Big Lots 2009 Annual Report Download - page 3

The Unaudited Adjusted Results, which include financial measures that are not calculated in accordance with accounting
principles generally accepted in the United States of America ("GAAP"), are presented in order to provide additional
meaningful financial information for the periods presented. The Unaudited Adjusted Results should not be construed as
an alternative to the results reported in accordance with GAAP. Our definition of adjusted results may differ from similarly
titled measures used by other companies. While it is not possible to predict future results, our management believes that
the adjusted non-GAAP information is useful for the assessment of our ongoing operations. The Unaudited Adjusted
Results should be read in conjunction with our Consolidated Financial Statements and the related Notes contained in our
2009 Form 10-K.
FISCAL 2009
The fiscal 2009 Unaudited Adjusted Results reflect lower selling and administrative expenses as a result of the
adjustment for legal settlement agreement expense and lower operating profit as a result of the adjustment for gain
on sale of real estate, as described and reconciled below ($ in thousands):
Gain on Sale of Real Estate
In fiscal 2009, we recognized a $12,964 gain on the sale of real estate ($8,163 net of tax) related to the sale of a
Company-owned and operated store in California which resulted in an increase of our operating profit.
Legal Settlement
In fiscal 2009, we recorded a $4,000 expense ($2,420 net of tax) related to a legal settlement agreement which resulted
in an increase of selling and administrative expenses.
FISCAL 2007
The fiscal 2007 Unaudited Adjusted Results reflect higher selling and administrative expenses as a result of the adjustment
for certain proceeds received in fiscal 2007, as described and reconciled below ($ in thousands):
KB Bankruptcy Proceeds
We sold the KB Toys business in December 2000. As partial consideration for the sale of the KB Toys business,
we received the Havens Corners Corporation Note ("HCC Note"). In January 2004, KB Toys filed for bankruptcy and
in separate charges included in selling and administrative expenses in fiscal 2003 and fiscal 2005, we reduced the
balance receivable on the HCC Note. In fiscal 2007, we recorded income of $5,172 ($3,127 net of tax) reflecting the
proceeds from the KB Toys bankruptcy trust which was recognized as a reduction of selling and administrative expenses
for partial recovery of prior charges incurred against the HCC Note.
Insurance Proceeds
In fiscal 2007, we received insurance proceeds as recovery for damages related to hurricanes occurring in fiscal 2005
and recorded income of $4,920 ($2,974 net of tax) as a reduction of selling and administrative expenses.
(f) The earnings per share for continuing operations, discontinued operations and net Income are separately calculated in accordance with Accounting Standards
Codification 260; therefore, the sum of earnings per share for continuing operations and discontinued operations may differ, due to rounding, from the
calculated earnings per share of net income.
($ in thousands, except per share amounts)
Net sales $ 4,726,772 100.0 % $ - $ - $ 4,726,772 100.0 % $ 4,656,302 100.0 % $ - $ - $ 4,656,302 100.0 %
Cost of sales 2,807,466 59.4 - - 2,807,466 59.4 2,815,959 60.5 - - 2,815,959 60.5
Gross profit 1,919,306 40.6 - - 1,919,306 40.6 1,840,343 39.5 - - 1,840,343 39.5
Selling and administrative expenses 1,532,356 32.4 - (4,000) 1,528,356 32.3 1,515,379 32.5 5,172 4,920 1,525,471 32.8
Depreciation expense 74,904 1.6 - - 74,904 1.6 88,484 1.9 - - 88,484 1.9
Gain on sale of real estate (12,964) (0.3) 12,964 - - - - - - - - -
Operating profit 325,010 6.9 (12,964) 4,000 316,046 6.7 236,480 5.1 (5,172) (4,920) 226,388 4.9
Interest expense (1,840) (0.0) - - (1,840) (0.0) (2,513) (0.1) - - (2,513) (0.1)
Interest income 175 0.0 - - 175 0.0 5,236 0.1 - - 5,236 0.1
Income from continuing operations
before income taxes 323,345 6.8 (12,964) 4,000 314,381 6.7 239,203 5.1 (5,172) (4,920) 229,111 4.9
Income tax expense 121,975 2.6 (4,801) 1,580 118,754 2.5 88,023 1.9 (2,045) (1,946) 84,032 1.8
Income from continuing operations 201,370 4.3 (8,163) 2,420 195,627 4.1 151,180 3.2 (3,127) (2,974) 145,079 3.1
Income (loss) from
discontinued operations (1,001) (0.0) - - (1,001) (0.0) 7,281 0.2 - - 7,281 0.2
Net income $ 200,369 4.2 % $ (8,163) $ 2,420 $ 194,626 4.1 % $ 158,461 3.4 % $ (3,127) $ (2,974) $ 152,360 3.3 %
Earnings per common share - basic:
(f)
Continuing operations $ 2.47 $ (0.10) $ 0.03 $ 2.40 $ 1.49 $ (0.03) $ (0.03) $ 1.43
Discontinued operations (0.01) - - (0.01) 0.07 - - 0.07
Net income $ 2.45 $ (0.10) $ 0.03 $ 2.38 $ 1.56 $ (0.03) $ (0.03) $ 1.50
Earnings per common share - diluted:
(f)
Continuing operations $ 2.44 $ (0.10) $ 0.03 $ 2.37 $ 1.47 $ (0.03) $ (0.03) $ 1.41
Discontinued operations (0.01) - - (0.01) 0.07 - - 0.07
Net income $ 2.42 $ (0.10) $ 0.03 $ 2.35 $ 1.55 $ (0.03) $ (0.03) $ 1.49
Gain on
Sale of
Real Estate
Legal
Settlement
Reported
(GAAP)
Unaudited
Adjusted Results
(non-GAAP)
KB
Bankruptcy
Proceeds
Insurance
Proceeds
Reported
(GAAP)
Unaudited
Adjusted Results
(non-GAAP)
FISCAL YEAR 2009 FISCAL YEAR 2007
Financial Highlights (Unaudited Adjusted Results)
BIG LOTS, INC. 2009 ANNUAL REPORT