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<SEC-DOCUMENT>0000930413-08-001139.txt : 20080528
<SEC-HEADER>0000930413-08-001139.hdr.sgml : 20080528
<ACCEPTANCE-DATETIME>20080221125225
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000930413-08-001139
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20080221

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			REX STORES CORP
		CENTRAL INDEX KEY:			0000744187
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-RADIO TV & CONSUMER ELECTRONICS STORES [5731]
		IRS NUMBER:				311095548
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0131

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2875 NEEDMORE RD
		CITY:			DAYTON
		STATE:			OH
		ZIP:			45414
		BUSINESS PHONE:		5132763931

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AUDIO VIDEO AFFILIATES INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>

<HTML>
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   <TITLE>corresp.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing</TITLE>
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<P align="center">
<FONT size=2 face="serif">REX Stores Corporation</FONT><BR>
<FONT size=2 face="serif"> 2875 Needmore Road </FONT><BR>
<FONT size=2 face="serif">Dayton, Ohio 45414 </FONT><BR>
<FONT size=2 face="serif">(937) 276-3931</FONT><FONT face="serif"> </FONT></P>
<P align="left">
<FONT size=2 face="serif">February 21, 2008</FONT></P>
<P align="left">
<FONT size=2 face="serif">Mr. Scott Anderegg </FONT><BR>
<FONT size=2 face="serif">Staff Attorney </FONT><BR>
<FONT size=2 face="serif">United States Securities and Exchange Commission</FONT><BR>
<FONT size=2 face="serif">Division of Corporation Finance </FONT><BR>
<FONT size=2 face="serif">100 F Street, N.E. </FONT><BR>
<FONT size=2 face="serif">Washington, D.C. 20549 </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD align=left width=7% nowrap>&nbsp;</TD>
	<TD align=left width=3% nowrap>
<FONT size=2 face="serif">RE:</FONT>&nbsp;&nbsp;</TD>
	<TD width=1%>&nbsp;	</TD>
	<TD align=left width=89% nowrap>
<FONT size=2 face="serif">REX Stores Corporation</FONT>	</TD>
</TR>
<TR valign="bottom">
  <TD align=left width=7% nowrap>&nbsp;</TD>
	<TD align=left width=3% nowrap>&nbsp;	</TD>
	<TD width=1%>&nbsp;	</TD>
	<TD align=left width=89% nowrap>
<FONT size=2 face="serif">Form 10-K for Fiscal Year Ended January 31, 2007,</FONT>	</TD>
</TR>
<TR valign="bottom">
  <TD align=left width=7% nowrap>&nbsp;</TD>
	<TD align=left width=3% nowrap>&nbsp;	</TD>
	<TD width=1%>&nbsp;	</TD>
	<TD align=left width=89% nowrap>
<FONT size=2 face="serif">Definitive Proxy Statement on Schedule 14A filed April 26, 2007</FONT>	</TD>
</TR>
<TR valign="bottom">
  <TD align=left width=7% nowrap>&nbsp;</TD>
	<TD align=left width=3% nowrap>&nbsp;	</TD>
	<TD width=1%>&nbsp;	</TD>
	<TD align=left width=89% nowrap>
<FONT size=2 face="serif">Form 10-Q for Fiscal Quarter Ended April 30, 2007</FONT>	</TD>
</TR>
<TR valign="bottom">
  <TD align=left width=7% nowrap>&nbsp;</TD>
	<TD align=left width=3% nowrap>&nbsp;	</TD>
	<TD width=1%>&nbsp;	</TD>
	<TD align=left width=89% nowrap>
<FONT size=2 face="serif">File No. 001-09097</FONT>	</TD>
</TR>
</TABLE>
<BR>
<P align="left">
<FONT size=2 face="serif">Dear Mr. Anderegg:</FONT></P>
<P align="left">
<FONT size=2 face="serif">The following letter sets forth below the responses of REX Stores Corporation (the &#147;Company&#148;) to the comments of the Staff of the Division of Corporation Finance in its letter to the Company dated January 31,
2008, with respect to the above referenced filings. In responding to the Staff&#146;s comments, we have utilized the headings and numbering system in the Staff&#146;s letter. This letter has been filed with the Commission as correspondence through
EDGAR. We will include the content of our responses in all appropriate future filings, beginning with the Form 10-K for the year ended January 31, 2008. The Staff&#146;s comments, indicated in bold, are followed by the Company&#146;s responses.
Modifications to disclosures in previous filings are underlined. </FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Form 10-K for the Fiscal Year Ended January 31, 2007</FONT></U></B><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="left">
<B><U><FONT size=2 face="serif">Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations page 27</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">1.We note that you have provided separate discussions concerning the two segments of your business. Please revise to elaborate, here or in your business discussion, upon your intentions as it relates to your entry into
the ethanol industry. For example, we note your indication in your Liquidity and Capital Resources discussion that your &#147;pending ethanol investments could require a significant amount, if not all, of [y]our available cash.&#148; Considering
your retail operations and ethanol investments could place increasingly greater, and potentially conflicting, demands upon your resources, advise investors as to your future plans as it relates to your ethanol investments and to what extent you
intend to expand this area of your business in contrast to your retail operations.</FONT></B></P>
<P align="left">
<FONT size=2 face="serif">In response to the staff&#146;s comments, we propose to revise future filings to enhance the discussion of our business. We have modified the disclosure from the January 31, 2007 Form 10-K to illustrate the enhanced
disclosure we are contemplating.</FONT></P>
<P align="center">
<FONT face="serif">1</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE>
<P align="left">
<B><FONT size=2 face="serif">&#147;Overview</FONT></B></P>
<P align="left">
<FONT size=2 face="serif">We are a specialty retailer in the consumer electronics/appliance industry and an investor in various alternative energy companies. </FONT><U><FONT size=2 face="serif"> We
are leveraging our experience from our</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">investments
in synthetic fuel partnerships into the ethanol (alternative energy) industry.</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">We
closed 25 retail stores during fiscal year 2006 and invested &#36;51.5 million in ethanol entities as we continue seeking diversified revenue and earnings sources. During fiscal year</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">2007, we anticipate additional retail store
closings as we seek to close unprofitable or marginally profitable</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">retail stores, although we have not established a targeted number of stores. We do not anticipate
opening</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">additional
retail stores. </FONT></U><U><FONT size=2 face="serif">We have historically owned
a majority of our retail stores and we expect to monetize a</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">portion of our real estate investment by selling
approximately 60% of our owned retail and vacant stores</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">based
upon an agreement entered into on February 8, 2007.</FONT></U></P>
<P align="left">
<B><FONT size=2 face="serif">Retail</FONT></B></P>
<P align="left">
<FONT size=2 face="serif">As of January 31, 2007, we operated 193 stores in 35 states under the "REX" trade name. By offering a broad selection of brand name products at guaranteed lowest prices, we believe we have become a leading consumer
electronics/appliance retailer in our markets. </FONT></P>
<P align="left">
<FONT size=2 face="serif">Our comparable store sales decreased 5.0% for fiscal year 2006, increased 5.0% for fiscal year 2005, and decreased 2.0% for fiscal year 2004. We believe our comparable store sales have recently been negatively affected by
increased competition and rapid change in television technology, resulting in the loss of CRT and projection television sales. We consider a store to be comparable after it has been open six full fiscal quarters. Comparable store sales comparisons
do not include sales of extended service contracts or sales from stores classified in discontinued operations. </FONT></P>
<P align="left">
<U><FONT size=2 face="serif">In recent years, we have continued to experience declines in our audio and video product groups of our</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">retail business. These two product groups
are subject to high levels of competition and have become a</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">commodity business. We believe the market for flat screen televisions will remain strong during fiscal
year</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">2007 as more consumers transition to digital technology. Although we are seeing gains in flat screen</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">television units sold, the average selling price of televisions continues to decline. We believe the market for large projection televisions will continue to decline, as there is a limited availability of such product.
