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 Big Lots Reports Q4 EPS From Continuing Operations of $1.99, $2.26 on an Adjusted Basis, Above Previously Communicated Guidance
   Friday, March 03, 2017 6:00:00 AM ET

Big Lots, Inc. (BIG ) today reported income from continuing operations of $90.1 million, or $1.99 per diluted share, for the fourth quarter of fiscal 2016 ended January 28, 2017. This result includes an after tax expense of $14.3 million, or $0.32 per diluted share, associated with legacy pension plans which have been terminated with final payouts occurring in the quarter. It also includes an after tax benefit of $2.4 million, or $0.05 per diluted share, associated with the gain on sale of real estate. Excluding these items, adjusted income from continuing operations totaled $102.0 million, or $2.26 per diluted share (see non-GAAP table included later in this release), which exceeds our previously communicated guidance of adjusted income of $2.18 to $2.23 per diluted share (non-GAAP). In the fourth quarter of fiscal 2015, adjusted income from continuing operations totaled $99.7 million, or $2.01 per diluted share (non-GAAP). Comparable store sales increased 0.3% for the fourth quarter of fiscal 2016, compared to our guidance of flat to an increase of 2%. Net sales for the fourth quarter of fiscal 2016 decreased 0.3% to $1,579.2 million, a result of the comparable store sales increase of 0.3% offset by a lower store count year-over-year.

Commenting on today’s release, David Campisi, Chief Executive Officer and President of Big Lots, stated, "I’m pleased to report a solid fourth quarter in what was a very difficult retail environment. We remained focused on our ownable, winnable merchandise strategy, improving the quality and value of our assortments, and our in-store service to Jennifer. Throughout 2016, we were able to drive improved consistency in our business resulting in operating profit and EPS results meaningfully above our original plans and last year. I am proud of our team and the accomplishments of 2016 and the last three years as we have made significant progress, in a very short period of time, repositioning our business for long-term success."

FOURTH QUARTER HIGHLIGHTS

-- Adjusted income from continuing operations of $2.26 per diluted share (non-GAAP), a 12% increase compared to last year’s adjusted income from continuing operations of $2.01 per diluted share (non-GAAP)

-- Comparable store sales increase of 0.3%, the twelfth consecutive quarter of flat or positive results

                                          Earnings per Share
                                                               Q4 2016  Q4 2015  FY 2016  FY 2015
Continuing operations                                          $1.99    $1.91    $3.32    $2.81
Impact of legacy pension costs (1)                             $0.32    $0.10    $0.37    $0.15
Impact of gain on sale of real estate (1)                      ($0.05)  -        ($0.05)  -
Impact of non-recurring legal expense (1)                      -        -        -        $0.05
Continuing operations - adjusted basis                         $2.26    $2.01    $3.64    $3.01
% change to LY                                                 +12%              +21%
(1)  Non-GAAP detailed reconciliation provided in our statements below.

FISCAL 2016 HIGHLIGHTS

-- Adjusted income from continuing operations of $3.64 per diluted share (non-GAAP), a 21% increase compared to fiscal 2015 adjusted income from continuing operations of $3.01 per diluted share (non-GAAP)

-- Comparable store sales increase of 0.9%

-- Cash flow of $227 million exceeded previous guidance of $195 million

-- Returned $288 million of cash to shareholders in the form of dividends and share repurchases

FISCAL 2016

For fiscal 2016, income from continuing operations totaled $152.8 million, or $3.32 per diluted share. Excluding the full year after tax expense of $16.8 million, or $0.37 per diluted share, associated with legacy pension plans which have been terminated, and the gain on sale of real estate noted above, adjusted income from continuing operations for the full year period ended January 28, 2017, totaled $167.2 million, or $3.64 per diluted share (non-GAAP). This result represents a 21% increase compared with adjusted income from continuing operations of $153.5 million, or $3.01 per diluted share (non-GAAP), for fiscal 2015. Comparable store sales increased 0.9% for fiscal 2016, while net sales increased 0.2% to $5,200.4 million, a result of the comparable store sales increase partially offset by a lower store count year-over-year. A reconciliation of all non-GAAP amounts to the most comparable GAAP amounts is provided later in this release.

