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): August 30, 2006 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 of incorporation) Identification No.) 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 (see General Instruction A.2. below): [ ] 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 August 30, 2006, REX Stores Corporation issued a press release announcing financial results and comparable store sales for the three month and six month periods ended July 31, 2006. 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 August 30, 2006
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: August 30, 2006 By: /s/ DOUGLAS L. BRUGGEMAN ------------------------ Name: Douglas L. Bruggeman Title: Vice President-Finance, Chief Financial Officer and Treasurer
[REX STORES LOGO] 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 SECOND QUARTER DILUTED EARNINGS PER SHARE OF $0.13 Dayton, Ohio (August 30, 2006) -- REX Stores Corporation (NYSE:RSC) today announced financial results and comparable store sales for the three- and six-month periods ended July 31, 2006 (the Company's 2006 fiscal year). Net sales in the fiscal 2006 second quarter were $82.1 million compared with $82.5 million in the fiscal 2005 second quarter. Comparable store sales for the three months ended July 31, 2006 rose 3.5%. 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. For the quarter ended July 31, 2006, income from synthetic fuel limited partnership investments was $0.7 million compared with $10.4 million in the comparable year-ago period. In the fiscal 2006 second quarter, Progress Energy (NYSE:PGN), the purchaser of the Company's partnership interest in the Colona synthetic fuel investments, ceased production at its synthetic fuel facilities as higher oil prices increased the likelihood that Section 29/45K tax credits would be reduced or phased out in 2006. Reflecting this announcement, the Company does not expect future income from the sale of its synthetic fuel interests to be comparable with the levels recorded in fiscal 2005. This could change, should operations resume at plants that have ceased production or should certain plants continue production. -more-
REX Stores Reports Second Quarter Results, 8/30/06 page 2 During the fiscal 2006 second quarter, REX recorded a $1.7 million pre-tax gain from the sale of real estate. Net income in the three months ended July 31, 2006 was $1.5 million, or $0.13 per diluted share, compared to net income of $8.7 million, or $0.70 per diluted share, in the three months ended July 31, 2005. Per share results are based on 11,575,000 and 12,437,000 diluted weighted average shares outstanding for the three-month periods ended July 31, 2006 and 2005, respectively. Net income in the six-month period ended July 31, 2006 was $3.0 million, or $0.26 per diluted share, compared with net income of $14.8 million, or $1.18 per diluted share, in the six-month period ended July 31, 2005. Per share results are based on 11,607,000 and 12,602,000 diluted weighted average shares outstanding for the six-month periods ended July 31, 2006 and July 31, 2005. Net sales in the 2006 six-month period were $167.8 million compared to $169.9 million in the six months ended July 31, 2005. Comparable store sales in the first six months of fiscal 2006 rose 2.0% compared to the same year-ago period. As previously announced, REX recently entered into a contingent agreement to invest an additional $11.5 million to $18.0 million in Levelland/Hockley County Ethanol, LLC ("Levelland/Hockley") which plans to commence construction of a 40 million gallon ethanol production facility in Levelland, Texas by November 1, 2006. The additional investment, along with Rex's previously announced $5 million convertible secured promissory note commitment enables REX to secure a majority ownership interest in Levelland/Hockley. In addition to Levelland/Hockley, REX has entered into contingent agreements to invest in three other ethanol plants with annual production capacity of 100 million gallons each, with one of the plants presently under construction. The four investment commitments to date could lead to REX investing over $80 million in ethanol production facilities. 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 212/346-6521; 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 12:30 p.m. EDT on September 6, 2006 by dialing 800/633-8284 or 402/977-9140 (international callers). The access code for the audio replay is 21301839. Alternatively, a replay will be available on the Internet for 30 days at www.rextv.com or www.earnings.com. ------------- ---------------- REX Stores Corporation is a leading specialty retailer of consumer electronic products and appliances. As of July 31, 2006, the Company operated 210 retail stores in 36 states under the trade name "REX." Over the past eight years, REX has also been active in several synthetic fuel investments, and the Company currently has agreements to invest in four proposed ethanol producing plants. -more-