We</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">expect sales of our audio products to decline as customers have opted for portable audio products that we do not sell. We expect sales of appliances to be consistent with
recent sales and the demand for appliance</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">products to remain stable in the markets we serve.</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="left">
<FONT size=2 face="serif">Our extended service contract revenues are deferred
and amortized on a straight-line basis over the life of the contracts after the
expiration of applicable manufacturers' warranty periods. Terms of coverage,
including the manufacturers' warranty periods, are usually for periods of 12
to 60 months. Extended service contract revenues represented 3.4% of net sales
and revenue for fiscal year 2006,</FONT><FONT color="#ff0000" size=2 face="serif"> </FONT><FONT size=2 face="serif">2.9%
of net sales and revenue for fiscal year 2005 and 3.4% of net sales and revenue
for fiscal year 2004. Service contract repair costs are charged to operations
as incurred.</FONT></P>
<P align="left">
<B><FONT size=2 face="serif">Investments in Alternative Energy</FONT></B></P>
<P align="left">
<FONT size=2 face="serif">In fiscal year 2006, we entered the alternative energy industry by investing in several entities organized to construct and, subsequently operate, ethanol producing plants. As we continue to seek to diversify sources of
revenue and earnings we have invested in four entities as of January 31, 2007 utilizing both debt and equity investments and have a contingent commitment to invest in a fifth entity. We expect all of the entities, </FONT><U><FONT size=2 face="serif">except Big River Resources, LLC</FONT></U><FONT size=2 face="serif">, to begin generating operating revenue approximately 14 to 20 months after construction of the plants has begun, as they are development stage entities. Big River
Resources, LLC has a 52 million gallon dry-mill ethanol manufacturing facility and is currently generating operating revenue. </FONT><U><FONT size=2 face="serif">Through January 31, 2007, we have invested approximately &#36;51.5 million in four of
the ethanol entities. We have contingent commitments to invest &#36;34.9 million in ethanol entities during fiscal</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="center">
<FONT face="serif">2</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE>
<P align="left">
<U><FONT size=2 face="serif">year 2007</FONT></U><FONT size=2 face="serif"> and
we plan to continue to evaluate other potential ethanol investments. </FONT><U><FONT size=2 face="serif">The
contingent</FONT></U><FONT size=2 face="serif">
</FONT><U><FONT size=2 face="serif">investment commitments are based upon, among
other things, Big River Resources, LLC making its</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">scheduled
capital calls and One Earth Energy,  LLC successfully completing its equity and
debt financing. We do not expect material cash receipts in fiscal year 2007 from
our ethanol investments as all of the</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">entities,
 except for Big River Resources, LLC, are development stage enterprises.</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="left">
<FONT size=2 face="serif">The following table is a summary of our ethanol investments (amounts in thousands, except ownership percentages): </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
	<TD width=39% align=left nowrap>&nbsp;	</TD>
	<TD width=3%>&nbsp;	</TD>
	<TD width=1% align=right>	<div align="left"></div></TD>
	<TD width=10% align=right>
<FONT size=2 face="serif">Equity</FONT>	</TD>
	<TD width=4%>&nbsp;	</TD>
	<TD width=9% align=right nowrap>
<FONT size=2 face="serif">Ownership</FONT>	</TD>
	<TD width=3% align=left nowrap>&nbsp;	</TD>
	<TD width=5%>&nbsp;	</TD>
	<TD colspan="2" align=left>
      <div align="right"><FONT size=2 face="serif">Debt</FONT> </div></TD>
	<TD width=4%>&nbsp;	</TD>
	<TD width=1% align=left>	<div align="left"></div></TD>
	<TD width=10% align=right>
<FONT size=2 face="serif">Contingent</FONT>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left nowrap>
<FONT size=2 face="serif">Entity</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right>	<div align="left"></div></TD>
	<TD align=right>
<FONT size=2 face="serif">Investment</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right>
      <div align="right"><FONT size=2 face="serif">%</FONT> </div></TD>
	<TD align=left nowrap>&nbsp;	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left colspan=2>
      <div align="right"><FONT size=2 face="serif">Investment</FONT> </div></TD>
	<TD>&nbsp;	</TD>
	<TD align=left>	<div align="left"></div></TD>
	<TD align=right>
<FONT size=2 face="serif">Commitment</FONT>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left nowrap>
<FONT size=2 face="serif">Levelland/Hockley County Ethanol, LLC</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right><div align="left"><FONT size=2 face="serif">&#36;</FONT> </div></TD>
	<TD align=right>
<FONT size=2 face="serif">11,500</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right nowrap>
<FONT size=2 face="serif">47.1</FONT>	</TD>
	<TD align=left nowrap>
<FONT size=2 face="serif">%</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD width="2%" align=left>

 <div align="left"><FONT size=2 face="serif">&#36;</FONT> </div></TD>
	<TD width="9%" align=right>
<FONT size=2 face="serif">5,000</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left><div align="left"><FONT size=2 face="serif">&#36;</FONT> </div></TD>
	<TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left nowrap>
<FONT size=2 face="serif">Millennium Ethanol, LLC</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right>	<div align="left"></div></TD>
	<TD align=right>
<FONT size=2 face="serif">-</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>	</TD>
	<TD align=left nowrap>&nbsp;	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left>	<div align="left"></div></TD>
	<TD align=right>
<FONT size=2 face="serif">14,000</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left>	<div align="left"></div></TD>
	<TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left nowrap>
<FONT size=2 face="serif">Big River Resources, LLC (a)</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right>	<div align="left"></div></TD>
	<TD align=right>
<FONT size=2 face="serif">5,000</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right nowrap>
<FONT size=2 face="serif">4.3</FONT>	</TD>
	<TD align=left nowrap>
<FONT size=2 face="serif">%</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left>	<div align="left"></div></TD>
	<TD align=right>
<FONT size=2 face="serif">-</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left>	<div align="left"></div></TD>
	<TD align=right nowrap>
<FONT size=2 face="serif">10,000</FONT>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left nowrap>
<FONT size=2 face="serif">Patriot Renewable Fuels, LLC</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right>	<div align="left"></div></TD>
	<TD align=right>
<FONT size=2 face="serif">16,000</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right nowrap>
<FONT size=2 face="serif">23.3</FONT>	</TD>
	<TD align=left nowrap>
<FONT size=2 face="serif">%</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left>	<div align="left"></div></TD>
	<TD align=right>
<FONT size=2 face="serif">-</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left>	<div align="left"></div></TD>
	<TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left nowrap>
<FONT size=2 face="serif">One Earth Energy, LLC</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">	<div align="left"></div></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">-</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right nowrap>
<FONT size=2 face="serif">-</FONT>	</TD>
	<TD align=left nowrap>&nbsp;	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">	<div align="left"></div></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">-</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">	<div align="left"></div></TD>
	<TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">24,900</FONT>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left nowrap>
<FONT size=2 face="serif">Total</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
      <div align="left"><FONT size=2 face="serif">&#36;</FONT> </div></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">32,500</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left nowrap>&nbsp;	</TD>
	<TD align=left nowrap>&nbsp;	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">

 <div align="left"><FONT size=2 face="serif">&#36;</FONT> </div></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">19,000</FONT>	</TD>
	<TD>&nbsp;	</TD>
	<TD align=left style="border-bottom:1px solid #000000;"><div align="left"><FONT size=2 face="serif">&#36;</FONT> </div></TD>
	<TD align=right nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="serif">34,900</FONT>	</TD>
</TR>
</TABLE>
<BR>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD width="1%" valign=top nowrap>&nbsp; &nbsp; 	</TD>
	<TD width="3%" valign=top nowrap><font size=2 face="serif">(a)</font>&nbsp; </TD>
	<TD width=96%>
<P align="left"><FONT size=2 face="serif">On January 25, 2007, we invested an additional &#36;5.0 million in Big River Resources, LLC (included in other assets). This investment was effective February 1, 2007 and our ownership percentage increased
from 4.3% to 6.9%.</FONT></P>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="left">
<U><FONT size=2 face="serif">Annual ethanol production of Levelland Hockley is expected to be approximately 40 million gallons, while</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">annual ethanol production of Millennium,
Patriot and One Earth are all expected to be approximately 100</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">million gallons. We expect the construction cost of the plants to be approximately &#36;1.70 to &#36;2.00 per
gallon of expected annual ethanol production. We expect the plants to finance approximately 60% of the plant</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">construction cost. Once the plants are operational, we will begin
to recognize interest expense on this debt. We expect a majority, if not all, of the interest incurred while the plants are being constructed to be</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">capitalized</FONT></U><FONT size=2 face="serif">. </FONT><U><FONT size=2 face="serif">We expect Big River Resources, LLC to expand its current 52 million gallon dry-mill ethanol</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">manufacturing facility to
a 90 million gallon dry-mill facility in fiscal year 2007.</FONT></U><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="left">
<U><FONT size=2 face="serif">We expect the Millennium, Levelland Hockley, Patriot and One Earth facilities to be operational by</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">December 2007, April 2008, July 2008 and July
2009, respectively. Each plant has hired a commodities</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">marketing company to assist in managing and appropriately hedging risks in the ethanol industry.</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="left">
<U><FONT size=2 face="serif">Income from our ethanol facilities, once operational,
is highly dependent on the price of corn, the primary</FONT></U> <U><FONT size=2 face="serif">raw
material, the price of natural gas,  the primary utility cost and the selling
price of ethanol. These items</FONT></U> <U><FONT size=2 face="serif">are
commodities subject to rapid price changes. Based on current pricing for corn,
natural gas and ethanol, we expect</FONT></U> </P>
<P align="center">
<FONT face="serif">3</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE>
<P align="left">
<U><FONT size=2 face="serif">the facilities to be cash flow positive after the commencement of operations. For much of fiscal year 2006,</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">the spread between ethanol and corn
prices were at historically high levels, driven in large part by high oil</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">prices and historically low corn prices resulting from continuing record corn yields and acreage. In
recent</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">months, the price of ethanol has been declining and corn costs have increased sharply. On June 30, 2006,</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">the Chicago spot price per gallon of ethanol was &#36;3.90 and the Chicago Board of Trade (&#147;CBOT&#148;) price of</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">corn was &#36;2.35 per bushel. On December
29, 2006, the Chicago spot price per gallon of ethanol was &#36;2.45</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">and the CBOT price of corn was &#36;3.90 per bushel. Any increase or reduction in the spread between
ethanol and corn prices, whether as a result of changes in the price of ethanol or corn, will have an effect on our</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">financial performance. We expect that all of our ethanol
plants will generate approximately 2.8 gallons of</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">ethanol per bushel of corn used. We estimate that natural gas usage will constitute approximately 10% of</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">annual revenues. We anticipate using a combination of hedges and energy specialists to assist us with our</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">natural gas
purchasing.</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="left">
<B><FONT size=2 face="serif">Investment in Synthetic Fuel Partnerships</FONT></B></P>
<P align="left">
<U><FONT size=2 face="serif">Income from synthetic fuel investments declined
approximately &#36;19.8 million as a result of a partial phase</FONT></U> <U><FONT size=2 face="serif">out
of Section 29/45K tax credits, a  temporary halting of production and a modification
of our agreement</FONT></U> <U><FONT size=2 face="serif">with
the owners and operators of the Gillette synthetic fuel facility. </FONT></U><FONT size=2 face="serif">Under
current law, credits under Section 29/45K are only available for qualified fuels
sold before January 1, 2008. In fiscal year 1998, we invested in two limited
partnerships which owned four facilities producing synthetic fuel. The  partnerships
earn federal income tax credits under Section 29/45K of the Internal Revenue
Code based on the tonnage and content of solid synthetic fuel produced and sold
to unrelated parties. Our share of the credits generated may be used to reduce
 our federal income tax liability down to the alternative minimum tax (AMT) rate.
