UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 9, 2008
REX STORES CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 001-09097 | 31-1095548 |
| (State or other jurisdiction | (Commission File No.) | (IRS Employer Identification No.) |
| of incorporation) |
| 2875 Needmore Road, Dayton, Ohio | 45414 |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (937) 276-3931
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
On December 9, 2008, REX Stores Corporation issued a press release announcing financial results for the three month period ended October 31, 2008. The press release is furnished as Exhibit 99 to this report.
Item 9.01. Financial Statements and Exhibits
| (c) |
Exhibits. The following exhibits are furnished with this report: |
|
| 99 Press Release dated December 9, 2008 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| REX STORES CORPORATION | |
| Date: December 9, 2008 | By: /s/ DOUGLAS L. BRUGGEMAN |
| Name: Douglas L. Bruggeman | |
| Title: Vice President - Finance, | |
| Chief Financial Officer | |
| and Treasurer |
| 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 THIRD QUARTER RESULTS
- Repurchased 626,000 Common Shares in Fiscal Third Quarter and
a Total of 1.5 Million Shares in Fiscal 2008 to Date -
Dayton, Ohio (December 9, 2008) – REX Stores Corporation (NYSE:RSC) today announced financial results for the three month period ended October 31, 2008 (the third quarter of the Company’s 2008 fiscal year). The Company will host a conference call and webcast this morning (details below) to review the results.
Fiscal Third Quarter and Nine Month Income Statement Review
The table below summarizes net sales and revenue from REX’s retail and alternative energy segments and income (loss) from continuing operations for the three and nine month periods ended October 31, 2008 and October 31, 2007.
| Three Months Ended | Nine Months Ended | ||||||||||||
| (in thousands) | October 31, | October 31, | |||||||||||
| 2008 | 2007 | 2008 | 2007 | ||||||||||
| Unaudited | |||||||||||||
| Net sales and revenue: | |||||||||||||
| Retail segment | $ | 41,235 | $ | 53,402 | $ | 127,320 | $ | 146,852 | |||||
| Alternative energy segment | 22,444 | - | 48,468 | - | |||||||||
| Total net sales and revenues | $ | 63,679 | $ | 53,402 | $ | 175,788 | $ | 146,852 | |||||
| Income (loss) from continuing operations | |||||||||||||
| Retail segment | $ | 2,833 | $ | 2,522 | $ | 4,582 | $ | 6,753 | |||||
| Alternative energy segment | (4,957 | ) | 16,896 | (3,527 | ) | 19,032 | |||||||
| Corporate expense | (484 | ) | (328 | ) | (1,597 | ) | (1,701 | ) | |||||
| Interest expense | (111 | ) | (47 | ) | (332 | ) | (704 | ) | |||||
| Interest income | 345 | 1,218 | 1,481 | 3,046 | |||||||||
| Income (loss) from synthetic fuel investments | 21 | (1,860 | ) | 691 | 8,279 | ||||||||
| (Loss) income from continuing operations before | |||||||||||||
| income taxes and minority interest | (2,353 | ) | 18,401 | 1,298 | 34,705 | ||||||||
| Benefit (provision) for income taxes | 50 | (7,119 | ) | (970 | ) | (13,380 | ) | ||||||
| Minority interest | 1,878 | 32 | 2,070 | (12 | ) | ||||||||
| (Loss) income from continuing operations | $ | (425 | ) | $ | 11,314 | $ | 2,398 | $ | 21,313 | ||||
| -more- | |||||||||||||
| REX Reports Fiscal 2008 Third Quarter, 12/9/08 | page 2 |
The Company’s financial results reflect the consolidation of its investments in two ethanol affiliates, Levelland Hockley County Ethanol, LLC (“Levelland Hockley”) as of September 30, 2006 and One Earth Energy LLC (“One Earth”) as of October 30, 2007.
Comparable retail store sales in the fiscal 2008 third quarter declined 13.6% compared to the fiscal 2007 third quarter. 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.
