[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 REPORTS FOURTH QUARTER NET INCOME
OF $16.8 MILLION, OR $1.30 PER DILUTED SHARE
Dayton, Ohio (March 31, 2005) -- 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 twelve-month
periods ended January 31, 2005 (the Company's 2004 fiscal year).
Net income in the three months ended January 31, 2005 was $16.8 million, or
$1.30 per diluted share, compared to net income of $17.1 million, or $1.32 per
diluted share, in the three months ended January 31, 2004. Net income in the
fiscal 2004 fourth quarter includes $4.8 million of investment income from a
synthetic fuel limited partnership. Results for the 2004 period also reflect an
income tax benefit due to the reduction of valuation allowances for tax credits
earned by its investment in a synthetic fuel limited partnership, which resulted
from the completion of an Internal Revenue Service examination. Per share
results are based on 12,899,000 and 12,966,000 diluted weighted average shares
outstanding for the three-month periods ending January 31, 2005 and 2004,
respectively.
Net sales in the three months ended January 31, 2005 fell 4% to $125.4 million
from $130.2 million in the three months ended January 31, 2004. Comparable store
sales during the period fell 2% compared to the 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.
During the three-month period ended January 31, 2005, REX purchased
approximately 70,000 shares of its common stock in open market transactions. The
Company has approximately 430,745 authorized shares remaining available to
purchase under its previously announced stock buy-back authorization.
-more-
REX Stores Reports Fourth Quarter/Year-End Results, 3/31/05 page 2
Net income for the fiscal year ended January 31, 2005 was $27.5 million, or
$2.17 per diluted share, compared to net income of $27.4 million, or $2.17 per
diluted share, in the twelve-month period ended January 31, 2004. Net income in
fiscal 2004 includes $18.6 million of investment income from a synthetic fuel
limited partnership, as well as an income tax benefit due to the reduction of
valuation allowances for tax credits earned by its investment in a synthetic
fuel limited partnership. Per share results are based on 12,714,000 and
12,648,000 diluted weighted average shares outstanding for the twelve-month
periods ending January 31, 2005 and 2004, respectively. Net sales in fiscal 2004
were $391.3 million compared to $405.4 million in fiscal 2003, while comparable
store sales fell 2%.
Commenting on the results, Stuart Rose, Chairman and Chief Executive Officer,
stated, "Our strongest product category in fiscal 2004 remained televisions,
reflecting higher demand for LCD, DLP, plasma and other high definition-ready
televisions. We continued to strengthen our balance sheet in fiscal 2004 with
the cash generated from our synthetic fuel investments, reducing long-term debt
by $25.4 million by pre-paying mortgages on 43 retail locations. This action
will continue to benefit the Company going forward."
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
212/341-7098; 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. EST on March 31, 2005 by dialing 800/633-8284 or 402/977-9140
(international callers). The access code for the audio replay is 21236574. A
replay of the webcast will be available 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 January 31, 2005 the Company operated 234 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, 3/31/05 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,
-------------------- --------------------
2005 2004 2005 2004
---- ---- ---- ----
NET SALES ................................................ $ 125,435 $ 130,170 $ 391,300 $ 405,413
COSTS AND EXPENSES:
Cost of merchandise sold ............................ 91,030 93,776 282,047 286,273
Selling, general and administrative expenses ........ 29,753 29,939 103,437 105,564
--------- --------- --------- ---------
Total costs and expenses ................................. 120,783 123,715 385,484 391,837
--------- --------- --------- ---------
Income from continuing operations before
interest, other items, income taxes and discontinued
operations ............................................... 4,652 6,455 5,816 13,576
INVESTMENT INCOME ........................................ 26 23 178 77
INTEREST EXPENSE ......................................... (706) (1,065) (3,130) (4,751)
