UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 1-11735
99 CENTS ONLY STORES
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-2411605
(State or other jurisdiction (I.R.S. Employer Identification No.)
or organization)
4000 EAST UNION PACIFIC AVENUE
CITY OF COMMERCE, CALIFORNIA 90023
(Address of Principal executive offices)
Registrant's telephone number, including area code: (213) 980-8145
NONE
Former name, address and fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Security Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the last 90 days.
YES [x] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Common Stock, No Par Value, 14,816,635 Shares as of November 13, 1996
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
99 CENTS ONLY STORES
BALANCE SHEETS
(Unaudited)
September 30, December 31,
1996 1995
------------ ------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $1,430,000 $3,057,000
Short-term investments 29,870,000 -
Accounts receivable, net of
allowance for doubtful accounts
of $75,000 and $34,000 as of
September 30, 1996 and December
31, 1995, respectively 2,197,000 1,360,000
Inventories 35,292,000 34,313,000
Other 450,000 324,000
---------- ----------
Total current assets 69,239,000 39,054,000
PROPERTY AND EQUIPMENT, at cost:
Land 5,107,000 5,107,000
Building and improvements 8,553,000 8,553,000
Leasehold improvements 6,031,000 5,025,000
Fixtures and equipment 5,164,000 3,992,000
Transportation equipment 438,000 421,000
Construction in progress 1,564,000 -
---------- ----------
26,857,000 23,098,000
Less - Accumulated
depreciation and amortization (6,693,000) (5,311,000)
---------- ----------
20,164,000 17,787,000
OTHER ASSETS:
Deferred income taxes 4,925,000 378,000
Deposits 231,000 231,000
Receivable from affiliated entity 107,000 107,000
Other 51,000 41,000
---------- ----------
5,314,000 757,000
---------- ----------
$94,717,000 $57,598,000
========== ==========
The accompanying notes are an integral part of these balance sheets.
September 30, December 31,
1996 1995
------------ ------------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of capital
lease obligation $645,000 $612,000
Accounts payable 4,866,000 5,750,000
Accrued expenses:
Payroll and payroll-related 774,000 818,000
Sales tax 796,000 900,000
Liability for claims 706,000 959,000
Other 32,000 20,000
Workers' compensation 1,306,000 1,209,000
Income taxes payable 2,060,000 96,000
---------- ----------
Total current liabilities 11,185,000 10,364,000
LONG-TERM LIABILITIES:
Deferred rent 1,396,000 1,346,000
Accrued interest 1,363,000 965,000
Capital lease obligation,
net of current portion 8,878,000 9,365,000
---------- ----------
11,637,000 11,676,000
COMMITMENTS AND CONTINGENCIES: - -
SHAREHOLDERS' EQUITY:
Preferred stock, no par value
Authorized - 1,000,000 shares
Issued and outstanding - none - -
Common stock, no par value:
Authorized - 40,000,000 shares
Issued and outstanding -
9,929,135 shares at December 31,
1995 and 14,816,635 shares at
September 30, 1996 65,522,000 195,000
Retained earnings 6,373,000 35,363,000
---------- ----------
71,895,000 35,558,000
---------- ----------
$94,717,000 $57,598,000
========== ==========
The accompanying notes are an integral part of these balance sheets.
99 CENTS ONLY STORES
STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
NET SALES:
99 Cents Only Stores $35,211,000 $30,096,000 $101,603,000 $86,995,000
Other Retail - - - 492,000
Bargain Wholesale 10,173,000 8,017,000 29,230,000 20,525,000
----------- ----------- ----------- -----------
45,384,000 38,113,000 130,833,000 108,012,000
COST OF SALES 29,266,000 25,475,000 86,315,000 72,196,000
----------- ----------- ----------- -----------
Gross Profit 16,118,000 12,638,000 44,518,000 35,816,000
SELLING, GENERAL
AND ADMINISTRATIVE
EXPENSES 10,334,000 8,459,000 29,007,000 24,514,000
----------- ----------- ----------- -----------
Operating Income 5,784,000 4,179,000 15,511,000 11,302,000
INTEREST INCOME
(EXPENSE), NET 242,000 (189,000) (10,000) (567,000)
----------- ----------- ----------- -----------
Income before provision
for income taxes 6,026,000 3,990,000 15,501,000 10,735,000
PROVISION FOR INCOME TAXES
Historical 2,474,000
Pro forma 1,665,000 6,355,000 4,311,000
----------- ----------- ----------- -----------
NET INCOME:
Historical $3,552,000
===========
Pro forma $2,325,000 $9,146,000 $6,424,000
=========== =========== ===========
EARNINGS PER SHARE:
Historical $0.24
=====
Pro forma $0.18 $0.66 $0.50
===== ===== =====
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
Historical 14,922,000
===========
Pro forma 12,803,000 13,809,000 12,803,000
=========== =========== ===========
The accompanying notes are an integral part of these statements.