The tax credits begin to phase out if the reference price of a barrel of oil
exceeds certain levels adjusted annually for inflation. The 2006 phase-out started
at
&#36;56.71 per barrel and based upon the price of oil to date, we estimated the
phase out for calendar 2006 to be approximately 40%. See Notes 4 and 16 of the
Notes to the Consolidated Financial Statements for further discussion. <U>Should
oil prices result in a</U></FONT> <U><FONT size=2 face="serif">phase
out of Section 29/45K tax credits or the synthetic fuel production facilities
experience production</FONT></U> <U><FONT size=2 face="serif">stoppages,
our income from synthetic fuel investments could be materially lower in fiscal
year 2007. Because synthetic fuel is not economical to produce absent the associated
tax credits and  the fact that we</FONT></U> <U><FONT size=2 face="serif">have
no control or decision involvement with production levels, we cannot determine
the impact of possible production reduction or elimination on our financial
results. We do not expect to receive income from our</FONT></U> <U><FONT size=2 face="serif">Colona
and Somerset synthetic fuel investments beyond fiscal year 2007, as the Section
29/45K tax credit</FONT></U> <U><FONT size=2 face="serif">program
expires December 31, 2007. However, we may realize income from our Gillette synthetic
fuel</FONT></U> <U><FONT size=2 face="serif">investment
as  payments for production subsequent to September 30, 2006 through December
31, 2007 are</FONT></U> <U><FONT size=2 face="serif">expected
to be made after January 31, 2008. We estimate that such payments may  be received
within the</FONT></U> <U><FONT size=2 face="serif">next
four years. We will recognize any income upon receipt of payments or upon our
ability to reasonably</FONT></U>
<U><FONT size=2 face="serif">assure ourselves of the timing and collectibility
of the payments.</FONT></U> </P>
<P align="left">
<FONT size=2 face="serif">We initially held a 30% interest in Colona Synfuel Limited Partnership, L.L.L.P. (Colona) and an 18.75% interest in Somerset Synfuel, L.P. (Somerset). We sold our ownership in the Colona and Somerset partnerships as
described below. </FONT></P>
<P align="left">
<FONT size=2 face="serif">Effective February 1, 1999, we sold 13% of our interest in the Colona partnership, reducing our ownership percentage from 30% to 17%. Payments are contingent upon and equal to 75% of the federal income tax credits
attributable to the 13% interest sold and are subject to certain annual limitations. The maximum amount of cash that can be received varies by year. The maximum that can be received for calendar 2007 is approximately &#36;9.9 million. Effective July
31, 2000, we sold an additional portion of our interest in the Colona partnership, reducing our ownership percentage from 17% to 8%. Effective May 31, 2001, we sold our remaining 8% ownership in the Colona partnership. For the 2000 and 2001 sales,
payments are contingent upon and equal to the greater of 82.5% of the federal income tax credits attributable to the </FONT></P>
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<P align="left">
<FONT size=2 face="serif">interest sold subject to annual limitations or 74.25% of the federal income tax credits amounts attributable to the interest sold with no annual limitations. </FONT></P>
<P align="left">
<FONT size=2 face="serif">Because the purchase price for the Colona sales is based on the value of Section 29/45K tax credits generated, they are subject to production levels and to possible reduction or elimination to the extent the credit is
limited.</FONT></P>
<P align="left">
<FONT size=2 face="serif">Effective October 1, 2005, we sold our entire ownership interest in the Somerset partnership. We received &#36;1.2 million, net of commissions, at closing along with a secured contingent payment note that could provide
additional investment income. We expect to receive quarterly payments through 2007 equal to 80% of the Section 29/45K tax credits attributable to the ownership interest sold. Because the purchase price is based on the value of Section 29/45K tax
credits generated, it is subject to production levels and to possible reduction or elimination to the extent the credit is limited. With this sale, we have divested all of our ownership interests in facilities that produce synthetic fuel which
qualifies for Section 29/45K tax credits. </FONT></P>
<P align="left">
<FONT size=2 face="serif">On September 5, 2002, we purchased a plant located in Gillette, Wyoming designed and constructed for the production of synthetic fuel, which qualifies for tax credits under Section 29/45K of the Internal Revenue Code. We
obtained a Private Letter Ruling from the Internal Revenue Service, which allowed for the disassembly, and reconstruction, of the facility. On March 30, 2004, we sold our membership interest in the limited liability company that owned the Gillette
facility to an outside party. We received &#36;2,750,000 at the time of sale, resulting in pre-tax income of approximately &#36;468,000 along with a secured contingent payment note that could provide additional investment income. The facility
resumed commercial operations during the second quarter of fiscal 2005; as such, we received &#36;3</FONT><FONT color="#ff0000" size=2 face="serif">.</FONT><FONT size=2 face="serif">5 million as a one-time payment per the terms of the purchase
agreement. In addition, we are eligible to receive &#36;1.50 per ton of &#147;qualified production&#148; produced by the facility. The plant was subsequently sold and during the third quarter of fiscal 2006, we modified our agreement with the owners
and operators of the synthetic fuel facility. </FONT><U><FONT size=2 face="serif">The modified agreement calls for us to receive payments related to production occurring after</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">September 30, 2006, only after the related Section 29/45K tax credits are allowed under IRS audit, or the</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">applicable statue of limitations for an IRS audit have
expired. We believe this could result in any cash</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">receipts from the production being received three to four years from now. </FONT></U><FONT size=2 face="serif">We cannot
reasonably assure ourselves of collectibility of these payments, thus, we cannot currently determine the timing of income recognition, if any, related to production occurring subsequent to September 30, 2006. Our proceeds </FONT><U><FONT size=2 face="serif">from</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">production occurring subsequent to September 30, 2006</FONT></U><FONT size=2 face="serif"> are subject to possible reduction </FONT><U><FONT size=2 face="serif">based upon the</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">price of oil</FONT></U><FONT size=2 face="serif"> and to the extent future production decreases. At January 31, 2007, we estimate that there is
approximately 1.8 million tons of production </FONT><U><FONT size=2 face="serif">(occurring after September 30, 2006</FONT></U><FONT size=2 face="serif">) for which we did not recognize income.</FONT></P>
<P align="left">
<FONT size=2 face="serif">Tax credits generated from the Somerset partnership were applied to reduce tax expense in the amounts of approximately &#36;0.2 million, &#36;6.4 million and &#36;8.0 million in fiscal 2006, 2005 and 2004, respectively.
</FONT></P>
<P align="left">
<FONT size=2 face="serif">Although the Section 29/45K tax credit program is expected to continue through calendar year 2007, recent market conditions and events have increased the volatility and level of oil prices that could limit the amount of those credits or eliminate
them entirely for calendar year 2007. This possibility is due to a provision of Section 29/45K that provides that if the average wellhead price per barrel for unregulated domestic crude oil for the year (the "Annual Average Price") exceeds a certain
threshold value (the "Threshold Price"), the Section 29/45K tax credits are subject to phase out. For calendar year 2006, the Threshold Price was &#36;56.71 per barrel and the Phase Out Price was &#36;71.19 per barrel. This resulted in a partial tax
credit phase out for calendar year 2006 which we estimated to be 40%. The Threshold Price and the Phase Out Price are adjusted annually as a result of inflation. </FONT></P>
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<FONT size=2 face="serif">We cannot determine the Annual Average Price for 2007. Therefore, we cannot determine, with absolute certainty, whether the price of oil will have a material effect on our synthetic fuel business after 2006. However, if
during 2007, oil prices remain at historically high levels or increase, our synthetic fuel income may be adversely affected. Based upon the price of oil to date, we estimate the tax credits and related income for calendar 2007 would not be subject
to a phase out as of January 31, 2007. Because synthetic fuel is not economical to produce absent the associated tax credits and the fact that we have no control or decision involvement with production levels, we cannot determine the impact of
possible production reduction or elimination on our financial results. </FONT></P>
<P align="left">
<FONT size=2 face="serif">See Item 1A Risk Factors for further discussion of the risks involved with our synthetic fuel investments.&#148; </FONT></P>
<P align="left">
<B><FONT size=2 face="serif">2. Please provide an overview of your entire business and expand this section to discuss known material trends and uncertainties that will have, or are reasonably likely to have, a material impact on your revenues or
income or result in your liquidity decreasing or increasing in any material way. In this regard, we note your disclosure that your income from synthetic fuel investments dropped by nearly &#36;20 million in the last fiscal year. Discuss whether you
expect that trend to continue. Please provide additional analysis concerning the quality and variability of your earnings and cash flows so that investors can ascertain the likelihood of the extent past performance is indicative of future
performance. Please discuss whether you expect levels to remain at this level or to increase or decrease. Also, you should consider discussing the impact of any changes on your earnings. Further, please discuss in reasonable detail: </FONT></B></P>
<UL>
<LI>
<P align="left"><B><FONT size=2 face="serif">Economic or industry-wide factors relevant to your company, and</FONT></B></P></LI>
<LI>
<P align="left"><B><FONT size=2 face="serif">Material opportunities, challenges, and</FONT></B></P></LI>
<LI>
<P align="left"><B><FONT size=2 face="serif">Risk in short and long term and the actions you are taking to address them.</FONT></B></P></LI>
</UL>
<P align="left">
<B><FONT size=2 face="serif">See Item 303 of Regulation S-K and SEC Release No. 33-8350</FONT></B><FONT size=2 face="serif">. </FONT></P>
<P align="left">
<FONT size=2 face="serif">See our response to comment number 1. We have incorporated a discussion of trends and uncertainties into our illustrative response therein. </FONT><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="left">
<B><U><FONT size=2 face="serif">Overview, page 27</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">3. In light of the material income recognized from the sale of Gillette in fiscal 2004, 2005 and 2006 and based on the terms of the modified agreement, please explain why you are currently not able to determine the
likelihood and timing of collecting payments related to production occurring after September 30, 2006. In this regard, a detailed explanation of the actual or anticipated accounting recognition given to the membership interest sale, the one-time
payment of &#36;3.5 million and the &#36;1.50 per ton of &#147;qualified production&#148; would be helpful to our understanding. Please specifically explain which proceeds would be subject to possible reduction. If the &#36;2.75 million and the
&#36;3.5 million onetime payments can be reduced, explain your basis for income recognition given this significant uncertainty. We note your disclosure in your Form 10-Q for the quarterly period ended July 31, 2007 in which you disclose that you
estimate there is approximately 4.0 million tons of production for which you did not recognize income. Please disclose which periods the production relates to and the likelihood and expected timing of collecting payment related to this production.