LOSS ON EARLY TERMINATION OF DEBT ........................ (65) (18) (679) (18)
GAIN ON SALE OF REAL ESTATE .............................. 125 375 246 1,153
INCOME FROM SYNTHETIC FUEL LIMITED PARTNERSHIP INVESTMENTS 4,817 6,094 18,615 16,011
--------- --------- --------- ---------
Income from continuing operations before
provision for income taxes and discontinued
operations ............................................... 8,849 11,864 21,046 26,048
BENEFIT FOR INCOME TAXES ................................. (7,834) (5,216) (6,840) (1,725)
--------- --------- --------- ---------
Income from continuing operations ........................ 16,683 17,080 27,886 27,773
Loss from discontinued operations, net of tax ............ (97) (26) (549) (333)
Gain on disposal of discontinued operations, net of tax .. 212 0 212 0
--------- --------- --------- ---------
Net Income ............................................... $ 16,798 $ 17,054 $ 27,549 $ 27,440
========= ========= ========= =========
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC ...................................... 11,049 10,992 11,081 10,863
========= ========= ========= =========
Basic income per share from continuing operations ........ $ 1.51 $ 1.55 $ 2.52 $ 2.56
Basic loss per share from discontinued operations ........ (0.01) (0.00) (0.05) (0.03)
Basic gain on disposal of discontinued operations ........ 0.02 0.00 0.02 0.00
--------- --------- --------- ---------
BASIC NET INCOME PER SHARE ............................... $ 1.52 $ 1.55 $ 2.49 $ 2.53
========= ========= ========= =========
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED .................................... 12,899 12,966 12,714 12,648
========= ========= ========= =========
Diluted income per share from continuing operations ...... $ 1.29 $ 1.32 $ 2.19 $ 2.20
Diluted loss per share from discontinued operations ...... (0.01) (0.00) (0.04) (0.03)
Diluted gain on disposal of discontinued operations ...... 0.02 0.00 0.02 0.00
--------- --------- --------- ---------
DILUTED NET INCOME PER SHARE ............................. $ 1.30 $ 1.32 $ 2.17 $ 2.17
========= ========= ========= =========
(more)
REX Stores Reports Fourth Quarter/Year-End Results, 3/31/05 page 4
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except per share amounts)
January 31, January 31,
2005 2004
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............... $ 4,671 $ 19,780
Accounts receivable, net ................ 5,460 4,806
Synthetic fuel receivable ............... 1,675 3,098
Investments available for sale .......... -- 7,000
Merchandise inventory ................... 124,188 116,755
Prepaid expenses and other .............. 1,230 1,481
Future income tax benefits .............. 10,929 8,703
--------- ---------
Total current assets ............ 148,153 161,623
PROPERTY AND EQUIPMENT, NET .................... 129,723 131,409
ASSETS HELD FOR SALE ........................... 1,986 --
OTHER ASSETS ................................... 841 3,477
FUTURE INCOME TAX BENEFITS ..................... 27,978 14,645
RESTRICTED INVESTMENTS ......................... 2,270 2,257
--------- ---------
Total assets .................... $ 310,951 $ 313,411
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt ...... $ 2,897 $ 5,258
Accounts payable, trade ................ 32,842 32,745
Accrued income taxes ................... 1,567 806
Current portion of deferred income and
deferred gain on sale and leaseback 10,432 10,544
Accrued payroll ........................ 6,303 6,602
Other current liabilities .............. 6,152 7,214
--------- ---------
Total current liabilities ....... 60,193 63,169
--------- ---------
LONG-TERM LIABILITIES:
Long-term mortgage debt ............... 30,501 53,548
Deferred income ....................... 11,703 12,762
--------- ---------
Total long-term liabilities ..... 42,204 66,310
--------- ---------
SHAREHOLDERS' EQUITY:
Common stock .......................... 290 283
Paid-in capital ....................... 133,474 126,124
Retained earnings ..................... 212,629 185,080
Treasury stock ........................ (137,839) (127,555)
--------- ---------
Total shareholders' equity ...... 208,554 183,932
--------- ---------
--------- ---------
Total liabilities and
shareholders' equity ........ $ 310,951 $ 313,411
========= =========
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