---

---

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549




---

FORM 10-Q

|           |                                                                                          
|---------- | -----------------------------------------------------------------------------------------
|(Mark One)
|           |                                                                                          
|x          | QUARTERLY
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|           |                                                                                          
|           | For the
 quarterly period ended April 30, 2009                                           
|           |                                                                                          
|OR        
|           |                                                                                          
|o          | TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|           |                                                                                          
|           | For the
 transition period from _________ to _________                                   

Commission File Number 001-09097



---

|                                                      
|------------------------------------------------------
|                                                      
|REX STORES CORPORATION                                
|(Exact name of registrant as specified in its charter)



---

| |                                 |                        | 
| | ------------------------------- | ---------------------- | 
|
| | Delaware                        | 31-1095548             | 
| | (State or other jurisdiction of | (I.R.S. Employer       | 
| | incorporation or organization)  | Identification Number) | 

|                                                     |                                          |            | 
|---------------------------------------------------- | ---------------------------------------- | ---------- | 
|                                                     | 2875 Needmore Road, Dayton, Ohio         | 45414      | 
|                                                     | (Address of principal executive offices) | (Zip Code) | 
|                                                    
|(937) 276-3931                                      
|(Registrants telephone number, including area code)



---

Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.                Yes x No o

Indicate by check mark
whether the registrant has submitted electronically and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post
such files).          Yes o No o

Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See definition of large
accelerated filer, accelerated filer and smaller reporting company in Rule
12b-2 of the Exchange Act.


|                           |                                                |                            
|-------------------------- | ---------------------------------------------- | ---------------------------
|Large accelerated filer o  | Accelerated
 filer x                          
|Non-accelerated filer
   o | (Do not check if a smaller
 reporting company) | Smaller reporting company o

Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No x

At the close of business on
June 8, 2009 the registrant had 9,224,887 shares of Common Stock, par value
$.01 per share, outstanding.

---

---



REX STORES CORPORATION AND SUBSIDIARIES

INDEX

|         |  |                                                                                        |  |      | 
|-------- |  | -------------------------------------------------------------------------------------- |  | ---- | 
|         |  |                                                                                        |  | Page
|         |  |                                                                                        |  |      | 
|PART I.  |  | FINANCIAL
 INFORMATION                                                                 |  |      | 
|         |  |                                                                                        |  |      | 
|Item 1.  |  | Financial
 Statements                                                                  |  |      | 
|         |  |                                                                                        |  |      | 
|         |  | Consolidated
 Condensed Balance Sheets                                                 |  | 3    | 
|         |  | Consolidated
 Condensed Statements of Operations                                       |  | 4    | 
|         |  | Consolidated
 Condensed Statements of Equity                                           |  | 5    | 
|         |  | Consolidated
 Condensed Statements of Cash Flows                                       |  | 6    | 
|         |  | Notes to
 Consolidated Condensed Financial Statements                                  |  | 7    | 
|         |  |                                                                                        |  |      | 
|Item 2.  |  | Managements
 Discussion and Analysis of Financial Condition and Results of Operations |  | 27   | 
|         |  |                                                                                        |  |      | 
|Item 3.  |  | Quantitative
 and Qualitative Disclosures About Market Risk                            |  | 38   | 
|         |  |                                                                                        |  |      | 
|Item 4.  |  | Controls
 and Procedures                                                               |  | 38   | 
|         |  |                                                                                        |  |      | 
|PART II. |  | OTHER
 INFORMATION                                                                     |  |      | 
|         |  |                                                                                        |  |      | 
|Item 1A. |  | Risk
 Factors                                                                          |  | 38   | 
|         |  |                                                                                        |  |      | 
|Item 2.  |  | Unregistered
 Sales of Equity Securities and Use of Proceeds                           |  | 38   | 
|         |  |                                                                                        |  |      | 
|Item 4.  |  | Submission
 of Matters to a Vote of Security Holders                                   |  | 39   | 
|         |  |                                                                                        |  |      | 
|Item 6.  |  | Exhibits                                                                               |  | 39   | 

2

---



PART I. FINANCIAL INFORMATION

Item 1. Financial
Statements

REX STORES CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
Unaudited

|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  
|------------------------------------------------------------------------------------ |  | --------------- | -------- | ----------------- | - | --------------- | - | - | -------- | -
|                                                                                     |  | April 30,
 2009 |          | January 31,
 2009 |   | April 30,
 2008 |  
|                                                                                     |  |                 |          |                   |   |                 |  
|                                                                                     |  | (In Thousands)  |         
|Assets                                                                               |  |                 |          |                   |   |                 |   |   |          |  
|Current assets:                                                                      |  |                 |          |                   |   |                 |   |   |          |  
|Cash and cash equivalents                                                            |  | $               | 85,854   |                   | $ | 91,991          |   | $ | 106,301  |  
|Restricted cash                                                                      |  |                 | 1,021    |                   |   |                |   |   |         |  
|Accounts receivable, net                                                             |  |                 | 2,333    |                   |   | 4,197           |   |   | 3,025    |  
|Inventory, net                                                                       |  |                 | 6,477    |                   |   | 24,374          |   |   | 56,800   |  
|Refundable income taxes                                                              |  |                 | 8,761    |                   |   | 7,790           |   |   | 1,400    |  
|Prepaid expenses and other                                                           |  |                 | 666      |                   |   | 1,063           |   |   | 804      |  
|Deferred taxes, net                                                                  |  |                 | 8,752    |                   |   | 13,230          |   |   | 10,399   |  
|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  
|Total current assets                                                                 |  |                 | 113,864  |                   |   | 142,645         |   |   | 178,729  |  
|Property and equipment, net                                                          |  |                 | 249,819  |                   |   | 235,454         |   |   | 168,359  |  
|Other assets                                                                         |  |                 | 11,294   |                   |   | 12,414          |   |   | 14,098   |  
|Goodwill                                                                             |  |                 |         |                   |   |                |   |   | 1,322    |  
|Deferred taxes, net                                                                  |  |                 | 23,862   |                   |   | 18,697          |   |   | 21,929   |  
|Equity method investments                                                            |  |                 | 38,566   |                   |   | 38,861          |   |   | 39,509   |  
|Investments in debt instruments                                                      |  |                 | 891      |                   |   | 933             |   |   |         |  
|Restricted investments                                                               |  |                 | 2,289    |                   |   | 2,284           |   |   | 2,491    |  
|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  
|Total assets                                                                         |  | $               | 440,585  |                   | $ | 451,288         |   | $ | 426,437  |  
|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  
|Liabilities and shareholders equity:                                                |  |                 |          |                   |   |                 |   |   |          |  
|Current liabilities:                                                                 |  |                 |          |                   |   |                 |   |   |          |  
|Current portion of long-term debt and capital lease
obligations,
 alternative energy |  | $               | 6,203    |                   | $ | 5,898           |   | $ | 3,641    |  
|Current portion of long-term debt, other                                             |  |                 | 648      |                   |   | 1,576           |   |   | 1,711    |  
|Accounts payable, trade                                                              |  |                 | 17,178   |                   |   | 25,167          |   |   | 39,409   |  
|Deferred income                                                                      |  |                 | 10,489   |                   |   | 11,952          |   |   | 13,708   |  
|Accrued restructuring charges                                                        |  |                 | 4,786    |                   |   | 4,171           |   |   |         |  
|Deferred gain on sale and leaseback                                                  |  |                 | 599      |                   |   | 1,558           |   |   | 1,436    |  
|Derivative financial instruments                                                     |  |                 | 2,354    |                   |   | 1,996           |   |   | 588      |  
|Other current liabilities                                                            |  |                 | 4,090    |                   |   | 5,951           |   |   | 5,928    |  
|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  
|Total current liabilities                                                            |  |                 | 46,347   |                   |   | 58,269          |   |   | 66,421   |  
|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  
|Long-term liabilities:                                                               |  |                 |          |                   |   |                 |   |   |          |  
|Long-term debt and capital lease obligations,
alternative energy                     |  |                 | 107,825  |                   |   | 94,003          |   |   | 32,562   |  
|Long-term debt, other                                                                |  |                 | 3,371    |                   |   | 9,936           |   |   | 12,714   |  
|Deferred income                                                                      |  |                 | 11,886   |                   |   | 13,796          |   |   | 16,282   |  
|Deferred gain on sale and leaseback                                                  |  |                 | 1,760    |                   |   | 3,467           |   |   | 4,132    |  
|Derivative financial instruments                                                     |  |                 | 3,883    |                   |   | 4,032           |   |   | 1,541    |  
|Other                                                                                |  |                 | 4,487    |                   |   | 4,152           |   |   | 6,485    |  
|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  
|Total long-term liabilities                                                          |  |                 | 133,212  |                   |   | 129,386         |   |   | 73,716   |  
|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  
|Equity:                                                                              |  |                 |          |                   |   |                 |   |   |          |  
|REX shareholders equity:                                                            |  |                 |          |                   |   |                 |   |   |          |  
|Common stock                                                                         |  |                 | 299      |                   |   | 299             |   |   | 298      |  
|Paid-in capital                                                                      |  |                 | 142,678  |                   |   | 142,486         |   |   | 141,867  |  
|Retained earnings                                                                    |  |                 | 280,601  |                   |   | 282,332         |   |   | 287,155  |  
|Treasury stock                                                                       |  |                 | (186,503 | )                 |   | (186,057        | ) |   | (170,532 | )
|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  
|Total
 REX shareholders equity                                                      |  |                 | 237,075  |                   |   | 239,060         |   |   | 258,788  |  
|Noncontrolling interests                                                             |  |                 | 23,951   |                   |   | 24,573          |   |   | 27,512   |  
|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  
|Total equity                                                                         |  |                 | 261,026  |                   |   | 263,633         |   |   | 286,300  |  
|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  
|Total liabilities and equity                                                         |  | $               | 440,585  |                   | $ | 451,288         |   | $ | 426,437  |  
|                                                                                     |  |                 |          |                   |   |                 |   |   |          |  

The accompanying notes are an
integral part of these unaudited consolidated condensed financial statements.

3

---



REX STORES CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements Of Operations 
Unaudited

|                                                                                                    |  |                                            |        |      |   |        |  
|--------------------------------------------------------------------------------------------------- |  | ------------------------------------------ | ------ | ---- | - | ------ | -
|                                                                                                    |  | Three Months Ended
 April 30,              |       
|                                                                                                    |  | 2009                                       |        | 2008 |  
|                                                                                                    |  |                                            |        |      |  
|                                                                                                    |  | (In Thousands, Except Per 
 Share Amounts) |       
|                                                                                                    |  |                                            |        |      |   |        |  
|Net sales and revenue                                                                               |  | $                                          | 29,734 |      | $ | 26,809 |  
|Cost of sales (excluding retail segment depreciation)                                               |  |                                            | 25,015 |      |   | 18,677 |  
|                                                                                                    |  |                                            |        |      |   |        |  
|Gross profit                                                                                        |  |                                            | 4,719  |      |   | 8,132  |  
|Selling, general and administrative expenses                                                        |  |                                            | (5,749 | )    |   | (9,240 | )
|Investment income                                                                                   |  |                                            | 188    |      |   | 857    |  
|Interest expense                                                                                    |  |                                            | (878   | )    |   | (113   | )
|Loss on early termination of debt                                                                   |  |                                            | (73    | )    |   |       |  
|Losses on disposals of real estate, net                                                             |  |                                            | (201   | )    |   |       |  
|Equity in (loss) income of unconsolidated ethanol
affiliates                                        |  |                                            | (260   | )    |   | 1,048  |  
|Income from synthetic fuel investments                                                              |  |                                            |       |      |   | 670    |  
|(Losses) gains on derivative financial instruments, net                                             |  |                                            | (556   | )    |   | 472    |  
|                                                                                                    |  |                                            |        |      |   |        |  
|(Loss) income from continuing operations before income taxes and
 discontinued operations           |  |                                            | (2,810 | )    |   | 1,826  |  
|Benefit (provision) for income taxes                                                                |  |                                            | 859    |      |   | (471   | )
|                                                                                                    |  |                                            |        |      |   |        |  
|(Loss) income from continuing operations including noncontrolling
 interest                         |  |                                            | (1,951 | )    |   | 1,355  |  
|Loss from discontinued operations, net of tax                                                       |  |                                            | (402   | )    |   | (46    | )
|                                                                                                    |  |                                            |        |      |   |        |  
|Net (loss) income including noncontrolling interest                                                 |  |                                            | (2,353 | )    |   | 1,309  |  
|Net loss attributable to noncontrolling interest                                                    |  |                                            | 622    |      |   | 217    |  
|                                                                                                    |  |                                            |        |      |   |        |  
|Net (loss) income attributable to REX common shareholders                                           |  | $                                          | (1,731 | )    | $ | 1,526  |  
|                                                                                                    |  |                                            |        |      |   |        |  
|                                                                                                    |  |                                            |        |      |   |        |  
|Weighted average shares outstanding - basic                                                         |  |                                            | 9,298  |      |   | 10,729 |  
|                                                                                                    |  |                                            |        |      |   |        |  
|                                                                                                    |  |                                            |        |      |   |        |  
|Basic (loss) income per share from continuing operations attributable
 to REX common shareholders   |  | $                                          | (0.14  | )    | $ | 0.14   |  
|Basic loss per share from discontinued operations attributable to REX
 common shareholders          |  |                                            | (0.05  | )    |   |       |  
|                                                                                                    |  |                                            |        |      |   |        |  
|Basic net (loss) income per share attributable to REX common
 shareholders                          |  | $                                          | (0.19  | )    | $ | 0.14   |  
|                                                                                                    |  |                                            |        |      |   |        |  
|                                                                                                    |  |                                            |        |      |   |        |  
|Weighted average shares outstanding  diluted                                                       |  |                                            | 9,298  |      |   | 11,620 |  
|                                                                                                    |  |                                            |        |      |   |        |  
|                                                                                                    |  |                                            |        |      |   |        |  
|Diluted (loss) income per share from continuing operations
 attributable to REX common shareholders |  | $                                          | (0.14  | )    | $ | 0.13   |  
|Diluted loss per share from discontinued operations attributable to
 REX common shareholders        |  |                                            | (0.05  | )    |   |       |  
|                                                                                                    |  |                                            |        |      |   |        |  
|Diluted net (loss) income per share attributable to REX common
 shareholders                        |  | $                                          | (0.19  | )    | $ | 0.13   |  
|                                                                                                    |  |                                            |        |      |   |        |  
|                                                                                                    |  |                                            |        |      |   |        |  
|Amounts attributable to REX common shareholders:                                                    |  |                                            |        |      |   |        |  
|(Loss) income from continuing operations, net of
tax                                                |  | $                                          | (1,329 | )    | $ | 1,572  |  
|Loss from discontinued operations, net of
tax                                                       |  |                                            | (402   | )    |   | (46    | )
|                                                                                                    |  |                                            |        |      |   |        |  
|Net (loss) income                                                                                   |  | $                                          | (1,731 | )    | $ | 1,526  |  
|                                                                                                    |  |                                            |        |      |   |        |  

The accompanying notes are an
integral part of these unaudited consolidated condensed financial statements

