MmBtu) $ 3.18 $ 3.93
Net sales and revenue in the quarter ended April 30, 2021 increased
approximately 97% compared to the prior year's first quarter. We had
significantly lower production and sales volumes in our ethanol and by-products
segment during fiscal year 2020, which related primarily to operations at NuGen
as diminished local availability of corn, the effects of the COVID-19 outbreak
and lower ethanol pricing resulted in the idling of the NuGen ethanol plant in
March of 2020. Both of our consolidated plants produced at or near capacity
during the first quarter of fiscal year 2021.
Ethanol sales increased in the first quarter of fiscal year 2021 compared to the
first quarter of fiscal year 2020 as the number of gallons sold increased 45%
and the average selling price per gallon increased 43% over the prior year first
quarter. The increase in the ethanol selling price resulted primarily from an
increase in demand and an increase in commodity prices.
Dried distillers grains sales increased in the first quarter of fiscal year 2021
compared to the first quarter of fiscal year 2020 as the number of tons sold
increased 15% and the average selling price per ton increased 43% over the prior
year first quarter. The increase in the dried distillers grains selling price
resulted primarily from an increase in corn prices as dried distillers grains
prices often follow corn pricing.
Non-food grade corn oil sales increased in the first quarter of fiscal year 2021
compared to the first quarter of fiscal year 2020 as the number of pounds sold
increased 34% and the average selling price per pound increased 32% over the
prior year first quarter. The increase in the non-food grade corn oil selling
price resulted primarily from an increase in demand from the biodiesel industry.
26
Modified distillers grains sales increased in the first quarter of fiscal year
2021 compared to the first quarter of fiscal year 2020 as the number of tons
sold increased 362% and the average selling price per ton increased 9% over the
prior year first quarter. The increase in the modified distillers grains selling
price resulted primarily from an increase in corn prices.
Losses on derivative financial instruments, included in net sales and revenue,
of approximately $1.1 million in the first quarter of fiscal year 2021 related
to our risk management activities and were impacted by the significant increase
in ethanol prices during that quarter. There were no gains or losses on
derivative financial instruments during the first quarter of fiscal year 2020.
Gross profit for the first quarter of fiscal year 2021 increased approximately
$27.1 million compared to the prior year's first quarter. This was primarily
caused by significantly higher production and sales volumes in our ethanol and
by-products segment during the first quarter of fiscal year 2021 compared to the
depressed levels during the first quarter of fiscal year 2020 discussed above.
The crush spread for the first quarter of fiscal year 2021 was approximately
$0.04 per gallon of ethanol sold compared to $(0.08) per gallon of ethanol sold
during the first quarter of fiscal year 2020. The selling price per gallon of
ethanol sold increased 43% for the first quarter of fiscal year 2021 compared to
the first quarter of fiscal year 2020, outpacing the 31% increase in the cost
per bushel of corn during the same periods. In addition, higher sales volumes
and prices of by-products contributed to the increase in gross profit during the
first quarter of fiscal year 2021 compared to the first quarter of fiscal year
2020. During the first quarter of fiscal year 2020 the impact from the COVID-19
outbreak and lower oil pricing resulted in lower ethanol and corn pricing which
severely impacted operations and resulted in the large gross loss.
Grain accounted for approximately 84% ($121.8 million) of our cost of sales
during the first quarter of fiscal year 2021 compared to approximately 75%
($65.8 million) during the first quarter of fiscal year 2020. Natural gas
accounted for approximately 3% ($3.6 million) of our cost of sales during the
first quarter of fiscal year 2021 compared to approximately 6% ($5.4 million)
during the first quarter of fiscal year 2020. The grain increase was primarily
attributable to the higher production levels in the first quarter of fiscal year
2021 compared to the depressed production levels in the first quarter of fiscal
year 2020 and the significant rise in corn prices during the first quarter of
fiscal year 2021. The natural gas decrease was primarily attributable to gains
realized on the sales of unused natural gas during the first quarter of fiscal
year 2021. The sales were a result of unusual and significant increases in the
spot price of natural gas during portions of the first quarter of fiscal year
2021 which resulted in an opportunity for us to sell forward natural gas
purchases at a gain.
We attempt to match quantities of ethanol, distillers grains and non-food grade
corn oil sales contracts with an appropriate quantity of grain purchase
contracts over a given time period when we can obtain a satisfactory margin
resulting from the crush spread inherent in the contracts we have executed.