REX Stores Reports Second Quarter Results, 8/30/06 page 3 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 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, 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. -tables follow-
REX Stores Reports Second Quarter Results, 8/30/06 page 4 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 ------- ------- 2006 2005 2006 2005 ---- ---- ---- ---- NET SALES $ 82,113 $ 82,515 $ 167,802 $ 169,939 COSTS AND EXPENSES: Cost of merchandise sold 59,543 57,968 121,241 121,311 ------ ------ ------- ------- Gross profit 22,570 24,547 46,561 48,628 Selling, general and administrative expenses 22,361 23,730 45,554 46,037 ------ ------ ------ ------ Operating income 209 817 1,007 2,591 INVESTMENT INCOME 287 58 579 132 INTEREST EXPENSE (497) (695) (999) (1,294) GAIN ON SALE OF REAL ESTATE 1,735 - 1,735 - INCOME FROM SYNTHETIC FUEL INVESTMENTS 722 10,398 2,785 16,380 --- ------ ----- ------ Income from continuing operations before provision for income taxes and discontinued operations 2,456 10,578 5,107 17,809 PROVISION FOR INCOME TAXES 892 1,652 1,892 2,746 --- ----- ----- ----- Income from continuing operations 1,564 8,926 3,215 15,063 Loss from discontinued operations, net of tax (67) (205) (229) (367) Gain on disposal of discontinued operations, net of tax - - - 125 ------ ------ ------ ------- Net Income $1,497 $8,721 $2,986 $14,821 ====== ====== ====== ======= WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 10,323 10,871 10,235 11,011 ====== ====== ====== ====== Basic income per share from continuing operations $0.15 $0.82 $0.31 $1.37 Basic loss per share from discontinued operations - (0.02) (0.02) (0.03) Basic income per share on disposal of discontinued operations - - - 0.01 ------ ------ ------ ------- BASIC NET INCOME PER SHARE $0.15 $0.80 $0.29 $1.35 ===== ===== ===== ===== WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 11,575 12,437 11,607 12,602 ====== ====== ====== ====== Diluted income per share from continuing operations $0.13 $0.72 $0.28 $1.20 Diluted loss per share from discontinued operations - (0.02) (0.02) (0.03) Diluted income per share on disposal of discontinued operations - - - 0.01 ------ ------ ------ ------- DILUTED NET INCOME PER SHARE $0.13 $0.70 $0.26 $1.18 ===== ===== ===== ===== -more-
REX Stores Reports Second Quarter Results, 8/30/06 page 5 REX STORES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) July 31, January 31, July 31, 2006 2006 2005 ---- ---- ---- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 5,481 $ 20,096 $ 1,744 Accounts receivable, net 4,149 3,457 3,458 Synthetic fuel receivable 3,171 1,680 786 Note receivable 5,595 -- -- Merchandise inventory 123,349 97,371 133,759 Prepaid expenses and other 2,226 2,052 2,807 Future income tax benefits 9,354 9,361 10,929 --------- --------- --------- Total current assets 153,325 134,017 153,483 PROPERTY AND EQUIPMENT, NET 121,994 125,245 128,700 ASSETS HELD FOR SALE 2,822 1,497 1,669 OTHER ASSETS 707 760 915 FUTURE INCOME TAX BENEFITS 29,228 30,031 27,978 RESTRICTED INVESTMENTS 2,367 2,318 2,290 --------- --------- --------- Total assets $ 310,443 $ 293,868 $ 315,035 ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable $ -- $ -- $ 4,031 Current portion of long-term debt 2,476 2,389 2,919 Current portion of deferred income and deferred gain on sale and leaseback 11,425 10,883 9,920 Accounts payable, trade 31,557 19,129 35,599 Accrued income taxes 597 541 -- Accrued payroll and related items 4,230 7,183 5,093 Other current liabilities 6,469 5,863 6,623 --------- --------- --------- Total current liabilities 56,754 45,988 64,185 --------- --------- --------- LONG-TERM LIABILITIES: Long-term mortgage debt 20,117 21,462 28,490 Deferred income 12,812 12,213 11,387 --------- --------- --------- Total long-term liabilities 32,929 33,675 39,877 --------- --------- --------- SHAREHOLDERS' EQUITY: Common stock 295 294 293 Paid-in capital 138,238 135,775 135,496 Retained earnings 243,884 240,898 227,450 Treasury stock (161,657) (162,762) (152,266) --------- --------- --------- Total shareholders' equity 220,760 214,205 210,973 --------- --------- --------- Total liabilities and shareholders' equity $ 310,443 $ 293,868 $ 315,035 ========= ========= ========= # # #