ALCO Stores, Inc. Reports Operating Results for Third Quarter and Year-to-Date Fiscal 2013

ALCO Stores, Inc. Reports Operating Results for Third Quarter and Year-to-Date
Fiscal 2013

ABILENE, Kan., Dec. 6, 2012 (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 third quarter ended October 28, 2012.

Net sales from continuing operations, excluding fuel, for the third quarter of
fiscal 2013 increased 0.2% to $106.6 million, compared to the third quarter of
fiscal 2012. Same-store sales, excluding fuel, decreased 3.3%. Net sales from
continuing operations, excluding fuel, for the 39 weeks ended October 28,
2012, increased 1.7% to $340.7 million, compared to the same period of the
prior year. Same-store sales, excluding fuel, decreased 1.2%.

Net loss for the third quarter of fiscal 2013 was $1.4 million, or $0.37 per
diluted share, compared to net earnings of $0.1 million, or $0.01 per diluted
share, for the third quarter of fiscal 2012. In the third quarter of fiscal
2012, an after-tax gain of $1.4 million, or $0.37 per share, was recorded for
an insurance settlement that represented an appearance allowance for the roofs
at the Company's corporate office and distribution center in Abilene, Kansas.
On an adjusted basis, results for the prior year's third quarter were a loss
of $1.3 million, or $0.36 cents per share.

Net loss for the 39 weeks ended October 28, 2012, was $0.7 million, or $0.18
per diluted share, compared to net earnings of $0.8 million, or $0.21 per
diluted share, for the same period of the prior year. On a comparative basis
year-over-year, results were affected by two one-time events that occurred
during the 39 weeks ended October 30, 2011, the first being the insurance
settlement noted above.In addition, during the second quarter of fiscal 2012,
the Company entered into a new revolving credit agreement with Wells Fargo
Bank, National Association and Wells Capital Finance, LLC, generating a
non-cash after-tax charge of $0.3 million, or $0.08 per share.This charge
represented accelerated recognition of deferred financing fees under the
previous revolving credit agreement. On an adjusted basis, results for the
prior year's 39 weeks ended October 30, 2011 were a loss of $0.3 million, or
$0.08 cents per share.

Adjusted EBITDA for the third quarter of fiscal 2013 was $1.4 million,
compared to $1.0 million in the same quarter of the prior year. In the 39
weeks ended October 28, 2012, adjusted EBITDA was $9.4 million, compared to
$9.6 million in the same period of the prior year.

Richard Wilson, President and CEO, commented, "Sales efforts in the third
quarter and for fiscal 2013 year-to-date struggled to overcome weak consumer
demand due to warm weather and the ongoing impact of drought in rural areas
across our Midwestern footprint. Our stronger pricing disciplines delivered
improvement in gross margin, but we clearly need to drive top-line growth to
increase operating income and returns for ALCO Stores, Inc. shareholders. We
are executing several initiatives to add momentum to our sales, including the
launch of frozen and expanded refrigerated foods beginning late in the third
quarter, our regional merchandising roll-out focusing on increasing quality in
winter apparel and sporting goods targeting local needs, new leadership and
upgraded merchandising in our apparel areas, and marketing of our robust
Ecommerce platform, which has expanded our offering to over 20,000
value-priced items on our website ALCOstores.com."

Investor Conference Call

ALCO Stores, Inc. will host an investor conference call at 10:00 a.m. Central
Time on Friday, December 7, 2012, to discuss operating results for the fiscal
year's third quarter, ended October 28, 2012. The dial-in number for the
conference call is 800-289-0493 (international/local participants dial
913-312-0655), and the Conference Code is 1788646. 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 December 7, 2012, through December 12, 2012, by dialing
888-203-1112 (international/local participants dial 719-457-0820), and the
Replay Code is 1788646. 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 SG&A 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
certainitems, as does Adjusted SG&A. 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 SG&A and Adjusted
EBITDA, management also utilizesGAAP performance measures such as gross
margin return on investment, return on equity and cash flow from operating
activities. As a result, Adjusted SG&A and Adjusted EBITDAmay not reflect
important aspects of the results of the Company's operations.

About ALCO Stores, Inc.

ALCO Stores, Inc. is a broad-line retailer, primarily located in small
underserved communities across 23 states.The Company currently 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 111 years.To learn
more about the Company, visit www.ALCOstores.com.

The 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.