4

---



REX STORES CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements Of Equity
Unaudited

|                                                |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |   |   |        |   |   |         |  
|----------------------------------------------- |  | ---------------- |  | -------- | --- | ---------------- | -------------- | ------------------ | - | ------------------------ | - | ------------- | ------- |  | - | ------- | - | - | ------ | - | - | ------- | -
|                                                |  | REX Shareholders |  |          |     |                  |                |                    |  
|                                                |  |                  |  |          |     |                  |                |                    |  
|                                                |  | Common Shares    |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |   |   |        |  
|                                                |  | Issued           |  | Treasury |     |                  |                |                    |   |                          |   |               |         |  |   |         |  
|                                                |  |                  |  |          |     | Paid-in
 Capital |                | Retained
 Earnings |   | Noncontrolling
 Interest |   | Total
 Equity |        
|                                                |  | Shares           |  | Amount   |     | Shares           |                | Amount             |   |                         
|                                                |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |  
|                                                |  |                  |  |          |     |                  | (In Thousands) |                    |   |                          |   |               |         |  |   |         |   |   |        |  
|                                               
|Balance at January 31, 2009, as reported        |  | 29,853           |  | $        | 299 |                  | 20,471         |                    | $ | (186,057                 | ) | $             | 142,486 |  | $ | 282,332 |   | $ |       |   | $ | 239,060 |  
|                                                |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |   |   |        |   |   |         |  
|Effects of adoption of SFAS No. 160             |  |                 |  |          |    |                  |               |                    |   |                         |   |               |        |  |   |        |   |   | 24,573 |   |   | 24,573  |  
|                                                |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |   |   |        |   |   |         |  
|                                                |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |   |   |        |   |   |         |  
|Balance at January 31, 2009, as adjusted        |  | 29,853           |  |          | 299 |                  | 20,471         |                    |   | (186,057                 | ) |               | 142,486 |  |   | 282,332 |   |   | 24,573 |   |   | 263,633 |  
|                                                |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |   |   |        |   |   |         |  
|Net loss                                        |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   | (1,731  | ) |   | (622   | ) |   | (2,353  | )
|                                                |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |   |   |        |   |   |         |  
|Stock based compensation                        |  |                  |  |          |     |                  |                |                    |   |                          |   |               | 176     |  |   |         |   |   |        |   |   | 176     |  
|                                                |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |   |   |        |   |   |         |  
|Treasury stock acquired                         |  |                  |  |          |     |                  | 155            |                    |   | (1,211                   | ) |               |         |  |   |         |   |   |        |   |   | (1,211  | )
|                                                |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |   |   |        |   |   |         |  
|Stock options exercised and related tax effects |  |                 |  |          |    |                  | (89            | )                  |   | 765                      |   |               | 16      |  |   |        |   |   |       |   |   | 781     |  
|                                                |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |   |   |        |   |   |         |  
|                                               
|Balance at April 30, 2009                       |  | 29,853           |  | $        | 299 |                  | 20,537         |                    | $ | (186,503                 | ) | $             | 142,678 |  | $ | 280,601 |   | $ | 23,951 |   | $ | 261,026 |  
|                                                |  |                  |  |          |     |                  |                |                    |   |                          |   |               |         |  |   |         |   |   |        |   |   |         |  

|                                                |  |                  |  |          |     |                   |                |                  |   |                          |   |               |         |  |   |         |  |   |        |   |   |         | 
|----------------------------------------------- |  | ---------------- |  | -------- | --- | ----------------- | -------------- | ---------------- | - | ------------------------ | - | ------------- | ------- |  | - | ------- |  | - | ------ | - | - | ------- | 
|                                                |  | REX Shareholders |  |          |     |                   |                |                  |  
|                                                |  |                  |  |          |     |                   |                |                  |  
|                                                |  | Common Shares    |  |          |     |                   |                |                  |   |                          |   |               |         |  |   |         |  |   |        |  
|                                                |  | Issued           |  | Treasury |     |                   |                |                  |   |                          |   |               |         |  |   |         | 
|                                                |  |                  |  |          |     | Paid-in
 Interest |                | Retained
 Equity |   | Noncontrolling
 Interest |   | Total
 Equity |        
|                                                |  | Shares           |  | Amount   |     | Shares            |                | Amount           |   |                         
|                                                |  |                  |  |          |     |                   |                |                  |   |                          |   |               |         |  |   |         | 
|                                                |  |                  |  |          |     |                   | (In Thousands) |                  |   |                          |   |               |         |  |   |         |  |   |        |  
|                                               
|Balance at January 31, 2008, as reported        |  | 29,813           |  | $        | 298 |                   | 19,094         |                  | $ | (170,693                 | ) | $             | 141,357 |  | $ | 285,629 |  | $ |       |   | $ | 256,591 | 
|                                                |  |                  |  |          |     |                   |                |                  |   |                          |   |               |         |  |   |         |  |   |        |   |   |         | 
|Effects of adoption of SFAS No. 160             |  |                 |  |          |    |                   |               |                  |   |                         |   |               |        |  |   |        |  |   | 27,729 |   |   | 27,729  | 
|                                                |  |                  |  |          |     |                   |                |                  |   |                          |   |               |         |  |   |         |  |   |        |   |   |         | 
|                                                |  |                  |  |          |     |                   |                |                  |   |                          |   |               |         |  |   |         |  |   |        |   |   |         | 
|Balance at January 31, 2008, as adjusted        |  | 29,813           |  |          | 298 |                   | 19,094         |                  |   | (170,693                 | ) |               | 141,357 |  |   | 285,629 |  |   | 27,729 |   |   | 284,320 | 
|                                                |  |                  |  |          |     |                   |                |                  |   |                          |   |               |         |  |   |         |  |   |        |   |   |         | 
|Net income (loss)                               |  |                  |  |          |     |                   |                |                  |   |                          |   |               |         |  |   | 1,526   |  |   | (217   | ) |   | 1,309   | 
|                                                |  |                  |  |          |     |                   |                |                  |   |                          |   |               |         |  |   |         |  |   |        |   |   |         | 
|Stock based compensation                        |  |                  |  |          |     |                   |                |                  |   |                          |   |               | 348     |  |   |         |  |   |        |   |   | 348     | 
|                                                |  |                  |  |          |     |                   |                |                  |   |                          |   |               |         |  |   |         |  |   |        |   |   |         | 
|Stock options exercised and related tax effects |  |                 |  |          |    |                   | (18            | )                |   | 161                      |   |               | 162     |  |   |        |  |   |       |   |   | 323     | 
|                                                |  |                  |  |          |     |                   |                |                  |   |                          |   |               |         |  |   |         |  |   |        |   |   |         | 
|                                               
|Balance at April 30, 2008                       |  | 29,813           |  | $        | 298 |                   | 19,076         |                  | $ | (170,532                 | ) | $             | 141,867 |  | $ | 287,155 |  | $ | 27,512 |   | $ | 286,300 | 
|                                                |  |                  |  |          |     |                   |                |                  |   |                          |   |               |         |  |   |         |  |   |        |   |   |         | 

The accompanying notes are an
integral part of these unaudited
consolidated condensed financial statements.

5

---



REX STORES CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements Of Cash Flows
Unaudited

|                                                                                                    |  |                               |         |      |   |         |  
|--------------------------------------------------------------------------------------------------- |  | ----------------------------- | ------- | ---- | - | ------- | -
|                                                                                                    |  | Three Months Ended
 April 30, |        
|                                                                                                    |  |                               |        
|                                                                                                    |  | 2009                          |         | 2008 |  
|                                                                                                    |  |                               |         |      |  
|                                                                                                    |  | (In Thousands)                |        
|Cash flows from operating activities:                                                               |  |                               |         |      |   |         |  
|Net (loss) income including noncontrolling interest                                                 |  | $                             | (2,353  | )    | $ | 1,309   |  
|Adjustments to reconcile net (loss) income to net cash provided by
 (used in) operating activities: |  |                               |         |      |   |         |  
|Depreciation and amortization                                                                       |  |                               | 1,201   |      |   | 623     |  
|Stock based compensation expense                                                                    |  |                               | 176     |      |   | 348     |  
|Impairment charges                                                                                  |  |                               | 13      |      |   |        |  
|Loss (income) from equity method investments                                                        |  |                               | 260     |      |   | (1,048  | )
|Income from synthetic fuel investments                                                              |  |                               |        |      |   | (670    | )
|Loss (gain) on disposal of real estate and property and
equipment                                   |  |                               | 358     |      |   | (2      | )
|Dividends received from equity method investees                                                     |  |                               |        |      |   | 400     |  
|Deferred income                                                                                     |  |                               | (6,039  | )    |   | (1,991  | )
|Unrealized loss (gain) on derivative financial instruments                                          |  |                               | 209     |      |   | (472    | )
|Excess tax benefits from stock option exercises                                                     |  |                               |        |      |   | (2      | )
|Unrealized loss on investments                                                                      |  |                               | 42      |      |   |        |  
|Deferred income tax                                                                                 |  |                               | (87     | )    |   | 200     |  
|Changes in assets and liabilities:                                                                  |  |                               |         |      |   |         |  
|Accounts receivable                                                                                 |  |                               | 1,864   |      |   | (1,148  | )
|Merchandise inventory                                                                               |  |                               | 17,897  |      |   | (6,867  | )
|Prepaid expenses and other                                                                          |  |                               | (436    | )    |   | 288     |  
|Other long term assets                                                                              |  |                               | 1,120   |      |   | 705     |  
|Accounts payable, trade                                                                             |  |                               | (2,317  | )    |   | 11,567  |  
|Other liabilities                                                                                   |  |                               | (1,511  | )    |   | (8,455  | )
|                                                                                                    |  |                               |         |      |   |         |  
|Net cash provided by (used in) operating activities                                                 |  |                               | 10,397  |      |   | (5,215  | )
|                                                                                                    |  |                               |         |      |   |         |  
|Cash flows from investing activities:                                                               |  |                               |         |      |   |         |  
|Capital expenditures                                                                                |  |                               | (21,576 | )    |   | (28,666 | )
|Proceeds from sale of synthetic fuel investments                                                    |  |                               |        |      |   | 1,243   |  
|Proceeds from sale of real estate and property and
equipment                                        |  |                               | 2       |      |   | 10      |  
|Restricted cash and investments                                                                     |  |                               | (1,026  | )    |   | (10     | )
|                                                                                                    |  |                               |         |      |   |         |  
|Net cash used in investing activities                                                               |  |                               | (22,600 | )    |   | (27,423 | )
|                                                                                                    |  |                               |         |      |   |         |  
|Cash flows from financing activities:                                                               |  |                               |         |      |   |         |  
|Payments of long-term debt                                                                          |  |                               | (8,707  | )    |   | (1,038  | )
|Proceeds from long-term debt                                                                        |  |                               | 15,341  |      |   | 11,936  |  
|Stock options exercised                                                                             |  |                               | 643     |      |   | 323     |  
|Treasury stock acquired                                                                             |  |                               | (1,211  | )    |   |        |  
|Excess tax benefits from stock option exercises                                                     |  |                               |        |      |   | 2       |  
|                                                                                                    |  |                               |         |      |   |         |  
|Net cash provided by financing activities                                                           |  |                               | 6,066   |      |   | 11,223  |  
|                                                                                                    |  |                               |         |      |   |         |  
|Net decrease in cash and cash equivalents                                                           |  |                               | (6,137  | )    |   | (21,415 | )
|Cash and cash equivalents, beginning of period                                                      |  |                               | 91,991  |      |   | 127,716 |  
|                                                                                                    |  |                               |         |      |   |         |  
|Cash and cash equivalents, end of period                                                            |  | $                             | 85,854  |      | $ | 106,301 |  
|                                                                                                    |  |                               |         |      |   |         |  
|                                                                                                    |  |                               |         |      |   |         |  
|Non cash investing activities  Accrued capital
expenditures                                        |  | $                             | 4,078   |      | $ | 3,508   |  
|                                                                                                    |  |                               |         |      |   |         |  
|Non cash investing activities  Assets acquired by capital
leases                                   |  | $                             |        |      | $ | 405     |  
|                                                                                                    |  |                               |         |      |   |         |  

The accompanying notes are an
integral part of these unaudited
consolidated condensed financial statements.

6

---



REX STORES CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED
CONSOLIDATED CONDENSED FINANCIAL 
STATEMENTS
April 30, 2009

Note 1. Consolidated
Condensed Financial Statements

The
consolidated condensed financial statements included in this report have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission and include, in the opinion of
management, all adjustments necessary to state fairly the information set forth
therein. Any such adjustments were of a normal recurring nature. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading. Financial information as of
January 31, 2009 included in these financial statements has been derived from
the audited consolidated financial statements included in the Companys Annual
Report on Form 10-K for the year ended January 31, 2009 (fiscal year 2008). It
is suggested that these unaudited consolidated condensed financial statements
be read in conjunction with the consolidated financial statements and the notes
thereto included in the Companys Annual Report on Form 10-K for the year ended
January 31, 2009. The results of operations for the interim periods are not
necessarily indicative of the results to be expected for the year.

Basis
of Consolidation  The consolidated condensed financial statements in this
report include the operating results and financial position of REX Stores
Corporation and its wholly and majority owned subsidiaries. The Company
includes the results of operations of Levelland Hockley County Ethanol, LLC
(Levelland Hockley) and One Earth Energy, LLC (One Earth) in its
Consolidated Condensed Statements of Operations on a delayed basis of one
month.

Note 2. Accounting
Policies

The
interim consolidated condensed financial statements have been prepared in
accordance with the accounting policies described in the notes to the
consolidated financial statements included in the Companys 2008 Annual Report
on Form 10-K. While management believes that the procedures followed in the
preparation of interim financial information are reasonable, the accuracy of
some estimated amounts is dependent upon facts that will exist or calculations
that will be accomplished at fiscal year end. Examples of such estimates
include management bonuses, restructuring accruals, reserves for inventory
obsolescence and lower of cost or market calculations and the provision for
income taxes. Any adjustments pursuant to such estimates during the quarter
were of a normal recurring nature. Actual results could differ from those
estimates.

Revenue Recognition

The
Company recognizes sales of retail products upon receipt by the customer. The
Company will honor returns from retail customers within seven days from the
date of sale. The

7

---



Company
establishes liabilities for estimated returns at the point of sale. Such
liabilities are immaterial for all periods presented. The Company sells retail
product service contracts covering periods beyond the normal manufacturers
warranty periods, usually with terms of coverage (including manufacturers
warranty periods) of between 12 to 60 months. Contract revenues and sales
commissions are deferred and amortized on a straight-line basis over the life
of the contracts after the expiration of applicable manufacturers warranty
periods. Amortization of deferred contract revenues is included in net sales
and revenue while amortization of deferred sales commissions is included in
selling, general and administrative expenses. The Company retains the
obligation to perform warranty service and such costs are charged to operations
as incurred.

The
Company includes income from its real estate leasing activities in net sales
and revenue. The Company accounts for these leases as operating leases.
Accordingly, minimum rental revenue is recognized on a straight-line basis over
the term of the lease.

