COPPELL, Texas, Sept. 17, 2013 (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 second quarter ended August 4, 2013.
Net sales from continuing operations, excluding fuel, increased 3.9% to $122.4 million during the second quarter of fiscal 2014, compared to $117.9 million in the second quarter of fiscal 2013. Same-store sales, excluding fuel centers, increased 1.4% to $119.3 million during the second quarter of fiscal 2014. For the 26 weeks ended August 4, 2013, net sales from continuing operations, excluding fuel, increased 2.0% to $236.2 million, compared to the same period of the prior year. Same-store sales, excluding fuel centers, decreased 0.8% to $229.4 million during the 26 weeks ended August 4, 2013.
Net income was $0.5 million, or $0.15 per diluted share, for the second quarter of fiscal 2014 compared to net income of $2.0 million, or $0.52 per diluted share, for the second quarter of fiscal 2013.
Results in the second quarter of fiscal 2014 included $1.8 million ($1.2 million net of tax benefit) of non-recurring expenses attributable to the relocation of the corporate office and the pending merger. On an adjusted basis, net income from continuing operations was $1.8 million, or $0.54 per diluted share, for the second quarter of fiscal 2014.
Net loss for the 26 weeks ended August 4, 2013 was $1.2 million, or $0.36 per diluted share, compared to net income of $0.7 million, or $0.18 per diluted share, for the 26 weeks ended July 29, 2012.
Results in the first half of fiscal 2014 also included $1.8 million ($1.2 million net of tax benefit) of non-recurring expenses attributable to the relocation of the corporate office and the pending merger. On an adjusted basis, net income from continuing operations was $0.2 million, or $0.04 per diluted share, for the 26 weeks ended August 4, 2013.
Richard Wilson, President and CEO, commented, "Operating results in the second quarter benefited from an increase in average market basket and same-store sales as ALCO shoppers embraced the value proposition and merchandise mix in our stores. Excluding the non-recurring costs associated with our pending merger and the now-completed headquarters move to the Dallas area, net income per share increased modestly from the prior-year period. This summer also marked the beginning of a strategic change for ALCO Stores following the July 25 announcement of a proposed merger agreement, which shareholders will read about in the upcoming proxy filing."
Supplemental Data
The Company has included certain tables in this press release that are set forth fully in the Company's 10-K.
Certain Non-GAAP Financial Measures
The Company has included 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. 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 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 EBITDA may not reflect important aspects of the results of the Company's operations.
ALCO Stores, Inc.
ALCO Stores, Inc. is a broad-line retailer, primarily located in small underserved communities across 23 states. The Company has 213 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 112 years. To learn more about the Company 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"). 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.
- Tables to follow -
| ALCO Stores, Inc. | ||
| Balance Sheets | ||
| (dollars in thousands, except share data) | August 4, | February 3, |
| 2013 | 2013 | |
| Assets | (Unaudited) | |
| Current assets: | ||
| Cash | $2,834 | $3,160 |
| Receivables | 12,434 | 13,187 |
| Inventories | 174,528 | 166,671 |
| Prepaid expenses | 4,389 | 3,767 |
| Deferred income taxes | 4,079 | 3,081 |
| Property held for sale | 568 | 568 |
| Total current assets | 198,832 | 190,434 |
| Property and equipment, at cost: | ||