Inventory and Cash Management

Inventory ended fiscal 2016 at $859 million, a 1% increase compared to $850 million for fiscal 2015. Inventory levels per store increased 2% compared to last year, partially offset by a lower store count year-over-year.

We ended fiscal 2016 with $51 million of Cash and Cash Equivalents and $106 million of borrowings under our credit facility compared to $54 million of Cash and Cash Equivalents and $62 million of borrowings under our credit facility as of the end of fiscal 2015. Cash flow (cash provided by operating activities less cash used in investing activities) was focused on returning cash to our shareholders.

Total Cash Returned To Shareholders

For fiscal 2016, we returned $288 million of cash to shareholders in the form of quarterly dividend payments totaling $38 million and share repurchases totaling $250 million.

FISCAL 2017 GUIDANCE

-- Forecasting fiscal 2017 income to be $3.95 to $4.10 per diluted share representing a 9% to 13% increase compared to fiscal 2016 adjusted income of $3.64 per diluted share (non-GAAP)

-- Forecasting comparable store sales to increase in the 1% to 2% range

-- Forecasting cash flow of approximately $180 to $190 million

-- Forecasting cash returned to shareholders of approximately $195 million, including share repurchases and quarterly dividend payments

We estimate fiscal 2017 income will be in the range of $3.95 to $4.10 per diluted share, compared to adjusted income of $3.64 per diluted share (non-GAAP) for fiscal 2016. This guidance is based on a comparable store sales increase in the 1% to 2% range and total sales flat to up slightly. We estimate this financial performance will result in cash flow of approximately $180 to $190 million.

On February 28, 2017, our Board of Directors approved a share repurchase program ("2017 Share Repurchase Program") providing for the repurchase of up to $150 million of our common shares. The $150 million authorization is expected to be utilized to repurchase shares in the open market and/or in privately negotiated transactions at our discretion, subject to market conditions and other factors. Common shares acquired through the 2017 Share Repurchase Program will be available to meet obligations under equity compensation plans and for general corporate purposes. The 2017 Share Repurchase Program is eligible to begin on March 7, 2017 and will continue until exhausted.

As announced in a separate press release earlier today, on February 28, 2017, the Board of Directors increased the Company’s quarterly dividend payment rate approximately 19% by declaring a quarterly cash dividend for the first quarter of fiscal 2017 of $0.25 per common share. This dividend is payable on March 31, 2017, to shareholders of record as of the close of business on March 17, 2017.

Fiscal Q1 2017 Guidance

For the first quarter of fiscal 2017, we estimate income in the range of $0.95 to $1.05 per diluted share representing a 16% to 28% increase compared to last year’s adjusted income of $0.82 per diluted share. This guidance assumes comparable store sales in the range of flat to +2%.

                            Q1                         Full Year
                            2017 Guidance    2016 (1)  2017 Guidance    2016 (1)
Earnings per diluted share  $0.95  -  $1.05  $0.82     $3.95  -  $4.10  $3.64
(1)  Non-GAAP detailed reconciliation provided below.

Conference Call/Webcast

We will host a conference call today at 8:00 a.m. to discuss our financial results for the fourth quarter of fiscal 2016 and provide commentary on our outlook for fiscal 2017. We invite you to listen to the webcast of the conference call through the Investor Relations section of our website http://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 http://www.biglots.com / after 12:00 noon today and will remain available through midnight on Friday, March 17, 2017. A replay of this call will also be available beginning today at 12:00 noon through March 17 by dialing 1.888.203.1112 (Toll Free USA and Canada) or 1.719.457.0820 (International), and entering Replay Passcode 8358778. All times are Eastern Time.

Headquartered in Columbus, Ohio, Big Lots, Inc. (BIG ) is a unique, non-traditional, discount retailer operating 1,432 BIG LOTS stores in 47 states with product assortments in the merchandise categories of Furniture, Seasonal, Soft Home, Food, Consumables, Hard Home, and Electronics, Toys, & Accessories. Our vision is to be recognized for providing an outstanding shopping experience for our customers, valuing and developing our associates, and creating growth for our shareholders. Big Lots supports the communities it serves through the Big Lots Foundation, a charitable organization focused on four areas of need: hunger, housing, healthcare, and education. For more information about the Company, visit www.biglots.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, current economic and credit conditions, 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.

