ABILENE, Kan., June 12, 2008 (PRIME NEWSWIRE) -- Duckwall-ALCO Stores, Inc. (Nasdaq:DUCK), which operates 256 retail stores in 22 states, today announced operating results for its first quarter ending May 4, 2008.
Net loss for the first quarter was $5.9 million, or $1.53 per basic share, compared with a net loss of $2.2 million, or $0.59 per basic share, in the first quarter of the prior fiscal year.
Net sales from continuing operations for the first quarter decreased 0.3% to $106.0 million, while same-store sales decreased 8.4%.
Gross margin for the first quarter was 30.0% compared with 30.9% in the first quarter of the prior year. Contributing to the quarter's decrease were the inventory reserve expense of $1.3 million, increased store level markdowns and increased freight.
Operating expenses, including depreciation and amortization, were 36.5% of sales for the quarter compared to 33.0% in the first quarter of the prior year. The increase was due to severance charges of $1.8 million, increased real property rent, and new-store opening expenses, offset by reduced share-based compensation expense of $610,000 and reduced costs for supplies. Excluding severance charges and new-store opening expenses, SG&A expenses were 34.0% and 32.8% respectively for first quarter fiscal 2009 and first quarter fiscal 2008. The Company opened six new stores in the first quarter of fiscal 2009, compared to one new store opened in the first quarter of fiscal 2008.
Donny Johnson, Interim President and CEO commented: "The first quarter of fiscal 2009 was a time for very significant changes for the Company: new members and direction on our Board of Directors, the resignation of our previous President and CEO, reductions in corporate staff, and actions by the Company to exit 14 markets. The Company has positioned itself to show stronger sales and reduced selling, general and administrative expenses for the remainder of fiscal 2009."
Store Operations Update
Since February 3, 2008, the Company has closed ten ALCO stores, four Duckwall stores, and three Duckwall stores where an ALCO store was opened in the same market. The increase in loss from discontinued operations is due to the expenses associated with the 14 stores closed where the Company exited the market.
Investor Conference Call
The Company will host an investor conference call at 10:00 a.m. Central Daylight Time on June 12, 2008, to discuss operating results for the first quarter ended May 4, 2008. The dial-in number for the conference call is 888-219-1420 (international/local participants dial 913-312-1390), and the Confirmation Code is 6945457. Parties interested in participating in the conference call should dial in approximately five minutes prior to 10:00 a.m. Central Daylight Time. A replay of the call will be available from two hours after completion on June 12 through June 27 by dialing 888-203-1112 or for international/local callers by dialing 719-457-0820. The Replay Passcode is 6945457.
About Duckwall-ALCO Stores, Inc.
Duckwall-ALCO Stores, Inc. is a regional retailer that specializes in meeting the needs of smaller, underserved communities throughout the central United States. The Company offers an exceptional selection of fashionable merchandise, quality products and recognized brand names at reasonable prices. Its specialty is delivering those products with the friendly, personal service its customers have come to expect. With 256 stores across 22 states, Duckwall-ALCO Stores is proud to have continually provided excellent products at good value prices to its customers for 107 years. To learn more about Duckwall-ALCO Stores, Inc. visit www.ALCOstores.com.
Forward-looking statements
This press release contains forward-looking statements, as referenced in the Private Securities Litigation Reform Act of 1995 ("the Act"). Any forward-looking statements are made by the Company in good faith, pursuant to the safe-harbor provisions of the Act. These forward-looking statements reflect management's current views and projections regarding economic conditions, retail industry environments, and Company performance. 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. and Subsidiaries
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
For the Thirteen Week
Periods Ended
--------- ---------
May 4, April 29,
2008 2007
--------- ---------
Net sales $ 105,982 $ 106,265
Cost of sales 74,146 73,456
--------- ---------
Gross margin 31,836 32,809
Selling, general and administrative 36,912 33,351
Depreciation and amortization 1,774 1,753
--------- ---------
Total operating expenses 38,686 35,104
Operating loss from continuing operations (6,850) (2,295)
Interest expense 605 758
--------- ---------
Loss from continuing operations before income
taxes (7,455) (3,053)
Income tax benefit (3,063) (1,206)
--------- ---------
Loss from continuing operations (4,392) (1,847)
Loss from discontinued operations, net of
income benefit (1,460) (385)
--------- ---------
Net loss $ (5,852) $ (2,232)
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Loss per diluted share
Continuing operations $ (1.15) $ (0.49)
--------- ---------
Net earnings $ (1.53) $ (0.59)
--------- ---------
Weighted-average shares outstanding:
Basic 3,811 3,800
Diluted 3,811 3,800
Supplemental Data: Thirteen Weeks Ended
May 4, April 29,
2008 2007
--------- ---------
Same store sales change -8.4% 1.2%
Total customer count change -9.5% -2.7%
Average sale per ticket change 1.3% 3.7%
Loss from continuing operations $ (4,392) $ (1,847)
Plus interest 605 758
Plus taxes (3,063) (1,206)
Plus depreciation and amortization 1,774 1,753
Plus share-based compensation expense (329) 282
Plus preopening expenses 722 100
Plus inventory review initiative 1,345 --
Plus executive and staff severance 1,942 128
--------- ---------
EBITDA from continuing operations $ (1,396) $ (32)
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Duckwall-ALCO Stores, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands, except share amounts)
(Unaudited)
May 4, April 29,
2008 2007
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 4,977 $ 4,986
Receivables 3,898 4,571
Prepaid expenses 3,263 2,957
Prepaid income taxes 4,955 1,780
Inventories 145,123 158,820
Deferred income taxes 6,835 3,037
--------- ---------
Total current assets 169,051 176,151
--------- ---------
Property and equipment, at cost 89,315 88,619
Less accumulated depreciation 61,360 65,400
--------- ---------
Net property and equipment 27,955 23,219
--------- ---------
Property under capital leases, net of
accumulated amortization 4,435 6,447
Other non-current assets 270 35
Deferred income taxes 3,028 5,580
--------- ---------
Total assets $ 204,739 $ 211,432
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Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $ 1,298 $ --
Current maturities of capital lease
obligations 1,840 2,060
Accounts payable 36,023 39,487
Accrued salaries and commissions 5,685 4,012
Accrued taxes other than income 3,554 5,173
Self-insurance claim reserves 4,693 4,719
Other current liabilities 6,344 3,714
--------- ---------
Total current liabilities 59,437 59,165
Long-term debt, less current maturities 3,895 --
Notes payable under revolving loan 29,671 34,076
Capital lease obligations - less current
maturities 4,376 6,305
Deferred gain on leases 4,888 5,276
Other noncurrent liabilities 1,594 2,477
--------- ---------
Total liabilities 103,861 107,299
--------- ---------
Stockholders' equity:
Common stock, $.0001 par value, authorized
20,000,000 shares; issued and outstanding
3,810,591 shares and 3,804,216 shares,
respectively 1 1
Additional paid-in capital 38,324 37,735
Retained earnings 62,553 66,397
--------- ---------
Total stockholders' equity 100,878 104,133
--------- ---------
Total liabilities and stockholders' equity $ 204,739 $ 211,432
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