Exhibit 99.2
99 (CENT) ONLY STORES
FIRST QUARTER 2003 FINANCIAL RESULTS
CONFERENCE CALL
APRIL 22, 2003
Operator: Gentlemen, welcome to 99 (Cent) Only Stores 2003 first
quarter earnings call. During this conference, all lines will be muted
until the question and answer portion of the call. If you need any
assistance, please press "*" "0" and an operator will assist you. At this
time I would like to introduce Chairman and CEO Mr. David Gold, CFO Andy
Farina, and President Eric Schiffer.
David Gold: Good morning. Thank you very, very much for attending our
99 (Cent) Only first quarter earnings conference call. I'm here today with
Andy Farina and I'm also here with Eric Schiffer, who I will turn it over
to right now. Thank you very, very much for attending.
Eric Schiffer: Good morning. Thank you. This is Eric Schiffer.
Operator, there seems to be a little noise in the background. If you could
try to fix that, I'll just go ahead. Good morning. This is Eric Schiffer.
Thank you for calling in and welcome to 99 (Cent) Only Stores first quarter
2003 conference call. Our conference call this morning includes first
quarter 2003 results along with a brief recap of anticipated future store
openings and other events which may be the topic of this discussion. To the
extent these matters include our views as to future events rather than
historical facts, they are forward-looking statements. Actual results could
differ materially from those which we have forecasted. I'm sorry, operator,
there's still noise. Operator, there's still noise in the background, like
someone has another conference call, or a radio on or a TV on. Could you
try to fix that, operator, and I'll continue. I apologize to everybody.
I am pleased to announce better-than-expected earnings per share for the
quarter of 20 cents. Net income in the first quarter was $14.6 million - an
increase of 17.2% over 2002. 99 (Cent) Only Stores' retail sales were
$184.7 million - up 23.4% over last year. Total sales were $196.4 million -
up 20.4% over last year. Operating income in the quarter increased 18.6%
over last year. Same-store sales for the quarter increased 4.3%. The number
of same-store sales transactions accounted for most of the increase,
indicating that the selection of merchandise and the value the stores offer
continue to be a key factor for achieving customer-repeat visits.
Additionally, the increase of same-store sales was partly driven by the
innovation of scan sales data information. The retail gross margin in the
quarter increased to 41.7% as compared to 41.2%. This improvement in gross
margin is due to continued efforts to improve our buys of both closeouts
and re-orderable products in key categories including grocery, household
products, hardware and houseware.
The Company opened 3 stores during the first quarter of 2003 in California.
We continue to expect to open 38 stores in 2003, which is a store growth
rate of 25% for the year. The first stores to be opened in Texas will open
in late June in the Houston area. We plan to open at least 15 stores in the
Houston area by year end. The Company is in the process of installing
warehouse management systems software. The Texas [distribution center] has
begun to receive merchandise this month in the new facility. We are pleased
with the progress we're making on the new facility in Texas.
The Company's SG&A ratio for the quarter was 28.7% versus 27.5% in 2002.
This 120 basis point increase results primarily from expenses related to
the new Texas [distribution center] -- 60 basis points. Depreciation -- 20
basis points. The health and worker's compensation insurance costs increase
is 20 basis points. The other 20 basis points were due to the timing of
items like supplies and maintenance. With Easter falling in the first
quarter of last year, the Company is pleased with its first quarter 2003
sales and earnings performance. We remain on course for achieving our
stated goal of annual 25% store growth and 20% earnings growth for the
year. The Company's liquidity remains very strong with approximately $175
million in short- and long-term marketable securities with no debt and no
off-balance sheet debt, other than its normal lease commitments for its
stores. Again we remain excited about our store model and tremendous growth
opportunities. We believe our stores are recession resistant because of our
outstanding values on everyday items. As stated before, we intend to grow
our square footage by 25% and earnings by 20% annually. Thank you. We would
now like to proceed to answer any questions you may have. Operator, you can
open up to questions.
Operator: Ladies and gentlemen. If you would like to ask a question,
please press the "1" key on your phone. Be aware, if the "1" key is pressed
twice, it will withdraw your question.
Eric Schiffer: Operator, this is Eric Schiffer. There still seems to
be some background noise on the call. At least we can hear it, I don't know
if everyone else can.
Operator: I am unable to hear that but I will be checking into it
for you.
Eric Schiffer: Okay.
Operator: Just a reminder to everyone, please limit your question to
one question and a follow-up. Our first question comes from Jack Balos from
Midwood Research. Please go ahead with your question Jack.