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BIG LOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                                                               JANUARY 28   JANUARY 30
                                                               2017         2016
                                                               (Unaudited)
                         ASSETS
Current assets:
                         Cash and cash equivalents             $51,164      $54,144
                         Inventories                           858,689      849,982
                         Other current assets                  84,526       90,306
                         Total current assets                  994,379      994,432
Property and equipment - net                                   525,851      559,924
Deferred income taxes                                          46,469       47,739
Other assets                                                   41,008       38,275
                                                               $1,607,707   $1,640,370
                         LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
                         Accounts payable                      $400,495     $382,277
                         Property, payroll and other taxes     81,306       76,568
                         Accrued operating expenses            71,251       81,756
                         Insurance reserves                    40,269       40,661
                         Accrued salaries and wages            54,009       72,250
                         Income taxes payable                  31,265       24,936
                         Total current liabilities             678,595      678,448
Long-term obligations under bank credit facility               106,400      62,300
Deferred rent                                                  56,035       59,454
Insurance reserves                                             56,593       58,359
Unrecognized tax benefits                                      15,853       17,789
Other liabilities                                              43,601       43,550
Shareholders’ equity                                           650,630      720,470
                                                               $1,607,707   $1,640,370
BIG LOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
                                                                                   13 WEEKS ENDED                                          13 WEEKS ENDED
                                                                                   JANUARY 28, 2017                                        JANUARY 30, 2016
                                                                                                                                    %                                                       %
                                                                                   (Unaudited)                                             (Unaudited)
Net sales                                                                          $1,579,211                                       100.0  $1,583,967                                       100.0
                           Gross margin                                            653,323                                          41.4   647,229                                          40.9
                           Selling and administrative expenses                     479,101                                          30.3   462,172                                          29.2
                           Depreciation expense                                    29,690                                           1.9    30,349                                           1.9
Operating profit                                                                   144,532                                          9.2    154,708                                          9.8
                           Interest expense                                        (1,298)                                          (0.1)  (946)                                            (0.1)
                           Other income (expense)                                  359                                              0.0    (2,812)                                          (0.2)
Income from continuing operations before income taxes                              143,593                                          9.1    150,950                                          9.5
                           Income tax expense                                      53,516                                           3.4    56,258                                           3.6
Income from continuing operations                                                  90,077                                           5.7    94,692                                           6.0
                           Income (loss) from discontinued operations, net of tax
                           (benefit) expense of ($14) and $125, respectively       1                                                0.0    (160)                                            (0.0)
Net income                                                                         $90,078                                          5.7    $94,532                                          6.0
Earnings per common share - basic (a)
                           Continuing operations                                   $2.04                                                   $1.93
                           Discontinued operations                                 0.00                                                    0.00
                           Net income                                              $2.04                                                   $1.93
Earnings per common share - diluted (a)
                           Continuing operations                                   $1.99                                                   $1.91
                           Discontinued operations                                 0.00                                                    0.00
                           Net income                                              $1.99                                                   $1.91
Weighted average common shares outstanding
                           Basic                                                   44,231                                                  49,094
                           Dilutive effect of share-based awards                   922                                                     452
                           Diluted                                                 45,153                                                  49,546
Cash dividends declared per common share                                           $0.21                                                   $0.19
(a)                        The earnings per share for Continuing Operations, Discontinued Operations and Net Income are separately calculated in accordance with accounting pronouncements; 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.
BIG LOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
                                                                                   52 WEEKS ENDED                                          52 WEEKS ENDED
                                                                                   JANUARY 28, 2017                                        JANUARY 30, 2016
                                                                                                                                    %                                                       %
                                                                                   (Unaudited)
Net sales                                                                          $5,200,439                                       100.0  $5,190,582                                       100.0
                           Gross margin                                            2,099,419                                        40.4   2,067,186                                        39.8
                           Selling and administrative expenses                     1,731,006                                        33.3   1,708,717                                        32.9
                           Depreciation expense                                    120,440                                          2.3    122,737                                          2.4
Operating profit                                                                   247,973                                          4.8    235,732                                          4.5
                           Interest expense                                        (5,091)                                          (0.1)  (3,683)                                          (0.1)
                           Other income (expense)                                  1,359                                            0.0    (5,199)                                          (0.1)
Income from continuing operations before income taxes                              244,241                                          4.7    226,850                                          4.4
                           Income tax expense                                      91,458                                           1.8    83,842                                           1.6
Income from continuing operations                                                  152,783                                          2.9    143,008                                          2.8
                           Income (loss) from discontinued operations, net of tax
                           expense of $14 and $135, respectively                   45                                               0.0    (135)                                            (0.0)
Net income                                                                         $152,828                                         2.9    $142,873                                         2.8
Earnings per common share - basic (a)
                           Continuing operations                                   $3.37                                                   $2.83
                           Discontinued operations                                 0.00                                                    0.00
                           Net income                                              $3.37                                                   $2.83
Earnings per common share - diluted (a)
                           Continuing operations                                   $3.32                                                   $2.81
                           Discontinued operations                                 0.00                                                    0.00
                           Net income                                              $3.32                                                   $2.80
Weighted average common shares outstanding
                           Basic                                                   45,316                                                  50,517
                           Dilutive effect of share-based awards                   658                                                     447
                           Diluted                                                 45,974                                                  50,964
Cash dividends declared per common share                                           $0.84                                                   $0.76
(a)                        The earnings per share for Continuing Operations, Discontinued Operations and Net Income are separately calculated in accordance with accounting pronouncements; 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.
BIG LOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
                                                              13 WEEKS ENDED    13 WEEKS ENDED
                                                              JANUARY 28, 2017  JANUARY 30, 2016
                                                              (Unaudited)       (Unaudited)
                   Net cash provided by operating activities  $268,389          $290,034
                   Net cash used in investing activities      (12,859)          (14,895)
                   Net cash used in financing activities      (264,109)         (282,536)
Decrease in cash and cash equivalents                         (8,579)           (7,397)
                   Cash and cash equivalents:
                   Beginning of period                        59,743            61,541
                   End of period                              $51,164           $54,144
BIG LOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
                                                                    52 WEEKS ENDED    52 WEEKS ENDED
                                                                    JANUARY 28, 2017  JANUARY 30, 2016
                                                                    (Unaudited)
                         Net cash provided by operating activities  $311,925          $342,352
                         Net cash used in investing activities      (84,701)          (113,193)
                         Net cash used in financing activities      (230,204)         (227,276)
(Decrease) Increase in cash and cash equivalents                    (2,980)           1,883
                         Cash and cash equivalents:
                         Beginning of period                        54,144            52,261
                         End of period                              $51,164           $54,144

