11th Consecutive Quarter of Record EPS from Continuing Operations
COLUMBUS, Ohio, Aug. 25 /PRNewswire-FirstCall/ -- Big Lots, Inc.
(NYSE: BIG) today reported second quarter fiscal 2009 income from
continuing operations of $28.6 million, or $0.35 per diluted share,
compared to income from continuing operations of $26.1 million, or
$0.32 per diluted share, in the second quarter of fiscal 2008.
Including the impact of discontinued operations, second quarter
fiscal 2009 net income totaled $28.4 million, or $0.34 per diluted
share, compared to $26.0 million, or $0.32 per diluted share, in
the prior year. (Logo:
http://www.newscom.com/cgi-bin/prnh/20011026/BIGLOTSLOGO) For the
year to date period ended August 1, 2009, income from continuing
operations totaled $64.9 million, or $0.79 per diluted share,
compared to income from continuing operations of $60.6 million, or
$0.74 per diluted share, for the same period in fiscal 2008.
Including the impact of discontinued operations, year to date
fiscal 2009 net income totaled $64.7 million, or $0.78 per diluted
share, compared to $60.5 million, or $0.74 per diluted share, in
the prior year. SECOND QUARTER HIGHLIGHTS -- Income from continuing
operations of $0.35 per diluted share versus income from continuing
operations of $0.32 per diluted share last year -- Record EPS from
continuing operations for the 11th consecutive quarter -- Operating
profit dollars increase 10% as operating profit rate increases 50
basis points -- Generated $48 million of Cash Flow (defined as
operating activities less investing activities) versus $8 million
of Cash Flow last year Second Quarter Results Net sales for the
second quarter of fiscal 2009 decreased 1.7% to $1,086.6 million,
compared to $1,105.2 million for the same period in fiscal 2008.
Comparable store sales for stores open at least two years at the
beginning of the fiscal year decreased 2.4% for the quarter.
Operating profit for the second quarter of fiscal 2009 was $47.7
million, or 4.4% of sales, compared to last year's operating profit
of $43.5 million, or 3.9% of sales. The 10% improvement in
operating profit dollars was the result of improvement in our gross
margin rate and lower overall expense dollars compared to last
year. Our gross margin rate for the quarter increased 70 basis
points compared to last year due to improved initial markup and
lower inbound freight expense, partially offset by merchandise mix
pressure created by better sales performance in certain of our
lower margin merchandise categories. As expected, the expense rate
as a percent of sales was up slightly to last year due to the comp
sales decline of 2.4% while total expense dollars were below last
year levels due to certain efficiencies in distribution and
transportation, lower advertising expenses, and lower payroll costs
reflecting the sales decline. For the second quarter of fiscal
2009, net interest expense was $0.5 million compared to net
interest expense of $1.1 million last year with the improvement
directly attributed to the overall cash flow of the business in the
last 12 months. The effective income tax rate for the second
quarter of fiscal 2009 was 39.3% compared to 38.3% last year which
benefited from favorable settlement activity. Inventory and Cash
Management Inventory ended the second quarter of fiscal 2009 at
$668 million compared to $698 million last year. The 4% decline in
overall inventory reflected a 4% decrease in average store
inventory as store count at the end of the quarter was fairly
similar to last year. We ended the second quarter of fiscal 2009
with no borrowings under our credit facility and $56 million of
cash in money market investments (included in Cash and Cash
Equivalents on our Balance Sheet) compared to $148 million of
borrowings under our credit facility and no money market
investments as of the end of the second quarter of fiscal 2008. The
debt reduction was attributable to cash generated by our business
over the last 12 months. Discontinued Operations As discussed in
our Form 10-K filed with the SEC on April 1, 2009, activity related
to KB Toys, our former division, as well as the operating results
and costs associated with 130 stores closed in January 2006 are
classified as discontinued operations. Results from discontinued
operations for the second quarter of fiscal 2009 totaled a net loss
of $0.2 million compared to a net loss from discontinued operations
of $0.1 million for the second quarter of fiscal 2008. For the year
to date period ended August 1, 2009, results from discontinued
operations totaled a net loss of $0.3 million compared to a net
loss from discontinued operations of $0.1 million for the same
period in fiscal 2008. 2009 OUTLOOK -- Providing initial Q3
guidance for income from continuing operations of $0.14 to $0.19
per diluted share versus income from continuing operations of $0.15