However, the market for future ethanol sales contracts generally lags the spot
market with respect to ethanol price. Consequently, we generally execute fixed
price sales contracts for no more than four months into the future at any given
time and we may lock in our corn or ethanol price without having a corresponding
locked in ethanol or corn price for short durations of time. As a result of the
relatively short period of time our contracts cover, we generally cannot predict
the future movements in our realized crush spread for more than four months.
SG&A expenses were approximately $10.0 million for the first quarter of fiscal
year 2021, significantly higher than the approximately $4.6 million of expenses
for the first quarter of fiscal year 2020. A majority of the increase results
from higher shipping costs as more sales contracts in our ethanol and
by-products segment provided for shipping to be paid by us in the first quarter
of fiscal year 2021 compared to the first quarter of fiscal year 2020.
27
During the first quarter of fiscal year 2021, we recognized income of
approximately $0.6 million compared to a loss of approximately $0.5 million for
the first quarter of fiscal year 2020, from our equity investment in Big River,
which is included in our ethanol and by-products segment results. Big River has
interests in four ethanol production plants that shipped approximately 378
million gallons in the trailing twelve months ended April 30, 2021 and has an
effective ownership of ethanol gallons shipped for the same period of
approximately 328 million gallons. Big River's operations also include
agricultural elevators. Due to the inherent volatility of commodity prices
within the ethanol industry, we cannot predict the likelihood of future
operating results from Big River being similar to historical results.
Interest and other income was approximately $43,000 for the first quarter of
fiscal year 2021 versus approximately $669,000 for the first quarter of fiscal
year 2020. Interest income decreased as yields on our excess cash decreased in
the first quarter of fiscal year 2021 compared to the first quarter of fiscal
year 2020.
As a result of the foregoing, income before income taxes was approximately $8.4
million for the first quarter of fiscal year 2021 versus loss of approximately
$13.7 million for the first quarter of fiscal year 2020.
We determined that small changes in estimated "ordinary" income would result in
significant changes in the estimated annual effective tax rate. Thus, the
Company used a discrete effective tax rate method to calculate the provision or
benefit for income taxes for the three months ended April 30, 2021 and 2020. Our
tax provision was approximately 0.3% for the three months ended April 30, 2021
versus a benefit of approximately 38.7% for the three months ended April 30,
2020. The fluctuation in the rate results primarily from the production tax
credits we expect to receive associated with our refined coal segment relative
to pre-tax income or loss. Our income tax benefit for the first quarter of
fiscal year 2020 includes approximately $1.4 million related to the lengthening
of a net operating loss carryback allowed by the CARES Act.
As a result of the foregoing, net income was approximately $8.4 million for the
first quarter of fiscal year 2021 compared to net loss of approximately $8.4
million for the first quarter of fiscal year 2020.
(Income) loss related to noncontrolling interests was approximately $(0.6)
million and approximately $0.8 million during the first quarter of fiscal years
2021 and 2020, respectively. These amounts represent the other owners' share of
the income or loss of NuGen, One Earth and the refined coal entity.
As a result of the foregoing, net income attributable to REX common shareholders
for the first quarter of fiscal year 2021 was approximately $7.8 million, an
increase of approximately $15.4 million from net loss attributable to REX common
shareholders of approximately $7.6 million for the first quarter of fiscal year
2020.
28
Liquidity and Capital Resources
Net cash provided by operating activities was approximately $13.6 million for
the first quarter of fiscal year 2021, compared to cash used of approximately
$0.3 million for the first quarter of fiscal year 2020. For the first quarter of
fiscal year 2021, cash was provided by net income of approximately $8.4 million,
adjusted for non-cash items of approximately $6.4 million, which consisted of
depreciation, amortization of operating lease right-of-use assets, income from
equity method investments, interest income from short-term investments, the
deferred income tax provision and stock based compensation expense. An increase
in the balance of accounts receivable used cash of approximately $7.8 million,
primarily a result of the timing of products shipped and the receipt of customer
payments at One Earth and NuGen in addition to higher sales. Inventories
decreased by approximately $11.2 million, primarily a result of the timing of
receipt of raw materials and the shipment of finished goods. An increase in the
balance of other assets of approximately $2.2 million primarily relates to
increases in the carrying value of forward purchase contracts recorded at fair
value as commodity price increased significantly during the first quarter of
fiscal year 2021. A decrease in the balance of accounts payable used cash of
approximately $1.0 million, which was primarily a result of the timing of
inventory receipts and vendor payments. A decrease in the balance of other
liabilities used cash of approximately $1.4 million, which was primarily a
result of operating lease payments.