BIG LOTS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In thousands, except per share data) (Unaudited)

The following tables reconcile: (1) selling and administrative expenses, selling and administrative expense rate, operating profit, operating profit rate, income tax expense, effective income tax rate, income from continuing operations, net income, diluted earnings per share from continuing operations, and diluted earnings per share for the fourth quarter of 2016, the full year 2016, the fourth quarter of 2015, the full year 2015, and the first quarter of 2016 (GAAP financial measures) to adjusted selling and administrative expenses, adjusted selling and administrative expense rate, adjusted operating profit, adjusted operating profit rate, adjusted income tax expense, adjusted effective income tax rate, adjusted income from continuing operations, adjusted net income, adjusted diluted earnings per share from continuing operations, and adjusted diluted earnings per share (non-GAAP financial measures).

Fourth quarter of 2016 - Thirteen weeks ended January 28, 2017
                                        As Reported                Adjustment to                   Gain on sale of                 As Adjusted
                                                                   exclude pension                 real estate                     (non-GAAP)
                                                                   costs
Selling and administrative expenses     $             479,101      $                  (23,693)     $                      3,823    $             459,231
Selling and administrative expense rate 30.3%                      (1.5%)                          0.2%                            29.1%
Operating profit                        144,532                    23,693                          (3,823)                         164,402
Operating profit rate                   9.2%                       1.5%                            (0.2%)                          10.4%
Income tax expense                      53,516                     9,364                           (1,412)                         61,468
Effective income tax rate               37.3%                      0.3%                            (0.0%)                          37.6%
Income from continuing operations       90,077                     14,329                          (2,411)                         101,995
Net income                              90,078                     14,329                          (2,411)                         101,996
Diluted earnings per share from
continuing operations                   $                    1.99  $                         0.32  $                       (0.05)  $                    2.26
Diluted earnings per share              $                    1.99  $                         0.32  $                       (0.05)  $                    2.26

The above adjusted selling and administrative expenses, adjusted selling and administrative expense rate, adjusted operating profit, adjusted operating profit rate, adjusted income tax expense, adjusted effective income tax rate, adjusted income from continuing operations, adjusted net income, adjusted diluted earnings per share from continuing operations, and adjusted diluted earnings per share are "non-GAAP financial measures" as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude from the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"): (1) all costs associated with the Company’s pension plans, as the Company completed termination and distribution proceedings in 2016, which totaled $23,693 ($14,329, net of tax); (2) a pretax adjustment for a gain on the sale of real estate of $3,823 ($2,411, net of tax). The pension costs encompass all items associated with net periodic benefit costs, including curtailment and settlement charges, and professional fees associated with the plan and plan termination proceedings.

Full Year 2016 - Fifty-two weeks ended January 28, 2017
                                        As Reported                Adjustment to                   Gain on sale of                 As Adjusted
                                                                   exclude pension                 real estate                     (non-GAAP)
                                                                   costs
Selling and administrative expenses     $          1,731,006       $                  (27,766)     $                      3,823    $          1,707,063
Selling and administrative expense rate 33.3%                      (0.5%)                          0.1%                            32.8%
Operating profit                        247,973                    27,766                          (3,823)                         271,916
Operating profit rate                   4.8%                       0.5%                            (0.1%)                          5.2%
Income tax expense                      91,458                     10,976                          (1,412)                         101,022
Effective income tax rate               37.4%                      0.3%                            (0.0%)                          37.7%
Income from continuing operations       152,783                    16,790                          (2,411)                         167,162
Net income                              152,828                    16,790                          (2,411)                         167,207
Diluted earnings per share from
continuing operations                   $                    3.32  $                         0.37  $                       (0.05)  $                    3.64
Diluted earnings per share              $                    3.32  $                         0.37  $                       (0.05)  $                    3.64

The above adjusted selling and administrative expenses, adjusted selling and administrative expense rate, adjusted operating profit, adjusted operating profit rate, adjusted income tax expense, adjusted effective income tax rate, adjusted income from continuing operations, adjusted net income, adjusted diluted earnings per share from continuing operations, and adjusted diluted earnings per share are "non-GAAP financial measures" as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude from the most directly comparable financial measures calculated and presented in accordance with GAAP: (1) all costs associated with the Company’s pension plans, as the Company completed termination and distribution proceedings in 2016, which totaled $27,766 ($16,790, net of tax); and (2) a pretax adjustment for a gain on the sale of real estate of $3,823 ($2,411, net of tax). The pension costs encompass all items associated with net periodic benefit costs, including curtailment and settlement charges, and professional fees associated with the plan and plan termination proceedings.

Fourth quarter of 2015 - Thirteen weeks ended January 30, 2016
                                        As Reported                Adjustment to                   As Adjusted
                                                                   exclude pension                 (non-GAAP)
                                                                   costs
Selling and administrative expenses     $             462,172      $                     (8,247)   $             453,925
Selling and administrative expense rate 29.2%                      (0.5%)                          28.7%
Operating profit                        154,708                    8,247                           162,955
Operating profit rate                   9.8%                       0.5%                            10.3%
Income tax expense                      56,528                     3,264                           59,792
Effective income tax rate               37.3%                      0.3%                            37.6%
Income from continuing operations       94,692                     4,983                           99,675
Net income                              94,532                     4,983                           99,515
Diluted earnings per share from
continuing operations                   $                    1.91  $                         0.10  $                    2.01
Diluted earnings per share              $                    1.91  $                         0.10  $                    2.01

The above adjusted selling and administrative expenses, adjusted selling and administrative expense rate, adjusted operating profit, adjusted operating profit rate, adjusted income tax expense, adjusted effective income tax rate, adjusted income from continuing operations, adjusted net income, adjusted diluted earnings per share from continuing operations, and adjusted diluted earnings per share are "non-GAAP financial measures" as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude from the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP") all costs associated with the Company’s pension plans, as the Company froze benefits and began termination activities for its pension plans in 2015 with the intentions of completing the termination and distributing all plan assets during 2016, which totaled $8,247 ($4,983, net of tax). The pension costs encompass all items associated with net periodic benefit costs, including curtailment and settlement charges, and professional fees associated with the plan and plan termination proceedings.

