ex99_1.htm

Columbus, Ohio – December 5, 2008 – Big Lots, Inc. (NYSE: BIG) today reported third quarter fiscal 2008 income from continuing operations of $12.4 million, or $0.15 per diluted share, compared to income from continuing operations of $14.4 million, or $0.14 per diluted share, in the third quarter of fiscal 2007. Including the impact of discontinued operations, third quarter fiscal 2008 net income totaled $12.2 million, or $0.15 per diluted share, compared to $14.3 million, or $0.14 per diluted share, in the prior year.

For the year to date period ended November 1, 2008, income from continuing operations totaled $73.0 million, or $0.89 per diluted share, compared to income from continuing operations of $65.5 million, or $0.61 per diluted share, for the same period in fiscal 2007. Including the impact of discontinued operations, year to date fiscal 2008 net income totaled $72.8 million, or $0.89 per diluted share, compared to $66.4 million, or $0.62 per diluted share, in the prior year.

Operating profit for the third quarter of fiscal 2008 was $20.1 million, or 2.0% of sales, compared to last year’s operating profit of $22.7 million, or 2.2% of sales. Despite a slightly negative comp store sales result, expenses as a percent of sales were flat to last year due to the continued disciplined approach to our cost structure. As anticipated, our gross margin rate was challenged by slightly higher markdowns and continued strength in our lower margin merchandising categories (Consumables and Hardlines) which were partially offset by better buying margins in a vibrant closeout deal environment.

For the third quarter of fiscal 2008, net interest expense was $1.6 million compared to net interest income of $0.3 million last year. The incremental $1.9 million of net interest expense was directly attributable to investments made to repurchase our stock during the second half of fiscal 2007 through February 2008. The effective income tax rate for the third quarter of fiscal 2008 was 33.2% compared to 37.7% last year.

Inventory and Cash Management

Our company remains in a strong financial position. Inventory ended the third quarter of fiscal 2008 at $958 million compared to $990 million last year. The decline in overall inventory was the direct result of a 3% decrease in average store inventory as our store count was relatively flat year over year. We continue to achieve record inventory turnover results driven by improving inventory management and record productivity in our distribution centers. We ended the third quarter of fiscal 2008 with debt of $269 million which was directly attributable to our seasonal borrowing needs and $750 million of share repurchase activity during the March 2007 through February 2008 timeframe. Our cash flow (defined as operating activities less investing activities) peaks during the fourth quarter of each fiscal year. As such, we expect to end the fourth quarter of fiscal 2008 with approximately $40 million of borrowings. This leaves us adequate liquidity and flexibility to pursue opportunities in merchandise and real estate openings while investing in and positioning our business for long-term success.

Discontinued Operations

As discussed in our Form 10-K filed with the SEC on April 1, 2008, activity related to KB Toys, our former division, as well as the operating results and costs associated with 130 stores closed in January 2006 are classified as discontinued operations. Income from discontinued operations for the third quarter of fiscal 2008 totaled a net loss of $0.1 million, or flat to the net loss from discontinued operations of $0.1 million posted for the third quarter of fiscal 2007. For the year to date period ended November 3, 2008, income from discontinued operations totaled a net loss of $0.2 million compared to net income from discontinued operations of $0.9 million for the same period in fiscal 2007.

For the fourth quarter of fiscal 2008, we anticipate a comparable store sales decrease of approximately 2% to 4%. Our gross margin rate is forecasted above last year while expense de-leverage is anticipated due to the softness in sales. Given these assumptions, our income from continuing operations is estimated to be in the range of $0.90 to $0.99 per diluted share, compared to income from continuing operations (on a non-GAAP basis) for the fourth quarter of fiscal 2007 of $0.93 per diluted share.

Based on the operating results of the first nine months of the year and our updated view of EPS for the fourth quarter of fiscal 2008, we revised our fiscal 2008 guidance for income from continuing operations. We now anticipate fiscal 2008 income from continuing operations will be $1.79 to $1.88 per diluted share, an increase of 27% to 33%, respectively, compared to income from continuing operations (on a non-GAAP basis) of $1.41 per diluted share for fiscal 2007. This updated EPS guidance is based on an expected fiscal 2008 comparable store sales increase of approximately 1% and an operating profit rate in the range of 5.3% to 5.5%.

Refer to our March 5, 2008 press release (furnished with our Form 8-K filed with the SEC on March 11, 2008) to view a presentation of the financial measures calculated and presented in accordance with GAAP that most directly compare to these fiscal 2007 non-GAAP financial measures and a reconciliation of the differences between the non-GAAP financial measures and the comparable financial measures calculated and presented in accordance with GAAP.

An archive of the call will be available through the Investor Relations section of our website (www.biglots.com) beginning two hours after the call ends and will remain available through midnight on Friday, December 19. A replay of the call will be available beginning December 5 at 12:00 noon (Eastern Time) through December 19 at midnight by dialing: 1.800.207.7077 (United States and Canada) or 1.913.383.5767 (International or metro-Seattle). The PIN number is 6697.

Big Lots is the nation’s largest broadline closeout retailer. As of the end of the third quarter of fiscal 2008 (November 1, 2008), we operated 1,366 BIG LOTS stores in 47 states. We also sell merchandise via the internet at www.biglots.com. Wholesale operations are conducted through BIG LOTS WHOLESALE, CONSOLIDATED INTERNATIONAL, and WISCONSIN TOY and with online sales at www.biglotswholesale.com.