Net cash used in operating activities was approximately $0.3 million for the
first quarter of fiscal year 2020. For the first quarter of fiscal year 2020,
cash was used by a net loss of approximately $8.4 million, adjusted for non-cash
items of approximately $5.3 million, which consisted of depreciation,
amortization of operating lease right-of-use assets, loss from equity method
investments, interest income from short-term investments, the deferred income
tax provision and stock based compensation expense. We received dividends from
Big River of approximately $2.0 million during the first quarter of fiscal year
2020. A decrease in the balance of accounts receivable provided cash of
approximately $10.2 million, which was primarily a result of idling production
at the NuGen facility during the first quarter of fiscal year 2020. Inventories
decreased by approximately $8.4 million, which was primarily a result of lower
of cost or net realizable value writedowns, the timing of receipt of raw
materials, plant shutdowns and the shipment of finished goods. An increase in
the balance of other assets of approximately $3.8 million primarily relates to a
net operating loss we intended to carry back for federal income tax purposes. A
decrease in the balance of accounts payable used cash of approximately $11.9
million, which was primarily a result of the timing of inventory receipts,
vendor payments and idling production at the NuGen facility during the first
quarter of fiscal year 2020. A decrease in the balance of other liabilities used
cash of approximately $2.0 million, which was primarily a result of payments of
operating leases and incentive compensation.
At April 30, 2021, working capital was approximately $240.2 million, compared to
approximately $228.0 million at January 31, 2021. The ratio of current assets to
current liabilities was 9.1 to 1 at April 30, 2021 and 8.4 to 1 at January 31,
2021.
Cash of approximately $0.9 million was used in investing activities for the
first quarter of fiscal year 2021, compared to approximately $11.4 million
during the first quarter of fiscal year 2020. During the first quarter of fiscal
year 2021, we had capital expenditures of approximately $1.3 million, primarily
for improvements at the One Earth and NuGen facilities. We expect capital
expenditures to be in the range of approximately $5.0 million to $8.0 million
for the remainder of fiscal year 2021. During the first quarter
29
of fiscal year 2021, we purchased certificates of deposit (classified as
short-term investments) of approximately $25.9 million. During the first quarter
of fiscal year 2021, certificates of deposit (classified as short-term
investments) of approximately $26.3 million matured. The certificates of
deposit, both matured and sold, had maturities of less than one year. Depending
on investment options available, we may elect to retain the funds, or a portion
thereof, in cash investments, short-term investments or long-term investments.
Cash of approximately $11.4 million was used in investing activities for the
first quarter of fiscal year 2020. During the first quarter of fiscal year 2020,
we had capital expenditures of approximately $4.7 million, primarily for the
purchase of land at One Earth Energy. During the first quarter of fiscal year
2020, we purchased certificates of deposit (classified as short-term
investments) of approximately $19.2 million. During the first quarter of fiscal
year 2020, certificates of deposit (classified as short-term investments) of
approximately $12.8 million matured.
Cash used in financing activities for the first quarter of fiscal year 2021 was
insignificant compared to approximately $3.9 million for the first quarter of
fiscal year 2020. During the first quarter of fiscal year 2020, we used cash of
approximately $3.9 million to purchase approximately 78,000 shares of our common
stock in open market transactions.
We are investigating various uses for our excess cash and short-term
investments. We have a stock buyback program, and given our current
authorization level, can repurchase a total of approximately 34,000 shares at
April 30, 2021. We also plan to seek and evaluate investment opportunities
including ethanol and/or energy related, carbon dioxide related, agricultural or
other ventures we believe fit our investment criteria in addition to investing
in highly liquid short-term securities.
We are working with the University of Illinois to explore the development of a
carbon sequestration project to be located near the One Earth ethanol plant. The
University of Illinois has received a United States Department of Energy award
through the CarbonSAFE program, and, will evaluate the greenhouse gas storage
potential beneath the site by drilling a test well and performing seismic
surveys. Further work and research is needed to determine if this will be a
feasible project.
Forward-Looking Statements
This Form 10-Q contains or may contain forward-looking statements as defined in
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, natural gas, logistical delays, our 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 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. Other factors that could
cause actual results to differ materially from those in the forward-looking
statements are set forth in Item 1A of the Company's Annual Report on Form 10-K
for the fiscal year ended January 31, 2021 (File No. 001-09097).
30
© Edgar Online, source Glimpses
REX AMERICAN RESOURCES CORPORATION 