99 CENTS ONLY STORES
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
1996 1995
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $15,958,000 $10,570,000
Adjustment to reconcile net income to
cash provided by operating activities:
Provision for doubtful accounts 41,000 -
Depreciation and amortization 1,460,000 1,201,000
Loss on disposition of property and
equipment 16,000 10,000
Provision (benefit) for deferred
income taxes (4,547,000) -
Changes in asset and liabilities
associated operating activities
Accounts Receivable (878,000) (398,000)
Inventories (979,000) 463,000
Other Asset (136,000) 217,000
Deposits - 49,000
Accounts payable (884,000) 42,000
Accrued expenses (389,000) (240,000)
Worker's compensation 97,000 100,000
Income taxes payable 1,964,000 (5,000)
Deferred rent 50,000 401,000
Accrued interest 398,000 371,000
----------- -----------
Net cash provided by
operating activities 12,171,000 12,781,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction in progress (1,564,000) -
Purchase of property and equipment (2,288,000) (1,919,000)
Investment in short term securities (29,870,000) -
----------- -----------
Net cash (used in) investting
activities (33,722,000) (1,919,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of capital lease obligation (454,000) (425,000)
Net proceeds from initial public offering 65,327,000 -
Payment of notes payable to shareholders (35,363,000) -
Payment of dividend payable (4,586,000) -
Distributions to shareholders (5,000,000) (10,300,000)
----------- -----------
Net cash provided (used in) financing
activities 19,924,000 (10,725,000)
NET INCREASE (DECREASE) IN CASH (1,627,000) 137,000
CASH, Beginning of period 3,057,000 212,000
----------- -----------
CASH, End of period $1,430,000 $349,000
=========== ===========
The accompanying notes are an integral part of these statements.
99 CENTS ONLY STORES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
conformity with generally accepted accounting principles. However, certain
information and footnote disclosures normally included in financial statements
prepared in conformity with generally accepted accounting principles have been
omitted or condensed pursuant to the rules and regulations of the Securities
and Exchange Commission (SEC). These statements should be read in conjunction
with the company's December 31, 1995 audited and pro forma financial
statements and notes thereto included in the Company's Form S-1 registration
statement dated March 26, 1996, including all amendments thereto. In the
opinion of management, these interim financial statements reflect all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation of the financial position and results of operation for each of
the periods presented. The results of operations and cash flows for such
periods are not necessarily indicative of results to be expected for the full
year.
2. PUBLIC OFFERING OF STOCK
In May 1996, the Company completed its initial public offering of
4,887,500 shares (including 637,500 shares from the exercise of the over
allotment option granted to the underwriters) of common stock. Of the net
proceeds of approximately $65.3 million, the Company used approximately
$39.9 million to pay notes issued and dividends payable declared to the
Existing Shareholders. The Company intends to use the balance of the net
proceeds to continue to accelerate the expansion of its retail operations and
for general corporate purposes. Any net proceeds not immediately used for such
purposes have been invested in short-term investments grade securities.
3. PRO FORMA PRESENTATION
Through April 30, 1996, the Company had elected treatment as an S corporation
under provisions of the Internal Revenue Code. Effective May 1, 1996, the
Company terminated its S corporation election and became a C corporation.
