ABILENE, Kan., June 7, 2012 (GLOBE NEWSWIRE) -- Duckwall-ALCO Stores, Inc. (Nasdaq:DUCK), which specializes in providing a superior selection of essential products for everyday life in small-town America, today announced operating results for its first quarter ended April 29, 2012.
Net sales from continuing operations for the first quarter of fiscal 2013 increased 3.6% to $117.2 million, compared to the first quarter of fiscal 2012. Same-store sales, excluding fuel center sales, increased 1.7% to $113.0 million for the first quarter of fiscal 2013, compared to a year earlier.
Net loss for the first quarter of fiscal 2013 was $1.3 million, or $0.34 per diluted share, an improvement from a loss of $1.5 million, or $0.40 per diluted share, for the first quarter of fiscal 2012. First quarter results were impacted by store closing expenses of approximately $0.04 cents a share. Adjusting for store closing expenses, loss from continuing operations was $0.30 per diluted share compared to $0.40 per diluted share for the first quarter of fiscal 2012.
Richard Wilson, President and CEO, commented, "Initiatives to build top line sales and profitability continue to improve results. Sales grew by 1.7% on a same store basis, Adjusted SG&A decreased by approximately 20 basis points to 28.4% of sales, gross margin dollars grew by 3.5% and margin rate was flat to last year at 29.5%. We remain focused on four key initiatives designed to improve sales and profitability for fiscal 2013: Improving gross margin rate by executing regional pricing strategies; rationalizing our real estate portfolio by closing unprofitable locations while modestly growing our store base with more productive locations; reducing debt by driving unproductive inventory out of the system; and growing top line sales with powerful marketing, strong value and improved customer service."
Wilson continued; "We are also excited about the initial success of our recently opened stores in Conifer, Colorado and Pinedale, Wyoming. In addition, our expanded ecommerce initiative will launch at the end of June and will include more than 13,000 new products. The team in Ecommerce, headed up by Brent Streit, VP Marketing and Ecommerce, represents an outstanding example of the dedication and strategic execution the entire management team at ALCO is committed to providing ALCO's customers and shareholders."
Investor Conference Call
The Company will host an investor conference call at 10:00 a.m. Central Time on Friday, June 8, 2012, to discuss operating results for the first quarter of fiscal year ended April 29, 2012. The dial-in number for the conference call is 888-254-2831 (international/local participants dial 913-312-0981), and the Conference Code is 1442841. Parties interested in participating in the conference call should dial in approximately five minutes prior to 10:00 a.m. Central Time. A replay of the call will be available after 1:30 p.m. Central Time June 8, 2012 through June 13, 2012, by dialing 888-203-1112 (international/local participants dial 719-457-0820), and the Replay Code is 1442841. A replay of the call will also be available four hours after completion of the call by visiting the Investors page on the Company's website, www.ALCOstores.com.
Supplemental Data
The Company has included certain tables in this press release that are set forth fully in the Company's 10-Q.
Certain Non-GAAP Financial Measures
The Company has included Adjusted SG&A and Adjusted EBITDA, non-GAAP performance measures, as part of its disclosure as a means to enhance its communications with stockholders. Certain stockholders have specifically requested this information to assist them in comparing the Company to other retailers that disclose similar non-GAAP performance measures. Further, management utilizes these measures in internal evaluation, review of performance and in comparing the Company's financial measures to those of its peers. Adjusted EBITDA differs from the most comparable GAAP financial measure (earnings [loss] from continuing operations) in that it does not include certain items, as does Adjusted SG&A. These items are excluded by management to better evaluate normalized operational cash flow and expenses excluding unusual, inconsistent and non-cash charges. To compensate for the limitations of evaluating the Company's performance using Adjusted SG&A and Adjusted EBITDA, management also utilizes GAAP performance measures such as gross margin return on investment, return on equity and cash flow from operating activities. As a result, Adjusted SG&A and Adjusted EBITDA may not reflect important aspects of the results of the Company's operations.
About Duckwall-ALCO Stores, Inc.
Duckwall-ALCO Stores, Inc. is a broad-line retailer, primarily located in small underserved communities across 23 states. The Company currently has 216 ALCO stores that offer both name brand and private label products of exceptional quality at reasonable prices. We are proud to have continually provided friendly, personal service to our customers for the past 111 years. To learn more about the Company, visit www.ALCOstores.com.
