Cost Plus, Inc. Reports Record First Quarter Earnings.Business Editors 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.--(BUSINESS WIRE)--May 24, 2001 Cost Plus, Inc. (Nasdaq:CPWM CPWM Certified Public Works Manager (New Jersey state license) CPWM Controlled Pulsewidth Modulation ) announced today record financial results for its first fiscal quarter ended May 5, 2001. Net income for the first quarter of fiscal 2001 was $1.2 million, compared to last year's net income of $1.1 million. Earnings per share were $0.06 for the quarter compared with the prior year's earnings of $0.05 and analysts' consensus estimates of $0.05. 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 were $112.9 million, a 22.4% increase over fiscal 2000 net sales of $92.2 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 increased 4.4% on top of last year's 6.4% increase. During the quarter, the Company opened five stores, one each in Escondido Escondido (ĕskəndē`dō), city (1990 pop. 108,635), San Diego co., S Calif.; inc. 1888. Located in a grain-, citrus-fruit-, and grape-growing valley, Escondido produces cereal products and has fruit-packing houses and one of the , 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). ; Evanston, Illinois Evanston is a city on Lake Michigan in Cook County, Illinois directly north of Chicago, east of Skokie, and south of Wilmette. The city was first settled in 1836, and has a total population of 74,239[1]. Evanston is part of Chicago's affluent North Shore region. ; Avon, Ohio Avon is a city in Lorain County, Ohio, United States. The population was 11,446 at the 2000 census. It is the home of the annual Avon Duct Tape Festival. It was also recently recognized by Forbes magazine as the 67th fastest-growing city in America with a 41. ; Tacoma Tacoma (təkō`mə), city (1990 pop. 176,664), seat of Pierce co., W Wash., on Commencement Bay and Puget Sound at the mouth of the Puyallup River; inc. 1884. , Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. and Fayetteville, Georgia Fayetteville is a city in Fayette County, Georgia, United States. The population was 11,148 at the 2000 Census. Census Estimates of 2005 indicate a population of 14,363. The city is the county seat of Fayette CountyGR6. . Murray Murray, river, Australia Murray, principal river of Australia, 1,609 mi (2,589 km) long, rising in the Australian Alps, SE New South Wales, and flowing westward to form the New South Wales–Victoria boundary. Dashe, Chairman, 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 President stated, "We are very pleased with our first quarter results, especially given the challenging economic climate facing retailers today. Our more aggressive promotional strategy, which resulted in lower gross profit rates, is clearly helping to drive traffic and maintain our sales momentum. Additionally, expenses continue to be well controlled, and despite the fact that we absorbed the costs of opening one more store than planned, we were still able to produce record earnings which exceeded analysts' expectations." Current earnings guidance for the second quarter of fiscal 2001 remains at $0.07 per share despite expectations of continued softness in consumer sentiment and spending. This estimate is predicated on the following major assumptions: -- Five new stores opened versus four last year. -- Same-store sales up approximately 3.5% over last year. -- Total sales up approximately 22% to $113 million versus $92.7 million in 2000. -- Gross profit rate at 34.0% compared to 34.1% last year, primarily due to the following: reduced leverage on occupancy costs from more moderate same-store sales estimates; a greater percentage of immature stores in our total base related to higher growth rates last year; continuation of the Company's strategy to remain more promotional in driving its sales; and increases in fuel and transportation costs. -- SG&A rate at approximately 30.7% versus 30.6% last year, primarily reflecting continued investments in systems and distribution infrastructure to support expansion, as well as more moderate estimates on same-store sales growth. -- Pre-tax income at $2.6 million versus $2.4 million in 2000, with estimated income tax rate of 39.0% in both years. -- Net income at approximately $1.6 million versus $1.4 million last year, with an approximate 2% increase in weighted average shares outstanding, which yields earnings per share of $0.07 versus $0.07 last year. Regarding earnings estimates for fiscal year 2001, the Company's guidance remains consistent at $1.22 per share, an increase of 22% from fiscal 2000. This estimate is predicated on the following major assumptions: -- New store openings will be 23 versus 24 last year. -- Same-store sales Same-store sales is