A. Pro Forma Statements of Income
As an S corporation, the Company's income, whether distributed or not,
was taxed at the shareholder level for federal income tax purposes. For
california franchise tax purposes, as an S corporation, the Company was taxed
at 1.5 percent of taxable income.
Because of the Company's change in tax status, historical results of
operations, including income taxes, and related earnings per share information
may not in all cases, be comparable to or indicative of current and future
results. Therefore, pro forma information, which shows results as if the
Company had always been a C Corporation is presented on the face of the
accompanying statements.
The pro forma provision for income taxes included in the accompanying
statements of income shows results as if the Company had always been subject
to taxes as a C Corporation and had adopted Statement of Financial Accounting
Standards No. 109 (SFAS 109), "Accounting for Income Taxes," prior to fiscal
1991.
Under SFAS 109, deferred income tax assets or liabilities are computed
based on temporary differences between the financial statement and income tax
bases of assets and liabilities using the enacted marginal income tax rate in
effect for the year in which the differences are expected to reverse. Deferred
income tax expenses or credits are based on the changes in the deferred income
tax assets or liabilities from period to period.
Under SFAS 109, deferred tax assets may be recognized for temporary
differences that will result in deductible amounts in future periods and for
loss carry forwards. A valuation allowance is recognized if, based on the
weight of available evidence, it is more likely than not that some portion or
all of the deferred tax asset will not be realized.
For the three month period ended September 30, 1995 and the nine month periods
ended September 30, 1996 and 1995 the pro forma provision for income taxes
was based upon a combined federal and state tax rate of approximately 41
percent, offset by the impact of various tax credits.
B. Pro Forma Earnings Per Common Share
Pro forma earnings per common share have been computed by dividing pro forma
net income by the pro forma weighted average number of common shares
shares outstanding plus the dilutive effect of common stock equivalents.
Pro forma weighted average number of common shares outstanding also includes
amounts (weighted from the beginning of the period to the initial public
offering) for shares offered as a part of the public offering; the proceeds
from such shares being used to fund a $39.9 million distribution to
shareholders.
Pro forma per share data are presented for the three month period ended
September 30, 1995 and the nine month periods ended September 30, 1996 and
September 30, 1995 and historical per share data are presented for the three
months period ended September 30, 1996 only, in the accompanying statements of
income. The number of common shares issuable due to options granted during the
twelve months preceding the Company's public offering are included in the
calculation of shares outstanding using the treasury stock method from the
beginning of all periods presented.
4. CHANGE IN TAX STATUS/INCOME TAX PROVISION
As discussed in note 3 above, effective May 1, 1996, the Company terminated
its S corporation election and became a C corporation. As such, the actual
taxes due by the Company through September 30, 1996 are based on S corporation
tax rates for income from January 1, 1996 through April 30, 1996 and C
corporation tax rates from May 1, 1996 through September 30, 1996.
In connection with the Company's change in tax status, the Company recorded
an increase in the deferred asset of $4,570,000. As a C corporation, the
computation of deferred taxes is based on federal C corporation tax rates,
which are not applicable to S corporations, and C corporation state tax
rates, which are significantly larger than S corporation state tax rates. In
accordance with SFAS 109, the gain resulting from the increase in the deferred
tax asset is included as a credit to tax expense during the nine month period
ended September 30, 1996.
The historical provision (benefit) for income taxes and resulting historical
net income, based on S corporation and C corporation tax rates as discussed
above and including the effect of the increase in deferred tax asset as
discussed above, for the three and nine month periods ended September 30, 1996
follows:
Three Month Nine Month
Period Ended Period Ended
Sept. 30, 1996 Sept. 30, 1996
------------ ------------
Income before provision (benefit)
for income taxes $6,026,000 $15,501,000
Historical provision (benefit) for
income taxes - -
During period as an S corporation 75,000
During period as a C corporation 2,474,000 4,038,000
Change in tax Status - (4,570,000)
---------- ----------
Historical net income 3,552,000 15,958,000
========== ==========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
General
99 Cents Only Stores is a leading deep-discount retailer of general
merchandise at a single price point. The Company has been engaged, since 1976,
in the purchase and sale of name brand, close-out and regularly available
general merchandise. Since that time, the Company has distributed its
merchandise on a wholesale basis through its Bargain Wholesale division. In
1982, the Company opened the first of its 99 Cents Only Stores and as of the
date of this 10-Q operates a chain of 41, 99 Cents Only Stores. The Company's
growth has primarily come from new store openings and growth in its Bargain
Wholesale division.
