Dayton, Ohio — Specialty retailer Rex Stores reported a 7.5 percent rise in net sales and revenue during its fiscal fourth quarter, climbing to $130.6 million from a year-ago $121.4 million. Comp-store sales increased 7.9 percent in the three months, ended Jan. 31.
Net income for the retailer’s fourth quarter dropped to $6.6 million, from a $16.8 million in the same quarter a year earlier. In the three months, ended Jan. 31, 2005, results reflect an $8 million income tax benefit primarily due to the reduction of valuation allowances for tax credits earned by the company’s investment in a synthetic fuel limited partnership, which resulted from the completion of an Internal Revenue Service examination. In the quarter, ended Jan. 31, 2006, Rex recorded income tax expenses of $2.5 million.
“We are pleased to report our second consecutive quarter of retail comp-store sales gains, said Stuart Rose, chairman/CEO. “This is particularly in light of the very competitive and promotional environment that characterized this year’s holiday selling season.
“Reflecting our retail earnings and another period of significant growth in income from synthetic fuel limited partnership investments, Rex Stores achieved record annual diluted earnings per share in fiscal 2005,” said Rose.
In the most recent quarter, income from the synthetic fuel limited partnership investments rose 18.4 percent, hitting $5.7 million, up from $4.8 million in the same quarter the prior year.
Operating income for the most recent fourth quarter reached $4 million, compared with a year-on-year $4.5 million.
For the 12 months, Rex net sales and revenue jumped 4.5 percent to $396 million from $379 million. Comp-store sales climbed 5 percent.
Net income for the 12 months rose to $28.3 million, from $27.5 million a year ago. Results for the previous fiscal year, ended in 2005, reflect a $6.7 million income tax benefit, primarily related to the synthetic fuel partnership. In fiscal 2005, the company recorded income tax expense of $7.4 million.
Operating income for the 12 months increased to $7.7 million from a year-over-year $6.2 million. Income from the fuel partnership increased to $30.5 million for the 12 months, from $18.6 million the previous year.
Rex, which operates 218 retail locations in 37 states, purchased about 391,700 shares of its common stock on the open market during the fourth quarter. It now has about 496,645 shares remaining available to purchase under its present stock buyback authorization.
