99 Cents Only Stores Reports Earnings Per Share of $0.21 for the Fourth Quarter Ended December 31, 2003.Business Editors CITY OF COMMERCE, Calif.--(BUSINESS WIRE)--March 11, 2004 99 Cents Only Stores(R) (NYSE NYSE See: New York Stock Exchange :NDN NDN Indian NDN Naples Daily News (Daily news paper in Naples Florida) NDN Non Delivery Notification NDN National Data Network NDN Necdin NDN New Democratic Network NDN Next Door Neighbor NDN Nevada Donor Network ) reported fourth quarter net income per share of $0.21 on net income of $15.0 million compared to earnings per share in the fourth quarter of 2002 of $0.28 on net income of $19.7 million. Earnings per share for the year 2003 were $0.78 compared to $0.83 in 2002. Eric ERIC Educational Research Information Clearinghouse ERIC Educational Resources Information Center ERIC ERISA Industry Committee ERIC Epidemiologic Research and Information Center (Durham, NC) Schiffer Schiffer is a German surname meaning "ship steerer". It may refer to:
n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin adjustment increasing our California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. reserve, $0.02 from our Texas operation and $0.01 from non-Texas transportation costs. "During 2004 we plan to grow our square footage by 25% by opening 48 new 99 Cents Only Stores with approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 14 in Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the , 12 in Dallas, Texas “Dallas” redirects here. For other uses, see Dallas (disambiguation). The City of Dallas (pronounced [ˈdæl.əs] or [ˈdæl. , 15 in California, 6 in Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). and 1 in Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). . The Company plans to open at least 9 stores in the first quarter, 14 in the second and third quarters and 11 in the fourth quarter. As of today, the Company has opened six stores and closed one and expects to open 3 to 4 more stores in the first quarter. One of these new stores, located in Northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern , achieved record sales for its first week of business. "On January January: see month. 29, 2004 we opened our first store in Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. . Sales performance from this store to date is comparable to our non-Texas stores. Sales for our Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; stores to date remain less than our average non-Texas store. The Houston stores are currently at an annual run rate of approximately $3.0 million, versus our average new store that does about $4 million. However, the Houston stores are profitable and over time we believe as these stores gain higher consumer awareness and customer acceptance, they will have significantly higher sales volumes. "The opening of the Houston distribution center and the retail store growth into Houston burdened the Company's results of operations in 2003. This along with the adverse development of California workers' compensation costs, negatively impacted earnings per share for the year by approximately $0.12. "Our merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain mix continues to improve with exciting new items added in several categories including fresh food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. , DVDs, cell phone and PDA (Personal Digital Assistant) A handheld computer for managing contacts, appointments and tasks. It typically includes a name and address database, calendar, to-do list and note taker, which are the functions in a personal information manager (see PIM). accessories and possibly the best deal in the country on phone cards, 99 minutes for only 99 cents. The Company still plans to grow earnings per share by 20% in 2004. The majority of this earnings growth will be back-weighted." Retail sales for the fourth quarter increased 18.9% to $236.0 million. Total fourth quarter sales including wholesale were $247.5 million, up 17.4% over 2002. Fourth quarter 2003 total gross margin was 40.7%, compared to 40.8% in 2002. Retail gross margin for the fourth quarter was 41.7%, versus 42.1% in 2002. This change primarily results from category mix shifts with continued focus on consumables. 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. for the fourth quarter were 31.3%, compared to 26.8% in 2002. Total operating expenses for the quarter increased $21.0 million. California workers' compensation reserve increases accounted for $7.9 million of the increase over 2002. Net income in the fourth quarter of 2003 decreased 23.9% to $15.0 million on total sales of $247.5 million, compared to net income of $19.7 million on total sales of $210.7 million in 2002. Retail sales for the 2003 year increased 22.9% to $816.3 million. Total 2003 sales including wholesale were $862.5 million, up 20.8% over 2002. Sales per sellable square foot were $308 in 2003, versus $309 in 2002. Average sales per store open for the entire 2003 year increased $4.9 million from $4.8 million in 2002. Retail gross margin for the year was 41.2% compared to 41.7% in 2002. This was primarily due to higher growth grocery sales volume throughout the year. Total 2003 gross margin was 40.1%, same as 2002. Operating expenses for 2003 were 29.9% of sales versus 27.4%, primarily because of additional costs incurred in our California workers' compensation reserve and our Texas operation. The company has begun to take significant steps to address these two issues. Guidance for 2004 Total sales for the full year 2004, including wholesale sales, are projected in the range of $1.02 billion to $1.06 billion. Comparable store sales for the year are projected at 1% to 2%. The company plans to grow its square footage 25% by opening 48 stores. The tax rate for 2004 as well as each quarter is estimated at 39.5%. Fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share count is projected at 74.0 million. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. for 2004 is projected to be in the range of $0.90 to $0.96. Total depreciation for 2004 is estimated in the range of $34 million to $36 million. Capital expenditures for 2004 are estimated to be in the range of $70 to $80 million. Total sales, including wholesale, for the first quarter of 2004 are projected to be in the range of $228 million to $235 million. 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 for the first quarter are projected to range from 1% to 2%. The Company plans to open at least 9 stores in the first quarter including two stores in Dallas, Houston and Tucson, Arizona Tucson (pronounced /ˈtusɑn/, Spanish: Tucsón [tuk'son] . Total gross margin for the first quarter is projected in the range of 40.3% to 40.5%. Total SG&A expenses including depreciation are projected at 30.1% to 30.6%. Fully diluted share count is projected at 72.8 million shares and EPS for the first quarter is projected in the range of $0.20 to $0.21 per share. Total sales for the second quarter, including wholesale, are projected in the range of $247 million to $256 million. Comparable store sales are projected at -1% to 1%. The company plans to open 14 stores in the second quarter. Total gross margin for the second quarter is projected in the range of 41.0% to 41.2%. Total SG&A expenses including depreciation are projected at 29.5% to 29.7%. Fully diluted share count is projected at 73.6 million and EPS for the second quarter is projected in the range of $0.21 to $0.22. Total sales for the third quarter, including wholesale, are projected in the range of $255 million to $262 million. Comparable store sales are projected at 1% to 2%. The company plans to open 14 stores in the third quarter. Total gross margin for the third quarter is projected in the range of 39.6% to 39.8%. Total SG&A expenses including depreciation are projected at 30.6% to 30.8%. Fully diluted share count is projected at 74.5 million and EPS for the third quarter is projected in the range of $0.21 to $0.23. Total sales for the fourth quarter, including wholesale, are projected in the range of $293 million to $306 million. Comparable store sales are projected at 1% to 3%. The company plans to open 11 stores in the fourth quarter. Total gross margin for the fourth quarter is projected in the range of 41.1% to 41.3%. Total SG&A expenses including depreciation are projected at 29.1% to 29.5%. Fully diluted share count is projected at 74.5 million and EPS for the fourth quarter is projected in the range of $0.28 to $0.30. A conference call to discuss this earnings release is scheduled for Thursday Thursday: see week. , March 11, 2004, at 2:30 PM Pacific Time. If you would like to participate in this conference call, please phone the Link conference call operator at 1-206-902-3250 (entry code 45779 followed by #) about nine minutes before the call is scheduled to begin. A recorded version of the call will be made available four hours after completion of the call and will remain on-line for 7 days until March 17, 2004. To access the recorded version, dial 1-913-383-5767 PASSCODE: 4071. 99 Cents Only Stores, the nation's oldest existing one-price retailer, operates 194 retail stores in California, Texas, Arizona and Nevada and a wholesale division called Bargain A reciprocal understanding, contract, or agreement of any sort usually pertaining to the loan, sale, or exchange of property between two parties, one of whom wants to dispose of an item that the other wants to obtain. Wholesale. 99 Cents Only Stores emphasizes name-brand consumables, priced at an excellent value, in attractively merchandised stores. This press release contains 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. , as referenced in 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 (the "Act"). Forward-looking statements are inherently unreliable and actual results may differ. Factors which could cause actual results to differ materially from these forward-looking statements include, changes in the competitive market place, general economic conditions, factors affecting the retail industry in general, the timing of new store openings, the ability of the Company to identify and obtain leases for new stores, the ability of the Company to acquire inventory at favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. costs, and other factors discussed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