The
Company recognizes sales from the production of ethanol and distillers grains
when title transfers to customers, generally upon shipment from our plant.
Shipping and handling charges to ethanol customers are included in net sales
and revenue.

Cost of Sales

Retail
cost of sales includes the cost of merchandise (net of vendor allowances),
markdowns and inventory shrink, receiving, warehousing and freight charges to
deliver merchandise to retail stores, service repair bills as well as cash
discounts and rebates. The Company classifies purchasing costs as selling,
general and administrative expenses. As a result of this classification, the
Companys retail gross margins may not be comparable to those of other
retailers that include costs related to their distribution network in selling,
general and administrative expense.

Ethanol
cost of sales includes depreciation, costs of raw materials, inbound freight
charges, purchasing and receiving costs, inspection costs, shipping costs,
other distribution expenses, warehousing costs, plant management, certain
compensation costs, and general facility overhead charges.

Vendor Allowances and Advertising Costs

Vendors
often fund, up front, certain advertising costs and exposure to general changes
in pricing to customers due to technological change. Allowances are deferred as
received from vendors and recognized into income as an offset to the cost of
merchandise sold when the related product is sold or expense incurred.
Advertising costs are expensed as incurred.

Selling, General and Administrative Expenses

The
Company includes store expenses from its retail segment (such as payroll and
occupancy costs), advertising, purchasing, depreciation, insurance and overhead
costs in selling, general and administrative expenses.

8

---



The
Company includes non-production related costs from its alternative energy
segment such as certain payroll and related costs, professional fees and other
    general expenses in selling, general and administrative expenses.

Interest Cost

Interest
expense of $878,000 for the quarter ended April 30, 2009 is net of approximately
$883,000 of interest capitalized. Interest expense of $113,000 for the quarter
ended April 30, 2008 is net of approximately $875,000 of interest capitalized.
Cash paid for interest for the quarter ended April 30, 2009 and 2008 was
approximately $607,000 and $301,000, respectively.

Financial Instruments

Forward
grain purchase and ethanol and distiller grain sale contracts are accounted for
under the normal purchases and normal sales scope exemption of SFAS No. 133,
Accounting for Derivative Instruments and
Hedging Activities (SFAS 133) because these arrangements are for
purchases of grain that will be delivered in quantities expected to be used by
the Company and sales of ethanol and distiller grain quantities expected to be
produced by the Company over a reasonable period time in the normal course of
business. The Company uses derivative financial instruments to manage its
balance of fixed and variable rate debt. The Company does not hold or issue
derivative financial instruments for trading or speculative purposes. Interest
rate swap agreements involve the exchange of fixed and variable rate interest
payments and do not represent an actual exchange of the notional amounts
between the parties. The swap agreements were not designated for hedge
accounting pursuant to SFAS 133. The interest rate swaps are recorded at their
fair values and the changes in fair values are recorded as gain or loss on
derivative financial instruments in the Consolidated Condensed Statements of
Operations.

Income Taxes

The
Company applies an effective tax rate to interim periods that is consistent
with the Companys estimated annual tax rate. The Company provides for deferred
tax liabilities and assets for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax basis and operating loss and tax
credit carryforwards. The Company provides for a valuation allowance if, based
on the weight of available evidence, it is more likely than not that some or
all of the deferred tax assets will not be realized. The Company paid income
taxes of approximately $0 and $634,000 for the quarters ended April 30, 2009
and 2008, respectively.

As
of April 30, 2009, total unrecognized tax benefits were $4,335,000 and accrued
penalties and interest were $152,000. If the Company were to prevail on all
unrecognized tax benefits recorded, approximately $178,000 of the reserve would
benefit the effective tax rate. In addition, the impact of penalties and
interest would also benefit the effective tax rate. Interest and penalties
associated with unrecognized tax benefits are recorded within income tax
expense. On a quarterly and annual basis, the Company accrues for the effects
of open uncertain tax positions and the related potential penalties and
interest.

9

---



Restricted Cash

The
Company deposited approximately $1.0 million into a restricted bank account as
collateral for a letter of credit on behalf of Levelland Hockley to secure
grain purchasing. The cash is carried at cost plus accrued interest.

Inventories

Inventories
are carried at the lower of cost or market on a first-in, first-out (FIFO)
basis. Retail segment inventory includes certain costs associated with
purchasing, warehousing and transporting merchandise. Alternative energy
segment inventory includes direct production costs and certain overhead costs
such as depreciation, property taxes and utilities related to producing ethanol
and related by-products. Reserves are established for estimated technological
obsolescence and net realizable value based upon commodity prices. The market
value of inventory is often dependent upon changes in technology resulting in
significant changes in customer demand and changes in commodity prices. The
components of inventory at April 30, 2009, January 31, 2009 and April 30, 2008
are as follows (amounts in thousands):

|                                      |  |                 |       |                   |   |                 |  |   |        | 
|------------------------------------- |  | --------------- | ----- | ----------------- | - | --------------- |  | - | ------ | 
|                                      |  | April 30,
 2009 |       | January 31,
 2009 |   | April 30,
 2008 | 
|                                      |  |                 |       |                   |   |                 | 
|                                      |  |                 |       |                   |   |                 | 
|Retail merchandise, net               |  | $               | 4,011 |                   | $ | 22,318          |  | $ | 51,541 | 
|Ethanol and other finished goods, net |  |                 | 777   |                   |   | 487             |  |   | 2,286  | 
|Work in process, net                  |  |                 | 487   |                   |   | 341             |  |   | 2,181  | 
|Grain and other raw materials         |  |                 | 1,202 |                   |   | 1,228           |  |   | 792    | 
|                                      |  |                 |       |                   |   |                 |  |   |        | 
|Total                                 |  | $               | 6,477 |                   | $ | 24,374          |  | $ | 56,800 | 
|                                      |  |                 |       |                   |   |                 |  |   |        | 

Property and Equipment

Property
and equipment is recorded at cost. Assets under capital leases are capitalized
at the lower of the net present value of minimum lease payments or the fair
market value of the leased asset. Depreciation is computed using the
straight-line method. Estimated useful lives are 15 to 40 years for buildings
and improvements, and 3 to 20 years for fixtures and equipment. Leasehold
improvements are depreciated over the initial lease term and one renewal term
when exercise of the renewal term is reasonably assured, or the life of the
improvement, whichever is shorter.

In
accordance with SFAS No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets, the carrying
value of long-lived assets is assessed for recoverability by management when
changes in circumstances indicate that the carrying amount may not be
recoverable, based on an analysis of undiscounted future expected cash flows
from the use and ultimate disposition of the asset.

Investments

The
Company periodically evaluates its investments for impairment due to declines
in market value considered to be other than temporary. Such impairment
evaluations include, in

10

---



addition to
persistent, declining market prices, general economic and company-specific
evaluations. If the Company determines that a decline in market value is other
than temporary, then a charge to earnings is recorded in the accompanying
Consolidated Condensed Statements of Operations for all or a portion of the
unrealized loss and a new cost basis in the investment is established.

Accounting Changes and Recently Issued
Accounting Standards

Accounting Changes

In
December 2007, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 141 (revised 2007), Business Combinations(SFAS 141 R). SFAS 141 R had no impact on the Companys
condensed consolidated balance sheet, statements of operations or cash flows.
SFAS 141 R provides guidance related to recognition of assets acquired and
liabilities assumed in business combinations. SFAS 141 R also established
expanded disclosure requirements for business combinations. The standard is
effective for fiscal years beginning after December 15, 2008. SFAS 141 R will
be applied prospectively to business combinations that occur subsequent to
February 1, 2009.

In
December 2007, the FASB issued SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statements (SFAS 160).SFAS
160 established accounting and reporting standards for the noncontrolling
interest in a subsidiary. It also requires that a retained noncontrolling
interest upon the deconsolidation of a subsidiary be initially measured at its
fair value. SFAS 160 is effective for fiscal years beginning on or after
December 15, 2008. Upon adoption of SFAS 160 on February 1, 2009, the Company
reports its noncontrolling interests (previously reported as minority interest
liability) as a separate component of shareholders equity. The Company also
reports net income attributable to the noncontrolling interests and net income
attributable to the shareholders of the Company separately in the condensed
consolidated statements of operations. SFAS 160 requires retrospective adoption
of the presentation and disclosure requirements for existing noncontrolling
interests. All other requirements of SFAS 160 are to be applied prospectively.
See the Consolidated Condensed Statements of Equity for the impact of adopting
this standard.

In
March 2008, the FASB issued SFAS No. 161, Disclosures
about Derivative Instruments and Hedging Activities  An Amendment of FASB
Statement No. 133(SFAS 161). SFAS 161 requires enhanced
qualitative disclosures about objectives and strategies for using derivatives,
quantitative disclosures about fair value amounts of gains and losses on
derivative instruments, and disclosures about credit-risk-related contingent
features in derivative agreements. SFAS 161 is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008. The Company adopted SFAS 161 on February 1, 2009. See Note 8 for a
further discussion of financial instruments.

On
February 1, 2009, the Company adopted FASB Staff Position SFAS No. 157-2, Effective Date of FASB Statement No. 157
which had no impact on the Companys condensed consolidated balance sheet,
statements of operations or cash flows. This standard partially delayed the
effective date of SFAS No. 157 Fair Value
Measurementsfor non financial assets

11

---



and non
financial liabilities that are recognized or disclosed at fair value in the
financial statements on a nonrecurring basis. The adoption of this standard had
no impact on the Companys condensed consolidated balance sheet, statements of
operations or cash flows.

Recently Issued Accounting Standards

In
April 2009, the FASB issued FASB Staff Position (FSP) FAS 107-1/APB 28-1, Interim Disclosures about Fair Value
of Financial
Instruments, (FSP 107-1). This pronouncement amended SFAS No 107,
Disclosures about Fair Value of Financial
Instruments, to require disclosure of the carrying amount and the
fair value of all financial instruments for interim reporting periods and
annual financial statements of publicly traded companies (even if the financial
instrument is not recognized in the balance sheet), including the methods and
significant assumptions used to estimate the fair values and any changes in such
methods and assumptions. FSP 107-1 also amended APB Opinion No. 28, Interim Financial Reporting, to require
disclosures in summarized financial information at interim reporting periods.
FSP 107-1 is effective for interim reporting periods ending after June 15,
2009, with early adoption permitted for periods ended after March 15, 2009. The
Company has not determined the impact on its consolidated financial statements
of adopting this standard.

Note 3. Sale
and Leaseback Transaction and Other Leases

On
July 28, 2006, the Company completed a transaction for the sale and leaseback
of one store under an initial three-year lease term. A pre-tax gain, classified
as continuing operations, of approximately $1.7 million (net of expenses)
resulted from this sale. The Company has also deferred approximately $0.4
million of the gain at April 30, 2009, based upon the present value of the
minimum lease payments and will amortize this deferred gain as a reduction to
lease expense over the lease term. The lease has been accounted for as an
operating lease.

On
September 16, 2008, the Company completed a transaction for the sale and
partial leaseback of its Cheyenne, Wyoming distribution center under a three
year lease term. A pre-tax gain, classified as continuing operations, of
approximately $1.6 million (net of expenses) resulted from this sale. The
Company has also deferred approximately $0.6 million of the gain at April 30,
2009, based upon the present value of the minimum lease payments and will amortize
this deferred gain as a reduction to lease expense over the lease term. The
lease has been accounted for as an operating lease.

On
April 30, 2007, the Company completed a transaction for the sale of 86 of its
current and former store locations to KLAC REX, LLC (Klac) for $74.5 million
in cash, before selling expenses. The Company also entered into leases to
leaseback 40 of the properties from Klac for initial lease terms expiring
January 31, 2010, with renewal options for up to 15 additional years. The
leases on 28 of the properties have been terminated as of April 30, 2009. The
Company also entered into license agreements with Klac for 15 of the properties
that allowed the Company to occupy the properties for up to 90 days rent free. Upon
the expiration of the license period, the Company vacated the properties.

This
transaction resulted in a gain (realized and deferred) of $14.8 million. Of
this gain, $2.6 million and $0.3 million was recognized in the first quarter of
fiscal years 2009 and 2008,

12

---



respectively.
The Company had a deferred gain of $1.4 million and $5.1 million at April 30,
2009 and 2008, respectively, based upon the present value of the remaining
minimum lease payments. The deferred gain will be amortized as a reduction to
lease expense over the lease periods or recognized as gain on disposal at the
end of the lease period. As a result of the wind down of the Companys retail
business, the term the deferred gain was being amortized over has been
shortened to January 31, 2010 for all remaining properties leased from Klac.
See Note 12 for a discussion of restructuring related charges. The leases have
been accounted for as operating leases. The following table summarizes the
pre-tax gains and losses recognized during the first quarters of fiscal years
2009 and 2008 (amounts in thousands):

|                         |  |                                    |       |                                    |   |     | 
|------------------------ |  | ---------------------------------- | ----- | ---------------------------------- | - | --- | 
|Classification
 of Gain  |  | Three Months Ended
 April 30, 2009 |       | Three Months Ended
 April 30, 2008 |  
|                         |  |                                    |       |                                    |  
|                         |  |                                    |       |                                    |  
|Continuing
 Operations   |  | $                                  | 58    |                                    | $ | 58  | 
|Discontinued
 Operations |  |                                    | 2,516 |                                    |   | 278 | 
|                         |  |                                    |       |                                    |   |     | 
|                         |  |                                    |       |                                    |   |     | 
|Total
 Pre-Tax Gain      |  | $                                  | 2,574 |                                    | $ | 336 | 
|                         |  |                                    |       |                                    |   |     | 

The
following table summarizes the components of the sale and leaseback transaction
as of April 30, 2009 (dollar amounts in thousands):

|                              |  |                        |    |               |   |                 |  |   |        | 
|----------------------------- |  | ---------------------- | -- | ------------- | - | --------------- |  | - | ------ | 
|Property
 Category            |  | Number
 of
 Properties |    | Deferred Gain |   | Recognized Gain | 
|                              |  |                        |    |               |   |                 | 
|                             
|Vacated                       |  |                        | 74 |               | $ |                |  | $ | 10,790 | 
|Leased until January 31, 2010 |  |                        | 12 |               | $ | 1,360           |  |   | 2,655  | 
|                              |  |                        |    |               |   |                 |  |   |        | 
|Total                         |  |                        | 86 |               | $ | 1,360           |  | $ | 13,445 | 
|                              |  |                        |    |               |   |                 |  |   |        | 

The
Company expects the remaining balance of the deferred gain to be amortized in
fiscal year 2009.

In
addition to the leaseback transactions described above, the Company is
committed under operating leases for certain retail store locations. The lease
agreements are for varying terms through fiscal year 2011 and contain renewal
options for additional periods. Real estate taxes, insurance and maintenance
costs are generally paid by the Company. Contingent rentals based on sales
volume are not significant. Certain leases contain scheduled rent increases and
rent expense is recognized on a straight-line basis over the term of the
leases.

