EXHIBIT 99.1
PRESS RELEASE
99(CENT) ONLY STORES(R) REPORTS EARNINGS PER SHARE OF $0.19 FOR THE THIRD
QUARTER ENDED SEPTEMBER 30, 2002, COMPARED TO $0.16 IN 2001.
CITY OF COMMERCE, CA -- October 22, 2002 -- 99(cent) Only Stores(R)
(NYSE:NDN) reported net income of $13.3 million for the quarter ended September
30, 2002 up 18.7% from $11.2 million in the third quarter of 2001. Net income in
the third quarter of 2002 was 7.7% of sales.
Earnings per share was $0.19 in the third quarter of 2002, compared with
earnings per share of $0.16 in the third quarter of 2001, a 18.8% increase.
Total sales in the third quarter 2002 increased 19.6% to $172.3 million
compared to net sales of $144.0 million in the third quarter of 2001. Retail
sales for the third quarter were $160.4 million, up $29.6 million or 22.6% from
sales of $130.8 million in 2001. Same-store-sales in the third quarter were
1.1%.
Earnings per share for the nine months ended September 30, 2002 increased
19.6% to $0.55 compared to $0.46 in 2001. Total sales for the nine months ended
September 30, 2002 increased 24.1%. Same-store-sales for the first nine months
of 2002 increased 3.7%.
Gross margin for the third quarter of 2002 was 39.9% versus 39.1% in the
third quarter of 2001. Retail gross margin for the quarter was 41.3% versus
41.1% in 2001. This improvement in gross margin is due to favorable buys of both
close-out and re-orderable product.
Selling, general and administrative expenses were 27.9% of sales, compared
with 27.4% in 2001. The increase in expenses was principally due to increases in
depreciation and in labor costs due to the January 2002 California minimum wage
increase.
Operating income for the third quarter of 2002 was 12.0% compared with
11.7% for 2001. Pre-tax net income for the third quarter of this year was 12.6%.
Eric Schiffer, President of the Company said, "We are pleased to announce
strong earnings per share of $0.19. We continue to expect to grow earnings per
share by 20% per annum. We are pleased with our customer's positive reaction to
recent merchandising initiatives including milk and our newly introduced gourmet
food section. We are excited about how our new stores outside of Southern
California are performing. We expect to open 7 stores in the fourth quarter and
to increase our square footage by at least 25% this year and into the future."
99(cent) Only Stores(R), the nation's oldest existing one-price retailer,
operates 146 retail stoRES IN Southern and Central California, Las Vegas, Nevada
and Phoenix, Arizona and a wholesale division called Bargain Wholesale. 99(cent)
Only Stores(R) emphasizes name-brand consumables, priced at an excellent valuE,
IN attractively merchandised stores.
This press release contains forward-looking statements, as referenced in
the Private Securities Litigation Reform Act of 1995 (the "Act").
Forward-looking statements are inherently unreliable and actual results may
differ. Factors which could cause actual results to differ materially from these
forward-looking statements include, changes in the competitive market place,
general economic conditions, factors affecting the retail industry in general,
the timing of new store openings, the ability of the Company to identify and
obtain leases for new stores, the ability of the Company to acquire inventory at
favorable costs and other factors discussed in the Company's filings with the
Securities and Exchange Commission. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
PAGE 1
99(cent) ONLY STORES
STATEMENTS OF INCOME
(Amounts in thousands except per share amounts)
Quarter Ended Nine Months Ended
SEPTEMBER 30 SEPTEMBER 30
------------ ------------
2002 2001 2002 2001
---- ---- ---- ----
Net sales:
99(cent)Only Stores $160,424 93.1% $130,799 90.8% $465,507 92.5% $363,534 89.7%
Bargain Wholesale 11,839 6.9% 13,223 9.2% 37,722 7.5% 41,831 10.3%
-------- ------ -------- ------ -------- ------ -------- ------
172,263 100.0% 144,022 100.0% 503,229 100.0% 405,365 100.0%
Cost of sales 103,509 60.1% 87,751 60.9% 302,668 60.1% 247,845 61.1%
-------- ------ -------- ------ -------- ------ -------- ------
Gross Profit 68,754 39.9% 56,271 39.1% 200,561 39.9% 157,520 38.9%
Selling, general and
Administrative expenses 48,147 27.9% 39,508 27.4% 139,609 27.8% 109,688 27.1%
-------- ------ -------- ------ -------- ------ -------- ------
Operating Income 20,607 12.0% 16,763 11.7% 60,952 12.1% 47,832 11.8%
Other income (expense)
Interest income, net 775 0.4% 937 0.7% 2,350 0.5% 3,364 0.8%
Other 360 0.2% 360 0.2% 1,080 0.2% 1,080 0.3%
-------- ------ -------- ------ -------- ------ -------- ------
1,135 0.6% 1,297 0.9% 3,430 0.7% 4,444 1.1%
