[REX STORES LOGO]
News Announcement For Immediate Release
For further information contact:
Douglas Bruggeman Joseph N. Jaffoni
Chief Financial Officer Jaffoni & Collins Incorporated
937/276-3931 212/835-8500 or rsc@jcir.com
REX STORES' THIRD QUARTER DILUTED
EARNINGS PER SHARE RISE 115% TO $0.58
- Fiscal Third Quarter Comp Store Sales Rise 4.6% -
Dayton, Ohio (November 30, 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
nine-month periods ended October 31, 2005.
Net income in the three months ended October 31, 2005 rose 104% to $6.9 million,
or $0.58 per diluted share, from net income of $3.4 million, or $0.27 per
diluted share, in the three months ended October 31, 2004. Per share results are
based on 11,865,000 and 12,610,000 diluted weighted average shares outstanding
for the three-month periods ending October 31, 2005 and October 31, 2004,
respectively.
Income from continuing operations before income taxes in the three months ended
October 31, 2005 rose 122% to $9.2 million from $4.1 million in the quarter
ended October 31, 2004. Income from continuing operations before income taxes
reflects fiscal 2005 third quarter income of $8.4 million from synthetic fuel
investments, including a $1.2 million gain related to the sale during the
fiscal third quarter by the Company of its interest in a synthetic fuel
limited partnership, compared to $5.2 million of comparable investment income
in the year-ago period.
Net sales in the three months ended October 31, 2005 rose 4.2% to $94.3 million
from $90.5 million in the three months ended October 31, 2004. Comparable store
sales during the period rose 4.6% compared with the same 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.
-more-
REX Stores Reports Third Quarter Results, 11/30/05 page 2
During the three-month period ended October 31, 2005, REX purchased
approximately 455,300 shares of its common stock in open market transactions.
Subsequent to the close of the fiscal third quarter, REX purchased an additional
119,100 shares. The Company now has approximately 769,245 shares remaining
available to purchase under its stock buy-back authorization reflecting the
previously disclosed expansion of its share repurchase authorization by
1,000,000 shares during the fiscal 2005 third quarter and the share repurchase
activity during and subsequent to the fiscal 2005 third quarter noted above.
Net income in the nine month period ended October 31, 2005 rose 102% to $21.7
million, or $1.76 per diluted share, compared to net income of $10.8 million, or
$0.84 per diluted share, in the nine month period ended October 31, 2004. Per
share results are based on 12,353,000 and 12,778,000 diluted weighted average
shares outstanding for the nine month periods ending October 31, 2005 and
October 31, 2004, respectively. Income from continuing operations before income
taxes in the nine months ended October 31, 2005 rose 112% to $26.9 million from
$12.7 million in the nine months ended October 31, 2004. Income from continuing
operations before income taxes for the nine months ended October 31, 2005,
reflects income of $24.8 million from synthetic fuel investments, compared to
$13.8 million of comparable investment income in the year-ago period. Net sales
in the 2005 nine month period rose 3% to $267.0 million from $259.2 million in
the nine months ended October 31, 2004. Comparable store sales in the first nine
months of fiscal 2005 rose 3.7% compared to the same year-ago period.
Commenting on the results, Stuart Rose, REX Stores' Chairman and Chief Executive
Officer, stated, "We are very pleased with the third quarter results as they
extended the Company's momentum from the first half of the fiscal year. We would
like to recognize all of our employees that were impacted by the hurricanes and
their tireless efforts which ensured that our stores are operational and ready
for the holiday selling season."
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
212/676-5411; 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.
