REX Stores Reports Fiscal 2008 Fourth Quarter and Full Year Results

Business Wire, April 15, 2009

Repurchased 303,910 Common Shares in Fiscal Fourth Quarter and a Total of 1.6 Million Shares in Fiscal 2008

DAYTON, Ohio -- REX Stores Corporation (NYSE:RSC) today announced financial results for the fourth quarter and fiscal year ended January 31, 2009 (the Company’s 2008 fiscal year). The Company will host a conference call and webcast this morning (details below) to review the results.

Fiscal 2008 Fourth Quarter and Full Year Income Statement Review

The table below summarizes net sales and revenue from REX’s retail and alternative energy segments and (loss) income from continuing operations for the three and twelve month periods ended January 31, 2009 and January 31, 2008.

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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.

Stuart Rose, REX Stores’ Chairman and Chief Executive Officer, commented on the Company’s year-end financial position, “In addition to our alternative energy investments and remaining retail assets, REX ended fiscal 2008 with approximately $90 million of non-restricted cash and cash equivalents. Approximately $100 million of the long-term debt and capital lease obligations on the balance sheet are secured by the ethanol facilities and are non-recourse to REX Stores or its wholly owned subsidiaries. We are evaluating the best means of deploying our strong net cash position to enhance shareholder value.”

During the fiscal 2008 fourth quarter, the Company entered into an agreement to lease 37 retail store locations owned by the Company to subsidiaries of Appliance Direct, Inc. The Company plans to exit the retail business during the 2009 fiscal year.

In the quarter ended January 31, 2009 REX incurred a loss from continuing operations of $5.0 million, or $0.53 per diluted share, inclusive of a pre-tax restructuring charge of approximately $4.2 million related to a workforce reduction of a majority of employees at its corporate headquarters, retail stores and distribution facilities and certain costs incurred in the downsizing of the Company’s retail operations and agreement to lease 37 owned retail locations. In the fourth quarter of fiscal 2007 REX reported income from continuing operations of $5.3 million, or $0.47 per diluted share.

During the fiscal 2008 fourth quarter the Company incurred $1.1 million in interest expense compared to $0.07 million of interest expense in the comparable prior year period. The increase is primarily attributable to the Company’s consolidation of its investments in Levelland Hockley which prior to going into production capitalized interest expense. During the fiscal 2008 fourth quarter, the Company recorded $4.3 million of realized and unrealized pre-tax losses from interest rate derivative financial instruments held by its consolidated ethanol entities, Levelland Hockley and One Earth. During the fiscal 2007 fourth quarter the Company recorded a $2.6 million loss from interest rate derivative financial instruments held by its consolidated ethanol entities. In the three months ended January 31, 2009 and 2008 the Company incurred a $2.1 million and $0.5 million pre-tax loss, respectively, related to its unconsolidated ethanol affiliates, Patriot Renewable Fuels, LLC and Big River Resources, LLC.

REX recorded a $3.5 million benefit for income taxes in the quarter ended January 31, 2009 compared with a $1.1 million income tax expense in the comparable prior year period.

During the quarter ended January 31, 2009 REX recognized a $0.5 million loss from discontinued operations, net of taxes, and a $0.1 million gain on disposal of discontinued operations, net of taxes. The Company recognized a $0.1 million loss from discontinued operations, net of taxes, and a $0.7 million gain on disposal of discontinued operations, net of taxes in the year ago period. During fiscal 2008 the Company closed 25 stores, 23 of which were classified as discontinued operations.

Net loss in the quarter ended January 31, 2009 was $5.4 million, or $0.57 per diluted share compared with net income of $5.9 million, or $0.52 per diluted share, in the same period of fiscal 2007. Per share results are based on 9,516,000 and 11,306,000 diluted weighted average shares outstanding for the quarters ended January 31, 2009 and January 31, 2008, respectively.

Select Segment Balance Sheet Data

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REX Stores’ Current Ethanol Production Interests

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During the fiscal 2008 fourth quarter REX purchased approximately 304,000 shares of its common stock in open market transactions and the Company repurchased a total of 1,636,000 shares of its common stock in fiscal 2008. In the fiscal 2009 first quarter to-date, REX purchased approximately 127,000 shares of its common stock in open market transactions. The Company has approximately 452,000 authorized shares remaining available to purchase under the expanded February 2009 stock buy-back authorization. Reflecting all purchases to-date, REX presently has approximately 9,290,000 shares of common stock outstanding.