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, the current economic and credit crisis, 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.


	NOVEMBER 1,		NOVEMBER 3,
	2008		2007
	(Unaudited)		(Unaudited)

ASSETS

Current assets:
Cash and cash equivalents	$	39,236	$	41,776
Inventories		957,979		989,742
Deferred income taxes		57,899		65,006
Other current assets		68,202		65,989
Total current assets		1,123,316		1,162,513

Property and equipment - net		494,369		491,780

Deferred income taxes		45,964		50,443
Other assets		19,374		22,308

	$	1,683,023	$	1,727,044


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Current maturities of long-term obligations	$	269,100	$	0
Accounts payable		385,761		386,981
Property, payroll and other taxes		72,143		69,186
Accrued operating expenses		48,790		117,879
Insurance reserves		36,204		38,257
KB bankruptcy lease obligation		0		8,768
Accrued salaries and wages		37,450		34,884
Income taxes payable		724		13,914
Total current liabilities		850,172		669,869

Long-term obligations		0		138,900

Deferred rent		28,545		32,604
Insurance reserves		44,899		43,961
Unrecognized tax benefits		25,510		31,052
Other liabilities		32,490		35,386

Shareholders' equity		701,407		775,272
	$	1,683,023	$	1,727,044

	13 WEEKS ENDED						13 WEEKS ENDED
	NOVEMBER 1, 2008						NOVEMBER 3, 2007
				%						%
	(Unaudited)						(Unaudited)


Net sales	$	1,021,580			100.0		$	1,030,638			100.0
Gross margin		406,262			39.8			411,806			40.0
Selling and administrative expenses		366,505			35.9			367,806			35.7
Depreciation expense		19,632			1.9			21,268			2.1
Operating profit		20,125			2.0			22,732			2.2
Interest expense		(1,635	)		(0.2	)		(235	)		(0.0	)
Interest and investment income		10			0.0			578			0.1
Income from continuing operations before income taxes		18,500			1.8			23,075			2.2
Income tax expense		6,142			0.6			8,702			0.8
Income from continuing operations		12,358			1.2			14,373			1.4
Loss from discontinued operations, net of tax benefit of $64 and $48, respectively		(110	)		(0.0	)		(75	)		(0.0	)
Net income	$	12,248			1.2		$	14,298			1.4

Earnings per common share - basic
Continuing operations	$	0.15					$	0.14
Discontinued operations		0.00						0.00
Net income	$	0.15					$	0.14

Earnings per common share - diluted
Continuing operations	$	0.15					$	0.14
Discontinued operations		0.00						0.00
Net income	$	0.15					$	0.14

Weighted average common shares outstanding
Basic		81,255						101,188
Dilutive effect of share-based awards		1,129						1,055
Diluted		82,384						102,243

	39 WEEKS ENDED						39 WEEKS ENDED
	NOVEMBER 1, 2008						NOVEMBER 3, 2007
				%						%
	(Unaudited)						(Unaudited)


Net sales	$	3,278,358			100.0		$	3,243,928			100.0
Gross margin		1,304,857			39.8			1,279,793			39.5
Selling and administrative expenses		1,124,246			34.3			1,116,315			34.4
Depreciation expense		58,868			1.8			64,860			2.0
Operating profit		121,743			3.7			98,618			3.0
Interest expense		(4,153	)		(0.1	)		(432	)		(0.0	)
Interest and investment income		36			0.0			5,180			0.2
Income from continuing operations before income taxes		117,626			3.6			103,366			3.2
Income tax expense		44,635			1.4			37,834			1.2
Income from continuing operations		72,991			2.2			65,532			2.0
Income (loss) from discontinued operations, net of tax (benefit) expense of ($123) and $581, respectively		(209	)		(0.0	)		914			0.0
Net income	$	72,782			2.2		$	66,446			2.0

Earnings per common share - basic
Continuing operations	$	0.90					$	0.62
Discontinued operations		0.00						0.01
Net income	$	0.90					$	0.63

Earnings per common share - diluted
Continuing operations	$	0.89					$	0.61
Discontinued operations		0.00						0.01
Net income	$	0.89					$	0.62

Weighted average common shares outstanding
Basic		81,043						105,866
Dilutive effect of share-based awards		1,064						1,329
Diluted		82,107						107,195

	13 WEEKS ENDED			13 WEEKS ENDED
	November 1, 2008			November 3, 2007
	(Unaudited)			(Unaudited)
Net cash used in operating activities	$	(106,120	)	$	(52,640	)

Net cash used in investing activities		(22,579	)		(18,707	)

Net cash provided by financing activities		124,414			4,484

Decrease in cash and cash equivalents		(4,285	)		(66,863	)
Cash and cash equivalents:
Beginning of period		43,521			108,639
End of period	$	39,236		$	41,776

	39 WEEKS ENDED			39 WEEKS ENDED
	November 1, 2008			November 3, 2007
	(Unaudited)			(Unaudited)
Net cash provided by (used in) operating activities	$	(5,521	)	$	45,040

Net cash used in investing activities		(75,101	)		(38,118	)

Net cash provided by (used in) financing activities		82,727			(246,803	)

Increase (decrease) in cash and cash equivalents		2,105			(239,881	)
Cash and cash equivalents:
Beginning of period		37,131			281,657
End of period	$	39,236		$	41,776

	Contact: Timothy A. Johnson
	Vice President, Strategic
	Planning and Investor Relations
	614-278-6622