per diluted share for the same period last year -- Providing
initial Q4 guidance for income from continuing operations of $0.99
to $1.04 per diluted share versus income from continuing operations
of $1.00 per diluted share for the same period last year --
Increasing fiscal 2009 annual guidance for income from continuing
operations to $1.92 to $2.02 per diluted share versus income from
continuing operations of $1.89 per diluted share last year --
Estimating fiscal year 2009 operating profit rate to be in the
range of 5.6% to 5.9% For the third quarter of fiscal 2009, we
anticipate comparable store sales will be in a range of flat to a
2% decrease. At this level of comp sales performance, we expect our
gross margin rate will be flat to slightly up compared to last year
and the overall expense rate will be essentially flat compared to
last year. Given these assumptions, our earnings are estimated to
be in the range of $0.14 to $0.19 per diluted share, compared to
income from continuing operations for the third quarter of fiscal
2008 of $0.15 per diluted share. For the fourth quarter of fiscal
2009, we anticipate comparable store sales will be in a range of
flat to slightly up. At this level of comp sales performance, we
expect our operating profit rate to be flat to slightly up to last
year. Given these assumptions, our earnings are estimated to be in
the range of $0.99 to $1.04 per diluted share, compared to income
from continuing operations for the fourth quarter of fiscal 2008 of
$1.00 per diluted share. Based on the strength of our second
quarter operating results and reaffirming our view of EPS for the
second half of fiscal 2009, we raised our fiscal 2009 guidance for
income from continuing operations. We anticipate fiscal 2009 income
from continuing operations will be $1.92 to $2.02 per diluted share
compared to income from continuing operations of $1.89 per diluted
share for fiscal 2008. Additionally, based on the performance of
the first two quarters of fiscal 2009, we are raising our annual
cash flow guidance to $155 million from $145 million. Conference
Call/Webcast We will host a conference call today at 8:00 a.m. to
discuss our financial results for the second quarter and provide
commentary on our outlook for fiscal 2009. We invite you to listen
to the webcast of the conference call through the Investor
Relations section of our website (http://www.biglots.com/). An
archive of the call will be available through the Investor
Relations section of our website (http://www.biglots.com/)
beginning two hours after the call ends and will remain available
through midnight on Tuesday, September 8. A replay of the call will
be available beginning August 25 at Noon through September 8 at
midnight by dialing: 1.888.203.1112 (United States and Canada) or
1.719.457.0820 (International). All times are Eastern Time. The PIN
number is 6246063. Big Lots is the nation's largest broadline
closeout retailer. As of the end of the second quarter of fiscal
2009 (August 1, 2009), we operated 1,350 BIG LOTS stores in 47
states. We also sell merchandise via the internet at
http://www.biglots.com/. Wholesale operations are conducted through
BIG LOTS WHOLESALE, CONSOLIDATED INTERNATIONAL, and WISCONSIN TOY.
Our website is located at http://www.biglots.com/. Cautionary
Statement Concerning Forward-Looking Statements Certain statements
in this release are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, and such
statements are intended to qualify for the protection of the safe
harbor provided by the Act. The words "anticipate," "estimate,"
"expect," "objective," "goal," "project," "intend," "plan,"
"believe," "will," "should," "may," "target," "forecast,"
"guidance," "outlook" and similar expressions generally identify
forward-looking statements. Similarly, descriptions of our
objectives, strategies, plans, goals or targets are also
forward-looking statements. Forward-looking statements relate to
the expectations of management as to future occurrences and trends,
including statements expressing optimism or pessimism about future
operating results or events and projected sales, earnings, capital
expenditures and business strategy. Forward-looking statements are
based upon a number of assumptions concerning future conditions
that may ultimately prove to be inaccurate. Forward-looking
statements are and will be based upon management's then-current
views and assumptions regarding future events and operating
performance, and are applicable only as of the dates of such
statements. Although we believe the expectations expressed in
forward-looking statements are based on reasonable assumptions
within the bounds of our knowledge, forward-looking statements, by
their nature, involve risks, uncertainties and other factors, any
one or a combination of which could materially affect our business,
financial condition, results of operations or liquidity.
