ABILENE, Kan., June 6, 2006 (PRIMEZONE) -- Duckwall-ALCO Stores, Inc. (Nasdaq:DUCK), which operates 254 retail stores in 21 central states, today announced its operating results for the first quarter ending April 30, 2006.
Net earnings for the fist quarter were $541,000, or $0.14 per diluted share, compared with a net loss of $2.7 million, or $0.62 per diluted share, in the first quarter of the prior fiscal year.
Net sales from continuing operations for the first quarter increased 11.3% to $109.1 million, while same-store sales increased 6.6% when compared with the prior-year quarter.
President and CEO Bruce Dale stated, "We are pleased with the first quarter earnings. The results we have achieved in sales and earnings this quarter continue to reflect our focus on achieving our plan. The initiatives we have undertaken are positioning us well for future growth."
Gross margin for the first quarter decreased 130 basis points to 29.9% of sales from 31.2% in the first quarter of the prior fiscal year. Increased freight costs and promotional markdowns offset by a reduction in shrinkage related to a warehouse inventory adjustment of 46 basis points contributed to this reduction.
Operating expenses for the first quarter decreased 390 basis points to 28.9% of sales from 32.8% in the prior-year quarter.
Stock Buyback Program Update
The Company previously announced that the Board of Directors had approved the repurchase of up to 200,000 additional shares of common stock. No purchases were made during the first quarter ended April 30, 2006.
Sale-Leaseback Update
The Company previously announced that it had entered into a sale-leaseback agreement for 11 of its locations. On May 25, 2006, the Company closed on the sale-leaseback on nine of these locations. The proceeds from this portion of the agreement of approximately $9.1 million were used to reduce long-term debt. One location is currently still under construction and will be sold upon completion. The sale-leaseback on the final location is expected to be completed in mid-June.
Store Operations Update
Since January 29, 2006, the Company has opened four new ALCO stores located in Yoakum, TX, Junction City, KS, Orange City, IA and Imperial, NE. The location in Imperial, NE replaces a Duckwall store that was closed.
Investor Conference Call
The Company will host an investor conference call at 4:00 p.m. eastern daylight time on June 16, 2006, to discuss operating results in greater detail for the quarter ended April 30, 2006. The dial-in number for the conference call is 800-289-0507 (international/local participants dial 913-981-5540), and the Confirmation Code is 4246216. Parties interested in participating in the conference call should dial in approximately five minutes prior to 4:00 p.m. eastern time. A replay of the call will be available two hours after completion from June 16 through June 30 by dialing 888-203-1112 or for international/local callers by dialing 719-457-0820. The Replay Passcode is 4246216
About Duckwall-ALCO Stores, Inc.
Duckwall-ALCO Stores, Inc. is a regional retailer that specializes in offering an exceptional product selection at reasonable prices to smaller communities throughout the central United States. Our specialty is delivering those products with the friendly, personal service found in the stores of yesteryear, but with the modern convenience our customers have come to expect. With 254 stores across 21 states, we are proud to have continually provided high quality products at good value prices to our customers for 105 years.
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. Actual events or results may differ materially from those described in this press release due to a number of risks and uncertainties. Factors that 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 industry in general. Additional information regarding these and other factors that could cause actual results to differ materially from those contained in the forward-looking statements set forth in this press release are included in the Company's 10-K and 10-Q filings and other public documents, copies of which are available from the Company on request.
DUCKWALL-ALCO STORES, INC. Consolidated Statements of Operations (In thousands, except per share amounts) Unaudited Three Months Ended ----------------------- April 30, May 1, 2006 2005 -------- -------- Net sales $109,071 $ 98,026 Cost of sales 76,496 67,466 -------- -------- Gross profit 32,575 30,560 Selling, general and administrative 29,901 30,592 Depreciation and amortization 1,606 1,547 -------- -------- Total operating expenses 31,507 32,139 Operating income from continuing operations 1,068 (1,579) Interest expense 571 210 -------- -------- Earnings from continuing operations before income taxes 497 (1,789) Income tax expense 188 (633) -------- -------- Earnings from continuing operations 309 (1,156) Earnings / (loss) from discontinued operations, net of income tax 232 (1,574) -------- -------- Net earnings $ 541 $ (2,730) ======== ======== Per share data (diluted): Earnings from continuing operations $ 0.08 ($0.26) Net earnings $ 0.14 ($0.62) Weighted-average shares outstanding: Basic 3,788 4,438 Diluted 3,810 4,438 DUCKWALL-ALCO STORES, INC. Consolidated Balance Sheet (In thousands) Unaudited April 30, May 1, 2006 2005 -------- -------- Assets Current assets: Cash and cash equivalents $ 4,658 $ 3,294 Receivables 2,209 2,052 Refundable income tax -- 1,637 Inventories 143,136 127,655 Prepaid expenses 2,312 2,154 Property held for sale 350 589 -------- -------- Total current assets 152,665 137,381 -------- -------- Property and equipment 95,478 86,657 Less accumulated amortization 64,817 63,296 -------- -------- Net property and equipment 30,661 23,361 -------- -------- Property under capital leases, net of accum. amortization 6,482 2,417 Other non-current assets 29 71 Deferred income taxes 1,363 1,350 -------- -------- Total assets $191,200 $164,580 ======== ======== Liabilities and Stockholders' Equity Current Liabilities Current maturities of capital lease obligations $ 1,878 $ 856 Notes payable under revolving loan credit facility -- 6,081 Accounts payable 31,542 28,854 Accrued salaries and commissions 4,057 5,718 Accrued taxes other than income 5,153 5,359 Income taxes payable 348 -- Other current liabilities 2,740 3,384 Self-insurance claim reserve 4,137 3,612 Deferred income taxes 37 888 -------- -------- Total current liabilities 49,892 54,752 Notes payable under revolving loan credit facility 30,300 -- Capital lease obligations, less current maturities 6,835 3,512 Other noncurrent liabilities 1,387 1,449 -------- -------- Total liabilities 88,414 59,713 -------- -------- Stockholders' equity Common Stock, $.0001 par value, authorized 20,000,000 shares in 2006 and 2005; issued and outstanding 3,790,386 and 4,085,992 shares in 2006 and 2005, respectively 1 1 Additional paid-in capital 36,509 43,810 Retained earnings 66,276 61,056 -------- -------- Total stockholders' equity 102,786 104,867 -------- -------- Total liabilities and stockholders' equity $191,200 $164,580