Cost-U-Less Reports Increase in Profitability and Sales for Third Quarter.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)--Oct. 23, 2002 Third Quarter 2002 Results Cost-U-Less, Inc. (the "Company") (Nasdaq:CULS CULS Capital University Law School (Columbus, Ohio) ) today reported net income of $207,000, or $0.06 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, for the quarter ended September 29, 2002, compared to net income of $150,000 or $0.04 per fully diluted share outstanding, for the corresponding quarter last year. 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 (stores open a full 13 months), rose 3.7% for Q3 2002 compared to the same quarter a year ago. Total sales for the quarter increased 0.9% to $43.2 million compared to $42.8 million for the same period a year ago. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become , (earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
"We are proud of our same store sales improvement and gains in gross margins. Most of our financial indicators have improved over last quarter and last year," said J. Jeffrey Meder the Company's President and Chief Executive Officer. "After experiencing a dip in profitability in the second quarter we believe we are well positioned going forward into the final quarter of this year." As previously reported, the Company experienced particularly strong sales in the Caribbean driven by high comparable sales in St. Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs and improving business-to-business sales throughout the region. Although the Company continues to experience lower sales in Guam as a result of a new competitor, its sales are improving and the Company expects sales in Guam to rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective to pre-competition levels as they did when the same competitor entered its St. Thomas market in fiscal 2001. Gross margins rose 0.5% points compared to the same period a year ago due to an increased focus on margins and a stronger mix of retail store sales compared to business-to-business sales. Store expenses for the third quarter were up 4%, or $212,000, over a year ago but down $74,000 from the prior quarter which experienced some non-recurring expenses. At $19.9 million, the Company's inventory is up $1.6 million from the end of the second quarter 2002 due to its seasonal inventory build, and this is in line with inventory levels at the end of the third quarter of 2001. The Company's working capital position continued to improve. The current ratio stood at 1.16 for the quarter ended September 29, 2002, compared to 1.11 for year ended December 30, 2001 and 1.08 at the end of the same period a year ago. The Company recently announced that its Board of Directors has adopted a program to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. from time to time at management's discretion shares of the Company's common stock in the open market or in privately negotiated transactions until December 31, 2002 at prevailing market prices. The Company is constantly exploring ways to maximize long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value for its shareholders, including focusing on efforts to increase earnings, responding to competition, improving same store sales and gross margins, and evaluating alternative methods of implementing future expansion. 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 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. practices, sophisticated distribution capabilities, and superior customer service, primarily to island markets. Additional information about Cost-U-Less is available at www.costuless.com 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 products and services; our small store base; the mix of geographic and product revenues; relationships with third 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; 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; and other risks and uncertainties detailed in the Company's filings with the SEC.
COST-U-LESS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
($ in thousands, except share and per share data)
13 WEEKS 13 WEEKS 39 WEEKS 39 WEEKS
ENDED ENDED ENDED ENDED
Sept. 29, Sept. 30, Sept. 29, Sept. 30,
2002 2001 2002 2001
(Restated) (Restated)
Net sales $43,215 $42,828 $130,878 $131,189
Merchandise costs 35,787 35,659 109,471 109,934
Gross profit 7,428 7,169 21,407 21,255
Operating expenses:
Store 5,533 5,321 16,627 15,777
General and
administrative 1,364 1,382 4,421 4,254
Store opening 2 10 14 44
Store closing 0 0 0 (3)
Total operating expenses 6,899 6,713 21,062 20,072
Operating income 529 456 345 1,183
Other income (expense):
Net interest (84) (134) (287) (474)
Other (103) 3 91 (120)
Income before income taxes 342 325 149 589
Income tax provision 135 175 60 335
Net income $207 $150 $89 $254
Earnings per common share:
Basic and Diluted $0.06 $0.04 $0.02 $0.07
Weighted average common
shares outstanding: 3,606,376 3,606,376 3,606,376 3,606,376
Weighted average common
shares outstanding,
assuming dilution. 3,630,341 3,614,986 3,611,129 3,612,839
Earnings Before Interest,
Taxes, Depreciation and
Amortization (EBITDA): $870 $935 $1,821 $2,476
COST-U-LESS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
September December
29, 2002 30, 2001
ASSETS
Current assets:
Cash and cash equivalents $1,527 $2,660
Receivables, net 2,112 2,117
Inventories, net 19,918 19,360
Other current assets 1,417 1,104
Total current assets 24,974 25,241
Property and equipment, net 14,468 15,464
Deposits and other assets 879 901
Total assets $40,321 $41,606
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit $3,322 $2,173
Accounts payable 15,021 15,885
Accrued expenses and other liabilities 2,902 4,348
Current portion of long-term debt 267 267
Total current liabilities 21,512 22,673
Deferred rent 523 515
Long-term debt, less current portion 2,877 3,077
Total liabilities 24,912 26,265
Total shareholders' equity 15,409 15,341
Total liabilities and shareholders' equity $40,321 $41,606
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