Cost-U-Less Reports Earnings of 15 Cents Per Share for Fourth Quarter, 38 Cents Per Share for Fiscal Year 2003.Business Editors PRESTON Preston, city (1991 pop. 166,675) and district, Lancashire, N England, on the Ribble River. Preston has an active port and is a center of cotton and rayon manufacturing. , Wash.--(BUSINESS WIRE)--Feb. 26, 2004 Cost-U-Less, Inc. (the "Company") (Nasdaq:CULS CULS Capital University Law School (Columbus, Ohio) ) today announced results for the fourth fiscal quarter and fiscal year ended December 28, 2003. Highlights for the fourth fiscal quarter ended December 28, 2003, were as follows: -- EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.15 compared to EPS of $0.05 for Q4 2002. -- Sales of $50.5M, an 11.4% increase over Q4 2002. -- Comparable store sales (stores open a full 13 months) increase of 13.8%. For the fourth fiscal quarter of 2003 the Company reported net income of $568,000, or $0.15 per fully 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 outstanding, compared to net income of $196,000, or $0.05 per fully diluted share outstanding for the corresponding period last year. For the fiscal year 2003, net income increased to $1.4 million, or $0.38 per fully diluted share outstanding, compared to net income of $285,000, or $0.08 per fully diluted share outstanding, for fiscal year 2002. As previously reported, total sales for the quarter increased 11.4% to $50.5 million compared to $45.3 million for the same period a year ago as the Company benefited from strong comparable sales of 13.8% and the very successful reopening Reopening Treasury offerings of additional amounts of outstanding issues, rather than an entirely new issue. A reopened issue will always have the same maturity date, CUSIP number, and interest rate as the original issue. of its Dededo, Guam Dededo is the most populous village of the American island of Guam. According to the U.S. census bureau estimates, Dededo's population was 46,000 in 2004. The village is located on the coral plateau of Northern Guam. store on October 3, 2003. This store suffered substantial damage from Supertyphoon Pongsona that struck the island of Guam on December 8, 2002, forcing it to close, and was subsequently rebuilt during 2003. 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 for the fiscal quarter and year ending December 28, 2003, are calculated on stores excluding the Guam market as the Company's Dededo store was closed for part of fiscal 2002 and 2003. Total sales for fiscal year 2003 increased 0.5% to $177.1 million compared to $176.2 million for fiscal year 2002. Despite the temporary closing of the Company's Dededo store in Guam from December 8, 2002, until October 3, 2003, total sales were relatively flat for fiscal 2003 due to positive sales elsewhere, with comparable store sales for the fiscal year ending December 28, 2003, increasing 8.2%. "We are pleased to cap off the year with such a strong sales, margins, and earnings effort," said J. Jeffrey Meder, the Company's President and 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. . "Figuratively fig·u·ra·tive adj. 1. a. Based on or making use of figures of speech; metaphorical: figurative language. b. Containing many figures of speech; ornate. 2. speaking, this comes not as a result of doing one thing one hundred percent better but one hundred things one percent better, and superior to our competitors. It encompasses merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. and operational improvements throughout our dispersed dis·perse v. dis·persed, dis·pers·ing, dis·pers·es v.tr. 1. a. To drive off or scatter in different directions: The police dispersed the crowd. b. locations." For the fourth quarter of fiscal 2003, the Company's gross margins rose 0.6 points to 17.8% of sales compared to 17.2% for the same period a year ago primarily as a result of higher margins for business-to-business sales. For fiscal 2003, the Company's gross margins rose 1.2 points to 17.8% of sales compared to 16.6% for fiscal 2002 due to several factors including better sourcing, pricing, merchandising and mix of goods in the Company's stores. General and Administrative expenses were negatively impacted for the fourth quarter of fiscal 2003 as the Company recorded a charge of approximately $500,000 for the write down of idle fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → from previously closed stores and an acceleration in depreciation of leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. . Other income for the fourth quarter of fiscal 2003 included a pre-tax gain of approximately $400,000 on the receipt of insurance reimbursements for damage to inventory and equipment suffered from Supertyphoon Pongsona. For the corresponding quarter a year ago, the Company's results included a pre-tax charge of approximately $400,000 for damage to inventory resulting from the Supertyphoon due to coverage issues. Subsequent to the fiscal year end, the Company has received the insurance receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed recorded on the balance sheet as of December 28, 2003. The Company's balance sheet working capital position also improved. The current ratio stood at 1.32 for the year ended December 28, 2003, compared to 1.22 for the year ended December 29, 2002, whereas the total liabilities-to-equity ratio improved to 1.41 for the year ended December 28, 2003, compared to 1.58 for the year ended December 29, 2002. Added Meder, "As we have said before, our focus has been on strengthening the quality of our balance sheet. We now believe that we have the financial foundation for the Company to explore expansion opportunities