RSC Rex American Resources Corp

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.

              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 and26% 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:

                               

 

 

Entity

   

REX’s

Capital

Investment

($ in millions)

   

 

REX’s

Ownership

Interest

   

Debt

Investment

($ in millions)

   

Production

Nameplate

Capacity

(millions of

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

Big River Resources, LLC-Galva

Big River United Energy, LLC (Dyersville) (2)

   

$20.0

    10%     -     92     10%     -     100         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).

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.

         

REX STORES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements Of Operations

(In Thousands, Except Per Share Amounts)

Unaudited

  Three Months

Ended

Nine Months

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 forincome 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.

     

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