EXHIBIT 99.1
PRESS RELEASE
DOLLAR TREE STORES, INC.
REPORTS THIRD QUARTER EARNINGS PER DILUTED SHARE OF $0.28
CHESAPEAKE, Va. – November 23, 2004 – Dollar Tree Stores, Inc. (NASDAQ: DLTR), the nation’s leading operator of single-price point dollar stores, reported third-quarter earnings per diluted share of $0.28 for the period ended October 30, 2004. As previously reported, sales for the quarter were $724 million compared to $665.2 million in last year’s fiscal third quarter, reflecting a comparable-store sales increase of 0.7%.
“Later than planned new-store openings put pressure on third quarter sales and earnings,” President and CEO Bob Sasser said. “These stores are now open, and we have achieved this year’s plan of 20% square footage growth. While record high fuel prices continue to burden the consumer, our merchandise assortment and value is better than ever and our stores are ready for business as we enter the holiday shopping season.”
Gross margin for the third quarter was 35.4%, compared to 36.6% in last year’s third quarter. Markdown and shrink results met expectations, but approximately $1 million of hurricane-related markdowns and difficult year-over-year comparisons account for most of the gross margin disparity. In addition, gross margin was negatively affected by loss of leverage on occupancy costs. Selling, general and administrative expenses, as a percentage of sales, were 28.0%, compared to 27.5% in the same quarter last year, with depreciation accounting for the majority of the increase.
During the third quarter of 2004, the Company repurchased approximately 693,000 shares of its common stock for $17 million under a $200 million authorization granted by its Board of Directors in November 2002. Through October 30, 2004, cumulative repurchases under this authorization total approximately $87 million for 3,075,000 shares.
As previously announced, the Company estimates sales for the fourth quarter to be in the range of $990-$1,010 million, based on square footage growth of approximately 20% and comparable-store sales growth of flat to slightly positive. Based on this level of sales, the Company expects earnings per share to be in the range of $0.80-$0.82 for the fourth quarter and $1.65-$1.67 for the year.
On Tuesday, November 23, 2004, the Company will host a conference call to discuss its third-quarter earnings results at 9:00 a.m. EST. The telephone number for the call is 703-639-1152. A recorded version of the call will be available until midnight Monday, November 29, and may be accessed by dialing 703-925-2533, and the access code is 590362. A webcast of the call is accessible through Dollar Tree’s website, www.DollarTree.com, as well as at Vcall’s website, www.Vcall.com, and will remain on-line until midnight Monday, November 29.
Dollar Tree will be participating in NASDAQ’s 13th Investor Program being held from December 1 through December 3, 2004 in London, England. Dollar Tree’s presentation is scheduled for Friday, December 3, 2004, at approximately 4:00 p.m. local time (11:00 a.m. EST). CEO Bob Sasser will discuss Dollar Tree’s business and growth plans. A webcast of this presentation will be available on the Company’s homepage, www.dollartree.com.
The Company’s regular, pre-recorded business update will be available Tuesday, January 4, 2005, by 5:00 p.m. EST, and will remain on-line through Friday, January 7, 2005. Interested parties can access the Company’s update by dialing (757) 321-5TRE.
Dollar Tree operated 2,674 stores in 48 states as of October 30, 2004, compared to 2,511 stores in 47 states a year ago. During the third fiscal quarter of 2004, the Company opened 65 stores, closed 3 stores, and expanded or relocated 38 stores. The Company’s retail selling square footage totaled approximately 19.6 million at October 30, 2004, an 18.4% increase compared to a year ago.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS: This press release contains “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address future events, developments or results and typically use words such as believe, anticipate, expect, intend, plan, forecast, outlook, or estimate. For example, our forward-looking statements include statements regarding the timing of new-store openings; fourth-quarter comparable-store sales, total sales, square footage growth and earnings per share; and annual earnings per share. For a discussion of the risks, uncertainties and assumptions that could affect our future events, developments or results, you should carefully review the “Risk Factors,” “Business,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in our Annual Report on Form 10-K filed April 13, 2004 and our Quarterly Report on Form 10-Q filed September 9, 2004. Also, carefully review “Risk Factors” in our most recent prospectuses filed November 15, 2000 and August 3, 2000. In light of these risks and uncertainties, the future events, developments or results described by our forward-looking statements in this document could turn out to be materially and adversely different from those we discuss or imply. We are not obligated to release publicly any revisions to any forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this report and you should not expect us to do so.
| CONTACT: | | Dollar Tree Stores, Inc., Chesapeake |
| | Adam Bergman, 757-321-5000 |
| | www.DollarTree.com |
| | |
DOLLAR TREE STORES, INC.
