EXHIBIT 99.1
PRESS RELEASE
DOLLAR TREE STORES, INC.
REPORTS RECORD FIRST QUARTER EARNINGS PER SHARE OF $0.29
CHESAPEAKE, Va. - May 29, 2003 - Dollar Tree Stores, Inc. (Nasdaq: DLTR), the
nation's leading operator of single-price point dollar stores, reported first
quarter 2003 earnings per share of $0.29, a 16% increase compared to $0.25 in
last year's fiscal first quarter ended April 30, 2002.
As previously reported, sales for the fiscal first quarter, which spanned
February 2, 2003 to May 3, 2003, were $615.6 million, exceeding the Company's
original guidance of $590-610 million. Total sales increased 20.8%
quarter-over-quarter, and comparable-store sales rose 2.2%.
"Easter sales exceeded our expectations," said CEO Macon Brock, Jr., "and
new-store performance has been above plan. These larger stores allow us to
better serve our customers with a mix of popular seasonal and everyday
merchandise that generates strong consumer loyalty and repeat visits to our
stores. We are extremely pleased to start the year off with such positive sales
and earnings results."
For the first quarter, gross margin was 35.4% compared to 36.2% in last year's
quarter. Last year's gross margin benefited from shrink adjustments made in
connection with our supply-chain implementation. Selling, general, and
administrative expenses, as a percentage of sales, improved to 26.5% in the
first quarter of 2003 compared to 27.2% in the same quarter last year. This
performance was driven primarily by improvements in payroll and related costs,
somewhat offset by higher depreciation expense.
Effective January 1, 2003, the Company adopted FIN 46 - Consolidation of
Variable Interest Entities, which consolidated four distribution centers on the
Company's financial statements. These distribution centers previously were
accounted for as operating leases. As a result of adopting FIN 46, this
quarter's results include approximately $2 million of additional pre-tax
expense.
Since the beginning of the year, Dollar Tree commenced operations at its new
Marietta, Oklahoma distribution center, and broke ground on two new distribution
centers (one in Ridgefield, Washington; the other in Joliet, Illinois). The
Company also recently announced it has signed a binding agreement to acquire
Greenbacks, Inc., for approximately $100 million. As of May 15, 2003, Greenbacks
operates a chain of 96 dollar stores, and is based in Salt Lake City, Utah.
At 4:45 p.m. EDT on Thursday, May 29, 2003, the Company will host a conference
call to discuss its earnings results. The telephone number for the call is (630)
395-0019, passcode DLTR. A recorded version of the call will be available until
midnight Tuesday, June 3 and may be accessed by dialing (402) 998-1102, passcode
DLTR. 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 Tuesday, June 3. Any financial and statistical
information related to the call can be accessed through the "About Us / News
Releases" section of Dollar Tree's website.
For the second quarter, the Company is planning sales to be in the range of
$575-$590 million (excluding Greenbacks), with the mid-point of that range
equating to roughly flat comparable-store sales. This year's fiscal second
quarter contains 91 days, compared to 92 days in last year's second period. The
Company's regular, pre-recorded sales update will be available Monday, July 7,
2003, by 5:30 p.m. EDT, and will remain on-line through Friday, July 11, 2003.
Interested parties can access the Company's update by dialing (757) 321-5TRE.
Dollar Tree Stores, Inc. operates 2,319 stores in 41 states as of May 3, 2003.
