Exhibit 99.1
PRESS RELEASE
DOLLAR TREE STORES, INC. REPORTS RECORD FIRST-QUARTER 2002
EARNINGS PER SHARE OF $0.20
CHESAPEAKE, Va. - April 25, 2002 - Dollar Tree Stores, Inc. (Nasdaq: DLTR), the
nation's leading $1.00 discount variety store chain, reported first-quarter
2002 earnings per share of $0.20 compared to $0.10 in the first quarter of
2001. As previously reported, sales for the first quarter of 2002 increased
26.4% to $489.6 million from $387.3 million for the same period in 2001.
Comparable-store sales increased 6.5% for the quarter. Sales were aided by
the shift of Easter.
"A strong Easter selling season, coupled with tight expense management
highlighted an outstanding quarter," commented Macon F. Brock, Jr.,
Chairman and CEO. "These results are due principally to management's focus
on better inventory offerings and strong merchandising efforts by our
operations personnel."
For the quarter, gross margin was 35.4%, compared to 33.9% for the first
quarter of 2001. The improvement in gross margin primarily relates to reduced
inventory shrink compared to last year, which included unusually high
shrink in the now-closed Philadelphia distribution facilities. In
addition, the 6.5% comparable-store sales gain enabled the Company to
achieve leverage on occupancy and distribution costs.
Operating expenses as a percentage of sales were 24.8% for the quarter,
compared to 26.3% in the first quarter of 2001. The improvement in operating
expense margin primarily relates to savings in payroll and related costs, as
a result of various expense-management initiatives, offset by higher
legal-related costs. Increased comparable-store sales also generated operating
expense leverage.
"It was a busy, and rewarding quarter for us," Brock said. "We broke ground on
our newest distribution center in Marietta, Oklahoma; celebrated the opening
of our 2,000th store; continued our supply-chain systems implementation;
improved our inventory management; and delivered record first-quarter
financial performance."
"While we expect second quarter's comparable-store sales results to be
challenged by the Easter shift, we think our first-quarter performance has set
the stage for a good year," Brock concluded.
On Thursday, April 25, 2002, Dollar Tree will host a conference call to discuss
its quarterly earnings results at 4:45 p.m. EDT. The telephone number for the
call is (712) 271-3300, pass code DLTR. A recorded version of the call will be
available until midnight Tuesday, April 30 and may be accessed by dialing (402)
220-3124, 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, April
30.
Dollar Tree Stores, Inc. is the nation's leading $1.00 discount variety store
chain. Dollar Tree Stores operates 2,031 stores in 37 states as of March 31,
2002. The Company opened 66 stores, closed 10 stores and expanded or relocated
29 stores in the first quarter of 2002. At the end of the quarter, the Company's
retail selling square footage totaled approximately 10.7 million, up 0.6 million
from December 31, 2001 and up 2.4 million from March 31, 2001.
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 the company's future performance as well as the
calendar shift of Easter and its potential impact on second quarter
comparable-store sales. 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" and "Business" sections in our Annual
Report on Form 10-K filed March 14, 2002, and the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" section in that
Annual Report. 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, VA
Erica Robb or Adam Bergman, (757) 321-5000
http://www.DollarTree.com
DOLLAR TREE STORES, INC.
Condensed Consolidated Income Statements
For the Three Months Ended March 31
(Dollars in thousands, except per share data)
(Unaudited)
First Quarter
-------------
2002 2001
---- ----
Net sales $ 489,625 $ 387,319
Cost of sales 316,460 255,858
Gross profit 173,165 131,461
35.4% 33.9%
Operating expenses 121,330 101,691
24.8% 26.3%
Depreciation and amortization (a) 15,721 11,831
Operating income 36,114 17,939
7.4% 4.6%
Interest income (expense), net (39) 387
Other income (expense) (b) 595 (792)
Earnings before income taxes 36,670 17,534
7.5% 4.5%
Income tax expense 14,118 6,751
Net earnings 22,552 10,783
4.6% 2.8%
Net earnings per share:
Basic $ 0.20 $ 0.10
Weighted average number of shares 112,718 112,097
Diluted $ 0.20 $ 0.10
Weighted average number of shares 113,900 112,764
<FN>
(a) The Company adopted the provisions of Statement of Financial Accounting
Standards No. 142, which requires that goodwill amortization cease effective
January 1, 2002. As a result, no goodwill amortization was recorded for the
first quarter of 2002. First quarter 2001 includes $0.5 million of goodwill
amortization.
