[REX 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 FISCAL FIRST QUARTER
DILUTED EARNINGS PER SHARE OF $0.13
Dayton, Ohio (May 26, 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 month period ended
April 30, 2006.
Net sales in the fiscal 2006 first quarter were $86.1 million compared with
$87.9 million in the fiscal 2005 first quarter. Comparable store sales for the
three months ended April 30, 2006 rose 0.5%. 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.
In the three months ended April 30, 2006, the Company incurred $0.6 million of
share-based payment expense pursuant to its adoption on February 1, 2006, of
Statement of Financial Accounting Standards, or SFAS, No. 123(R), "Share-Based
Payment." The Company incurred no share-based payment expense in the three
months ended April 30, 2005. Inclusive of the impact of SFAS, No. 123(R), fiscal
2006 first quarter operating income was $0.8 million, compared with operating
income of $1.8 million in the quarter ended April 30, 2005.
For the quarter ended April 30, 2006, income from synthetic fuel limited
partnership investments was $2.1 million compared with $6.0 million in the
comparable year-ago period. Income from continuing operations before income
taxes in the three months ended April 30, 2006 was $2.6 million compared with
$7.2 million in the quarter ended April 30, 2005.
Net income in the three months ended April 30, 2006 was $1.5 million, or $0.13
per diluted share, compared to net income of $6.1 million, or $0.48 per diluted
share, in the three months ended April 30,
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REX Stores Reports First Quarter Results, 5/26/06 page 2
2005. Per share results are based on 11,543,000 and 12,771,000 diluted weighted
average shares outstanding for the three-month periods ending April 30, 2006 and
2005, respectively.
Subsequent to the end of the quarter, Progress Energy (NYSE:PGN), the purchaser
of the Company's partnership interest in the Colona synthetic fuel investments,
announced that it had ceased production at its synthetic fuel facilities as
higher oil prices have increased the likelihood that Section 29/45K tax credits
would be reduced or phased out in 2006. Due to this announcement and similar
announcements in the industry, the Company no longer anticipates additional
income from the sale of its synthetic fuel interests. This could change, should
operations resume at plants that have ceased production or should certain plants
continue production.
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
212/676-4913; 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 12:30 p.m. EDT on June 2, 2006 by dialing 800/633-8284 or 402/977-9140
(international callers). The access code for the audio replay is 21292814.
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 April 30, 2006, the Company operated 211 retail
stores in 36 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 29/45K tax credits to phase out based on the price of crude oil adjusted
for inflation, and the uncertain amount of synthetic fuel production and
resulting income received from time to time from the Company's synthetic fuel
investments.
-tables follow-
REX Stores Reports First Quarter Results, 5/26/06 page 3
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
April 30,
2006 2005
-------- --------
NET SALES AND REVENUE $86,125 $87,934
Cost of sales 62,003 63,709
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Gross profit 24,122 24,225
Selling, general and administrative expenses 23,325 22,447
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OPERATING INCOME 797 1,778
INVESTMENT INCOME 292 74
INTEREST EXPENSE (502) (598)
INCOME FROM LIMITED PARTNERSHIPS 2,062 5,983
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Income from continuing operations before provision
for income taxes and discontinued operations 2,649 7,237
PROVISION FOR INCOME TAXES 999 1,096
------- -------
Income from continuing operations 1,650 6,141
Loss from discontinued operations, net of tax (161) (166)
Gain on disposal of discontinued operations, net of tax - 125
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Net Income $ 1,489 $ 6,100
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WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 10,145 11,156
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Basic income per share from continuing operations $0.16 $0.55
Basic loss per share from discontinued operations (0.01) (0.01)
Basic income per share on disposal of discontinued operations - .01
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BASIC NET INCOME PER SHARE $0.15 $0.55
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WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 11,543 12,771
====== ======
Diluted income per share from continuing operations $0.14 $0.48
Diluted loss per share from discontinued operations (0.01) (0.01)
Diluted income per share on disposal of discontinued operations - 0.01
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DILUTED NET INCOME PER SHARE $0.13 $0.48
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REX Stores Reports First Quarter Results, 5/26/06 page 4
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
April 30 January 31 April 30
2006 2006 2005
---- ---- ----
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 15,081 $ 20,096 $ 6,221
Escrow deposit - - 9,000
Accounts receivable, net 3,642 3,457 3,984
Synthetic fuel receivable 3,021 1,680 964
Merchandise inventory 108,516 97,371 131,547
Prepaid expenses and other 1,955 2,052 672
Future income tax benefits 9,339 9,361 10,929
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Total current assets 141,554 134,017 163,317
PROPERTY AND EQUIPMENT, NET 123,639 125,245 129,330
ASSETS HELD FOR SALE 2,148 1,497 1,669
OTHER ASSETS 735 760 953
FUTURE INCOME TAX BENEFITS 29,671 30,031 27,978
RESTRICTED INVESTMENTS 2,337 2,318 2,277
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Total assets $ 300,084 $ 293,868 $ 325,524
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 2,432 $ 2,389 $ 2,881
Current portion of deferred income 10,658 10,883 9,886
Accounts payable, trade 25,340 19,129 47,064
Accrued income taxes 606 541 624
Accrued payroll and related items 4,025 7,183 4,264
Other current liabilities 5,784 5,863 5,974
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Total current liabilities 48,845 45,988 70,693
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LONG-TERM LIABILITIES:
Long-term mortgage debt 20,701 21,462 29,213
Deferred income 12,308 12,213 11,582
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Total long-term liabilities 33,009 33,675 40,795
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SHAREHOLDERS' EQUITY:
Common stock 295 294 291
Paid-in capital 137,400 135,775 134,338
Retained earnings 242,387 240,898 218,729
Treasury stock (161,852) (162,762) (139,322)
--------- --------- ---------
Total shareholders' equity 218,230 214,205 214,036
--------- --------- ---------
Total liabilities and shareholders' equity $300,084 $ 293,868 $325,524
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