| Land and land improvements | 5,658 | 5,648 |
| Buildings and building improvements | 10,500 | 10,499 |
| Furniture, fixtures and equipment | 78,118 | 74,066 |
| Transportation equipment | 988 | 988 |
| Leasehold improvements | 21,138 | 21,138 |
| Construction work in progress | 5,575 | 5,083 |
| Total property and equipment | 121,977 | 117,422 |
| Less accumulated depreciation and amortization | 85,631 | 81,794 |
| Net property and equipment | 36,346 | 35,628 |
| Property under capital leases | 26,972 | 26,972 |
| Less accumulated amortization | 11,981 | 11,476 |
| Net property under capital leases | 14,991 | 15,496 |
| Deferred income taxes — non current | 1,538 | 1,693 |
| Other non-current assets | 1,955 | 624 |
| Total assets | $253,662 | $243,875 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Current maturities of capital lease obligations | $574 | $580 |
| Accounts payable | 30,129 | 39,220 |
| Accrued salaries and commissions | 3,674 | 3,111 |
| Accrued taxes other than income taxes | 5,559 | 5,046 |
| Self-insurance claim reserves | 4,291 | 4,429 |
| Other current liabilities | 5,812 | 4,429 |
| Total current liabilities | 50,039 | 56,815 |
| Notes payable under revolving loan | 81,562 | 63,446 |
| Capital lease obligations - less current maturities | 15,621 | 15,936 |
| Deferred gain on leases | 2,860 | 3,053 |
| Other noncurrent liabilities | 2,361 | 2,462 |
| Total liabilities | 152,443 | 141,712 |
| Stockholders' equity: | ||
| Common stock, $.0001 par value, authorized 20,000,000 shares; 3,258,163 and 3,808,338 shares issued and outstanding, respectively | 1 | 1 |
| Additional paid-in capital | 36,761 | 36,533 |
| Retained earnings | 64,457 | 65,629 |
| Total stockholders' equity | 101,219 | 102,163 |
| Total liabilities and stockholders' equity | $253,662 | $243,875 |
| ALCO Stores, Inc. | ||||
| Statements of Operations | ||||
| (dollars in thousands, except share data) | ||||
| (Unaudited) | ||||
| Thirteen Week Periods Ended | Twenty-Six Week Periods Ended | |||
| August 4, | July 29, | August 4, | July 29, | |
| 2013 | 2012 | 2013 | 2012 | |
| Net sales | $124,057 | $119,817 | $239,366 | $235,095 |
| Cost of sales | 84,848 | 80,542 | 166,059 | 161,794 |
| Gross margin | 39,209 | 39,275 | 73,307 | 73,301 |
| Selling, general and administrative | 35,052 | 32,870 | 68,509 | 65,823 |
| Depreciation and amortization expenses | 2,194 | 2,116 | 4,361 | 4,214 |
| Total operating expenses | 37,246 | 34,986 | 72,870 | 70,037 |
| Operating income | 1,963 | 4,289 | 437 | 3,264 |
| Interest expense | 957 | 792 | 2,010 | 1,536 |
| Earnings (loss) from continuing operations before income taxes | 1,006 | 3,497 | (1,573) | 1,728 |
| Income tax expense (benefit) | 376 | 1,415 | (589) | 685 |
| Earnings (loss) from continuing operations | 630 | 2,082 | (984) | 1,043 |
| Loss from discontinued operations, net of income tax benefit of $81, $59, $114, and $209 respectively | (133) | (97) | (188) | (343) |
| Net earnings (loss) | $497 | $1,985 | $(1,172) | $700 |
| Earnings (loss) per share | ||||
| Basic | ||||
| Continuing operations | $0.19 | $0.55 | $(0.30) | $0.27 |
| Discontinued operations | (0.04) | (0.03) | (0.06) | (0.09) |
| Net earnings (loss) per share | $0.15 | $0.52 | $(0.36) | $0.18 |
| Earnings (loss) per share | ||||
| Diluted | ||||
| Continuing operations | $0.19 | $0.55 | $(0.30) | $0.27 |
| Discontinued operations | (0.04) | (0.03) | (0.06) | (0.09) |
| Net earnings (loss) per share | $0.15 | $0.52 | $(0.36) | $0.18 |
| ALCO Stores, Inc. | ||||
| Schedule of Adjusted SG&A | ||||
| (Unaudited) | ||||
| Thirteen Week Periods Ended | Twenty-Six Week Periods Ended | |||
| August 4, | July 29, | August 4, | July 29, | |
| 2013 | 2012 | 2013 | 2012 | |
| SG&A Expenses from Continuing Operations | ||||
| Store support center (1) | $6,931 | $4,678 | $12,122 | $9,963 |