13

---



The following
table is a summary of rental activity under operating leases (amounts in
thousands):

|                               |  |                  |       |                    |   |                  |   |       |      |   |   |        |  
|------------------------------ |  | ---------------- | ----- | ------------------ | - | ---------------- | - | ----- | ---- | - | - | ------ | -
|Years
 Ended
 January 31       |  | Minimum
 Rentals |       | Gain
 Amortization |   | Sublease
 Income |   | Total |     
|                               |  |                  |       |                    |   |                  |   |       |     
|Remainder of January 31,
 2010 |  | $                | 1,263 |                    | $ | (2,359           | ) | $     | (145 | ) | $ | (1,241 | )
|2011                           |  |                  | 673   |                    |   |                 |   |       | (110 | ) |   | 563    |  
|2012 (a)                       |  |                  | 257   |                    |   |                 |   |       | (46  | ) |   | 211    |  
|2013 (a)                       |  |                  | 60    |                    |   |                 |   |       | (40  | ) |   | 20     |  
|2014 (a)                       |  |                  | 60    |                    |   |                 |   |       | (40  | ) |   | 20     |  
|Thereafter
 (a)                |  |                  | 65    |                    |   |                 |   |       | (43  | ) |   | 22     |  
|                               |  |                  |       |                    |   |                  |   |       |      |   |   |        |  
|Total                          |  | $                | 2,378 |                    | $ | (2,359           | ) | $     | (424 | ) | $ | (405   | )
|                               |  |                  |       |                    |   |                  |   |       |      |   |   |        |  

|    |                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Amounts
 include minimum rentals related to lease renewal options assumed to be
 exercised in the amounts of $55,000 for the fiscal year ended January 31,
 2011, $60,000 for the fiscal years ended 2012, 2013 and 2014 and $65,000 for
 the thereafter category.

The
amounts in the table above do not include minimum rental charges of $1,033,000
that have been accrued as early lease termination expense at April 30, 2009.
These charges will be paid in fiscal years 2010 and 2011.

At
April 30, 2009, the Company has lease agreements or commitments, as landlord,
for all or portions of 45 properties, including 40 stores leased to
subsidiaries of Appliance Direct, Inc. (Appliance Direct), a third party
appliance retail chain. The Company owns 41 of these properties and is the
tenant/sub landlord for four of the properties. At April 30, 2009, Appliance
Direct leased and occupied six of the owned properties and three of the sub
leased properties. Pursuant to the amended agreement with Appliance Direct, the
Company expects the leases for the remaining 31 owned stores will commence no
later than July 31, 2009.

All
of the leases are accounted for as operating leases. The following table is a
summary of future minimum rentals on such leases (amounts in thousands):

|                               |  |                  |        | 
|------------------------------ |  | ---------------- | ------ | 
|Years
 Ended
 January 31       |  | Minimum
 Rentals |       
|                               |  |                  |       
|Remainder of January 31,
 2010 |  | $                | 2,011  | 
|2011                           |  |                  | 3,136  | 
|2012                           |  |                  | 3,069  | 
|2013                           |  |                  | 3,073  | 
|2014                           |  |                  | 3,044  | 
|Thereafter                     |  |                  | 5,135  | 
|                               |  |                  |        | 
|Total                          |  | $                | 19,468 | 
|                               |  |                  |        | 

14

---



Levelland
Hockley leases certain real estate and equipment for its ethanol plant. These
leases have been classified as capital leases. The following is a summary, at
April 30, 2009, of the aggregate minimum future annual rental commitments for
all capital leases (amounts in thousands):

|                                                      |  |                  |       | 
|----------------------------------------------------- |  | ---------------- | ----- | 
|Years
 Ended January 31                               |  | Minimum
 Rentals |      
|                                                      |  |                  |      
|                                                     
|Remainder of
 January 31, 2010                        |  | $                | 388   | 
|2011                                                  |  |                  | 569   | 
|2012                                                  |  |                  | 569   | 
|2013                                                  |  |                  | 524   | 
|2014                                                  |  |                  | 432   | 
|                                                      |  |                  |       | 
|Total
 minimum lease payments                         |  |                  | 2,482 | 
|Less amount
 representing interest                    |  |                  | 268   | 
|                                                      |  |                  |       | 
|Present
 value of minimum capital lease payments      |  |                  | 2,214 | 
|Less current
 maturities of capital lease obligations |  |                  | 450   | 
|                                                      |  |                  |       | 
|Long term
 capital lease obligations                  |  | $                | 1,764 | 
|                                                      |  |                  |       | 

Note 4. Fair
Value

Effective
February 1, 2008, the Company determined the fair market values of its
financial instruments based on the fair value hierarchy established in SFAS No. 157 Fair Value Measurements
(SFAS
157) which requires an entity to maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair value. The standard
describes three levels of inputs that may be used to measure fair values which
are provided below. The Company carries cash equivalents and derivative assets
and liabilities at fair value.

Level
1  Quoted prices in active markets for identical assets or liabilities. Level
1 assets and liabilities include debt and equity securities and derivative
contracts that are traded in an active exchange market, as well as certain U.S.
Treasury securities that are highly liquid and are actively traded in
over-the-counter markets.

Level
2  Observable inputs other than Level 1 prices such as quoted prices for
similar assets or liabilities; quoted prices in markets that are not active; or
other inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets or liabilities. Level 2
assets and liabilities include derivative contracts whose value is determined
using a pricing model with inputs that are observable in the market or can be
derived principally or corroborated by observable market data.

Level
3  Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities. Level 3
assets and liabilities include financial instruments whose value is determined
using pricing models, discounted cash flow methods, or similar techniques, as
well as instruments for which the determination of fair value requires
significant management judgment or estimation. Unobservable inputs shall be
developed based on the best information available, which may include the
Companys own data.

15

---



The
fair values of derivative assets and liabilities traded in the over-the-counter
market are determined using quantitative models that require the use of
multiple market inputs including interest rates, prices and indices to generate
pricing and volatility factors, which are used to value the position. The
predominance of market inputs are actively quoted and can be validated through
external sources, including brokers, market transactions and third-party
pricing services. Estimation risk is greater for derivative asset and liability
positions that are either option-based or have longer maturity dates where
observable market inputs are less readily available or are unobservable, in
which case interest rate, price or index scenarios are extrapolated in order to
determine the fair value. The fair values of derivative assets and liabilities
include adjustments for market liquidity, counterparty credit quality, the
Companys own credit standing and other specific factors, where appropriate. To
ensure the prudent application of estimates and management judgment in
determining the fair value of derivative assets and liabilities, various
processes and controls have been adopted, which include: model validation that
requires a review and approval for pricing, financial statement fair value
determination and risk quantification; periodic review and substantiation of
profit and loss reporting for all derivative instruments. There was no impact
on the beginning balance of retained earnings as a result of adopting SFAS 157
because the Company held no financial instruments in which a gain or loss at
inception was deferred. Financial assets and liabilities measured at fair value
on a recurring basis are summarized below (amounts in thousands):

|                                |  |         |        |         |   |         |  |            |   |  |   |        | 
|------------------------------- |  | ------- | ------ | ------- | - | ------- |  | ---------- | - |  | - | ------ | 
|                                |  | Level 1 |        | Level 2 |   | Level 3 |  | Fair Value |  
|                                |  |         |        |         |   |         |  |            |  
|                               
|Cash equivalents                |  | $       | 84,950 |         | $ |        |  | $          |  |  | $ | 84,950 | 
|Investments
 in debt securities |  |         |       |         |   | 891     |  |            |  |  |   | 891    | 
|Restricted
 investments         |  |         | 1,356  |         |   |        |  |            |  |  |   | 1,356  | 
|                                |  |         |        |         |   |         |  |            |   |  |   |        | 
|Total assets                    |  | $       | 86,306 |         | $ | 891     |  | $          |  |  | $ | 87,197 | 
|                                |  |         |        |         |   |         |  |            |   |  |   |        | 
|Derivative
 liabilities         |  | $       |       |         | $ | 6,237   |  | $          |  |  | $ | 6,237  | 
|                                |  |         |        |         |   |         |  |            |   |  |   |        | 

Note 5. Property and Equipment

The
components of property and equipment at April 30, 2009, January 31, 2009 and
April 30, 2008 are as follows (amounts in thousands):

|                                   |  |                 |         |                   |   |                 |   |   |         |  
|---------------------------------- |  | --------------- | ------- | ----------------- | - | --------------- | - | - | ------- | -
|                                   |  | April 30,
 2009 |         | January 31,
 2009 |   | April 30,
 2008 |  
|                                   |  |                 |         |                   |   |                 |  
|                                  
|Land and
 improvements             |  | $               | 22,250  |                   | $ | 24,073          |   | $ | 23,066  |  
|Buildings
 and improvements        |  |                 | 51,728  |                   |   | 40,987          |   |   | 56,657  |  
|Machinery,
 equipment and fixtures |  |                 | 68,804  |                   |   | 70,408          |   |   | 61,148  |  
|Leasehold
 improvements            |  |                 | 1,967   |                   |   | 3,396           |   |   | 5,235   |  
|Construction
 in progress          |  |                 | 127,948 |                   |   | 121,333         |   |   | 46,666  |  
|                                   |  |                 |         |                   |   |                 |   |   |         |  
|                                   |  |                 | 272,697 |                   |   | 260,197         |   |   | 192,772 |  
|Less:
 accumulated depreciation    |  |                 | (22,878 | )                 |   | (24,743         | ) |   | (24,413 | )
|                                   |  |                 |         |                   |   |                 |   |   |         |  
|                                   |  |                 |         |                   |   |                 |   |   |         |  
|                                   |  | $               | 249,819 |                   | $ | 235,454         |   | $ | 168,359 |  
|                                   |  |                 |         |                   |   |                 |   |   |         |  

16

---



Note 6. Other
Assets

The
components of other assets at April 30, 2009, January 31, 2009 and April 30,
2008 are as follows (amounts in thousands):

|                     |  |                 |        |                   |   |                 |  |   |        | 
|-------------------- |  | --------------- | ------ | ----------------- | - | --------------- |  | - | ------ | 
|                     |  | April 30,
 2009 |        | January 31,
 2009 |   | April 30,
 2008 | 
|                     |  |                 |        |                   |   |                 | 
|                    
|Prepaid loan
 fees   |  | $               | 4,214  |                   | $ | 4,515           |  | $ | 5,088  | 
|Prepaid
 commissions |  |                 | 6,795  |                   |   | 7,563           |  |   | 8,813  | 
|Other                |  |                 | 285    |                   |   | 336             |  |   | 197    | 
|                     |  |                 |        |                   |   |                 |  |   |        | 
|Total                |  | $               | 11,294 |                   | $ | 12,414          |  | $ | 14,098 | 
|                     |  |                 |        |                   |   |                 |  |   |        | 

Note 7. Long
Term Debt and Interest Rate Swaps

During
the first quarter of fiscal year 2009, the Company completed the payoff of
twelve mortgage loans resulting in approximately $7.3 million of fixed rate
debt being paid off prior to the scheduled maturities of the loans. The Company
recognized approximately $0.1 million of early debt termination costs in
connection with the early payoff of these loans.

Levelland Hockley Subsidiary Level Debt

During
the second quarter of fiscal year 2008, pursuant to the terms of the
construction loan agreement, Levelland Hockley converted the construction loan
into a permanent term loan. Beginning with the first monthly payment on June
30, 2008, payments are due in 59 equal monthly payments of principal plus
accrued interest with the principal portion calculated based on a 120 month
amortization schedule. One final installment will be required on the maturity
date (June 30, 2013) for the remaining unpaid principal balance with accrued
interest. The term loan bears interest at a floating rate of 400 basis points
above LIBOR (4.6%) at April 30, 2009, adjusted monthly through the maturity
date. Borrowings are secured by all of the assets of Levelland Hockley. This
debt is recourse only to Levelland Hockley and not to REX Stores Corporation or
any of its wholly owned subsidiaries. As of April 30, 2009, approximately $40.4
million was outstanding on the term loan. Levelland Hockley is also subject to
certain financial covenants under the loan agreement, including required levels
of EBITDAR, debt service coverage ratio requirements, net worth requirements
and other common covenants. Levelland Hockley was not in compliance with its
debt covenants at April 30, 2009. On April 13, 2009, Levelland Hockley entered
into a forbearance agreement with GE. This agreement includes:

| |     |                                                                                                                                                                                                                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | An
 acknowledgement by Levelland Hockley that it anticipates it has failed to
 meet the EBITDAR Coverage Ratio, as defined, for the period ended March 31,
 2009 as required by the loan agreement (the Specified Default) and                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                         
| | (2) | An agreement
 that GE will forbear from exercising its rights and remedies with respect to
 the Specified Default and also with respect to any failure to meet the
 EBITDAR Coverage Ratio at any future date through the end of the forbearance
 period, August 30, 2009, as long as no other defaults of the loan agreement
 occur and

17

---



| |     |                                                                                                                                                                       
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (3) | An agreement
 that Levelland Hockley will not make any payments of principal or interest to
 Farmers Energy, Inc. (a subsidiary of REX) during the forbearance period.

Management
believes the EBITDAR Coverage Ratio covenant violation will be cured on or
before the end of the forbearance period. Also, based on forecasts which are
primarily based on estimates of plant production, prices of ethanol, sorghum,
distillers grains and natural gas as well as other assumptions management
believes to be reasonable, the Company believes that Levelland Hockley will be
able to maintain compliance with the covenants subsequent to the Forbearance
Period as noted above for the next 12 months. Management believes that cash
flow from operating activities together with working capital will be sufficient
to meet Levelland Hockleys liquidity needs. However, if a material adverse
change in the financial position or operations of Levelland Hockley should
occur, or if actual sales or expenses are substantially different than
forecasted, Levelland Hockleys liquidity and ability to fund future operating
and capital requirements and compliance with debt covenants could be negatively
impacted.

Levelland
Hockley entered into a forward interest rate swap with an initial notional
amount of $43.7 million with Merrill Lynch Capital during fiscal year 2007. The
swap effectively fixed the variable interest rate of the term loan subsequent
to the plant completion date at 7.89%. The swap settlements commenced on May
31, 2008 and terminate on April 30, 2010. At April 30, 2009, the Company has
recorded a liability of $1.3 million related to the fair value of the swap. The
change in fair value not resulting from settlements was recorded in the
Consolidated Condensed Statements of Operations.

One Earth Energy Subsidiary Level Debt

In
September 2007, One Earth entered into a $111,000,000 financing agreement
consisting of a construction loan agreement for $100,000,000 together with a
$10,000,000 revolving loan and a $1,000,000 letter of credit with First
National Bank of Omaha. During the construction period, One Earth will be
required to make interest payments quarterly on the outstanding principal
amount at a variable interest rate equal to LIBOR plus 310 basis points (4.4%)
at April 30, 2009. The construction loan will be converted into a term loan
upon completion of plant construction. The term loan will bear interest at
rates ranging from LIBOR plus 300 basis points to LIBOR plus 310 basis points
and is payable over five years.