(Jack Balos): . . . your expense going forward this year, where you
don't have the same increase in minimum wage. Whether, on a 4.3% comparable
sales gain, if you're only looking at the payroll ratio to sales, excluding
health care and other benefit costs, how would that ratio compare versus a
year ago?
Eric Schiffer: Well, Jack, this is Eric Schiffer. We've never really
gotten into that kind of detailed discussion of how it breaks out, so I
don't think we can really answer that question.
(Jack Balos): I'm not asking for a specific number, just wondering what
the comparison was, was it flat, or up, or down?
Eric Schiffer: Well, part of your question was cut off, so I guess I
didn't hear the first part of your question.
(Jack Balos): Okay, the question is, since you don't have the
unfavorable higher minimum wage this year compared to last year, how would
your payroll ratio compare in direction, up or down, compared to a year
ago, just looking at payroll, and excluding things like health care costs?
Eric Schiffer: Oh, the labor rate was flat.
(Jack Balos): Okay. And the other thing is how come your gain in
inventories was about 28% which is faster than your gain in sales?
David Gold: This is Dave. Thank you very, very, very much. We're in a
business where last year, inventory went down; this year it went up. We're
in the business that we have to have opportunistic buys. So we buy things
that are available to us. They may not be available next week or the week
after. This is the culture of our business -- that we buy things, not
necessarily when we need them, but when great values are available to us
that we can pass on to the consumer, as we only buy one out of 15 items
that are presented to us. And there just happened to be a lot better buys,
so we bought more merchandise. In over 20 years of business, this is how
we've always run it. Thank you for the good question.
Operator: Our next question comes from Mark Mandel from Blaylock &
Partners. Mark, please go ahead with your question.
(Mark Mandel): Great. Thanks. Good morning and congratulations. I was
just wondering if you could just give us a little more color as to the
outlook for expenses taking into account the forthcoming move into Texas,
this timing issue with respect to supplies, and I can't read my writing,
but I think its maintenance, and any other items, and I have one follow-up.
Eric Schiffer: This is Eric. The timing thing for the supplies and
maintenance, that's kind of an issue that -- that's probably just a
one-time issue. With Texas, again it was a 60 basis points increase, and
that was really for two months, because we purchased this brand new
facility in I think late January or early February, I think January 29 or
30th, and so we'll have a full quarter impact. We'll probably be closer to
90 basis points. That's without any sales from any Texas stores. We expect
to open our first Texas store in late June, and of course as we open more
stores in Texas, then we'll minimize that impact on the SG&A. To remind
everybody, the Texas [distribution center] was purchased from Albertson's
for $23 million in cash to own it outright on January 30th. It's a 740,000
square foot facility in the Houston area, about 15 miles west of Houston in
a city called Katy. Albertsons had built this brand new in 1995 and an
addition a year or two after that and the total cost we heard was
approaching $80 million on that facility. A beautiful state-of-the-art
facility that comes with a mechanized conveyor pick to belt system which we
plan on utilizing when we open the [distribution center]. That facility
will be fully equipped with RF radio frequency technology, with a
state-of-the-art modern warehouse management system software from a company
called Highjump. The installation is going well and we expect it to be able
to run and support the stores when we get the first store open.
(Mark Mandel): Eric, on this timing thing, will that just go away or will
it reverse going forward, and on the distribution center, do those numbers
-- those basis point numbers you gave, does that incorporate extraordinary
expenses associated with, you know, labor associated with stocking the
facility, etc.?
Andy Farina: Mark, this is Andy Farina. The issue on the supplies is
really not an issue, just a matter of when we want to bring it in, whether
a vendor has a better price, and we take advantage of it. It has no
indication that there's going to be this major issue with supplies. It's
really a non-issue. In terms of the Texas [distribution center], we've laid
those out. It's going to be a million dollars a quarter for the next three
quarters. And as the stores fold in, and we've discussed this many times,
that once we get up to about 9 stores, we should start to reach kind of
break even on that, with extra volume. And then once we get to 15 to 20
stores, we should start to approach a normal distribution cost as we would
in our regular model.
David Gold: This is Dave. We plan to have 15 stores by the end of the
year, so it shouldn't take us too long to get to the ninth store.
Eric Schiffer: We should be there -- we should be at the ninth store by
this summer. Okay? Thank you.
Operator: Our next question comes from Mark Miller from William
Blair. Please go ahead with your question Mark.
(Mark Miller): Thanks. Good morning. Can you talk a little bit about
the logistics issues surrounding the implementation of the second
distribution center? As you're thinking about the way you source product
there, do you contemplate, longer term, any changes in the buying
structure? Would you ever need buyers physically in Texas, you know for
open-to-buy days, and then, as you've gotten further into discussions with
manufacturers, do you think there's any significant new supply
opportunities based on closer location to them? Then I have a follow-up
question.
