Exhibit 99.1
Selected Pro Forma Financial Information (Unaudited):
The accompanying unaudited pro forma condensed consolidated statements of operations for the three-month periods ended May 5, 2007, August 4, 2007, November 3, 2007, and February 2, 2008 have been prepared to reflect the results of continuing operations as adjusted for reclassification of the operating results of the eight underperforming media markets that will be exited in fiscal 2008 as discontinued operations. In the opinion of management, all adjustments necessary to present fairly such pro forma financial statements have been made. The pro forma condensed consolidated statements of operations have been prepared as if the eight media markets that the Company is exiting in 2008 had qualified for treatment as discontinued operations during fiscal 2007. If the eight media markets that the Company will be exiting in fiscal 2008 had qualified for treatment as discontinued operations in fiscal 2007 there would have been no resulting change in the Company’s condensed consolidated balance sheets as previously reported as of May 5, 2007, August 4, 2007, November 3, 2007, and February 2, 2008. The pro forma financial information is unaudited and is not necessarily indicative of the results that would have occurred if the media markets had been exited in fiscal 2007. The pro forma condensed consolidated financial information should be read in conjunction with the notes to the historical consolidated financial statements of Cost Plus, Inc.
COST PLUS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amount)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Fiscal Quarters Ended | |
| | | May 5, 2007 | | | August 4, 2007 | | | November 3, 2007 | | | February 2, 2008 | |
| | | As
Reported | | | Reclass
Discontinued
Operations (1) | | | Pro forma
Results | | | As
Reported | | | Reclass
Discontinued
Operations (1) | | | Pro forma
Results | | | As
Reported | | | Reclass
Discontinued
Operations (1) | | | Pro forma
Results | | | As
Reported | | | Reclass
Discontinued
Operations (1) | | | Pro forma
Results | |
Net sales | | $ | 207,947 | | | (5,445 | ) | | $ | 202,502 | | | $ | 215,185 | | | (5,957 | ) | | $ | 209,228 | | | $ | 220,581 | | | (5,993 | ) | | $ | 214,588 | | | $ | 380,184 | | | (10,836 | ) | | $ | 369,348 | |
Cost of sales and occupancy | | | 149,970 | | | (4,511 | ) | | | 145,459 | | | | 162,951 | | | (4,993 | ) | | | 157,958 | | | | 158,686 | | | (4,704 | ) | | | 153,982 | | | | 264,989 | | | (8,071 | ) | | | 256,918 | |
Gross profit | | | 57,977 | | | (934 | ) | | | 57,043 | | | | 52,234 | | | (964 | ) | | | 51,270 | | | | 61,895 | | | (1,289 | ) | | | 60,606 | | | | 115,195 | | | (2,765 | ) | | | 112,430 | |
Selling, general and administrative expenses | | | 73,690 | | | (2,041 | ) | | | 71,649 | | | | 77,655 | | | (2,168 | ) | | | 75,487 | | | | 81,386 | | | (2,261 | ) | | | 79,125 | | | | 94,708 | | | (2,836 | ) | | | 91,872 | |
Impairment of property and equipment related to store closures | | | — | | | — | | | | — | | | | — | | | — | | | | — | | | | — | | | — | | | | — | | | | 2,251 | (2) | | (2,251 | ) | | | — | |
Store preopening expenses | | | 1,088 | | | — | | | | 1,088 | | | | 1,103 | | | — | | | | 1,103 | | | | 702 | | | — | | | | 702 | | | | 550 | | | — | | | | 550 | |
Income (loss) from continuing operations | | | (16,801 | ) | | 1,107 | | | | (15,694 | ) | | | (26,524 | ) | | 1,204 | | | | (25,320 | ) | | | (20,193 | ) | | 972 | | | | (19,221 | ) | | | 17,686 | | | 2,322 | | | | 20,008 | |
Net interest expense | | | 1,923 | | | — | | | | 1,923 | | | | 2,941 | | | — | | | | 2,941 | | | | 3,359 | | | — | | | | 3,359 | | | | 3,390 | | | — | | | | 3,390 | |
Income (loss) from continuing operations before income taxes | | | (18,724 | ) | | 1,107 | | | | (17,617 | ) | | | (29,465 | ) | | 1,204 | | | | (28,261 | ) | | | (23,552 | ) | | 972 | | | | (22,580 | ) | | | 14,296 | | | 2,322 | | | | 16,618 | |
Income tax expense (benefit)(3) | | | (7,611 | ) | | 424 | | | | (7,187 | ) | | | (11,480 | ) | | 461 | | | | (11,019 | ) | | | (9,608 | ) | | 373 | | | | (9,235 | ) | | | 26,754 | | | 721 | | | | 27,475 | |
Loss from continuing operations | | | (11,113 | ) | | 683 | | | | (10,430 | ) | | | (17,985 | ) | | 743 | | | | (17,242 | ) | | | (13,944 | ) | | 599 | | | | (13,345 | ) | | | (12,458 | ) | | 1,601 | | | | (10,857 | ) |
Loss from discontinued operations, net of tax | | | — | | | (683 | ) | | | (683 | ) | | | — | | | (743 | ) | | | (743 | ) | | | — | | | (599 | ) | | | (599 | ) | | | — | | | (1,601 | ) | | | (1,601 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss | | $ | (11,113 | ) | | — | | | $ | (11,113 | ) | | $ | (17,985 | ) | | — | | | $ | (17,985 | ) | | $ | (13,944 | ) | | — | | | $ | (13,944 | ) | | $ | (12,458 | ) | | — | | | $ | (12,458 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss per diluted share from continuing operations | | $ | (0.50 | ) | | 0.03 | | | $ | (0.47 | ) | | $ | (0.81 | ) | | 0.03 | | | $ | (0.78 | ) | | $ | (0.63 | ) | | 0.03 | | | $ | (0.60 | ) | | $ | (0.56 | ) | | 0.07 | | | $ | (0.49 | ) |
Loss per diluted share from discontinued operations | | $ | — | | | (0.03 | ) | | $ | (0.03 | ) | | $ | — | | | (0.03 | ) | | $ | (0.03 | ) | | $ | — | | | (0.03 | ) | | $ | (0.03 | ) | | $ | — | | | (0.07 | ) | | $ | (0.07 | ) |
Net loss per diluted share | | $ | (0.50 | ) | | — | | | $ | (0.50 | ) | | $ | (0.81 | ) | | — | | | $ | (0.81 | ) | | $ | (0.63 | ) | | — | | | $ | (0.63 | ) | | $ | (0.56 | ) | | — | | | $ | (0.56 | ) |
Weighted average shares outstanding- diluted | | | 22,086 | | | | | | | 22,086 | | | | 22,086 | | | | | | | 22,086 | | | | 22,086 | | | | | | | 22,086 | | | | 22,087 | | | | | | | 22,087 | |
Cost Plus, Inc. Pro Forma Financial Statement Footnotes:
| 1. | Reflects net sales and expenses incurred during the quarter associated with the stores that will be closed upon exiting the eight media markets. |
| 2. | The Company recorded a $2.3 million non-cash impairment charge to write-down affected property and equipment related to the store closures that will occur in fiscal 2008 from exiting the eight underperforming media markets. The $2.3 million non-cash charge is included in the loss from discontinued operations line on the pro forma condensed consolidated statements of operations for the three-month period ended February 2, 2008. |
| 3 | Income taxes have been allocated using the effective tax rate of 38.3%. |