99 CENTS ONLY STORES
STATEMENTS OF INCOME
(Amounts in thousands except per share amounts)
Three Months Ended December 31
2003 2002
------------------ ------------------
Net sales:
99 Cents Only Stores $236,016 95.4% $198,476 94.2%
Bargain Wholesale 11,452 4.6% 12,237 5.8%
------------------ ------------------
247,468 100.0% 210,713 100.0%
Cost of sales 146,773 59.3% 124,688 59.2%
------------------ ------------------
Gross profit 100,695 40.7% 86,025 40.8%
Selling, general and
Administrative expenses 70,588 28.5% 51,534 24.5%
Depreciation 6,829 2.8% 4,941 2.3%
------------------ ------------------
Total operating expenses 77,417 31.3% 56,475 26.8%
------------------ ------------------
Operating Income 23,278 9.4% 29,550 14.0%
Interest & other income (expense)
net 822 0.3% 1,416 0.7%
Income before income taxes 24,100 9.7% 30,966 14.7%
Provision for income taxes 9,118 3.6% 11,236 5.3%
------------------ ------------------
Net income $14,982 6.1% $19,730 9.4%
================== ==================
Basic earnings per share
Net income $0.21 $0.28
========= =========
Diluted earnings per share
Net income $0.21 $0.28
========= =========
Weighted average number of
Common shares outstanding:
Basic 72,044 70,278
Diluted 72,779 71,362
Twelve Months Ended December 31
2003 2002
------------------ ------------------
Net sales:
99 Cents Only Stores $816,348 94.7% $663,983 93.0%
Bargain Wholesale 46,112 5.3% 49,959 7.0%
------------------ ------------------
862,460 100.0% 713,942 100.0%
Cost of sales 516,686 59.9% 427,356 59.9%
------------------ ------------------
Gross profit 345,774 40.1% 286,586 40.1%
Selling, general and
Administrative expenses 234,626 27.2% 178,374 24.9%
Depreciation 23,763 2.7% 17,711 2.5%
------------------ ------------------
Total operating expenses 258,389 29.9% 196,085 27.4%
------------------ ------------------
Operating Income 87,385 10.2% 90,501 12.7%
Interest & other income (expense)
net 4,457 0.5% 4,847 0.7%
Income before income taxes 91,842 10.7% 95,348 13.4%
Provision for income taxes 35,313 4.1% 36,374 5.1%
------------------ ------------------
Net income $56,529 6.6% $58,974 8.3%
================== ==================
Basic earnings per share
Net income $0.79 $0.84
========= =========
Diluted earnings per share
Net income $0.78 $0.83
========= =========
Weighted average number of
Common shares outstanding:
Basic 71,348 69,938
Diluted 72,412 71,181
99 CENTS ONLY STORES
BALANCE SHEETS
(Amounts in thousands)
December 31, December 31,
2003 2002
------------------------------
ASSETS:
Cash $318 $7,985
Short-term investments 145,670 146,857
Receivables, net 2,245 2,753
Due from shareholder - 1,232
Income tax receivable 841 -
Deferred income tax 15,927 11,927
Inventories 107,409 83,176
Other current assets 2,717 2,869
------------------------------
Total current assets 275,127 256,799
Property and Equipment, net 202,565 127,560
Long term investments 52,789 37,223
Other assets 22,757 20,994
------------------------------
Total assets $553,238 $442,576
==============================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current portion of capitalized lease $40 $40
Accounts payable 27,903 16,946
Accrued expenses 12,963 10,157
Workers compensation 16,319 7,725
Income tax payable - 6,184
------------------------------
Total current liabilities 57,225 41,052
Deferred rent 2,460 2,210
Capitalized lease obligation 1,553 1,597
Deferred Compensation 2,114 1,102
------------------------------
6,127 4,909
Shareholders' equity 489,886 396,615
------------------------------
Total liabilities and
shareholders' equity $553,238 $442,576
==============================
99 CENTS ONLY STORES
STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Year Ended
December 31,
2003 2002
--------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $56,529 $58,974
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 23,643 17,711
Tax benefit from exercise of non qualified
employee stock options 11,041 5,053
Benefit for deferred income tax (3,900) (6,056)
Changes in assets and liabilities associated with
operating activities:
Accounts receivable 507 770
Inventories (24,233) (16,648)
Other assets (866) (16)
Accounts payable 10,956 3,538
Accrued expenses 2,808 1,977
Due to (from) shareholder 1,232 (2,887)
Workers' compensation 8,594 2,191
Income taxes (7,025) 7,567
Deferred rent 250 149
Net cash provided by operating activities 79,536 72,323
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (98,648) (41,631)
Purchases of short and long term investments (14,378) (35,981)
Investments in other long-term assets 166 137
Net cash used in investing activities (112,860) (77,475)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of capital lease obligation (44) (40)
Proceeds from exercise of stock options 25,701 12,945
Net cash provided by financing activities 25,657 12,905
NET INCREASE (DECREASE) IN CASH (7,667) 7,753
CASH, beginning of period 7,985 232
CASH, end of period $318 $7,985
Note to Editors: 99 Cents Only Stores(R) news releases and information available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.99only.com |
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