Condensed Consolidated Income Statements
(Dollars in thousands, except per share data)
| | Third Quarter Ended
| | Year-to-Date
|
|---|
| Oct. 30,
2004
| Nov. 1,
2003
| Oct. 30,
2004
| Nov. 1,
2003
|
|---|
| Net sales | | | $ | 723,967 | | $ | 665,211 | | $ | 2,138,531 | | $ | 1,906,807 | |
| Cost of sales | | | | 467,463 | | | 421,612 | | | 1,382,408 | | | 1,224,313 | |
| Gross profit | | | | 256,504 | | | 243,599 | | | 756,123 | | | 682,494 | |
| | | | | 35.4 | % | | 36.6 | % | | 35.4 | % | | 35.8 | % |
| Selling, general & administrative expenses | | | | 202,915 | | | 183,234 | | | 594,791 | | | 520,038 | |
| | | | | 28.0 | % | | 27.5 | % | | 27.8 | % | | 27.3 | % |
| Operating income | | | | 53,589 | | | 60,365 | | | 161,332 | | | 162,456 | |
| | | | | 7.4 | % | | 9.1 | % | | 7.5 | % | | 8.5 | % |
| Interest expense, net | | | | (1,539 | ) | | (1,555 | ) | | (4,852 | ) | | (4,242 | ) |
| Other income (expense) | | | | (223 | ) | | (11 | ) | | 688 | | | 737 | |
| Income before income taxes | | | | 51,827 | | | 58,799 | | | 157,168 | | | 158,951 | |
| | | | | 7.2 | % | | 8.8 | % | | 7.3 | % | | 8.3 | % |
| Income tax expense | | | | 19,973 | | | 22,638 | | | 60,572 | | | 61,196 | |
| Net income | | | | 31,854 | | | 36,161 | | | 96,596 | | | 97,755 | |
| | | | | 4.4 | % | | 5.4 | % | | 4.5 | % | | 5.1 | % |
| Net earnings per share: | | |
| Basic | | | $ | 0.28 | | $ | 0.31 | | $ | 0.85 | | $ | 0.85 | |
| Weighted average number of shares | | | | 112,890 | | | 115,038 | | | 113,411 | | | 114,599 | |
| Diluted | | | $ | 0.28 | | $ | 0.31 | | $ | 0.85 | | $ | 0.85 | |
| Weighted average number of shares | | | | 113,373 | | | 116,427 | | | 114,104 | | | 115,518 | |
DOLLAR TREE STORES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
| Oct. 30,
2004
| Jan. 31,
2004
| Nov. 1,
2003
|
|---|
| Cash and cash equivalents | | | $ | 87,844 | | $ | 168,685 | | $ | 67,138 | |
| Short-term investments | | | | 10,000 | | | -- | | | -- | |
| Merchandise inventories | | | | 775,292 | | | 525,643 | | | 663,687 | |
| Other current assets | | | | 45,276 | | | 28,241 | | | 26,259 | |
|
| |
| |
| |
| Total current assets | | | | 918,412 | | | 722,569 | | | 757,084 | |
|
| |
| |
| |
| Property and equipment, net | | | | 661,147 | | | 613,214 | | | 592,606 | |
| Intangibles, net | | | | 124,590 | | | 123,738 | | | 123,168 | |
| Other assets, net | | | | 8,455 | | | 20,785 | | | 20,467 | |
|
| |
| |
| |
| Total assets | | | $ | 1,712,604 | | $ | 1,480,306 | | $ | 1,493,325 | |
|
| |
| |
| |
| Current portion of long-term debt | | | | 19,000 | | | 25,000 | | | 64,700 | |
| Accounts payable | | | | 173,856 | | | 114,972 | | | 167,446 | |
| Other current liabilities | | | | 108,772 | | | 88,095 | | | 88,615 | |
| Income taxes payable | | | | 6,029 | | | 37,035 | | | 3,616 | |
|
| |
| |
| |
| Total current liabilities | | | | 307,657 | | | 265,102 | | | 324,377 | |
|
| |
| |
| |