Forward-looking statements that we make herein and in other reports
and releases are not guarantees of future performance and actual
results may differ materially from those discussed in such
forward-looking statements as a result of various factors,
including, but not limited to, the current economic and credit
crisis, the cost of goods, our inability to successfully execute
strategic initiatives, competitive pressures, economic pressures on
our customers and us, the availability of brand name closeout
merchandise, trade restrictions, freight costs, the risks discussed
in the Risk Factors section of our most recent Annual Report on
Form 10-K, and other factors discussed from time to time in our
other filings with the SEC, including Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. This release should be read
in conjunction with such filings, and you should consider all of
these risks, uncertainties and other factors carefully in
evaluating forward-looking statements. You are cautioned not to
place undue reliance on forward-looking statements, which speak
only as of the date thereof. We undertake no obligation to publicly
update forward-looking statements, whether as a result of new
information, future events or otherwise. You are advised, however,
to consult any further disclosures we make on related subjects in
our public announcements and SEC filings. BIG LOTS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
--------- --------- AUGUST 1, AUGUST 2, 2009 2008 ---------
--------- (Unaudited) (Unaudited) ASSETS Current assets: Cash and
cash equivalents $98,275 $43,521 Inventories 667,741 698,392
Deferred income taxes 43,614 53,040 Other current assets 88,650
69,956 ------ ------ Total current assets 898,280 864,909 -------
------- Property and equipment - net 492,072 495,521 Deferred
income taxes 45,692 48,034 Other assets 26,939 22,044 ----------
---------- $1,462,983 $1,430,508 ========== ========== LIABILITIES
AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable
$263,850 $269,281 Property, payroll and other taxes 72,657 70,153
Accrued operating expenses 54,377 55,115 Insurance reserves 39,498
35,919 KB bankruptcy lease obligation 4,806 0 Accrued salaries and
wages 31,641 32,409 Income taxes payable 905 0 --- --- Total
current liabilities 467,734 462,877 ------- ------- Long-term bank
obligations under bank credit facility 0 147,700 Deferred rent
31,749 31,216 Insurance reserves 45,597 44,550 Unrecognized tax
benefits 26,920 27,221 Other liabilities 43,630 35,465
Shareholders' equity 847,353 681,479 ------- ------- $1,462,983
$1,430,508 ========== ========== BIG LOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands,
except per share data) 13 WEEKS ENDED 13 WEEKS ENDED --------------
-------------- AUGUST 1, 2009 AUGUST 2, 2008 % % ---------------
-------------- (Unaudited) (Unaudited) Net sales $1,086,567 100.0
$1,105,189 100.0 ---------- ----- ---------- ----- Gross margin
434,383 40.0 434,804 39.3 Selling and administrative expenses
367,781 33.8 370,885 33.6 Depreciation expense 18,949 1.7 20,458
1.9 ------ --- ------ --- Operating profit 47,653 4.4 43,461 3.9
Interest expense (506) (0.0) (1,106) (0.1) Interest and investment
income 19 0.0 14 0.0 -- --- -- --- Income from continuing
operations before income taxes 47,166 4.3 42,369 3.8 Income tax
expense 18,550 1.7 16,222 1.5 ------ --- ------ --- Income from
continuing operations 28,616 2.6 26,147 2.4 Loss from discontinued
operations, net of tax benefit of $112 and $73, respectively (173)
(0.0) (122) (0.0) ---- ---- ---- ---- Net income $28,443 2.6
$26,025 2.4 ======= === ======= === Earnings per common share -
basic (a) Continuing operations $0.35 $0.32 Discontinued operations
0.00 0.00 ----- ----- Net income $0.35 $0.32 ===== ===== Earnings
per common share - diluted (a) Continuing operations $0.35 $0.32
