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 third quarter ended October 31, 2010.
Net sales from continuing operations for the third quarter of
fiscal 2011 decreased 0.6% to $110.5 million and same-store sales
decreased 2.3%. Net sales from continuing operations year-to-date
decreased 2.8% to $341.5 million and same-store sales decreased
4.2%.
Net loss for the third quarter was $2.0 million, or $0.53 per
diluted share, compared to net loss of $1.4 million, or $0.38 per
diluted share, for the third quarter of fiscal 2010. Year-to-date
net loss for fiscal 2011 was $5.3 million, or $1.37 per diluted
share, compared to net earnings of $1.5 million, or $0.40 per
diluted share, for the same period of the prior fiscal year.
Richard Wilson, President and CEO, commented, "In the third
quarter we completed the implementation of a number of strategic
and operational initiatives that began after my arrival at the
Company in February. The 2.3% decline in same-store sales result
for the quarter, while still negative, showed improvement over
second-quarter results of negative 7.2%. I am encouraged by the
tireless dedication of our associates to accomplish the actions
aimed at improving performance, and by our recently reported
November same-store sales increase of 6.2% for ALCO
stores."
"Earnings for the quarter were impacted by a number of charges,
including $484,000 related to our store reset initiative, $210,000
related to the integration of Associated Wholesale Grocers' 'Best
Choice' and 'Always Save' brands across our ALCO stores, and
$60,000 in severance expense due to a reduction of force in our
corporate
office."
In the past eight months the Company has completed several key
initiatives. Through the third quarter, the Company has:
- Remerchandised and reset all 214 ALCO stores to expand space
devoted to key trip-driving departments such as food, paper and
cleaning products.
- Updated ALCO stores with new graphic signage featuring our
improved merchandise and brand selection.
- Improved our value proposition in the consumables businesses
with the introduction of the "Best Choice" and "Always Save"
brands.
- Integrated new space management tools designed to improve shelf
productivity and return on investment.
- Expanded our "Everyday Value" and "Dollar" merchandise
selections to position ALCO as the consumer's destination for
exceptional value for everyday needs.
"As previously announced, we have decided to close the Duckwall
stores, which are smaller stores that contributed less than 4.0% of
overall sales. After thorough analysis, the Board decided to
redeploy assets to support the core ALCO stores based on sales and
profitability," Mr. Wilson added.
"In summary, today ALCO is a better place to shop, with more
value, a stronger merchandise offering, in a more customer-friendly
store layout. We look forward to building upon these improvements
to deliver the sales and profitability results our shareholders
deserve."
Investor Conference Call
The Company will host an investor conference call at
10:00 a.m. Central Time on December 10, 2010, to discuss operating
results for the third quarter ended October 31, 2010.
The dial-in number for the conference call is
888-601-3873 (international/local participants dial 913-981-5537),
and the Confirmation Code is 6535943. 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 10,
2010 through December 15, 2010 by dialing 888-203-1112 or for
international/local callers by dialing 719-457-0820. The
Replay Passcode is 6535943. 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 Gross Margin 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 Gross Margin. 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 Gross Margin 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
Gross Margin 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 regional broad line retailer
that specializes in meeting the needs of smaller, underserved
communities across 23 states, primarily in the central United
States. The Company offers an exceptional selection of 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 214 ALCO stores,
the Company is proud to have continually provided excellent
products at good value prices to its customers for 109 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.
