Exhibit 99.1
PRESS RELEASE
DOLLAR TREE STORES, INC.
REPORTS FOURTH-QUARTER 2001 EARNINGS PER SHARE OF $0.67
CHESAPEAKE, Va. - January 24, 2002 -- Dollar Tree Stores, Inc. (Nasdaq: DLTR),
the nation's leading $1.00 discount variety store chain, reported fourth-quarter
2001 earnings per common share of $0.67 compared to $0.57 in the fourth quarter
of 2000. Net earnings increased 17.6% to $76.1 million in the fourth quarter of
2001, compared to $64.7 million for the same period in 2000.
Sales for the fourth quarter of 2001 increased 19.3% to $714.8 million from
$599.2 million for the same period in 2000. Comparable store net sales increased
1.5% for the quarter. Sales were aided by the long holiday selling season. Gross
margin for the quarter decreased as a percentage of net sales to 38.2% compared
to 39.1% in 2000 primarily as a result of an increase in markdowns and loss of
leverage on occupancy costs. Operating expenses decreased as a percentage of net
sales to 18.6% from 19.0%, due to improved payroll-related costs.
Macon Brock, Jr., Chairman and CEO, remarked, "We are pleased to end the year on
a positive note with these fourth-quarter results. I am particularly proud of
how our management team handled our growth, controlled costs, and improved
inventory in this year's difficult economic environment. Among our many 2001
accomplishments, we replaced our Philadelphia distribution center with a larger,
more efficient facility in Briar Creek, Pennsylvania. 2001 also marked the start
of our point-of-sale rollout and Dollar Tree's entry into Washington state, our
37th state. And, more recently, we successfully completed the expansion and
automation of our Stockton, California distribution center, which will enable us
to serve our West Coast markets with greater efficiency."
Net earnings in 2001 increased to $123.1 million compared to $121.6 million in
2000 ($125.1 million in 2000 excluding merger-related and extraordinary items).
Earnings per common share increased to $1.09 in 2001 compared to $1.08 in 2000
($1.11 in 2000 excluding merger-related and extraordinary items). Sales
increased 17.7% to $1,987.3 million in 2001 compared to $1,688.1 million in
2000. As previously reported, comparable store net sales for the year increased
0.1%.
For 2001, gross margin was 36.0% compared to 37.0% for 2000, excluding
merger-related costs in 2000. The decrease in gross margin resulted primarily
from a loss of leverage on occupancy costs and increased shrink in the
now-closed Philadelphia distribution facilities. Operating expenses, as a
percentage of net sales, were 23.1% in 2001 compared to 22.2% in 2000, excluding
merger-related expenses. The increase is primarily due to increases in
payroll-related costs, including insurance; certain store operating expenses;
and charges recorded in connection with our closed distribution facilities.
Dollar Tree's preliminary growth plans for 2002 call for approximately 300 net
new stores, as well as the expansion of approximately 100 existing stores. The
company expects the average size of a new store to be approximately 9,250 square
feet. Comparisons in the first and second quarters of 2002 will be affected by
the shift of Easter into the first quarter. Last year, Easter fell on April 15;
this year, it falls on March 31.
With respect to 2002, Brock commented: "We plan to add approximately 25% in
gross square footage by expanding Dollar Tree in underserved markets and
strategically increasing our presence in existing markets. As we finalize the
implementation of our new supply chain management systems and refine our
merchandise mix, we remain committed to improving and expanding our business. We
are enthusiastic about the opportunities we see in 2002."
On Thursday, January 24, 2002, Dollar Tree will host a conference call to
discuss its quarterly earnings results at 4:45 p.m. EST. The telephone number
for the call is (712) 257-3640, pass code DLTR. A recorded version of the call
will be available until midnight Tuesday, January 29 and may be accessed by
dialing (402) 998-0975, pass code DLTR. In addition, the 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 Tuesday,
January 29.
Dollar Tree Stores, Inc. is the nation's leading $1.00 discount variety store
chain. Dollar Tree Stores operates 1,975 stores in 37 states as of December 31,
2001. The Company opened 276 stores, closed 30 stores and expanded or relocated
111 stores in 2001, expanding gross retail square footage by 3.0 million square
feet to approximately 12.8 million square feet at the end of the year.
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 or estimate. For example, our forward-looking statements
include statements regarding our planned 2002 increase in gross square footage,
store growth, market penetration, implementation of our supply-chain
initiatives, expansion of our distribution system, and the calendar shift in
Easter sales.
For a discussion of the risks, uncertainties and assumptions that could affect
our future events, developments or results, you should carefully review the
"Business" section in our Annual Report on Form 10-K filed March 30, 2001, and
the "Management's Discussion and Analysis of Financial Condition and Results of
Operations" section in that Annual Report and in our Quarterly Report on Form
10-Q filed November 14, 2001. 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 or to reflect the occurrence of future
events and you should not expect us to do so.
CONTACT: Dollar Tree Stores, Inc., Chesapeake, VA
Eric Coble or Erica Robb, 757/321-5000
http://www.DollarTree.com
DOLLAR TREE STORES, INC.
