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As of July 31, 2009, REX had unrestricted cash and cash equivalents of approximately $81.1 million (exclusive of approximately $3.0 million of cash at consolidated ethanol production facilities). Total REX shareholders' equity at July 31, 2009 was $236.9 million and the Company had 9.2 million shares outstanding at the end of its fiscal 2009 second quarter.
During the fiscal 2009 second quarter the company closed its remaining retail locations though it continues to recognize deferred income from service contracts. Effective in the fiscal 2009 second quarter REX began reporting the results of its real estate operations as a separate segment which includes all owned and sub leased real estate including sites previously used as retail stores and distribution centers and certain administrative expenses. Reporting for REX's real estate segment excludes results from discontinued operations.
At July 31, 2009, REX had lease or sub-lease agreements, as landlord, for all or parts of 24 properties, including 18 stores leased to a third party appliance retail chain. REX owns 20 of these properties and is the tenant/sub landlord for four of the properties. At July 31, 2009 the third party leased and occupied 15 of the owned properties and three of the sub leased properties. REX has 25 owned properties, including two distribution centers, that are vacant at July 31, 2009 which it is marketing as vacant properties to lease or sell.
At July 31, 2009 REX also had interests in the following ethanol production facilities with initial production commencing at One Earth Energy LLC and Big River Resources, LLC-Galva during the period:
Entity REX's REX's Debt Production
Capital Ownership Investment Nameplate
Investment Interest ($ in millions) Capacity
($ in (millions of
millions) gallons)
Levelland Hockley County Ethanol, LLC (1) $16.5 56% $5.3 40
Patriot Renewable Fuels, LLC $16.0 23% $1.0 100
One Earth Energy, LLC $50.8 74% - 100
Big River Resources, LLC-W. Burlington $20.0 10% - 92
Big River Resources, LLC-Galva
- 100
(1) On January 29, 2009, REX (through a wholly-owned subsidiary) agreed
to fund up to $2.0 million in the form of a subordinated revolving
line of credit to Levelland Hockley and to issue a $1.0 million
letter of credit for the benefit of Levelland Hockley. These amounts
are not reflected in the table above.
Segment Balance Sheet Data
July 31, 2009 Jan. 31, 2009 July 31, 2008
Assets:
Alternative energy $280,490 $249,422 $217,994
Real estate 35,235 35,523 38,247
Retail 8,915 80,437 75,991
Corporate 121,509 118,325 107,975
Total assets $446,149 $451,288 $440,207
Segment Income Statement Data
The table below summarizes net sales and revenue from REX's alternative energy, real estate and retail segments and income (loss) from continuing operations for the three and six month periods ended July 31, 2009 and July 31, 2008. The Company's financial results reflect the consolidation of its investments in two ethanol affiliates, Levelland Hockley County Ethanol, LLC ("Levelland Hockley") and One Earth Energy LLC ("One Earth"). The real estate revenue recorded in the fiscal 2009 second quarter is from rental income. Certain amounts differ from those previously reported as a result of certain retail stores being reclassified into discontinued operations.
