COSTCO COMPANIES, INC. ANNOUNCES FISCAL 1997 THIRD QUARTER AND YEAR-TO-DATE OPERATING RESULTS.ISSAQUAH, Wash.--(BUSINESS WIRE)--May 29, 1997--Costco Companies, Inc. (Nasdaq: COST) today reported sales and operating results for the third quarter (12 weeks) and first thirty-six weeks of fiscal 1997, both ended May 11, 1997. 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 third quarter of fiscal 1997 increased 12% to $4.75 billion from $4.24 billion during last year's third quarter. On a comparable warehouse basis, that is warehouses open at least a year, net sales increased 10 percent. Net income for the third quarter of fiscal 1997 increased 61% to $66.3 million, or $.31 per share, from $41.3 million, or $.21 per share, during the third quarter of fiscal 1996. Earnings per share increased 48%. The Company recorded in the third quarter of 1997 a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern provision for warehouse closing costs Closing Costs The numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, of $3.5 million, or $.01 per share on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. , compared to a pretax provision for warehouse closing costs of $6.0 million, or $.02 per share on an after-tax basis in the third quarter of the prior fiscal year. These provisions primarily include estimated closing costs for certain warehouses which were or will be replaced by new warehouses. Net sales for the first thirty-six weeks of fiscal 1997 increased 12% to $14.69 billion from $13.14 billion during the first thirty-six weeks of fiscal 1996. Comparable warehouse sales during the first thirty-six weeks of fiscal 1997 increased 9 percent over the prior year's levels. Net income for the first thirty-six weeks of fiscal 1997 was impacted by a first quarter $65 million pretax, non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. , reflecting the Company's adoption of the accounting standard for the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of long-term assets Long-Term Assets 1. Reported on the balance sheet, it's the value of a company's property, equipment and other capital assets, less depreciation. 2. A stock, bond or other asset that you plan on holding in your portfolio for a lengthy period of time. . Before the impact of this non-cash charge, net earnings were $234.2 million, or $1.10 per share (fully-diluted), an increase of 44% from net income of $162.3 million, or $.80 per share, reported in the first thirty-six weeks of fiscal 1996. As a result of the charge for impaired assets Impaired Asset An asset with a market value that is worth less than its book value. Notes: If the sum of all estimated future cash flows is less than the carrying value of the asset, then the asset would be considered impaired and would have to be written down to its fair , the Company reported net income for the first thirty-six weeks of fiscal 1997 of $195.5 million, or $.92 per share. Fiscal 1997 year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. results also reflect an $8.5 million pretax provision ($.02 per share on an after-tax basis) for estimated warehouse closing costs compared to a prior year-to-date provision of $6.0 million ($.02 per share on an after-tax basis). The Company currently operates 258 warehouses: 198 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , 54 in Canada, five warehouses in the United Kingdom, and one warehouse in Taiwan. The Company also operates 13 warehouses in Mexico with a joint venture partner, and has a license agreement for the operation of a membership warehouse in Seoul, Korea. Expansion plans for the remainder of the fiscal year, which ends on August 31, 1997, are to open 5 additional warehouses, including the relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of its New Rochelle, New York New Rochelle (French: Nouvelle-Rochelle) is a city in the southeast portion of the U.S. state of New York in Westchester County, 16 miles (26 km) from Grand Central Terminal in New York City and 2 miles north of the border with The Bronx. warehouse to a larger and better-located facility. -0-
COSTCO COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(unaudited)
12 Weeks Ended 36 Weeks Ended
5-11-97 5-12-96 5-11-97 5-12-96
REVENUE
Net sales $4,752,445 $4,236,207 $14,685,506 $13,138,139
Membership fees
and other 83,784 75,281 273,024 245,608
Total revenue 4,836,229 4,311,488 14,958,530 13,383,747
OPERATING EXPENSES
Merchandise costs 4,283,157 3,829,923 13,210,736 11,871,031
Selling, general and
administrative 426,980 383,387 1,289,119 1,161,303
Preopening expenses 2,458 4,738 18,743 20,158
Provision for impaired
assets and warehouse
closing costs 3,500 6,000 73,500 6,000
Operating income 120,134 87,440 366,432 325,255
OTHER INCOME (EXPENSE)
Interest expense (14,662) (19,194) (50,839) (54,466)
Interest income
and other 4,055 2,007 11,177 5,385
INCOME BEFORE PROVISION FOR
INCOME TAXES 109,527 70,253 326,770 276,174
Provision for
income taxes 43,262 28,979 131,246 113,921
NET INCOME $ 66,265 $ 41,274 $ 195,524(a) $ 162,253
NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE --
FULLY DILUTED:
Net income $ 0.31 $ 0.21 $ 0.92(a) $ 0.80
Shares used in
calculation (000's) 216,362 218,336 218,433 218,145
(a) Net income and net income per common and common equivalent share would have been $234,199 and $1.10, respectively, without the effect of adopting FAS No. 121, using 225,706 fully-diluted shares. CONTACT: Costco Companies, Inc. Richard Galanti Richard A. Galanti (born 1956 or 1957) is currently the chief financial officer and executive vice president of Costco Wholesale Corporation. He has held these positions since 1993 and he has been with Costco since 1984. , 425/313-8203 Bob Nelson, 425/313-8255 |
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