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 May 1, 2011.
Net sales from continuing operations for the first quarter of
fiscal 2012 increased $6.1 million, or 5.6%, to $114.6 million,
compared to $108.5 million in the first quarter of fiscal 2011.
Same-store sales, excluding fuel center sales, increased 3.2%,
compared to the same period in the prior fiscal year.
Net loss for the first quarter was $1.9 million, or $0.48 per
diluted share, compared to a net loss of $2.3 million, or $0.60 per
diluted share, for the first quarter of fiscal 2011.
Richard Wilson, President and CEO, commented, "Our first-quarter
results reflect continued improvement in top line sales and mark
our second consecutive quarter of positive same-store sales. The
merchandising strategies initiated last year to provide ALCO's core
customer with better value, a cleaner and more organized shopping
environment, and a new mix of product designed to increase average
basket size are the main contributors to our improved top line
sales performance."
Wilson added, "Our first-quarter net earnings improvement was
primarily a result of lower operating expenses including lower
payroll and legal expenses. Expense reduction initiatives designed
to reduce payroll expense have been effective and management
believes that these initiatives will continue to provide better
operating results throughout fiscal 2012."
First-quarter gross margin was negatively impacted by increased
sales in lower margin food and electronics businesses. The shift in
sales to these categories was not offset by commensurate growth in
seasonal apparel, and outdoor categories which carry a higher gross
margin rate. Unseasonably cool temperatures and regional weather
disruptions impacted these more profitable categories. The Company
believes as weather returns to a more typical pattern, sales in the
higher margin categories will increase and gross margins will
improve.
Wilson concluded, "The team at ALCO has executed a significant
number of major initiatives over the last 12 months. The
foundational work to stabilize same-store sales, lever a reduced
expense base and improve shareholder returns is underway and we
look forward to delivering more profitable results going
forward."
Investor Conference Call
The Company will host an investor conference call at
10:00 a.m. Central Time on Friday, June 10, 2011, to discuss
operating results for the first quarter ended May 1, 2011. The
dial-in number for the conference call is 888-778-8904
(international/local participants dial 913-312-0866), and the
Confirmation Code is 9126361. 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 10, 2011 through
June14, 2011 by dialing 888-203-1112 or for international/local
callers by dialing 719-457-0820. The Replay Passcode is 9126361. 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 110 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. Statements of Operations (dollars in
thousands, except share and per share amounts) (Unaudited) |
|
|
Thirteen Week
Periods Ended |
|
May 1, 2011 |
May 2, 2010 |
Net sales |
$114,559 |
$108,479 |
Cost of sales |
81,374 |
75,261 |
|
|
|
Gross margin |
33,185 |
33,218 |
|
|
|
Selling, general and administrative |
32,983 |
33,376 |
Depreciation and amortization expenses |
2,189 |
2,474 |
|
|
|
Total operating expenses |
35,172 |
35,850 |
|
|
|
Operating loss from continuing
operations |
(1,987) |
(2,632) |
|
|
|
Interest expense |
1,069 |
674 |
|
|
|
Loss from continuing operations before income
taxes |
(3,056) |
(3,306) |
|
|
|
Income tax benefit |
(1,136) |
(1,072) |
|
|
|
Loss from continuing operations |
(1,920) |
(2,234) |
|
|
|
Earnings (loss) from discontinued operations,
net of income tax expense (benefit) of $36 in 2012 and ($25) in
2011 |
60 |
(41) |
Net loss |
$ (1,860) |
$ (2,275) |
|
|
|
Earnings (loss) per share |
|
|
Basic |
|
|
Continuing operations |
$ (0.50) |
$ (0.59) |
Discontinued operations |
0.02 |
(0.01) |
|
|
|
Net loss per share |
$ (0.48) |
$ (0.60) |
|
|
|
Earnings (loss) per share |
|
|
Diluted |
|
|
Continuing operations |
$ (0.50) |
$ (0.59) |
Discontinued operations |
0.02 |
(0.01) |
|
|
|
Net loss per share |
$ (0.48) |
$ (0.60) |
|
|
|
|
|
|
Weighted-average shares outstanding: |
|
|
Basic |
3,841,895 |
3,811,153 |
Diluted |
3,841,895 |
3,811,153 |
|
Thirteen
Week Periods Ended |
|
May 1, 2011 |
