99 Cent Stuff, Inc. Reports First Quarter Financial Results.BOCA RATON Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Fla. -- 99 Cent Stuff, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :NNCT) announced today its financial results for three months ended March 31, 2005. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the quarter increased $2.7 million, or 25.0% to $13.5 million in 2005 from $10.8 million in 2004. Same store net sales decreased $0.5 million, or 4.8%, compared to the prior year. Approximately one-half of the decrease was attributable to two less sales days in 2005 (leap year leap year: see calendar. in 2004 and Easter Sunday fell in the first quarter this year and the second quarter last year). The remaining decrease was due to our planned strategy to remerchandise our stores with higher margin goods and therefore we slowed down inventory shipments to our stores to allow us to effectuate ef·fec·tu·ate tr.v. ef·fec·tu·at·ed, ef·fec·tu·at·ing, ef·fec·tu·ates To bring about; effect. [Medieval Latin effectu this conversion. We anticipate completing this project by the end of the 2nd quarter and expect to see the negative trend in same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of reverse itself. Gross profit for the quarter increased $0.9 million, or 29.9%, to $3.9 million in 2005 from $3.0 million in 2004. As a percentage of net sales, gross margin increased to 28.9% in 2005 from 27.8% in 2004. Selling, general and administrative expenses ("SG&A"), which include operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and depreciation and amortization, increased $1.3 million, or 38.5%, to $4.9 million in 2005 from $3.6 million in 2004, and was primarily attributable to increased wages and related benefits, occupancy costs Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal , insurance expense and depreciation and amortization. Operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the quarter increased $0.4 million to $1.0 million in 2005, from $0.6 million in 2004 and is attributable to the increased SG&A expenses explained above, partially offset by the increase in gross profit. Net loss for 2005 increased $0.5 million to $1.2 million from $0.7 million in 2004. "The company continued its growth, opening one new store in January, bringing its total to 16, or five more stores than in the same period a year ago," said Raymond Zimmerman, Chairman and Chief Executive Officer. Mr. Zimmerman continued that, "in April 2005, we opened our 17th store and it is anticipated that we will open our 18th store in June 2005." About 99 Cent Stuff Founded in 1999, 99 Cent Stuff, Inc. (http://www.99centstuff.com) is a Florida-based single-priced value discount retailer of primarily name brand, consumable A material that is used up and needs continuous replenishment, such as paper and toner. "The low-tech end of the high-tech field!" merchandise that operates 17 retail stores in South Florida. The stores offer a wide assortment of regularly available consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and as well as a broad variety of quality, closeout closeout, closure the finalization of a feeding program in a feedlot. The cattle are sold and a balance sheet is struck which includes the costs of feeding and housing or confining them. merchandise. Every product is sold at 99 cents, including extra value savings of two or three items sold together for 99 cents. The stores feature consumer staples Consumer Staples The industries that manufacture and sell food/beverages, tobacco, prescription drugs, and household products. Notes: Proctor and Gamble would be considered a consumer staple company because many of its products are household and food related. such as produce, bread, and grocery items to encourage customers to visit the stores frequently. Certain statements in this press release constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from what is expressed or implied by such forward-looking statements. The company's future operating results are dependent upon many factors, including but not limited to: (a) those risks and uncertainties related to general economic conditions in the U.S., including regulatory factors that may affect such economic conditions, (b) whether we are able to manage our planned growth efficiently and operate profitable operations, including whether our management will be able to identify, hire, train, retain, motivate and manage required personnel or that management will be able to successfully manage existing and potential market opportunities, and (c) other risks set forth in the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2004. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements contained in this press release, whether as a result of new information, future events, or otherwise.
99 Cent Stuff, Inc
Statement of Operations
For the Three Months Ended March 31, 2005 and 2004
(Amounts in Thousands, Except Share and Per Share Data)
(Unaudited)
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Three Months Ended March 31,
2005 2004
--------------- ---------------
Net sales $13,485 100.0% $10,787 100.0%
Cost of goods sold 9,591 71.1% 7,790 72.2%
-------- ------ -------- ------
Gross profit 3,894 28.9% 2,997 27.8%
Selling, general and administrative
expenses 4,940 36.6% 3,566 33.1%
-------- ------ -------- ------
Loss from operations (1,046) (7.8%) (569) (5.3%)
-------- ------ -------- ------
Other income (expense):
Other income 17 0.1% 11 0.1%
Interest expense (208) (1.5%) (146) (1.4%)
-------- ------ -------- ------
Total other income
(expense) (191) (1.4%) (135) (1.3%)
-------- ------ -------- ------
Loss before provision for income
taxes (1,237) (9.2%) (704) (6.5%)
Provision for income taxes - 0.0% - 0.0%
-------- ------ -------- ------
Net loss $(1,237) (9.2%) $(704) (6.5%)
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Net loss per share, basic and
diluted $(0.21) $(0.13)
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Weighted average number of common
and common equivalent shares
outstanding - basic and
diluted 5,834 5,487
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