Cost Plus, Inc. Announces First Quarter Results and Provides Guidance for Second Quarter.OAKLAND Oakland, city (1990 pop. 372,242), seat of Alameda co., W Calif., on the eastern side of San Francisco Bay; inc. 1852. Together with San Francisco and San Jose, the city comprises the fourth largest metropolitan area in the United States. , Calif. -- Cost Plus, Inc. (Nasdaq:CPWM CPWM Certified Public Works Manager (New Jersey state license) CPWM Controlled Pulsewidth Modulation ) announced today financial results for its fiscal first quarter ended April 30, 2005. The Company reported a net loss of $138,000 or $0.01 per 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 for the first quarter of fiscal 2005. The net loss includes pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charges totaling $3.1 million, or $0.09 per diluted common share, related to the departure of the Company's former CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and the closure of four stores. The Company earned $3.2 million, or $0.14 per diluted share, in the prior year first quarter. 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 first quarter of 2005 were $200.0 million, a 7.7% increase over first quarter 2004 net sales of $185.7 million. Comparable store sales decreased 1.9%, compared to a 3.4% increase for the first quarter of 2004. The Company indicated that weaker than expected customer traffic surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. the Easter Easter [A.S. Eastre, name of a spring goddess], chief Christian feast, commemorating the resurrection of Jesus after his crucifixion. In the West, Easter is celebrated on the Sunday following the full moon next after the vernal equinox (see calendar); thus, it Holiday was the primary reason for the comparable store sales decrease. For the quarter, sales of 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!" products outperformed the home side of the business. Despite this shift, net merchandise margin rates were up 50 basis points quarter-over-quarter, reflecting a more disciplined approach to markdown Markdown The difference between the highest current bid price among broker-dealers in the market and the lower price that a dealer charges a customer. Notes: The broker offers a lower price to try stimulate trading in hopes that they will make the money back on the extra activity and stronger than average sales performance from higher margin categories including bedding, home collectibles, floor coverings, jewelry jewelry, personal adornments worn for ornament or utility, to show rank or wealth, or to follow superstitious custom or fashion. The most universal forms of jewelry are the necklace, bracelet, ring, pin, and earring. and accessories, pillows and frames. The Company indicated that recent efforts to reinvigorate re·in·vig·o·rate tr.v. re·in·vig·o·rat·ed, re·in·vig·o·rat·ing, re·in·vig·o·rates To give new life or energy to. re these higher margin businesses appear to have met with initial success. During the quarter, the Company opened five stores and closed four stores, as planned. Earnings guidance for the second quarter of fiscal 2005 is estimated to be in the range of $0.06 to $0.11 per diluted share vs. $0.15 per diluted share for the prior year second quarter. The Company's guidance is predicated on the following major assumptions: --Ten new stores opened vs. nine stores opened in the second quarter last year. One store is anticipated to close this year vs. one store closed in the second quarter last year. --Comparable store sales from a decrease of 1% to an increase of 1% vs. a 3.2% increase in the prior year second quarter. The comparable store sales guidance includes lower sales of outdoor dining furniture from cooler weather in certain key markets and from an oversupply o·ver·sup·ply n. pl. o·ver·sup·plies A supply in excess of what is appropriate or required. tr.v. o·ver·sup·plied, o·ver·sup·ply·ing, o·ver·sup·plies of outdoor wooden dining products in the marketplace. Other outdoor living categories have performed better thus far in the quarter, including such items as acrylic acrylic, artificial fiber made from a special group of vinyl compounds, primarily acrylonitrile. Acrylic fibers are thermoplastic (i.e., soften when heated, reharden upon cooling), have low moisture regain, are low in density, and can be made into bulky fabrics. drink and dinnerware, umbrellas and outdoor furniture pillows. --Total sales between $202 million and $206 million vs. $190 million in the prior year. --Gross profit rate between 33.5% and 33.9% vs. 33.9% in the prior year. Added 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 and reduced leverage from these costs offset an anticipated 30 basis point increase in merchandise margin rates between the two quarterly periods. --SG&A rate between 30.3% and 30.7% vs. 29.6% in the prior year. Included in second quarter 2005 SG&A expense is an additional $0.8 million in advertising production costs for media expected to run primarily in the last half of the year. These costs are expensed as incurred. --Pre-tax income between $2.0 million and $3.8 million vs. $5.4 million in the prior year. --An effective income tax rate of 