Bargain Wholesale's growth over the last three years ending December 31,
1995 was primarily attributable to an increased focus on large domestic and
international accounts and expansion into new geographic markets. The Company
intends to continue to expand its wholesale division by continuing this
focus and increasing its marketing and promotional programs. The Company
generally realizes lower gross margin on Bargain Wholesale net sales than on
99 Cents Only Stores net sales. However, Bargain Wholesale complements the
Company's retail operations by allowing the Company to purchase in larger
volumes at more favorable pricing and to generate additional net sales with
relatively small increases in operating expenses.
Initial Public Offering
In May 1996, the Company completed its initial public offering of
4,887,500 shares (including 637,500 shares from the exercise of the
overallotment option granted to the underwriters) of common stock. Of the net
proceeds of approximately $65.3 million, the Company used approximately $39.9
million to pay notes issued and dividends payable declared to the Existing
Shareholders. The Company intends to use the balance of the net proceeds to
continue to accelerate the expansion of its retail operations and for general
corporate purposes. Any net proceeds not immediately used for such purposes
have been invested in short-term investment grade securities.
Effect of Change in Form From an S Corporation to a C Corporation
As part of its initial public offering , the Company changed in form from
an S Corporation which will affect its operations and financial condition by
increasing the level of federal and state income taxes.
As an S Corporation , the Company's income, whether or not distributed, was
taxed at the shareholder level for federal income tax purposes. For California
franchise tax purposes, S Corporations were taxed at 1.5% of taxable income
for the first four months of 1996. Currently the Corporate tax rate for C
Corporations is 35% and the corporate tax rate in California is 9.3%. As such,
the change in form will affect the earnings and the cash flows of the Company.
The pro forma provision for income taxes in the accompanying statements of
income shows results as if the Company had always been a C Corporation and
had adopted Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes" prior to January 1, 1991. (See Note 4 of Notes to Financial
Statements.)
Three Months Ended September 30, 1996 Compared to Three Months Ended
September 30, 1995
NET SALES: Net sales increased $7.3 million, or 19.1%, to $45.4 million
in the 1996 period from $38.1 million in the 1995 period. The 99 Cents Only
Stores net sales increased approximately $5.1 million, or 17.0%, to $35.2
million in the 1996 period from $30.1 million in the 1995 period, and Bargain
Wholesale net sales increased approximately $2.2 million, or 26.9%, to $10.2
million in the 1996 period from $8.0 million in the 1995 period. The increase
in the 99 Cents Only Stores net sales was attributable to the positive effect
in the period of 3 new stores opened in the third quarter and 2 in the first
quarter and 0 in the second quarter of 1996, the full effect of 2 new store
openings in each of the second and fourth quarter of 1995 and a 0.5% or $0.3
million increase in comparable store net sales in the 1996 period from the
1995 period. The increase in Bargain Wholesale net sales was primarily
attributable to a continued increased focus on large domestic and
international marketing activity during the 1996 period.
GROSS PROFIT: Gross profit increased approximately $3.5 million, or
27.5%, to $16.1 million in 1996 period from $12.6 million in the 1995 period.
The increase in gross profit was due to higher net sales and an increase in
the gross profit margin to 35.5% in the 1996 period from 33.2% in the 1995
period.
SELLING, GENERAL AND ADMINISTRATIVE: SG&A increased by
$1.9 million, or 22.2%, from $8.5 million in 1995 to $10.3 million in the
1996 period, primarily due to increased costs associated with new store growth
and higher wage costs. As a result SG&A increased as a percentage of net
sales from 22.2% in 1995 to 22.8% in 1996.
OPERATING INCOME: As a result of the items discussed above,
operating income increased $1.6 million, or 38.4%, to $5.8 million in 1996
from $4.2 million in 1995. The operating margin increased to 12.7% of sales in
1996 compared to 11.0% in 1995.
