REX Stores Reports Fiscal Second Quarter Diluted Earnings Per Share of $0.48 versus $0.13 in the Prior Year
DAYTON, Ohio--REX Stores Corporation today announced financial results for the three month period ended July 31, 2007.
Net income in the fiscal 2007 second quarter ended July 31, 2007 was $5.8 million, or $0.48 per diluted share, compared with net income of $1.5 million, or $0.13 per diluted share, in the second quarter of fiscal 2006. For the quarter ended July 31, 2007, income from continuing operations, net of taxes was $3.8 million, compared with income from continuing operations, net of taxes of $1.6 million in the same period a year ago. Per share results are based on 11,989,000 and 11,575,000 diluted weighted average shares outstanding for the quarters ended July 31, 2007 and July 31, 2006, respectively.
Net sales and revenue in the fiscal 2007 second quarter were $56.3 million compared with $63.6 million in the fiscal 2006 second quarter. Comparable store sales for the quarter ended July 31, 2007 declined 12.0%. 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.
REX recorded a total of $5.9 million of income from synthetic fuel limited partnership investments, interest income, gains on sale of real estate and equity in unconsolidated affiliates in the quarter ended July 31, 2007 of which approximately $3.4 million was income from synthetic fuel limited partnership investments. In the fiscal 2006 second quarter, REX recorded approximately $2.7 million of income from these sources (none which was derived from equity in unconsolidated affiliates). During the quarter ended July 31, 2007 REX recognized a $0.6 million loss from discontinued operations, net of taxes, compared with a $0.07 million loss from discontinued operations, net of taxes, in the year ago period. In addition, REX recorded a $2.6 million gain on disposal of discontinued operations, net of taxes, in the three months ended July 31, 2007.
In the fiscal 2007 second quarter, REX purchased approximately 195,400 shares of its common stock in open market transactions. In the fiscal 2007 third quarter to date, the Company has repurchased an additional 259,300 shares of its common stock in open market transactions. The Company has approximately 545,300 authorized shares remaining available to purchase under the expanded June 2007 stock buy-back authorization.
On August 30, 2007 (in REX’s fiscal 2007 third quarter), REX received 3,693,858 shares of US BioEnergy common stock and approximately $4.8 million of cash as total consideration for its interest in Millennium Ethanol, LLC (acquired by US BioEnergy) based upon the conversion of REX’s $14 Million Convertible Secured Promissory Note, accrued interest and exercise of its Related Purchase Rights.
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 212/231-6010; 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.earnings.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 12, 2007 by dialing 800/633-8284 or 402/977-9140 (international callers). The access code for the audio replay is 21347687. Alternatively, a replay will be available on the Internet for 30 days at www.rextv.com or www.earnings.com.
Over the past eight years, REX has been active in several synthetic fuel investments and has agreements to participate in four ethanol entities. REX Stores Corporation is also a specialty retailer of consumer electronic products and appliances. As of July 31, 2007, the Company operated 142 retail stores in 35 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 the risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission and include among other things: risks and uncertainties relating to the acquisition of REX Stores’ interest in Millennium Ethanol, LLC by U.S. BioEnergy Corporation including uncertainty of the financial performance of U.S. BioEnergy Corporation following completion of the transaction; fluctuations in the market prices and trading volumes of U.S. BioEnergy Corporation common stock; 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, changes in real estate market conditions, 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 price volatility of corn, dried distiller grains, ethanol, gasoline and natural gas.
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REX STORES CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements Of Income Unaudited |
||||||||
| Three Months Ended | Six Months Ended | |||||||
| July 31 | July 31 | |||||||
| 2007 | 2006 | 2007 | 2006 | |||||
| (In Thousands, Except Per Share Amounts) | ||||||||
| Net sales and revenue | $ 56,264 | $ 63,583 | $ 113,955 | $ 129,572 | ||||
| Cost of sales (Excluding depreciation) | 38,666 | 45,822 | 78,577 | 92,964 | ||||