| Long-term debt, excluding current portion | | | | 250,000 | | | 142,568 | | | 142,422 | |
| Other liabilities | | | | 78,582 | | | 58,114 | | | 57,001 | |
|
| |
| |
| |
| Total liabilities | | | | 636,239 | | | 465,784 | | | 523,800 | |
|
| |
| |
| |
| Shareholders' equity | | | | 1,076,365 | | | 1,014,522 | | | 969,525 | |
|
| |
| |
| |
| Total liabilities and shareholders' equity | | | $ | 1,712,604 | | $ | 1,480,306 | | $ | 1,493,325 | |
|
| |
| |
| |
| STORE DATA: | | |
| Number of stores open at end of period | | | | 2,674 | | | 2,513 | | | 2,511 | |
| Total selling square footage (in thousands) | | | | 19,608 | | | 16,878 | | | 16,567 | |
DOLLAR TREE STORES, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
| | Year-to-Date
|
|---|
| Oct. 30,
2004
| Nov. 1,
2003
|
|---|
| Cash flows from operating activities: | | | | | | | | |
| Net income | | | $ | 96,596 | | $ | 97,755 | |
|
| |
| |
| Adjustments to reconcile net income to net cash provided by | | |
| operating activities: | | |
| Depreciation and amortization | | | | 90,895 | | | 74,093 | |
| Other non-cash adjustments | | | | 27,694 | | | 25,593 | |
| Changes in working capital | | | | (203,560 | ) | | (191,733 | ) |
|
| |
| |
| Total adjustments | | | | (84,971 | ) | | (92,047 | ) |
|
| |
| |
| Net cash provided by operating activities | | | | 11,625 | | | 5,708 | |
|
| |
| |
| Cash flows from investing activities: | | |
| Capital expenditures | | | | (140,017 | ) | | (178,578 | ) |
| Purchase of Greenbacks, Inc., net of cash acquired of $1,248 | | | | -- | | | (99,560 | ) |
| Purchase of short-term investments | | | | (110,500 | ) | | (30,360 | ) |
| Proceeds from maturities of short-term investments | | | | 100,500 | | | 93,885 | |
| Acquisition of favorable lease rights | | | | (1,925 | ) | | (105 | ) |
| Investment in Ollie's | | | | -- | | | (4,000 | ) |
| Settlement of merger related contingencies | | | | -- | | | 1,021 | |
| Proceeds from sale of property and equipment | | | | -- | | | 32 | |
|
| |
| |
| Net cash used in investing activities | | | | (151,942 | ) | | (217,665 | ) |
|
| |
| |
| Cash flows from financing activities: | | |
| Proceeds from long-term debt, net of facility fees of $1,094 and $0 | | | | 248,906 | | | 39,700 | |
| Repayment of long-term debt | | | | (148,568 | ) | | (11,813 | ) |
| Principal payments under capital lease obligations | | | | (3,537 | ) | | (5,681 | ) |
| Proceeds from stock issued pursuant to stock-based | | |
| compensation plans | | | | 11,286 | | | 19,587 | |
| Payments for share repurchases | | | | (48,611 | ) | | -- | |
|
| |
| |
| Net cash provided by financing activities | | | | 59,476 | | | 41,793 | |
|
| |
| |
| Net decrease in cash and cash equivalents | | | | (80,841 | ) | | (170,164 | ) |
| Cash and cash equivalents at beginning of period | | | | 168,685 | | | 237,302 | |
|
| |
| |
| Cash and cash equivalents at end of period | | | $ | 87,844 | | $ | 67,138 | |
|
| |
| |