The Duckwall-ALCO Stores, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5865
Forward-looking statements
This press release contains forward-looking statements, as referenced in the Private Securities Litigation Reform Act of 1995 ("the Act"). Forward-looking statements can be identified by the inclusion of "will," "believe," "intend," "expect," "plan," "project" and similar future-looking terms. You should not rely unduly on these forward-looking statements. These forward-looking statements reflect management's current views and projections regarding economic conditions, retail industry environments, and Company performance. Forward-looking statements inherently involve risks and uncertainties, and, accordingly, actual results may vary materially. Factors which could significantly change results include but are not limited to: sales performance, expense levels, competitive activity, interest rates, changes in the Company's financial condition, and factors affecting the retail category in general. Additional information regarding these and other factors may be included in the Company's 10-Q filings and other public documents, copies of which are available from the Company on request and are available from the United States Securities and Exchange Commission.
| Duckwall-ALCO Stores, Inc. | ||
| Balance Sheets | ||
| (dollars in thousands, except share and per share amounts) | ||
|
April 29, 2012 (Unaudited) |
January 29, 2012 |
|
| Assets | ||
| Current assets: | ||
| Cash | $ 612 | $ 2,491 |
| Receivables | 9,166 | 10,334 |
| Inventories | 166,357 | 156,215 |
| Prepaid expenses | 3,039 | 3,603 |
| Deferred income tax assets | 6,617 | 5,607 |
| Property held for sale | 568 | 568 |
| Total current assets | 186,359 | 178,818 |
| Property and equipment, at cost: | ||
| Land and land improvements | 1,508 | 1,508 |
| Buildings and building improvements | 10,421 | 10,488 |
| Furniture, fixtures and equipment | 71,942 | 71,518 |
| Transportation equipment | 846 | 861 |
| Leasehold improvements | 19,254 | 19,289 |
| Construction work in progress | 1,680 | 1,177 |
| Total property and equipment | 105,651 | 104,841 |
| Less accumulated depreciation and amortization | 78,280 | 76,563 |
| Net property and equipment | 27,371 | 28,278 |
| Property under capital leases | 24,054 | 24,054 |
| Less accumulated amortization | 11,711 | 11,498 |
| Net property under capital leases | 12,343 | 12,556 |
| Other non-current assets | 742 | 754 |
| Total assets | $ 226,815 | $ 220,405 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Current maturities of capital lease obligations | $ 596 | $ 570 |
| Accounts payable | 46,866 | 26,695 |
| Accrued salaries and commissions | 4,338 | 3,984 |
| Accrued taxes other than income | 4,939 | 4,845 |
| Self-insurance claim reserves | 3,931 | 4,112 |
| Income taxes payable | 259 | — |
| Other current liabilities | 3,915 | 4,327 |
| Total current liabilities | 64,844 | 44,533 |
| Notes payable under revolving loan | 40,000 | 52,063 |
| Capital lease obligations - less current maturities | 12,612 | 12,804 |
| Deferred gain on leases | 3,343 | 3,439 |
| Deferred income taxes | 537 | 643 |
| Other non-current liabilities | 2,493 | 2,483 |
| Total liabilities | 123,829 | 115,965 |
| Stockholders' equity: | ||
| Common stock, $.0001 par value, authorized 20,000,000 shares; 3,808,338 and 3,842,745 shares issued and outstanding, respectively | 1 | 1 |
| Additional paid-in capital | 39,945 | 40,115 |
| Retained earnings | 63,040 | 64,324 |
| Total stockholders' equity | 102,986 | 104,440 |
| Total liabilities and stockholders' equity | $ 226,815 | $ 220,405 |
| Duckwall-ALCO Stores, Inc. | ||
| Statements of Operations | ||
| (dollars in thousands, except share and per share amounts) | ||
| (Unaudited) | ||
| Thirteen Week Periods Ended | ||
|
April 29, 2012 |
May 1, 2011* |
|
| Net sales | $ 117,205 | $ 113,187 |
| Cost of sales | 82,627 | 79,790 |
| Gross margin | 34,578 | 33,397 |
| Selling, general and administrative | 33,645 | 32,495 |
| Depreciation and amortization expenses | 2,111 | 2,171 |
| Total operating expenses | 35,756 | 34,666 |
| Operating loss from continuing operations | (1,178) | (1,269) |
