Big Lots Reports First Quarter Adjusted Consolidated Income from Continuing Operations of $0.61 per Diluted Share

COLUMBUS, Ohio, May 30, 2013 /PRNewswire/ -- Big Lots, Inc. (NYSE: BIG) today reported consolidated income from continuing operations of $32.3 million, or $0.56 per diluted share, for the first quarter of fiscal 2013 ended May 4, 2013. This result includes a non-recurring, after-tax charge of $3.2 million, or $0.06 per diluted share, associated with store-related legal activity. Excluding this non-recurring charge, adjusted consolidated income from continuing operations totaled $35.5 million, or $0.61 per diluted share (non-GAAP), consistent with our guidance of $0.53 to $0.65 per diluted share issued on March 6, 2013. This result compares to adjusted consolidated income from continuing operations of $44.2 million, or $0.68 per diluted share (non-GAAP), for the first quarter of fiscal 2012. Consolidated net sales for the first quarter of fiscal 2013 increased 1.3% to $1,311.3 million, compared to $1,294.5 million for the same period of fiscal 2012. Consolidated comparable store sales decreased 2.5% for the quarter, consistent with our guidance of negative low single digits.

(Logo:  http://photos.prnewswire.com/prnh/20011026/BIGLOTSLOGO)

FIRST QUARTER HIGHLIGHTS

• Adjusted consolidated income from continuing operations of $0.61 per diluted share (non-GAAP), compared to adjusted consolidated income from continuing operations of $0.68 per diluted share (non-GAAP) last year
• Consolidated net sales of $1.3 billion, an increase of 1.3% compared to last year
• Opened 14 stores in the U.S. and the first Big Lots branded store in Canada

First Quarter Results

U.S. Operations

Net sales for U.S. operations for the first quarter of fiscal 2013 increased 1.0% to $1,274.7 million, compared to $1,262.2 million for the same period of fiscal 2012. Comparable store sales for U.S. stores open at least fifteen months decreased 2.9% for the quarter. Adjusted income from continuing U.S. operations totaled $40.0 million, or $0.69 per diluted share (non-GAAP), compared to adjusted income from continuing U.S. operations of $50.3 million, or $0.77 per diluted share (non-GAAP), for the same period of fiscal 2012. Results for our U.S. operations were consistent with our communicated guidance.

Canadian Operations

Net sales for Canadian operations for the first quarter of fiscal 2013 increased 13.5% to $36.6 million, while comparable stores sales increased 13.2%. For the first quarter of fiscal 2013, we incurred a net loss of $4.4 million, or $0.08 per diluted share (non-GAAP), compared to a net loss of $6.1 million, or $0.09 per diluted share (non-GAAP) for the same period of fiscal 2012. Results for our Canadian operations were consistent with our communicated guidance.

Inventory and Cash Management

On a consolidated basis, Inventory ended the first quarter of fiscal 2013 at $885 million, compared to $848 million for the first quarter of fiscal 2012. The growth in inventory was driven by an increase in U.S. store count, as inventory per store in our U.S. stores was essentially flat to last year.

We ended the first quarter of fiscal 2013 with $72 million of Cash and Cash Equivalents and $137 million of borrowings under our credit facility compared to $83 million of Cash and Cash Equivalents and no borrowings under our credit facility as of the end of the first quarter of fiscal 2012. Our use of cash generated by our U.S. operations and debt incurred during the last 12 months was focused on share repurchase activity and funding our Canadian operations.

As part of our ongoing focus on capital structure, we have extended our current $700 million, 5-year unsecured credit facility. The strength of our credit profile, operations, balance sheet and cash flow generation, enabled us to work collaboratively with our existing banking group to extend the term of our current credit facility by nearly two years. The credit facility now covers a five year period (expiration May 2018), provides us lower rates and fees, and maintains the same structure, bank participants, and financial covenants as our previous facility. 

FISCAL Q2 2013 GUIDANCE

• Provides initial Q2 guidance for consolidated income from continuing operations of $0.17 to $0.27 per diluted share, compared to consolidated income from continuing operations of $0.36 per diluted share for the same period last year
• Provides initial Q2 guidance for consolidated net sales in the range of +1% to -1%, with consolidated comparable stores sales in the range of -2% to -4%

For the second quarter of fiscal 2013, we estimate consolidated income from continuing operations will be in the range of $0.17 to $0.27 per diluted share, compared to consolidated income from continuing operations of $0.36 per diluted share for the second quarter of fiscal 2012. This guidance is based on estimated consolidated net sales in the range of +1% to -1% for the second quarter of fiscal 2013 and consolidated comparable store sales in the range of -2% to -4% (see table below).