in selected markets." Cost-U-Less currently operates eleven stores in the Caribbean and Pacific region: U.S. Virgin Islands (2), Netherlands Antilles Netherlands Antilles, island group, an autonomous part of the Netherlands (2005 est. pop. 220,000), 371 sq mi (961 sq km), West Indies. Formerly known as the Dutch West Indies and Netherlands West Indies, they are divided into two groups. (2), Hawaiian Islands (2), 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). (1), Guam (2), American Samoa American Samoa, officially Territory of American Samoa, unincorporated territory of the United States (2000 pop. 57,291), comprising the eastern half of the Samoa island chain in the South Pacific. (1), and Republic of Fiji (1). The Company builds its business through delivering high-quality U.S. and local goods, progressive merchandising practices, sophisticated distribution capabilities, and superior customer service, primarily to island markets. Additional information about Cost-U-Less is available at www.costuless.com 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. This press release contains statements that are forward-looking. These statements are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of 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. These statements are based on current expectations that are subject to risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. These factors include, without limitation: future market opportunities for existing and planned stores; our small store base; the mix of geographic and product revenues; relationships with fourth parties; 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. ; our ability to maintain existing credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities and obtain additional credit; business and economic conditions and growth in various geographic regions; pricing pressures; and political and regulatory instability instability /in·sta·bil·i·ty/ (-stah-bil´i-te) lack of steadiness or stability. detrusor instability in various geographic regions. In addition, these statements are subject to risks associated with the ongoing negotiations with ASSI ASSI Airglow Solar Spectrometer Instrument ASSI Ab Statens Skogsindustrier ASSI Additional Special Skill Indicator ASSI Aerial Scout Sensors Integration ASSI Arvin Suspension Systems Italy , Inc. regarding the possibility of acquiring all outstanding shares of the Company's common stock, including any adverse effect on employee morale and retention, the diversion A turning aside or altering of the natural course or route of a thing. The term is chiefly applied to the unauthorized change or alteration of a water course to the prejudice of a lower riparian, or to the unauthorized use of funds. of management resources and attention, and significant costs incurred in connection with negotiations, including legal, accounting and financial advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal , as well as other risks and uncertainties detailed in the Company's filings with the SEC.
COST-U-LESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)
13 Weeks Ended 52 Weeks Ended
----------------------------------------
December December December December
28, 29, 28, 29,
2003 2002 2003 2002
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Net sales $50,464 $45,312 $177,066 $176,190
Merchandise costs 41,493 37,504 145,563 146,975
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Gross profit 8,971 7,808 31,503 29,215
Operating expenses:
Store 6,210 5,554 22,304 22,181
General and administrative 2,145 1,513 6,853 5,934
Store openings 79 0 287 14
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Total operating expenses 8,434 7,067 29,444 28,129
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Operating income 537 741 2,059 1,086
Other income (expense):
Interest expense, net (139) (88) (458) (375)
Other 550 (327) 710 (236)
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Income before income taxes 948 326 2,311 475
Income tax provision 380 130 930 190
----------------------------------------
Net income $568 $196 $1,381 $285
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Earnings per common share:
Basic $0.16 $0.05 $0.38 $0.08
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Diluted $0.15 $0.05 $0.38 $0.08
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Weighted average common shares
outstanding, basic 3,636,823 3,606,376 3,613,988 3,606,376
========================================
Weighted average common shares
outstanding, diluted 3,807,643 3,608,228 3,670,908 3,614,514
========================================
COST-U-LESS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
Dec. Dec.
28, 29,
2003 2002
----------------
ASSETS
Current assets:
Cash and cash equivalents $4,093 $2,383
Insurance receivable 1,135 1,460
Accounts receivable, net 1,366 2,517
Inventories, net 19,540 18,626
Other current assets 1,145 911
----------------
Total current assets 27,279 25,897
Property and equipment, net 12,862 13,510
Deposits and other assets 799 783
----------------
Total assets $40,940 $40,190
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit $960 $2,367
Accounts payable 15,240 15,449
Accrued expenses and other liabilities 4,245 3,107
Current portion of long-term debt 267 267
----------------
Total current liabilities 20,712 21,190
Other long-term liabilities 684 594
Long-term debt, less current portion 2,544 2,811
----------------
Total liabilities 23,940 24,595
Commitments and contingencies
Shareholders' equity 17,000 15,595
----------------
Total liabilities and shareholders' equity $40,940 $40,190
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