ALCO Stores, Inc. Reports Operating Results For Fourth Quarter And Fiscal Year Ended February 3, 2013

ABILENE, Kan., April 18, 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 fourth quarter and fiscal year ended February 3, 2013.

Net sales from continuing operations during the fourth quarter of fiscal 2013 (14 weeks) increased 8.5% to $146.8 million, compared to $135.3 million in the fourth quarter of fiscal 2012 (13 weeks). Excluding the 14th week of the fiscal 2013 quarter, net sales from continuing operations increased 3.6% to $140.2 million. Same-store sales, excluding fuel centers, increased 4.2% to $138.7 million during the fourth quarter of fiscal 2013. Excluding the 14th week of the fiscal 2013 quarter, same-store sales, excluding fuel centers, decreased 0.5% to $132.5 million.

Net earnings for the fourth quarter of fiscal 2013 were $2.0 million, or $0.61 per diluted share, compared to $0.8 million, or $0.21 per diluted share, for the fourth quarter of fiscal 2012. Earnings from continuing operations, net of tax, for the fourth quarter of fiscal 2013 were $2.0 million, or $0.61 per diluted share, compared to $0.9 million, or $0.23 per diluted share, for the fourth quarter of fiscal 2012.

Net sales from continuing operations during the 53 weeks of fiscal year 2013 increased 3.5% to $492.6 million, compared to net sales during the 52 weeks of fiscal year 2012 of $476.0 million. Excluding the 53rd week of fiscal year 2013, net sales from continuing operations increased 2.1% to $486.1 million. Same-store sales, excluding fuel centers, during the 53 weeks of fiscal year 2013 increased 0.3% to $469.4 million. Excluding the 53rd week of fiscal year 2013, same-store sales, excluding fuel centers, decreased 1.0% to $463.2 million.

Net earnings for fiscal 2013 were $1.3 million, or $0.36 per diluted share, compared to net earnings of $1.7 million, or $0.43 per diluted share, for fiscal 2012. Included within the fiscal 2012 results are the following two events: 1) $1.4 million benefit (net of tax), or $0.37 per diluted share, related to an insurance settlement received, and 2) $0.3 million of expense (net of tax), or $0.09 per diluted share, related to the accelerated amortization of financing fees on the Company's previous credit facility. The impact of these two events on prior year earnings is a net benefit of $1.1 million, or $0.28 cents per diluted share. Excluding these two events, net earnings for fiscal 2013 were $1.3 million, or $0.36 per diluted share, compared to adjusted net earnings of $0.6 million, or $0.15 cents per diluted share, for fiscal 2012. Earnings from continuing operations, net of tax, for fiscal 2013 were $1.7 million, or $0.48 per diluted share, compared to adjusted net earnings from continuing operations of $0.8 million, or $0.21 per diluted share, for fiscal 2012.

Richard Wilson, President and CEO, commented, "In spite of a difficult economic landscape and lingering weather issues in late fiscal 2013, ALCO achieved respectable net earnings of 61 cents per share in the fourth quarter as a result of several company-wide initiatives. These actions include expanding product offerings in food and frozen categories, improving merchandise assortments in apparel and sporting goods, implementing buying efficiencies and competitive price opportunities, and delivering better customer service and a clean, easy-to-shop store environment. In addition, new stores opened in the past year are performing very well. We are encouraged by the positive impact these actions had on earnings and are equally excited about the potential benefit of price optimization initiatives we are rolling out in fiscal 2014."

Investor Conference Call

The Company will host an investor conference call at 10:00 a.m. Central Time on Friday, April 19, 2013, to discuss operating results for the fourth quarter and fiscal year ended February 3, 2013. The dial-in number for the conference call is 888-240-9373 (international/local participants dial 913-312-0376), and the Conference Code is 8688745. 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 1:00 p.m. Central Time April 19, 2013 through April 24, 2013, by dialing 888-203-1112 (international/local participants dial 719-457-0820), and the Replay Code is 8688745. 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-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 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 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.
Statements of Operations
Fiscal Years Ended February 3, 2013 and January 29, 2012
(dollars in thousands, except share and per share amounts)
  (unaudited)   (unaudited)  
  Fourteen Week Thirteen Week Fifty-Three Week Fifty-Two Week
  Period Ended Period Ended Period Ended Period Ended
  February 3, 2013 January 29, 2012 February 3, 2013 January 29, 2012
Net sales  $ 146,783  135,344  492,595  476,032
Cost of sales 105,176 96,621 343,232 331,984
Gross margin 41,607 38,723 149,363 144,048
         
Selling, general and administrative 35,390 34,684 134,746 130,951
Depreciation and amortization 2,411 2,201 8,847 8,569
Total operating expenses 37,801 36,885 143,593 139,520
         
Other operating income  --   --   --   2,270
         
Operating income from continuing operations 3,806 1,838 5,770 6,798
         
Interest expense 1,083 871 3,477 4,207
         
Earnings from continuing operations before income taxes 2,723 967 2,293 2,591
Income tax expense 748 70 565 702
         