Condensed Consolidated Income Statements
For the Three Months and Year Ended December 31
(Dollars in thousands, except per share data)
Fourth Quarter Year-to-Date
-------------- ------------
2001 2000 2001 2000
---- ---- ---- ----
(unaudited) (unaudited)
Net sales $ 714,846 $ 599,173 $ 1,987,271 $ 1,688,105
Cost of sales 441,732 365,092 1,271,314 1,063,416
Merger-related costs (a) - - - 1,100
Gross profit 273,114 234,081 715,957 623,589
38.2% 39.1% 36.0% 36.9%
Operating expenses 133,271 113,935 458,329 375,316
18.6% 19.0% 23.1% 22.2%
Merger-related expenses (a) - - - 3,266
Depreciation/amortization 14,982 13,084 53,763 41,971
Operating income 124,861 107,062 203,865 203,036
17.5% 17.9% 10.3% 12.0%
Interest expense, net 1,311 1,634 1,891 3,551
Other expense (income) (b) (251) - 1,723 -
Earnings before income taxes 123,801 105,428 200,251 199,485
17.3% 17.6% 10.1% 11.8%
Income tax expense 47,713 40,756 77,170 77,476
Net earnings before extraordinary item 76,088 64,672 123,081 122,009
Loss on debt extinguishment,
net of tax benefit of $242 - - - 387
Net earnings 76,088 64,672 123,081 121,622
10.6% 10.8% 6.2% 7.2%
Net earnings available to common
shareholders (c) 76,088 64,672 123,081 120,209
10.6% 10.8% 6.2% 7.1%
Net earnings per common share:
Basic $ 0.68 $ 0.59 $ 1.10 $ 1.16
Weighted average number of shares 112,309 109,128 112,238 103,972
Diluted $ 0.67 $ 0.57 $ 1.09 $ 1.08
Weighted average number of shares 113,108 113,344 112,990 111,809
<FN>
(a) Merger related costs and expenses, net of taxes, were $3,134 for the year
ended December 31, 2000.
(b) Amount represents the earnings impact of recording non-hedging interest rate
swaps to market value in accordance with Statement of Financial Accounting
Standards No. 133, which was effective January 1, 2001.
(c) Amounts include accretion of the cumulative preferred stock to redemption
value, accrued preferred stock dividends and amortization of the discount
on preferred stock. The amount deducted from net earnings available to
common shareholders is $1,413 for the year ended December 31, 2000.
</FN>
DOLLAR TREE STORES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
December 31, December 31,
2001 2000
---- ----
Cash and cash equivalents $ 236,653 $ 181,166
Merchandise inventories 296,473 258,687
Other current assets 27,653 37,661
------- -------
Total current assets 560,779 477,514
------- -------
Property and equipment, net 279,011 211,632
Goodwill, net 38,358 40,376
Other assets, net 23,619 17,337
------- -------
Total assets $ 901,767 $ 746,859
======= =======
Accounts payable $ 68,653 $ 75,404
Income taxes payable 38,848 23,448
Other current liabilities 67,521 50,453
Current portion of long-term debt 25,000 25,000
------- -------
Total current liabilities 200,022 174,305
Long-term debt, excluding current portion 12,000 18,000
Other liabilities 38,290 35,896
------- -------
Total liabilities 250,312 228,201
------- -------
Shareholders' equity 651,455 518,658
------- -------
Total liabilities and
shareholders' equity $ 901,767 $ 746,859
======= =======
STORE DATA:
Number of stores open at
end of period 1,975 1,729
Total gross square footage
(in thousands) 12,791 9,832
DOLLAR TREE STORES, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
Year ended Year ended
December 31, December 31,
2001 2000
---- ----
Cash flows from operating activities:
Net income $ 123,081 $ 121,622
------- -------
Adjustments to reconcile net income to net cash
provided by
operating activities:
Depreciation and amortization 53,763 41,971
Other non-cash adjustments 3,003 14,813
Changes in working capital (1,121) (71,141)
------- -------
Total adjustments 55,645 (14,357)
------- -------
Net cash provided by operating activities 178,726 107,265
------- -------
Cash flows from investing activities:
Capital expenditures (121,566) (95,038)
Proceeds from sale of property and equipment 98 271
------- -------
Net cash used in investing activities (121,468) (94,767)
------- -------
Cash flows from financing activities:
Net change in revolving credit facilities - (6,500)
Repayment of long-term debt and facility fees (6,239) (27,708)
Principal payments under capital lease obligations (3,562) (3,274)
Proceeds from stock issued pursuant to stock-based
compensation plans 11,802 24,563
Repurchase of common stock (a) (3,772) -
------- -------
Net cash used in financing activities (1,771) (12,919)
------- -------
Net increase (decrease) in cash and cash equivalents 55,487 (421)
Cash and cash equivalents at beginning of period 181,166 181,587
------- -------
Cash and cash equivalents at end of period $ 236,653 $ 181,166
======= =======
<FN>
(a) Represents the repurchase of 225,000 shares of outstanding common stock
pursuant to the Securities and Exchange Commission's Emergency Relief
Order, which has since expired.
</FN>