ABILENE, Kan., April 28, 2008 (PRIME NEWSWIRE) -- Duckwall-ALCO Stores, Inc. (Nasdaq:DUCK), which currently operates 250 retail stores in 22 states; today announced its operating results for the fourth quarter and year ending February 3, 2008.
Net income for the fourth quarter was $1.0 million, or $0.27 per diluted share, compared with a net income of $4.4 million, or $1.14 per diluted share, in the fourth quarter of the prior fiscal year. The decline was attributable to the Company experiencing lower gross margin percent, increased store level wages and benefits, increased store real property rent offset by increased vendor participation in CO-OP advertising.
Net loss year-to-date was $224,000, or ($0.06) per basic share, compared with a net income of $5.7 million or $1.49 per diluted share, in the prior fiscal year.
Net sales from continuing operations for the fourth quarter increased 13.8% to $152.3 million, while same-store sales increased 5.2% when compared to 4.6% in the fourth quarter in the prior-year quarter. The current year fourth quarter consisted of 14 weeks when compared to 13 weeks for the prior-year fourth quarter. On a comparable 13 week basis, same-store sales decreased 3.2%. Year-to-date sales from continuing operations increased 6.8% to $499.0 million, while same-store sales increased 2.8% compared to 6.0% in the prior year. The current year consisted of 53 weeks when compared to 52 weeks for prior-year. On a comparable 52 week basis, same-store sales increased 0.8%.
Gross margin for the fourth quarter was 30.3% compared to 34.9% in the fourth quarter of the prior year. The gross margin percentage for the fourth quarter was negatively impacted by reduced vendor rebates, LIFO expense offset by increased new store allowances.
Year-to-date, gross margin was 31.6% compared to 31.7% in the prior-year. The decrease in gross margin was attributable to reduced vendor rebates, additional shrinkage reserve, and LIFO expense offset by increased initial mark-on percentage.
Operating expenses, which for the purposes of this release includes depreciation and amortization, for the quarter were 28.7% compared to 29.5% in the fourth quarter of the prior year. The reduction is due to decreased insurance expenses, reduced store level professional fees and increased vendor participation in CO-OP advertising, offset by increased new store expenses, increased depreciation, professional services and software maintenance fees associated with the rollout of the IT initiative.
Operating expenses for the year were 31.0% compared to 29.4% in the prior-year. The increase is due in part to decreased vendor participation in CO-OP advertising, increased payroll, credit card fees, advertising, utilities, depreciation, professional services and software maintenance fees associated with the rollout of the IT initiative and increase in utilities and new store rents.
Store Operations Update
The Company opened 18 new ALCO stores during the year ended February 3, 2008. The Company expects to open 18 new ALCO stores during fiscal year 2009, three of which are conversions of existing smaller ALCO stores.
Investor Conference Call
The Company will host an investor conference call at 10:00 a.m. Central Daylight Time on April 29, 2008 to discuss operating results in greater detail for the quarter and year ended February 3, 2008. The Company will release earnings following the close of business on April 28, 2008. The dial-in number for the conference call is 888-259-8389 (international/local participants dial 913-312-1269), and the Confirmation Code is 5094149. Parties interested in participating in the conference call should dial in approximately five minutes prior to 10:00 a.m. Central Daylight Time. A replay of the call will be available two hours after completion from April 29 through May 13 by dialing 888-203-1112 or for international/local callers by dialing 719-457-0820. The Replay Passcode is 5094149.
About Duckwall-ALCO Stores, Inc.
Duckwall-ALCO Stores, Inc. is a regional retailer that specializes in meeting the needs of smaller, underserved communities throughout the central United States. The Company offers an exceptional selection of fashionable merchandise, 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 250 stores across 22 states, Duckwall-ALCO Stores is proud to have continually provided excellent products at good value prices to its customers for 107 years. To learn more about Duckwall-ALCO Stores, Inc. 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"). Any forward-looking statements are made by the Company in good faith, pursuant to the safe-harbor provisions of the Act. These forward-looking statements reflect management's current views and projections regarding economic conditions, retail industry environments, and Company performance. 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.
