99 Cents Only Stores Reports Earnings Per Share of $0.34 for the Third Quarter Ended Sept. 30, 1998, an Increase of 35.1 Percent.CITY OF COMMERCE, Calif.--(BUSINESS WIRE)--Oct. 20, 1998-- The Company Also Reported Net Income and Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the Three Months Ended Sept. 30, 1998, Increased 41.3 Percent and 29.8 Percent, Respectively 99 Cents Only Stores (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 net income for the quarter ended Sept. 30, 1998, of $6.7 million on record 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 of $78.0 million, compared with net income of $4.8 million on net sales of $59.0 million in 1997. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of was $0.34 in the third quarter of 1998 on 19.95 million weighted average number of common shares outstanding, compared with $0.25 in the third quarter of 1997 on 19.07 million weighted average number of common shares outstanding. This represents a 35.1 percent increase in earnings per share despite an additional 0.88 million shares outstanding. Net sales in the third quarter of 1998 increased $19.0 million or 32.2 percent over net sales for the third quarter of 1997 as previously reported. Gross margin for the third quarter was 36.0 percent compared with 35.9 percent in the same quarter last year. This change is primarily due to the effect of $0.8 million of proceeds from business interruption insurance Noun 1. business interruption insurance - insurance that provides protection for the loss of profits and continuing fixed expenses resulting from a break in commercial activities due to the occurrence of a peril . Selling, general and administrative expenses were 22.9 percent of sales compared with 22.6 percent in 1997. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the quarter was 13.1 percent of sales compared with 13.3 percent in 1997. Margins were affected slightly by the consolidation of Universal's 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 nine months ended Sept. 30, 1998, diluted earnings per share was $0.86 on 19.46 million weighted average number of common shares outstanding, compared with $0.68 in 1997 on 18.82 million weighted average number of common shares outstanding. This represents a 25.8 percent increase in earnings per share despite an additional 0.64 million shares outstanding. The diluted earnings per share for the first nine months was $0.92 or a 35.3 percent increase over 1997, excluding the impact of the company's share of the loss from its minority interest in Universal. Net sales for the nine months ended Sept. 30, 1998, increased $49.1 million or 30.0 percent over net sales in 1997. Gross margin for the nine months was 36.0 percent of sales compared with 35.4 percent for the same period in 1997. This change is primarily due to favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. 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 cost factors, wholesale, retail sales mix sales mix See product mix. and impact of $0.8 million of proceeds from business interruption insurance. For the nine-month period, SG&A expenses were 22.7 percent vs. 22.5 percent in 1997, and operating margin was 13.3 percent vs. 12.9 percent in 1997. David Gold
David Gold is an English businessman. , president of the company said: "We are pleased to announce better-than-expected growth in earnings and net sales in our third quarter and for the first nine months. The company expects to open four additional stores in the fourth quarter of 1998, including our first stores in San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. and Riverside Riverside. 1 City (1990 pop. 226,505), seat of Riverside co., S Calif.; inc. 1883. One of the fastest growing U.S. cities in the late 20th cent., it is famous for its orange industry. Counties. Our Riverside County store in Corona Corona, city, United States Corona (kərō`nə), city (1990 pop. 76,095), Riverside co., S Calif.; inc. 1896. The city developed as a primary citrus fruit producer and shipping center. There is also light manufacturing. is scheduled to open on Oct. 27, 1998." 