| Interest expense | 744 | 1,069 |
| Loss from continuing operations before income taxes | (1,922) | (2,338) |
| Income tax benefit | (788) | (805) |
| Loss from continuing operations | (1,134) | (1,533) |
| Earnings (loss) from discontinued operations, net of income tax expense (benefit) of $(92) in 2013 and $7 in 2012 | (150) | 11 |
| Net loss | $ (1,284) | $ (1,522) |
| Earnings (loss) per share | ||
| Basic | ||
| Continuing operations | $ (0.30) | $ (0.40) |
| Discontinued operations | (0.04) | 0.00 |
| Net loss per share | $ (0.34) | $ (0.40) |
| Earnings (loss) per share | ||
| Diluted | ||
| Continuing operations | $ (0.30) | $ (0.40) |
| Discontinued operations | (0.04) | 0.00 |
| Net loss per share | $ (0.34) | $ (0.40) |
| *Fiscal year 2012 amounts have been revised to reflect the change in accounting for inventory. | ||
| Weighted-average shares outstanding: | ||
| Basic | 3,822,006 | 3,841,895 |
| Diluted | 3,822,006 | 3,841,895 |
| Duckwall-ALCO Stores, Inc. | ||||
| Schedule of Adjusted SG&A | ||||
| (dollars in thousands) | ||||
| (unaudited) | ||||
| Thirteen Week Periods Ended | ||||
| (dollars in thousands, except square footage ratios) |
April 29, 2012 |
May 1, 2011 |
||
| SG&A Expenses Breakout | ||||
| Store support center (1) | $ 5,284 | $ 5,363 | ||
| Distribution center | 1,788 | 1,915 | ||
| Same-store SG&A (2) | 25,442 | 25,117 | ||
| Non same-store SG&A (3) | 1,001 | — | ||
| Share-based compensation | 130 | 100 | ||
| SG&A as reported | 33,645 | 32,495 | ||
| Less: | ||||
| Share-based compensation | (130) | (100) | ||
| Preopening store costs (3) | (74) | — | ||
| Executive and staff severance (1) | (222) | (76) | ||
| Gain on sale of assets | 92 | 23 | ||
| Adjusted SG&A | $ 33,311 | $ 32,342 | ||
| Adjusted SG&A % of sales | 28.4% | 28.6% | ||
| (1) Store support center includes severance | ||||
| (2) These amounts may not agree with 10-Qs and 10-Ks of previous quarters due to stores that had reached their fourteenth period of operation. In addition, these amounts may not agree with 10-Qs and 10-Ks of previous quarters due to subsequent store closures. These closed stores are now included in discontinued operations. | ||||
| (3) Non same-stores are those stores which have not reached their fourteenth period of operation | ||||
| Duckwall-ALCO Stores, Inc. | ||||
| Schedule of Adjusted EBITDA | ||||
| (dollars in thousands) | ||||
| (unaudited) | ||||
| 52 Weeks |
Thirteen Week Periods Ended |
Trailing 52 Weeks Ended |
||
| (dollars in thousands) | Fiscal 2012 |
April 29, 2012 |
May 1, 2011 |
April 29, 2012 |
| Net earnings (loss) from continuing operations (1) | $ 1,680 | (1,134) | (1,533) | 2,079 |
| Plus: | ||||
| Interest | 4,207 | 744 | 1,069 | 3,882 |
| Tax expense (benefit) (1) | 924 | (788) | (805) | 941 |
| Depreciation and amortization (1) | 8,585 | 2,111 | 2,171 | 8,525 |
| Share-based compensation | 257 | 130 | 100 | 287 |
| Preopening store costs (2) | 557 | 74 | — | 631 |
| Executive and staff severance (3) | 143 | 222 | 76 | 289 |
| Gain (loss) on sale of assets | 252 | (92) | (23) | 183 |
| Insurance proceeds (4) | (2,270) | — | — | (2,270) |
| =Adjusted EBITDA | 14,335 | 1,267 | 1,055 | 14,547 |
| Cash | 2,491 | 612 | 5,720 | 612 |
| Debt | 65,437 | 53,208 | 64,815 | 53,208 |
| Debt, net of cash | $ 62,946 | 52,596 | 59,095 | 52,596 |
| (1) These amounts may not agree with 10-Qs and 10-Ks of previous quarters due to subsequent store closures. These closed stores are now included in discontinued operations. | ||||
| (2) These costs are not consistent quarter to quarter as the Company does not open the same number of stores in each quarter of each fiscal year. These costs are directly associated with the number of stores that have been or will be opened and are incurred prior to the grand opening of each store. | ||||
| (3) During fiscal years 2013 and 2012, the Company made departmental restructuring changes resulting in severance for various individuals. | ||||
| (4) On September 9, 2011, the Company received a $2.3 million settlement from Factory Mutual Insurance Company for damage sustained during the second quarter of fiscal 2012, due to wind and hail. | ||||