Three Months Ended Six Months Ended
July 31, July 31,
2009 2008 2009 2008
Net sales and revenue:
Alternative energy $ 16,810 $ 24,857 $ 30,927 $ 26,024
Real estate 353 96 486 185
Retail 4,314 17,150 15,513 35,009
Total net sales and revenues $ 21,477 $ 42,103 $ 46,926 $ 61,218
Segment gross profit (loss):
Alternative energy $ 1,209 $ 634 $ 1,441 $ 690
Real estate (163 ) 91 (234 ) 178
Retail 2,519 5,949 6,203 11,968
Total gross profit $ 3,565 $ 6,674 $ 7,410 $ 12,836
Segment Income Statement Data (continued)
Three Months Ended Six Months Ended
July 31, July 31,
2009 2008 2009 2008
Segment profit (loss):
Alternative energy $(551) $983 $(2,367) $1,406
Real estate (214) 33 (285) 95
Retail 2,185 539 2,453 893
Corporate expense (430) (582) (787) (1,096)
Interest expense (52) (93) (253) (221)
Investment income 73 478 180 1,140
Income from synthetic fuel investments - - - 670
Income (loss) from continuing operations $1,011 $1,358 $(1,059) $2,887
before income taxes
REX recorded pre-tax income from continuing operations, of $1.0 million in the quarter ended July 31, 2009 compared with $1.4 million in the comparable prior year period. In the quarter ended July 31, 2009 REX generated income from continuing operations including non-controlling interest, net of tax of $0.4 million and a gain from discontinued operations, net of tax, of $0.2 million. In the comparable year ago period REX reported income from continuing operations including non-controlling interest, net of tax of $1.0 million and a gain from discontinued operations, net of tax of $0.3 million. For the fiscal second quarter ended July 31, 2009 REX generated net income attributable to common shareholders of $0.8 million, or $0.09 per diluted share. In the second quarter of fiscal 2008 REX reported net income attributable to common shareholders of $1.2 million, or $0.11 per diluted share. Per share results are based on 9,486,000 and 11,146,000 diluted weighted average shares outstanding for the quarters ended July 31, 2009 and July 31, 2008, respectively.
During the fiscal 2009 second quarter REX purchased 125,942 shares of its common stock in open market transactions. In the first half of fiscal 2009, REX repurchased 280,505 of its common stock in open market transactions. Reflecting all purchases to-date, the Company has approximately 299,000 authorized shares remaining available to purchase under the expanded February 2009 stock buy-back authorization and presently has approximately 9,210,000 shares of common stock outstanding.
The Company will host a conference call and webcast today at 11:00 a.m. ET, which are open to the general public. The conference call dial-in number is 212/231-2910; 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; 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. ET on September 23, 2009 by dialing 800/633-8284 or 402/977-9140 (international callers). The access code for the audio replay is 21436625. Alternatively, a replay will be available on the Internet for 30 days at www.rextv.com.
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: the uncertainty of constructing ethanol plants on time and on budget, the impact of legislative changes, the price volatility and availability of corn, sorghum, dried distiller grains, ethanol, gasoline and natural gas, ethanol plants operating efficiently and according to forecasts and projections, changes in the national or regional economies, weather, the effects of terrorism or acts of war, changes in real estate market conditions, the fluctuating amount of income received from the Company's synthetic fuel investments and the impact of Internal Revenue Service audits. The Company does not intend to update publicly any forward-looking statements except as required by law.
REX STORES CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements Of Income
(In Thousands, Except Per Share Amounts)
Unaudited
Three Months Six Months
Ended July 31, Ended July 31,
2009 2008* 2009 2008*
Net sales and revenue $ 21,477 $ 42,103 $ 46,926 $ 61,218
Cost of sales (excluding retail segment depreciation) 17,912 35,429 39,516 48,382
Gross profit 3,565 6,674 7,410 12,836
Selling, general and administrative expenses (1,905) (6,779) (6,282) (14,340)
Investment income 114 519 259 1,374
Interest expense (811) (890) (1,604) (1,003)
Loss on early termination of debt (28) - (100) -
Equity in income (loss)of unconsolidated ethanol affiliates 184 874 (77) 1,922
