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ALCO Stores, Inc. Reports Operating Results for First Quarter Ended May 5, 2013

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ABILENE, Kan., June 13, 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 first quarter ended May 5, 2013.

Net sales from continuing operations during the first quarter of fiscal 2014 increased 0.9% to $117.5 million, compared to $116.5 million in the first quarter of fiscal 2013. Same-store sales, excluding fuel centers, decreased 2.2% to $112.4 million during the first quarter of fiscal 2014.

Net loss for the first quarter of fiscal 2014 was $1.7 million, or $0.51 per diluted share, compared to a net loss of $1.3 million, or $0.34 per diluted share, for the first quarter of fiscal 2013. Loss from continuing operations, net of tax, for the first quarter of fiscal 2014 was $1.7 million, or $0.51 per diluted share, compared to a loss of $1.1 million, or $0.29 per diluted share, for the first quarter of fiscal 2013.

Richard Wilson, President and CEO, commented, "Operating results for the first quarter were negatively impacted by lingering winter weather conditions in many of our markets. More than 80% of our same-store sales performance came from outdoor businesses - Outdoor Living, Horticulture, Sporting Goods and Menswear. The decrease in these outdoor businesses was partially offset by favorable sales performance in Domestics, Housewares, and Women's Apparel where customers have responded favorably to the introduction of our new apparel lines."

Wilson continued, "Although consumers remain cautious due to slow economic growth, we are encouraged by the positive impact our changes in merchandise are starting to have, and we 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, June 14, 2013, to discuss operating results for the first quarter ended May 5, 2013. The dial-in number for the conference call is 888-481-2844 (international/local participants dial 719-785-1753), and the Conference Code is 2271713. 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 June 14, 2013 through June 19, 2013, by dialing 888-203-1112 (international/local participants dial 719-457-0820), and the Replay Code is 2271713. 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 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 had 217 ALCO stores at the end of the first quarter ended May 5, 2013 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
First Quarter Ended May 5, 2013 and April 29, 2012
(dollars in thousands, except share and per share amounts)
(unaudited)
Thirteen Week Thirteen Week
Period Ended Period Ended
May 5, 2013 April 29, 2012
Net sales $ 117,520 116,500
Cost of sales 83,053 82,123
Gross margin 34,467 34,377
Selling, general and administrative 33,876 33,374
Depreciation and amortization 2,175 2,107
Total operating expenses 36,051 35,481
Operating loss from continuing operations (1,584) (1,104)
Interest expense 1,053 744
Loss from continuing operations before income taxes (2,637) (1,848)
Income tax benefit (987) (760)
Loss from continuing operations (1,650) (1,088)
Loss from discontinued operations, net of income tax benefit (18) (196)
Net loss $ (1,668) (1,284)
Loss per share
Basic
Continuing operations $ (0.51) (0.29)
Discontinued operations $ (0.00) (0.05)
Net loss per share $ (0.51) (0.34)
Loss per share
Diluted
Continuing operations $ (0.51) (0.29)
Discontinued operations $ (0.00) (0.05)
Net loss per share $ (0.51) (0.34)
Weighted-average shares outstanding:
Basic 3,258,163 3,822,006
Diluted 3,258,163 3,822,006
ALCO Stores, Inc.
Schedule of Adjusted EBITDA
(dollars in thousands)
(unaudited)
For the Thirteen Week Trailing 53 Weeks
53 Weeks Periods Ended Ended
May 5, April 29, May 5,
Fiscal 2013 2013 2012 2013
Net earnings (loss) $ 1,307 (1,668) (1,284) 923
Plus:
Interest 3,477 1,053 744 3,786
Taxes 311 (998) (880) 193
Depreciation and amortization 8,902 2,183 2,122 8,963
EBITDA 13,997 570 702 13,865
Plus:
Share-based compensation 381 140 130 391
(Gain) loss asset disposals 141 -- (92) 233
Adjusted EBITDA $ 14,519 710 740 14,489
Cash $ 3,160 2,923 612 2,923
Debt 79,962 87,978 53,208 87,978
Debt, net of cash $ 76,802 85,055 52,596 85,055
ALCO Stores, Inc.
Balance Sheets
(dollars in thousands, except share and per share amounts)
(unaudited)
May 5, 2013 February 3, 2013
Assets
Current assets:
Cash $ 2,923 $ 3,160
Receivables 12,782 12,232
Inventories 190,614 166,671
Prepaid expenses 3,459 3,767
Deferred income taxes 5,884 3,081
Property held for sale 568 568
Total current assets 216,230 189,479
Long term investments 1,293 955
Property and equipment, at cost:
Land and land improvements 5,648 5,648
Buildings and building improvements 10,499 10,499
Furniture, fixtures and equipment 74,149 74,066
Transportation equipment 988 988
Leasehold improvements 21,138 21,138
Construction work in progress 6,383 5,083
Total property and equipment 118,805 117,422
Less accumulated depreciation and amortization 83,708 81,794
Net property and equipment 35,097 35,628
Property under capital leases 26,972 26,972
Less accumulated amortization 11,743 11,476
Net property under capital leases 15,229 15,496
Deferred income tax - non current -- 1,693
Other non-current assets 558 624
Total assets $ 268,407 $ 243,875
ALCO Stores, Inc.
Balance Sheets
(dollars in thousands, except share and per share amounts)
(unaudited)
May 5, 2013 February 3, 2013
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of capital lease obligations $ 575 $ 580
Accounts payable 58,215 39,220
Accrued salaries and commissions 3,134 3,111
Accrued taxes other than income 5,409 5,046
Self-insurance claim reserves 4,086 4,429
Other current liabilities 3,578 4,429
Total current liabilities 74,997 56,815
Notes payable under revolving loan 71,627 63,446
Capital lease obligations - less current maturities 15,777 15,936
Deferred gain on leases 2,956 3,053
Other noncurrent liabilities 2,415 2,462
Total liabilities 167,772 141,712
Stockholders' equity:
Common stock, $.0001 par value, authorized 20,000,000 shares;
3,258,163 and 3,808,338 shares issued and outstanding, respectively 1 1
Additional paid-in capital 36,673 36,533
Retained earnings 63,961 65,629
Total stockholders' equity 100,635 102,163
Total liabilities and stockholders' equity $ 268,407 $ 243,875

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

Source:ALCO Stores, Inc.