[REX GRAPHIC]
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 UPDATES STATUS OF ENERGY INTERESTS
- All Synthetic Fuel Plants for Which REX Receives Income are in Operation -
- REX Provides Updates on Ethanol Projects -
Dayton, Ohio (October 31, 2006) -- REX Stores Corporation (NYSE:RSC) today
provided an update on its synthetic fuel and ethanol interests.
Synthetic Fuel Interests
REX recently received confirmation that all synthetic fuel plants for which it
receives income are in operation. As such, the Company expects to record higher
levels of income from the sales of its synthetic fuel interests than previously
indicated through December 31, 2007 at which time the Section 29/45K tax credit
program is currently legislated to end.
Ethanol Interests
REX reported today that it has funded $5 million in Big River Resources, LLC
("Big River") and has entered into an agreement to fund an additional $15
million in exchange for a minority equity interest in the entity.
Big River Resources, LLC is an Iowa Limited Liability Company and holding
company for several entities including Big River Resources West Burlington, LLC
which presently operates a 52 million gallon dry-mill ethanol manufacturing
facility in West Burlington, Iowa. The facility has been in operation since
April 12, 2004, initially as a 40 million gallon per year facility, and expanded
to a 52 million gallon per year facility in August 2006. Big River Resources
West Burlington, LLC intends to further expand the plant to produce 80 million
gallons per year. In addition, through interests in other entities, Big River
intends to develop additional ethanol production plants.
-more-
REX Updates Status of Energy Investments, 10/31/06 page 2
REX also received notice that all conditions necessary for the Company to fund
$14 million in Millennium Ethanol, LLC ("Millennium") have been satisfied. The
$14 million will be in the form of a convertible note that provides the Company
rights to convert the note, with additional funds, into a minority ownership
interest in Millennium. The Company expects to fund the note in December 2006.
With funding secured, Millennium Ethanol, LLC has commenced construction of a
100 million gallon per year ethanol production facility in Marion, South Dakota.
As previously announced, REX recently funded $11.5 million for Levelland/Hockley
County Ethanol, LLC ("Levelland/Hockley"), which intends to commence
construction of a 40 million gallon ethanol production facility in Levelland,
Texas in November 2006. The $11.5 million funding, along with REX's previously
announced $5 million convertible secured promissory note commitment (expected to
be funded by December 31, 2006), enables REX to secure a majority equity
interest in Levelland/Hockley. REX has an agreement, subject to certain
conditions, to fund up to an additional $6.5 million in Levelland/Hockley to
further increase its ownership.
In addition to Big River, Millennium and Levelland/Hockley, REX has entered into
contingent agreements to fund $16 million for Patriot Renewable Fuels LLC
("Patriot") and $24.9 million for One Earth Energy LLC ("One Earth"). Patriot
and One Earth intend to construct ethanol manufacturing facilities with annual
production capacity of 100 million gallons each. Patriot recently held ground
breaking ceremonies for its Annawon, Illinois facility. One Earth intends to
commence construction of its Gibson City, Illinois facility in 2007.
Stuart Rose, REX's Chairman and Chief Executive Officer, commented, "We are
pleased that all the synthetic fuel plants are open and operating. We believe
our ethanol interests represent ideal opportunities for REX to extend our
presence in the energy sector and further diversify our earnings mix."
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 the risk
factors set forth from time to time in the Company's filings with the Securities
and Exchange Commission and 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. As it relates to ethanol investments,
risks and uncertainties include among other things: the uncertainty of
constructing plants on time and on budget and the volatility of corn, dried
distiller grains, ethanol, gasoline and natural gas prices.
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