PRESS RELEASE
DOLLAR TREE REPORTS SECOND QUARTER EARNINGS OF $0.22 PER SHARE, EXCLUDING
MERGER-RELATED CHARGES OF $0.01 PER SHARE
CHESAPEAKE, Va.--July 21, 1999--Dollar Tree Stores, Inc.(Nasdaq: DLTR),
the nation's leading $1.00 price point retailer, reported that pro forma
combined earnings per share, excluding merger-related costs, increased to $0.22
for the second quarter of 1999, compared to $0.17 for the second quarter of
1998.
These results represent the first reporting of the combined operations
of Dollar Tree and the operator of 24 ONLY $ONE stores. The merger of the two
companies, which was completed on June 30, 1999, was accounted for as a
pooling-of-interests. Net of merger-related costs, earnings per share were $0.21
for the second quarter of 1999.
On a combined basis, sales for the quarter increased to $253.2 million,
$48.0 million over sales for the second quarter of 1998, primarily due to new
store openings. Sales in comparable stores increased 1.8%, as previously
reported, despite the shift in timing of the Easter selling season.
For the second quarter of 1999, gross margin, excluding merger-related
costs, increased to 37.0% of net sales, compared to 36.1% for the prior year
period. Improvements in distribution costs, resulting from efficiencies at the
new distribution centers, and reductions in shrink and markdowns more than
offset a slight increase in merchandise costs, including freight charges.
For the first half of 1999, net sales, pro forma earnings and pro forma
earnings per share, excluding merger-related items, were $480.3 million, $26.1
million and $0.38, respectively, compared to net sales, pro forma earnings, and
pro forma earnings per share for the first half of 1998 of $385.8 million, $19.4
million and $0.29, respectively.
"Dollar Tree's growth plans are well on track," commented Macon Brock,
President and CEO. "Our stores are performing well, both new and comparable
stores, and our merchandise offerings continue to exceed customers'
expectations. The addition of the ONLY $ONE stores in New York state blends well
with our larger store format, giving us an Eastern platform to complement our
West Coast stores. We look forward to continued growth opportunities."
Dollar Tree Stores, Inc. is the nation's leading $1.00 discount variety
retailer. Stores offer a wide assortment of quality everyday general
merchandise, in many traditional variety store categories, at the $1.00 price
point. As of June 30, 1999, Dollar Tree operates 1,291 stores in 32 states,
having opened 111 net stores during the first half of 1999 and adding 24 ONLY
$ONE stores due to a merger completed in June 1999.
CONTACT: Dollar Tree Stores, Inc., Chesapeake
Eric Coble or Erica Robb, 757/321-5000
http://www.DollarTree.com
DOLLAR TREE STORES, INC.
ONLY $ONE
Comparative Detail
For the Three Months and Six Months Ended June 30
(in thousands, except per share data)
(Unaudited)
NET DILUTED
SALES INCOME EPS
SECOND QUARTER 1999:
Dollar Tree Stores $246,279 $14,593 $0.22
ONLY $ONE* $ 6,937 $ 432 N/A
-------- ------- -----
Combined (excluding
merger-related items)* $253,216 $15,025 $0.22
-------- ------- -----
Merger-related items (net of tax) N/A ($ 792) ($0.01)
-------- ------- -----
Net combined companies* $253,216 $14,233 $0.21
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YEAR-TO-DATE 1999:
Dollar Tree Stores $467,481 $25,311 $0.38
ONLY $ONE* $ 12,778 $ 807 N/A
-------- ------- -----
Combined (excluding
merger-related items)* $480,259 $26,118 $0.38
-------- ------- -----
Merger-related items (net of tax) N/A ($ 792) ($0.01)
-------- ------- -----
Net combined companies* $480,259 $25,326 $0.37
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* Net Income and Diluted EPS include a pro forma adjustment for C-corporation
income taxes relating to ONLY $ONE of $271 for the second quarter 1999 and $505
for year-to-date 1999.
DOLLAR TREE STORES, INC.
COMBINED COMPANIES, AFTER GIVING EFFECT TO THE POOLING
Condensed Consolidated Income Statements
For the Three Months and Six Months Ended June 30
(Amounts in thousands, except per share data)
(Unaudited)
Second Quarter Year-to-Date
1999 1998 1999 1998
Net sales $253,216 $205,209 $480,259 $385,808
Cost of sales 159,525 131,130 305,703 247,740
Merger costs 443 -- 443 --
Gross profit 93,248 74,079 174,113 138,068
36.8% 36.1% 36.3% 35.8%
SGA expenses 61,710 49,463 117,835 95,460
24.4% 24.1% 24.5% 24.7%
Merger expenses 607 -- 607 --
Depr./amort. 6,881 4,889 13,101 9,303
Interest expense 670 1,051 1,152 1,759
Earnings before
income taxes 23,380 18,676 41,418 31,546
9.2% 9.1% 8.6% 8.2%
Income tax expense* 9,147 7,169 16,092 12,155
Net earnings* $14,233 $11,507 $25,326 $19,391
5.6% 5.6% 5.3% 5.0%
Pro forma earnings per share*:
Basic $ 0.23 $ 0.19 $ 0.41 $ 0.32
Weighted average
number of shares 61,815 61,182 61,679 61,051
Diluted $ 0.21 $ 0.17 $ 0.37 $ 0.29
Weighted average
number of shares 68,035 67,644 67,972 67,482
* Amounts include a pro forma adjustment for C-corporation income taxes relating
to ONLY $ONE of $271 and $299 for the second quarters of 1999 and 1998,
respectively, and $505 and $395 for year-to-date 1999 and 1998, respectively.
DOLLAR TREE STORES, INC.
COMBINED COMPANIES, AFTER GIVING EFFECT TO THE POOLING
Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)
June 30, Dec. 31, June 30,
1999 1998 1998
Cash and cash equivalents $ 36,502 $ 74,644 $ 8,932
Merchandise inventories 187,247 142,706 179,237
Other current assets 15,271 14,160 12,317
------ ------ ------
Total current assets 239,020 231,510 200,486
------- ------- -------
Property and equipment, net 134,195 122,503 98,459
Goodwill, net 41,587 42,551 43,514
Other assets, net 8,269 8,623 4,812
----- ----- -----
Total assets $423,071 $405,187 $347,271
======== ======== ========
Current portion
of long-term debt $ 25,000 $ 16,500 $ 20,964
Accounts payable 60,322 53,030 53,739
Income taxes payable 4,936 21,353 2,284
Other current liabilities 18,124 26,445 20,203
------ ------ ------
Total current liabilities 108,382 117,328 97,190
------- ------- ------
Long-term debt 24,000 30,000 53,000
Other liabilities 8,405 9,043 6,645
----- ----- -----
Total liabilities 140,787 156,371 156,835
------- ------- -------
Shareholders' equity 282,284 248,816 190,436
------- ------- -------
Total liabilities and
shareholders' equity $423,071 $405,187 $347,271
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