ABILENE, Kan., Dec. 6, 2012 (GLOBE NEWSWIRE) -- ALCO Stores, Inc. (Nasdaq:ALCS), which specializes in providing a superior selection of essential products for everyday life in small-town America, today announced operating results for its third quarter ended October 28, 2012.
Net sales from continuing operations, excluding fuel, for the third quarter of fiscal 2013 increased 0.2% to $106.6 million, compared to the third quarter of fiscal 2012. Same-store sales, excluding fuel, decreased 3.3%. Net sales from continuing operations, excluding fuel, for the 39 weeks ended October 28, 2012, increased 1.7% to $340.7 million, compared to the same period of the prior year. Same-store sales, excluding fuel, decreased 1.2%.
Net loss for the third quarter of fiscal 2013 was $1.4 million, or $0.37 per diluted share, compared to net earnings of $0.1 million, or $0.01 per diluted share, for the third quarter of fiscal 2012. In the third quarter of fiscal 2012, an after-tax gain of $1.4 million, or $0.37 per share, was recorded for an insurance settlement that represented an appearance allowance for the roofs at the Company's corporate office and distribution center in Abilene, Kansas. On an adjusted basis, results for the prior year's third quarter were a loss of $1.3 million, or $0.36 cents per share.
Net loss for the 39 weeks ended October 28, 2012, was $0.7 million, or $0.18 per diluted share, compared to net earnings of $0.8 million, or $0.21 per diluted share, for the same period of the prior year. On a comparative basis year-over-year, results were affected by two one-time events that occurred during the 39 weeks ended October 30, 2011, the first being the insurance settlement noted above. In addition, during the second quarter of fiscal 2012, the Company entered into a new revolving credit agreement with Wells Fargo Bank, National Association and Wells Capital Finance, LLC, generating a non-cash after-tax charge of $0.3 million, or $0.08 per share. This charge represented accelerated recognition of deferred financing fees under the previous revolving credit agreement. On an adjusted basis, results for the prior year's 39 weeks ended October 30, 2011 were a loss of $0.3 million, or $0.08 cents per share.
Adjusted EBITDA for the third quarter of fiscal 2013 was $1.4 million, compared to $1.0 million in the same quarter of the prior year. In the 39 weeks ended October 28, 2012, adjusted EBITDA was $9.4 million, compared to $9.6 million in the same period of the prior year.
Richard Wilson, President and CEO, commented, "Sales efforts in the third quarter and for fiscal 2013 year-to-date struggled to overcome weak consumer demand due to warm weather and the ongoing impact of drought in rural areas across our Midwestern footprint. Our stronger pricing disciplines delivered improvement in gross margin, but we clearly need to drive top-line growth to increase operating income and returns for ALCO Stores, Inc. shareholders. We are executing several initiatives to add momentum to our sales, including the launch of frozen and expanded refrigerated foods beginning late in the third quarter, our regional merchandising roll-out focusing on increasing quality in winter apparel and sporting goods targeting local needs, new leadership and upgraded merchandising in our apparel areas, and marketing of our robust Ecommerce platform, which has expanded our offering to over 20,000 value-priced items on our website ALCOstores.com."
Investor Conference Call
ALCO Stores, Inc. will host an investor conference call at 10:00 a.m. Central Time on Friday, December 7, 2012, to discuss operating results for the fiscal year's third quarter, ended October 28, 2012. The dial-in number for the conference call is 800-289-0493 (international/local participants dial 913-312-0655), and the Conference Code is 1788646. 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 December 7, 2012, through December 12, 2012, by dialing 888-203-1112 (international/local participants dial 719-457-0820), and the Replay Code is 1788646. 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 ALCO Stores, Inc.
ALCO Stores, Inc. is a broad-line retailer, primarily located in small underserved communities across 23 states. The Company currently has 217 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 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.
