Big Lots 2011 Annual Report Download - page 135

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(b) We adopted the measurement date provisions of guidance under Financial Accounting Standards Board
Accounting Standards Codification (“ASC”) 715-30-35, Defined Benefit Plans-Pension (Statement of
Financial Accounting Standard (“SFAS”) No. 158, Employers’ Accounting for Defined Benefit Pension
and Other Postretirement Plans) in 2008, which resulted in an adjustment to accumulated other
comprehensive loss of $66 ($40 net of tax).
(c) We adopted guidance under ASC 740, Income Taxes (FIN No. 48, Accounting for Uncertainty in Income
Taxes an interpretation of SFAS No. 109), in the first fiscal quarter of 2007, on a prospective basis.
(d) For 2008, working capital included $61.7 million for current maturities under bank credit facility because
the 2004 Credit Agreement terminated in 2009.
(e) On July 18, 2011, the Company completed its acquisition of Liquidation World Inc., whose results are
included in the consolidated results since that date.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
The discussion and analysis presented below should be read in conjunction with the accompanying consolidated
financial statements and related notes. Please refer to “Item 1A. Risk Factors” of this Form 10-K for a discussion
of forward-looking statements and certain risk factors that may have a material adverse effect on our business,
financial condition, results of operations, and/or liquidity.
Our fiscal year ends on the Saturday nearest to January 31, which results in some fiscal years with 52 weeks and
some with 53 weeks. Fiscal years 2011, 2010, and 2009 were each comprised of 52 weeks. Fiscal year 2012 will
be comprised of 53 weeks.
Operating Results Summary
The following are the results from 2011 that we believe are key indicators of both our consolidated and segment
operating performance when compared to 2010.
Consolidated Highlights
• Net sales increased $250.0 million, or 5.0%.
• Diluted earnings per share from continuing operations increased from $2.83 per share to $2.99 per
share.
• Inventory increased by 8.3%, or $63.1 million, to $825.2 million from 2010.
• We acquired Liquidation World Inc.
• We acquired 11.0 million of our outstanding common shares for $359.3 million under the 2011
Repurchase Program.
U.S. Segment Highlights
• Comparable store sales for stores open at least two years at the beginning of 2011 increased 0.1%.
• Gross margin dollars increased $33.6 million, while gross margin rate decreased 80 basis points
from 40.6% to 39.8% of sales.
• Selling and administrative expenses increased $23.3 million. As a percentage of net sales, selling
and administrative expenses improved by decreasing 70 basis points to 31.1% of sales.
• Operating profit rate decreased 20 basis points to 7.0%.