Duckwall-ALCO Stores Reports Operating Results for the First Quarter of Fiscal 2013
07 Junho 2012 - 5:15PM
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. |
CONTACT: Wayne S. Peterson
Senior Vice President - Chief Financial Officer
785-263-3350 X164
email: wpeterson@alcostores.com
or
Debbie Hagen
Hagen and Partners
913-642-6363
email: dhagen@hagenandpartners.com
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