Net loss in the quarter ended October 31, 2008 was $0.7 million, or $0.07 per diluted share compared with net income of $14.7 million, or $1.25 per diluted share, in the same period of fiscal 2007. As required by SFAS 142 “Goodwill and Other Intangible Assets,” in addition to the required annual test, REX Stores tests the impairment of its intangible assets whenever events or changes in circumstances indicate that such assets might be impaired. This testing resulted in a $1.3 million non-cash pre-tax impairment charge in the fiscal third quarter ended October 31, 2008, related to the Company’s investment in Levelland Hockley County Ethanol, LLC. During the fiscal 2008 third quarter the Company recorded a $2.3 million pre-tax gain related to the sale of its Cheyenne, Wyoming distribution facility and associated real estate. During the fiscal 2008 third quarter, the Company recorded a $0.9 million non-cash pre-tax loss from interest rate derivative financial instruments held by its consolidated ethanol entities, Levelland Hockley and One Earth. The fiscal 2008 third quarter net loss also reflects a $0.2 million loss from discontinued operations, net of tax, or $0.02 per diluted share, while the fiscal 2007 third quarter net income reflects a $0.5 million loss from discontinued operations, net of tax, or $0.04 per diluted share. In the year ago fiscal third quarter, REX recorded a $17.1 million pre-tax gain related to consideration for its interest in Millennium Ethanol, LLC which was acquired by US BioEnergy. Per share results are based on 9,937,000 and 11,750,000 diluted weighted average shares outstanding for the quarters ended October 31, 2008 and October 31, 2007, respectively.
| Select Segment Balance Sheet Data | |||||||||
| Oct. 31, 2008 | Jan. 31, 2008 | Oct. 31, 2007 | |||||||
| Assets: | |||||||||
| Retail | $ | 112,083 | $ | 120,711 | $ | 140,351 | |||
| Alternative energy | 233,941 | 167,070 | 178,664 | ||||||
| Corporate | 97,085 | 121,197 | 76,996 | ||||||
| Total assets | $ | 443,109 | $ | 408,978 | $ | 396,011 | |||
| Long-term debt and capital lease obligations: | |||||||||
| Retail | $ | - | $ | - | $ | - | |||
| Alternative energy | 73,089 | 22,072 | 8,618 | ||||||
| Corporate | 11,428 | 13,152 | 15,600 | ||||||
| Total long-term debt and capital lease obligations: | $ | 84,517 | $ | 35,224 | $ | 24,218 | |||
| -more- |
| REX Reports Fiscal 2008 Third Quarter, 12/9/08 | page 3 |
REX Stores’ Current Ethanol Production Interests
| Entity |
REX’s Capital Investment ($ In millions) |
REX’s
Ownership Interest |
Production
Nameplate Capacity (millions of gallons) |
Estimated
Commencement of Production |
|
| Levelland Hockley County Ethanol, LLC (1) | $16.5 | 56% | 40 | In Production | |
| Patriot Renewable Fuels, LLC | $16.0 | 23% | 100 | In Production | |
| One Earth Energy, LLC | $50.8 | 74% | 100 | Early 2009 | |
| Big River Resources, LLC-W. Burlington | 92 | In Production | |||
| Big River Resources, LLC-Galva | $20.0 | 10% | 100 | Summer 2009 | |
| (1) |
On February 20, 2008, REX (through a wholly-owned subsidiary) purchased a $5.0 million secured promissory note from Levelland Hockley. The note grants REX rights to convert the note into an additional equity ownership position. |
During the fiscal 2008 third quarter REX purchased approximately 626,000 shares of its common stock in open market transactions. Subsequent to the end of the fiscal 2008 third quarter, REX purchased approximately 144,000 shares of its common stock in open market transactions. The Company has approximately 239,000 authorized shares remaining available to purchase under the expanded October 2008 stock buy-back authorization. Reflecting all purchases to-date, REX presently has approximately 9,541,000 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, 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. ET on December 23, 2008 by dialing 800/633-8284 or 402/977-9140 (international callers). The access code for the audio replay is 21401698. Alternatively, a replay will be available on the Internet for 30 days at www.rextv.com or www.earnings.com.