a business term which refers to the revenue generated by one of a retail chain's specific outlets during a certain period of time (often a fiscal quarter or a particular shopping season), compared to an identical period in the past, usually in the previous year. growth is expected to be approximately 4.6% versus 4.6% last year. -- Net sales will grow to approximately $587 million, a 20.5% increase on a 52-week basis compared to fiscal 2000. -- Gross profit rate is expected to be approximately 35.7% versus 35.9% in 2000, due to the Company's increased promotional activity and to higher occupancy, fuel and transportation costs. -- SG&A rate is expected to be approximately 27.2% versus 27.5% last year. -- Pre-tax income is expected to be approximately $44.1 million at a rate of 7.5% versus $35.5 million at 7.2% in fiscal 2000. -- Net income is expected to rise to approximately $26.9 million, up 24% from fiscal 2000, with weighted average shares outstanding at approximately 22.0 million versus 21.6 million last year. The Company's first quarter earnings conference call is today, May 24, 2001 at 8:00 a.m. PST PST Paroxysmal supraventricular tachycardia, see there . It will be held in a "listen-only" mode for all participants other than the Company's current sell-side and buy-side investment professionals. Phone numbers for the call are 415/537-1919 or 212/346-7474. Callers are advised to dial in approximately 15 minutes prior to the scheduled start time. A telephonic replay will be available at 800/633-8284, Access Code: 18460353, from 10:00 a.m. to 5:00 p.m. PST on Thursday, May 24. Investors may also access the live call or the replay over the internet at www.streetevents.com; www.aol.com; www.fool.com; and www.wallstreetcity.com. The replay will be available approximately 30 minutes after the live call concludes. Cost Plus, Inc. is a leading specialty retailer of casual home living and entertaining products. As of May 24, 2001, the Company operated 135 stores in 19 states, compared to 110 stores in 17 states as of this time last year. The above statements related to anticipated second quarter and fiscal 2001 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. " which are based on current expectations, and are subject to various risks and uncertainties which could cause actual results to differ materially from those forecasted. Such risk factors include, but are not limited to: changes in economic conditions that affect 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. ; changes in the competitive environment; interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. in the flow of merchandise; increases in fuel and transportation costs; store construction delays; changes in the anticipated opening of the Company's new distribution center in Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). ; labor market labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience fluctuations; unseasonable un·sea·son·a·ble adj. 1. Not suitable to or appropriate for the season. 2. Not characteristic of the time of year: unseasonable weather. 3. Poorly timed; inopportune. weather conditions and changes in accounting rules and other regulations. 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 Ended
May 5, 2001 April 29, 2000
Net sales $ 112,915 100.0% $ 92,238 100.0%
Cost of sales and
occupancy 75,654 67.0 60,447 65.5
Gross profit 37,261 33.0 31,791 34.5
Selling, general
and
administrative
expenses 34,174 30.3 28,657 31.1
Store preopening
expenses 1,066 0.9 1,244 1.4
Income from
operations 2,021 1.8 1,890 2.0
Net interest
(income) expense (1) 0.0 32 0.0
Income before
income taxes 2,022 1.8 1,858 2.0
Income taxes 789 0.7 725 0.8
Net income $ 1,233 1.1% $ 1,133 1.2%
Net income per
share - diluted $ 0.06 $ 0.05
Weighted average
shares
outstanding-
diluted 21,595 21,325
New stores opened 5 6
(more)
COST PLUS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
May 5, April 29,
2001 2000
ASSETS
Current assets:
Cash and cash equivalents $ 26,688 $ 26,126
Merchandise inventories 108,678 87,332
Other current assets 12,396 7,765
Total current assets 147,762 121,223
Property and equipment, net 82,372 67,666
Other assets 14,338 12,448
Total assets $244,472 $201,337
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 31,204 $ 17,026
Accrued compensation 5,539 8,447
Other current liabilities 12,470 11,398
Total current liabilities 49,213 36,871
Capital lease obligations 13,370 14,301
Other long-term obligations 8,378 7,659
Shareholders' equity:
Common stock 212 207
Additional paid-in capital 125,504 116,276
Retained earnings 47,795 26,023
Total shareholders' equity 173,511 142,506
Total liabilities and shareholders'
equity $244,472 $201,337
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