Borrowings
are secured by all property of One Earth. This debt is recourse only to One
Earth and not to REX Stores Corporation or any of its wholly owned subsidiaries.
During the first quarter of fiscal year 2009, One Earth borrowed $15.4 million
on this loan. As of April 30, 2009, approximately $71.4 million had been drawn
on the construction loan. One Earth is also subject to certain financial
covenants under the loan agreement, including required levels of EBITDA, debt
service coverage ratio requirements, net worth requirements and other common
covenants. One Earth was in compliance with all covenants at April 30, 2009.
One Earth has paid approximately $1.4 million in financing costs. These costs
are recorded as prepaid loan fees and will be amortized ratably over the loan.

One
Earth entered into two forward interest rate swaps in the notional amounts of
$50.0 million and $25.0 million with the Bank. The swap settlements commence as
of July 31, 2009; the $50.0 million swap terminates on July 8, 2014 and the
$25.0 million swap terminates on July 31, 2011. The $50.0 million swap fixed a
portion of the variable interest rate of the term loan

18

---



subsequent to
the plant completion date at 7.9% while the $25.0 million swap fixed the rate
at 5.49%. At April 30, 2009, the Company recorded a liability of $4.9 million
related to the fair value of the swaps. The change in fair value was recorded
in the Consolidated Condensed Statements of Operations.

Note 8. Financial
Instruments

The
Company uses interest rate swaps to manage its interest rate exposure at
Levelland Hockley and One Earth by fixing the interest rate on a portion of the
variable rate debt these entities have. The Company does not engage in trading
activities involving derivative contracts for which a lack of marketplace
quotations would necessitate the use of fair value estimation techniques. As of
April 30, 2009, the notional value of the Levelland Hockley and One Earth
interest rate swaps were $39.7 million and $75.0 million, respectively. At
April 30, 2009, the Company has recorded a liability of $6.2 million related to
the fair value of the swaps. The change in fair value not resulting from
settlements was recorded in the Consolidated Condensed Statements of
Operations.

The
notional amounts and fair values of derivatives, all of which are not
designated as cash flow hedges at April 30, 2009 are summarized in the table
below (amounts in thousands):

|                     |  |                  |         |                       |   |       | 
|-------------------- |  | ---------------- | ------- | --------------------- | - | ----- | 
|                     |  | Notional
 Amount |         | Fair Value
 Liability |  
|                     |  |                  |         |                       |  
|                    
|Interest
 rate swaps |  | $                | 114,339 |                       | $ | 6,237 | 

As
the interest rate swaps are not designated as cash flow hedges, the unrealized
gain and loss on the derivatives is reported in current earnings. The Company
reported losses of $556,000 in the first quarter of fiscal year 2009 and gains
of $472,000 in the first quarter of fiscal year 2008.

In
the normal course of its ethanol business, the Company enters into forward
pricing agreements for the purchase of grain and for the sale of ethanol and
distillers grains for delivery in future periods. The Company accounts for
these forward pricing arrangements under the normal purchases and normal
sales scope exemption of SFAS No. 133. Levelland Hockley has forward purchase
contracts for 436,000 bushels of sorghum, the principal raw material for its
ethanol plant. Levelland Hockley expects to take delivery of the sorghum
through May 2009. The unrealized gain of such contracts was approx $262,000 at
March 31, 2009.

One
Earth has forward purchase contracts for 690,000 bushels of corn, the principal
raw material for its ethanol plant. One Earth expects to take delivery of the
corn through July 2009. The unrealized gain of such contracts was approximately
$46,000 at March 31, 2009.

Levelland
Hockley has sales commitments for 0.9 million gallons of ethanol and 18,500
tons of distiller grains. Levelland Hockley expects to deliver the ethanol and
distiller grains through May 2009. The unrealized loss of such contracts was
approximately $0.1 million at March 31, 2009.

19

---



Note 9. Stock Option Plans

The
Company has stock-based compensation plans under which stock options have been
granted to directors, officers and key employees at the market price on the
date of the grant.

No
options have been granted since fiscal 2004. The fair values of options granted
were estimated as of the date of grant using a Black-Scholes option pricing
model with the following weighted average assumptions used for grants in the
fiscal year ended January 31, 2005: risk-free interest rate of 4.7%, expected
volatility of 65.4% and a weighted average stock option life of nine years for
all option grants.

The
total intrinsic value of options exercised during the quarters ended April 30,
2009 and 2008 was approximately $0.4 million and $0.2 million, respectively,
resulting in tax deductions to realize benefits of approximately $0.1 million
and $0.1 million, respectively. The following table summarizes options granted,
exercised and canceled or expired during the three months ended April 30, 2009:

|                                 |  |        |           |                                    |   |                                                           |  |                                              |     |  |   |       | 
|-------------------------------- |  | ------ | --------- | ---------------------------------- | - | --------------------------------------------------------- |  | -------------------------------------------- | --- |  | - | ----- | 
|                                 |  | Shares |           | Weighted
 Average
 Exercise
 Price |   | Weighted Average
 Remaining
 Contractual Term
 (in years) |  | Aggregate
 Intrinsic
 Value 
 (in thousands) |    
|                                 |  |        |           |                                    |   |                                                           |  |                                              |    
|Outstanding
 at January 31, 2009 |  |        | 2,715,001 |                                    | $ | 9.63                                                      |  |                                              |     |  |   |       | 
|Exercised                        |  |        | (89,608   | )                                  | $ | 7.67                                                      |  |                                              |     |  |   |       | 
|Forfeited                        |  |        | (3,600    | )                                  | $ | 12.45                                                     |  |                                              |     |  |   |       | 
|                                 |  |        |           |                                    |   |                                                           |  |                                              |     |  |   |       | 
|Outstanding
 at April 30, 2009   |  |        | 2,621,793 |                                    | $ | 9.69                                                      |  |                                              | 2.5 |  | $ | 6,849 | 
|Exercisable
 at April 30, 2009   |  |        | 2,571,425 |                                    | $ | 9.64                                                      |  |                                              | 2.4 |  | $ | 6,849 | 

At
April 30, 2009, there was approximately $0.1 million (pre-tax) of unrecognized
compensation cost related to nonvested stock options, which is expected to be
recognized over a weighted average period of 0.1 years.

20

---



Note 10.Income Per Share from Continuing Operations

The
following table reconciles the computation of basic and diluted net income per
share from continuing operations for the period presented (in thousands, except
per share amounts):

|                                                                                             |  |                                    |       |        |  |             |  |   |      | 
|-------------------------------------------------------------------------------------------- |  | ---------------------------------- | ----- | ------ |  | ----------- |  | - | ---- | 
|                                                                                             |  | Three Months Ended
 April 30, 2008 |      
|                                                                                             |  |                                    |      
|                                                                                             |  | Income                             |       | Shares |  | Per 
 Share | 
|                                                                                             |  |                                    |       |        |  |             | 
|Basic income per share from continuing
 operations attributable to REX common shareholders   |  | $                                  | 1,572 |        |  | 10,729      |  | $ | 0.14 | 
|                                                                                             |  |                                    |       |        |  |             |  |   |      | 
|Effect of stock options                                                                      |  |                                    |       |        |  | 891         |  |   |      | 
|                                                                                             |  |                                    |       |        |  |             |  |   |      | 
|Diluted income per share from continuing
 operations attributable to REX common shareholders |  | $                                  | 1,572 |        |  | 11,620      |  | $ | 0.13 | 
|                                                                                             |  |                                    |       |        |  |             |  |   |      | 

As
there was a loss from continuing operations for the first quarter of fiscal
year 2009, basic loss per share from continuing operations equals diluted loss
per share from continuing operations. For the three months ended April 30, 2009
and 2008, a total of 2,622,000 shares and 143,400 shares, respectively, subject
to outstanding options were not included in the common equivalent shares
outstanding calculation as the effect from these shares is antidilutive.

Note 11.Investments

The
following tables summarize investments at April 30, 2009, January 31, 2009 and
April 30, 2008 (amounts in thousands):

Debt
Securities April 30, 2009

|                                               |  |        |              |            |          |                     |                |   |                      |  |                   |     |  | 
|---------------------------------------------- |  | ------ | ------------ | ---------- | -------- | ------------------- | -------------- | - | -------------------- |  | ----------------- | --- |  | 
|Investment                                     |  |        | Coupon
 Rate |            | Maturity |                     | Classification |   | Fair
 Market 
 Value |  | Carrying 
 Amount |    
|                                               |  |        |              |            |          |                     |                |   |                      |  |                   |     |  | 
|                                              
|Patriot
 Renewable Fuels, LLC Convertible Note |  | 16.00% |              | 11/25/2011 |          | Available
 for Sale |                | $ | 891                  |  | $                 | 891 | 
|                                               |  |        |              |            |          |                     |                |   |                      |  |                   |     | 

Debt
Securities January 31, 2009

|                                               |  |        |              |            |          |                     |                |   |                      |  |                   |     |  | 
|---------------------------------------------- |  | ------ | ------------ | ---------- | -------- | ------------------- | -------------- | - | -------------------- |  | ----------------- | --- |  | 
|Investment                                     |  |        | Coupon
 Rate |            | Maturity |                     | Classification |   | Fair
 Market 
 Value |  | Carrying 
 Amount |    
|                                               |  |        |              |            |          |                     |                |   |                      |  |                   |     |  | 
|                                               |  |        |              |            |          |                     |                |   |                      |  |                   |     |  | 
|Patriot
 Renewable Fuels, LLC Convertible Note |  | 16.00% |              | 11/25/2011 |          | Available
 for Sale |                | $ | 933                  |  | $                 | 933 | 
|                                               |  |        |              |            |          |                     |                |   |                      |  |                   |     | 

21

---



Debt
Securities April 30, 2008

|                             |  |       |              |           |          |                   |                |   |                      |  |                   |       |  | 
|---------------------------- |  | ----- | ------------ | --------- | -------- | ----------------- | -------------- | - | -------------------- |  | ----------------- | ----- |  | 
|Investment                   |  |       | Coupon
 Rate |           | Maturity |                   | Classification |   | Fair
 Market 
 Value |  | Carrying 
 Amount |      
|                             |  |       |              |           |          |                   |                |   |                      |  |                   |      
|                            
|United
 States Treasury Bill |  | 1.76% |              | 5/29/2008 |          | Held to
 Maturity |                | $ | 1,558                |  | $                 | 1,558 | 
|                             |  |       |              |           |          |                   |                |   |                      |  |                   |       | 

There
were no material realized or unrealized holding gains or losses at April 30,
2009 or 2008.

The
Company has approximately $933,000 at April 30, 2009, January 31, 2009 and
April 30, 2008, respectively, on deposit with the Florida Department of
Financial Services to secure its obligation to fulfill future obligations
related to extended warranty contracts sold in the state of Florida. The
deposits earned 2.5%, 2.3% and 5.9% at April 30, 2009, January 31, 2009 and
April 30, 2008, respectively.

In
addition to the deposit with the Florida Department of Financial Services, the
Company has $1,356,000 at April 30, 2009 invested in a money market mutual fund
to satisfy Florida Department of Financial Services regulations. This
investment earned 0.4% at April 30, 2009 and 1.3% at January 31, 2009.

The
following table summarizes equity method investments at April 30, 2009, January
31, 2009 and April 30, 2008 (amounts in thousands):

Equity Method
Investments April 30, 2009

|                                 |  |  |                       |  |                 |   |                    |  |  |  |   |        |  |  | 
|-------------------------------- |  |  | --------------------- |  | --------------- | - | ------------------ |  |  |  | - | ------ |  |  | 
|Entity                           |  |  | Ownership
 Percentage |  | Carrying Amount |   | Initial Investment | 
|                                 |  |  |                       |  |                 |   |                    | 
|                                
|Big River
 Resources, LLC        |  |  | 10%                   |  |                 | $ | 23,941             |  |  |  | $ | 20,000 |  | 
|Patriot
 Renewable Fuels, LLC    |  |  | 23%                   |  |                 |   | 14,625             |  |  |  |   | 16,000 |  | 
|                                 |  |  |                       |  |                 |   |                    |  |  |  |   |        |  | 
|                                
|Total Equity
 Method Investments |  |  |                       |  |                 | $ | 38,566             |  |  |  | $ | 36,000 |  | 
|                                 |  |  |                       |  |                 |   |                    |  |  |  |   |        |  | 

Equity Method
Investments January 31, 2009

|                                 |  |  |                       |  |                 |   |                    |  |  |  |   |        |  |  | 
|-------------------------------- |  |  | --------------------- |  | --------------- | - | ------------------ |  |  |  | - | ------ |  |  | 
|Entity                           |  |  | Ownership
 Percentage |  | Carrying Amount |   | Initial Investment | 
|                                 |  |  |                       |  |                 |   |                    | 
|                                
|Big River
 Resources, LLC        |  |  | 10%                   |  |                 | $ | 23,850             |  |  |  | $ | 20,000 |  | 
|Patriot
 Renewable Fuels, LLC    |  |  | 23%                   |  |                 |   | 15,011             |  |  |  |   | 16,000 |  | 
|                                 |  |  |                       |  |                 |   |                    |  |  |  |   |        |  | 
|                                
|Total Equity
 Method Investments |  |  |                       |  |                 | $ | 38,861             |  |  |  | $ | 36,000 |  | 
|                                 |  |  |                       |  |                 |   |                    |  |  |  |   |        |  | 

22

---



Equity Method
Investments April 30, 2008

|                                 |  |  |                       |  |                 |   |                    |  |  |  |   |        |  |  | 
|-------------------------------- |  |  | --------------------- |  | --------------- | - | ------------------ |  |  |  | - | ------ |  |  | 
|Entity                           |  |  | Ownership
 Percentage |  | Carrying Amount |   | Initial Investment | 
|                                 |  |  |                       |  |                 |   |                    | 
|                                
|Big River
 Resources, LLC        |  |  | 10%                   |  |                 | $ | 22,960             |  |  |  | $ | 20,000 |  | 
|Patriot
 Renewable Fuels, LLC    |  |  | 23%                   |  |                 |   | 16,549             |  |  |  |   | 16,000 |  | 
|                                 |  |  |                       |  |                 |   |                    |  |  |  |   |        |  | 
|                                
|Total Equity
 Method Investments |  |  |                       |  |                 | $ | 39,509             |  |  |  | $ | 36,000 |  | 
|                                 |  |  |                       |  |                 |   |                    |  |  |  |   |        |  | 

During
the first quarter of fiscal years 2009 and 2008, the Company recorded income of
$92,000 and $1,007,000, respectively as its share of earnings from Big River
Resources, LLC (Big River).

During
the first quarter of fiscal years 2009 and 2008, the Company recorded a loss of
$352,000 and income of $41,000, respectively as its share of earnings from
Patriot Renewable Fuels, LLC (Patriot).

Undistributed
earnings of equity method investees totaled approximately $3.9 million and $2.2
million at April 30, 2009 and 2008, respectively.

Note 12.Restructuring and Other

During
the fourth quarter of fiscal year 2008, the Company entered into an agreement
with Appliance Direct, Inc. (Appliance Direct) pursuant to which (i) the
Company agreed to sell certain appliance inventory, furniture, fixtures and
equipment at the store locations to be taken over by Appliance Direct and (ii)
subsidiaries of Appliance Direct leased 37 retail store locations owned by the
Company. The Company plans to exit the retail business during fiscal year 2009.   The Company agreed to pay
Appliance Direct, as of the implementation date defined in the agreement, an
amount equal to the adjusted book value liability of the Companys customer
extended service plans for certain appliance inventory previously sold at
locations that Appliance Direct takes over from the Company (the ESP Credit).