We believe such additional disclosure may be necessary to an understanding of the extent to which reported financial information is indicative of future results. Refer to Item 303 of Regulation S-K and SEC Release No. 33&#151;8350.</FONT></B></P>
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<FONT size=2 face="serif">We cannot determine the likelihood and timing of payments from the Gillette membership sale related to production occurring after September 30, 2006. The modified agreement with the owners and operators of the Gillette
synthetic fuel facility calls for us to receive payments related to production occurring after September 30, 2006, only after the related Section 29/45K tax credits are allowed under IRS audit, or the applicable statute of limitations for an IRS
audit have expired. We believe this could result in any cash receipts from the production being received three to four years from now. Furthermore, the entities involved in the modified agreement are all privately held businesses (except for REX)
and we are not able to determine whether the entities have the financial resources to remit any payments to us required by the modified agreement. The one-time payments of &#36;2.75 million and &#36;3.5 million cannot be reduced, and, thus were
recorded as income when earned and payments were reasonably assured. </FONT></P>
<P align="left">
<FONT size=2 face="serif">We have modified the disclosure from the July 31, 2007 Form 10-Q to illustrate the enhanced disclosure we are contemplating. </FONT></P>
<P align="left">
<U><FONT size=2 face="serif">&#147; The 4.0 million tons of production for which we have not recognized income represents production</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">occurring from October 1, 2006 to July 31,
2007 and is subject to possible reduction based upon the price of oil. Should we receive any payments for this production, or subsequent production, we anticipate</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">recognizing
the income upon receipt of such payments, or upon our ability to reasonably assure ourselves</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">that collection of the payments is probable. We estimate that such payments will be
received within the</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">next four years.&#148;</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Results of Operations, page 30</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">4. Please tell us the impact of your extended service contracts on gross profit and income from continuing operations for the years presented. To the extent these contracts represent a significant portion of your gross
profit and/or income from continuing operations, please include a discussion of the impact on your operating results in satisfying the three principal objectives of management&#146;s discussion and analysis as noted in SEC Release No. 33-8350 which
are: </FONT></B></P>
<UL>
<LI>
<P align="left"><B><FONT size=2 face="serif">to provide a narrative explanation of a company&#146;s financial statements that enables</FONT></B> <B><FONT size=2 face="serif">investors to see the company through the eyes of
management</FONT></B></P></LI>
<LI>
<P align="left"><B><FONT size=2 face="serif">to enhance the overall financial disclosure and provide the context within which</FONT></B> <B><FONT size=2 face="serif">financial information should be analyzed; and</FONT></B></P></LI>
<LI>
<P align="left"><B><FONT size=2 face="serif">to provide information about the quality of, and potential variability of, a company&#146;s</FONT></B> <B><FONT size=2 face="serif">earnings and cash flow, so that investors can ascertain the likelihood
that past</FONT></B> <B><FONT size=2 face="serif">performance is indicative of future performance.</FONT></B></P></LI>
</UL>
<P align="left">
<FONT size=2 face="serif">Extended service contracts contributed approximately &#36;9,027,000, &#36;8,407,000 and &#36;8,819,000 of gross profit for the fiscal years ended January 31, 2007, 2006 and 2005, respectively. Gross profit from extended
service contracts represents revenue less direct repair costs. We do not track separately all expenses associated with extended service contracts; therefore, we cannot determine income from continuing operations related to extended service
contracts. </FONT></P>
<P align="left">
<FONT size=2 face="serif">In response to the staff&#146;s comments, we propose to revise future filings to enhance the discussion of our extended service contracts. We have modified the disclosure from the January 31, 2007 Form 10-K to illustrate
the enhanced disclosure we are contemplating.</FONT></P>
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<B><I><FONT size=2 face="serif">&#147;Gross Profit</FONT></I></B><FONT size=2 face="serif"> &#150; Gross profit was &#36;93.3 million in fiscal year 2006, or 26.9% of net sales and revenue, versus &#36;103.5 million for fiscal year 2005 or 27.6% of
net sales and revenue. Gross profit for fiscal year 2006 was negatively impacted by approximately &#36;4.0 million as a result of having 11 fewer stores classified in continuing operations compared to fiscal year 2005. Gross profit margin for fiscal
year 2006 was negatively impacted by a change in product mix, a competitive market environment and a focused effort to sell slow moving or aged inventory at a discount. </FONT><U><FONT size=2 face="serif">In addition, extended service contracts
contributed gross</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">profit of &#36;9.0 million in fiscal year 2006, compared to &#36;8.4 million in fiscal year 2005, reflecting the</FONT></U><FONT size=2 face="serif">
</FONT><U><FONT size=2 face="serif">income recognition of extended service contracts sold in prior years. Historically, our direct warranty</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">repair costs have averaged
approximately 25% of extended service contract revenue.&#148;</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Liquidity and Capital Resources, page 38</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">5</FONT></B><B><I><FONT size=2 face="serif">. </FONT></I></B><B><FONT size=2 face="serif">Please ensure your discussion and analysis of cash flows is not a recitation of changes evident from the financial statements. For
example, you discuss that a large use of cash in fiscal 2005 was due to a decrease in accounts payable of &#36;12.5 million. You should explain the underlying reasons for the decrease in accounts payable. Please provide analysis explaining the
underlying reasons for material fluctuations in balance sheet accounts. Refer to SEC Release No. 33&#151;8350. </FONT></B></P>
<P align="left">
<FONT size=2 face="serif">In response to the staff&#146;s comment, we propose to revise, in future filings, our discussion and analysis of cash flows. We have modified the disclosure from the January 31, 2007 Form 10-K to illustrate the enhanced
disclosure we are contemplating.</FONT></P>
<P align="left">
<B><I><FONT size=2 face="serif">&#147;Operating Activities</FONT></I></B><FONT size=2 face="serif"> &#150; Net cash provided by operating activities was &#36;31.8 million for fiscal year 2006 compared to &#36;19.0 million in fiscal year 2005. For
fiscal year 2006, operating cash flow was provided by net income of &#36;11.4 million adjusted for the impact of a &#36;10.8 million gain on sales of partnership interest, &#36;1.7 million of stock based compensation expense and non-cash items of
&#36;5.8 million, which consist of deferred income, the deferred income tax provision, impairment charges, gain on disposal of fixed assets, income from ethanol investments and depreciation and amortization. Cash was provided by a decrease in
inventory of &#36;27.3 million, primarily due to managing our inventory at lower levels than normal in late fiscal year 2006. In addition, we are carrying a lower level of air conditioners in the current year as compared to the prior year.