During the first fiscal quarter of 2003, the Company opened 55 stores, closed 8
stores and expanded or relocated 30 stores. At May 3, 2003, the Company's retail
selling square footage totaled approximately 13.9 million, a 4.9% increase from
February 1, 2003 and a 27.5% 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 or estimate. For example, our forward-looking statements
include statements regarding our expectations for second-quarter sales and the
approval and timing of our Greenbacks acquisition. 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 March
28, 2003 and in our Current Report on Form 8-K filed May 20, 2003. 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
Erica Robb or Adam Bergman, 757/321-5000
www.DollarTree.com
DOLLAR TREE STORES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
May 3, February 1, April 30,
2003 2003 2002
-------------- ------------- -------------
Cash and cash equivalents $ 89,873 $ 237,302 $ 136,958
Short-term investments 87,185 63,525 --
Merchandise inventories 496,904 438,439 404,424
Other current assets 27,260 30,116 40,380
-------------- ------------- -------------
Total current assets 701,222 769,382 581,762
-------------- ------------- -------------
Property and equipment, net 520,204 477,947 296,389
Goodwill, net 38,358 38,358 38,358
Other assets, net 18,759 18,552 25,198
-------------- ------------- -------------
Total assets $ 1,278,543 $ 1,304,239 $ 941,707
============== ============= =============
Current portion of long-term debt $ 25,000 $ 25,000 $ 25,000
Accounts payable 89,644 137,668 105,067
Other current liabilities 76,531 80,844 50,527
Income taxes payable 14,049 23,548 1,947
-------------- ------------- -------------
Total current liabilities 205,224 267,060 182,541
-------------- ------------- -------------
Long-term debt, excluding current portion 142,422 146,628 6,000
Other liabilities 50,585 44,732 42,116
-------------- ------------- -------------
Total liabilities 398,231 458,420 230,657
-------------- ------------- -------------
Shareholders' equity 880,312 845,819 711,050
-------------- -------------- -------------
Total liabilities and shareholders' equity $ 1,278,543 $ 1,304,239 $ 941,707
============== ============= =============
STORE DATA:
Number of stores open at end of period 2,319 2,272 2,048
Total selling square footage (in thousands) 13,879 13,237 10,889
DOLLAR TREE STORES, INC.
condensed Consolidated Income Statements
(Dollars in thousands, except per share data)
(Unaudited)
First Quarter ended
----------------------------
May 3, Apr 30,
2003 2002
---------- ---------
Net sales $ 615,568 $ 509,668
Cost of sales 397,780 325,159
Gross profit 217,788 184,509
35.4% 36.2%
Selling, general & administrative expenses 163,297 138,793
26.5% 27.2%
Operating income 54,491 45,716
8.9% 9.0%
Interest expense, net (1,248) (164)
Other income 83 110
Earnings before income taxes 53,326 45,662
8.7% 9.0%
Income tax expense 20,531 17,580
Net earnings 32,795 28,082
5.3% 5.5%
Net earnings per share:
Basic $0.29 $0.25
Weighted average number of shares 114,258 112,801
Diluted $0.29 $0.25
Weighted average number of shares 114,531 114,035
DOLLAR TREE STORES, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
First Quarter ended
-----------------------------------
May 3, April 30,
2003 2002
------------- -------------
Cash flows from operating activities:
Net income $ 32,795 $ 28,082
------------- -------------
Adjustments to reconcile net income to net cash used in operating
activities:
Depreciation and amortization 23,169 16,601
Other non-cash adjustments 5,322 5,005
Changes in working capital (115,585) (110,130)
------------- -------------
Total adjustments (87,094) (88,524)
------------- -------------
Net cash used in operating activities (54,299) (60,442)
------------- -------------
Cash flows from investing activities:
Capital expenditures (63,336) (29,762)
Purchase of short-term investments (28,360) --
Proceeds from maturities of short-term investments 4,700 --
Settlement of merger-related contingencies -- 42
Acquisition of favorable lease rights -- (813)
Proceeds from sale of property and equipment 29 252
------------- -------------
Net cash used in investing activities (86,967) (30,281)
------------- -------------
Cash flows from financing activities:
Repayment of long-term debt and facility fees (6,000) (6,025)
Principal payments under capital lease obligations (1,657) (940)
Proceeds from stock issued pursuant to stock-based
compensation plans 1,494 16,569
------------- -------------
Net cash (used in) provided by financing activities (6,163) 9,604
------------- -------------
Net decrease in cash and cash equivalents (147,429) (81,119)
Cash and cash equivalents at beginning of year 237,302 218,077
------------- -------------
Cash and cash equivalents at end of year $ 89,873 $ 136,958
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