We estimate income from U.S. operations in a range of $0.27 to $0.32 per diluted share (non-GAAP, see reconciliation below), compared to $0.42 per diluted share (non-GAAP) for the same period last year. This guidance is based on estimated net sales for U.S. operations in the range of +1% to -1% for the second quarter of fiscal 2013 and comparable store sales in the range of -2% to -4%.

We estimate a loss from our Canadian operations in the range of $3 to $6 million, or $0.05 to $0.10 per diluted share (non-GAAP), compared to a loss of $3.3 million, or $0.05 per diluted share (non-GAAP), for the second quarter of fiscal 2012. This guidance is based on estimated net sales of $37 to $41 million and a comparable store sales increase in the range of 4% to 14%.

2013 OUTLOOK

• Fiscal 2013 adjusted consolidated income from continuing operations projected to be $2.87 to $3.12 per diluted share (non-GAAP), compared to fiscal 2012 adjusted consolidated income from continuing operations of $2.99 per diluted share (non-GAAP)
• Cash Flow estimated to be approximately $175 million (defined as operating activities less investing activities)
• Fiscal 2013 consolidated net sales increase of 1% to 2%, with consolidated comparable store sales in the range of 0% to -1%

Based on the actual results for the first quarter and the guidance provided above for the second quarter, we are updating our full year fiscal 2013 outlook. We estimate fiscal 2013 adjusted consolidated income from continuing operations will be in the range of $2.87 to $3.12 per diluted share (non-GAAP, see reconciliation below) compared to adjusted consolidated income from continuing operations of $2.99 per diluted share for fiscal 2012 (non-GAAP). This outlook excludes the previously mentioned non-recurring charge associated with store-related legal activity and is based on an estimated consolidated net sales increase in the range of 1% to 2% for fiscal 2013 and consolidated comparable store sales in the range of 0% to -1% (see table below). We estimate this financial performance will result in cash flow of approximately $175 million in fiscal 2013. As a reminder, we are operating under a 52-week retail calendar compared to 53-weeks in fiscal 2012.

U.S. Operations

We are forecasting adjusted income from continuing U.S. operations to be in the range of $3.00 to $3.20 per diluted share (non-GAAP), compared to fiscal 2012 adjusted income from continuing U.S. operations of $3.21 per diluted share (non-GAAP). This outlook excludes the previously mentioned non-recurring charge associated with store-related legal activity and is based on an estimated net sales increase for U.S. operations in the range of 1% to 2% and comparable store sales for U.S. operations in the range of 0% to -1%.

Canadian Operations

Canadian net sales are expected to be in the range of $175 to $185 million for fiscal 2013, resulting in a net loss in the range of $5 to $8 million, or $0.08 to $0.13 per diluted share (non-GAAP). This compares to a net loss for fiscal 2012 of $13.5 million, or $0.22 per diluted share (non-GAAP). Our outlook for fiscal 2013 is based on a Canadian net sales increase in the range of 13% to 20% and a comparable store sales increase in the range of 12% to 19%. From a real estate perspective, we expect to open 2 new stores in Canada under the Big Lots banner.

Conference Call/Webcast

We will host a conference call today at 8:00 a.m. to discuss our financial results for the first quarter and provide commentary on our outlook for fiscal 2013. We invite you to listen to the webcast of the conference call through the Investor Relations section of our website (www.biglots.com).

If you are unable to join the live webcast, an archive of the call will be available through the Investor Relations section of our website (www.biglots.com) beginning two hours after the call ends and will remain available through midnight on Thursday, June 20. A replay of the call will be available beginning today at 12:00 noon through June 20 at midnight by dialing: 1.888.203.1112 (United States and Canada) or 1.719.457.0820 (International). The Replay Confirmation Code is 6565635.  All times are Eastern Time.

Big Lots is North America's largest broadline closeout retailer. As of the end of the first quarter of fiscal 2013, we operated 1,505 BIG LOTS stores in the 48 contiguous United States, 1 BIG LOTS store in Canada, and 79 LIQUIDATION WORLD and LW stores in Canada. Wholesale operations are conducted through BIG LOTS WHOLESALE, CONSOLIDATED INTERNATIONAL, and WISCONSIN TOY and with online sales at www.biglotswholesale.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.

SOURCE Big Lots, Inc.