REX has interests in four ethanol entities and is a specialty retailer of consumer electronic products and appliances. As of October 31, 2008, the Company operated 105 retail stores in 32 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: 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, the fluctuating amount of quarterly payments received by the Company with respect to sales of its partnership interest in its synthetic fuel investments, and the variability of 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, the price volatility of corn, sorghum, dried distiller grains, ethanol, gasoline and natural gas, and the plants operating efficiently and according to forecasts and projections.
-tables follow-
| REX Reports Fiscal 2008 Third Quarter, 12/9/08 | page 4 |
REX STORES CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements Of Income
(In Thousands, Except Per Share Amounts)
Unaudited
| Three Months | Nine Months | |||||||||||||||
| Ended October 31, | Ended October 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Net sales and revenue | $ | 63,679 | $ | 53,402 | $ | 175,788 | $ | 146,852 | ||||||||
| Cost of sales (excluding retail segment depreciation) | 54,038 | 38,210 | 140,032 | 101,933 | ||||||||||||
| Gross profit | 9,641 | 15,192 | 35,756 | 44,919 | ||||||||||||
| Selling, general and administrative expenses | (13,671 | ) | (14,165 | ) | (40,505 | ) | (42,612 | ) | ||||||||
| Interest income | 363 | 1,503 | 1,732 | 4,772 | ||||||||||||
| Interest expense | (1,074 | ) | (47 | ) | (2,093 | ) | (147 | ) | ||||||||
| Loss on early termination of debt | (9 | ) | - | (9 | ) | (557 | ) | |||||||||
| Gains on sale of real estate, net | 2,279 | 125 | 2,279 | 876 | ||||||||||||
| Equity in income of unconsolidated ethanol affiliates | 1,044 | 535 | 2,966 | 2,057 | ||||||||||||
| Realized and unrealized investment gains, net | - | 17,118 | - | 17,118 | ||||||||||||
| Income (loss) from synthetic fuel investments | 21 | (1,860 | ) | 691 | 8,279 | |||||||||||
| Unrealized and realized (losses) gains on derivative financial | ||||||||||||||||
| instruments, net | (947 | ) | - | 481 | - | |||||||||||
| (Loss) income from continuing operations before provision for | ||||||||||||||||
| income taxes, minority interest and discontinued operations | (2,353 | ) | 18,401 | 1,298 | 34,705 | |||||||||||
| Benefit (provision) for income taxes | 50 | (7,119 | ) | (970 | ) | (13,380 | ) | |||||||||
| Minority interest | 1,878 | 32 | 2,070 | (12 | ) | |||||||||||
| (Loss) income from continuing operations | (425 | ) | 11,314 | 2,398 | 21,313 | |||||||||||
| Loss from discontinued operations, net of tax | (225 | ) | (535 | ) | (507 | ) | (2,171 | ) | ||||||||
| Gain on disposal of discontinued operations, net of tax | - | 3,887 | 191 | 8,868 | ||||||||||||
| Net (loss) income | $ | (650 | ) | $ | 14,666 | $ | 2,082 | $ | 28,010 | |||||||
| Weighted average shares outstanding – basic | 9,937 | 10,433 | 10,389 | 10,509 | ||||||||||||
| Basic (loss) income per share from continuing operations | $ | (0.05 | ) | $ | 1.08 | $ | 0.23 | $ | 2.03 | |||||||
| Basic loss per share from discontinued operations | (0.02 | ) | (0.04 | ) | (0.05 | ) | (0.20 | ) | ||||||||
| Basic income per share on disposal of discontinued operations | - | 0.37 | 0.02 | 0.84 | ||||||||||||
| Basic net (loss) income per share | $ | (0.07 | ) | $ | 1.41 | $ | 0.20 | $ | 2.67 | |||||||
| Weighted average shares outstanding – diluted | 9,937 | 11,750 | 11,029 | 11,864 | ||||||||||||