</FONT><U><FONT size=2 face="serif">The inventory levels of air conditioners fluctuate significantly based upon sales</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">and vendor arrangements. We experienced relatively higher
sales of air conditioners in fiscal year 2006</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">compared to fiscal year 2005. </FONT></U><FONT size=2 face="serif">Additionally, cash was provided by a decrease in accounts
receivable of &#36;1.5 million and an increase in accounts payable of &#36;2.3 million. The largest uses of cash were an increase in other assets of &#36;4.1 million and a decrease in other liabilities of &#36;3.2 million. </FONT><U><FONT size=2 face="serif">Other assets increased</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">primarily as a result of a &#36;5.0 million advance equity investment in Big River. Other liabilities decreased</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">partially as a result of lower accruals for executive bonus compensation. </FONT></U><FONT size=2 face="serif">For fiscal year 2005, operating cash flow was provided by net income of &#36;28.3
million adjusted for the impact of a &#36;30.5 million gain on sales of partnership interest and non-cash items of &#36;6.5 million, which consist of deferred income, the deferred income tax provision, impairment charges and depreciation and
amortization. Cash was provided by a decrease in inventory of &#36;26.8 million, primarily due to a shortage in the supply of certain televisions and lower levels of air conditioners. Additionally, cash was provided by a decrease in accounts
receivable of &#36;2.0 million, </FONT><U><FONT size=2 face="serif">primarily a function of the timing of settlement with our credit card merchant processor. </FONT></U><FONT size=2 face="serif">The largest use of cash was a decrease in accounts
payable of &#36;12.5 million </FONT><U><FONT size=2 face="serif">which was a result of the timing of inventory purchases. </FONT></U><FONT size=2 face="serif">Cash was also used by an increase in other assets of &#36;0.7 million and a decrease in
other liabilities of &#36;0.4 million.&#148;</FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Critical Accounting Policies, page 41</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">6. Please revise your disclosure to describe the material implications of </FONT></B><B><I><FONT size=2 face="serif">uncertainties </FONT></I></B><B><FONT size=2 face="serif">associated with the methods, assumptions and
estimates underlying your critical accounting measurements that have </FONT></B></P>
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<B><FONT size=2 face="serif">had or that you reasonably expect will have a material impact on financial condition and operating performance and on the comparability of reported information among periods. Such disclosure should supplement, not
duplicate, the accounting policies disclosed in the notes to the financial statements. In preparing your revised disclosure, please identify those accounting estimates or assumptions where there is a significant amount of subjectivity involved, the
estimates or assumptions are susceptible to change, and the impact of the estimates and assumptions on your financial condition or operating performance is material. Discuss, to the extent material, such factors as how you arrived at each estimate,
how accurate the estimate/assumption has been in the past, how much the estimate/assumption has changed in the past and whether the estimate/assumption is reasonably likely to change in the future. We would expect you to provide quantitative as well
as qualitative disclosure when quantitative information is reasonably available and to provide greater insight into the quality and variability of information regarding financial condition and operating performance. The quantitative disclosure
should include, to the extent material, information about your provisions and allowances for doubtful accounts receivable, sales returns and excess and obsolete inventories, income from synthetic fuel partnership sales, impairment losses, income tax
contingencies and income tax valuation allowances. Also, since critical accounting estimates and assumptions are based on matters that are highly uncertain, you should analyze and disclose their specific sensitivity to change, based on other
outcomes that are reasonably likely to occur and would have a material effect. For example, if reasonably likely changes in the average wellhead price per barrel for unregulated domestic crude oil could have a material effect on your future
financial condition or operating performance, the impact that could result given the range of reasonably likely outcomes should be disclosed and quantified. Please refer to Item 303(a)(3)(ii) of Regulation S-K as well as the Commission&#146;s
Guidance Regarding Management&#146;s Discussion and Analysis of Financial Condition and Results of</FONT></B><B><FONT face="serif"> </FONT></B><B><FONT size=2 face="serif">Operations, SEC Release No. 33-8350, issued December 19, 2003 and available
on our website at </FONT></B><B><U><FONT size=2 face="serif">www.sec.gov.</FONT></U></B></P>
<P align="left">
<FONT size=2 face="serif">We acknowledge that providing additional detail related to certain critical accounting estimates would enhance the disclosure associated with our income from synthetic fuel partnership sales, inventory
reserves and income taxes. We do not, however, consider each of the above-identified items significant enough to warrant additional disclosure as a critical accounting estimate. The estimates related to allowances for doubtful accounts, sales
returns and impairment losses are appropriately included as elements of our revenue recognition policy and have an element of estimates, but the amounts are not material to the financial statements, and we, therefore, do not believe they warrant
additional disclosure in MD&amp;A.</FONT></P>
<P align="left">
<FONT size=2 face="serif">We do, however, believe that readers of the financial statements would benefit from additional disclosure surrounding the estimate related to synthetic fuel partnership sales, inventory reserves and income
taxes due to the significance to the financial statements. In order to better convey this to readers of the financial statements, we will modify our disclosure in future filings to include the following language. </FONT></P>
<P align="left">
<B><I><FONT size=2 face="serif">&#147;Revenue Recognition</FONT></I></B><FONT size=2 face="serif"> &#150; We recognize sales of products upon receipt by the customer. We will honor returns from customers within seven
days from the date of sale. </FONT><U><FONT size=2 face="serif">We establish liabilities for estimated</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">returns at the point of
sale. Such liabilities are immaterial in all years presented.</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="left">
<FONT size=2 face="serif">We also sell extended service contracts covering periods beyond the normal manufacturers&#146; warranty periods, usually with terms of coverage (including manufacturers&#146; warranty periods) of between 12
to 60 months. Contract revenues are deferred and amortized on a straight-line basis over the life of the contracts after the expiration of applicable manufacturers&#146; warranty periods. We retain the obligation to perform warranty service and such
costs are charged to operations as incurred.</FONT></P>
<P align="left">
<FONT size=2 face="serif">We recognize income from synthetic fuel partnership sales as the synthetic fuel is produced and sold except for operations at the Gillette facility as we have not determined that collection of our
</FONT><U><FONT size=2 face="serif">proceeds for</FONT></U><FONT size=2 face="serif"> </FONT></P>
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<U><FONT size=2 face="serif">production occurring subsequent to September 30, 2006</FONT></U><FONT size=2 face="serif"> is reasonably assured </FONT><U><FONT size=2 face="serif">from that plant. </FONT></U><FONT size=2 face="serif">We estimate the
impact of oil prices and the likelihood of any phase out of Section 29/45K credits and the resulting reduction of synthetic fuel income quarterly. We use available market data concerning crude oil prices to determine the phase out. </FONT><U><FONT size=2 face="serif">We estimate the tax credits and related income will be subject to a phase out of</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">approximately 40% for calendar year 2006. This phase out resulted in
approximately &#36;6.6 million of</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">potential income not being recognized in fiscal year 2006. Should oil prices result in a phase out of Section 29/45K tax credits or the
synthetic fuel production facilities experience production stoppages, our income</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">from synthetic fuel investments could be materially lower in fiscal year 2007. Because
synthetic fuel is not</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">economical to produce absent the associated tax credits and the fact that we have no control or decision</FONT></U><FONT size=2 face="serif">
</FONT><U><FONT size=2 face="serif">involvement with production levels, we cannot determine the impact of possible production reduction or</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">elimination on our financial results.
</FONT></U><FONT size=2 face="serif">See Note 4 of the Notes to the Consolidated Financial Statements for a further discussion of synthetic fuel partnership sales. </FONT></P>
<P align="left">
<B><I><FONT size=2 face="serif">Inventory Reserves</FONT></I></B><FONT size=2 face="serif"> &#150; Inventory is recorded at the lower of cost or market, net of reserves established for estimated technological obsolescence. The market value of
inventory is often dependent upon changes in technology resulting in significant changes in customer demand. If these estimates are inaccurate, we may be exposed to market conditions that require an additional reduction in the value of certain
inventories affected. </FONT><U><FONT size=2 face="serif">We provide an inventory reserve for specifically identified inventory items that have a cost</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">greater than net
realizable value, aged and slow moving inventory and non-saleable or defective inventory</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">items. The inventory reserve was approximately &#36;5.1 million, &#36;5.2 million and
&#36;5.5 million at January 31,</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">2007, January 31, 2006 and January 31, 2005, respectively. Fluctuations in the inventory reserve generally</FONT></U><FONT size=2 face="serif">
</FONT><U><FONT size=2 face="serif">relate to the levels and composition of such inventory at a given point in time. Assumptions we use to</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">estimate the necessary reserve have
not significantly changed over the last three fiscal years. Such</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">assumptions include our ability to return defective products to vendors for credit and the estimated
salvage</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">value of defective inventory items if we are unable to return such items to the vendor for credit.</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="left">
<B><I><FONT size=2 face="serif">Income Taxes</FONT></I></B><FONT size=2 face="serif"> &#150; Income taxes are recorded based on the current year amounts payable or refundable, as well as the consequences of events that give rise to deferred tax
assets and liabilities based on differences in how those events are treated for tax purposes, net of valuation allowances. We base our estimate of deferred tax assets and liabilities on current tax laws and rates and other expectations about future
outcomes, including the outcome of tax credits under Section 29/45K of the Internal Revenue Code. Changes in existing regulatory tax laws and rates may affect our ability to successfully manage regulatory matters, and future business results may
affect the amount of deferred tax liabilities or the valuation of deferred tax assets over time. </FONT><U><FONT size=2 face="serif">We have established valuation allowances for certain state net operating loss</FONT></U><FONT size=2 face="serif">
</FONT><U><FONT size=2 face="serif">carryforwards and other deferred tax assets. The valuation allowance was approximately &#36;1.0 million, &#36;1.0 million and &#36;0.4 million at January 31, 2007, January 31, 2006 and January 31, 2005,
respectively. Should</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">estimates of future income differ significantly from our prior estimates, we could be required to make a</FONT></U><FONT size=2 face="serif">
</FONT><U><FONT size=2 face="serif">material change to our deferred tax valuation allowance. The primary assumption used to estimate the</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">valuation allowance has been estimates
of future state taxable income. Such estimates can have material</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">variations from year to year based upon expected levels of retail income and projected capital gains.
</FONT></U><FONT size=2 face="serif">Our accounting for deferred tax consequences represents management's best estimate of future events that can be appropriately reflected in the accounting estimates. </FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Item 8 Financial Statements and Supplementary Data, page 46</FONT></U></B><B><FONT size=2 face="serif">  </FONT></B></P>
<P align="left">
<B><U><FONT size=2 face="serif">Consolidated Balance Sheets, page 46</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">7. Please separately present investments accounted for using the equity method on the face of the balance sheet. Refer to paragraph 19.c. of APB 18.</FONT></B></P>
<P align="center">
<FONT face="serif">10</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE>
<P align="left">
<FONT size=2 face="serif">We propose to modify our future filings to include separate captions on the balance sheet for investments accounted for using the equity method. </FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Notes to Consolidated Financial Statements, page 50</FONT></U></B></P>
<P align="left">
<B><U><FONT size=2 face="serif">Note 1. Summary of Significant Accounting Policies, page 50</FONT></U></B><B><FONT size=2 face="serif">  </FONT></B></P>
<P align="left">
<B><U><FONT size=2 face="serif">Property and Equipment, page 50</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">8. Please revise to describe the impaired long-lived assets or asset groups, the facts and circumstances leading to the impairments and the segment in which the impaired long-lived assets or asset groups are reported.