|
ALCO Stores, Inc. Balance Sheets (dollars in thousands, except share data) |
||
| October 28, 2012 |
January 29, 2012 |
|
| (Unaudited) | ||
| Assets | ||
| Current assets: | ||
| Cash | $ 1,179 | $ 2,491 |
| Receivables | 10,413 | 10,334 |
| Inventories | 192,008 | 156,215 |
| Prepaid expenses | 4,049 | 3,603 |
| Deferred income tax assets | 6,147 | 5,607 |
| Property held for sale | 568 | 568 |
| Total current assets | 214,364 | 178,818 |
| Property and equipment, at cost: | ||
| Land and land improvements | 1,544 | 1,508 |
| Buildings and building improvements | 10,469 | 10,488 |
| Furniture, fixtures and equipment | 73,404 | 71,518 |
| Transportation equipment | 846 | 861 |
| Leasehold improvements | 20,450 | 19,289 |
| Construction work in progress | 5,621 | 1,177 |
| Total property and equipment | 112,334 | 104,841 |
| Less accumulated depreciation and amortization | 81,851 | 76,563 |
| Net property and equipment | 30,483 | 28,278 |
| Property under capital leases | 27,956 | 24,054 |
| Less accumulated amortization | 12,191 | 11,498 |
| Net property under capital leases | 15,765 | 12,556 |
| Other non-current assets | 770 | 754 |
| Total assets | $ 261,382 | $ 220,405 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Current maturities of capital lease obligations | $ 583 | $ 570 |
| Accounts payable | 61,859 | 26,695 |
| Accrued salaries and commissions | 4,221 | 3,984 |
| Accrued taxes other than income taxes | 5,664 | 4,845 |
| Self-insurance claim reserves | 3,898 | 4,112 |
| Income taxes payable | 154 | — |
| Other current liabilities | 4,513 | 4,327 |
| Total current liabilities | 80,892 | 44,533 |
| Notes payable under revolving loan | 58,000 | 52,063 |
| Capital lease obligations – less current maturities | 16,162 | 12,804 |
| Deferred gain on leases | 3,149 | 3,439 |
| Deferred income taxes – non-current | 537 | 643 |
| Other non-current liabilities | 2,511 | 2,483 |
| Total liabilities | 161,251 | 115,965 |
| Stockholders' equity: | ||
| Common stock, $.0001 par value, authorized 20,000,000 shares; 3,257,817 and 3,842,745 shares issued and outstanding, respectively | 1 | 1 |
| Additional paid-in capital | 36,479 | 40,115 |
| Retained earnings | 63,651 | 64,324 |
| Total stockholders' equity | 100,131 | 104,440 |
| Total liabilities and stockholders' equity | $ 261,382 | $ 220,405 |
|
ALCO Stores, Inc. Statements of Operations (dollars in thousands, except share data) (Unaudited) |
||||
| Thirteen Week Periods Ended | Thirty-Nine Week Periods Ended | |||
| October 28, 2012 | October 30, 2011* | October 28, 2012 | October 30, 2011* | |
| Net sales | $ 108,185 | $ 108,149 | $ 345,812 | $ 340,688 |
| Cost of sales | 74,528 | 75,012 | 238,057 | 235,363 |
| Gross margin | 33,657 | 33,137 | 107,755 | 105,325 |
| Selling, general and administrative expenses | 32,676 | 32,480 | 99,355 | 96,267 |
| Depreciation and amortization expenses | 2,204 | 2,084 | 6,436 | 6,368 |
| Total operating expenses | 34,880 | 34,564 | 105,791 | 102,635 |
| Other operating income | — | 2,270 | — | 2,270 |
| Operating income (loss) from continuing operations | (1,223) | 843 | 1,964 | 4,960 |
| Interest expense | 859 | 619 | 2,395 | 3,336 |
| Earnings (loss) from continuing operations before income taxes | (2,082) | 224 | (431) | 1,624 |
| Income tax expense (benefit) | (839) | 48 | (183) | 632 |
| Earnings (loss) from continuing operations | (1,243) | 176 | (248) | 992 |
| Loss from discontinued operations, net of income tax benefit of $80, $77, $260, and $103, respectively | (130) | (127) | (425) | (169) |
| Net earnings (loss) | $ (1,373) | $ 49 | $ (673) | $ 823 |
| Earnings (loss) per share | ||||
| Basic | ||||
| Continuing operations | $ (0.34) | $ 0.04 | $ (0.07) | $ 0.25 |
| Discontinued operations | (0.03) | (0.03) | (0.11) | (0.04) |
| Net earnings (loss) per share | $ (0.37) | $ 0.01 | $ (0.18) | $ 0.21 |
| Earnings (loss) per share | ||||
| Diluted | ||||
| Continuing operations | $ (0.34) | $ 0.04 | $ (0.07) | $ 0.25 |
| Discontinued operations | (0.03) | (0.03) | (0.11) | (0.04) |
| Net earnings (loss) per share | $ (0.37) | $ 0.01 | $ (0.18) | $ 0.21 |
| *Fiscal year 2012 amounts have been revised to reflect the change in accounting for inventory. | ||||
| Weighted-average shares outstanding: | ||||
