[REX STORES 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 RECORD DILUTED
EARNINGS PER SHARE OF $2.31 FOR FISCAL 2005
- Fiscal Fourth Quarter Comp Store Sales Rise 7.9% -
- Reports Fourth Quarter Earnings Per Diluted Share of $0.57 -
Dayton, Ohio (March 24, 2006) -- 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, 2006 (the Company's 2005 fiscal year).
Net income in the three months ended January 31, 2006 was $6.6 million, or $0.57
per diluted share, compared with net income of $16.8 million, or $1.30 per
diluted share, in the three months ended January 31, 2005. Results for the
quarterly period ended January 31, 2005 reflect an $8.0 million income tax
benefit primarily due to the reduction of valuation allowances for tax credits
earned by the Company's investment in a synthetic fuel limited partnership,
which resulted from the completion of an Internal Revenue Service examination.
In the quarter ended January 31, 2006, REX Stores recorded income tax expense of
$2.5 million. Per share results are based on 11,552,000 and 12,899,000 diluted
weighted average shares outstanding for the three-month periods ending January
31, 2006 and January 31, 2005, respectively.
In the three months ended January 31, 2006, REX Stores recorded operating income
of $4.0 million, compared with operating income of $4.5 million in the quarter
ended January 31, 2005. For the quarter ended January 31, 2006, income from
synthetic fuel limited partnership investments rose 18.4% to $5.7 million
compared with $4.8 million in the comparable year-ago period. Income from
continuing
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REX Stores Reports Fourth Quarter Results, 3/24/06 page 2
operations before income taxes in the three months ended January 31, 2006 rose
5.8% to $9.2 million from $8.7 million in the quarter ended January 31, 2005.
Net sales and revenue in the three months ended January 31, 2006 rose 7.5% to
$130.6 million from $121.4 million in the three months ended January 31, 2005.
Comparable store sales during the period rose 7.9% 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.
During the three-month period ended January 31, 2006, REX Stores purchased
approximately 391,700 shares of its common stock in open market transactions.
The Company now has approximately 496,645 shares remaining available to purchase
under its present stock buy-back authorization.
Net income in the twelve-month period ended January 31, 2006 rose to $28.3
million, or $2.31 per diluted share, compared to net income of $27.5 million, or
$2.17 per diluted share, in the fiscal year ended January 31, 2005. Results for
the fiscal year ended January 31, 2005 reflect a $6.7 million income tax benefit
primarily related to the reduction of valuation allowances for tax credits
earned by the Company's investment in a synthetic fuel limited partnership,
which resulted from the completion of an Internal Revenue Service examination.
For fiscal 2005, the Company recorded income tax expense of $7.4 million. Per
share results are based on 12,220,000 and 12,714,000 diluted weighted average
shares outstanding for the fiscal years ended January 31, 2006 and January 31,
2005, respectively.
In the twelve months ended January 31, 2006, REX Stores reported operating
income of $7.7 million, compared with operating income of $6.2 million in the
fiscal year ended January 31, 2005. For the twelve months ended January 31,
2006, income from synthetic fuel limited partnership investments rose to $30.5
million from $18.6 million in fiscal 2004. Income from continuing operations
before income taxes in the twelve months ended January 31, 2006 rose to $36.1
million from $21.5 million in the twelve months ended January 31, 2005.
Net sales and revenue in fiscal 2005 rose 4.5% to $396.0 million from $379.0
million in fiscal 2004. Comparable store sales in fiscal 2005 rose 5.0% compared
to fiscal 2004.
Commenting on the results, Stuart Rose, REX Stores' Chairman and Chief Executive
Officer, stated, "We are pleased to report our second consecutive quarter of
retail comp store sales gains, particularly in light of the very competitive and
promotional environment that characterized this year's holiday selling season.
Reflecting our retail earnings and another period of significant growth
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REX Stores Reports Fourth Quarter Results, 3/24/06 page 3
in income from synthetic fuel limited partnership investments, REX Stores
achieved record annual diluted earnings per share in fiscal 2005."
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
212/676-4904; 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, 2006 by dialing 800/633-8284 or 402/977-9140
(international callers). The access code for the audio replay is 21285929.
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 January 31, 2006, the Company operated 218 retail
stores in 37 states under the trade name "REX."