During
the fourth quarter of fiscal year 2008, the Company recorded a restructuring
charge of approximately $4.2 million related to (i) a workforce reduction of a
majority of employees located at its corporate headquarters, retail stores and
distribution facilities and (ii) certain costs associated with the transition
of the Companys retail business to Appliance Direct. During the first quarter
of fiscal year 2009, the Company recorded additional restructuring

23

---



charges of
approximately $1.5 million related to lease termination costs. The following is
a summary of restructuring charges and payments (in thousands):

|                                     |  |                                      |       |                           |   |                          |  |             |     |                               |   |     |  |   |       | 
|------------------------------------ |  | ------------------------------------ | ----- | ------------------------- | - | ------------------------ |  | ----------- | --- | ----------------------------- | - | --- |  | - | ----- | 
|                                     |  | Employee
 Severance and
 Bonus Costs |       | Lease
 Termination
 Costs |   | Investment
 Banker
 Fees |  | ESP
 Credit |     | Total
 Restructuring
 Accrual |  
|                                     |  |                                      |       |                           |   |                          |  |             |     |                               |  
|                                     |  |                                      |       |                           |   |                          |  |             |     |                               |  
|Balance, January 31, 2009            |  | $                                    | 2,839 |                           | $ |                         |  | $           | 834 |                               | $ | 498 |  | $ | 4,171 | 
|                                     |  |                                      |       |                           |   |                          |  |             |     |                               |   |     |  |   |       | 
|Restructuring charges                |  |                                      |      |                           |   | 1,460                    |  |             |    |                               |   |    |  |   | 1,460 | 
|Payment of restructuring liabilities |  |                                      | 436   |                           |   | 409                      |  |             |    |                               |   |    |  |   | 845   | 
|                                     |  |                                      |       |                           |   |                          |  |             |     |                               |   |     |  |   |       | 
|Balance, April 30, 2009              |  | $                                    | 2,403 |                           | $ | 1,051                    |  | $           | 834 |                               | $ | 498 |  | $ | 4,786 | 
|                                     |  |                                      |       |                           |   |                          |  |             |     |                               |   |     |  |   |       | 

Note 13. Income
Taxes

The
effective tax rate on consolidated pre-tax loss or income from continuing operations
was 30.6% for the quarter ended April 30, 2009, 30.5% for the year ended
January 31, 2009 and 25.8% for the quarter ended April 30, 2008. An adjustment
for recognizing the benefit of certain statutes of limitations expiring
relating to uncertain tax positions of (14.1)% is reflected in the effective
rate for the quarter ended April 30, 2008. In addition, a benefit of (6.8)% was
recognized in the first quarter of fiscal year 2008 for a federal tax credit
which is earned by Levelland Hockley as a small ethanol producer. The Company
does not expect to be eligible to utilize the ethanol small producer federal
tax credit for years beyond fiscal year 2008. The provision for state taxes is
approximately 5% and 6% for the quarters ended April 30, 2009 and 2008,
respectively. The provision for state taxes was approximately 3% for the year
ended January 31, 2009. The effective tax rate was decreased by approximately
9% in the first quarter of fiscal year 2009 from the loss of pass-through
entities (Levelland Hockley and One Earth) that is allocated to non-controlling
interests.

The
Company files a U.S. federal income tax return and income tax returns in
various states. In general, the Company is no longer subject to U.S. federal,
state or local income tax examinations by tax authorities for years ended
January 31, 2006 and prior. A reconciliation of the beginning and ending amount
of unrecognized tax benefits, including interest and penalties, is as follows
(amounts in thousands):

|                                             |  |   |       | 
|-------------------------------------------- |  | - | ----- | 
|Unrecognized
 tax benefits, February 1, 2009 |  | $ | 4,160 | 
|Changes for
 prior years tax positions      |  |   | 327   | 
|Changes for
 current year tax positions      |  |   |      | 
|                                             |  |   |       | 
|Unrecognized
 tax benefits, April 30, 2009   |  | $ | 4,487 | 
|                                             |  |   |       | 

Note 14. Discontinued
Operations

During
the first three months of fiscal year 2009 the Company closed 37 stores in
which the Company vacated the market or will not have a further continuing
involvement with the

24

---



related
property. These stores, and certain other stores closed in previous periods,
were classified as discontinued operations for all periods presented.

Below
is a table reflecting certain items of the Consolidated Condensed Statements of
Operations that were reclassified as discontinued operations for the period
indicated.

|                                                                   |  |                               |       |      |   |        |  
|------------------------------------------------------------------ |  | ----------------------------- | ----- | ---- | - | ------ | -
|                                                                   |  | Three Months Ended
 April 30, |      
|                                                                   |  |                               |      
|                                                                   |  | 2009                          |       | 2008 |  
|                                                                   |  |                               |       |      |  
|                                                                   |  |                               |       |      |  
|Net sales and revenue                                              |  | $                             | 8,368 |      | $ | 20,866 |  
|Cost of sales                                                      |  |                               | 7,721 |      |   | 15,567 |  
|Loss from continuing operations before
 income taxes               |  |                               | (654  | )    |   | (73    | )
|Benefit for income taxes                                           |  |                               | 252   |      |   | 27     |  
|Loss from continuing operations including
 noncontrolling interest |  | $                             | (402  | )    | $ | (46    | )

Note 15. Commitments

In
May 2007, One Earth entered into an agreement with a designer/builder for the
construction of One Earths ethanol plant. The designer/builder is responsible
for all engineering, labor, materials and equipment to design, construct,
startup and achieve guaranteed performance criteria of the plant. The contract
price is approximately $120 million, subject to adjustments as provided by the
general conditions of the agreement, of which approximately $109 million has
been spent through April 30, 2009.

One
Earth has also entered other construction and facility related contracts. Some
of these contracts have been completed and all required funds have been
expended as of April 30, 2009. The total of other incomplete construction and
facility related contracts is approximately $10 million, of which approximately
$9 million has been spent through April 30, 2009.

Note 16. Segment
Reporting

The
Company has two reportable segments, consumer electronics and appliance
retailing (retail) and alternative energy. The Company evaluates the
performance of each reportable segment based on segment profit. Segment profit
excludes income taxes, indirect interest expense, discontinued operations,
indirect investment income and certain other items that are included in net
income determined in accordance with accounting principles generally accepted
in the United States of America. Segment profit includes realized and
unrealized gains on

25

---



derivative
financial instruments. The following table summarizes segment and other results
and assets (amounts in thousands):

|                                                              |  |                              |        |      |   |        |  
|------------------------------------------------------------- |  | ---------------------------- | ------ | ---- | - | ------ | -
|                                                              |  | Three Months Ended April 30, |       
|                                                              |  | 2009                         |        | 2008 |  
|                                                              |  |                              |        |      |  
|                                                              |  |                              |        |      |  
|Net sales and revenue:                                        |  |                              |        |      |   |        |  
|Retail                                                        |  | $                            | 15,616 |      | $ | 25,642 |  
|Alternative energy                                            |  |                              | 14,118 |      |   | 1,167  |  
|                                                              |  |                              |        |      |   |        |  
|Total net sales and revenues                                  |  | $                            | 29,734 |      | $ | 26,809 |  
|                                                              |  |                              |        |      |   |        |  
|                                                              |  |                              |        |      |   |        |  
|Segment gross profit:                                         |  |                              |        |      |   |        |  
|Retail                                                        |  | $                            | 4,486  |      | $ | 8,076  |  
|Alternative energy                                            |  |                              | 233    |      |   | 56     |  
|                                                              |  |                              |        |      |   |        |  
|Total gross profit                                            |  | $                            | 4,719  |      | $ | 8,132  |  
|                                                              |  |                              |        |      |   |        |  
|                                                              |  |                              |        |      |   |        |  
|Segment profit (loss):                                        |  |                              |        |      |   |        |  
|Retail segment (loss) profit                                  |  | $                            | (453   | )    | $ | 713    |  
|Alternative energy segment (loss) profit                      |  |                              | (2,003 | )    |   | 428    |  
|Corporate expense                                             |  |                              | (383   | )    |   | (537   | )
|Interest expense                                              |  |                              | (201   | )    |   | (112   | )
|Investment income                                             |  |                              | 230    |      |   | 664    |  
|Income from synthetic fuel investments                        |  |                              |       |      |   | 670    |  
|                                                              |  |                              |        |      |   |        |  
|(Loss) income from continuing operations
 before income taxes |  | $                            | (2,810 | )    | $ | 1,826  |  
|                                                              |  |                              |        |      |   |        |  

|                   |  |                 |         |                   |   |                 |  |   |         | 
|------------------ |  | --------------- | ------- | ----------------- | - | --------------- |  | - | ------- | 
|                   |  | April 30,
 2009 |         | January 31,
 2009 |   | April 30,
 2008 | 
|                   |  |                 |         |                   |   |                 | 
|                   |  |                 |         |                   |   |                 | 
|Assets:            |  |                 |         |                   |   |                 |  |   |         | 
|Retail             |  | $               | 52,135  |                   | $ | 80,437          |  | $ | 112,449 | 
|Alternative energy |  |                 | 263,204 |                   |   | 249,422         |  |   | 192,323 | 
|Corporate          |  |                 | 125,246 |                   |   | 121,429         |  |   | 121,665 | 
|                   |  |                 |         |                   |   |                 |  |   |         | 
|Total assets       |  | $               | 440,585 |                   | $ | 451,288         |  | $ | 426,437 | 
|                   |  |                 |         |                   |   |                 |  |   |         | 

26

---



|                                              |  |                              |   |      |     |   | 
|--------------------------------------------- |  | ---------------------------- | - | ---- | --- | - | 
|                                              |  | Three Months Ended April 30, |  
|                                              |  | 2009                         |   | 2008 |    
|                                              |  |                              |   |      |    
|Sales of products retail segment:             |  |                              |   |      |     |   | 
|Televisions                                   |  | 41                           | % |      | 52  | % | 
|Appliances                                    |  | 33                           | % |      | 28  | % | 
|Audio                                         |  | 3                            | % |      | 4   | % | 
|Video                                         |  | 1                            | % |      | 2   | % | 
|Other                                         |  | 3                            | % |      | 1   | % | 
|                                              |  |                              |   |      |     |   | 
|Total                                         |  | 81                           | % |      | 87  | % | 
|                                              |  |                              |   |      |     |   | 
|                                              |  |                              |   |      |     |   | 
|Sales of services retail segment:             |  |                              |   |      |     |   | 
|Extended service contracts                    |  | 19                           | % |      | 13  | % | 
|                                              |  |                              |   |      |     |   | 
|                                              |  |                              |   |      |     |   | 
|Total retail segment sales                    |  | 100                          | % |      | 100 | % | 
|                                              |  |                              |   |      |     |   | 
|                                              |  |                              |   |      |     |   | 
|Sales of products alternative energy segment: |  |                              |   |      |     |   | 
|Ethanol and related by-products               |  | 100                          | % |      | 100 | % | 
|                                              |  |                              |   |      |     |   | 

Certain
corporate costs and expenses, including information technology, employee
benefits and other shared services are allocated to the business segments. The
allocations are generally amounts agreed upon by management, which may differ
from amounts that would be incurred if such services were purchased separately
by the business segment. Corporate assets are primarily cash, synthetic fuel
accounts receivable and deferred income tax benefits.

Cash,
except for cash held by Levelland Hockley and One Earth, is considered to be
fungible and available for both corporate and segment use dependent on
liquidity requirements. Cash of approximately $1.3 million held by Levelland
Hockley will be used to provide working capital.

|                                                                                                | 
|----------------------------------------------------------------------------------------------- | 
|Item 2. Managements Discussion and Analysis of
 Financial Condition and Results of Operations.

Historically,
we were a specialty retailer in the consumer electronics/appliance industry
serving small to medium-sized towns and communities. In addition, we have been
an investor in various alternative energy entities beginning with synthetic
fuel partnerships in 1998 and later ethanol production facilities beginning in
2006.

In
fiscal year 2007 we began to evaluate strategic alternatives for our retail
segment with a focus on closing unprofitable or marginally profitable retail
stores and monetizing our retail-related real estate assets. Reflecting this
focus, we commenced an evaluation of a broad range of alternatives intended to
derive value from the remaining retail operations and our real estate
portfolio. Following a comprehensive analysis, late in fiscal year 2008 we
leased 37 owned store locations to a third party. We also provided the lessee
an option to purchase all of the properties being leased from REX during the
first two years of the lease term. The lessee also reached an

27

---



agreement to
lease or sub lease two of our leased locations. We anticipate closing, in
fiscal year 2009, the remainder of the retail locations the lessee does not
take over from REX.

We
currently have invested approximately $113 million in ethanol production
entities and have interests in four ethanol entities, two of which we have
majority ownership. We have no definitive plans, but will continue to consider
additional investments in the alternative energy segment.

We
plan to seek and evaluate various investment opportunities including energy
related, agricultural and real estate. We can make no assurances that we will
be successful in our efforts to find such opportunities.

As
of April 30, 2009, we operated 19 stores in 10 states, predominantly in small
to medium-sized markets under the trade name REX. We expect to be
substantially completed with the wind down of our retail business by July 31,
2009.

Fiscal Year

All
references in this report to a particular fiscal year are to REXs fiscal year
ended January 31. For example, fiscal year 2009 means the period February 1,
2009 to January 31, 2010.

