REX Reports Q4 Results, 3/29/11

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Stuart Rose, Chairman and CEO commented, “REX’s fourth quarter and fiscal 2010 revenue growth of 21.8% and 77.4%, respectively, reflect the Company’s transition to alternative energy and our interests in an expanded portfolio of ethanol production facilities. Excluding the impairment charge and inclusive of the Company’s share of losses at Levelland Hockley, we generated approximately $6.6 million and $16.3 million of net income attributable to shareholders for the fourth quarter and full year reflecting higher ethanol production volumes for the year, our mid-year acquisition of a 48% ownership interest in NuGen Energy and production efficiencies achieved at One Earth Energy which was in the early stages of production in Q3 ‘09. Fiscal 2010 alternative energy segment profits reflected higher average ethanol and dried distiller grain prices, which were offset by increases in grain and natural gas prices and a decline in wet distiller grain pricing.

“Throughout the year, REX’s alternative energy segment profits were impacted by the results of Levelland Hockley County Ethanol, a smaller plant which has been consistently challenged by higher costs and limited availability of sorghum in the market which weighed on crush spreads. Reflecting the recent sharp rise in ethanol production feedstocks, including sorghum and corn pricing, the LHCE facility temporarily ceased production in early January 2011. With the success of our other six ethanol production facilities, we determined that it was in our shareholders’ best interests to reduce our ownership in LHCE, deconsolidate its operations and write down the investment. The deconsolidation allows us to focus on our more profitable alternative energy segment holdings and other expansion opportunities.

“REX ended the year with a highly liquid balance sheet including $72.7 million of cash at the parent company level and a portfolio of real estate assets with a carrying value of $22.2 million that we are marketing for lease or sale. During fiscal 2010, we opportunistically acquired a 48% equity ownership interest in NuGen Energy, which operates a nameplate 100 million gallon ethanol plant in Marion, South Dakota. Our investment in NuGen was $9.2 million with a commitment of up to an additional $6.5 million based upon its future profitability, and we are committed to deploying our capital base in other renewable resource or industrial project opportunities where we see attractive returns. We also deployed some of our cash in the repurchase of common stock at prices well below book value, an investment we believe will deliver value to shareholders over the long term. We remain authorized to continue acting on our repurchase program as market opportunities permit.”

Real Estate Assets

At January 31, 2011, REX had lease agreements, as landlord for all or parts of eight former retail store locations. REX has 22 owned former retail stores that were vacant at January 31, 2011, which it is marketing to lease or sell. In addition, one former distribution center is partially leased, partially occupied by the REX corporate office and partially vacant. The Q4 ‘10 real estate segment revenue reflects rental income derived from these sites.