ALCO Stores, Inc.
Balance Sheets
(dollars in thousands, except share data)

                                                 October 28, 2012 January29,
                                                                   2012
                                                 (Unaudited)      
Assets                                                            
Current assets:                                                   
Cash                                              $ 1,179          $ 2,491
Receivables                                       10,413           10,334
Inventories                                       192,008          156,215
Prepaid expenses                                  4,049            3,603
Deferred income tax assets                        6,147            5,607
Property held for sale                            568              568
Total current assets                              214,364          178,818
                                                                 
Property and equipment, at cost:                                  
Land and land improvements                        1,544            1,508
Buildings and building improvements               10,469           10,488
Furniture, fixtures and equipment                 73,404           71,518
Transportation equipment                          846              861
Leasehold improvements                            20,450           19,289
Construction work in progress                     5,621            1,177
Total property and equipment                      112,334          104,841
Less accumulated depreciation and amortization    81,851           76,563
Net property and equipment                        30,483           28,278
                                                                 
Property under capital leases                     27,956           24,054
Less accumulated amortization                     12,191           11,498
Net property under capital leases                 15,765           12,556
                                                                 
Other non-current assets                          770              754
Total assets                                      $ 261,382        $ 220,405
                                                                 
Liabilities and Stockholders' Equity                              
Current liabilities:                                              
Current maturities of capital lease obligations   $ 583            $ 570
Accounts payable                                  61,859           26,695
Accrued salaries and commissions                  4,221            3,984
Accrued taxes other than income taxes             5,664            4,845
Self-insurance claim reserves                     3,898            4,112
Income taxes payable                              154              —
Other current liabilities                         4,513            4,327
Total current liabilities                         80,892           44,533
                                                                 
Notes payable under revolving loan                58,000           52,063
Capital lease obligations – less current          16,162           12,804
maturities
Deferred gain on leases                           3,149            3,439
Deferred income taxes – non-current               537              643
Other non-current liabilities                     2,511            2,483
Total liabilities                                 161,251          115,965
                                                                 
Stockholders' equity:                                             
Common stock, $.0001 par value, authorized
20,000,000 shares; 3,257,817 and 3,842,745 shares 1                1
issued and outstanding, respectively
Additional paid-in capital                        36,479           40,115
Retained earnings                                 63,651           64,324
Total stockholders' equity                        100,131          104,440
Total liabilities and stockholders' equity        $ 261,382        $ 220,405


ALCO Stores, Inc.
Statements of Operations
(dollars in thousands, except share data)
(Unaudited)

                             Thirteen Week Periods   Thirty-Nine Week Periods
                              Ended                   Ended
                             October 28, October 30, October 28,  October 30,
                              2012        2011*       2012         2011*
Net sales                     $ 108,185   $ 108,149   $ 345,812    $ 340,688
Cost of sales                 74,528      75,012      238,057      235,363
                                                               
Gross margin                  33,657      33,137      107,755      105,325
                                                               
Selling, general and          32,676      32,480      99,355       96,267
administrative expenses
Depreciation and amortization 2,204       2,084       6,436        6,368
expenses
                                                               
Total operating expenses      34,880      34,564      105,791      102,635
                                                               
Other operating income        —           2,270       —            2,270
                                                               
Operating income (loss) from  (1,223)     843         1,964        4,960
continuing operations
                                                               
Interest expense              859         619         2,395        3,336
                                                               
Earnings (loss) from
continuing operations before  (2,082)     224         (431)        1,624
income taxes
                                                               
Income tax expense (benefit)  (839)       48          (183)        632
                                                               
Earnings (loss) from          (1,243)     176         (248)        992
continuing operations
                                                               
Loss from discontinued
operations, net of income tax (130)       (127)       (425)        (169)
benefit of $80, $77, $260,
and $103, respectively
Net earnings (loss)           $ (1,373)   $ 49        $ (673)      $ 823
                                                               
Earnings (loss) per share                                       
Basic                                                           
Continuing operations         $ (0.34)    $ 0.04      $ (0.07)     $ 0.25
Discontinued operations       (0.03)      (0.03)      (0.11)       (0.04)
                                                               
Net earnings (loss) per share $ (0.37)    $ 0.01      $ (0.18)     $ 0.21
                                                               
Earnings (loss) per share                                       
Diluted                                                         
Continuing operations         $ (0.34)    $ 0.04      $ (0.07)     $ 0.25
Discontinued operations       (0.03)      (0.03)      (0.11)       (0.04)
                                                               
Net earnings (loss) per share $ (0.37)    $ 0.01      $ (0.18)     $ 0.21

*Fiscal year 2012 amounts have been revised to reflect the change in
accounting for inventory.

