99 (CENT) ONLY STORES(R) REPORTS EARNINGS PER SHARE OF $0.20 FOR THE FIRST
QUARTER ENDED MARCH 31, 2003.
CITY OF COMMERCE, CA - April 22, 2003 -- 99 (Cent) Only Stores(R)
(NYSE:NDN) reported earnings per share increased 17.6% to $0.20 for the first
quarter of 2003, compared with earnings per share of $0.18 for the first quarter
of 2002. Net Income for the first quarter of 2003 was $14.6 million, up 17.2%
over 2002.
Gross margin for the quarter was 40.4% versus 39.4% in 2002. Retail gross
margin for the first quarter of 2003 was 41.7%, versus 41.2% in 2002. This
increase in the retail gross margin in the quarter results from favorable
product sales mix factors.
Operating income for the quarter was $22.9 million up 18.6% over $19.3
million for the first quarter of 2002. Operating expenses in the first quarter
of 2003 were 28.7% of sales versus 27.5% for the same period in 2002. Operating
expenses were primarily impacted by costs associated with the new Texas
distribution center, depreciation, health care and workers compensation.
Retail sales for the quarter increased 23.4% to $184.7 million from $149.6
million in 2002. Total sales including wholesale were $196.4 million, up 20.4%
over sales of $163.1 million in 2002. Same-store-sales for the first quarter
2003 increased 4.3%.
Eric Schiffer, President of the Company said, "We are pleased to report
better than expected earnings per share growth for the quarter. Our objective
continues to be to grow earnings at 20% per year. We expect to achieve our goal
of opening 38 new stores this year including at least 15 in Texas. The Company
also expects to open five stores in the second quarter including its first Texas
stores in late June in the Houston area. Our balance sheet continues to remain
strong with about $175 million in cash and marketable securities and no debt."
99 (Cent) Only Stores(R), the nation's oldest existing one-price retailer,
operates 154 retail stores in California, Nevada and 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.
99 (CENT) ONLY STORES
STATEMENTS OF INCOME
(Amounts in thousands except per share amounts)
(Unaudited)
Three Months Ended March 31
2003 2002
-------- --------
Net sales:
99 (Cent) Only Stores $184,713 94.0% $149,647 91.8%
Bargain Wholesale 11,710 6.0% 13,456 8.2%
-------- ------ -------- ------
Net sales 196,423 100.0% 163,103 100.0%
Cost of sales 117,025 59.6% 98,861 60.6%
-------- ------ -------- ------
Gross profit 79,398 40.4% 64,242 39.4%
Selling, general and
administrative expenses 51,349 26.1% 40,982 25.1%
Depreciation 5,134 2.6% 3,940 2.4%
-------- ------ -------- ------
Total operating expenses 56,483 28.7% 44,922 27.5%
-------- ------ -------- ------
Operating income 22,915 11.7% 19,320 11.9%
Other income 1,194 0.6% 1,085 0.6%
-------- ------ -------- ------
Income before taxes 24,109 12.3% 20,405 12.5%
Provision for taxes 9,500 4.8% 7,935 4.8%
-------- ------ -------- ------
Net Income $ 14,609 7.5% $ 12,470 7.7%
======== ====== ======== ======
Basic earnings per share $ 0.21 $ 0.18
======== ========
Diluted earnings per share $ 0.20 $ 0.18
======== ========
Weighted average number of
Common shares outstanding:
Basic 70,469 69,558
Diluted 71,536 70,925
99 (CENT) ONLY STORES
BALANCE SHEETS
(Amounts in thousands)
March 31, December 31,
2003 2002
------------ --------------
(Unaudited) (Audited)
ASSETS:
Cash $ 289 $ 7,985
Short-term investments 140,429 146,857
Receivables, net 2,670 2,753
Due from shareholder 735 1,232
Inventories 86,523 83,176
Other current assets 2,630 2,869
------------ --------------
Total current assets 233,276 244,872
Property and Equipment, net 157,811 127,560
Long term investments in marketable securities 34,217 37,223
Deferred taxes 19,078 19,078
Other assets 11,770 11,177
------------ --------------
65,065 67,478
------------ --------------
Total assets $ 456,152 $ 439,910
============ ==============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current portion of capitalized lease $ 40 $ 40
Accounts payable 13,381 16,946
Accrued expenses 9,535 10,157
Workers Compensation 8,035 7,725
Income tax payable 6,907 3,518
------------ --------------
Total current liabilities 37,898 38,386
Deferred rent 2,270 2,210
Deferred compensation liability 1,220 1,102
Capitalized lease obligation 1,586 1,597
------------ --------------
5,076 4,909
Shareholders' equity 413,178 396,615
------------ --------------
Total liabilities and shareholders' equity $ 456,152 $ 439,910
============ ==============
99 (CENT) ONLY STORES
STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
Three Months March 31,
2003 2002
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,609 $ 12,470
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . 5,134 3,940
Tax benefit from exercise of non qualified employee stock options . . . . . . . 847 406
Changes in assets and liabilities associated with operating activities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 (1,084)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,346) (709)
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (273) (954)
Due from shareholder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497 -
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,565) (1,020)
Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (622) 2,243
Workers' compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310 472
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,389 7,502
Deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 29
--------- ---------
Net cash provided by operating activities. . . . . . . . . . . . . . . . . . 17,123 23,295
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . . . (35,385) (9,322)
Investment in partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 -
Net sales of short and long term investments. . . . . . . . . . . . . . . . . . . 9,434 (7,219)
--------- ---------
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . (25,915) (16,541)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of capital lease obligation. . . . . . . . . . . . . . . . . . . . . . . (11) (9)
Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . . . 1,107 1,492
--------- ---------
Net cash provided by financing activities . . . . . . . . . . . . . . . . . 1,096 1,483
--------- ---------
NET INCREASE (DECREASE) IN CASH . . . . . . . . . . . . . . . . . . . . . . . . . . (7,696) 8,237
CASH, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,985 232
--------- ---------
CASH, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 289 $ 8,469
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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--99
(CENT) --