REX American Resources Corporation (NYSE:REX) Q1 2023 Earnings Conference Call May 25, 2023 11:00 AM ET

Company Participants

Doug Bruggeman - Chief Financial Officer

Stuart Rose - Executive Chairman

Zafar Rizvi - Chief Executive Officer

Conference Call Participants

David Locke - Old Mammoth Investments

Operator

Greetings, and thank you for standing by. Welcome to the REX American Resources Fiscal 2023 First Quarter Conference Call. During your presentation, all participants will be in a listen-only mode. And afterwards, we will conduct a question-and-answer session. [Operator Instructions]

And now I'd like to turn the conference over to Doug Bruggeman, Chief Financial Officer. Please go ahead.

Doug Bruggeman

Good morning, and thank you for joining REX American Resources fiscal 2023 first quarter conference call. We'll get to our presentation and comments momentarily, as well as your question-and-answer session, but first, I'll 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 risks 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, but 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.

Sales for the first quarter increased by 9.5% as we experienced higher volume for ethanol, dried distiller grains and corn oil. Ethanol sales for the quarter were based upon 71.5 million gallons this year versus 64.5 million last year. Higher volumes were partially offset by lower ethanol selling prices as the price per gallon went from $2.28 to $2.21.

We reported gross profit of $15 million this year versus a gross profit of $11.9 million in the prior year. Meanwhile, the SG&A increased from the first quarter -- increased for the first quarter from $5.2 million to $10.6 million. There was a trade-off between these two line items between the years as we currently classify freight cost repay to an outlined vendor as SG&A expense.

We incurred charges of $5.1 million for that this year. In the prior year, more contracts called for the buyer to pay these fees and it was netted out of the ethanol price. We had income of $1.5 million from our unconsolidated equity investment in this year's first quarter versus $2 million in the prior year. We reported interest and other income of $2.8 million versus $174,000 in the prior year as we benefited from higher interest rates on our cash and short-term investments.