| Gross profit | 17,598 | 17,761 | 35,378 | 36,608 | ||||
| Selling, general and administrative expenses | (17,013) | (17,645) | (33,834) | (35,936) | ||||
| Interest income | 1,976 | 287 | 3,269 | 579 | ||||
| Interest expense | (121) | (398) | (286) | (799) | ||||
| Loss on early termination of debt | - | - | (651) | - | ||||
| Gains on sale of real estate, net | 72 | 1,735 | 842 | 1,735 | ||||
| Equity in income of unconsolidated ethanol affiliates | 412 | - | 1,522 | - | ||||
|
Income from synthetic fuel investments |
3,406 | 723 | 10,139 | 2,785 | ||||
|
Income from continuing operations before provision for income taxes and minority interest |
6,330 |
2,463 |
16,379 |
4,972 |
||||
| Provision for income taxes | 2,578 | 895 | 6,454 | 1,845 | ||||
| Minority interest | 54 | - | (41) | - | ||||
| Income from continuing operations | 3,806 | 1,568 | 9,884 | 3,127 | ||||
| Loss from discontinued operations, net of tax | (573) | (71) | (1,525) | (141) | ||||
| Gain on disposal of discontinued operations, net of tax |
2,577 |
- |
4,985 |
- |
||||
| NET INCOME | $5,810 | $1,497 | $13,344 | $2,986 | ||||
|
WEIGHTED AVERAGE SHARES
OUTSTANDING – BASIC |
10,625 |
10,323 |
10,548 |
10,235 |
||||
| Basic income per share from continuing operations | $0.36 | $0.15 | $0.94 | $0.30 | ||||
| Basic loss per share from discontinued operations | (0.05) | - | (0.14) | (0.01) | ||||
| Basic income per share on disposal of discontinued operations |
0.24 |
- |
0.47 |
- |
||||
| BASIC NET INCOME PER SHARE | $0.55 | $0.15 | $1.27 | $0.29 | ||||
|
WEIGHTED AVERAGE SHARES
OUTSTANDING – DILUTED |
11,989 |
11,575 |
11,911 |
11,607 |
||||
| Diluted income per share from continuing operations | $0.32 | $0.13 | $0.83 | $0.27 | ||||
| Diluted loss per share from discontinued operations | (0.05) | - | (0.13) | (0.01) | ||||
| Diluted income per share on disposal of discontinued operations |
0.21 |
- |
0.42 |
- |
||||
| DILUTED NET INCOME PER SHARE | $0.48 | $0.13 | $1.12 | $0.26 | ||||
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REX STORES CORPORATION AND SUBSIDIARIES Consolidated Condensed Balance Sheets Unaudited |
|||||||||
| July 31, | January 31, | July 31, | |||||||
| 2007 | 2007 | 2006 | |||||||
| ASSETS | (In Thousands) | ||||||||
| CURRENT ASSETS: | |||||||||
| Cash and cash equivalents | $ | 90,293 | $ | 43,008 | $ | 5,481 | |||
| Accounts receivable, net | 3,128 | 1,975 | 4,149 | ||||||
| Synthetic fuel receivable | 3,851 | 8,838 | 3,171 | ||||||
| Note receivable, related party | - | - | 5,595 | ||||||
| Merchandise inventory, net | 84,256 | 70,078 | 123,349 | ||||||
| Prepaid expenses and other | 2,932 | 2,915 | 2,226 | ||||||
| Future income tax benefits | 6,562 | 9,192 | 9,354 | ||||||
| Total current assets | 191,022 | 136,006 | 153,325 | ||||||
| PROPERTY AND EQUIPMENT, NET | 78,575 | 122,769 | 121,994 | ||||||
| ASSETS HELD FOR SALE, NET | 1,064 | 2,009 | 2,822 | ||||||
| OTHER ASSETS | 23,595 | 18,986 | 10,580 | ||||||
| GOODWILL | 1,322 | 1,322 | - | ||||||
| FUTURE INCOME TAX BENEFITS | 23,533 | 26,245 | 29,228 | ||||||
| INVESTMENTS | 60,887 | 35,699 | - | ||||||
| RESTRICTED INVESTMENTS | 2,443 | 2,406 | 2,367 | ||||||
| Total assets | $ | 382,441 | $ | 345,442 | $ | 320,316 | |||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES: |
|||||||||
| Current portion of long-term debt | $ | 2,183 | $ | 2,678 | $ | 2,476 | |||
| Deferred income – extended warranties | 15,085 | 15,641 | 15,401 | ||||||
| Accounts payable, trade | 42,923 | 23,254 | 31,557 | ||||||
| Current portion of deferred gain on sale and leaseback | 2,068 | 101 | 101 | ||||||
| Other current liabilities | 9,381 | 10,510 | 11,296 | ||||||
| Total current liabilities | 71,640 | 52,184 | 60,831 | ||||||
| LONG-TERM LIABILITIES: | |||||||||
| Long-term mortgage debt | 19,122 | 31,236 | 20,117 | ||||||
| Deferred income – extended warranties | 17,653 | 19,286 | 18,054 | ||||||
| Deferred gain on sale and leaseback | 6,163 | 504 | 554 | ||||||
| Other | 940 | - | - | ||||||
| Total long-term liabilities | 43,878 | 51,026 | 38,725 | ||||||
| MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY |
11,764 |
11,443 |
- |
||||||
| SHAREHOLDERS' EQUITY: | |||||||||
| Common stock | 298 | 295 | 295 | ||||||
| Paid-in capital | 143,214 | 139,337 | 138,238 | ||||||
| Retained earnings | 265,106 | 252,249 | 243,884 | ||||||
| Treasury stock | (163,176) | (161,092) | (161,657) | ||||||
| Accumulated other comprehensive income, net of tax | 9,717 | - | - | ||||||
| Total shareholders' equity | 255,159 | 230,789 | 220,760 | ||||||
| Total liabilities and shareholders' equity | $ | 382,441 | $ | 345,442 | $ | 320,316 | |||