Big Lots 2012 Annual Report Download - page 100

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20
(c) On July 18, 2011, the Company completed its acquisition of Liquidation World Inc., whose results are
included in the consolidated results since that date.
(d) 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).
(e) For 2008, working capital included $61.7 million for current maturities under bank credit facility because
the 2004 Credit Agreement terminated in 2009.
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 year 2012 was comprised of 53 weeks. Fiscal years 2011 and 2010 were each
comprised of 52 weeks. Fiscal year 2013 will be comprised of 52 weeks.
Operating Results Summary
The following are the results from 2012 that we believe are key indicators of both our consolidated and segment
operating performance when compared to 2011.
Consolidated Highlights
x Net sales increased $197.9 million, or 3.8%.
x Diluted earnings per common share from continuing operations decreased from $2.99 in 2011 to
$2.93 in 2012, which included the impact of a non-cash, non-recurring charge of $0.06 per diluted
share related to a change in accounting principle associated with the implementation of our new
retail inventory systems in the U.S.
x Inventory increased by 11.2%, or $92.8 million, to $918.0 million in 2012.
x We acquired 8.1 million of our outstanding common shares for $298.5 million, which exhausted the
authorizations under both the 2011 Repurchase Program and the 2012 Repurchase Program.
U.S. Segment Highlights
x Net sales increased $105.1 million or 2.0%.
x Comparable store sales for stores open at least fifteen months decreased 2.7%.
x Gross margin dollars increased $14.0 million, while gross margin rate decreased 50 basis points
from 39.8% to 39.3% of sales.
x Selling and administrative expenses increased $44.8 million. As a percentage of net sales, selling
and administrative expenses increased 30 basis points to 31.4% of sales.
x Operating profit rate decreased 100 basis points to 6.0%, or $45.7 million.