Refer to paragraph 26.a. and 26.d of SFAS 144. </FONT></B></P>
<P align="left">
<FONT size=2 face="serif">We propose to modify disclosure in our future filings as follows: </FONT></P>
<P align="left">
<FONT size=2 face="serif">&#147; In accordance with SFAS No. 144, &#147;Accounting for the Impairment or Disposal of Long-Lived Assets&#148;, 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. The Company recorded an impairment charge included in
selling, general and administrative expenses in the accompanying consolidated statements of income of &#36;168,000, &#36;1,200,000 and &#36;875,000 in the fiscal years ended January 31, 2007, 2006 and 2005, respectively. In addition, the Company
recorded an impairment charge included in discontinued operations in the accompanying consolidated statements of income of &#36;85,000, &#36;100,000 and &#36;0 in the fiscal years ended January 31, 2007, 2006 and 2005 respectively. </FONT><U><FONT size=2 face="serif">The</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">impairment charges all relate to individual stores in the Company&#146;s retail segment. The impairment charges are primarily related to increased
competition and/or unfavorable changes in real estate conditions in local</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">markets. Long- lived assets are tested for recoverability whenever events or changes in
circumstances</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">indicate that its carrying amount may not be recoverable. Generally, declining cash flows from a retail</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">store operation or deterioration in local real estate market conditions are indicators of possible impairment. Impairment charges result from the Company&#146;s management performing a discounted cash flow
analysis</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">for individual store locations and represent management&#146;s estimate of the excess of net book value over</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">estimated discounted future cash flows.&#148;</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Revenue Recognition, page 52</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">9. Please tell us how sales commissions related to the sale of extended service contracts are presented in the statements of income. To the extent that sales commissions are netted against the related revenue, please
tell us your basis in GAAP for such presentation. Please also quantify the amount of sales commissions included in the net sales and revenue line item for the periods presented.</FONT></B></P>
<P align="left">
<FONT size=2 face="serif">Historically, sales commissions related to the sale of extended service contracts are presented in selling, general and administrative expenses in the statements of income. Accordingly, no portion of sales commissions
related to the sale of extended service contracts were included in the net sales and revenue line item for the periods presented. </FONT></P>
<P align="left">
<FONT size=2 face="serif">We will revise future filings to disclose that all commissions on the sale of extended service contracts are reported in selling, general and administrative expenses. </FONT></P>
<P align="left">
<B><FONT size=2 face="serif">10.Your income from synthetic fuel partnership sales and the related tax credits earned prior to the sales are contingent on the average wellhead price per barrel for unregulated domestic crude oil.</FONT></B></P>
<P align="center">
<FONT face="serif">11</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE>
<P align="left">
<B><FONT size=2 face="serif">Quarterly you estimate the impact of these oil prices and the likelihood of any phase out. Please tell us your basis in GAAP for recognizing income prior to resolution of the contingency. Refer to paragraph 17.a
of</FONT></B><B><I><FONT size=2 face="serif"> </FONT></I></B><B><FONT size=2 face="serif">SFAS 5.</FONT></B></P>
<P align="left">
<FONT size=2 face="serif">We believe it is appropriate to recognize income from synthetic fuel partnership sales based upon when the synthetic fuel is produced and sold. This results in a proper matching of the revenue to the period in which it was
earned. We believe the criteria in SEC Staff Accounting Bulletin Topic 13.A.1, &#147;Revenue Recognition,&#148; should be evaluated to determine when it is appropriate to recognize the income related to the synthetic fuel partnership sales.
Accordingly, we have considered the following criteria:</FONT></P>
<UL>
<LI>
<P align="left"><FONT size=2 face="serif">Persuasive evidence of an arrangement exists,</FONT></P></LI>
<LI>
<P align="left"><FONT size=2 face="serif">Delivery has occurred or services have been rendered,</FONT></P></LI>
<LI>
<P align="left"><FONT size=2 face="serif">The seller's price to the buyer is fixed or determinable, and</FONT></P></LI>
<LI>
<P align="left"><FONT size=2 face="serif">Collectibility is reasonably assured.</FONT></P></LI>
</UL>
<P align="left">
<FONT size=2 face="serif">Our rights to income are derived from agreements executed when our interests were sold. All of our performance requirements were satisfied in prior years. Our rights to the income are contractual and subject to the actual
production and sale of synthetic fuel at our formerly owned facilities and the tax credits generated. The current owners of the facilities provide us reliable data regarding the production of synthetic fuel at each facility. With this production
data, we can reasonably estimate the income we have earned. We will revise future filings to disclose this information. </FONT></P>
<P align="left">
<FONT size=2 face="serif">With respect to price, we believe the price is determinable as we can estimate the average wellhead price per barrel for unregulated domestic crude oil and calculate an approximate phase out for any period during the year.
Thus, we believe the price is determinable as discussed in the above- mentioned SEC guidance. Furthermore, by the end of our fiscal year, the phase out percentage is a known virtual certainty as the phase out is based upon an average annual calendar
year price per barrel for unregulated domestic crude oil.</FONT></P>
<P align="left">
<FONT size=2 face="serif">We have not experienced any collectibility issues related to payments due us from the sale of the Colona and Somerset synthetic fuel interests. The agreements for the sale of the Colona and Somerset synthetic fuel
interests, call for payments to be made directly to us or into an escrow account. Such payments are made on a quarterly basis. These are in contrast to the Gillette agreement (for production occurring subsequent to September 30, 2006) in which no
payments will be made until the successful completion of an examination by the Internal Revenue Service or the expiration of the appropriate statute of limitations for an IRS examination. </FONT></P>
<P align="left">
<FONT size=2 face="serif">Paragraph 1 of SFAS No. 5, Accounting for Contingencies (&#147;SFAS 5&#148;), states for the purpose of this Statement, a contingency is defined as an existing condition, situation, or set of circumstances involving
uncertainty as to possible gain (hereinafter a "gain contingency") or loss (hereinafter a "loss contingency") to an enterprise that will ultimately be resolved when one or more future events occur or fail to occur. Resolution of the uncertainty may
confirm the acquisition of an asset or the reduction of a liability or the loss or impairment of an asset or the incurrence of a liability. </FONT></P>
<P align="left">
<FONT size=2 face="serif">Paragraph 2 of SFAS 5 states all uncertainties inherent in the accounting process give rise to contingencies as that term is used in this Statement. Estimates are required in financial statements for many on-going and
recurring activities of an enterprise. The mere fact that an estimate is involved does not of itself constitute the type of uncertainty referred to in the definition in paragraph 1. For example, the fact that estimates are used to allocate the known
cost of a depreciable asset over the period of use by an enterprise does not make depreciation a contingency; the eventual expiration of the utility of the asset is not uncertain. Thus, depreciation of assets is not a contingency as defined in
paragraph 1, nor are such matters as recurring repairs, maintenance, and overhauls, which interrelate with depreciation. Also, amounts owed for services </FONT></P>
<P align="center">
<FONT face="serif">12</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE>
<P align="left">
<FONT size=2 face="serif">received, such as advertising and utilities, are not contingencies even though the accrued amounts may have been estimated; there is nothing uncertain about the fact that those obligations have been incurred. We believe
that the impact on synthetic fuel partnership sale income is more closely analogous to an estimate rather than a contingency.</FONT></P>
<P align="left">
<FONT size=2 face="serif">Based on the above, we do not believe paragraph 17 of SFAS 5 applies to our income recognition of income from our synthetic fuel partnership sales.</FONT></P>
<P align="left">
<FONT size=2 face="serif">Finally, given, at the end of our fiscal year, that we know with a high degree of certainty the actual phase out percentage, if any, we believe it is appropriate to record income as synthetic fuel production occurs and the
income is earned.</FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Note 3, Investments, page 57</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">11. Given your under 20% ownership interest, please tell us why you have the ability to exercise significant influence over the operating and financial policies of Big River and therefore accounting for your investment
using the equity method is appropriate. Refer to paragraph 17 of APB 18.</FONT></B></P>
<P align="left">
<FONT size=2 face="serif">ABP 18 represents accounting for investments in voting stock of a corporation. Our investments in Big River represent a membership interest in a limited liability company (LLC). Paragraph 17 of APB 18 states, in part, that
in order to achieve a reasonable degree of uniformity in application, the Board concludes that an investment of 20% or more of the voting stock of an investee should lead to a presumption that in the absence of evidence to the contrary an investor
has the ability to exercise significant influence over an investee. Conversely, an investment of less than 20% of the voting stock of an investee should lead to a presumption that an investor does not have the ability to exercise significant
influence unless such ability can be demonstrated.</FONT></P>
<P align="left">
<FONT size=2 face="serif">Management believes the appropriate guidance to address investments in LLCs is EITF 03-16, EITF D-46 and SOP 78-9. We will revise our future filings to reference the applicability of EITF 03-16 and D-46 in addition to APB
18.</FONT></P>
<P align="left">
<FONT size=2 face="serif">EITF 03-16 discusses the accounting for investments in LLCs. LLCs have characteristics of both corporations and partnerships but are dissimilar from both in certain respects. The issue is whether an LLC should be viewed as
similar to a corporation or similar to a partnership for purposes of determining whether noncontrolling investments in an LLC should be accounted for using the cost method or the equity method. The Task Force reached a consensus that an investment
in an LLC that maintains a &#147;specific ownership account&#148; for each investor-similar to a partnership capital structure-should be viewed as similar to an investment in a limited partnership for purposes of determining whether a noncontrolling
investment in an LLC should be accounted for using the cost method or the equity method. Therefore, the provisions of SOP 78-9 and related guidance, including Topic D-46, also apply to such LLCs. </FONT></P>
<P align="left">