| Diluted (loss) income per share from continuing operations | $ | (0.05 | ) | $ | 0.96 | $ | 0.22 | $ | 1.79 | |||||||
| Diluted loss per share from discontinued operations | (0.02 | ) | (0.04 | ) | (0.05 | ) | (0.18 | ) | ||||||||
| Diluted income per share on disposal of discontinued operations | - | 0.33 | 0.02 | 0.75 | ||||||||||||
| Diluted net (loss) income per share | $ | (0.07 | ) | $ | 1.25 | $ | 0.19 | $ | 2.36 | |||||||
| * | Amounts differ from those previously reported as a result of certain stores being reclassified into discontinued operations. |
- balance sheet follows -
| REX Reports Fiscal 2008 Third Quarter, 12/9/08 | page 5 |
REX STORES CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(in thousands)
Unaudited
| October 31, | January 31, | October 31, | ||||||||||
| 2008 | 2008 | 2007 | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 66,215 | $ | 127,716 | $ | 102,966 | ||||||
| Restricted cash | 1,318 | - | - | |||||||||
| Accounts receivable, net | 4,643 | 1,877 | 1,317 | |||||||||
| Synthetic fuel receivable | - | 573 | 1,683 | |||||||||
| Inventory, net | 56,554 | 49,933 | 78,427 | |||||||||
| Prepaid expenses and other | 3,677 | 2,492 | 1,550 | |||||||||
| Deferred taxes | 9,801 | 10,599 | 6,619 | |||||||||
| Total current assets | 142,208 | 193,190 | 192,562 | |||||||||
| Property and equipment, net | 221,967 | 136,505 | 91,634 | |||||||||
| Assets held for sale, net | 92 | - | 522 | |||||||||
| Other assets | 12,861 | 14,803 | 14,630 | |||||||||
| Goodwill | - | 1,322 | 1,322 | |||||||||
| Deferred taxes | 21,929 | 21,929 | 25,943 | |||||||||
| Equity method investments | 41,549 | 38,748 | 39,010 | |||||||||
| Investments in marketable equity securities | - | - | 27,926 | |||||||||
| Restricted investments | 2,503 | 2,481 | 2,462 | |||||||||
| Total assets | $ | 443,109 | $ | 408,978 | $ | 396,011 | ||||||
| Liabilities and shareholders’ equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Current portion of long-term debt and capital lease obligations | $ | 6,393 | $ | 4,101 | $ | 3,741 | ||||||
| Accounts payable, trade | 38,539 | 27,253 | 35,411 | |||||||||
| Deferred income | 12,485 | 14,448 | 14,472 | |||||||||
| Deferred gain on sale and leaseback | 1,655 | 1,436 | 1,730 | |||||||||
| Other current liabilities | 6,715 | 13,617 | 13,315 | |||||||||
| Total current liabilities | 65,787 | 60,855 | 68,669 | |||||||||
| Long-term liabilities: | ||||||||||||
| Long-term debt and capital lease obligations | 84,517 | 35,224 | 24,218 | |||||||||
| Deferred income | 14,250 | 17,172 | 16,958 | |||||||||
| Deferred gain on sale and leaseback | 3,886 | 4,493 | 5,187 | |||||||||
| Derivative financial instruments | 1,359 | 2,601 | - | |||||||||
| Other | 1,176 | 4,313 | 619 | |||||||||
| Total long-term liabilities | 105,188 | 63,803 | 46,982 | |||||||||
| Minority interest in consolidated subsidiaries | 25,659 | 27,729 | 28,568 | |||||||||
| Shareholders’ equity: | ||||||||||||
| Common stock | 299 | 298 | 298 | |||||||||
| Paid-in capital | 142,310 | 141,357 | 143,682 | |||||||||
| Retained earnings | 287,711 | 285,629 | 279,772 | |||||||||
| Treasury stock | (183,845 | ) | (170,693 | ) | (171,960 | ) | ||||||
| Total shareholders' equity | 246,475 | 256,591 | 251,792 | |||||||||
| Total liabilities and shareholders' equity | $ | 443,109 | $ | 408,978 | $ | 396,011 | ||||||
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