Consolidated Statements of Operations
(dollars in thousands, except per share amounts)
Unaudited
Fourteen Thirteen
Weeks Weeks 53 Weeks 52 Weeks
------------------- ------------------
Feb. 3, Jan. 28, Feb. 3, Jan. 28,
2008 2007 2008 2007
--------- ------- ------- --------
Net sales $ 152,268 133,844 499,032 467,321
Cost of goods sold 106,104 87,073 341,393 318,999
--------- ------- ------- --------
Gross margin 46,164 46,771 157,639 148,322
Selling, general and
administrative 39,494 37,472 144,937 130,445
Depreciation and amortization 4,198 1,989 9,817 6,868
--------- ------- ------- --------
Total operating expenses 43,692 39,461 154,754 137,313
Operating income from
continuing operations 2,472 7,310 2,885 11,009
Interest expense 857 720 3,382 2,730
--------- ------- ------- --------
Earnings (loss) from continuing
operations before income taxes 1,615 6,590 (497) 8,279
Income tax expense (benefit) 626 2,277 (252) 2,893
--------- ------- ------- --------
Earnings (loss) from continuing
operations 989 4,313 (245) 5,386
Earnings (loss) from
discontinued operations, net
of income tax 60 80 21 318
--------- ------- ------- --------
Net earnings (loss) $ 1,049 4,393 (224) 5,704
========= ======= ======= ========
Per share data (diluted):
Earnings (loss) from continuing
operations $0.26 $1.12 ($0.06) $1.41
Net earnings (loss) $0.27 $1.14 ($0.06) $1.49
Weighted-average shares
outstanding:
Basic 3,810 3,794 3,807 3,792
Diluted 3,834 3,844 3,807 3,829
Supplemental Data:
Fourteen Thirteen
Weeks Weeks 53 Weeks 52 Weeks
Feb. 3, Jan. 28, Feb. 3, Jan. 28,
2008 2007 2008 2007
--------------------------------------
Same Store Sales change 5.2% 4.6% 2.8% 6.0%
Total customer count change 5.3% 3.9% 1.2% 2.3%
Average sale per ticket change -0.2% 4.3% 2.6% 3.8%
Adjusted EBITDA:
Earnings (loss) from continuing
operations $ 989 4,313 (245) 5,386
Plus interest 857 720 3,382 2,730
Plus taxes 626 2,277 (252) 2,893
Plus depreciation and
amortization 4,198 1,989 9,817 6,868
Plus share-based compensation 236 281 1,130 821
--------------------------------------
Adjusted EBITDA $ 6,906 9,580 13,832 18,698
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DUCKWALL-ALCO STORES, INC.
Consolidated Balance Sheet
(dollars in thousands, except share amounts)
Unaudited
February 3, January 28,
2008 2007
------------------------
Assets
Current assets:
Cash and cash equivalents $ 5,501 2,983
Receivables 4,905 3,059
Prepaid income taxes 768 --
Inventories 128,545 151,406
Prepaid expenses 3,101 1,561
Deferred income taxes 7,094 3,037
---------- ----------
Total current assets 149,914 162,046
---------- ----------
Property and equipment 91,058 87,484
Less accumulated amortization 64,019 64,451
---------- ----------
Net property and equipment 27,039 23,033
---------- ----------
Property under capital leases, net of accum.
amortization 4,917 6,953
Other non-current assets 262 44
Deferred income taxes 3,254 344
---------- ----------
Total assets $ 185,386 192,420
========== ==========
Liabilities and Stockholders' Equity
Current Liabilities
Short term debt $ 1,278 --
Current maturities of capital lease
obligations 1,860 2,128
Accounts payable 19,134 35,263
Income Taxes Payable -- 1,915
Accrued salaries and commissions 3,711 4,180
Accrued taxes other than income 4,301 4,242
Other current liabilities 7,360 3,634
Self-insurance claim reserves 4,571 4,322
---------- ----------
Total current liabilities 42,215 55,684
Long term debt 4,227 --
Notes payable under revolving loan credit
facility 20,715 21,077
Capital lease obligations, less current
maturities 4,933 6,783
Deferred gain on leases 4,985 5,372
Other noncurrent liabilities 1,139 444
---------- ----------
Total liabilities 78,214 89,360
---------- ----------
Stockholders' equity
Common Stock, $.0001 par value, authorized
20,000,000 shares in 2008 and 2007; issued
and outstanding 3,810,591 and 3,794,303
shares in 2008 and 2007, respectively 1 1
Additional paid-in capital 38,766 37,315
Retained earnings 68,405 68,744
---------- ----------
Total stockholders' equity 107,172 106,060
---------- ----------
Total liabilities and stockholders'
equity $ 185,386 195,420
========== ==========