REX Stores Reports Fiscal 2009 First Quarter Results

Business Wire, June 09, 2009

- Repurchased 251,463 Common Shares in Fiscal 2009 to Date -

DAYTON, Ohio -- REX Stores Corporation (NYSE: RSC) today announced financial results for the three month period ended April 30, 2009 (the first 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.

Select Balance Sheet and Segment Balance Sheet Data

Reflecting the fiscal 2009 first quarter repayment of $7.5 million of mortgage debt as well as the use during the fiscal 2009 first quarter of approximately $1.2 million for the repurchase of 154,563 common shares, as of April 30, 2009, REX had unrestricted cash and cash equivalents of approximately $84.3 million.

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Fiscal 2009 First Quarter Income Statement Review

Late in fiscal 2008 REX leased 37 owned retail locations to a third party who also entered into a lease and sublease for two store locations leased by REX. The Company plans to fully discontinue its retail operations during the 2009 fiscal year and going forward expects to recognize deferred income from service contracts and prior real estate sales which should largely offset costs incurred in exiting this segment. 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 month periods ended April 30, 2009 and April 30, 2008. Certain amounts differ from those previously reported as a result of some stores being reclassified into discontinued operations.

[Table Omitted]

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”).

In the quarter ended April 30, 2009 REX incurred a loss from continuing operations, net of tax, attributable to common shareholders of $1.3 million, or $0.14 per diluted share attributable to REX common shareholders. In the first quarter of fiscal 2008 REX reported income from continuing operations, net of tax, attributable to common shareholders of $1.6 million, or $0.13 per diluted share attributable to REX common shareholders.

During the fiscal 2009 first quarter REX recorded $0.2 million in investment income compared to $0.9 million of investment income in the comparable prior year period. The decline primarily reflects the lower yields available on cash balances in the current period. In the fiscal 2009 first quarter the Company incurred $0.8 million in interest expense compared to $0.1 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. In the three months ended April 30, 2009 REX incurred a $0.2 million loss on disposal on real estate, net, as well as a $0.1 million loss on early termination of debt. In the three months ended April 30, 2008 REX recorded $0.7 million of income from synthetic fuel investments. In the three months ended April 30, 2009 and 2008 the Company incurred a $0.3 million pre-tax loss and $1.0 million pre-tax gain, respectively, related to its unconsolidated ethanol affiliates, Patriot Renewable Fuels, LLC and Big River Resources, LLC.

During the fiscal 2009 first quarter the Company incurred a $0.6 million loss on derivative financial instruments, net, held by its consolidated ethanol entities (Levelland Hockley and One Earth) compared to a gain of $0.5 million during the fiscal 2008 first quarter.

REX recorded, from continuing operations, a $0.9 million benefit for income taxes in the quarter ended April 30, 2009 compared with a $0.5 million income tax expense in the comparable prior year period. During the quarters ended April 30, 2009 and 2008, REX recognized a $0.4 million loss and $0.04 million loss, respectively from discontinued operations, net of taxes. Net loss attributable to common shareholders in the quarter ended April 30, 2009 was $1.7 million, or $0.19 per diluted share compared with net income of $1.5 million, or $0.13 per diluted share, in the same period of fiscal 2008. Per share results are based on 9,298,000 and 11,620,000 diluted weighted average shares outstanding for the quarters ended April 30, 2009 and April 30, 2008, respectively.

During the fiscal 2009 first quarter REX purchased 154,563 shares of its common stock in open market transactions. In the fiscal second quarter to date, REX repurchased an additional 96,900 shares. Reflecting all purchases to-date, the Company has approximately 327,885 authorized shares remaining available to purchase under the expanded February 2009 stock buy-back authorization and presently has approximately 9,225,000 shares of common stock outstanding.