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Edited Transcript of REX earnings conference call or presentation 2-Jun-16 3:00pm GMT

Dayton Jun 2, 2016 (Thomson StreetEvents) -- Edited Transcript of REX American Resources Corp earnings conference call or presentation Thursday, June 2, 2016 at 3:00:00pm GMT

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Corporate Participants

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Operator [1]

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Thank you for standing by. Welcome to the REX American Resources FY16 first-quarter conference call.

(Operator instructions)

As a reminder, this call is being recorded, Thursday, June 2, 2016. I would now like to turn the conference over to Mr. Doug Bruggeman, Chief Financial Officer. Please go ahead.

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Doug Bruggeman, REX American Resources Corporation - CFO [2]

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Good morning, and thank you for joining REX American Resources' FY16 first-quarter conference call. We'll get to our presentation and comments momentarily, as well as your Q&A. But first, I will review the Safe Harbor disclosure.

In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements that involve risk and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company's current expectations and beliefs, are not guarantees of future performance. As such, actual results may vary materially from expectations. The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the Company's filings with the Securities and Exchange Commission, including the Company's reports on Form 10-K and 10-Q. Rex American Resources assumes no obligation to publicly update or revise any forward-looking statements.

I have joining me on the call today Stuart Rose, Executive Chairman of the Board; and Zafar Rizvi, Chief Executive Officer. I will first review our financial performance, and then turn the call over to Stuart for his comments.

REX is pleased to report an industry-leading and profitable first quarter to begin our FY16. Sales for the quarter declined approximately 5%. Sales were based upon 58.7 million gallons this year versus 55.8 million gallons in the prior year. We experienced a $0.09 per gallon reduction in ethanol price and approximately a $19 per ton reduction in DDG pricing for the quarter.

Gross profit declined from $9.1 million to $8.4 million for the first quarter. This decline was principally due to lower DDG pricing. DDG pricing for the quarter was impacted by the lower corn pricing and continued uncertainty of demand from China.

SG&A was slightly reduced from $4.5 million to $4 million, reflecting slightly lower incentive compensation, professional fees and railcar leases. Equity method income was $233,000 this year versus $1.5 million in prior year, due to no longer recognizing income from the Patriot plant, as well as lower contribution from the Big River facilities.

Our tax rate for the first quarter of FY16 was approximately 35% versus approximately 38% in the prior-year first quarter, net of non-controlling interest. Our tax rate can fluctuate based upon levels of income, domestic production activity deduction and state allocations. We currently believe this is a good approximation for this tax rate for the year.

Our net income for the...


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