| Distribution center | 1,343 | 1,632 | 3,169 | 3,420 |
| 401K expense | 125 | — | 250 | — |
| Same-store SG&A (2) | 25,934 | 26,420 | 51,413 | 52,170 |
| Non same-store SG&A (3) | 631 | 40 | 1,327 | 40 |
| Share-based compensation | 88 | 100 | 228 | 230 |
| SG&A as reported | 35,052 | 32,870 | 68,509 | 65,823 |
| (Less) add: | ||||
| Share-based compensation | (88) | (100) | (228) | (230) |
| Pending merger (1) | (1,208) | — | (1,208) | — |
| Office relocation (1) | (602) | — | (602) | — |
| Gain (loss) on sale of fixed assets (1) | — | (1) | — | 92 |
| Adjusted SG&A from Continuing Operations | $33,154 | $32,769 | $66,471 | $65,685 |
| Adjusted SG&A as % of sales | 26.7% | 27.3% | 27.8% | 27.9% |
| Sales per average selling square feet (4) | $28.03 | $27.51 | $54.08 | $54.03 |
| Gross Margin dollars per average selling square feet (4) | $8.97 | $9.16 | $16.78 | $17.10 |
| Adjusted SG&A per average selling square feet (4) | $7.59 | $7.64 | $15.21 | $15.32 |
| Adjusted EBITDA per average selling square feet (4)(5) | $1.34 | $1.49 | $1.50 | $1.66 |
| Average inventory per average selling square feet (4)(6)(7) | $38.35 | $33.82 | $35.30 | $32.77 |
| Average selling square feet (4) | 4,369 | 4,287 | 4,369 | 4,287 |
| Total stores operating beginning of period | 217 | 214 | 217 | 216 |
| Total stores operating end of period | 213 | 215 | 213 | 215 |
| Total stores less than twelve months old | 3 | 6 | 3 | 6 |
| Total non-same stores | 3 | 6 | 3 | 6 |
| Supplemental Data: | ||||
| Same-store gross margin dollar change | -2.7% | -1.2% | -2.9% | 0.0% |
| Same-store SG&A dollar change | 1.3% | 2.5% | 1.0% | 1.9% |
| Same-store total customer count change | -2.8% | -6.1% | -5.4% | -4.1% |
| Same-store average sale per ticket change | 4.3% | 4.5% | 4.9% | 4.0% |
| (1) Store support center includes gain (loss) on disposal of fixed assets and costs associated with office relocation and pending merger. |
| (2) Same-stores are those stores which were open at the end of the reporting period, had reached their fourteenth month of operation, and include store locations, if any, that had experienced a remodel, an expansion, or relocation. Same-stores also include the Company's transactional website. |
| (3) Non same-stores are those stores which have not reached their fourteenth month 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) | |||||||
| Trailing | Trailing | ||||||
| Thirteen Week Periods | 53 Weeks | Thirteen Week Periods | 53 Weeks | ||||
| 53 Weeks | Ended | Ended | Ended | Ended | |||
| May 5, | April 29, | May 5, | August 4, | July 29, | August 4, | ||
| Fiscal 2013 | 2013 | 2012 | 2013 | 2013 | 2012 | 2013 | |
| Net earnings (loss) | $1,307 | (1,668) | (1,284) | 923 | 497 | 1,985 | (565) |
| Plus: | |||||||
| Interest | 3,477 | 1,053 | 744 | 3,786 | 957 | 792 | 3,951 |
| Taxes | 311 | (998) | (880) | 193 | 295 | 1,356 | (868) |
| Depreciation and amortization | 8,902 | 2,181 | 2,122 | 8,961 | 2,211 | 2,141 | 9,031 |
| EBITDA | 13,997 | 568 | 702 | 13,863 | 3,960 | 6,274 | 11,549 |
| Plus: | |||||||
| Share-based compensation | 381 | 140 | 130 | 391 | 88 | 100 | 379 |
| Pending merger | — | — | — | — | 602 | — | 602 |
| Office relocation | — | — | — | — | 1,208 | — | 1,208 |
| (Gain) loss asset disposals | 141 | — | (92) | 233 | — | 1 | 232 |
| Adjusted EBITDA | 14,519 | 708 | 740 | 14,487 | 5,858 | 6,375 | 13,970 |
| Cash | 3,160 | 2,923 | 612 | 2,923 | 2,834 | 2,407 | 2,834 |
| Debt | 79,962 | 87,979 | 53,208 | 87,979 | 97,757 | 56,567 | 97,757 |
| Debt, net of cash | $76,802 | 85,056 | 52,596 | 85,056 | 94,923 | 54,160 | 94,923 |
For more information, contact: Wayne S. Peterson Senior Vice President - Chief Financial Officer 469-322-2900 X1071 email: or Debbie Hagen Hagen and Partners 913-642-6363 email:
