CASE NAME:

 ALCO Stores, Inc.

CASE NUMBER:

14-34941

JUDGE:

JERNIGAN

MONTHLY PERIOD:

NOVEMBER 2014

RESPONSIBLE PARTY:

/s/ Michael Juniper

CRO

ORIGINAL SIGNATURE OF RESPONSIBLE PARTY

TITLE

MICHAEL JUNIPER

1/6/2015

PRINTED NAME OF RESPONSIBLE PARTY

DATE

PREPARER:

/s/ Michael Juniper

CRO

ORIGINAL SIGNATURE OF PREPARER

TITLE

MICHAEL JUNIPER

1/6/2015

PRINTED NAME OF PREPARER

DATE

CASE NAME:

ALCO Stores, Inc.

CASE NUMBER:

14-34941

Month:

NOVEMBER 2014

1-1

The Debtors have prepared this presentation, as required by the Office of the United States Trustee, based on the information available to the Debtors at this time, but note that such information may be incomplete and may be materially deficient in certain respects. The Monthly Operating Report (“MOR”) is not meant to be relied upon as a complete description of the Debtors, their business, condition (financial or otherwise), results of operations, prospects, assets or liabilities. The Debtors reserve all rights to revise this report.

1-2

This MOR is  not prepared in accordance with U.S. generally accepted accounting principles (GAAP).  This MOR should be read in conjunction with the previously filed financial statements and accompanying notes in the Company’s annual and quarterly reports that are filed with the United States Securities and Exchange Commission.  Certain exceptions as listed below are not exhaustive of all non-GAAP compliance:

· The financial statements are unaudited and will not be subject to audit or review by the Debtor’s external auditors at any time in the future and are subject to change.

· The MOR does not reflect normal quarterly adjustments that are generally recorded by the Debtor upon review of major accounts period to the end of each quarterly accounting period.

· Certain items presented in this MOR are under research and may be accounted for differently in future monthly reports.

· The MOR does not include explanatory footnotes such as disclosures required under GAAP.

· The MOR is not presented in GAAP-based SEC reporting format.

1-3

The November monthly period ends on November 30, 2014 to correspond with the Debtors’ fiscal month end. All data presented is for the period of November 3, 2014 - November 30, 2014.

1-4

This MOR has been filed on a consolidated basis for ALCO Stores, Inc., case No. l4-34941 and ALCO Holdings, LLC, case No. 14-34942 (collectively, the “Debtors”). The Debtors use a centralized cash management system. It is important to note that ALCO Holdings, LLC has no financial activity. See the Cash Management Order entered 10/16/14 for a full description of the Debtors’ cash management system.

On October 12, 2014 (the “Petition Date”), the Debtors each filed a voluntary petition with the Bankruptcy Court for reorganization under Chapter 11 of Title 11  of the United States Code, 11 U.S.C §§ 101, et seq. (the “Bankruptcy Code”). The cases were consolidated for procedural purposes under Case No. 14-34941.

For financial reporting purposes, the Debtors generally prepare consolidate financial statements, which include financial information for all subsidiaries and affiliates.  Separate Schedules and Statements were filed for each of the Debtors on November 14, 2014; however, all amounts shown in the “scheduled amounts” column remain subject to change. Each Debtor’s Schedules and Statements were prepared using the assets and liabilities of that Debtor pursuant to the Debtor’s accounting records.  Financial information may include results for ALCO Discount Liquor, LLC, a non-debtor entity. These amounts would be insignificant to the overall results. For purposes of this MOR, however, the financial statements are presented as consolidated.

SCHEDULE

OCTOBER 2014

NOVEMBER 2014

ASSETS

1. UNRESTRICTED CASH

$

4,256,215

$

2,717,553

$

5,762,092

2. RESTRICTED CASH

226,000

1,326,000

3. TOTAL CASH (1)

$

4,256,215

$

2,943,553

$

7,088,092

4. ACCOUNTS RECEIVABLE (NET)

$

4,995,189

$

5,085,270

$

8,593,347

5. INVENTORY (2)

144,158,480

133,075,801

208,799

6. NOTES RECEIVABLE

—

—

—

7. PREPAID EXPENSES (3)

5,336,406

4,864,802

3,253,212

8. OTHER (ATTACH LIST)

—

(40,865

)