David Gold: This is Dave. We do have buyers there all the time right
now. Every week we send a couple buyers there, and we definitely have to
find a place, and find suppliers that sell eggs and bread and milk and
items like that because there's no way that we're going to ship them from
LA to Houston. So we have one person devoted completely to finding
suppliers. I was out there a couple of weeks ago and we have a lot of
opportunities there. And it just seemed like there are suppliers that can
help supply that location and also that same supplier can supply the
California location. And we have hired some people that were running the
[distribution center] for Albertson's. We also plan to have at least one
buyer in the Houston facility. A permanent buyer. Thank you.
(Mark Miller): Okay, and then as you've gotten into the discussions
with the manufacturers, do you think that most of them will ship separately
to the City of Commerce and to Houston, or will you have to take some of
that merchandise and then ship it yourself from LA down to Houston? Thanks.
David Gold: Every supplier we have talked to would gladly ship it to
Houston at the same price or less, and also lesser quantities, and some of
the merchandise will come from this warehouse because they could be
close-outs that we have in the past so that some of the initial merchandise
will be coming from this warehouse. As we grow in there, they'll be
switching merchandise from warehouse to warehouse. But most of the
merchandise we plan to get in Houston will be directly shipped by the
manufacturer to that warehouse facility in Houston.
Eric Schiffer: Right. And this is Eric. The facility we have is more
than large enough to stock, you know, the full line if we choose to stock
the full line of items. And, as Dave mentioned, we recently hired a very
experienced senior buyer here in Los Angeles. His job right now is to focus
exclusively on Texas and he's been spending a lot of his time down there.
We also plan to bring aboard someone who will live in the Houston area to
work in that facility as a buyer, and we will continue to conduct
open-to-buy days just like we have out here. And we will also probably
implement our wholesale operation down there too, which is called Bargain
Wholesale. The timing of that is yet to be determined, but we eventually
will have that operating out of that facility and we think we can do a nice
little piece of business on that as well. Thank you.
Operator: Our next question comes from Michael Baker from Deutsche
Bank. Michael, please go ahead with your question.
(Michael Baker): Hey guys, how are you? My question is on progression of
signing leases for your move into Houston. Do you have any of those leases
signed yet or I guess, you know, what stage are you in for the 15 stores
that you're looking for later this year?
Eric Schiffer: Sure, Michael. I knew that question would come up.
This is Eric. Where we are right now, I'll just give you Texas as well as
the rest of the non-Texas states -- we're in California, Arizona and
Nevada. We currently have locations which we expect we can open this year.
We have some other deals that are longer-term deals, but locations we
expect to open this year. We have 9 signed, either signed leases or owned
facilities that we purchased. 9 of them are in Texas and 20 outside. Sorry,
20, including Texas, plus outside -- 20 total, 9 of which are in Texas. And
then in the letter of intent stage, or beyond that, but not quite a signed
lease, we have 7 in Texas, 17 including Texas and outside, so 17 total, 7
in Texas of those. 20 lease or to own stores of which 9 are in Texas, which
brings the total of lease or to own or letter of intent to 37 total, 16 of
which are in Texas.
(Michael Baker): And so that, is that pretty much where you would expect to
be at this point in order to get the 15 opened in Houston and the 38 open
for the country?
Eric Schiffer: Yeah. Well, we've opened 3 already, so we need to get
35 more for the 38. But yeah, these are locations that we feel very good
about -- we feel will be opened. We have other locations which I'm not
mentioning, where there are contingent deals or there are construction
issues that we foresee taking a long time - so we see them as 2004 stores.
There are another 6 to 10 stores in there, on top of that, that are 2004
stores that are done deals. So we feel very comfortable with it. We also
see tremendous opportunity outside of Houston in the Dallas/Fort Worth and
San Antonio areas and we expect to go to at least one of those markets,
perhaps both, in early 2004. So we're very comfortable where we are on the
situation with leases. Our real estate department has really done a
tremendous job of getting up to speed in that area and adding
infrastructure. Thank you.
Operator: Our next question comes from David Cumberland. David,
please go ahead with your question. He's from Robert Baird.
(David Cumberland): Good morning and congratulations. Could you please
comment on your sales in early Q2 including on Easter-related items and as
a follow-up what is your top expectation for Q2 in view of the Easter
shift?
David Gold: This is Dave. We're one of the few companies that don't
come up with monthly statements. We are very well satisfied with the sales
so far this quarter, but I can't say anything above that.
