[REX LOGO]
News Announcement For Immediate Release
FOR FURTHER INFORMATION CONTACT:
Douglas Bruggeman Joseph N. Jaffoni/David Collins
Chief Financial Officer Jaffoni & Collins Incorporated
937/276-3931 212/835-8500 or rsc@jcir.com
REX STORES REPORTS FISCAL THIRD QUARTER DILUTED
EARNINGS PER SHARE OF $1.25 VERSUS $0.42 IN THE PRIOR YEAR
- REPURCHASES 487,000 SHARES PURSUANT TO PRIOR AUTHORIZATION -
Dayton, Ohio (November 29, 2007) -- REX Stores Corporation (NYSE:RSC) today
announced financial results for the three month period ended October 31, 2007.
Net income in the fiscal 2007 third quarter ended October 31, 2007 was $14.7
million, or $1.25 per diluted share, compared with net income of $4.8 million,
or $0.42 per diluted share, in the third quarter of fiscal 2006. For the quarter
ended October 31, 2007, income from continuing operations, net of taxes was
$11.7 million, compared with income from continuing operations, net of taxes of
$3.8 million in the same period a year ago. Per share results are based on
11,750,000 and 11,517,000 diluted weighted average shares outstanding for the
quarters ended October 31, 2007 and October 31, 2006, respectively.
Net sales and revenue in the fiscal 2007 third quarter were $58.8 million
compared with $61.1 million in the fiscal 2006 third quarter. Comparable store
sales for the quarter ended October 31, 2007 declined 8.0%. The Company reports
sales performance quarterly and considers a store to be comparable after it has
been open six full fiscal quarters. Comparable store sales figures do not
include sales of extended service contracts.
As previously disclosed, during the fiscal 2007 third quarter, REX received
3,693,858 shares of US BioEnergy (NASDAQ: USBE) common stock and approximately
$4.8 million of cash as total consideration for its interest in Millennium
Ethanol, LLC (acquired by US BioEnergy) based upon the conversion of REX's $14
Million Convertible Secured Promissory Note, accrued interest and exercise of
its Related Purchase Rights. Accordingly, REX recorded a $17.1 million net gain
on sale of investments in the fiscal 2007 third quarter adjusted for US
BioEnergy's October 31, 2007 closing share price of $7.56. Inclusive of this
gain, in the three months ended October 31, 2007 REX recorded a total of $18.1
million of pre-tax income from net interest income, net gains on sale of
-more-
REX REPORTS FISCAL 2007 THIRD QUARTER, 11/29/07 page 2
real estate, equity in unconsolidated affiliates, loss from synthetic fuel
limited partnership investments, equity in unconsolidated affiliates and the
realized and unrealized gain on investments related to Millennium Ethanol, LLC
and US BioEnergy. The loss from synthetic fuel limited partnership investments
reflects the increase in the Company's estimate of the phase out to 60% and the
previously announced closure of the Colona facility. In the fiscal 2006 third
quarter, REX recorded approximately $6.3 million of pre-tax income from these
sources.
The Company's financial results reflect the consolidation of One Earth Energy
LLC as of October 30, 2007 and Levelland/Hockley County Ethanol, LLC as of
September 30, 2006.
During the quarter ended October 31, 2007 REX recognized a $0.4 million after
tax loss from discontinued operations, net of taxes, compared with a $0.1
million loss from discontinued operations, net of taxes, in the year ago period.
In addition, REX recorded a $3.4 million gain on disposal of discontinued
operations, net of taxes, in the three months ended October 31, 2007 compared
with a $1.1 million gain on disposal of discontinued operations, net of taxes,
in the comparable prior year period.
In the fiscal 2007 third quarter, REX purchased approximately 487,000 shares of
its common stock in open market transactions. In the fiscal 2007 fourth quarter
to date, the Company has repurchased an additional 86,200 shares of its common
stock in open market transactions. The Company has approximately 231,400
authorized shares remaining available to purchase under the expanded June 2007
stock buy-back authorization.
The Company will host a conference call and webcast today at 11:00 a.m. EST,
which are open to the general public. The conference call dial-in number is
212/676-4905; please call ten minutes in advance to ensure that you are
connected prior to the presentation. Interested parties may also access the call
live via the Investor Relations page of the Company's website, www.rextv.com, or
at www.earnings.com; please allow 15 minutes to register, download and install
any necessary software.
Following its completion, a telephonic replay of the call can be accessed
through 1:00 p.m. EST on December 6, 2007 by dialing 800/633-8284 or
402/977-9140 (international callers). The access code for the audio replay is
21358650. Alternatively, a replay will be available on the Internet for 30 days
at WWW.REXTV.COM or WWW.EARNINGS.COM.
REX Stores Corporation presently has interests in ethanol entities and has been
active in synthetic fuel investments. REX is also a specialty retailer of
consumer electronic products and appliances. As of October 31, 2007, the Company
operated 124 retail stores in 34 states under the trade name "REX."
-more-
REX REPORTS FISCAL 2007 THIRD QUARTER, 11/29/07 page 3
This news announcement contains or may contain forward-looking statements within
the meaning of 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: risks and uncertainties
relating to the the financial performance of U.S. BioEnergy Corporation;
fluctuations in the market prices and trading volumes of U.S. BioEnergy
Corporation common stock; the highly competitive nature of the consumer
electronics retailing industry, changes in the national or regional economies,
weather, the effects of terrorism or acts of war on consumer spending patterns,
the availability of certain products, technological changes, changes in real
estate market conditions, new regulatory restrictions or tax law changes
relating to the Company's synthetic fuel investments, the fluctuating amount of
quarterly payments received by the Company with respect to sales of its
partnership interest in a synthetic fuel investment, the potential for Section
29/45K tax credits to phase out based on the price of crude oil adjusted for
inflation, and the uncertain amount of synthetic fuel production and resulting
income received from time to time from the Company's synthetic fuel investments.