Discontinued operations 0.00 0.00 ----- ----- Net income $0.34
$0.32 ===== ===== Weighted average common shares outstanding Basic
81,623 80,772 Dilutive effect of share-based awards 893 1,196
------ --- Diluted 82,516 81,968 ====== ====== (a) The earnings per
share for Continuing Operations, Discontinued Operations and Net
Income are separately calculated in accordance with SFAS No. 128;
therefore, the sum of earnings per share for Continuing Operations
and Discontinued Operations may differ, due to rounding, from the
calculated earnings per share of Net Income. BIG LOTS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In
thousands, except per share data) 26 WEEKS ENDED 26 WEEKS ENDED
-------------- -------------- AUGUST 1, 2009 AUGUST 2, 2008 % %
-------------- -------------- (Unaudited) (Unaudited) Net sales
$2,228,223 100.0 $2,256,778 100.0 ---------- ----- ---------- -----
Gross margin 896,563 40.2 898,595 39.8 Selling and administrative
expenses 750,463 33.7 757,741 33.6 Depreciation expense 38,164 1.7
39,236 1.7 ------ --- ------ --- Operating profit 107,936 4.8
101,618 4.5 Interest expense (827) (0.0) (2,518) (0.1) Interest and
investment income 25 0.0 26 0.0 -- --- -- --- Income from
continuing operations before income taxes 107,134 4.8 99,126 4.4
Income tax expense 42,208 1.9 38,493 1.7 ------ --- ------ ---
Income from continuing operations 64,926 2.9 60,633 2.7 Loss from
discontinued operations, net of tax benefit of $163 and $59,
respectively (252) (0.0) (99) (0.0) ---- ---- --- ---- Net income
$64,674 2.9 $60,534 2.7 ======= === ======= === Earnings per common
share - basic (a) Continuing operations $0.80 $0.75 Discontinued
operations 0.00 0.00 ----- ----- Net income $0.79 $0.75 ===== =====
Earnings per common share - diluted (a) Continuing operations $0.79
$0.74 Discontinued operations 0.00 0.00 ----- ----- Net income
$0.78 $0.74 ===== ===== Weighted average common shares outstanding
Basic 81,515 80,937 Dilutive effect of share-based awards 894 1,027
------ --- Diluted 82,409 81,964 ====== ====== (a) The earnings per
share for Continuing Operations, Discontinued Operations and Net
Income are separately calculated in accordance with SFAS No. 128;
therefore, the sum of earnings per share for Continuing Operations
and Discontinued Operations may differ, due to rounding, from the
calculated earnings per share of Net Income. BIG LOTS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In
thousands) 13 WEEKS ENDED 13 WEEKS ENDED --------------
-------------- August 1, 2009 August 2, 2008 --------------
-------------- (Unaudited) (Unaudited) Net cash provided by
operating activities $73,327 $41,962 Net cash used in investing
activities (25,799) (34,426) Net cash used in financing activities
(355) (7,201) ---- ------ Increase in cash and cash equivalents
47,173 335 Cash and cash equivalents: Beginning of period 51,102
43,186 ------ ------ End of period $98,275 $43,521 ------- -------
BIG LOTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (In thousands) 26 WEEKS ENDED 26 WEEKS ENDED
-------------- -------------- August 1, 2009 August 2, 2008
-------------- -------------- (Unaudited) (Unaudited) Net cash
provided by operating activities $171,200 $100,599 Net cash used in
investing activities (38,657) (52,522) Net cash used in financing
activities (69,041) (41,687) ------- ------- Increase in cash and
cash equivalents 63,502 6,390 Cash and cash equivalents: Beginning
of period 34,773 37,131 ------ ------ End of period $98,275 $43,521
------- -------
http://www.newscom.com/cgi-bin/prnh/20011026/BIGLOTSLOGODATASOURCE:
Big Lots, Inc. CONTACT: Timothy A. Johnson, Vice President,
Strategic Planning and Investor Relations, +1-614-278-6622 Web
Site: http://www.biglots.com/
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