Income from synthetic fuel investments - - - 670
(Losses) gains on derivative financial instruments, net (108) 960 (665) 1,428
Income (loss) from continuing operations before provision/benefit 1,011 1,358 (1,059) 2,887
for income taxes and discontinued operations
(Provision) benefit for income taxes (569) (399) 24 (762)
Income (loss) from continuing operations including noncontrolling 442 959 (1,035) 2,125
interest
(Loss) income from discontinued operations, net of tax (52) 86 (800) 224
Gain on disposal of discontinued operations, net of tax 251 197 124 196
Net income (loss) including noncontrolling interest 641 1,242 (1,711) 2,545
Net loss (income) attributable to noncontrolling interest 196 (36) 817 187
Net income (loss) attributable to REX common shareholders $ 837 $ 1,206 $ (894) $ 2,732
Weighted average shares outstanding - basic 9,231 10,510 9,264 10,618
Basic income (loss) per share from continuing operations $ 0.07 $ 0.08 $ (0.02) $ 0.22
attributable to REX common shareholders
Basic (loss) income per share from discontinued operations (0.01) 0.01 (0.09) 0.02
attributable to REX common shareholders
Basic income per share on disposal of discontinued operations 0.03 0.02 0.01 0.02
attributable to REX common shareholders
Basic net income (loss) per share attributable to REX common $ 0.09 $ 0.11 $ (0.10) $ 0.26
shareholders
Weighted average shares outstanding - diluted 9,486 11,146 9,264 11,396
Diluted income (loss) per share from continuing operations $ 0.07 $ 0.08 $ (0.02) $ 0.20
attributable to REX common shareholders
Diluted (loss) income per share from discontinued operations (0.01) 0.01 (0.09) 0.02
attributable to REX common shareholders
Diluted income per share on disposal of discontinued operations 0.03 0.02 0.01 0.02
attributable to REX common shareholders
Diluted net income (loss) per share attributable to REX common $ 0.09 $ 0.11 ($0.10) $ 0.24
shareholders
Amounts attributable to REX common shareholders:
Income (loss) from continuing operations, net of tax $ 638 $ 923 $ (218) $ 2,312
Income (loss) from discontinued operations, net of tax 199 283 (676) 420
Net income (loss) $ 837 $ 1,206 $ (894) $ 2,732
* Amounts differ from those previously reported as a result of
certain stores being reclassified into discontinued operations.
REX STORES CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(in thousands)
Unaudited
July 31, January 31, July 31,
2009 2009 2008
Assets
Current assets:
Cash and cash equivalents $ 84,103 $ 91,991 $ 79,608
Restricted cash 1,024 - 2,774
Accounts receivable, net 2,119 4,197 3,509
Inventory, net 7,832 24,374 59,457
Refundable income taxes 7,364 7,790 1,158
Prepaid expenses and other 3,267 1,063 1,274
Deferred taxes, net 8,523 13,230 10,312
Total current assets 114,232 142,645 158,092
Property and equipment, net 255,879 235,454 202,193
Other assets 10,203 12,414 13,670
Goodwill - - 1,322
Deferred taxes, net 23,836 18,697 21,929
Investments 41,999 42,078 43,001
Total assets $ 446,149 $ 451,288 $ 440,207
Liabilities and shareholders' equity:
Current liabilities:
Current portion of long-term debt and capital lease $ 10,642 $ 5,898 $ 4,874
obligations,
alternative energy
Current portion of long-term debt, other 362 1,576 1,735
Accounts payable, trade 5,099 25,167 49,688
Deferred income 9,659 13,510 14,533
Derivative financial instruments 2,105 1,996 -
Other current liabilities 6,696 10,122 7,140
Total current liabilities 34,563 58,269 77,970
Long-term liabilities:
Long-term debt and capital lease obligations, alternative energy 128,045 94,003 49,877
Long-term debt, other 2,780 9,936 12,250
Deferred income 9,793 17,263 18,919
Derivative financial instruments 3,776 4,032 839
Other 6,559 4,152 1,152
Total long-term liabilities 150,953 129,386 83,037
Equity:
REX shareholders' equity:
Common stock 299 299 299
Paid-in capital 142,735 142,486 142,584
Retained earnings 281,438 282,332 288,361
Treasury stock (187,632) (186,057) (179,583)
Accumulated other comprehensive income, net of tax 37 - -
Total REX shareholders' equity 236,877 239,060 251,661
Noncontrolling interests 23,756 24,573 27,539
Total equity 260,633 263,633 279,200
Total liabilities and equity $ 446,149 $ 451,288 $ 440,207
SOURCE: REX Stores Corporation
REX Stores Corporation Douglas Bruggeman, 937-276-3931 Chief Financial Officer or Jaffoni & Collins Incorporated Joseph N. Jaffoni/David Collins, 212-835-8500 rsc@jcir.com
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