| Basic | 3,677,357 | 3,842,745 | 3,769,234 | 3,842,745 |
| Diluted | 3,677,357 | 3,842,745 | 3,769,234 | 3,842,745 |
|
ALCO Stores, Inc. Schedule of Adjusted SG&A (Unaudited) |
||||
| Thirteen Week Periods Ended | Thirty-Nine Week Periods Ended | |||
| (dollars and average selling square feet in thousands, except square footage ratios) |
October 28, 2012 |
October 30, 2011 |
October 28, 2012 |
October 30, 2011 |
| SG&A Expenses Breakout | ||||
| Store support center (1) | $ 5,245 | 4,755 | 15,207 | 14,812 |
| Distribution center | 1,667 | 2,051 | 5,087 | 5,665 |
| 401K benefit | — | (53) | — | (53) |
| Same-store SG&A (2) | 24,308 | 25,292 | 75,184 | 75,223 |
| Non same-store SG&A (3) | 1,359 | 343 | 3,550 | 346 |
| Share-based compensation | 97 | 92 | 327 | 274 |
| SG&A as reported | 32,676 | 32,480 | 99,355 | 96,267 |
| Less: | ||||
| Share-based compensation | (97) | (92) | (327) | (274) |
| Preopening store costs (3) | (171) | (233) | (416) | (236) |
| Executive and corporate staff severance (1) | (49) | — | (271) | (131) |
| Gain (loss) on sale of assets (1) | (87) | (9) | 4 | 126 |
| Adjusted SG&A | $ 32,272 | 32,146 | 98,345 | 95,752 |
| Adjusted SG&A % of sales | 29.8% | 29.7% | 28.4% | 28.1% |
|
Sales per average selling square foot (4) |
$ 24.50 | 25.41 | 78.77 | 80.06 |
| Gross Margin dollars per average selling square feet (4) | $ 7.62 | 7.79 | 24.54 | 24.75 |
| Adjusted SG&A per average selling square foot (4) | $ 7.31 | 7.55 | 22.40 | 22.50 |
| Adjusted EBITDA per average selling square foot (4)(5) | $ 0.31 | 0.23 | 2.14 | 2.25 |
| Average inventory per average selling square foot (4)(6)(7) | $ 33.98 | 35.24 | 33.83 | 34.13 |
| Average selling square feet (4) | 4,416 | 4,255 | 4,390 | 4,255 |
| Total stores operating beginning of period | 215 | 213 | 216 | 214 |
| Total stores operating end of period | 215 | 214 | 215 | 214 |
| Total non same-stores | 6 | 1 | 6 | 1 |
| Supplemental Data: | ||||
| Same-store gross margin dollar change | (2.1)% | 0.3% | (0.7)% | 0.9% |
| Same-store SG&A dollar change | (3.8)% | 0.1% | 0.0% | (1.0)% |
| Same-store total customer count change | (6.8)% | (3.9)% | (5.0)% | (3.0)% |
| Same-store average sale per ticket change | 3.7% | 6.9% | 4.0% | 7.7% |
|
(1) Store support center includes severance and gain (loss) on sale of assets (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 (4) Average selling square feet is calculated as beginning square feet plus ending square feet divided by 2 (5) Adjusted EBITDA per average selling square foot is calculated as Adjusted EBITDA divided by average selling square feet (6) Average store level merchandise inventory is calculated as beginning inventory plus ending inventory divided by 2 (7) Excludes inventory for unopened stores |
||||
|
ALCO Stores, Inc. Schedule of Adjusted EBITDA (Unaudited) |
|||||||
|
Twenty-Six Week Periods Ended |
Trailing 52 Weeks Ended |
Thirteen Week Periods Ended |
Trailing 52 Weeks Ended |
||||
| (dollars in thousands) |
52 Weeks Fiscal 2012 |
July 29, 2012 |
July 31, 2011 |
July 29, 2012 |
October 28, 2012 |
October 30, 2011 |
October 28, 2012 |
| Net earnings (loss) from continuing operations (1) | $ 1,839 | 995 | 817 | 2,017 | (1,243) | 176 | 598 |
| Plus: | |||||||
| Interest | 4,207 | 1,536 | 2,718 | 3,025 | 859 | 619 | 3,265 |
| Tax expense (benefit) (1) | 753 | 656 | 583 | 826 | (839) | 48 | (61) |
| Depreciation and amortization (1) | 8,569 | 4,232 | 4,283 | 8,518 | 2,204 | 2,084 | 8,638 |
| Share-based compensation | 257 | 229 | 182 | 304 | 97 | 92 | 309 |
| Preopening store costs (2) | 557 | 245 | 3 | 799 | 171 | 233 | 737 |
| Executive and corporate staff severance (3) | 143 | 222 | 131 | 234 | 49 | — | 283 |
| (Gain) loss on sale of assets | 252 | (92) | (135) | 295 | 87 | 9 | 373 |
| Insurance proceeds (4) | (2,270) | — | — | (2,270) | — | (2,270) | — |
| =Adjusted EBITDA (1) (3)(4) | 14,307 | 8,023 | 8,582 | 13,748 | 1,385 | 991 | 14,142 |
| Cash | 2,491 | 2,407 | 6,431 | 2,407 | 1,179 | 3,125 | 1,179 |
| Debt | 65,437 | 56,567 | 65,380 | 56,567 | 74,745 | 80,211 | 74,745 |
| Debt, net of cash | $ 62,946 | 54,160 | 58,949 | 54,160 | 73,566 | 77,086 | 73,566 |
|
(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. (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. |
|||||||