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 3, 2009
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 3, 2009, REX Stores Corporation issued a press release announcing financial results for the three month period ended October 31, 2009. 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 3, 2009 | ||
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 3, 2009 | 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 2009 THIRD QUARTER DILUTED EPS OF $0.24
COMPARED WITH DILUTED EPS LOSS OF $0.07
- Repurchased 254,042 Common Shares in Fiscal 2009 Third Quarter and
Board of Directors Authorizes the Repurchase of an Additional 500,000 Shares -
Dayton, Ohio (December 3, 2009) – REX Stores Corporation (NYSE: RSC) today announced financial results for the three month period ended October 31, 2009 (the third quarter of the Company’s 2009 fiscal year). The Company will host a conference call and webcast this morning (details below) to review the results.
In the fiscal 2009 third quarter REX reported net sales and revenue of $64.4 million a 64.4% increase over net sales and revenue of $39.2 million in the fiscal 2008 third quarter. For the three months ended October 31, 2009, REX recorded pre-tax income from continuing operations of $4.8 million compared with a $2.2 million loss in the comparable prior year period, inclusive of a $2.3 million gain on sales of real estate. In the quarter ended October 31, 2009 REX generated income from continuing operations including non-controlling interest, net of tax, of $3.3 million compared with a loss from continuing operations including non-controlling interest, net of tax, of $2.2 million in the fiscal 2008 third quarter. For the fiscal third quarter ended October 31, 2009 REX generated net income attributable to common shareholders of $2.3 million, or $0.24 per diluted share. In the third quarter of fiscal 2008 REX reported a net loss attributable to common shareholders of $0.7 million, or a $0.07 per diluted share loss. Per share results are based on 9,464,000 and 9,937,000 diluted weighted average shares outstanding for the quarters ended October 31, 2009 and October 31, 2008, respectively.
Segment Income Statement Data
The table below summarizes net sales and revenue from REX’s alternative energy, real estate and retail segments and income (loss) from continuing operations for the three and nine month periods ended October 31, 2009 and
October 31, 2008. The Company’s financial results reflect the consolidation of its investments in two ethanol affiliates, Levelland Hockley County Ethanol, LLC (“Levelland Hockley”) and One Earth Energy, LLC (“One Earth”).
The fiscal 2009 third quarter real estate revenue reflects rental income derived from all owned and sub-leased real estate including sites previously used as retail stores and distribution centers. The Company discontinued its retail operations
earlier in fiscal 2009 and the retail segment revenue recognized in the fiscal 2009 third quarter period reflects deferred income from service contracts. Certain amounts differ from those previously reported as a result of certain retail stores and
real estate assets being reclassified into discontinued operations.
-more-
| REX Reports Fiscal 2009 Third Quarter Results, 12/3/09 | page 2 |
| Three Months Ended | Nine Months Ended | |||||||||||||
| ($ in thousands) | October 31, | October 31, | ||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||
| Net sales and revenue: | ||||||||||||||
| Alternative energy (1) | $ | 61,368 | $ | 22,444 | $ | 92,296 | $ | 48,468 | ||||||
| Real estate | 341 | 83 | 827 | 270 | ||||||||||
| Retail | 2,707 | 16,644 | 18,057 | 50,904 | ||||||||||
| Total net sales and revenues | $ | 64,416 | $ | 39,171 | $ | 111,180 | $ | 99,642 | ||||||
| Segment gross profit (loss): | ||||||||||||||
| Alternative energy (1) | $ | 5,790 | $ | (2,443 | ) | $ | 6,740 | $ | (1,753 | ) | ||||
| Real estate | (117 | ) | 77 | (351 | ) | 252 | ||||||||
| Retail | 2,187 | 6,038 | 8,383 | 17,807 | ||||||||||
| Total gross profit | $ | 7,860 | $ | 3,672 | $ | 14,772 | $ | 16,306 | ||||||
| Segment profit (loss): | ||||||||||||||
| Alternative energy (1) | $ | 4,569 | $ | (4,957 | ) | $ | 2,222 | $ | (3,527 | ) | ||||
| Real estate | (187 | ) | 25 | (462 | ) | 95 | ||||||||
