ALCO Stores Inc. (OTC:ALCSQ)

Fourth Quarter 2012 Results

• Net sales from continuing operations during the fourth quarter of fiscal 2013 (14 weeks) increased 8.5% to $146.8 million, compared to $135.3 million in the fourth quarter of fiscal 2012 (13 weeks). Excluding the 14th week of the fiscal 2013 quarter, net sales from continuing operations increased 3.6% to $140.2 million.
•  Earnings from continuing operations, net of tax, for the fourth quarter of fiscal 2013 were $2.0 million, or $0.61 per diluted share, compared to $0.9 million, or $0.23 per diluted share, for the fourth quarter of fiscal 2012.

Richard Wilson, President and CEO, commented, "In spite of a difficult economic landscape and lingering weather issues in late fiscal 2013, ALCO achieved respectable net earnings of 61 cents per share in the fourth quarter as a result of several company-wide initiatives. These actions include expanding product offerings in food and frozen categories, improving merchandise assortments in apparel and sporting goods, implementing buying efficiencies and competitive price opportunities, and delivering better customer service and a clean, easy-to-shop store environment. In addition, new stores opened in the past year are performing very well. We are encouraged by the positive impact these actions had on earnings and are equally excited about the potential benefit of price optimization initiatives we are rolling out in fiscal 2014."

Second Quarter 2012 Results

• Net sales from continuing operations for the second quarter of fiscal 2012 increased 7.9% to $122.0 million, compared to second quarter of fiscal 2011
• Net earnings for the second quarter of fiscal 2012 were $1.2 million, or $0.32 per diluted share, compared to a net loss of $1.1 million, or $0.28 per diluted share, for the second quarter of fiscal 2011.

Richard Wilson, President and CEO, commented, "The improved operating results in the first half of fiscal 2012 demonstrate the progressive benefit of changes we have implemented. Merchandising strategies and cost-reduction initiatives have enabled us to deliver strong same-store sales growth while achieving better operating results as we progress through the year. Gross margin has improved from first to second quarter as a result of the increased sales performance of departments such as Apparel, Housewares and Domestics. Top-line growth continues to be strong in other departments such as Consumables, Electronics, and Sporting Goods."

Wilson added, "While the Company maintains a primary focus on serving small-town America, we are excited to announce an addition to our growth strategy. We are launching a pilot project to add future store locations in selected urban markets where the ALCO value proposition and shopping experience can offer superior convenience to consumers. During the second half of fiscal 2012, the Company anticipates opening ALCO stores in Grand Prairie, Texas (a suburb of Dallas, Texas), and in Houston, Texas. We believe these stores in more densely populated areas will reach a higher volume of customers with merchandise that meets their basic daily shopping needs."

Wilson concluded, "We continue to build momentum across the Company and are focused on achieving further improvement of the business through future initiatives."