Cost-U-Less Reports Profitability for Fourth Quarter; Results Include Charge for Supertyphoon Pongsona.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)--March 24, 2003 Cost-U-Less, Inc. (Nasdaq:CULS CULS Capital University Law School (Columbus, Ohio) ): Fourth Quarter 2002 Results Cost-U-Less, Inc. (the "Company") (Nasdaq:CULS) today reported net income of $196,000, or $0.05 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 fourth quarter ended December December: see month. 29, 2002, compared to net income of $301,000, or $0.08 per fully diluted share outstanding, for the corresponding quarter last year. The results include a pre-tax charge of $406,000 for damage resulting from Supertyphoon Pongsona that struck the island of Guam on December 8, 2002. The Company continues to work with its insurance company to resolve coverage issues that may result in a recovery of some or all of this charge. As previously reported by the Company on December 11, 2002, its two stores on the island of Guam suffered damage from Supertyphoon Pongsona resulting in the immediate closure of both stores. The Company's Tamuning store, opened in 1995, lost its generator generator, in electricity, machine used to change mechanical energy into electrical energy. It operates on the principle of electromagnetic induction, discovered (1831) by Michael Faraday. and freezer-cooler equipment in the storm, but reopened shortly thereafter on December 12. The Dededo store, opened in 1992, suffered more substantial damage, and will require reconstruction. The Company is in the process of working with the landlord to rebuild the store and believes it will be ready to reopen re·o·pen tr. & intr.v. re·o·pened, re·o·pen·ing, re·o·pens 1. To open or be opened again: Officials reopened the airport after the snow was cleared. Schools reopen in September. in late 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 (stores open a full 13 months), rose 0.3% for Q4 2002 compared to the same quarter a year ago. Total sales for the quarter decreased 2.9% to $45.3 million compared to $46.7 million for the same period a year ago due primarily to the closure of the Company's Dededo store in Guam. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 22% to $741,000 for the fourth quarter ended December 29, 2002, compared to $609,000 for the corresponding quarter last year. 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 pleased to complete 2002 so strongly, especially given the difficult circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or ," said J. Jeffrey Meder the Company's President and Chief Executive Officer. "Early in the quarter we were facing logistics issues due to the dockworker strike and then towards the end of the quarter we experienced Pongsona. Despite these challenges, we recorded a profitable quarter, our fourth consecutive quarter of positive same store sales and operating income increased significantly from a year ago." Gross margin rose 0.7 points to 17.2% of sales as compared to the same period a year ago due to improvements in 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 store operations. Improved buying reduced the cost of sales, margins were higher on seasonal sales, and stores experienced less damage and inventory shrink shrink Vox populi noun A psychiatrist than they did in the same period a year ago. The Company's working capital position also continued to improve. The current ratio stood at 1.22 for the quarter ended December 29, 2002, compared to 1.16 for the quarter ended September 29, 2002, and 1.11 for year ended December 30, 2001. The Company is currently working with a financial institution to secure a replacement line of credit to meet its working capital needs. The Company's current lender has indicated that it will not renew the existing line of credit beyond its expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. of April 1, 2003, although they have stated that they will extend its terms until such time as the Company finalizes its replacement facility. Although the Company has not entered into any formal agreement with respect to the new line of credit, it intends to secure the line of credit as soon as possible. Cost-U-Less currently operates ten stores due to the December 8, 2002 closure 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 as a result of damage sustained from Supertyphoon Pongsona. The Company's stores are located 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 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 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; 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 52 WEEKS 52 WEEKS
ENDED ENDED ENDED ENDED
Dec. 29, Dec. 30, Dec. 29, Dec. 30,
2002 2001 2002 2001
-------------------------------------------
Net sales $45,312 $46,666 $176,190 $177,856
Merchandise costs 37,504 38,990 146,975 148,924
-------------------------------------------
Gross profit 7,808 7,676 29,215 28,932
Operating expenses:
Store 5,554 5,511 22,181 21,288
General and
administrative 1,513 1,532 5,934 5,786
Store opening 0 24 14 68
-------------------------------------------
Total operating expenses 7,067 7,067 28,129 27,142
-------------------------------------------
Operating income 741 609 1,086 1,790
Other income (expense):
Net interest (88) (115) (375) (589)
Other (327) (38) (236) (155)
-------------------------------------------
Income before income taxes 326 456 475 1,046
Income tax provision 130 155 190 490
-------------------------------------------
Net income $196 $301 $285 $556
===========================================
Earnings per common share:
Basic and Diluted $0.05 $0.08 $0.08 $0.15
Weighted average common
shares outstanding: 3,606,376 3,606,376 3,606,376 3,606,376
Weighted average common
shares outstanding,
assuming dilution. 3,608,228 3,609,560 3,614,514 3,607,238
Earnings Before Interest,
Taxes, Depreciation and
Amortization (EBITDA): $860 $1,045 $2,681 $3,521
COST-U-LESS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
December 29, 2002 December 30, 2001
------------------ ------------------
ASSETS
Current assets:
Cash and cash equivalents $2,383 $2,660
Insurance receivable 1,460
Accounts receivables, net 2,517 2,117
Inventories, net 18,626 19,360
Other current assets 911 1,104
--------------- ----------------
Total current assets 25,897 25,241
Property and equipment, net 13,510 15,464
Deposits and other assets 783 901
--------------- ----------------
Total assets $40,190 $41,606
=============== ================
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Line of credit $2,367 $2,173
Accounts payable 15,449 15,885
Accrued expenses and other
liabilities 3,107 4,348
Current portion of long-term
debt 267 267
--------------- ----------------
Total current liabilities 21,190 22,673
Deferred rent 529 515
Long-term debt, less current
portion 2,811 3,077
Other long-term liabilities 65
--------------- ----------------
Total liabilities 24,595 26,265
Total shareholders' equity 15,595 15,341
--------------- ----------------
Total liabilities and
shareholders' equity $40,190 $41,606
=============== ================
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