28

---



Results of Operations

The
following table sets forth, for the periods indicated, the relative percentages
that certain income and expense items bear to net sales and revenue:

|                                                                                           |  |                               |       |      |  |       |  
|------------------------------------------------------------------------------------------ |  | ----------------------------- | ----- | ---- |  | ----- | -
|                                                                                           |  | Three Months Ended
 April 30, |      
|                                                                                           |  |                               |      
|                                                                                           |  | 2009                          |       | 2008 | 
|                                                                                           |  |                               |       |      | 
|                                                                                           |  |                               |       |      |  |       |  
|Net sales
 and revenue                                                                     |  |                               | 100.0 | %    |  | 100.0 | %
|Cost of
 sales                                                                             |  |                               | 84.1  |      |  | 69.7  |  
|                                                                                           |  |                               |       |      |  |       |  
|Gross profit                                                                               |  |                               | 15.9  |      |  | 30.3  |  
|Selling,
 general and administrative expenses                                              |  |                               | (19.3 | )    |  | (34.5 | )
|Investment
 income                                                                         |  |                               | 0.6   |      |  | 3.2   |  
|Interest
 expense                                                                          |  |                               | (3.0  | )    |  | (0.4  | )
|Loss on
 early termination of debt                                                         |  |                               | (0.2  | )    |  |      |  
|Losses on
 disposals of real estate, net                                                   |  |                               | (0.7  | )    |  |      |  
|Equity in
 (loss) income of unconsolidated ethanol affiliates                              |  |                               | (0.9  | )    |  | 3.9   |  
|Income from
 synthetic fuel investments                                                    |  |                               |      |      |  | 2.5   |  
|(Losses)
 gains on derivative financial instruments, net                                   |  |                               | (1.8  | )    |  | 1.8   |  
|                                                                                           |  |                               |       |      |  |       |  
|(Loss)
 income from continuing operations before income taxes and discontinued
 operations |  |                               | (9.4  | )    |  | 6.8   |  
|Benefit
 (provision) for income taxes                                                      |  |                               | 2.9   |      |  | (1.7  | )
|                                                                                           |  |                               |       |      |  |       |  
|(Loss)
 income from continuing operations including noncontrolling interest                |  |                               | (6.5  | )    |  | 5.1   |  
|Loss from
 discontinued operations, net of tax                                             |  |                               | (1.4  | )    |  | (0.2  | )
|                                                                                           |  |                               |       |      |  |       |  
|Net (loss)
 income including noncontrolling interest                                       |  |                               | (7.9  | )    |  | 4.9   |  
|Net loss
 attributable to noncontrolling interest                                          |  |                               | 2.1   |      |  | 0.8   |  
|                                                                                           |  |                               |       |      |  |       |  
|Net loss
 attributable to RSC common shareholders                                          |  |                               | (5.8  | ) %  |  | 5.7   | %
|                                                                                           |  |                               |       |      |  |       |  

Business Segment Results

As
discussed in Note 16, our chief operating decision maker (as defined by SFAS
No. 131, Disclosures about Segments of an
Enterprise and Related Information) evaluates the operating
performance of our business segments using a measure we call segment profit.
Segment profit includes realized and unrealized gains on derivative financial
instruments. Segment profit excludes income taxes, indirect interest expense,
discontinued operations, indirect interest income and certain other items that
are included in net income determined in accordance with accounting principles
generally accepted in the United States of America. Management believes these
are useful financial measures; however, they should not be construed as being
more important than other comparable GAAP measures.

Items
excluded from segment profit generally result from decisions made by corporate
executives. Financing, divestiture and tax structure decisions are generally

29

---



made by
corporate executives. Excluding these items from our business segment
performance measure enables us to evaluate business segment operating
performance based upon current economic conditions.

The
following table sets forth, for the periods indicated, sales and profits by
segment (amounts in thousands):

|                                                              |  |                              |        |      |   |        |  
|------------------------------------------------------------- |  | ---------------------------- | ------ | ---- | - | ------ | -
|                                                              |  | Three Months Ended April 30, |       
|                                                              |  | 2009                         |        | 2008 |  
|                                                              |  |                              |        |      |  
|Net sales
 and revenue:                                       |  |                              |        |      |   |        |  
|Retail                                                        |  | $                            | 15,616 |      | $ | 25,642 |  
|Alternative
 energy                                           |  |                              | 14,118 |      |   | 1,167  |  
|                                                              |  |                              |        |      |   |        |  
|Total net
 sales and revenues                                 |  | $                            | 29,734 |      | $ | 26,809 |  
|                                                              |  |                              |        |      |   |        |  
|                                                              |  |                              |        |      |   |        |  
|Segment
 gross profit:                                        |  |                              |        |      |   |        |  
|Retail                                                        |  | $                            | 4,486  |      | $ | 8,076  |  
|Alternative
 energy                                           |  |                              | 233    |      |   | 56     |  
|                                                              |  |                              |        |      |   |        |  
|Total gross
 profit                                           |  | $                            | 4,719  |      | $ | 8,132  |  
|                                                              |  |                              |        |      |   |        |  
|                                                              |  |                              |        |      |   |        |  
|Segment
 profit (loss):                                       |  |                              |        |      |   |        |  
|Retail
 segment (loss) profit                                 |  | $                            | (453   | )    | $ | 713    |  
|Alternative
 energy segment (loss) profit                     |  |                              | (2,003 | )    |   | 428    |  
|Corporate
 expense                                            |  |                              | (383   | )    |   | (537   | )
|Interest
 expense                                             |  |                              | (201   | )    |   | (112   | )
|Investment
 income                                            |  |                              | 230    |      |   | 664    |  
|Income from
 synthetic fuel investments                       |  |                              |       |      |   | 670    |  
|                                                              |  |                              |        |      |   |        |  
|(Loss)
 income from continuing operations before income taxes |  | $                            | (2,810 | )    | $ | 1,826  |  
|                                                              |  |                              |        |      |   |        |  

Retail

The
retail segment includes all of our store and distribution center operations,
our real estate sales and leasing activities and certain administrative
expenses. It excludes results from discontinued operations.

The
net sales and revenue from our retail segment are discussed in the Comparison
of Three Months Ended April 30, 2009 and 2008 discussion below.

Retail
segment performance decreased $1.2 million to a loss of $0.5 million in the
first quarter of fiscal year 2009 from profit of $0.7 million in the first
quarter of fiscal year 2008. The decrease in segment profit was primarily
related to lower gross profit of approximately $3.6 million, generally
reflecting lower sales and lower gross margin percentages. This unfavorable
result was partially offset by lower selling, general and administrative
expenses of $2.5 million. In general, revenue, gross profit and operating
expenses were lower in the first quarter of fiscal year 2009 compared to the
first quarter of fiscal year 2008 as a result of the wind down efforts of our retail
business.

30

---



Alternative Energy

The
alternative energy segment includes the consolidated financial statements of
Levelland Hockley and One Earth, our other investments in ethanol facilities,
the income related to those investments and certain administrative expenses.

Net
sales and revenue increased $13.0 million to $14.1 million as Levelland Hockley
commenced production operations late in the first quarter of fiscal year 2008.
Gross profit from these sales was approximately $0.2 million during the first
quarter of fiscal year 2009 compared to $0.1 million during the first quarter
of fiscal year 2008. Gross profit was negatively affected by inefficiencies and
costs associated with a sustained shut down of the plant for maintenance in the
first quarter of fiscal year 2009. In addition, the spread between ethanol and
grain prices was lower than expected.

The following
table summarizes certain operating data from Levelland Hockley:

|                                                         |  |                             |        |      |   |        | 
|-------------------------------------------------------- |  | --------------------------- | ------ | ---- | - | ------ | 
|                                                         |  | Three Months EndedApril 30, |       
|                                                         |  | 2009                        |        | 2008 |  
|                                                         |  |                             |        |      |  
|                                                        
|Average
 selling price per gallon of ethanol             |  | $                           | 1.55   |      | $ | 2.05   | 
|Average
 selling price per ton of dried distiller grains |  | $                           | 160.10 |      | $ | 175.82 | 
|Average
 selling price per ton of wet distiller grains   |  | $                           | 47.82  |      | $ | 44.04  | 
|Average cost
 per bushel of grain                        |  | $                           | 3.26   |      | $ | 6.03   | 
|Average cost
 of natural gas (per mmbtu)                 |  | $                           | 5.47   |      | $ | 6.65   | 

Segment
performance decreased $2.4 million to a loss of $2.0 million in the first
quarter of fiscal year 2009 from profit of $0.4 million in the first quarter of
fiscal year 2008. The decrease in segment profit was primarily related to
income from our investments in Big River and Patriot. We recorded a loss of
$0.3 million in the first quarter of fiscal year 2009 compared to income of
$1.0 million in the first quarter of fiscal year 2008. Interest expense
increased by $0.9 million in the first quarter of fiscal year 2009 as Levelland
Hockley ceased capitalizing interest on its construction loan upon the
commencement of operations in fiscal year 2008.

Corporate and Other

Corporate
and other includes certain administrative expenses of the corporate
headquarters, interest expense and investment income not directly allocated to
the retail or alternative energy segments and income from synthetic fuel
investments.

Income
from synthetic fuel investments declined $0.7 million in the first quarter of
fiscal year 2009 compared to the first quarter of fiscal year 2008. Prior year
income represents the estimated final settlements as all synthetic fuel production
ceased during fiscal year 2007.

31

---



Investment
income of $0.2 million in the first quarter of fiscal year 2009 was $0.5
million lower compared to the first quarter of fiscal year 2008. This
fluctuation is primarily a result of lower yields earned on our excess cash
during the current year.

Comparison of Three Months Ended April 30,
2009 and 2008

Net
sales and revenue in the quarter ended April 30, 2009 were $29.7 million
compared to $26.8 million in the prior years first quarter, representing an
increase of $2.9 million or 10.8%. Net sales and revenue do not include
merchandise sales from stores classified in discontinued operations.

The
increase was primarily caused by $12.9 million of sales from our alternative energy
segment as Levelland Hockley commenced operations late in the first quarter of
fiscal year 2008. This positive trend was partially offset by a decrease in
sales at retail stores of $10.0 million in the first quarter of fiscal year
2009 compared to fiscal year 2008. The decline in retail store sales is
primarily attributable to the winding down of our retail business.

The
following table reflects the approximate percent of net sales for each major
product and service group for the following periods:

|                                 |  |                             |       |      |  |       |   | 
|-------------------------------- |  | --------------------------- | ----- | ---- |  | ----- | - | 
|                                 |  | Three Months EndedApril 30, |      
|                                 |  |                             |      
|Product
 Category                |  | 2009                        |       | 2008 | 
|                                 |  |                             |       |      | 
|Televisions                      |  |                             | 16.5  | %    |  | 51.4  | %
|Appliances                       |  |                             | 13.3  |      |  | 28.1  |  
|Audio                            |  |                             | 1.0   |      |  | 4.1   |  
|Video                            |  |                             | 0.3   |      |  | 1.8   |  
|Extended
 warranties             |  |                             | 10.0  |      |  | 7.1   |  
|Ethanol and
 related by-products |  |                             | 47.9  |      |  | 2.5   |  
|Other                            |  |                             | 11.0  |      |  | 5.0   |  
|                                 |  |                             |       |      |  |       |  
|                                 |  |                             | 100.0 | %    |  | 100.0 | %
|                                 |  |                             |       |      |  |       |  

At
April 30, 2009, we operated 19 stores compared to 111 stores one year earlier.
We did not open any stores and closed 71 stores during the first three months
of fiscal year 2009. We did not open any stores and closed four stores during
the first three months of fiscal year 2008.

At
April 30, 2009, we had lease agreements or commitments, as landlord for all or
parts of 45 properties, including 40 stores leased to subsidiaries of Appliance
Direct, a third party appliance retail chain. We own 41 of these properties and
are the tenant/sub landlord for four of the properties. At April 30, 2009,
Appliance Direct leased and occupied six of the owned properties and three of
the sub leased properties. Pursuant to the amended agreement with Appliance
Direct, we expect the leases for the remaining 31 owned stores to commence no
later than July 31, 2009. We have three additional owned properties that are
vacant at April 30, 2009. We are marketing these vacant properties to lease or
sell.

32

---



Gross
profit of $4.7 million (15.9% of net sales and revenue) in the first quarter of
fiscal year 2009 was approximately $3.4 million lower than the $8.1 million
(30.3% of net sales and revenue) recorded in the first quarter of fiscal year
2008. Gross profit for the first quarter of fiscal year 2009 was negatively
impacted by lower sales related to the wind down of our retail business. In
addition, low margins at Levelland contributed to the decline in gross profit
as Levelland generated only $0.2 million of gross profit on sales of $14.1
million during the first quarter of fiscal year 2009. The plant shut down and
the spread between ethanol and grain prices was the primary reason for the low
gross margins Levelland experienced. Extended service contracts contributed
gross profit of $2.1 million in the first quarter of fiscal year 2009 compared
to $2.6 million in the first quarter of fiscal year 2008. Our direct warranty
repair costs were approximately 29% and 23% of extended service contract
revenue in the first quarter of fiscal years 2009 and 2008, respectively. The
direct warranty repair costs were a higher percentage of revenue partially as a
result of lower levels of vendor support in fiscal year 2009.

Selling,
general and administrative expenses for the first quarter of fiscal year 2009
were $5.7 million (19.3% of net sales and revenue), a decrease of $3.5 million
or 38.0% from $9.2 million (34.5% of net sales and revenue) for the first
quarter of fiscal year 2008. The decrease in expenses was primarily a result of
lower payroll expense of $1.1 million in fiscal year 2009 compared to fiscal
year 2008 as we have lowered our head count as part of the wind down of our
retail business. In addition, sales commissions declined in the first quarter
of fiscal year 2009, related to the sales decrease. Advertising expense was
$0.5 million in the first quarter of fiscal year 2009, compared to $1.2 million
in the first quarter of fiscal year 2008. The decrease is primarily related to
the wind down of our retail business as we cancelled many advertising programs.
Expenses (primarily payroll and related costs) at Levelland Hockley were $0.2
million during the first quarter of fiscal year 2009 compared to $0.9 million
during the first quarter of fiscal year 2008. The decrease results from start
up activities incurred in fiscal year 2008 related to the commencement of
operations at Levelland Hockley.

Investment
income was $0.2 million for the first quarter of fiscal year 2009 compared to
$0.9 million for the first quarter of fiscal year 2008. The decrease results
primarily from lower yields earned on our excess cash compared to the prior
year.

Interest
expense was $0.9 million for the first quarter of fiscal year 2009 compared to
$0.1 million for the first quarter of fiscal year 2008. The increase primarily
results from the interest on the Levelland Hockley credit facility subsequent
to the commencement of operations at that plant. Prior to starting operations,
interest on Levelland Hockley debt was capitalized.

During
the first quarter of fiscal year 2009, we paid off approximately $7.3 million
of debt. As a result, we incurred prepayment penalties and the write off of
prepaid loan fees totaling approximately $0.1 million.

During
the first quarter of fiscal year 2009, we donated an owned building and land to
a charitable organization. As a result, we recognized a loss on disposal of
real estate equal to $0.2 million, the book value of the related assets.

On
April 30, 2007, we completed a transaction for the sale of 86 of our current
and former store locations to Klac for $74.5 million in cash, before selling
expenses. We also

33

---



entered into
agreements to leaseback 40 of the properties from Klac for initial lease terms
expiring January 31, 2010, with renewal options for up to 15 additional years.
The leases on 28 of the properties have been terminated as of April 30, 2009.
We also entered into license agreements with Klac for 15 of the properties that
allowed us to occupy the properties for up to 90 days rent free. Upon the
expiration of the license period, we vacated the 15 properties.