<FONT size=2 face="serif">In EITF Topic D-46, the SEC acknowledged that investments in limited partnerships of between 3% and 5% are more than minor and thus, would be subject to the equity method (by drawing a parallel between a partnership and an
LLC with specific ownership accounts using EITF 03-16 as discussed above).</FONT></P>
<P align="left">
<FONT size=2 face="serif">Big River is required to maintain specific ownership accounts in order to properly allocate earnings. Since Big River does maintain specific ownership accounts and since we have an ownership interest of between 3% and 5%,
we believe it is appropriate to use the equity method to account for our investment in Big River. Furthermore, we have one board seat which we believe also allows us to influence the financial and operating policies of Big River.</FONT></P>
<P align="center">
<FONT face="serif">13</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE>
<A name="page_14"></A>

<P align="left">
<B><U><FONT size=2 face="serif">Note 10, Revolving Line of Credit, page 64</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">12. We note that you are restricted from paying dividends under the covenants your revolving credit agreement. Please describe the most significant restrictions on the payment of dividends, indicating their sources,
their pertinent provisions and the amount of retained earnings or net income restricted or free of restriction as required by Rule 4-08(e)(1) of Regulation S-X. </FONT></B></P>
<P align="left">
<FONT size=2 face="serif">We propose to modify disclosure in our future filings as follows: </FONT></P>
<P align="left">
<U><FONT size=2 face="serif">&#147;To pay a dividend, the Company must notify the Agent Bank and the Agent Bank must have determined</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">that, at the time of making the dividend
payment and after giving effect thereto, Excess Availability on the</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">line of credit for the 12 months preceding the payment and on a projected pro-forma basis for the 12 months
following the payment is greater than &#36;25,000,000. At January 31, 2007, we estimate that the maximum</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">dividend we could pay without violating the restriction in our
revolving loan agreement is &#36;18.3 million.&#148;</FONT></U></P>
<P align="left">
<B><U><FONT size=2 face="serif">Note 17. Segment Reporting, page 73</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">13. Please provide the revenue disclosures by product and service group required by paragraph 37 of SFAS 131.</FONT></B></P>
<P align="left">
<FONT size=2 face="serif">We acknowledge the comment and, in future filings, will provide information on revenues by product and service group as required by FAS 131. We anticipate that our disclosure will be similar to the following.</FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
	<TD align=left width=36% nowrap>&nbsp;	</TD>
	<TD width=18%>&nbsp;	</TD>
	<TD align=right nowrap colspan=8>
      <div align="center"><B><U><FONT size=2 face="serif">Years Ended January 31,</FONT></U></B> </div>	</TD>
  </TR>
<TR valign="bottom">
	<TD align=left width=36% nowrap>&nbsp;	</TD>
	<TD width=18%>&nbsp;	</TD>
	<TD colspan="2" align=right nowrap>
      <div align="center"><B><U><FONT size=2 face="serif">2007</FONT></U></B> </div></TD>
	<TD width=8%>&nbsp;	</TD>
	<TD colspan="2" align=right nowrap>
      <div align="center"><B><U><FONT size=2 face="serif">2006</FONT></U></B> </div></TD>
	<TD width=6%>&nbsp;	</TD>
	<TD colspan="2" align=right nowrap>
      <div align="center"><B><U><FONT size=2 face="serif">2005</FONT></U></B> </div></TD>
  </TR>
<TR valign="bottom">
	<TD align=left width=36% nowrap>
<U><FONT size=2 face="serif">Sales of products retail segment:</FONT></U>	</TD>
	<TD width=18%>&nbsp;	</TD>
	<TD align=left width=5% nowrap>&nbsp;	</TD>
	<TD align=left width=4% nowrap>&nbsp;	</TD>
	<TD width=8%>&nbsp;	</TD>
	<TD align=left width=6% nowrap>&nbsp;	</TD>
	<TD align=left width=5% nowrap>&nbsp;	</TD>
	<TD width=6%>&nbsp;	</TD>
	<TD align=left width=6% nowrap>&nbsp;	</TD>
	<TD align=left width=6% nowrap>&nbsp;	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=36% nowrap>
<U><FONT size=2 face="serif">Televisions</FONT></U>	</TD>
	<TD width=18%>&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<U><FONT size=2 face="serif">53</FONT></U>	</TD>
	<TD align=left width=4% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=8%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">54</FONT></U>	</TD>
	<TD align=left width=5% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=6%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">53</FONT></U>	</TD>
	<TD align=left width=6% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=36% nowrap>
<U><FONT size=2 face="serif">Appliances</FONT></U>	</TD>
	<TD width=18%>&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<U><FONT size=2 face="serif">25</FONT></U>	</TD>
	<TD align=left width=4% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=8%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">21</FONT></U>	</TD>
	<TD align=left width=5% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=6%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">18</FONT></U>	</TD>
	<TD align=left width=6% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=36% nowrap>
<U><FONT size=2 face="serif">Audio</FONT></U>	</TD>
	<TD width=18%>&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<U><FONT size=2 face="serif">7</FONT></U>	</TD>
	<TD align=left width=4% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=8%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">9</FONT></U>	</TD>
	<TD align=left width=5% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=6%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">10</FONT></U>	</TD>
	<TD align=left width=6% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=36% nowrap>
<U><FONT size=2 face="serif">Video</FONT></U>	</TD>
	<TD width=18%>&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<U><FONT size=2 face="serif">4</FONT></U>	</TD>
	<TD align=left width=4% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=8%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">6</FONT></U>	</TD>
	<TD align=left width=5% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=6%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">7</FONT></U>	</TD>
	<TD align=left width=6% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=36% nowrap>
<U><FONT size=2 face="serif">Other</FONT></U>	</TD>
	<TD width=18%>&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<U><FONT size=2 face="serif">8</FONT></U>	</TD>
	<TD align=left width=4% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=8%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">7</FONT></U>	</TD>
	<TD align=left width=5% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=6%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">9</FONT></U>	</TD>
	<TD align=left width=6% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=36% nowrap>
<U><FONT size=2 face="serif">Total</FONT></U>	</TD>
	<TD width=18%>&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<U><FONT size=2 face="serif">97</FONT></U>	</TD>
	<TD align=left width=4% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=8%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">97</FONT></U>	</TD>
	<TD align=left width=5% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=6%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">97</FONT></U>	</TD>
	<TD align=left width=6% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=36% nowrap>
<U><FONT size=2 face="serif">Sales of services retail segment:</FONT></U>	</TD>
	<TD width=18%>&nbsp;	</TD>
	<TD align=left width=5% nowrap>&nbsp;	</TD>
	<TD align=left width=4% nowrap>&nbsp;	</TD>
	<TD width=8%>&nbsp;	</TD>
	<TD align=left width=6% nowrap>&nbsp;	</TD>
	<TD align=left width=5% nowrap>&nbsp;	</TD>
	<TD width=6%>&nbsp;	</TD>
	<TD align=left width=6% nowrap>&nbsp;	</TD>
	<TD align=left width=6% nowrap>&nbsp;	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=36% nowrap>
<U><FONT size=2 face="serif">Extended service contracts</FONT></U>	</TD>
	<TD width=18%>&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<U><FONT size=2 face="serif">3</FONT></U>	</TD>
	<TD align=left width=4% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=8%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">3</FONT></U>	</TD>
	<TD align=left width=5% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
	<TD width=6%>&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<U><FONT size=2 face="serif">3</FONT></U>	</TD>
	<TD align=left width=6% nowrap>
<U><FONT size=2 face="serif">%</FONT></U>	</TD>
</TR>
</TABLE>
<BR>
<P align="left">
<B><U><FONT size=2 face="serif">Schedule II- Valuation and Qualifying Accounts, page 78</FONT></U></B><B><FONT size=2 face="serif">  </FONT></B></P>
<P align="left">
<B><FONT size=2 face="serif">14. To the extent material please revise to disclose information related to your provision for sales returns. Alternatively, you may include this information in your footnotes. See Rules 5-04 and 12-09 of Regulation
S.X</FONT></B><FONT size=2 face="serif">.</FONT></P>
<P align="left">
<FONT size=2 face="serif">We acknowledge the comment and agree to add footnote disclosure of this information in our future filings, if material. Historically, the reserve for sales returns has been immaterial. In 2007, 2006 and 2005, the reserve
for sales returns was less than &#36;300,000 for all years presented.</FONT></P>
<P align="center">
<FONT face="serif">14</FONT></P>

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<P STYLE="page-break-before:always"></P><P align="left"><PAGE>
<B><U><FONT size=2 face="serif">Controls and Procedures, page 79</FONT></U></B></P>

<P align="left">
<B><FONT size=2 face="serif">15. We note your disclosure that your &#147;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&#146;s rules and forms.&#148; Please
revise to clarify, if true, that your officers concluded that your disclosure controls and procedures are also effective to ensure that information required to be disclosed in the reports that you file or submit under the Exchange Act is accumulated
and communicated to your management, including your chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure. See Exchange Act Rule 13a 15(e).</FONT></B></P>
<P align="left">
<FONT size=2 face="serif">Per the Staff&#146;s comment, we will revise our future periodic reports to clarify that our officers concluded that our disclosure controls and procedures are also effective to ensure that information required to be
disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
</FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Definitive Proxy Statement on Schedule 14A</FONT></U></B><B><FONT size=2 face="serif">  </FONT></B><BR>
<BR>
<B><U><FONT size=2 face="serif">Compensation Discussion and Analysis, page 7</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">16. We note that you attempt to adjust base salaries &#147;to reflect competitive market levels.&#148; Please tell us how you go about assessing competitive market levels.&#148; If you engage in benchmarking in setting
this amount, please identify the benchmark and its components, pursuant to Item 402(b)(2)(xiv) of Regulation S-K. </FONT></B></P>
<P align="left">
<FONT size=2 face="serif">We assess competitive market levels by considering base salaries paid by similarly sized companies in our industry, such as Tweeter Home Entertainment Group, Inc. and Conn&#146;s, Inc., recognizing that our executive
officers&#146; base salaries generally are below those levels. We do not engage in benchmarking in setting or adjusting base salaries. </FONT></P>
<P align="left">
<FONT size=2 face="serif">We will revise future filings to reflect this disclosure.</FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Change in Control Payments, page 9</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">17. With respect to the potential payments upon termination disclosed here and under &#147;Potential Payments Upon Termination or Change in Control,&#148; please discuss and analyze how the amounts and periods were