- Tables to follow -
Duckwall-ALCO Stores,
Inc. |
Consolidated Statements
of Operations |
(dollars in thousands, except
share and per share amounts) |
(Unaudited) |
|
|
|
|
|
|
For the Thirteen Week
Periods Ended |
For the Thirty-Nine Week
Periods Ended |
|
October 31, 2010 |
November 1, 2009 |
October 31, 2010 |
November 1, 2009 |
Net sales |
$ 110,488 |
111,194 |
341,497 |
351,173 |
Cost of sales |
75,530 |
75,635 |
233,850 |
234,921 |
Gross margin |
34,958 |
35,559 |
107,647 |
116,252 |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
35,428 |
34,709 |
106,373 |
104,740 |
Depreciation and amortization |
2,588 |
2,328 |
7,571 |
6,972 |
Total operating expenses |
38,016 |
37,037 |
113,944 |
111,712 |
|
|
|
|
|
Operating income (loss) from continuing
operations |
(3,058) |
(1,478) |
(6,297) |
4,540 |
Interest expense, net |
1,015 |
531 |
2,410 |
1,589 |
|
|
|
|
|
Earnings (loss) from continuing
operations before income taxes |
(4,073) |
(2,009) |
(8,707) |
2,951 |
Income tax expense (benefit) |
(2,105) |
(606) |
(3,656) |
1,346 |
|
|
|
|
|
Earnings (loss) from continuing
operations |
(1,968) |
(1,403) |
(5,051) |
1,605 |
|
|
|
|
|
Loss from discontinued operations, net of
income tax benefit |
(59) |
(34) |
(204) |
(61) |
Net earnings (loss) |
$ (2,027) |
$ (1,437) |
$ (5,255) |
$ 1,544 |
|
|
|
|
|
Earnings (loss) per diluted share |
|
|
|
|
Continuing operations |
$ (0.51) |
(0.37) |
$ (1.32) |
0.41 |
Net earnings (loss) per share |
$ (0.53) |
(0.38) |
$ (1.37) |
0.40 |
|
|
|
|
|
Weighted-average shares outstanding: |
|
|
|
|
Basic |
3,841 |
3,798 |
3,829 |
3,798 |
Diluted |
3,841 |
3,798 |
3,829 |
3,877 |
Supplemental Data: |
|
|
|
|
|
For the Thirteen Week
Periods Ended |
For the Thirty-Nine Week
Periods Ended |
|
October 31, 2010 |
November 1, 2009 |
October 31, 2010 |
November 1, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store gross margin dollar change |
(0.3)% |
0.8% |
(1.3)% |
1.1% |
Same-store SG&A dollar change |
0.5% |
(0.6)% |
0.7% |
(0.5)% |
Same-store total customer count change |
(2.8)% |
(0.6)% |
(3.5)% |
1.4% |
Same-store average sale per ticket
change |
0.4% |
(2.4)% |
(0.5)% |
(0.6)% |
|
|
For the Twenty-Six Week
Periods Ended |
Trailing Twelve Periods Ended |
For the Thirteen Week
Periods Ended |
Trailing Twelve Periods Ended |
|
Fiscal 2010 |
August 1, 2010 |
August 2, 2009 |
August 1, 2010 |
October 31, 2010 |
November 1, 2009 |
October 31, 2010 |
Net earnings (loss) from continuing
operations (1) |
$ 3,111 |
(3,083) |
3,008 |
(2,980) |
(1,968) |
(1,403) |
(3,545) |
Plus: |
|
|
|
|
|
|
|
Interest |
2,149 |
1,395 |
1,058 |
2,486 |
1,015 |
531 |
2,970 |
Taxes (1) |
2,181 |
(1,551) |
1,952 |
(1,322) |
(2,105) |
(606) |
(2,821) |
Depreciation and amortization (1) |
9,982 |
4,983 |
4,645 |
10,320 |
2,588 |
2,328 |
10,580 |
Share-based compensation |
757 |
200 |
447 |
510 |
68 |
155 |
423 |
Preopening store costs (2) |
128 |
382 |
-- |
510 |
110 |
2 |
618 |
Store re-set costs |
-- |
401 |
-- |
401 |
494 |
-- |
895 |
Private label implementation costs |
-- |
-- |
-- |
-- |
210 |
-- |
210 |
Executive and staff severance |
-- |
481 |
-- |
481 |
59 |
-- |
540 |
Store transformation project costs |
2,096 |
-- |
2,096 |
-- |
-- |
-- |
-- |
=Adjusted EBITDA (1)(3)(4)(5) |
20,404 |
3,208 |
13,206 |
10,406 |
471 |
1,007 |
9,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
5,164 |
3,690 |
5,446 |
3,690 |
5,356 |
5,703 |
5,356 |
Debt |
40,992 |
34,018 |
48,802 |
34,018 |
64,834 |
54,180 |
64,834 |
Debt, net of cash |
$ 35,828 |
30,328 |
43,356 |
30,328 |
59,478 |
48,477 |
59,478 |
|
|
|
|
|
|
|
|
(1) These amounts will not agree
with the fiscal year end 2010 or fiscal 2010 second quarter 10-Q