Earnings from continuing operations 1,975 897 1,728 1,889
         
Earnings (loss) from discontinued operations, net of income tax (expense) benefit 5 (65) (421) (234)
Net earnings  $ 1,980  832  1,307  1,655
         
Earnings (loss) per share        
Basic        
Continuing operations  $ 0.61  0.23  0.48  0.49
Discontinued operations  $ 0.00  (0.02)  (0.12)  (0.06)
Net earnings per share  $ 0.61  0.21  0.36  0.43
         
Earnings (loss) per share        
Diluted        
Continuing operations  $ 0.61  0.23  0.48  0.49
Discontinued operations  $ 0.00  (0.02)  (0.12)  (0.06)
Net earnings per share  $ 0.61  0.21  0.36  0.43
         
         
Weighted-average shares outstanding:        
Basic 3,258,152 3,842,745 3,634,235 3,842,281
Diluted 3,258,152 3,842,745 3,634,235 3,842,281
 
 
 
ALCO Stores, Inc.
Schedule of Adjusted EBITDA
(dollars in thousands)
(unaudited) 
               
     For the Thirty-Nine Week   Trailing Twelve  Fourteen Week Thirteen Week  
  52 Weeks Periods Ended Period Ended Period Ended Period Ended 53 Weeks
    October 28, October 30, October 28, February 3, January 29,  
  Fiscal 2012 2012 2011 2012 2013 2012 Fiscal 2013
Net earnings (loss)  $ 1,655  (673)  823  159  1,980  832  1,307
Plus:              
Interest  4,207  2,394  3,336  3,265  1,083  871  3,477
Taxes  641  (443)  529  (331)  754  112  311
Depreciation and amortization  8,656  6,479  6,434  8,701  2,423  2,222  8,902
EBITDA  15,159  7,757  11,122  11,794  6,240  4,037  13,997
               
Plus:              
Share-based compensation  257  327  274  310  54  (17)  381
(Gain) loss asset disposals  292  (4)  (126)  414  145  418  141
Insurance proceeds (1)  (2,270)  --   (2,270)  --   --   --   -- 
Adjusted EBITDA  $ 13,438  8,080  9,000  12,518  6,439  4,438  14,519
               
               
Cash  $ 2,491  1,179  3,125  1,179  3,160  2,491  3,160
Debt  65,437  74,745  80,210  74,745  79,962  65,437  79,962
Debt, net of cash  $ 62,946  73,566  77,085  73,566  76,802  62,946  76,802
 
(1) On September 9, 2011, the Company received a $2.3 million settlement from Factory Mutual Insurance Company that represented an appearance allowance for the roofs at the Company's corporate office and warehouse in Abilene, KS.
 
 
 
ALCO Stores, Inc.
Balance Sheets
(dollars in thousands, except share and per share amounts)
  (unaudited)  
  February 3, 2013 January 29, 2012
Assets    
     
Current assets:    
Cash  $ 3,160  $ 2,491
Receivables  13,187  10,334
Inventories  166,671  156,214
Prepaid expenses  3,767  3,603
Deferred income taxes  3,081  5,607
Property held for sale  568  568
Total current assets  190,434  178,817
     
Property and equipment, at cost:    
Land and land improvements  5,648  1,508
Buildings and building improvements  10,499  10,488
Furniture, fixtures and equipment  74,066  71,518
Transportation equipment  988  861
Leasehold improvements  21,138  19,289
Construction work in progress  5,083  1,177
Total property and equipment  117,422  104,841
Less accumulated depreciation and amortization  81,794  76,563
Net property and equipment  35,628  28,278
     
Property under capital leases  26,972  24,054
Less accumulated amortization  11,476  11,498
Net property under capital leases  15,496  12,556
     
Deferred income tax - non current  1,693  -- 
Other non-current assets  624  754
     
Total assets  $ 243,875  $ 220,405
 
 
 
ALCO Stores, Inc.
Balance Sheets
(dollars in thousands, except share and per share amounts)
  (unaudited)  
  February 3, 2013 January 29, 2012
     
Liabilities and Stockholders' Equity    
     
Current liabilities:    
Current maturities of capital lease obligations  $ 580    $ 570
Accounts payable  39,220  26,695
Accrued salaries and commissions  3,111  3,984
Accrued taxes other than income  5,046  4,845
Self-insurance claim reserves  4,429  4,112
Other current liabilities  4,429  4,327
Total current liabilities  56,815  44,533
     
Notes payable under revolving loan  63,446  52,063
Capital lease obligations - less current maturities  15,936  12,804
Deferred gain on leases  3,053  3,439
Deferred income taxes  --   643
Other noncurrent liabilities  2,462  2,483
Total liabilities  141,712  115,965
Stockholders' equity:    
Common stock, $.0001 par value, authorized 20,000,000 shares; 3,258,163 and 3,842,745 shares issued and outstanding, respectively  1  1
Additional paid-in capital  36,533  40,115
Retained earnings  65,629  64,324
Total stockholders' equity  102,163  104,440
     
Total liabilities and stockholders' equity   $ 243,875   $ 220,405
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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