INTEREST INCOME (EXPENSE): Interest expense relates to interest on
the Company's capitalized warehouse lease, net of interest earned on the
Company's cash balances and short-term investments. The change in interest
expense between 1996 and 1995 was due to interest earned from proceeds of the
initial public offering of May 23, 1996. During 1996 and 1995, the Company
had no bank debt.
PROVISION FOR INCOME TAXES: The provision for income taxes of
$2.5 million in 1996 compares to a pro forma provision of $1.7 million in
1995.The effective rate of the historical and pro forma provision for income
taxes was approximately 41.1% in 1996 and 41.7% in 1995. The effective rates
approximate the statutory rates in each period. See Note 4 of "Notes to
Financial Statements."
NET INCOME: As a result of the items discussed above, pro forma net
income increased $1.2 million, or 52.8% to $3.6 million in 1996 from $2.3
million in the 1995 period. Net income increased to 7.8% of net sales from
6.1% pro forma net income in the 1995 period.
Nine Months Ended September 30, 1996 Compared to Nine Months Ended
September 30, 1996.
NET SALES: Total net sales increased $22.8 million, or 21.1%, to $130.8
million in the 1996 period from $108.0 million in the 1995 period. 99 Cents
Only Stores net sales increased approximately $14.6 million, or 16.8%, to
$101.6 million in the 1996 period from $87.0 million in the 1995 period.
Bargain Wholesale net sales increased approximately $8.7 million, or 42.4%, to
$29.2 million in the 1996 period from $20.5 million in the 1995 period. The
increase in 99 Cents Only Stores net sales was primarily attributable to the
positive effects of new store openings in 1995 and 1996. The Company had 2 new
stores opened during the first quarter and 3 in the third quarter of 1996.
Also 2 new stores opened during the forth quarter of 1995. The increase in
Bargain Wholesale net sales was primarily attributable to an increased focus
on large domestic and international accounts, expansion into new geographic
markets and increased marketing activity during the 1996 period.
GROSS PROFIT: Gross profit increased approximately $8.7 million, or 24.3%,
to $44.5 million in the 1996 period from $35.8 million in the 1995 period.
The increase in gross profit dollars was due to higher net sales. As a
percentage of net sales, gross profit increased to 34.0% in the 1996 period
from 33.2% in the 1996 period.
SELLING, GENERAL AND ADMINISTRATIVE: SG&A increased by
$4.5 million, or 18.3%, to $29.0 million in 1996 from $24.5 million in 1995,
primarily due to increased costs associated with new store growth. SG&A
decreased as a percentage of net sales from 22.7% in 1995 to 22.2% in 1996.
The decrease as a percentage of net sales in 1996 resulted primarily from
spreading SG&A over a larger revenue base.
OPERATING INCOME: As a result of the items discussed above,
operating income increased $4.2 million, or 37.2%, from $11.3 million in 1995
to $15.5 million in 1996.
INTEREST INCOME (EXPENSE): Interest expense relates to interest on the
Company's capitalized warehouse lease, net of interest earned on the
Company's cash balances and short-term investments. The change in interest
expense between 1995 and 1996 was due to interest income earned from
proceeds of the initial public offering of May 23, 1996. During 1995 and 1996,
the Company had no bank debt.
PRO FORMA PROVISION FOR INCOME TAXES: The proforma provision for income taxes
in 1995 was $4.3 million, compared to $6.4 million in 1996.
The effective rate of the historical and pro forma provision for income taxes
was 41.0% in 1996 and 40.2% in 1995. The effective rates in 1995 are less
than the statutory rates due to the benefit of certain credits. See Note 4 of
"Notes to Financial Statements."
PRO FORMA NET INCOME: As a result of the items discussed above,
pro forma net income increased $2.7 million, or 42.4% from the $6.4 million in
1995 to $9.1 million in 1996 period.
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its operations principally from cash provided by
operations, and has not generally relied upon external sources of financing.
The Company's capital requirements result primarily from purchases of
inventory, expenditures related to store openings and the working capital
requirements for new and existing stores. The Company takes advantage of
close-out and other special situation opportunities which frequently results
in large volume purchases, and as a consequence, its cash requirements are not
constant or predictable during the year and can be affected by the timing and
size of its purchases.
