EX-99 2 ex99-1.txt EXHIBIT 99.1 [LOGO OF REX STORES] 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' SECOND QUARTER DILUTED EARNINGS PER SHARE INCREASES 169% TO $0.70 - Prior Share Repurchase Authorization Expanded By 1,000,000 Shares - Dayton, Ohio (August 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 six-month periods ended July 31, 2005 (the Company's 2005 fiscal year). Net income in the three months ended July 31, 2005 rose 166% to $8.7 million, or $0.70 per diluted share, from net income of $3.3 million, or $0.26 per diluted share, in the three months ended July 31, 2004. Net income in the fiscal 2005 second quarter includes $10.4 million of pre-tax income from synthetic fuel investments, including a one-time $3.5 million payment related to a synthetic fuel facility resuming commercial operations, compared to $3.3 million of comparable investment income in the year-ago period. Net income in the fiscal 2004 period reflects an income tax benefit of $1.4 million due to the successful completion of an Internal Revenue Service examination related to the Company's Section 29 income tax credits for certain years and a $0.6 million pre-tax loss on the early termination of debt. Per share results are based on 12,437,000 and 12,854,000 diluted weighted average shares outstanding for the three-month periods ending July 31, 2005 and July 31, 2004, respectively. Net sales in the three months ended July 31, 2005 fell 1% to $84.7 million from $85.8 million in the three months ended July 31, 2004. Comparable store sales during the period fell 1% compared to the same year-ago period. Excluding sales of air conditioners in the quarter ended July 31, 2005, comparable store sales would have declined 5% compared to 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 Second Quarter Results, 8/31/05 page 2 During the three-month period ended July 31, 2005, REX purchased approximately 989,600 shares of its common stock in open market transactions. Subsequent to the close of the quarter, REX purchased an additional 87,700 shares. On August 30, 2005, the Company's Board of Directors expanded the previous share repurchase authorization by an additional 1,000,000 shares. Pursuant to this expanded reauthorization, the Company now has approximately 1,255,945 authorized shares remaining available to purchase under its stock buy-back authorization. Net income in the six-month period ended July 31, 2005 rose 101% to $14.8 million, or $1.18 per diluted share, compared to net income of $7.4 million, or $0.57 per diluted share, in the six-month period ended July 31, 2004. Per share results are based on 12,602,000 and 12,925,000 diluted weighted average shares outstanding for the six-month periods ending July 31, 2005 and July 31, 2004. Net sales in the 2005 six-month period were $174.3 million compared to $170.2 million in the six months ended July 31, 2004, while comparable store sales rose 3%. 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 212/676-5257; 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. EDT on September 7, 2005 by dialing 800/633-8284 or 402/977-9140 (international callers). The access code for the audio replay is 21258881. 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 July 31, 2005, the Company operated 228 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 Second Quarter Results, 8/31/05 page 3 REX STORES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited)
Three Months Ended Six Months Ended July 31, July 31, ----------- ----------- ----------- ----------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- NET SALES $ 84,693 $ 85,814 $ 174,272 $ 170,241 COST OF MERCHANDISE SOLD 59,698 61,483 124,754 121,179 ----------- ----------- ----------- ----------- GROSS PROFIT 24,995 24,331 49,518 49,062 SELLING, GENERAL & ADMINISTRATIVE EXPENSES 24,248 23,530 47,055 46,976 ----------- ----------- ----------- ----------- OPERATING INCOME 747 801 2,463 2,086 INVESTMENT INCOME 58 58 132 145 INTEREST EXPENSE (714) (784) (1,330) (1,718) LOSS ON EARLY TERMINATION OF DEBT - (592) - (614) INCOME FROM SYNTHETIC FUEL INVESTMENTS 10,398 3,343 16,380 8,579 ----------- ----------- ----------- ----------- INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION (BENEFIT) FOR INCOME TAXES 10,489 2,826 17,645 8,478 PROVISION (BENEFIT) FOR INCOME TAXES 1,621 (762) 2,689 672 ----------- ----------- ----------- ----------- INCOME FROM CONTINUING OPERATIONS 8,868 3,588 14,956 7,806 LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (147) (304) (260) (437) GAIN ON DISPOSAL OF DISCONTINUED OPERATIONS, NET OF TAX - - 125 - ----------- ----------- ----------- ----------- NET INCOME $ 8,721 $ 3,284 $ 14,821 $ 7,369 =========== =========== =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 10,871 11,225 11,011 11,190 =========== =========== =========== =========== Basic income per share from continuing operations 0.81 0.32 1.36 0.70 Basic loss per share from discontinued operations (0.01) (0.03) (0.02) (0.04) Basic gain of disposal of discontinued operations 0.00 0.00 0.01 0.00 ----------- ----------- ----------- ----------- BASIC NET INCOME PER SHARE $ 0.80 $ 0.29 $ 1.35 $ 0.66 =========== =========== =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 12,437 12,854 12,602 12,925 =========== =========== =========== =========== Diluted income per share from continuing operations 0.71 0.28 1.19 0.60 Diluted loss per share from discontinued operations (0.01) (0.02) (0.02) (0.03) Diluted gain on disposal of discontinued operations 0.00 0.00 0.01 0.00 ----------- ----------- ----------- ----------- DILUTED NET INCOME PER SHARE $ 0.70 $ 0.26 $ 1.18 $ 0.57 =========== =========== =========== ===========
(more) REX Stores Reports Second Quarter Results, 8/31/05 page 4 REX STORES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (in thousands, except per share amounts)
July 31 January 31 July 31 2005 2005 2004 ----------- ---------- ----------- (Unaudited) (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 1,744 $ 4,671 $ 1,202 Accounts receivable, net 3,458 5,460 3,929 Synthetic fuel receivable 786 1,675 2,288 Merchandise inventory 133,759 124,188 156,167 Prepaid expenses and other 2,807 1,230 1,670 Future income tax benefits 10,929 10,929 8,703 ----------- ---------- ----------- Total current assets 153,483 148,153 173,959 PROPERTY AND EQUIPMENT, NET 128,700 129,723 132,953 ASSETS HELD FOR SALE 1,669 1,986 - OTHER ASSETS 915 841 639 FUTURE INCOME TAX BENEFITS 27,978 27,978 16,082 RESTRICTED INVESTMENTS 2,290 2,270 2,262 ----------- ---------- ----------- Total assets $ 315,035 $ 310,951 $ 325,895 =========== ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable $ 4,031 $ - $ 11,560 Current portion of long-term debt 2,919 2,897 2,899 Current portion of deferred income and deferred gain on sale and leaseback 9,920 10,432 10,348 Accounts payable, trade 35,599 32,842 57,522 Accrued income taxes - 1,567 575 Accrued payroll and related items 5,093 6,303 4,406 Other current liabilities 6,623 6,152 7,576 ----------- ---------- ----------- Total current liabilities 64,185 60,193 94,886 ----------- ---------- ----------- LONG-TERM LIABILITIES: Long-term mortgage debt 28,490 30,501 32,406 Deferred income 11,387 11,703 11,809 ----------- ---------- ----------- Total long-term liabilities 39,877 42,204 44,215 ----------- ---------- ----------- SHAREHOLDERS' EQUITY: Common stock 293 290 286 Paid-in capital 135,496 133,474 127,734 Retained earnings 227,450 212,629 192,449 Treasury stock (152,266) (137,839) (133,675) ----------- ---------- ----------- Total shareholders' equity 210,973 208,554 186,794 ----------- ---------- ----------- Total liabilities and shareholders' equity $ 315,035 $ 310,951 $ 325,895 =========== ========== ===========
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