negotiated and how and why the company agreed to the specified amounts and periods. </FONT></B></P>
<P align="left">
<FONT size=2 face="serif">Per the Staff&#146;s comment, we will revise future disclosure under &#147;Change in Control Payments&#148; in our Compensation Discussion and Analysis to add the following: </FONT></P>
<P align="left" style="margin-left:40px">
<FONT size=2 face="serif">&#147;</FONT><U><FONT size=2 face="serif">This bonus was negotiated as part of Mr. Bearden&#146;s compensation package when he was hired</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">as our Chief
Operating Officer with primary responsibility for retail operations. The payment</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">reflects that Mr. Bearden would be significantly involved in any sale of our retail operations
and</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">is intended to provide him with a severance benefit should a sale occur during or shortly after his employment.&#148;</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P align="center">
<FONT face="serif">15</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE>
<P align="left">
<FONT size=2 face="serif">We will revise future disclosure under &#147;Potential Payments Upon Termination or Change in Control&#148; to add the following: </FONT></P>
<P align="left" style="margin-left:40px">
<FONT size=2 face="serif">&#147;</FONT><U><FONT size=2 face="serif">We agreed to pay Mr. Rose the balance of his salary and bonus because a termination without</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">cause would not
be reflective of his individual performance. Under these circumstances, we</FONT></U><FONT size=2 face="serif"> </FONT><U><FONT size=2 face="serif">believe he should receive his full contractual compensation.</FONT></U><FONT size=2 face="serif">
</FONT></P>
<P align="left" style="margin-left:40px">
<U><FONT size=2 face="serif">The amount we agreed to pay to Mr. Bearden upon a termination without cause was negotiated as an appropriate severance upon a termination not based on his individual performance</FONT></U><FONT size=2 face="serif">.&#148; </FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Certain Relationships and Related Transactions, page 18</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">18. Please disclose whether the transactions and agreements with related parties were comparable to terms you could have obtained from unaffiliated third parties. Also, if written, please file all related party contracts
as exhibits or confirm to us that they all have been filed. Finally, please revise your disclosure to identify the related person&#146;s title or relationship to you.</FONT></B></P>
<P align="left">
<FONT size=2 face="serif">Per the Staff&#146;s comment, we will disclose in future filings that we believe the lease with Stuart Rose/Beavercreek, Inc., fees paid to Chernesky, Heyman &amp; Kress P.L.L. for legal services, and amounts paid to Elcan
&amp; Associates in leasing commissions and mortgage broker fees were comparable to terms that we could have obtained from unaffiliated third parties. The commission on the sale of our interest in Somerset SynFuel, L.P. was set at a rate we believed
fair to both parties given the absence of comparable transactions. </FONT></P>
<P align="left">
<FONT size=2 face="serif">The lease with Stuart Rose/Beavercreek, Inc. has been filed as an exhibit to our Form 10-K. There are no other written agreements with related parties required to be filed as exhibits. </FONT></P>
<P align="left">
<FONT size=2 face="serif">Per the Staff&#146;s comment, related party transaction disclosure in future filings will be revised to identify the related person&#146;s title or relationship with us. For example, Stuart A. Rose, our CEO, and Lawrence
Tomchin are members of our board of directors, Edward M. Kress is a member of our board of directors, and Dan Elcan is the brother of Charles Elcan, a member of our board of directors. </FONT></P>
<P align="left">
<B><FONT size=2 face="serif">19. Please disclose the dollar value of the transaction with Dan Elcan.</FONT></B></P>
<P align="left">
<FONT size=2 face="serif">During calendar year 2006, Dan Elcan was allocated &#36;139,744 in accrued distributions from Rex Investment, LLC, and Pinnacle Advisors, LLC, an entity affiliated with Dan Elcan, received &#36;1,275,418 in payments from
the sale of its interest in Rex Investment I, LLC. </FONT></P>
<P align="left">
<FONT size=2 face="serif">We will disclose the dollar value of the transaction with Dan Elcan in future filings.</FONT></P>
<P align="left">
<B><FONT size=2 face="serif"> </FONT></B><B><U><FONT size=2 face="serif">Form 10-Q for Quarterly Period Ended April 30,
2007</FONT></U></B><B><FONT size=2 face="serif">  </FONT></B><B><U><FONT size=2 face="serif">Notes to Unaudited Consolidated Condensed Financial Statements, page 7</FONT></U></B><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="left">
<B><U><FONT size=2 face="serif">Note 4 Accounting Changes, page 11</FONT></U></B></P>
<P align="left">
<B><FONT size=2 face="serif">20. Please explain supplementally how the lower of cost or market inventory values make FIFO and LIFO produce equal results for all 3 years presented. Please be detailed in your explanation with examples as
necessary</FONT></B><FONT size=2 face="serif">. </FONT></P>
<P align="center">
<FONT face="serif">16</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE>
<P align="left">
<FONT size=2 face="serif">Historically, we have experienced price deflation in the products we sell (primarily televisions and appliances). Generally, all of our inventory has experienced deflation since we adopted LIFO accounting in 1982. As a
result, LIFO inventory valuation is irrelevant from a costing perspective, since the lower of cost or market principle requires us to mark inventory down from cost on a LIFO basis to the net realizable value. In the current and historical
deflationary environments we have operated in, there has been no difference in reported inventory values as a result of the lower of cost or market principle. For example, at January 31, 2006, LIFO inventory before the application of the lower of
cost or market principle was &#36;35.9 million compared to FIFO inventory of &#36;30.8 million.</FONT><FONT color="#ff0000" size=2 face="serif"> </FONT></P>
<P align="left">
<B><U><FONT size=2 face="serif">Note 5 Sale and Leaseback Transaction and Other Leases, page 11</FONT></U></B><B><FONT size=2 face="serif">  </FONT></B></P>
<P align="left">
<B><FONT size=2 face="serif">21. You disclose that a portion of the &#36;11.6 million deferred gain relates to stores that the Company has continuing involvement with. Any form of continuing involvement should be accounted for by the deposit method
or as a financing, whichever is appropriate under SFAS 66. Refer to paragraph 10 of SFAS 98. Please explain in detail how your method of amortizing gain achieves this result. In addition, please tell us and disclose the circumstances that result in
your continuing involvement. Refer to paragraph 17 of SFAS 98. </FONT></B></P>
<P align="left">
<FONT size=2 face="serif">We believe there is no form of continuing involvement other than a &#147;normal&#148; leaseback. Accordingly, we will revise in future filings, disclosures to distinguish that continuing involvement is limited to a
&#147;normal&#148; leaseback. </FONT></P>
<P align="left">
<FONT size=2 face="serif">As permitted by paragraph 7 in SFAS 98, we used sale-leaseback accounting, as the leaseback is a &#147;normal leaseback&#148; as described in paragraph 10 of SFAS 98. Specifically, the buyer-lessor paid us 100% of the sales
price at closing and all risks and rewards of ownership transferred to the buyer-lessor. We do not believe that the continuing involvement in the form of a normal leaseback requires us to account for the transaction using the deposit method or as a
financing. </FONT></P>
<P align="left">
<FONT size=2 face="serif">Per paragraph 27 of SFAS 98, &#147;The proper approach is first to determine the gain that would be recognized under Statement 66 as if the transaction were a sale without a leaseback and then to allocate that gain as
provided by SFAS 13 over the remaining lease term.&#148; Per SFAS 13, the total gain is recognized immediately if the leaseback is considered minor under the context of paragraph 33(a) of SFAS 13. The gain to be recognized under paragraph 33(b) of
SFAS 13 is the amount of gain in excess of the present value of the minimum lease payments if the leaseback is classified as an operating lease. Thus, the deferred gain would equal the present value of the minimum lease payments (assuming that the
total gain exceeded the present value of the minimum lease payments.) We have concluded that none of the leasebacks are minor. </FONT><B><FONT size=2 face="serif"> </FONT></B></P>
<P align="left">
<B><FONT size=2 face="serif">22. In regard to the 15</FONT></B><B><I><FONT size=2 face="serif"> </FONT></I></B><B><FONT size=2 face="serif">properties sold for which the Company also entered into</FONT></B><B><I><FONT size=2 face="serif">
</FONT></I></B><B><FONT size=2 face="serif">license agreements, please tell us, with reference to authoritative literature, how you determined the deferred gain and the related amortization period. In addition, tell us your consideration of the
&#147;rent free&#148; provisions when considering the proper financial statement impact for this and the subsequent quarterly period end. </FONT></B></P>
<P align="left">
<FONT size=2 face="serif">The accounting for the licensed stores follows the accounting for the lease stores described in Comment 21. Further we believe that the license agreements are in substance lease agreements, following the definition of a
lease in SFAS 13 paragraph 1. The cost associated with the 90 day license period is not material. </FONT></P>
<P align="center">
<FONT face="serif">17</FONT></P>

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<P STYLE="page-break-before:always"></P><PAGE>
<P align="center">
<FONT face="serif">* &nbsp;&nbsp;&nbsp;&nbsp;*  &nbsp;&nbsp;&nbsp;&nbsp;*  &nbsp;&nbsp;&nbsp;&nbsp;* &nbsp;&nbsp;&nbsp;&nbsp; *  &nbsp;&nbsp;&nbsp;&nbsp;*  &nbsp;&nbsp;&nbsp;&nbsp;*  &nbsp;&nbsp;&nbsp;&nbsp;*  &nbsp;&nbsp;&nbsp;&nbsp;* </FONT></P>
<P align="left">
<FONT size=2 face="serif">In connection with responding to the Staff&#146;s comments, we acknowledge that:</FONT></P>
<UL>
<LI>
<P align="left"><FONT size=2 face="serif">The Company is responsible for the adequacy and accuracy of the disclosure in the filing;</FONT></P></LI>
<LI>
<P align="left"><FONT size=2 face="serif">Staff comments or changes to disclosures in response to staff comments do not foreclose the Commission</FONT> <FONT size=2 face="serif">from taking any action with respect to the filing; and</FONT></P></LI>
<LI>
<P align="left"><FONT size=2 face="serif">The Company may not assert staff comments as a defense in any proceeding initiated by the Commission or</FONT> <FONT size=2 face="serif">any person under the federal securities laws of the United
States.</FONT></P></LI>
</UL>
<P align="left">
<FONT size=2 face="serif">Should you require further clarification of any of the issues raised in this letter, please contact Douglas L. Bruggeman at (937) 276-3931 (or by fax at (937) 276-8643). We respectfully request that the Staff let us know at
its earliest convenience if we can be of any further assistance. </FONT></P>
<P align="left">
<FONT size=2 face="serif">Sincerely,</FONT></P>
<P align="left">
<U><FONT size=2 face="serif">/s/ Douglas L. Bruggeman</FONT></U><FONT size=2 face="serif">  <br>
Douglas L. Bruggeman </FONT><br>

<FONT size=2 face="serif"> Vice President-Finance, Chief Financial Officer and Treasurer</FONT></P><P align="left">&nbsp;&nbsp;</P>
<P align="center">
<FONT face="serif">18</FONT></P>

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