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 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, the potential for
Section 29 tax credits to phase out based on the price of crude oil adjusted for
inflation, 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 Results, 3/24/06 page 4
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
January 31 January 31
---------- ----------
2006 2005 2006 2005
---- ---- ---- ----
NET SALES AND REVENUE $ 130,565 $ 121,444 $ 396,032 $ 379,023
COSTS AND EXPENSES:
Cost of sales 96,262 87,921 286,722 272,496
------ ------ ------- -------
Gross profit 34,303 33,523 109,310 106,527
Selling, general and administrative expenses 30,336 29,028 101,609 100,283
------ ------ ------- -------
Operating income 3,967 4,495 7,701 6,244
INVESTMENT INCOME 153 27 308 178
INTEREST EXPENSE (605) (710) (2,625) (3,147)
LOSS ON EARLY TERMINATION OF DEBT (22) (65) (22) (679)
GAIN ON SALE OF REAL ESTATE - 125 253 246
INCOME FROM LIMITED PARTNERSHIPS 5,702 4,817 30,515 18,615
----- ----- ------ ------
Income from continuing operations before provision
(benefit) for income taxes and discontinued operations 9,195 8,689 36,130 21,457
PROVISION (BENEFIT) FOR INCOME TAXES 2,470 (8,004) 7,398 (6,718)
----- ------- ----- -------
Income from continuing operations 6,725 16,693 28,732 28,175
Loss from discontinued operations, net of tax (159) (120) (588) (852)
Gain on disposal of discontinued operations, net of tax - 226 125 226
------ ------- ------- -------
Net Income $6,566 $16,799 $28,269 $27,549
====== ======= ======= =======
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC
10,208 11,049 10,688 11,081
====== ====== ====== ======
Basic income per share from continuing operations $0.66 $1.51 $2.69 $2.54
Basic loss per share from discontinued operations (0.02) (0.01) (0.06) (0.07)
Basic income per share on disposal of discontinued operations - 0.02 0.01 0.02
----- ----- ----- -----
BASIC NET INCOME PER SHARE $0.64 $1.52 $2.64 $2.49
===== ===== ===== =====
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED
11,552 12,899 12,220 12,714
====== ====== ====== ======
Diluted income per share from continuing operations $0.58 $1.29 $2.35 $2.22
Diluted loss per share from discontinued operations (0.01) (0.01) (0.05) (0.07)
Diluted income per share on disposal of discontinued operations - 0.02 0.01 0.02
----- ----- ----- ------
DILUTED NET INCOME PER SHARE $0.57 $1.30 $2.31 $2.17
===== ===== ===== =====
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REX Stores Reports Fourth Quarter Results, 3/24/06 page 5
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
January 31, January 31,
2006 2005
---- ----
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 20,096 $ 4,671
Accounts receivable, net 3,457 5,460
Synthetic fuel receivable 1,680 1,675
Merchandise inventory 97,371 124,188
Prepaid expenses and other 2,052 1,230
Future income tax benefits 9,361 10,929
--------- ---------
Total current assets 134,017 148,153
PROPERTY AND EQUIPMENT, NET 125,245 129,723
ASSETS HELD FOR SALE, NET 1,497 1,986
OTHER ASSETS 760 841
FUTURE INCOME TAX BENEFITS 30,031 27,978
RESTRICTED INVESTMENTS 2,318 2,270
--------- ---------
Total assets $ 293,868 $ 310,951
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 2,389 $ 2,897
Current portion of deferred income
and deferred gain on sale and leaseback 10,883 10,432
Accounts payable, trade 19,129 32,842
Accrued income taxes 541 1,567
Accrued payroll and related items 7,183 6,303
Other current liabilities 5,863 6,152
--------- ---------
Total current liabilities 45,988 60,193
--------- ---------
LONG-TERM LIABILITIES:
Long-term mortgage debt 21,462 30,501
Deferred income 12,213 11,703
--------- ---------
Total long-term liabilities 33,675 42,204
--------- ---------
SHAREHOLDERS' EQUITY:
Common stock 294 290
Paid-in capital 135,775 133,474
Retained earnings 240,898 212,629
Treasury stock (162,762) (137,839)
--------- ---------
Total shareholders' equity 214,205 208,554
--------- ---------
Total liabilities and shareholders' equity $ 293,868 $ 310,951
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