This
transaction resulted in a gain (realized and deferred) of $14.8 million. Of
this gain, $2.6 million and $0.3 million was recognized in the first quarter of
fiscal years 2009 and 2008, respectively. The increase in current year gain
recognition relates to our restructuring and winding down of our retail
business. Amortization of the gain was accelerated for properties that we
closed during fiscal year 2009. We had a deferred gain of $1.4 million and $5.1
million at April 30, 2009 and 2008, respectively, based upon the present value
of the remaining minimum lease payments. The deferred gain will be amortized as
a reduction to lease expense over the lease periods or recognized as gain on
disposal at the end of the lease period. The leases have been accounted for as
operating leases. The following table summarizes the pre-tax gains and losses
recognized during the first quarters of fiscal years 2009 and 2008 (amounts in
thousands):

|                         |  |                                |       |                                |   |     | 
|------------------------ |  | ------------------------------ | ----- | ------------------------------ | - | --- | 
|Classification
 of Gain  |  | Quarter Ended 
 April 30, 2009 |       | Quarter Ended 
 April 30, 2008 |  
|                         |  |                                |       |                                |  
|                         |  |                                |       |                                |   |     | 
|Continuing
 Operations   |  | $                              | 58    |                                | $ | 58  | 
|Discontinued
 Operations |  |                                | 2,516 |                                |   | 278 | 
|                         |  |                                |       |                                |   |     | 
|                         |  |                                |       |                                |   |     | 
|Total Pre-Tax Gain       |  | $                              | 2,574 |                                | $ | 336 | 
|                         |  |                                |       |                                |   |     | 

The
following table summarizes the components of the sale and leaseback transaction
(dollar amounts in thousands):

|                               |  |                        |    |                 |  |                   |   |       |  |  |  |   |        |  | 
|------------------------------ |  | ---------------------- | -- | --------------- |  | ----------------- | - | ----- |  |  |  | - | ------ |  | 
|Property
 Category             |  | Number of 
 Properties |    | Deferred 
 Gain |  | Recognized 
 Gain |  
|                               |  |                        |    |                 |  |                   |   |       |  |  |  |   |        |  | 
|Vacated                        |  |                        | 74 |                 |  |                   | $ |      |  |  |  | $ | 10,790 |  | 
|Leased until
 January 31, 2010 |  |                        | 12 |                 |  |                   |   | 1,360 |  |  |  |   | 2,655  |  | 
|                               |  |                        |    |                 |  |                   |   |       |  |  |  |   |        |  | 
|Total                          |  |                        | 86 |                 |  |                   | $ | 1,360 |  |  |  | $ | 13,445 |  | 
|                               |  |                        |    |                 |  |                   |   |       |  |  |  |   |        |  | 

During
the first quarter of fiscal year 2009, we recognized income of approximately
$0.1 million and loss of approximately $0.4 million from our equity investments
in Big River and Patriot, respectively. During the first quarter of fiscal year
2008, we recognized income of approximately $1.0 million and $41,000 from our
equity investments in Big River and Patriot, respectively.

Income
from continuing operations for the first quarter of fiscal year 2008 includes
approximately $0.7 million of pre-tax investment income from the sales of the
Companys entire partnership interests in Colona SynFuel Limited Partnership,
L.L.L.P., (Colona) and Somerset Synfuel, L.P. (Somerset). This income
represents the estimated final settlements related to Colona and Somerset as
all synthetic fuel production ceased during fiscal year 2007. As the

34

---



Section 29/45K
program expired December 31, 2007, the Company does not expect additional income
from these sales.

We
also sold our membership interest in the limited liability company that owned a
synthetic fuel facility in Gillette, Wyoming. The plant was subsequently sold
and during the third quarter of fiscal year 2006, we modified our agreement
with the owners and operators of the synthetic fuel facility. Based on the
terms of the modified agreement, we currently are not able to determine the
likelihood and timing of collecting payments related to production occurring
after September 30, 2006. Thus, we cannot currently determine the timing of
income recognition, if any, related to production occurring subsequent to
September 30, 2006. We did not recognize any income from this sale during the
first quarter of fiscal years 2009 or 2008.

We
recognized losses of $556,000 during the first quarter of fiscal year 2009,
related to forward starting interest rate swap agreements that Levelland
Hockley and One Earth entered into during fiscal year 2007. Levelland Hockleys
loss was $318,000 and One Earths loss was $238,000. We recognized an
unrealized gain of $472,000 during the first quarter of fiscal year 2008,
related to the swaps. Levelland Hockleys unrealized gain was $161,000 and One
Earths unrealized gain was $311,000.

Our
effective tax rate was 30.6% and 25.8% for the first quarter of fiscal years
2009 and 2008, respectively. The change is primarily a result of a reduction in
the reserve for uncertain tax positions during fiscal year 2008, related to the
expiration of the statute of limitations in certain states and the recognition
of a federal tax credit that is earned by Levelland Hockley as a small ethanol
producer. We do not expect to be eligible to utilize the ethanol small producer
federal tax credit for years beyond fiscal year 2008.

Noncontrolling
interest loss of $622,000 and $217,000 represents the owners (other than REX)
share of the loss of Levelland Hockley and One Earth for the quarters ended
April 30, 2009 and 2008, respectively.

During
the quarter ended April 30, 2009 we closed 37 stores that were classified as
discontinued operations. As a result of these closings and certain other store
closings from prior periods, we had a loss from discontinued operations, net of
tax benefit, of $402,000 for the first quarter of fiscal year 2009 compared to
$46,000 for the first quarter of fiscal year 2008. Included in current year
results are $1.5 million of early lease termination costs and $1.8 million of
gain recognition related to the KLAC real estate sale.

As
a result of the foregoing, net loss for the first quarter of fiscal year 2009
was $1.7 million, a decrease of $3.2 million from net income of $1.5 million
for the first quarter of fiscal year 2008.

Liquidity and Capital Resources

Net
cash provided by operating activities was approximately $10.4 million for the
first quarter of fiscal year 2009, compared to cash used of $5.2 million for
the first quarter of fiscal year 2008. For the first three months of fiscal
year 2008, cash was used by net loss of $2.4 million, adjusted for non-cash
items of $4.2 million, which consisted of depreciation and amortization, stock
based compensation expense, loss from equity method investments, loss on

35

---



disposal of
real estate and property and equipment, deferred income and the deferred income
tax provision. In addition, inventory provided cash of $17.9 million, primarily
a result of the wind down of our retail business inventory levels as we have
liquidated a significant portion of our retail merchandise inventory as we
close stores. The primary use of cash was a decrease in accounts payable of
$2.3 million as we have reduced virtually all of our merchandise vendor
balances in connection with the wind down of our retail business. Accounts
receivable provided $1.9 million of cash, primarily a result of the timing of
cash receipts and customer billings at Levelland Hockley. Prepaid expenses and
other current assets used cash of $0.4 million as we had an increase in the
balance of refundable income taxes due to the operating losses incurred in
fiscal year 2008.

Net
cash used in operating activities was approximately $5.2 million for the first
quarter of fiscal year 2008. For the first three months of fiscal year 2008, cash
was provided by net income of $1.5 million, adjusted for the impact of $0.7
million for gains on our installment sales of the limited partnership
interests, the unrealized gain on derivative financial instruments of $0.5
million and non-cash items of $2.1 million, which consisted of depreciation and
amortization, stock based compensation expense, income from equity method
investments, deferred income and the deferred income tax provision. In
addition, accounts payable provided cash of $11.6 million, primarily a result
of changes in inventory levels and extended terms from vendors. The primary use
of cash was a decrease in other liabilities of $8.5 million, primarily a result
of incentive compensation and other payroll and sales tax payments being made in
the first quarter of fiscal year 2008. The increase in inventory of $6.9
million was primarily due to seasonal fluctuations in our retail segment and
Levelland Hockley commencing operations.

At
April 30, 2009, working capital was $67.5 million compared to $84.4 million at
January 31, 2009. This decrease is primarily a result of the early payoffs of
approximately $7.3 in mortgage debt and a decrease in current deferred taxes
during the first quarter of fiscal year 2009 as our estimate of taxable income
for fiscal year 2009 was reduced. The ratio of current assets to current
liabilities was 2.5 to 1 at April 30, 2009 and January 31, 2009.

Cash
of $22.6 million was used in investing activities for the first quarter of
fiscal year 2009, compared to $27.4 million of cash used during the first
quarter of fiscal year 2008. During the first quarter of fiscal year 2009, we
had capital expenditures of approximately $21.6 million, primarily related to
construction at the One Earth ethanol plant. We paid approximately $1.0 million
into a restricted account as collateral for a letter of credit on behalf of
Levelland Hockley to secure grain purchasing.

Cash
of $27.4 million was used in investing activities for the first quarter of
fiscal year 2008. During the first quarter of fiscal year 2008, we received
proceeds of $1.2 million from the installment sales of our ownership interests
in synthetic fuel entities. We had capital expenditures of approximately $28.7
million during the first quarter of fiscal year 2008, primarily related to
construction at the Levelland Hockley and One Earth ethanol plants.

Cash
provided by financing activities totaled approximately $6.1 million for the
first quarter of fiscal year 2009 compared to $11.2 million for the first
quarter of fiscal year 2008. Cash was provided by debt borrowings of $15.3
million on construction loans at ethanol

36

---



facilities and
stock option activity of $0.6 million. Cash of $8.7 million was used for
payments of mortgage debt. In addition, cash of $1.2 million used to repurchase
our common shares.

Cash
provided by financing activities totaled approximately $11.2 million for the
first quarter of fiscal year 2008. Cash was provided by debt borrowings of
$11.9 million and stock option activity of $0.3 million. Cash of $1.0 million
was used for scheduled payments of mortgage debt.

In
May 2007, One Earth entered into an agreement with a designer/builder for the
construction of One Earths ethanol plant. The designer/builder is responsible
for all engineering, labor, materials and equipment to design, construct,
startup and achieve guaranteed performance criteria of the plant. The contract
price is approximately $120.2 million, subject to adjustments as provided by
the general conditions of the agreement, of which approximately $109.2 million
has been spent through April 30, 2009. One Earth has also entered into other
construction and facility related contracts. Some of these contracts have been
completed and all required funds have been expended as of April 30, 2009. The
total of other incomplete construction and facility related contracts is
approximately $9.8 million, of which approximately $9.3 million has been spent
through April 30, 2009.

We
expect One Earth to begin operations late in the second quarter of fiscal year
2009. In connection with beginning operations, One Earth will expend funds for
initial inventories, supplies and other items. We believe One Earth has
sufficient working capital and credit availability to fund these commitments
and the initial steps necessary to begin production.

Forward-Looking Statements

This
Form 10-Q contains or may contain forward-looking statements as defined in 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 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 and 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. As it relates to ethanol investments, risks and uncertainties
include among other things: the uncertainty of constructing plants on time and
on budget, the impact of legislative changes, the price volatility and availability
of corn, sorghum, distiller grains, ethanol, gasoline and natural gas and the
plants operating efficiently and according to forecasts and projections. The
Company does not intend to update publicly any forward-looking statements except
as required by law. Other
factors that could cause actual results to differ materially from those in the
forward-looking statements are set forth in Item 1A of the Companys Annual
Report on Form 10-K for the fiscal year ended January 31, 2009 (File No.
001-09097).

37

---



Item 3. Quantitative and Qualitative Disclosures About Market
Risk

No
material changes since January 31, 2009.

Item 4. Controls and Procedures

Our
management evaluated, with the participation of our Chief Executive Officer and
Chief Financial Officer, the effectiveness of our disclosure controls and
procedures, as of the end of the period covered by this report. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective to ensure that
information required to be disclosed by us in the reports that we file or
submit under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commissions rules and forms and is accumulated and communicated to
our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure.

There
were no changes in our internal control over financial reporting that occurred
during our last fiscal quarter that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1A. Risk Factors

During
the quarter ended April 30, 2009, there have been no material changes to the
risk factors discussed in our Annual Report on Form 10-K for the year ended
January 31, 2009.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds

Issuer Purchases of Equity Securities

|                     |  |                                    |         |                                 |   |                                                                                          |  |                                                                                        |         |  |  |         | 
|-------------------- |  | ---------------------------------- | ------- | ------------------------------- | - | ---------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------- | ------- |  |  | ------- | 
|Period               |  | Total Number
 of Shares
 Purchased |         | Average
 Price
 Paid per
 Share |   | Total Number of
 Shares Purchased
 as Part of Publicly
 Announced Plans
 or Programs (1) |  | Maximum Number
 of Shares that May
 Yet Be Purchased
 Under the Plans
 or Programs (1) |        
|                     |  |                                    |         |                                 |   |                                                                                          |  |                                                                                        |        
|February
 1-28, 2009 |  |                                    | 94,237  |                                 | $ | 7.01                                                                                     |  |                                                                                        | 94,237  |  |  | 485,111 | 
|March 1-31,
 2009    |  |                                    | 32,800  |                                 | $ | 6.58                                                                                     |  |                                                                                        | 32,800  |  |  | 452,311 | 
|April 1-30,
 2009    |  |                                    | 27,526  |                                 | $ | 12.16                                                                                    |  |                                                                                        | 27,526  |  |  | 424,785 | 
|                     |  |                                    |         |                                 |   |                                                                                          |  |                                                                                        |         |  |  |         | 
|Total                |  |                                    | 154,563 |                                 | $ | 7.84                                                                                     |  |                                                                                        | 154,563 |  |  | 424,785 | 
|                     |  |                                    |         |                                 |   |                                                                                          |  |                                                                                        |         |  |  |         | 

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | During the
 first quarter of fiscal year 2009, we completed the purchase of our common
 stock under a previously announced authorization. On February 20, 2009, we
 announced our Board of Directors had authorized the repurchase of up to an
 additional 500,000 shares from time to time in private or market transactions
 at prevailing market prices. At April 30, 2009, a total of 424,785 shares
 remained available to purchase under this authorization.

38

---



Item 4. Submission of Matters to a Vote of Security Holders.

The
annual meeting of shareholders of REX Stores Corporation was held on June 2,
2009, at which the following matter was submitted to a vote of shareholders:

1. Election of seven directors.

|                    |  |     |           |          |  |           | 
|------------------- |  | --- | --------- | -------- |  | --------- | 
|Nominee             |  | For |           | Withheld | 
|                    |  |     |           |          |  |           | 
|Stuart A.
 Rose     |  |     | 6,984,478 |          |  | 1,721,200 | 
|Lawrence
 Tomchin   |  |     | 6,894,408 |          |  | 1,811,270 | 
|Robert
 Davidoff    |  |     | 8,276,810 |          |  | 428,868   | 
|Edward M.
 Kress    |  |     | 6,894,778 |          |  | 1,810,900 | 
|Charles A.
 Elcan   |  |     | 6,588,625 |          |  | 2,117,053 | 
|David S.
 Harris    |  |     | 8,510,872 |          |  | 194,806   | 
|Mervyn L.
 Alphonso |  |     | 8,531,635 |          |  | 174,043   | 

Item 6. Exhibits.

The
following exhibits are filed with this report:

| |    |                                         
| | -- | ----------------------------------------
| | 31 | Rule
 13a-14(a)/15d-14(a) Certifications
| |    |                                         
| | 32 | Section 1350
 Certifications            

39

---



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,
thereunto duly authorized.

| |                                     
| | ------------------------------------
| | REX STORES
 CORPORATION 
 Registrant

|                          |  |                                        |             
|------------------------- |  | -------------------------------------- | ------------
|Signature                 |  | Title                                  | Date        
|                          |  |                                        |             
|                          |  |                                        |             
|/s/
 Stuart A. Rose       |  | Chairman of the Board                  | June 9, 2009
|                          |  | (Chief Executive Officer)              |             
|(Stuart
 A. Rose)         |  |                                        |             
|                          |  |                                        |             
|                          |  |                                        |             
|/s/
 Douglas L. Bruggeman |  | Vice President, Finance
 and Treasurer | June 9, 2009
|                          |  | (Chief Financial Officer)              |             
|(Douglas
 L. Bruggeman)   |  |                                        |             

40

---