ABILENE, Kan., Dec. 9, 2010 (GLOBE NEWSWIRE) -- Duckwall-ALCO Stores, Inc. (Nasdaq:DUCK), 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 31, 2010.
Net sales from continuing operations for the third quarter of fiscal 2011 decreased 0.6% to $110.5 million and same-store sales decreased 2.3%. Net sales from continuing operations year-to-date decreased 2.8% to $341.5 million and same-store sales decreased 4.2%.
Net loss for the third quarter was $2.0 million, or $0.53 per diluted share, compared to net loss of $1.4 million, or $0.38 per diluted share, for the third quarter of fiscal 2010. Year-to-date net loss for fiscal 2011 was $5.3 million, or $1.37 per diluted share, compared to net earnings of $1.5 million, or $0.40 per diluted share, for the same period of the prior fiscal year.
Richard Wilson, President and CEO, commented, "In the third quarter we completed the implementation of a number of strategic and operational initiatives that began after my arrival at the Company in February. The 2.3% decline in same-store sales result for the quarter, while still negative, showed improvement over second-quarter results of negative 7.2%. I am encouraged by the tireless dedication of our associates to accomplish the actions aimed at improving performance, and by our recently reported November same-store sales increase of 6.2% for ALCO stores."
"Earnings for the quarter were impacted by a number of charges, including $484,000 related to our store reset initiative, $210,000 related to the integration of Associated Wholesale Grocers' 'Best Choice' and 'Always Save' brands across our ALCO stores, and $60,000 in severance expense due to a reduction of force in our corporate office."
In the past eight months the Company has completed several key initiatives. Through the third quarter, the Company has:
- Remerchandised and reset all 214 ALCO stores to expand space devoted to key trip-driving departments such as food, paper and cleaning products.
- Updated ALCO stores with new graphic signage featuring our improved merchandise and brand selection.
- Improved our value proposition in the consumables businesses with the introduction of the "Best Choice" and "Always Save" brands.
- Integrated new space management tools designed to improve shelf productivity and return on investment.
- Expanded our "Everyday Value" and "Dollar" merchandise selections to position ALCO as the consumer's destination for exceptional value for everyday needs.
"As previously announced, we have decided to close the Duckwall stores, which are smaller stores that contributed less than 4.0% of overall sales. After thorough analysis, the Board decided to redeploy assets to support the core ALCO stores based on sales and profitability," Mr. Wilson added.
"In summary, today ALCO is a better place to shop, with more value, a stronger merchandise offering, in a more customer-friendly store layout. We look forward to building upon these improvements to deliver the sales and profitability results our shareholders deserve."
Investor Conference Call
The Company will host an investor conference call at 10:00 a.m. Central Time on December 10, 2010, to discuss operating results for the third quarter ended October 31, 2010. The dial-in number for the conference call is 888-601-3873 (international/local participants dial 913-981-5537), and the Confirmation Code is 6535943. 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 10, 2010 through December 15, 2010 by dialing 888-203-1112 or for international/local callers by dialing 719-457-0820. The Replay Passcode is 6535943. 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 Gross Margin 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 certain items, as does Adjusted Gross Margin. 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 Gross Margin and 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 Gross Margin and Adjusted EBITDA may not reflect important aspects of the results of the Company's operations.
About Duckwall-ALCO Stores, Inc.
Duckwall-ALCO Stores, Inc. is a regional broad line retailer that specializes in meeting the needs of smaller, underserved communities across 23 states, primarily in the central United States. The Company offers an exceptional selection of 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 214 ALCO stores, the Company is proud to have continually provided excellent products at good value prices to its customers for 109 years. To learn more about the company visit .
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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 -
CONTACT: Duckwall-ALCO Stores, Inc. Wayne S. Peterson, Senior Vice President - Chief Financial Officer 785-263-3350 X164 wpeterson@alcostores.com Hagen and Partners Debbie Hagen 913-652-6547 dhagen@hagenandpartners.com