99 Cents Only Stores Reports a 33.7 Percent Increase in Net Income for the Third Quarter Ended Sept. 30, 1997, With Earnings Per Share of 31 Cents.

CITY OF COMMERCE, Calif.--(BUSINESS WIRE)--Oct. 21, 1997--

The Company Also Reported Net Income for the Nine Months Ended

Sept. 30, 1997, Increased 39.9 Percent With Earnings Per Share

of 85 Cents

99 Cents Only Stores (NYSE:NDN) reported record net income for the quarter ended Sept. 30, 1997, of $4.8 million on record net sales of $59 million, compared with net income of $3.6 million on net sales of $45.4 million in 1996.

This represents a 33.7 percent increase in net income. Net income as a percentage of net sales increased to 8.1 percent from 7.8 percent in 1996.

Earnings per share was 31 cents in the third quarter of 1997 on 15.3 million weighted average number of common shares outstanding, compared with earnings per share of 24 cents in the third quarter of 1996 on 14.9 million weighted average number of common shares outstanding.

This represents a 29.2 percent increase in earnings per share despite an additional 300,000 shares outstanding.

Net sales in the third quarter of 1997 increased $13.6 million, or 30 percent, over net sales for the third quarter of 1996 as previously reported. Gross margin for the third quarter increased to 35.9 percent from 35.5 percent in the same quarter last year. This change is primarily due to favorable merchandise cost factors.

Selling, general and administrative expenses were 22.6 percent of sales, compared with 22.8 percent in 1996. Operating margin for the quarter increased to 13.3 percent from 12.7 percent in 1996.

For the nine months ended Sept. 30, 1997, earnings per share was 85 cents on 15.1 million weighted average number of common shares outstanding, compared with 66 cents in 1996 on 13.8 million weighted average number of common shares outstanding. This represents a 28.8 percent increase in earnings per share despite an additional 1.3 million shares outstanding.

Net sales for the nine months ended Sept. 30, 1997, increased $32.7 million, or 25 percent, over net sales in 1996. Gross margin for the nine months was 35.4 percent of sales, compared with 34 percent for the same period in 1996. This change is primarily due to favorable merchandise cost factors.

Selling, general and administrative expenses were 22.5 percent of sales, compared with 22.2 percent in 1996. Operating margin increased to 12.9 percent from 11.8 percent in 1996.

David Gold, 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 has opened eight stores in the first nine months of this year and will open its 52nd store, the ninth store for the current year, this coming Thursday, Oct. 23, 1997.''

In a separate news release dated Tuesday, Oct. 21, 99 Cents Only Stores announced it has agreed in principal, subject to due diligence, to acquire a 48 percent interest in Universal International Inc. (NASDAQ:UNIV) for $4 million, payable in a combination of cash and merchandise.

99 Cents Only Stores, the nation's oldest existing one-price retailer, operates 51 retail stores, as of Oct. 21, all in Southern California and a wholesale division called Bargain Wholesale. 99 Cents Only Stores emphasizes name-brand consumables, priced at an excellent value, in clean, attractively merchandised stores. -0-

                        99 Cents Only Stores
                        Statements of Income
                            (Unaudited)
          (Amounts in thousands, except per-share amounts)

                                      Three Months Ended
                                           Sept. 30,
                                  1997                    1996

Net sales:
  99 Cents Only Stores    $46,991      79.7%       $35,211      77.6%
  Bargain wholesale        11,995      20.3%        10,173      22.4%
                           58,986     100.0%        45,384     100.0%
Cost of sales              37,794      64.1%        29,266      64.5%
  Gross profit             21,192      35.9%        16,118      35.5%
Selling, general
 and administrative
 expenses                  13,313      22.5%        10,334      22.8%
  Operating income          7,879      13.4%         5,784      12.8%
Interest income
 (expense), net               218       0.3%           242       0.5%
  Income before provision
   for income taxes         8,097      13.7%         6,026      13.3%
Provision for income
 taxes/a                    3,347       5.6%         2,474       5.5%
Net income                $ 4,750       8.1%       $ 3,552       7.8%

Earnings per share       31 cents                 24 cents
Weighted average number
 of common shares
 outstanding               15,259                   14,922


                                      Nine Months Ended
                                           Sept. 30,
                                  1997                    1996

Net sales:
  99 Cents Only Stores   $128,726      78.7%      $101,603      77.7%
  Bargain wholesale        34,818      21.3%        29,230      22.3%
                          163,544     100.0%       130,833     100.0%
Cost of sales             105,623      64.6%        86,315      66.0%
  Gross profit             57,921      35.4%        44,518      34.0%
Selling, general
 and administrative
 expenses                  36,800      22.5%        29,007      22.2%
  Operating income         21,121      12.9%        15,511      11.8%
Interest income
 (expense), net               513       0.3%           (10)       (-)
  Income before provision
   for income taxes        21,634      13.2%        15,501      11.8%
Provision for income
 taxes/a                    8,839       5.4%         6,355       4.9%
Net income               $ 12,795       7.8%      $  9,146       7.0%

Earnings per share       85 cents                 66 cents
Weighted average number
 of common shares
 outstanding               15,107                   13,809


(a) Income tax provision for the nine-month period ended Sept. 30,
1996, has been restated to give pro forma effect for the change in
tax status from an S corporation to a C corporation as of May 1,
1996.


                        99 Cents Only Stores
                           Balance Sheets
                       (Amounts in thousands)

                                Sept. 30,                  Sept. 30,
                               (Unaudited)    Dec. 31,    (Unaudited)
                                   1997         1996          1996

Assets:
Cash                            $  4,338      $  3,375      $  1,430
Short-term investments            29,588        27,619        29,870
Accounts receivable, net           2,540         1,561         2,197
Inventories                       39,011        36,933        35,292
Other current assets                 607           323           450
   Total current assets           76,084        69,811        69,239

Property and equipment, net       28,735        23,073        20,164

Other assets                       6,373         6,113         5,314
   Total assets                 $111,192      $ 98,997      $ 94,717

Liabilities and Shareholders' Equity:
Current portion of capitalized
 lease obligation               $    691      $    656      $    645
Accounts payable                   6,448         6,577         4,866
Accrued expenses                   2,918         3,653         3,614
Income taxes payable                  --           103         2,060
   Total current liabilities      10,057        10,989        11,185

Capitalized lease obligation,
 net of current portion            8,186         8,709         8,878
Deferred rent                      1,325         1,294         1,396
Accrued interest on capitalized
 lease obligation                  1,927         1,500         1,363
   Total long-term liabilities    11,438        11,503        11,637

Shareholders' equity              89,697        76,505        71,895

   Total liabilities and
    shareholders' equity        $111,192      $ 98,997      $ 94,717

-0-

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--99 Cents--

CONTACT: 99 Cents Only Stores, City of Commerce

Eric Schiffer, senior vice president-finance, 213/881-9912