(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.
</FN>
DOLLAR TREE STORES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
March 31, December 31, March 31,
2002 2001 2001
---- ---- ----
Cash and cash equivalents $ 181,040 $ 236,653 $ 65,984
Merchandise inventories 371,841 296,473 354,911
Other current assets 30,580 27,653 35,829
----------- ----------- ----------
Total current assets 583,461 560,779 456,724
=========== =========== ==========
Property and equipment, net 293,644 279,011 226,371
Goodwill, net 38,358 38,358 39,872
Other assets, net 25,230 23,900 18,094
----------- ----------- ----------
Total assets $ 940,693 $ 902,048 $ 741,061
=========== =========== ==========
Current portion of long-term debt $ 25,000 $ 25,000 $ 25,000
Accounts payable 103,347 68,653 81,936
Income taxes payable 19,209 38,848 12,426
Other current liabilities 49,869 67,521 35,484
----------- ----------- ----------
Total current liabilities 197,425 200,022 154,846
----------- ----------- ----------
Long-term debt, excluding current portion 12,000 12,000 18,000
Other liabilities 41,094 38,290 36,945
----------- ----------- ----------
Total liabilities 250,519 250,312 209,791
----------- ----------- ----------
Shareholders' equity 690,174 651,736 531,270
----------- ----------- ----------
Total liabilities and shareholders' equity $ 940,693 $ 902,048 $ 741,061
=========== =========== ==========
STORE DATA:
Number of stores open at end of period 2,031 1,975 1,781
Total selling square footage (in thousands) 10,735 10,129 8,324
DOLLAR TREE STORES, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Three-months ended Year ended Three-months ended
March 31, December 31, March 31,
2002 2001 2001
---- ---- ----
Cash flows from operating activities:
Net income $ 22,552 $ 123,081 $ 10,783
----------- ----------- ----------
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization 15,721 53,763 11,831
Other non-cash adjustments 469 893 1,711
Changes in working capital (75,234) 989 (113,402)
----------- ----------- ----------
Total adjustments (59,044) 55,645 (99,860)
----------- ----------- ----------
Net cash provided by (used in) operating activities (36,492) 178,726 (89,077)
----------- ----------- ----------
Cash flows from investing activities:
Capital expenditures (31,280) (121,566) (26,325)
Acquisition of favorable lease rights (813) - -
Proceeds from sale of property and equipment 334 98 13
----------- ----------- ----------
Net cash used in investing activities (31,759) (121,468) (26,312)
----------- ----------- ----------
Cash flows from financing activities:
Repayment of long-term debt and facility fees - (6,239) (239)
Principal payments under capital lease obligations (937) (3,562) (865)
Proceeds from stock issued pursuant to stock-based
compensation plans 6,921 11,805 1,311
Repurchase of common stock - (3,775) -
Settlement of merger-related contingencies 6,654 - -
----------- ----------- ----------
Net cash provided by (used in) financing activities 12,638 (1,771) 207
----------- ----------- ----------
Net increase (decrease) in cash and cash equivalents (55,613) 55,487 (115,182)
Cash and cash equivalents at beginning of period 236,653 181,166 181,166
----------- ----------- ----------
Cash and cash equivalents at end of period $ 181,040 $ 236,653 $ 65,984
=========== =========== ==========