Weighted-average shares                                         
outstanding:
                                                               
Basic                         3,677,357   3,842,745   3,769,234    3,842,745
                                                               
Diluted                       3,677,357   3,842,745   3,769,234    3,842,745


ALCO Stores, Inc.
Schedule of Adjusted SG&A
(Unaudited)

                       Thirteen WeekPeriods Ended  Thirty-Nine Week Periods
                                                     Ended
(dollars and average
selling square feet in  October 28,    October 30,   October 28,  October 30,
thousands, except       2012           2011          2012         2011
square footage ratios)
SG&A Expenses Breakout                                         
Store support center    $ 5,245        4,755         15,207       14,812
(1)
Distribution center     1,667          2,051         5,087        5,665
401K benefit            —              (53)          —            (53)
Same-store SG&A (2)     24,308         25,292        75,184       75,223
Non same-store SG&A (3) 1,359          343           3,550        346
Share-based             97             92            327          274
compensation
SG&A as reported        32,676         32,480        99,355       96,267
Less:                                                          
Share-based             (97)           (92)          (327)        (274)
compensation
Preopening store costs  (171)          (233)         (416)        (236)
(3)
Executive and corporate (49)           —             (271)        (131)
staff severance (1)
Gain (loss) on sale of  (87)           (9)           4            126
assets (1)
Adjusted SG&A           $ 32,272       32,146        98,345       95,752
                                                              
Adjusted SG&A % of      29.8%          29.7%         28.4%        28.1%
sales
                                                              
Sales per average       $ 24.50        25.41         78.77        80.06
selling square foot (4)
                                                              
Gross Margin dollars
per average selling     $ 7.62         7.79          24.54        24.75
square feet (4)
                                                              
Adjusted SG&A per
average selling square  $ 7.31         7.55          22.40        22.50
foot (4)
                                                              
Adjusted EBITDA per
average selling square  $ 0.31         0.23          2.14         2.25
foot (4)(5)
                                                              
Average inventory per
average selling square  $ 33.98        35.24         33.83        34.13
foot (4)(6)(7)
                                                              
Average selling square  4,416          4,255         4,390        4,255
feet (4)
                                                              
Total stores operating  215            213           216          214
beginning of period
Total stores operating  215            214           215          214
end of period
Total non same-stores   6              1             6            1
                                                              
Supplemental Data:                                             
Same-store gross margin (2.1)%         0.3%          (0.7)%       0.9%
dollar change
Same-store SG&A dollar  (3.8)%         0.1%          0.0%         (1.0)%
change
Same-store total        (6.8)%         (3.9)%        (5.0)%       (3.0)%
customer count change
Same-store average sale 3.7%           6.9%          4.0%         7.7%
per ticket change
                                                              

(1)Store support center includes severance and gain (loss) on sale of assets
(2)These amounts may not agree with 10-Qs and 10-Ks of previous quarters due
to stores that had reached their fourteenth period of operation.In addition,
these amounts may not agree with 10-Qs and 10-Ks of previous quarters due to
subsequent store closures.These closed stores are now included in
discontinued operations.
(3)Non same-stores are those stores which have not reached their fourteenth
period of operation
(4)Average selling square feet is calculated as beginning square feet plus
ending square feet divided by 2
(5)Adjusted EBITDA per average selling square foot is calculated as Adjusted
EBITDA divided by average selling square feet
(6)Average store level merchandise inventory is calculated as beginning
inventory plus ending inventory divided by 2
(7)Excludes inventory for unopened stores


ALCO Stores, Inc.
Schedule of Adjusted EBITDA
(Unaudited)

                            Twenty-Six     Trailing  Thirteen Week  Trailing
                          Week          52 Weeks   PeriodsEnded   52 Weeks
                            PeriodsEnded  Ended                      Ended
(dollars in   52 Weeks     July    July   July 29,   October October October
thousands)     Fiscal2012  29,     31,    2012       28,     30,     28,
                            2012    2011              2012    2011    2012
Net earnings
(loss) from    $ 1,839      995     817    2,017      (1,243) 176     598
continuing
operations (1)
Plus:                                                           
Interest       4,207        1,536   2,718  3,025      859     619     3,265
Tax expense    753          656     583    826        (839)   48      (61)
(benefit) (1)
Depreciation
and            8,569        4,232   4,283  8,518      2,204   2,084   8,638
amortization
(1)
Share-based    257          229     182    304        97      92      309
compensation
Preopening
store costs    557          245     3      799        171     233     737
(2)
Executive and
corporate      143          222     131    234        49      —       283
staff
severance (3)
(Gain) loss on 252          (92)    (135)  295        87      9       373
sale of assets
Insurance      (2,270)      —       —      (2,270)    —       (2,270) —
proceeds (4)
=Adjusted
EBITDA (1)     14,307       8,023   8,582  13,748     1,385   991     14,142
(3)(4)
                                                               
Cash           2,491        2,407   6,431  2,407      1,179   3,125   1,179
Debt           65,437       56,567  65,380 56,567     74,745  80,211  74,745
Debt, net of   $ 62,946     54,160  58,949 54,160     73,566  77,086  73,566
cash
                                                               

(1)These amounts may not agree with 10-Qs and 10-Ks 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)During fiscal years 2013 and 2012, the Company made departmental
restructuring changes resulting in severance.
(4)On September 9, 2011, the Company received a $2.3 million settlement from
Factory Mutual Insurance Company for damage sustained during the second
quarter of fiscal 2012, due to wind and hail.


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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