[REX STORES LOGO]
News Announcement For Immediate Release
For further information contact:
Douglas Bruggeman Joseph N. Jaffoni, Stewart A. Lewack
Vice President, Finance Jaffoni & Collins Incorporated
937/276-3931 212/835-8500 or rsc@jcir.com
REX STORES REPORTS FOURTH QUARTER EPS OF $1.32
Dayton, Ohio (March 31, 2004) -- REX Stores Corporation (NYSE: RSC), a specialty
retailer of consumer electronic products and appliances, today announced
financial results and comparable store sales for the fiscal 2003 fourth quarter
and year ended January 31, 2004.
Net income in the fiscal 2003 fourth quarter ended January 31, 2004 rose 88% to
$17.1 million, or $1.32 per diluted share, from net income of $9.1 million, or
$0.68 per diluted share, in the fiscal 2002 fourth quarter. The gains in fiscal
2003 fourth quarter net income reflect investment income from a synthetic fuel
limited partnership, as well as an income tax benefit due to the favorable
completion of an IRS audit of one of the Company's synthetic fuel limited
partnership investments. Per share results are based on 12,966,000 and
13,292,000 diluted weighted average shares outstanding for the fiscal 2003 and
2002 three-month periods, respectively.
Net sales in the fiscal 2003 fourth quarter fell 8% to $134.0 million from
$146.3 million in the fiscal 2002 fourth quarter. Comparable store sales during
the period fell 7% compared to the comparable year-ago period. 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.
Net income in fiscal 2003 rose 20% to $27.4 million, or $2.17 per diluted share,
compared to net income of $22.9 million, or $1.61 per diluted share, in fiscal
2002. Per share results are based on 12,648,000 and 14,192,000 diluted weighted
average shares outstanding for fiscal 2003 and 2002, respectively.
-more-
REX Stores Reports Fourth Quarter/Year-End Results, 3/31/04 page 2
Net sales in fiscal 2003 fell 3% to $417.4 million from $428.6 million in fiscal
2002, while comparable store sales fell 1%.
Commenting on the results, Stuart Rose, Chairman and Chief Executive Officer,
stated, "Rex Stores achieved record net income per share in fiscal 2003
reflecting a continued focus on our core high definition-ready, big screen
television category, as well as income and tax benefits from synthetic fuel
limited partnerships. We also significantly strengthened our balance sheet
during the year, reducing debt by $11.3 million. We remain optimistic about our
long-term prospects, as evidenced by the Board's February 2004 action to extend
the previous share repurchase authorization by an additional 1,000,000 shares."
During fiscal 2003, REX purchased approximately 711,000 shares of its common
stock. Subsequent to the close of the fiscal year, the Company purchased
approximately 25,000 additional shares of its common stock. As of March 31,
2004, the Company had approximately 1,145,000 authorized shares remaining
available to purchase under the expanded February 2004 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
212-346-6527; 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.vcall.com; please allow 15 minutes to register and download and install
any necessary software. Following its completion, a telephonic replay of the
call can be accessed through 1:00 p.m. on April 7, 2004 by dialing 800/633-8284
or 402/977-9140 (international callers). The access code for the audio replay is
21190289. Alternatively, a replay will be available on the Internet for 30 days
at www.rextv.com or www.vcall.com.
REX Stores Corporation is a leading specialty retailer of consumer electronic
products and appliances. As of January 31, 2004, the Company operated 248 stores
in 37 states under the trade name "REX."
This news announcement contains 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 among other things: 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, 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, and the uncertain amount of synthetic
fuel production and tax credits received from time to time from the Company's
synthetic fuel investments.
-tables follow-
REX Stores Reports Fourth Quarter/Year-End Results, 3/31/04 page 3
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Three Months Ended, Twelve Months Ended
January 31, January 31, January 31, January 31,
2004 2003 2004 2003
----------- ----------- ----------- -----------
NET SALES $133,999 $146,276 $417,402 $428,625
COSTS AND EXPENSES:
Cost of merchandise sold 96,635 104,654 295,156 301,501
Selling, general and administrative expenses
30,922 29,802 108,933 106,535
-------- -------- -------- --------
Total costs and expenses 127,557 134,456 404,089 408,036
-------- -------- -------- --------
INCOME FROM OPERATIONS 6,442 11,820 13,313 20,589
INVESTMENT INCOME 23 94 77 393
INTEREST EXPENSE (1,112) (1,388) (4,885) (5,626)
GAIN ON SALE OF REAL ESTATE 375 -- 1,153 --
INCOME FROM LIMITED PARTNERSHIPS 6,094 1,586 16,011 15,080
-------- -------- -------- --------
Income before provision for income taxes 11,822 12,112 25,669 30,436
PROVISION FOR INCOME TAXES (BENEFIT) (5,232) 3,029 (1,771) 7,504
-------- -------- -------- --------
NET INCOME $ 17,054 $ 9,083 $ 27,440 $ 22,932
======== ======== ======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC
10,992 11,575 10,863 12,142
======== ======== ======== ========
BASIC NET INCOME PER SHARE $ 1.55 $ 0.78 $ 2.53 $ 1.89
======== ======== ======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED
12,966 13,292 12,648 14,192
======== ======== ======== ========
DILUTED NET INCOME PER SHARE $ 1.32 $ 0.68 $ 2.17 $ 1.61
======== ======== ======== ========
(more)
REX Stores Reports Fourth Quarter/Year-End Results, 3/31/04 page 4
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
January 31, January 31,
2004 2003
----------- -----------
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 29,026 $ 1,380
Accounts receivable, net of allowance for doubtful accounts of
$235 and $200 in 2004 and 2003, respectively 2,560 3,413
Synthetic fuel receivable 3,098 6,619
Merchandise inventory 116,755 142,063
Prepaid expenses and other 2,357 2,567
Future income tax benefits 17,510 10,350
--------- ---------
Total current assets 171,306 166,392
PROPERTY AND EQUIPMENT, NET 131,409 134,563
OTHER ASSETS 2,601 1,656
FUTURE INCOME TAX BENEFITS 5,838 6,070
RESTRICTED INVESTMENTS 2,257 2,241
--------- ---------
Total assets $ 313,411 $ 310,922
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES:
Notes payable $ -- $ 13,451
Current portion of long-term debt 5,258 5,657
Accounts payable, trade 32,745 27,417
Accrued income taxes 806 --
Current portion, deferred income and deferred gain
on sale and leaseback 10,544 11,107
Accrued payroll 6,602 6,750
Other current liabilities 7,214 8,669
--------- ---------
Total current liabilities 63,169 73,051
--------- ---------
LONG-TERM LIABILITIES:
Long-term mortgage debt 53,548 64,426
Deferred income 12,762 13,993
Deferred gain on sale and leaseback -- 348
--------- ---------
Total long-term liabilities 66,310 78,767
--------- ---------
Shareholders' equity:
Common stock 283 277
Paid-in capital 126,124 121,282
Retained earnings 185,080 157,640
Treasury stock (127,555) (120,095)
--------- ---------
Total shareholders' equity 183,932 159,104
--------- ---------
Total liabilities & shareholders' equity $ 313,411 $ 310,922
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