99 Cents Only Stores, the nation's oldest existing one-price retailer, operates 60 retail stores, all in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , 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 and through its Universal International Inc. subsidiary, it operates 73 Only Deals and Odd's-N-End's multiprice discount stores located in the upper Midwest The Upper Midwest is a region of the United States with no universally agreed-upon boundary, but it almost always lies within the US Census Bureau's definition of the Midwest and includes the states of Minnesota and Wisconsin, as well as at least the Upper Peninsula of Michigan. , New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Texas. 99 Cents Only Stores emphasizes name-brand consumables, priced at an excellent value, in attractively merchandised stores. 99 Cents Only Stores news releases and information are available on the World Wide Web at http://www.businesswire.com/cnn/ndn.htm or via fax by calling 888/835-0099, toll free. This news 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 that could cause actual results to differ materially from these forward-looking statements include, changes in the competitive marketplace, general economic conditions, factors affecting the retail industry in general, the timing of new store openings, the ability of the company to acquire inventory at favorable 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. -0-
99 CENTS ONLY STORES
STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands except per share amounts)
Three Months Ended
Sept.30,
1998 1997
NET SALES:
99 Cents Only Stores $59,147 75.9% $46,991 79.7%
Universal 2,456 3.1% -- --
Bargain wholesale 16,357 21.0% 11,995 20.3%
77,960 100.0% 58,986 100.0%
COST OF SALES 49,865 64.0% 37,794 64.1%
Gross profit 28,095 36.0% 21,192 35.9%
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 17,865 22.9% 13,313 22.6%
Operating income 10,230 13.1% 7,879 13.3%
INTEREST INCOME
(EXPENSE), NET 480 0.6% 218 0.4%
Income before (loss) from
minority interest 10,710 13.7% 8,097 13.7%
(LOSS) FROM MINORITY
INTEREST (98) (0.1%) -- 0.0%
Income before provision
for income taxes 10,612 13.6% 8,097 13.7%
PROVISION FOR INCOME TAXES 3,900 5.0% 3,347 5.7%
NET INCOME $ 6,712 8.6% $4,750 8.1%
EARNINGS PER SHARE
Basic $0.34 $0.26
Diluted $0.34 $0.25
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic 19,544 18,532
Diluted 19,952 19,074
Nine Months Ended
Sept. 30,
1998 1997
NET SALES:
99 Cents Only Stores $167,324 78.7% $128,726 78.7%
Universal 2,456 1.2% -- --
Bargain wholesale 42,819 20.1% 34,818 21.3%
212,599 100.0% 163,544 100.0%
COST OF SALES 136,139 64.0% 105,623 64.6%
Gross profit 76,460 36.0% 57,921 35.4%
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 48,206 22.7% 36,800 22.5%
Operating income 28,254 13.3% 21,121 12.9%
INTEREST INCOME
(EXPENSE), NET 1,099 0.5% 513 0.3%
Income before (loss) from
minority interest 29,353 13.8% 21,634 13.2%
(LOSS) FROM MINORITY
INTEREST (1,334) (0.6%) -- 0.0%
Income before provision
for Income taxes 28,019 13.2% 21,634 13.2%
PROVISION FOR INCOME TAXES 11,381 5.4% 8,839 5.4%
NET INCOME $16,638 7.8% $12,795 7.8%
EARNINGS PER SHARE
Basic $0.87 $0.69
Diluted $0.86 $0.68
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic 19,041 18,524
Diluted 19,458 18,824
-0-
99 CENTS ONLY STORES
BALANCE SHEETS
(Amounts in thousands)
Sept. 30, Dec. 31, Sept. 30,
1998 1997 1997
(Unaudited) (Unaudited)
ASSETS:
Cash $776 $882 $4,338
Short-term investments 36,814 26,191 24,428
Accounts receivable, net 2,579 1,510 2,540
Inventories 77,213 43,114 39,011
Other current assets 2,508 673 607
Total current assets 119,890 72,370 70,924
Property and equipment, net 42,730 29,441 28,735
Long-term investments 5,214 6,393 5,160
Deferred Taxes 7,041 5,947 5,702
Goodwill 8,926 -- --
Other assets 2,113 5,292 671
23,294 17,632 11,533
Total assets $ 185,914 $119,443 $111,192
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current portion of
capitalized lease
obligation $ 910 $ 704 $ 691
Accounts payable 12,897 5,534 6,448
Accrued expenses 4,597 5,130 2,918
Other current liabilities 1,088 -- --
Income taxes payable -- 211 --
Total current liabilities 19,492 11,579 10,057
Capitalized lease obligation,
net of current portion 7,585 8,005 8,186
Deferred rent 1,960 1,476 1,325
Accrued interest on
capitalized lease obligation 2,623 2,075 1,927
Total long-term liabilities 12,168 11,556 11,438
Shareholders' equity 154,254 96,308 89,697
Total liabilities and
shareholders' equity $185,914 $119,443 $111,192
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