-more-
REX Stores Reports Third Quarter Results, 11/30/05 page 3
Following its completion, a telephonic replay of the call can be accessed
through 1:00 p.m. EST on December 7, 2005 by dialing 800/633-8284 or
402/977-9140 (international callers). The access code for the audio replay is
21269518. 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 October 31, 2005, the Company operated 226 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 Third Quarter Results, 11/30/05 page 4
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
October 31 October 31
---------- ----------
2005 2004 2005 2004
---- ---- ---- ----
NET SALES $ 94,321 $ 90,502 $ 267,011 $ 259,172
COSTS AND EXPENSES:
Cost of merchandise sold 68,465 66,138 192,073 186,165
------ ------ ------ ------
Gross profit 25,856 24,364 74,938 73,007
Selling, general and administrative expenses 24,689 24,846 71,284 71,359
------ ------ ------ ------
Operating income (loss) 1,167 (482) 3,654 1,648
INVESTMENT INCOME 23 7 155 152
INTEREST EXPENSE (690) (719) (2,020) (2,437)
LOSS ON EARLY TERMINATION OF DEBT - - - (614)
GAIN ON SALE OF REAL ESTATE 253 121 253 121
INCOME FROM SYNTHETIC FUEL INVESTMENTS 8,433 5,219 24,813 13,798
------ ------ ------ ------
Income from continuing operations before provision
for income taxes and discontinued operations 9,186 4,146 26,855 12,668
PROVISION FOR INCOME TAXES 2,203 564 4,900 1,251
------ ------ ------ ------
Income from continuing operations 6,983 3,582 21,955 11,417
Loss from discontinued operations, net of tax (101) (201) (377) (667)
Gain on disposal of discontinued operations, net of tax - - 125 -
------ ------ ------ ------
Net Income $6,882 $3,381 $21,703 $10,750
====== ====== ======= =======
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 10,532 10,897 10,850 11,092
====== ====== ====== ======
Basic income per share from continuing operations $0.66 $0.33 $2.02 $1.03
Basic loss per share from discontinued operations (0.01) (0.02) (0.03) (0.06)
Basic income per share on disposal of discontinued operations
- - 0.01 -
------ ------ ------ ------
BASIC NET INCOME PER SHARE $0.65 $0.31 $2.00 $0.97
====== ====== ====== ======
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 11,865 12,610 12,353 12,778
====== ====== ====== ======
Diluted income per share from continuing operations $0.59 $0.29 $1.78 $0.89
Diluted loss per share from discontinued operations (0.01) (0.02) (0.03) (0.05)
Diluted income per share on disposal of discontinued operations - - 0.01 -
------ ------ ------ ------
DILUTED NET INCOME PER SHARE $0.58 $0.27 $1.76 $0.84
====== ====== ====== ======
-more-
REX Stores Reports Third Quarter Results, 11/30/05 page 5
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
October 31 January 31 October 31
2005 2005 2004
---- ---- ----
Unaudited Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,254 $ 4,671 $ 1,075
Accounts receivable, net 4,460 5,460 5,088
Synthetic fuel receivable 2,930 1,675 1,848
Merchandise inventory 135,220 124,188 152,215
Prepaid expenses and other 1,555 1,230 2,897
Future income tax benefits 10,929 10,929 8,703
-------- --------- --------
Total current assets 156,348 148,153 171,826
PROPERTY AND EQUIPMENT, NET 127,626 129,723 130,487
ASSETS HELD FOR SALE 1,669 1,986 2,569
OTHER ASSETS 823 841 612
FUTURE INCOME TAX BENEFITS 27,978 27,978 16,082
RESTRICTED INVESTMENTS 2,300 2,270 2,265
-------- --------- --------
Total assets $ 316,744 $ 310,951 $323,841
========= ========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ - $ - $ 15,169
Current portion of long-term debt 2,958 2,897 2,939
Current portion of deferred income
and deferred gain on sale and leaseback 10,609 10,432 10,378
Accounts payable, trade 38,919 32,842 49,259
Accrued income taxes 418 1,567 -
Accrued payroll and related items 5,777 6,303 5,101
Other current liabilities 6,596 6,152 7,454
-------- --------- --------
Total current liabilities 65,277 60,193 90,300
-------- --------- --------
LONG-TERM LIABILITIES:
Long-term mortgage debt 27,774 30,501 31,633
Deferred income 11,349 11,703 11,522
-------- --------- --------
Total long-term liabilities 39,123 42,204 43,155
-------- --------- --------
SHAREHOLDERS' EQUITY:
Common stock 293 290 287
Paid-in capital 134,985 133,474 130,705
Retained earnings 234,332 212,629 195,830
Treasury stock (157,266) (137,839) (136,436)
-------- --------- --------
Total shareholders' equity 212,344 208,554 190,386
-------- --------- --------
Total liabilities and shareholders' equity $316,744 $ 310,951 $323,841
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