7,046,343

9. TOTAL CURRENT ASSETS

$

158,746,290

$

145,928,562

$

26,189,794

10. PROPERTY, PLANT & EQUIPMENT (3)

$

36,446,061

$

124,411,493

$

124,678,044

11. LESS: ACCUMULATED DEPRECIATION/DEPLETION

(88,891,820

)

(89,428,719

)

12. NET PROPERTY, PLANT & EQUIPMENT

$

36,446,061

$

35,519,674

$

35,249,325

13. DUE FROM INSIDERS

$

—

$

—

$

—

14. OTHER ASSETS - NET OF AMORTIZATION (ATTACH LIST)

13,937,869

13,870,774

13,805,793

15. OTHER (ATTACH LIST)

1,708,291

680,571

1,062,334

16. TOTAL ASSETS

$

210,838,511

$

195,999,580

$

76,307,246

POSTPETITION LIABILITIES

17. ACCOUNTS PAYABLE (4)

$

1,345,733

$

1,981,270

18. TAXES PAYABLE

1,913,817

4,101,029

19. NOTES PAYABLE

—

—

20. PROFESSIONAL FEES

1,103,858

2,376,000

21. SECURED DEBT (5)

—

$

(5,545,470

)

22. OTHER (ATTACH LIST)

—

659,478

23. TOTAL POSTPETITION LIABILITIES

$

4,363,408

$

3,572,306

PREPETITION LlABILITIES

24. SECURED DEBT (6)

$

106,254,553

$

106,254,553

$

—

25. PRIORITY DEBT (7) (8)

1,359,294

1,359,294

1,359,294

26. UNSECURED DEBT (8) (3)

40,716,988

38,637,553

38,637,553

27. OTHER (ATTACH LIST) (9)

—

9,173,403

21,969,798

28. TOTAL PREPETITION LIABILITIES

$

148,330,835

$

155,424,804

$

61,966,646

29. TOTAL LIABILITIES

$

148,330,835

$

159,788,212

$

65,538,952

EQUITY

30. PREPETITION OWNERS’ EQUITY (10)

$

38,033,769

$

38,033,769

31. POSTPETITION CUMULATIVE PROFIT OR

—

—

32. DIRECT CHARGES TO EQUITY (11)

(1,822,400

)

(27,265,474

)

33. TOTAL EQUITY

$

36,211,368

$

10,768,294

34. TOTAL LIABILITIES & OWNERS’ EQUITY

$

195,999,580

$

76,307,246

Footnotes:

(1)

Total Cash is based on the unaudited balance sheet and bank statements for the debtor entities. The cash balance includes store cash, depository accounts, and primary operating account.

(2)

Inventory was sold to The Tiger Group. The amount in inventory left is $200,000 for phones and $8,799 for fuel.

(3)

October  amount has been corrected for formula error.

(4)

$176,432.19 of this amount is split between pre- and post-petition and may include amounts that have been paid.

(5)

Postpetition secured debt represent Wells Fargo DIP loan at a credit balance at the end of November. Wells Fargo sweeps all cash and either pays down loan or creates a balance due to ALCO as the case is here.

(6)

Prepetition secured debt amount was paid off with the proceeds from Tiger.

(7)

The Priority Debt amount includes updated tax amounts for prepetition tax accruals and other priority prepetition liabilities. Some vacation for November  may have been taken in the ordinary course, ALCO needs to review the current outstanding vacation accrual.

(8)

Pursuant to various “first day” orders of the Bankruptcy Court, certain priority debt and unsecured debt payments were made.  

(9)

Other prepetition liabilities include accruals from pre- and post-petition periods.

(10)

Amount represents owner’s equity as of November  2, 2014.

(11)

The Direct Charges to Equity is an adjustment for liabilities and assets (accrued expenses, deferred gains, and others) not reflected in the prepetition scheduled amounts.

CASE NAME:

ALCO Stores, Inc.

CASE NUMBER:

14-34941

SCHEDULE AMOUNT

OCTOBER 2014

NOVEMBER 2014

1  Unrestricted Cash

Operating Accounts

$

2,556,449

$

1,051,571

$

2,573,886

Store Depository Accounts

1,183,967

1,150,182

1,386,294

Petty Cash

515,800

515,800

—

Sales Tax Escrow

—

—

907,770

Professional Fee Escrow (1)

—

226,000

894,142

 Total Unrestricted Cash

$

4,256,215

$

2,717,553

$

5,762,092

2  Restricted Cash

Utility Deposit

$

—

$

—

$

651,000

Tax Escrow (Ad Valorem)

—

—

675,000

$

—

$

—

$

1,326,000

7  Prepaid Expenses

Prepaid Expense

$

1,927,924

$

1,622,388

$

1,190,008

Prepaid Sales Promotion

—

48,052

(15,989

)

Prepaid Insurance

1,597,713

1,482,176

1,340,387

Prepaid Rent

1,524,082

—

865

Security Deposits (2)

286,686

1,712,186

737,942

$

5,336,406

$

4,864,802

$

3,253,212

8  Other Assets

Receivable from Tiger for Balance of lnventory Sal

$

—

$

—

$

7,087,208

Deferred Tax Asset

—

(40,865

)

(40,865

)

Total Other Assets

$

—

$

(40,865

)

$

7,046,343

14  Other Assets - Net of Amortization

Property Under Capital Lease

$

13,937,869

$

13,870,774

$

13,805,793

Capital Leased Software

—

—

—

  Total Other Assets- Net of Amortization

$

13,937,869

$

13,870,774

$

13,805,793

15  Other Assets

Financing Costs

$

1,708,291

$

622,587

$

1,004,504

Capitalized Lease Costs

—

17,119

16,965

Deferred Income Taxes

—

40,865

40,865

  Total Other Assets

$

1,708,291

$

680,571

$

1,062,334

22 Other Postpetition Liabilities

Prepaid Expenses from Tiger

$

—

$

—

$

1,476,243

Expenses Incurred Through Nov. 30

—

—

(816,766

)

 Net Postpetition Liabilities

$

—

$

—

$

659,478

27  Other Prepetition Liabilities

Miscellaneous Accrued Expenses

$

1,106,220

$

546,136

Accrued Percentage Rent Payable

381,916

461,474

Store Closing Reserves

252,952

208,148

Loyalty Liability

342,297

305,990

Customer Liabilities

235,013

2,649

Gift Certificates O/S

308,450

195,115

AFCO Installment Agreement

875,813

750,783

Deferred Gain on Operating Lease

2,376,707

2,346,985

Deferred Rent Credit

2,188,056

2,180,214

Non-Current Deferred Revenue

60,000

60,000

Miscellaneous - Other (3)

1,045,979

14,912,304

  Total Other Prepetition Liabilities

$

9,173,403

$

21,969,798

Monthly Operating Report

Accrual Basis-2

CASE NAME:

ALCO Stores, Inc.

CASE NUMBER:

14-34941

INCOME STATEMENT

OCTOBER 2014

NOVEMBER 2014

REVENUES

1. GROSS REVENUES

$

20,655,081

$

17,695,982

2. INVENTORY LIQUIDATION

—

110,562,376

3. LESS: RETURNS & DISCOUNTS

32,452

—

4  NET REVENUE

$

20,687,533

$

128,258,358

COST OF GOODS SOLD

5. MERCHANDISE & FREIGHT

$

12,148,125

$

14,288,233

6. INVENTORY LIQUIDATED

—

157,168,862

7. TOTAL COST OF GOODS SOLD

$

12,148,125

$

171,457,095

8. GROSS PROFIT

$

8,539,407

$

(43,198,736

)

OPERATING EXPENSES

9.   OFFICER / INSIDER COMPENSATION

$

69,158

$

294,254

10. OTHER PAYROLL

3,419,467

3,087,699

11. SELLING & MARKETING

995,231

778,446

12. GENERAL & ADMINISTRATIVE

4,058,032

1,922,808

13. RENT & LEASE

2,326,757

1,660,105

14. OTHER (ATTACH LIST)

—

—

15. TOTAL OPERATING EXPENSES

$

10,868,645

$

7,743,312

16. INCOME BEFORE NON-OPERATING INCOME & EXPENSE

$

(2,329,238

)

$

(50,942,049

)

OTHER INCOME & EXPENSES

17. NON-OPERATING INCOME

$

—

$

—

18. NON-OPERATING EXPENSE

—

—

19. INTEREST EXPENSE & BANK FEES (3)

186,392

—

20. DEPRECIATION / DEPLETION

—

—

21. AMORTIZATION

—

—

22. OTHER (1)

3,902,602

632,727

23. NET OTHER INCOME & EXPENSES

$

4,088,994

$

632,727

REORGANIZATION EXPENSES

24. PROFESSIONAL FEES

$

174,189

$

2,376,000

25. U.S. TRUSTEE FEES

—

—

26. OTHER (2)

178,401

1,632,280

27. TOTAL REORGANIZATION EXPENSES

$

352,590

$

4,008,280

28. INCOME TAX

29. NET PROFIT (LOSS)

$

(6,770,821

)

$

(55,583,056

)

Monthly Operating Report

Cash Basis-3

CASE NAME:

ALCO Stores, Inc.

CASE NUMBER:

14-34941

CASH RECEIPTS AND DISBURSEMENTS (1)

OCTOBER 2014

NOVEMBER 2014

1. CASH- BEGINNING OF MONTH (2) 

$

 4,256,215

$

2,943,553

RECEIPTS FROM OPERATIONS

2. CASH COLLECTIONS

$

22,520,803

$

24,411,096

3. CASH COLLECTIONS ON BEHALF OF TIGER

—

13,758,647

COLLECTION OF ACCOUNTS RECEIVABLE

4. PREPETITION

$

—

$

—

5. POSTPETITION

—

—

6. TOTAL OPERATING RECEIPTS

$

22,520,803

$

38,169,743

NON-OPERATING RECEIPTS

7. LOANS & ADVANCES

$

2,073,121

$

—

8. SALE OF ASSETS (3)

—

103,475,168

9. OTHER (3)

—

1,476,243

10. TOTAL NON-OPERATING RECEIPTS

$

2,073,121

$

104,951,411

11. TOTAL RECEIPTS

$

24,593,924

$

143,121,154

12. TOTAL CASH AVAILABLE

$

28,850,139

$

146,064,708

OPERATING DISBURSEMENTS

13. MERCHANDISE

$

16,681,706

$

7,278,417

14. FUEL

122,156

129,387

15. PAYROLL

3,842,069

4,370,782

16. BENEFITS

496,460

340,875

17. RENT

531

1,713,586

18. UTILITIES

1,779

353,121

19. ADVERTISING

400,388

54,251

20. FREIGHT

1,471,191

906,285

21. SALES TAX

2,077,672

1,732,618

22. INSURANCE

—

125,130

23. OTHER

374,182

846,231

24. BOARD FEES AND RELATED COSTS

—

160,750

25. TIGER SALES REMITTANCE

—

9,393,789

26. TOTAL OPERATING DISBURSEMENTS

$

25,468,135

$

27,405,222

REORGANIZATION EXPENSES

27. PROFESSIONAL FEES

$

174,189

$

455,214

28. U.S. TRUSTEE FEES

—

—

29. UTILITY DEPOSIT & TAX ESCROW

—

—

30. OTHER- LENDER INTEREST AND FEES (4)

178,401

1,632,280

31. SECURED DEBT PAYDOWN

103,523,929

32. TOTAL REORGANIZATION EXPENSES

$

352,590

$

105,611,423

33. TOTAL DISBURSEMENTS

$

25,820,725

$

133,016,646

34. FLOAT CHANGE AND OTHER (5)

(85,862

)

(414,499

)

35. NET CASH FLOW

$

(1,312,662

)

$

9,690,009

36. CASH HELD BY WELLS FARGO IN LOAN ACCT.

$

(5,545,470

)

37. CASH- END OF MONTH

$

2,943,553

$

7,088,092

Monthly Operating Report

Accrual Basis-4

CASE NAME:

ALCO Stores, Inc.

CASE NUMBER:

14-34941

ACCOUNTS RECEIVABLE AGING

SCHEDULE
AMOUNT

OCTOBER 2014

NOVEMBER 2014

1.

0-30

$

—

$

2,550,265

$

7,520,859

2.

31-60

—

307,796

176,267

3.

61-90

—

108,158

155,784

4.

91+

—

2,136,983

758,536

5.

ACCOUNTS PAYABLE DEBIT BALANCES

7,785,694

7,785,694

7,785,694

6.

TOTAL ACCOUNTS RECEIVABLE

$

12,780,883

$

12,888,896

$

16,397,140

7.

AMOUNT CONSIDERED UNCOLLECTIBLE (1)

(7,785,694

)

(7,803,626

)

(7,803,793

)

8.

