FACTORY 2-U STORES, INC. Announces Fiscal 2002 Third Quarter Operating Results.Business Editors SAN DIEGO--(BUSINESS WIRE)--Nov. 13, 2002 FACTORY 2-U Factory 2-U is a chain of department stores that are located mostly in the Western United States selling clothing, domestics, and merchandise, founded in 1962, originally private owned. They have 6000 employees with more than 10 stores. STORES, INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . (Nasdaq: FTUS FTUS Full-Time Unit Support ) today announced its operating results for the third quarter ended November 2, 2002. 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 third quarter decreased 7.6% to $134.5 million as compared to $145.6 million for the same period last year. Comparable store sales for the third quarter decreased 5.6% versus a decrease of 10.5% for the same period last year. The Company reported a net loss of $3.5 million or $0.27 per share in the third quarter, compared to a net loss of $0.3 million or $0.03 per share for the same period last year. Net sales for the nine months ended November 2, 2002 decreased 7.6% to $379.5 million as compared to $410.6 million for the same period last year. Comparable store sales decreased 8.5% versus a decrease of 6.6% for the same period last year. Before special items, the Company reported a net loss of $11.2 million, or $0.87 per share, compared to a net loss of $1.0 million, or $0.08 per share for the same period last year. For the current year, the Company incurred a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charge of $2.1 million, or $0.10 per share related to the settlement agreement of a lawsuit lawsuit: see procedure; tort. which alleged that the Company violated vi·o·late tr.v. vi·o·lat·ed, vi·o·lat·ing, vi·o·lates 1. To break or disregard (a law or promise, for example). 2. To assault (a person) sexually. 3. 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). Labor Code and Internal Wage Commission Orders, by classifying store managers and assistant managers as exempt salaried employees and thereby failing to pay them overtime. Last year, the Company recorded a pretax special charge of $1.6 million, or $0.07 per share related to the retirement and replacement of the Company's general merchandise manager. Giving effect for these special items, the Company reported a net loss of $12.5 million, or $0.97 per share compared to a net loss of $2.0 million, or $0.15 per share for the same period last year. The Company will host a real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. webcast presentation and live conference call to discuss the Company's third quarter operating results and fourth quarter sales and earnings expectations today at 5:00 P.M. Eastern Standard Time. To participate in the call, dial 1-800-843-7949 five minutes before the call or access the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.factory2-u.com. All shareholders and other interested parties are encouraged to participate. A replay of the call will remain available for 48 hours by telephone or on the Internet through November 27, 2002. You may also obtain a transcript A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record of the call by contacting Kehoe, White & Co., Inc. at 1-562-437-0655. The Company will provide a mid-month sales update for November sales on November 18, 2002 at 5:00 P.M. Eastern Standard Time. Those interested can access this update message at 1-888-201-9603. This message will remain available until December 23, 2001. The Company will release its November sales results on December 4, 2002 after the market closes, or approximately 4:00 P.M. Eastern Standard Time. FACTORY 2-U STORES, INC. operates 261 "Factory 2-U" off-price retail stores which sell branded casual apparel for the family, as well as selected domestics and household merchandise at prices which generally are significantly lower than the prices offered by its discount competitors. The Company operates 34 stores in Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). , 3 stores in Arkansas Arkansas, river, United States Arkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. , 64 stores in southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , 63 stores in northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern , 1 store in Idaho, 5 stores in Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , 3 stores
in Missouri, 8 stores in Nevada, 9 stores in New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). , 2 stores in
Oklahoma, 15 stores in Oregon, 2 stores in Tennessee, 36 stores in
Texas, and 16 stores in Washington.
Except for the historical information contained herein, the matters discussed in this news release 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 involve risks and uncertainties, and actual results could differ materially from the Company's present expectations. Among the important factors that could cause actual results to differ materially from those indicated in the forward-looking statements are: customer demand and trends in the off-price apparel industry, the effect of economic conditions, the impact of competitive openings and pricing, supply constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. or difficulties, and other risks detailed in the Company's Securities and Exchange Commission filings.
FACTORY 2-U STORES, INC.
Statements of Operations
(in thousands, except per share data)
(Unaudited)
13 Weeks Ended 39 Weeks Ended
November 2, November 3, November 2, November 3,
2002 2001 2002 2001
Net sales $134,506 $145,568 $379,545 $410,646
Cost of sales 89,854 95,308 252,706 268,807
Gross profit 44,652 50,260 126,839 141,839
Selling and
administrative
expenses 49,057 49,065 144,936 139,503
Pre-opening and
closing expenses 366 989 1,069 2,881
Amortization of
intangibles - 422 - 1,267
Stock-based
compensation expense - - - 456
Operating loss (4,771) (216) (19,166) (2,268)
Interest expense, net 515 342 1,083 1,123
Loss before income
taxes (5,286) (558) (20,249) (3,391)
Income tax benefit (1,770) (234) (7,755) (1,424)
Net loss $(3,516) $(324) $(12,494) $(1,967)
Loss per share:
Basic $(0.27) $(0.03) $(0.97) $(0.15)
Diluted $(0.27) $(0.03) $(0.97) $(0.15)
Weighted average
common shares
outstanding:
Basic 12,970 12,823 12,943 12,780
Diluted 12,970 12,823 12,943 12,780
FACTORY 2-U STORES, INC.
BALANCE SHEETS
(in thousands)
(Unaudited)
November 2, November 3, February 2,
2002 2001 2002
ASSETS
Current assets:
Cash $5,922 $6,059 $17,390
Merchandise inventory 83,461 85,416 54,860
Accounts receivable 2,613 1,823 2,013
Income taxes receivable 7,820 1,489 -
Prepaid expenses 6,109 6,393 6,357
Deferred income taxes 3,553 2,503 3,553
Total current assets 109,478 103,683 84,173
Leasehold improvements and
equipment, net 34,856 42,311 37,042
Deferred income taxes 7,182 4,992 7,182
Other assets 985 1,066 1,011
Excess of cost over net assets
acquired, net 26,301 26,701 26,301
Total assets $178,802 $178,753 $155,709
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term
debt and capital leases $2,000 $2,058 $2,019
Accounts payable 42,047 50,472 36,271
Taxes payable 3,234 3,310 3,332
Accrued expenses and other
liabilities 26,322 17,711 27,918
Total current
liabilities 73,603 73,551 69,540
Revolving credit facility 30,046 8,143 -
Long-term debt 9,181 10,088 8,376
Other long-term obligations 3,578 4,346 3,578
Deferred rent 3,291 3,706 3,649
Total liabilities 119,699 99,834 85,143
Stockholders' equity 59,103 78,919 70,566
Total liabilities and
stockholders' equity $178,802 $178,753 $155,709
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