Income before income taxes 21,742 12.6% 18,060 12.6% 64,382 12.8% 52,276 12.9%
Provision for income taxes 8,487 4.9% 6,892 4.8% 25,139 5.0% 20,215 5.0%
-------- ------ -------- ------ -------- ------ -------- ------
Net Income $ 13,255 7.7% $ 11,168 7.8% $ 39,243 7.8% $ 32,061 7.9%
======== ====== ======== ====== ======== ====== ======== ======
Basic earnings per share
Net income $0.19 $0.16 $0.56 $0.47
======== ======== ======== ========
Diluted earnings per share
Net income $0.19 $0.16 $0.55 $0.46
======== ======== ======== ========
Weighted average number of
Common shares outstanding:
Basic 70,043 68,995 69,830 68,635
Diluted 71,217 70,369 71,139 69,684
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99(cent) ONLY STORES
BALANCE SHEETS
(Amounts in thousands)
September 30, December 31, September 30,
2002 2001 2001
------------- ------------ -------------
ASSETS:
Cash $ 3,292 $ 232 $ 10,783
Short-term investments 112,162 147,566 122,469
Receivables, net 3,590 3,523 5,430
Income tax receivable 5,342 1,384 -
Inventories 83,823 66,528 68,215
Other current assets 3,212 3,886 4,051
-------- -------- --------
Total current assets 211,421 223,119 210,948
Property and Equipment, net 118,169 103,639 90,388
Long term investments in marketable 42,959 533 -
securities
Other assets 27,018 24,867 22,428
-------- -------- --------
Total assets $399,567 $352,158 $323,764
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current portion of capitalized lease $ 41 $ 40 $ -
Accounts payable 9,850 15,244 10,178
Accrued expenses 13,881 11,878 7,829
Income tax payable - - 6,960
Due to shareholder - 1,655 -
-------- -------- --------
Total current liabilities 23,772 28,817 24,967
Deferred compensation 950 - -
Deferred rent 2,150 2,061 2,232
Capitalized lease obligation 1,627 1,637 -
-------- -------- --------
4,727 3,698 2,232
Shareholders' equity 371,068 319,643 296,565
-------- -------- --------
Total liabilities and
shareholders' equity $399,567 $352,158 $323,764
======== ======== ========
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99(cent) ONLY STORES
STATEMENTS OF CASH FLOWS
(Amounts in thousands)
NINE MONTHS ENDED
September 30,
2002 2001
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income....................................................... $39,243 $32,061
Adjustment to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization.................................. 12,769 8,703
Other.......................................................... (18) (191)
Tax benefit from exercise of non-qualified employee stock 3,925
options...................................................... 3,500
Changes in assets and liabilities associated with operating
activities:
Accounts receivable............................................ (67) (1,861)
Inventories.................................................... (17,295) (4,522)
Other assets................................................... 674 (3,836)
Accounts payable............................................... (5,393) (2,444)
Accrued expenses............................................... 1,518 (1,220)
Worker's compensation.......................................... 486 613
Income taxes................................................... (3,958) 6,408
Deferred rent.................................................. 90 90
Due to shareholder............................................. (1,655) -
Net cash provided by operating activities.................... 29,894 37,726
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment.............................. (27,281) (31,498)
Reduction of short-term investments.............................. 35,403 (13,039)
Purchases of long-term investments and other .................... (42,426) 1,514
Purchases of other assets........................................ (1,201) -
Net cash (used) in investing activities...................... (35,505) (43,023)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of capital lease obligation............................. (10) -
Proceeds from exercise of stock options.......................... 8,681 7,046
Net cash provided by financing activities.................... 8,671 7,046
NET INCREASE IN CASH................................................ 3,060 1,749
CASH, beginning of period........................................... 232 9,034
CASH, end of period................................................. $3,292 $10,783
Note to Editors: 99(cent)Only Stores(R)news releases and information available
on the World Wide Web AT htpp://www.99only.com
CONTACT: 99(cent)Only Stores(R), City of Commerce, California, Andy Farina, CFO,
323/881-9933
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