38.5% in the current year vs. 38.0% in the prior year. --Net income between $1.2 million and $2.3 million vs. $3.3 million in the prior year. --Estimated earnings per diluted share between $0.06 and $0.11 vs. $0.15 last year, with weighted average shares outstanding estimated at 22.3 million for the quarter vs. 22.3 million last year. The Company now estimates earnings per share for fiscal 2005 between $1.26 to $1.36 per diluted share based upon an estimated comparable store sales increase of approximately 1.5% in the last half of the year. The Company's first quarter earnings conference call will be today at 8:00 a.m. PT. It will be held in a "listen-only" mode for all participants other than the sell-side and buy-side investment professionals who regularly follow the Company. Phone numbers for the call are (415) 908-6247 or (212) 346-6540. Callers are advised to dial in approximately 15 minutes prior to the scheduled start time. A telephonic replay will be available at (402) 977-9140, Access Code: 21246289, from 10:00 a.m. PT Thursday Thursday: see week. to 10:00 a.m. PT on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , May 20. Investors may also access the live call or the replay over the internet at www.streetevents.com; www.fulldisclosure.com and www.worldmarket.com. The replay will be available approximately one hour after the live call concludes. Cost Plus, Inc. is a leading specialty retailer of casual home furnishings furnishings the extra type or quantity of hair on the head, tail, ears or legs, specified for a particular breed. For example, the feathers in setters, the beard in Bearded collies, the eyebrows in Schnauzers. and entertaining products. As of May 19, 2005, the Company operated 240 stores in 30 states compared to 218 stores in 26 states at the same time last year. The above statements and assumptions relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc anticipated second quarter and fiscal 2005 financial results are "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. " that are based on current expectations and are subject to various risks and uncertainties that could cause actual results to differ materially from those forecasted. Such risk factors include, but are not limited to: changes in economic conditions that effect consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. ; international conflicts; changes in the competitive environment; interruptions in the flow of merchandise; changes in the cost of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. purchased including fuel, transportation and insurance; a material unfavorable outcome with respect to litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , claims and assessments; further terrorist attacks and changes in accounting rules, regulations and interpretations. Please refer to documents on file with the Securities and Exchange Commission for a more detailed discussion of the Company's risk factors. The Company does not undertake any obligation to update its forward-looking statements.
COST PLUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts, unaudited)
First Quarter
April 30, 2005 May 1, 2004
(As Restated)
Net sales $200,023 100.0% $185,703 100.0%
Cost of sales and occupancy 133,304 66.6 122,771 66.1
Gross profit 66,719 33.4 62,932 33.9
Selling, general and
administrative expenses 65,157 32.6 55,156 29.7
Store preopening expenses 1,061 0.5 1,841 1.0
Income from operations 501 0.3 5,935 3.2
Net interest expense 726 0.4 822 0.4
Income (loss) before income taxes (225) -0.1 5,113 2.8
Income tax expense (benefit) (87) 0.0 1,940 1.1
Net income (loss) $ (138) -0.1% $ 3,173 1.7%
Net income (loss) per share --
diluted $ (0.01) $ 0.14
Weighted average shares
outstanding -- diluted 21,914 22,556
New stores opened 5 8
See Notes 2 and 12 to the Company's consolidated financial
statements filed on Form 10-K for the year ended January 29, 2005
for information regarding the restatement.
COST PLUS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
April 30, 2005 May 1, 2004
(As Restated)
ASSETS
Current assets:
Cash and cash equivalents $ 3,759 $ 14,668
Short-term investments - 1,004
Merchandise inventories 268,492 220,210
Other current assets 14,498 17,768
Total current assets 286,749 253,650
Property and equipment, net 188,134 131,567
Goodwill 4,178 4,178
Other assets 12,937 8,897
Total assets $ 491,998 $ 398,292
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 50,377 $ 36,945
Income taxes payable - 236
Accrued compensation 9,700 7,717
Short-term borrowings 10,830 -
Other current liabilities 23,738 19,124
Total current
liabilities 94,645 64,022
Capital lease obligations 13,471 35,695
Long-term debt 54,121 -
Other long-term obligations 35,328 31,355
Shareholders' equity:
Common stock 220 219
Additional paid-in capital 163,128 156,066
Retained earnings 132,071 110,935
Other comprehensive income (986) -
Total shareholders'
equity 294,433 267,220
Total liabilities and
shareholders' equity $ 491,998 $ 398,292
See Notes 2 and 12 to the Company's consolidated financial
statements filed on Form 10-K for the year ended January 29, 2005
for information regarding the restatement.
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