In May 1996, the Company completed its initial public offering of
4,888,500 shares (including 637,500 shares from the exercise of the over
allotment option granted to the underwriters) of common stock. Of the net
proceeds of approximately $65.3 million, the Company used approximately $39.9
million to pay notes issued and dividends payable declared to the pre public
offering Shareholders. The Company intends to use the balance of the net
proceeds for the expansion of its retail operations, and for general corporate
purposes. Any net proceeds not immediately used for such purposes have been
invested in short-term investments grade securities.
During the nine months ended September 30, 1996, net cash provided by
operations was $12.2 million. This amount reflects a $1.0 million increase in
inventories, an $0.9 increase in receivables and an increase of $2.0 million
in current income taxes and $4.5 million in deferred income taxes. During this
period, net cash used in investing activities was $33.7 million, consisting
primarily of investments in short-term securities and expenditures for
property and equipment and construction in progress. Net cash provided by
financing activities was $19.9 million. These funds represented the net
proceeds of the initial public offering in May 1996 of $65.3 million. The
Company used approximately $39.9 million to pay notes payable and dividends
payable declared to the pre public offering Shareholders. The remaining funds
represented payments of the capitalized warehouse lease and distributions to
the pre public offering Shareholders to cover, in part, federal and state
income taxes payable by the pre public offering Shareholders with respect to
the net income earned by the Company prior to the initial public offering.
The Company has a $7.0 million bank line of credit facility bearing interest
at the bank's prime rate. Under terms of the facility, the Company must comply
with certain financial and performance covenants including the maintenance of
profitability, minimum current ratio, a minimum net worth , a maximum total
liabilities to tangible net worth, a minimum fixed charge covered ratio and a
maximum capital expenditures. Noncompliance by the Company with respect to
any of the loan covenants constitutes an event of default that gives the bank
the right to call the credit facility and to pursue certain remedies.
As of September 30, 1996, the Company was in compliance with all such
covenants and there were no amounts outstanding on the line of credit.
The Company believes that it can adequately fund its planned capital
expenditures and working capital requirements for the next 12 months from net
cash provided by operations, amounts available under its credit facilities and
net proceeds from the initial public offering.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS. 27.01 Financial Data Schedule
(b) FORM 8-K. None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
99 CENTS STORES ONLY
Date: November 15, 1996 /s/ Andrew A. Farina
Andrew A. Farina
Vice President Finance
EXHIBIT 27.1
<PERIOD TYPE> 9-mos
<FISCAL YEAR END> Dec 31 1996
<PERIOD START> Jan 01 1996
<PERIOD END> Sep 30 1996
[CASH] 1,430,000
[SECURITIES] 29,870,000
[RECEIVABLES] 2,197,000
[ALLOWANCES] (75,000)
[INVENTORY] 35,292,000
<CURRENT ASSETS> 69,239,000
[PP&E] 26,857,000
[DEPRECIATION] (6,693,000)
<TOTAL ASSETS> 94,717,000
<CURRENT LIABILITIES> 11,185,000
[BONDS] 0
<PREFERRED MANDATORY> 0
[PREFERRED] 0
[COMMON] 65,522,000
<OTHER SE> 6,373,000 <FN 1>
<TOTAL LIABILITY AND EQUITY> 94,717,000
[SALES] 130,833,000
<TOTAL REVENUE> 130,833,000
[CGS] 86,315,000
<TOTAL COSTS> 29,007,000
<OTHER EXPENSES> 0
<LOSS PROVISION> 0
<INTEREST EXPENSE> 10,000
<INCOME PRE TAX> 15,501,000
<INCOME TAX> 6,355,000 <FN 2>
<INCOME CONTINUING> 9,146,000
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
<NET INCOME> 9,146,000
<EPS PRIMARY> 0.66
<EPS DILUTED> 0.66
< /TABLE>
<FN1> Retained Earnings
<FN2> Represents pro forma adjustments to reflect conversion of Company
from S corporation to C corporation.