Full Year 2015 - Fifty-two weeks ended January 30, 2016
                                        As Reported                Adjustment to                Adjustment to                   As Adjusted
                                                                   exclude loss                 exclude pension                 (non-GAAP)
                                                                   contingency                  costs
Selling and administrative expenses     $          1,708,717       $                   (4,487)  $                   (12,932)    $          1,691,298
Selling and administrative expense rate 32.9%                      (0.1%)                       (0.2%)                          32.6%
Operating profit                        235,732                    4,487                        12,932                          253,151
Operating profit rate                   4.5%                       0.1%                         0.2%                            4.9%
Income tax expense                      83,842                     1,776                        5,112                           90,730
Effective income tax rate               37.0%                      0.0%                         0.1%                            37.1%
Income from continuing operations       143,008                    2,711                        7,820                           153,539
Net income                              142,873                    2,711                        7,820                           153,404
Diluted earnings per share from
continuing operations                   $                    2.81  $                       0.05 $                         0.15  $                    3.01
Diluted earnings per share              $                    2.80  $                       0.05 $                         0.15  $                    3.01

The above adjusted selling and administrative expenses, adjusted selling and administrative expense rate, adjusted operating profit, adjusted operating profit rate, adjusted income tax expense, adjusted effective income tax rate, adjusted income from continuing operations, adjusted net income, adjusted diluted earnings per share from continuing operations, and adjusted diluted earnings per share are "non-GAAP financial measures" as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude from the most directly comparable financial measures calculated and presented in accordance with GAAP: (1) a pretax accrual of a loss contingency associated with merchandise-related legal matters of $4,487 ($2,711, net of tax); and (2) all costs associated with the Company’s pension plans, as the Company froze benefits and began termination activities for its pension plans in 2015 with the intentions of completing the termination and distributing all plan assets during 2016, which totaled $12,932 ($7,820, net of tax). The pension costs encompass all items associated with net periodic benefit costs, including curtailment and settlement charges, and professional fees associated with the plan and plan termination proceedings.

First quarter of 2016 - Thirteen weeks ended April 30, 2016
                                        As Reported                Adjustment to                   As Adjusted
                                                                   exclude pension                 (non-GAAP)
                                                                   costs
Selling and administrative expenses     $             425,412      $                     (2,140)   $             423,272
Selling and administrative expense rate 32.4%                      (0.2%)                          32.2%
Operating profit                        62,570                     2,140                           64,710
Operating profit rate                   4.8%                       0.2%                            4.9%
Income tax expense                      24,002                     846                             24,848
Effective income tax rate               38.3%                      0.0%                            38.4%
Income from continuing operations       38,613                     1,294                           39,907
Net income                              38,659                     1,294                           39,953
Diluted earnings per share from
continuing operations                   $                    0.79  $                         0.03  $                    0.82
Diluted earnings per share              $                    0.79  $                         0.03  $                    0.82

The above adjusted selling and administrative expenses, adjusted selling and administrative expense rate, adjusted operating profit, adjusted operating profit rate, adjusted income tax expense, adjusted effective income tax rate, adjusted income from continuing operations, adjusted net income, adjusted diluted earnings per share from continuing operations, and adjusted diluted earnings per share are "non-GAAP financial measures" as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude from the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP") all costs associated with the Company’s pension plans, as the Company completed termination and distribution proceedings in 2016, which totaled $2,140 ($1,294, net of tax). The pension costs encompass all items associated with net periodic benefit costs, including curtailment and settlement charges, and professional fees associated with the plan and plan termination proceedings.

Our management believes that the disclosure of these non-GAAP financial measures provides useful information to investors because the non-GAAP financial measures present an alternative and more relevant method for measuring our operating performance, excluding special items included in the most directly comparable GAAP financial measures that management believes is more indicative of our on-going operating results and financial condition. Our management uses these non-GAAP financial measures, along with the most directly comparable GAAP financial measures, in evaluating our operating performance.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/big-lots-reports-q4-eps-from-continuing-operations-of-199-226-on-an-adjusted-basis-above-previously-communicated-guidance-300417545.html

SOURCE Big Lots, Inc.

https://rt.prnewswire.com/rt.gif?NewsItemId=CL27386&Transmission_Id=201703030600PR_NEWS_USPR_____CL27386&DateId=20170303



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