Eric Schiffer: This is Eric. We don't comment on sales during the
month, but obviously there was an Easter shift from this year to last year,
and so that Easter fell on March 31st as you all know last year, and this
year it was April 20th, I believe. So we would expect that we should have a
positive impact from that on a same store sales basis, of course, for the
month of April. So we are comfortable with how we're doing. We had a good
selection of Easter merchandise, including a great selection of Easter
candy. Our buyers did a terrific job, and the merchants in the stores did a
terrific job this year. Thank you.
Operator: Our next question comes from David Yamamoto from Wedbush
Morgan Securities. Please go ahead with your question David.
(David Yamamoto): Good morning and congratulations. You've had 2 years of
solid gross margin increases in the first quarter. Could you please
describe with more detail what's driving the improvement both at retail and
at Bargain Wholesale?
David Gold: Well, this is Dave. Bargain Wholesale did not increase.
The stores definitely increased and we just really try to constantly get
the merchandise. We don't really spend much time looking at other stores or
copying other companies. We just try to do better ourselves, and I think
that we have the people focus. I think we also have more tools in the IS
department, and we are looking at those and making sure all stores are in
stock more often. And we just really, really focused. Also, as we grow, we
have a lot more cooperation with the vendors we buy from, the major
manufacturers.
Eric Schiffer: Just to clarify something Dave mentioned very quickly,
Bargain Wholesale sales did decrease as a percent of the total, which
actually helps our gross margin, because the wholesale business has lower
margins. Your question was on gross margin. It actually helped our total
gross margin because Bargain Wholesale sales decreased and retail went up
as a percent. And another thing that's been helpful -- we've talked about
Rinso before -- that's the brand that we purchased, as well as Halsa. We
have the whole cleaning line of Rinso products that you've heard about and
we're introducing the Halsa line. In fact in our ad in the LA Times today
and Orange County Register, we have a 20-oz. container of Halsa
antibacterial liquid soap for 99 cents, which is just an amazing deal. And
so what we can do with these lines like Rinso and Halsa -- they're not the
most famous brands but they're known to a lot of people -- so it's almost
like name brands at private label pricing. And so to the extent that they
can replace sales of name brands, that can help our gross margin. I think
we're seeing some positive impact from that too.
David Gold: Well, what happened -- Halsa was purchased from Dep
Corporation. It used to be owned by SC Johnson Wax, who sold it to Dep and
we bought the product, the label, from Dep. Rinso, which was started in
1910, was the largest-selling soap detergent in the world and in Central
America - Nicaragua, Guatemala, and El Salvador -- is either number 1 or
number 2. We've purchased that from Unilever and we are going to start
radio advertising on that within the next 30 days.
(David Yamamoto): As we move into the rest of the year, should be expect
continued gross margin improvement?
Eric Schiffer: This is Eric. You know, Dave said in the beginning,
when the question was asked about inventory, that we're in the nature of
buying these large one-time buys and so we can't tell you what to expect or
what not to expect. We've been fortunate that the gross margins have
expanded. It is helpful that by growing our business, opening all these
stores and increasing our sales, we can go back to the manufacturers and
try to get better pricing on re-orderable items, which we're buying 20 to
25% more of a year. We may buy a large one-time buy of, you know, 6-packs
of Coke and pay a lot of money for it and it may not help the gross margin,
but it will help our sales and drive traffic into the stores. So it's very
difficult for us to say to you, so we can't say, whether or not you can
expect that or not, but we're going to try like heck and we try not to let
the gross margin drive our business, we try to make it so it's values for
the customers. Thanks.
Operator: Our next question comes from John Rouleau from Wachovia.
John please go ahead with your question.
(John Rouleau): Good morning gentlemen. I got on the call on time but
unfortunately the operator interrupted right when you going through the
breakout of the expenses. I'm wondering if, maybe, Eric, you could just run
through that quickly again, and I apologize for that. And then I have a
follow up question.
Eric Schiffer: Okay, John. What I said was with the increase in SG&A,
it was 120 basis point increase over the first quarter of last year, from
27.5% to 28.7. This increase results primarily from expenses related to the
new Texas [distribution center], which is about 60 basis points. And that
was a 2-month impact, because the [distribution center] was purchased
January 30th. So we said, as an aside, that in the second quarter it could
be as much as 90 basis points which could be offset by a certain amount of
sales that we start to get as we open stores in Texas. Depreciation was
about 20 basis points, health care and worker's comp insurance cost
increases amounted together to another 20 basis points, which leaves about
20 basis points left over, and that basically was due to a variety of
things, mainly the timing of items like supplies and maintenance which Andy
mentioned are really kind of a non-issue going forward.