As it relates to ethanol investments, risks and uncertainties include among
other things: the uncertainty of constructing plants on time and on budget and
the price volatility of corn, dried distiller grains, ethanol, gasoline and
natural gas.
-tables follow-
REX REPORTS FISCAL 2007 THIRD QUARTER, 11/29/07 page 4
REX STORES CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
UNAUDITED
Three Months Ended Nine Months Ended
October 31, October 31,
----------- -----------
2007 2006 2007 2006
---- ---- ---- ----
(In Thousands, Except Per Share Amounts)
Net sales and revenue $ 58,765 $ 61,113 $ 162,848 $ 178,968
Cost of sales (Excluding depreciation) 42,292 44,561 113,759 128,904
------ ------ ------- -------
Gross profit 16,473 16,552 49,089 50,064
Selling, general and administrative expenses (15,612) (17,151) (46,995) (50,444)
Interest income 1,503 341 4,772 920
Interest expense (59) (387) (199) (1,084)
Loss on early termination of debt - - (651) -
Gains on sale of real estate, net 901 462 1,446 2,197
Equity in income of unconsolidated ethanol affiliates 535 - 2,057 -
Realized and unrealized investment gains, net 17,118 - 17,118 -
Income (loss) from synthetic fuel investments (1,860) 5,865 8,279 8,650
------ ------ ------- -------
Income from continuing operations before provision
for income taxes and minority interest 18,999 5,682 34,916 10,303
Provision for income taxes 7,374 1,834 13,665 3,556
Minority interest 32 - (12) -
------ ------ ------- -------
Income from continuing operations 11,657 3,848 21,239 6,747
Loss from discontinued operations, net of tax (413) (123) (1,830) (36)
Gain on disposal of discontinued operations, net of tax 3,422 1,090 8,601 1,090
------ ------ ------- -------
NET INCOME $14,666 $4,815 $28,010 $7,801
======= ====== ======= ======
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 10,433 10,333 10,509 10,268
====== ====== ====== ======
Basic income per share from continuing operations $1.12 $0.37 $2.02 $0.66
Basic loss per share from discontinued operations (0.04) (0.01) (0.17) (0.01)
Basic income per share on disposal of discontinued operations 0.33 0.11 0.82 0.11
----- ----- ----- -----
BASIC NET INCOME PER SHARE $1.41 $0.47 $2.67 $0.76
===== ===== ===== =====
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 11,750 11,517 11,864 11,608
====== ====== ====== ======
Diluted income per share from continuing operations $0.99 $0.33 $1.79 $0.58
Diluted loss per share from discontinued operations (0.03) (0.01) (0.15) -
Diluted income per share on disposal of discontinued operations 0.29 0.10 0.72 0.09
----- ----- ----- -----
DILUTED NET INCOME PER SHARE $1.25 $0.42 $2.36 $0.67
===== ===== ===== =====
- balance sheet follows -
REX REPORTS FISCAL 2007 THIRD QUARTER, 11/29/07 page 5
REX STORES CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
UNAUDITED
October 31, January 31, October 31,
2007 2007 2006
---- ---- ----
(In Thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 102,966 $ 43,008 $ 15,923
Accounts receivable, net 1,317 1,975 3,757
Synthetic fuel receivable 1,683 8,838 7,592
Merchandise inventory, net 78,427 70,078 116,065
Prepaid expenses and other 1,550 2,915 1,655
Future income tax benefits 6,619 9,192 9,588
--------- --------- ---------
Total current assets 192,562 136,006 154,580
PROPERTY AND EQUIPMENT, NET 91,634 122,769 121,846
ASSETS HELD FOR SALE, NET 522 2,009 1,497
OTHER ASSETS 14,630 18,986 17,305
GOODWILL 1,322 1,322 726
FUTURE INCOME TAX BENEFITS 25,943 26,245 28,397
INVESTMENTS 66,936 35,699 5,000
RESTRICTED INVESTMENTS 2,462 2,406 2,384
--------- --------- ---------
Total assets $ 396,011 $ 345,442 $ 331,735
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 1,510 $ -- $ --
Current portion of long-term debt 2,231 2,678 2,354
Deferred income 14,472 15,641 15,287
Accounts payable, trade 35,411 23,254 23,153
Deferred gain on sale and leaseback 1,730 101 101
Other current liabilities 13,315 10,510 12,189
--------- --------- ---------
Total current liabilities 68,669 52,184 53,084
--------- --------- ---------
LONG-TERM LIABILITIES:
Long-term mortgage debt 24,218 31,236 21,454
Deferred income 16,958 19,286 18,477
Deferred gain on sale and leaseback 5,187 504 529
Other 619 -- --
--------- --------- ---------
Total long-term liabilities 46,982 51,026 40,460
--------- --------- ---------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 28,568 11,443 12,119
SHAREHOLDERS' EQUITY:
Common stock 298 295 295
Paid-in capital 143,682 139,337 138,700
Retained earnings 279,772 252,249 248,699
Treasury stock (171,960) (161,092) (161,622)
--------- --------- ---------
Total shareholders' equity 251,792 230,789 226,072
--------- --------- ---------
Total liabilities and shareholders' equity $ 396,011 $ 345,442 $ 331,735
========= ========= =========
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