filing due to the five stores the Company closed since the second
quarter of fiscal 2010. These stores are now shown 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) For the trailing twelve
periods ended October 31, 2010 the average open weeks for the
Company's five non same-stores was 22 weeks. |
(4) The Company implemented
new initiatives for fiscal year 2010. The fiscal 2010 initiatives
are designed to better control costs and include, but are not
limited to, programs to reduce point-of-sale hardware lease and
energy expense, as well as accident reduction programs. These
initiatives achieved approximately $2.0 million in SG&A savings
for the thirty-nine weeks of fiscal 2010 when compared to the prior
year same period. |
(5) The store transformation
project completed in fiscal 2010 continues to provide SG&A
savings in fiscal 2011. This initiative achieved approximately
$458 in SG&A savings for the thirty-nine weeks of fiscal 2011
when compared to the prior year same period. |
Duckwall-ALCO Stores,
Inc. |
Consolidated Balance
Sheets |
(dollars in thousands, except
share and per share amounts) |
(Unaudited) |
|
October 31, 2010 |
November 1, 2009 |
Assets |
|
|
|
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 5,356 |
$ 5,703 |
Receivables |
5,376 |
5,998 |
Prepaid income taxes |
3,996 |
1,527 |
Inventories |
177,335 |
165,131 |
Prepaid expenses |
3,727 |
3,688 |
Deferred income taxes |
4,073 |
2,835 |
Assets held for sale |
935 |
1,531 |
Total current assets |
200,798 |
186,413 |
|
|
|
Property and equipment, at cost |
103,885 |
102,318 |
Less accumulated depreciation |
73,916 |
71,228 |
Net property and equipment |
29,969 |
31,090 |
|
|
|
Property under capital leases, net of
accumulated amortization |
7,395 |
1,931 |
Other non-current assets |
1,096 |
2,198 |
|
|
|
Total assets |
$ 239,258 |
$ 221,632 |
Duckwall-ALCO Stores,
Inc. |
Consolidated Balance
Sheets |
(dollars in thousands, except
share and per share amounts) |
(Unaudited) |
|
October 31, 2010 |
November 1, 2009 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
|
|
|
Current liabilities: |
|
|
Current maturities of long-term
debt |
$ 1,522 |
$ 1,428 |
Current maturities of capital
lease obligations |
706 |
1,929 |
Accounts payable |
46,011 |
37,290 |
Accrued salaries and
commissions |
4,942 |
5,107 |
Accrued taxes other than
income |
6,414 |
5,410 |
Self-insurance claim
reserves |
4,236 |
5,087 |
Other current liabilities |
5,130 |
4,280 |
Total current liabilities |
68,961 |
60,531 |
|
|
|
Long-term debt, less current maturities |
263 |
1,786 |
Notes payable under revolving loan
agreement |
54,865 |
47,510 |
Capital lease obligations - less current
maturities |
7,478 |
1,527 |
Deferred gain on leases |
3,922 |
4,309 |
Deferred income taxes |
858 |
160 |
Other noncurrent liabilities |
1,791 |
1,682 |
Total liabilities |
138,138 |
117,505 |
Stockholders' equity: |
|
|
Common stock, $.0001 par value,
authorized 20,000,000 shares; issued and outstanding 3,841,895
shares and 3,797,947 shares, respectively |
1 |
1 |
Additional paid-in capital |
39,955 |
39,158 |
Retained earnings |
61,164 |
64,968 |
Total stockholders' equity |
101,120 |
104,127 |
|
|
|
Total liabilities and stockholders'
equity |
$ 239,258 |
$ 221,632 |
CONTACT: Duckwall-ALCO Stores, Inc.
Wayne S. Peterson, Senior Vice President
- Chief Financial Officer
785-263-3350 X164
wpeterson@alcostores.com
Hagen and Partners
Debbie Hagen
913-652-6547
dhagen@hagenandpartners.com
Duckwall Alco (NASDAQ:DUCK)
Historical Stock Chart
From May 2024 to Jun 2024
Duckwall Alco (NASDAQ:DUCK)
Historical Stock Chart
From Jun 2023 to Jun 2024