[REX STORES LOGO]
News Announcement For Immediate Release
For further information contact:
Douglas Bruggeman Stewart A. Lewack, Joseph N. Jaffoni
Chief Financial Officer Jaffoni & Collins Incorporated
937/276-3931 212/835-8500 or rsc@jcir.com
REX STORES' SECOND QUARTER DILUTED
EARNINGS PER SHARE INCREASE 4% TO $0.26
Dayton, Ohio (September 2, 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 three- and
six-month periods ended July 31, 2004.
Net income in the three months ended July 31, 2004 rose 4% to $3.3 million, or
$0.26 per diluted share, from net income of $3.2 million, or $0.25 per diluted
share, in the three months ended July 31, 2003. Net income for the 2004 period
reflects an income tax benefit of $1.4 million due to the June 2004 successful
completion of an Internal Revenue Service examination related to the Company's
Section 29 income tax credits for certain years. Net income for the 2004 period
also reflects a $0.6 million pre-tax loss on the early termination of debt. Per
share results are based on 12,854,000 and 12,626,000 diluted weighted average
shares outstanding for the three-month periods ending July 31, 2004 and July 31,
2003, respectively.
Net sales in the three months ended July 31, 2004 fell 2% to $88.4 million from
$90.2 million in the three months ended July 31, 2003. Comparable store sales
during the period were flat compared to the same year-ago period. Excluding air
conditioners, which can represent a significant portion of the Company's fiscal
second quarter sales, comparable store sales would have risen 4%. 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.
-more-
REX Stores Reports Second Quarter Results, 9/2/04 page 2
During the three-month period ended July 31, 2004, REX purchased approximately
420,400 shares of its common stock in open market transactions. Subsequent to
the end of the quarter, the Company purchased approximately 103,000 additional
shares. The Company has approximately 597,000 authorized shares remaining
available to purchase under its previously announced stock buy-back
authorization.
Net income in the six-month period ended July 31, 2004 rose 17% to $7.4 million,
or $0.57 per diluted share, compared to net income of $6.3 million, or $0.50 per
diluted share, in the six-month period ended July 31, 2003. Per share results
are based on 12,925,000 and 12,567,000 diluted weighted average shares
outstanding for the six-month periods ending July 31, 2004 and July 31, 2003.
Net sales in the 2004 six-month period were $175.6 million compared $184.2
million in the six months ended July 31, 2003, while comparable store sales
fell 4%.
The Company will host a conference call and webcast today at 11:00 a.m. EDT,
which are open to the general public. The conference call dial-in number is
646-862-1110; 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.fulldisclosure.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. EDT on September 9, 2004 by dialing 800/633-8625 or
402/977-9141 (international callers). The access code for the audio replay is
21206758. Alternatively, a replay will be available on the Internet for 30 days
at www.rextv.com or www.fulldisclosure.com.
REX Stores Corporation is a leading specialty retailer of consumer electronic
products and appliances. As of July 31, 2004, the Company operated 239 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 Second Quarter Results, 9/2/04 page 3
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
July 31, July 31,
-------- -------- --------- ---------
2004 2003 2004 2003
-------- -------- --------- ---------
NET SALES $ 88,429 $ 90,150 $ 175,605 $ 184,212
COSTS AND EXPENSES:
Cost of merchandise sold 63,350 62,135 125,028 128,722
Selling, general and administrative expenses 24,410 25,561 48,704 51,088
-------- -------- --------- ---------
Total costs and expenses 87,760 87,696 173,732 179,810
-------- -------- --------- ---------
Income from continuing operations before interest,
other items, income taxes and
discontinued operations 669 2,454 1,873 4,402
INVESTMENT INCOME 58 23 145 40
INTEREST EXPENSE (796) (1,292) (1,750) (2,488)
LOSS ON EARLY TERMINATION OF DEBT (592) - (614) -
GAIN ON SALE OF REAL ESTATE - - - 386
INCOME FROM SYNFUEL INVESTMENTS 3,343 3,119 8,579 6,183
-------- -------- --------- ---------
Income from continuing operations before
provision for income taxes and discontinued
operations 2,682 4,304 8,233 8,523
PROVISION (BENEFIT) FOR INCOME TAXES (800) 1,088 603 2,147
-------- -------- --------- ---------
Income from continuing operations 3,482 3,216 7,630 6,376
Loss from discontinued operations, net of tax (198) (49) (261) (71)
-------- -------- --------- ---------
Net Income $ 3,284 $ 3,167 $ 7,369 $ 6,305
======== ======== ========= =========
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 11,225 10,705 11,190 10,821
======== ======== ========= =========
Basic income per share from continuing operations 0.31 0.30 0.68 0.59
Basic loss per share from discontinued operations (0.02) (0.00) (0.02) (0.01)
-------- -------- --------- ---------
BASIC NET INCOME PER SHARE $ 0.29 $ 0.30 $ 0.66 $ 0.58
======== ======== ========= =========
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 12,854 12,626 12,925 12,567
======== ======== ========= =========
Diluted income per share from continuing operations 0.27 0.25 0.59 0.51
Diluted loss per share from discontinued operations (0.01) (0.00) (0.02) (0.01)
-------- -------- --------- ---------
DILUTED NET INCOME PER SHARE $ 0.26 $ 0.25 $ 0.57 $ 0.50
======== ======== ========= =========
(more)
REX Stores Reports Second Quarter Results, 9/2/04 page 4
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except per share amounts)
July 31 January 31 July 31
2004 2004 2003
----------- ---------- ---------
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 3,360 $ 29,026 $ 2,116
Accounts receivable, net 1,771 2,560 1,844
Synthetic fuel receivable 2,288 3,098 400
Merchandise inventory 156,167 116,755 169,101
Prepaid expenses and other 1,670 1,481 3,068
Future income tax benefits 8,703 8,703 8,860
--------- --------- ---------
Total current assets 173,959 161,623 185,389
PROPERTY AND EQUIPMENT, NET 132,953 131,409 133,439
OTHER ASSETS 639 3,477 2,434
FUTURE INCOME TAX BENEFITS 16,082 14,645 7,560
SYNTHETIC FUEL ESCROW - - 10,042
RESTRICTED INVESTMENTS 2,262 2,257 2,250
--------- --------- ---------
Total assets $ 325,895 $ 313,411 $ 341,114
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 11,560 $ - $ 30,775
Current portion of long-term debt 2,899 5,258 6,478
Current portion of deferred income and
deferred gain on sale and leaseback 10,348 10,544 11,301
Accounts payable, trade 57,522 32,745 45,407
Accrued income taxes 575 806 51
Accrued payroll 4,406 6,602 4,495
Other current liabilities 7,576 7,214 8,738
--------- --------- ---------
Total current liabilities 94,886 63,169 107,245
--------- --------- ---------
LONG-TERM LIABILITIES:
Long-term mortgage debt 32,406 53,548 60,504
Deferred income 11,809 12,762 13,015
Deferred gain on sale and leaseback - - 49
--------- --------- ---------
Total long-term liabilities 44,215 66,310 73,568
--------- --------- ---------
SHAREHOLDERS' EQUITY:
Common stock 286 283 278
Paid-in capital 127,734 126,124 121,786
Retained earnings 192,449 185,080 163,945
Treasury stock (133,675) (127,555) (125,708)
--------- --------- ---------
Total shareholders' equity 186,794 183,932 160,301
--------- --------- ---------
Total liabilities and
shareholders' equity $ 325,895 $ 313,411 $ 341,114
========= ========= =========
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