| Retail | 843 | 2,936 | 3,142 | 3,331 | ||||||||||
| Corporate expense | (430 | ) | (484 | ) | (1,046 | ) | (1,113 | ) | ||||||
| Interest expense | (60 | ) | (111 | ) | (314 | ) | (332 | ) | ||||||
| Investment income | 82 | 345 | 230 | 1,481 | ||||||||||
| Income from synthetic fuel investments | - | 21 | - | 691 | ||||||||||
| Income (loss) from continuing | ||||||||||||||
| operations before income taxes | $ | 4,817 | $ | (2,225 | ) | $ | 3,772 | $ | 626 | |||||
| (1) |
Includes results attributable to non-controlling interest of approximately 44% for Levelland Hockley and 26% for One Earth Energy. |
At October 31, 2009 REX had interests in the following ethanol production facilities. The fiscal 2009 third quarter represented the first full quarter of production at One Earth Energy, LLC:
| REX’s | Production | |||
| Capital | Nameplate | |||
| Investment | REX’s | Debt | Capacity | |
| Entity | ($ in | Ownership | Investment | (millions of |
| millions) | Interest | ($ in 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 | 10% | - | 92 | |
| Big River Resources, LLC-Galva | $20.0 | 10% | - | 100 |
| Big River United Energy, LLC (Dyersville) (2) | 5% | - | 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. |
| (2) |
In August 2009, Big River Resources acquired a 50% interest in an ethanol production facility in Dyersville, Iowa. Reflecting REX’s 10% ownership interest in Big River Resources, LLC, REX has an ownership interest in this entity. |
Reflecting the use during the fiscal 2009 third quarter of approximately $3.0 million for the repurchase of 254,042 common shares, as of October 31, 2009, REX had unrestricted cash and cash equivalents of approximately $75.8 million (exclusive of approximately $8.7 million of cash at consolidated ethanol production facilities).
-more-
| REX Reports Fiscal 2009 Third Quarter Results, 12/3/09 | page 3 |
In the first nine months of fiscal 2009, REX repurchased 535,000 shares of its common stock in open market transactions. The Company’s Board of Directors has authorized the repurchase of up to an additional 500,000 shares of its common stock. Purchases will be made from time to time in open market or private transactions at prevailing market prices, and all shares purchased will be held in the Company’s treasury for possible future use. Reflecting the new repurchase authorization, the repurchase of an additional 7,000 shares of common stock in the fiscal fourth quarter to-date and the balance of the February 2009 stock buy-back authorization, the Company is presently authorized to repurchase up to 538,000 shares of its common stock. Total REX shareholders’ equity at October 31, 2009 was $236.6 million and at the end of the fiscal 2009 third quarter, the Company had approximately 8,995,000 shares of common stock outstanding.
| Segment Balance Sheet Data | ||||||||
| ($ in thousands) | October 31, 2009 | January 31, 2009 | October 31, 2008 | |||||
| Assets: | ||||||||
| Alternative energy (1) | $ | 289,662 | $ | 249,422 | $ | 233,941 | ||
| Real estate | 36,416 | 35,523 | 35,969 | |||||
| Retail | 7,863 | 44,914 | 76,114 | |||||
| Corporate | 114,458 | 121,429 | 97,085 | |||||
| Total assets | $ | 448,399 | $ | 451,288 | $ | 443,109 | ||
| (1) |
Includes assets attributable to non-controlling interest of approximately 44% for Levelland Hockley and 26% for One Earth Energy. |
During the fiscal 2009 third quarter the Company terminated an agreement with a third party for the lease of 15 REX owned retail locations and also terminated a lease and sub-lease for one store location leased by REX. At October 31, 2009, REX had lease or sub-lease agreements, as landlord, for all or parts of eight properties (including a portion of one distribution center). REX owns seven of these properties and is the tenant/sub landlord for one of the properties. REX has 38 owned properties (including one former distribution center), that were completely vacant at October 31, 2009 and which it is marketing as vacant properties to lease or sell.
The Company will host a conference call and webcast today at 10:00 a.m. ET, which are open to the general public. The conference call dial-in number is 212/231-2914; 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 replay of today’s call 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.