May 2, 2010 |
|
|
|
Same-store adjusted gross margin dollar
change |
0.8% |
(2.1)% |
|
|
|
Same-store SG&A dollar change |
(0.6)% |
(0.9)% |
Same-store total customer count
change |
(3.4)% |
(3.0)% |
Same-store average sale per ticket
change |
6.8% |
0.7% |
|
Duckwall-ALCO Stores,
Inc. Schedule of Adjusted EBITDA (dollars
in thousands, except share and per share amounts) (Unaudited) |
|
|
52 Weeks |
Thirteen
Week Periods Ended |
Trailing Twelve
Periods Ended |
|
Fiscal 2011 |
May 1, 2011 |
May 2, 2010 |
May 1, 2011 |
Net earnings (loss) from continuing
operations (1) |
$(3,594) |
(1,920) |
(2,234) |
(3,280) |
Plus: |
|
|
|
|
Interest |
3,502 |
1,069 |
674 |
3,897 |
Tax benefit (1) |
(2,446) |
(1,136) |
(1,072) |
(2,510) |
Depreciation and amortization (1) |
10,014 |
2,189 |
2,474 |
9,729 |
Share-based compensation |
316 |
100 |
81 |
335 |
Preopening store costs (2) |
543 |
— |
199 |
344 |
Executive and staff severance |
540 |
48 |
— |
588 |
Store reset costs |
895 |
— |
— |
895 |
AWG transition costs |
210 |
— |
— |
210 |
=Adjusted EBITDA (1) (3)(4) |
9,980 |
350 |
122 |
10,208 |
|
|
|
|
|
Cash |
4,189 |
5,720 |
5,186 |
5,720 |
Debt |
59,072 |
64,815 |
35,606 |
64,815 |
Debt, net of cash |
$54,883 |
59,095 |
30,420 |
59,095 |
(1) These amounts may not agree with 10-Qs 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) For the trailing twelve periods ended May
1, 2011 the average open weeks for the Company's five non
same-stores was 39 weeks.
(4) During fiscal year 2011, the Company made
changes in its executive management team and warehouse
operations. For the trailing twelve periods ended May 1,
2011, these initiatives resulted in approximately $1.6 million
reduced SG&A expenses when compared to the same prior year
trailing twelve periods. The initiatives include, but are not
limited to, executive and staff reduction.
|
Duckwall-ALCO Stores,
Inc. Balance Sheets (dollars in
thousands, except share and per share amounts) |
|
|
May 1, 2011 |
January 30,
2011 |
|
(Unaudited) |
|
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$5,720 |
$4,189 |
Receivables |
7,011 |
6,847 |
Prepaid income taxes |
131 |
168 |
Inventories |
160,873 |
151,079 |
Prepaid expenses |
3,133 |
3,720 |
Deferred income taxes |
3,662 |
2,563 |
Property held for sale |
884 |
884 |
Total current assets |
181,414 |
169,450 |
|
|
|
Property and equipment, at cost: |
|
|
Land and land improvements |
1,496 |
1,496 |
Buildings and building improvements |
11,840 |
11,828 |
Furniture, fixtures and equipment |
69,555 |
69,924 |
Transportation equipment |
1,330 |
1,305 |
Leasehold improvements |
16,545 |
16,449 |
Construction work in progress |
552 |
350 |
Total property and equipment |
101,318 |
101,352 |
Less accumulated depreciation and
amortization |
74,259 |
72,788 |
Net property and equipment |
27,059 |
28,564 |
|
|
|
Property under capital leases |
22,254 |
22,254 |
Less accumulated amortization |
10,918 |
10,727 |
Net property under capital leases |
11,336 |
11,527 |
|
|
|
Deferred income taxes — non-current |
2,201 |
2,180 |
Other non-current assets |
983 |
990 |
Total assets |
$222,993 |
$212,711 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Current liabilities: |
|
|
Current maturities of long-term debt |
$1,036 |
$1,414 |
Current maturities of capital lease
obligations |
602 |
703 |
Accounts payable |
33,020 |
25,969 |
Accrued salaries and commissions |
4,382 |
4,133 |
Accrued taxes other than income |
4,599 |
4,822 |
Self-insurance claim reserves |
4,135 |
4,139 |
Other current liabilities |
3,907 |
4,607 |
Total current liabilities |
51,681 |
45,787 |
|
|
|
Notes payable under revolving loan |
51,655 |
45,282 |
Capital lease obligations - less current
maturities |
11,522 |
11,673 |
Deferred gain on leases |
3,729 |
3,826 |
Other non-current liabilities |
1,883 |
1,850 |
Total liabilities |
120,470 |
108,418 |
|
|
|
Stockholders' equity: |
|
|
Common stock, $.0001 par value,
authorized 20,000,000 shares; issued and outstanding 3,841,895
shares at May 1, 2011 and January 30, 2011 |
1 |
1 |
Additional paid-in capital |
40,093 |
40,003 |
Retained earnings |
62,429 |
64,289 |
Total stockholders' equity |
102,523 |
104,293 |
Total liabilities and stockholders'
equity |
$222,993 |
$212,711 |
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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