ACCOUNTS RECEIVABLE (NET)

$

4,995,189

$

5,085,270

$

8,593,347

AGING OF POSTPETITION TAXES AND PAYABLES

MONTH:

NOVEMBER 2014

TAXES PAYABLE

0-30
DAYS

31-60
DAYS

61-90
DAYS

91+
DAYS

TOTAL

1.

FEDERAL

$

668,346

$

5,774

$

—

$

—

$

674,119

2.

STATE

2,773,262

23,155

—

—

2,796,417

3.

LOCAL

357,196

254,338

—

—

611,534

4.

OTHER (ATTACH LIST)

18,959

—

—

—

18,959

5.

TOTAL TAXES PAYABLE

$

3,817,763

$

283,266

$

—

$

—

$

4,101,029

6.

ACCOUNTS  PAYABLE (2)

853,346

1,127,923

—

—

$

1,981,270

STATUS OF POSTPETITION TAXES

MONTH:

NOVEMBER 2014

FEDERAL

BEGINNING
TAX
LIABILITY

AMOUNT
WITHHELD AND/
OR ACCRUED

AMOUNT
PAID

ENDING
TAX
LIABILITY

1.

WITHHOLDING

$

87,559

$

350,089

$

182,116

$

255,532

2.

FICA-EMPLOYEE

97,378

305,997

199,903

203,472

3.

FICA-EMPLOYER

97,378

305,997

199,903

203,471

4.

UNEMPLOYMENT

5,774

5,871

—

11,644

5.

INCOME

—

18,959

—

18,959

6.

OTHER (ATTACH LIST)

—

—

—

—

7.

TOTAL FEDERAL TAXES

$

288,088

$

986,912

$

581,923

$

693,078

STATE AND LOCAL

8.

WITHHOLDING

$

58,708

$

81,238

$

84,408

$

55,537

9.

SALES

1,287,563

2,694,659

1,287,563

2,694,659

10.

EXCISE

—

—

—

—

11.

UNEMPLOYMENT

23,155

23,066

—

46,221

12.

REAL PROPERTY

206,287

283,341

—

489,628

13.

PERSONAL PROPERTY

50,016

73,855

1,965

121,906

14.

OTHER (ATTACH LIST)

—

—

15.

TOTAL STATE & LOCAL

$

1,625,729

$

3,156,159

$

1,373,936

$

3,407,951

16.

TOTAL TAXES

$

1,913,817

$

4,143,071

$

1,955,859

$

4,101,029

Monthly Operating Report

Accrual Basis-5

CASE NAME:

ALCO Stores, Inc.

CASE NUMBER:

14-34941

MONTH:

NOVEMBER 2014

BANK RECONCILIATIONS (1)

Account #1

Account #2

Account #3

TOTAL

A.       BANK:

B.       ACCOUNT NUMBER:

C.       PURPOSE (TYPE):

I.     BALANCE PER BANK STATEMENT

$

—

2.     ADD: TOTAL DEPOSITS NOT CREDITED

$

—

3.     SUBTRACT: OUTSTANDING CHECKS

$

—

4.     OTHER RECONCILING ITEMS

$

—

5.     MONTH END BALANCE PER BOOKS

$

—

$

—

$

—

$

—

6.     NUMBER OF LAST CHECK WRITTEN

INVESTMENT ACCOUNTS (2)

BANK, ACCOUNT NAME & NUMBER

DATE OF
PURCHASE

TYPE OF
INSTRUMENT

PURCHASE
PRICE

CURRENT
VALUE

7.

8.

9.

10.

11. TOTAL INVESTMENTS

$

—

$

—

CASH

12.CURRENCY ON HAND

$

—

13.TOTAL CASH- END OF MONTH

$

7,088,092

Footnotes:

(1) There are over 200 separate bank accounts that are maintained by the Debtors. These accounts are in the process of being reconciled for October and November 2014.

(2) The Debtors affirm that bank statements for all open and active bank accounts are retained by the Debtors. There were three accounts opened by the Debtors during the current reporting period (professional fee escrow account, utility deposit account, and payroll account).

CASE NAME:

ALCO Stores, Inc.

CASE NUMBER:

14-34941

Month:

NOVEMBER 2014

INSIDERS

TYPE OF

AMOUNT

TOTAL PAID

NAME

PAYMENT

PAID

TO DATE

I.

Stanley B. Latacha

Payroll

$

36,450

$

72,900

2.

Ricardo Clemente

Payroll

16,667

33,333

3.

Brent Streit

Payroll

11,229

27,271