-tables follow-
| REX Reports Fiscal 2009 Third Quarter Results, 12/3/09 | page 4 |
REX STORES CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements Of Operations
(In Thousands, Except Per Share Amounts)
Unaudited
| Three Months | Nine Months | |||||||||||
| Ended | Ended | |||||||||||
| October 31, | October 31, | |||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||
| Net sales and revenue | $ | 64,416 | $ | 39,171 | $ | 111,180 | $ | 99,642 | ||||
| Cost of sales (excluding retail segment depreciation) | 56,556 | 35,499 | 96,408 | 83,336 | ||||||||
| Gross profit | 7,860 | 3,672 | 14,772 | 16,306 | ||||||||
| Selling, general and administrative expenses | (2,581 | ) | (7,578 | ) | (8,355 | ) | (21,746 | ) | ||||
| Investment income | 92 | 363 | 356 | 1,732 | ||||||||
| Interest expense | (1,642 | ) | (1,070 | ) | (3,250 | ) | (2,074 | ) | ||||
| Equity in income of unconsolidated ethanol affiliates | 1,221 | 1,044 | 1,144 | 2,966 | ||||||||
| Gains on sales of real estate | - | 2,279 | - | 2,279 | ||||||||
| Other income | 766 | 12 | 666 | 682 | ||||||||
| (Losses) gains on derivative financial instruments, net | (899 | ) | (947 | ) | (1,561 | ) | 481 | |||||
| Income (loss) from continuing operations before provision/benefit for | ||||||||||||
| income taxes and discontinued operations | 4,817 | (2,225 | ) | 3,772 | 626 | |||||||
| (Provision) benefit for income taxes | (1,510 | ) | 41 | (1,450 | ) | (701 | ) | |||||
| Income (loss) from continuing operations including noncontrolling | ||||||||||||
| interest | 3,307 | (2,184 | ) | 2,322 | (75 | ) | ||||||
| Loss from discontinued operations, net of tax | (22 | ) | (344 | ) | (873 | ) | (103 | ) | ||||
| Gain on disposal of discontinued operations, net of tax | - | - | 127 | 190 | ||||||||
| Net income (loss) including noncontrolling interest | 3,285 | (2,528 | ) | 1,576 | 12 | |||||||
| Net (income) loss attributable to noncontrolling interest | (1,012 | ) | 1,878 | (195 | ) | 2,070 | ||||||
| Net income (loss) attributable to REX common shareholders | $ | 2,273 | $ | (650 | ) | $ | 1,381 | $ | 2,082 | |||
| Weighted average shares outstanding – basic | 9,161 | 9,937 | 9,229 | 10,389 | ||||||||
| Basic income (loss) per share from continuing operations attributable | ||||||||||||
| to REX common shareholders | $ | 0.25 | $ | (0.03 | ) | $ | 0.23 | $ | 0.19 | |||
| Basic loss per share from discontinued operations attributable to REX | ||||||||||||
| common shareholders | - | (0.04 | ) | (0.09 | ) | (0.01 | ) | |||||
| Basic income per share on disposal of discontinued operations | ||||||||||||
| attributable to REX common shareholders | - | - | 0.01 | 0.02 | ||||||||
| Basic net income (loss) per share attributable to REX common | ||||||||||||
| shareholders | $ | 0.25 | $ | (0.07 | ) | $ | 0.15 | $ | 0.20 | |||
| Weighted average shares outstanding – diluted | 9,464 | 9,937 | 9,478 | 11,029 | ||||||||
| Diluted income (loss) per share from continuing operations attributable | ||||||||||||
| to REX common shareholders | $ | 0.24 | $ | (0.03 | ) | $ | 0.23 | $ | 0.18 | |||
| Diluted loss per share from discontinued operations attributable to | ||||||||||||
| REX common shareholders | - | (0.04 | ) | (0.09 | ) | (0.01 | ) | |||||
| Diluted income per share on disposal of discontinued operations | ||||||||||||
| attributable to REX common shareholders | - | - | 0.01 | 0.02 | ||||||||
| Diluted net income (loss) per share attributable to REX common | ||||||||||||
| shareholders | $ | 0.24 | $ | (0.07 | ) | $ | 0.15 | $ | 0.19 | |||
| Amounts attributable to REX common shareholders: | ||||||||||||
| Income (loss) from continuing operations, net of tax | $ | 2,295 | $ | (306 | ) | $ | 2,127 | $ | 1,995 | |||
| (Loss) income from discontinued operations, net of tax | (22 | ) | (344 | ) | (746 | ) | 87 | |||||
| Net income (loss) | $ | 2,273 | $ | (650 | ) | $ | 1,381 | $ | 2,082 | |||
| * |
Amounts differ from those previously reported as a result of certain stores and real estate assets being reclassified into discontinued operations. |
- balance sheet follows -
| REX Reports Fiscal 2009 Third Quarter Results, 12/3/09 | page 5 |
REX STORES CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(in thousands)
Unaudited
| October 31, | January 31, | October 31, | |||||||
| 2009 | 2009 | 2008 | |||||||
| Assets | (In Thousands) | ||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 84,448 | $ | 91,991 | $ | 66,215 | |||
| Restricted cash | 1,025 | - | 1,318 | ||||||
| Accounts receivable, net | 9,261 | 4,197 | 4,643 | ||||||
| Inventory, net | 7,673 | 24,374 | 56,554 | ||||||
| Refundable income taxes | 4,703 | 7,790 | 2,501 | ||||||
| Prepaid expenses and other | 1,846 | 1,063 | 1,176 | ||||||
| Deferred taxes, net | 7,980 | 13,230 | 9,801 | ||||||
| Total current assets | 116,936 | 142,645 | 142,208 | ||||||
| Property and equipment, net | 253,153 | 235,454 | 221,967 | ||||||
| Other assets | 9,837 | 12,414 | 12,953 | ||||||
| Deferred taxes, net | 25,435 | 18,697 | 21,929 | ||||||
| Investments | 43,038 | 42,078 | 44,052 | ||||||
| Total assets | $ | 448,399 | $ | 451,288 | $ | 443,109 | |||
| Liabilities and shareholders' equity: | |||||||||
| Current liabilities: | |||||||||
| Current portion of long-term debt and capital lease | |||||||||
| obligations, alternative energy | $ | 12,802 | $ | 5,898 | $ | 4,852 | |||
| Current portion of long-term debt, other | 369 | 1,576 | 1,541 | ||||||
| Accounts payable, trade | 9,474 | 25,167 | 38,539 | ||||||
| Deferred income | 8,813 | 13,510 | 14,140 | ||||||
| Derivative financial instruments | 2,796 | 1,996 | 507 | ||||||
| Other current liabilities | 6,492 | 10,122 | 6,208 | ||||||
| Total current liabilities | 40,746 | 58,269 | 65,787 | ||||||
| Long-term liabilities: | |||||||||
| Long-term debt and capital lease obligations, alternative energy | 127,450 | 94,003 | 73,089 | ||||||
| Long-term debt, other | 2,686 | 9,936 | 11,428 | ||||||
| Deferred income | 7,929 | 17,263 | 18,136 | ||||||
| Derivative financial instruments | 3,746 | 4,032 | 1,359 | ||||||
| Other | 4,462 | 4,152 | 1,176 | ||||||
| Total long-term liabilities | 146,273 | 129,386 | 105,188 | ||||||
| Equity: | |||||||||
| REX shareholders’ equity: | |||||||||
| Common stock | 299 | 299 | 299 | ||||||
| Paid-in capital | 142,806 | 142,486 | 142,310 | ||||||
| Retained earnings | 283,713 | 282,332 | 287,711 | ||||||
| Treasury stock | (190,255 | ) | (186,057 | ) | (183,845 | ) | |||
| Accumulated other comprehensive income, net of tax | 49 | - | - | ||||||
| Total REX shareholders' equity | 236,612 | 239,060 | 246,475 | ||||||
| Noncontrolling interests | 24,768 | 24,573 | 25,659 | ||||||
| Total equity | 261,380 | 263,633 | 272,134 | ||||||
| Total liabilities and equity | $ | 448,399 | $ | 451,288 | $ | 443,109 | |||
| # # # | |||||||||