(John Rouleau): And then if you kind of strip out the Texas expenses and
you just look at the remainder, it looks like that was up 50-60 basis
points over last year. What are the primary components kind of driving
that? You said that labor was flat which I know is the biggest expense in
the stores. But what is contributing to that increase?
Eric Schiffer: Like I said, depreciation was one third of it, worker's
comp and health care was another one third and the other one third was the
timing issues of things that fell like supplies and maintenance. To be able
to get a better deal on something we might have pushed it up or made
payment so that's it. The labor was basically flat as a percent. Okay?
Operator: Our next question comes from Meredith Adler from Lehman
Brothers. Meredith go ahead with your question.
(Meredith Adler): Hi. I just wanted to talk a little bit about Texas. I'm
assuming that the distribution center you're building is going to be able
to service all the markets in Texas that you're looking at going into,
right?
Eric Schiffer: Yeah, well, this is Eric. Just to clarify. We're not
building it. We purchased a facility that was built brand new in 1995 by
Albertson's and they exited the Houston market so it's a brand new facility
we bought. So we're not building anything, its ready to go, and we started
moving people down there and putting merchandise in this month. And so that
is a great facility that will support the first store, and we get them open
in late June and we'll be able to support, we believe, over 150 stores. We
think we can put 150 stores in the state of Texas eventually, so it can
support all the stores. And it happens to be, on the point of building,
which we're not, but just to mention, that facility, which is 740,000
square feet, is on 87 acres of land. So there's plenty of room if we wanted
to expand and add to it.
(Meredith Adler): Great. I misspoke. I didn't mean building, I meant
developing. I guess my question would only be, would you then concentrate
your growth on Texas and Arizona, Nevada and California, or would you
consider moving into other regions, or are you going to -- this is going to
keep you busy for a while?
Eric Schiffer: Well, we believe our stores can do well in almost any
part of the country, and can do well in any densely populated area of the
country, whether its Chicago, Philadelphia, Atlanta, Miami or wherever. But
we also believe in expanding in a controlled, contiguous way and so you
know, from California through Texas, it's a lot of people there. And so we
think probably about 50% of our growth over the next couple years, three
years could be in the state of Texas. The rest of it would be to continue
to grow in California, and in northern California, which was a big push
last year. More stores in the Phoenix/Arizona area and then into places
like Tucson. And we could add a few more stores in Las Vegas, Nevada. But
you know, we do feel our stores can do well in other parts of the country.
We just want to do it in a controlled way, where it makes sense. I think
the main thing we're trying to do right now, our main focus, is to succeed
in our growth into this new marketplace of Texas and to show the world that
we can operate in two very far away markets, with two distribution centers.
It's a challenge, but we feel we're up to the challenge and we have
management focused on it; we have a lot of resources devoted to it. So,
when that is achieved, we'll obviously turn our sights toward other
potential markets we can go to, so eventually we feel we can become a
nationwide retailer. Thank you.
Operator: Our next question comes from Mike Napolitona from JMP
Securities. Please go ahead with your question Mike.
(Mike Napolitona): Good morning gentlemen. Solid results for the quarter.
Question on the real estate in Texas. Eric, you mentioned you had some
leases and real estate signed. Can you talk about, of the 15-16 stores you
are going to open there this year, how many do you plan to lease versus
purchase?
David Gold: This is Dave. We purchased a few stores so far. Of
course, we purchased [the distribution center] in Katy, Texas. We would
rather buy than lease if we could but quite often, in most cases, we do
lease because many times you cannot, given the area -- the only way you can
get in an area is a lease. The cost of money right now is very, very low.
We don't borrow any money. We get very low returns on our money right now.
We do have $175 million, so we'd just as soon buy right now. So we're not
sure how many we're going to buy and how many we're going to lease. Eric
may have some information of what we've done so far.
Eric Schiffer: This is Eric. I have a little more up-to-date
information than Dave. Basically, the vast majority like he said are leased
in Texas, not purchased. We'd love to buy property, we have a lot of extra
cash and if we could get a great deal, we think it makes a lot of sense.
And if you need to free up cash, you always can do a sale lease-back. But
the vast majority -- I said we have 9 stores that are currently either
leased or owned, either 7 or 8 of them are leased and 1 or 2 are owned. And
then we are in letters of intent on another 7 stores in the Houston area
and the majority of those are for leased locations, but 1 or 2 of those are
locations that we could purchase. But overall, for the whole Company, as
well, the vast majority we lease. But we're always looking for the
opportunity to buy and when it makes sense we do it. So there's a time when
it makes a lot of sense, and we're fortunate to be in a position to be able
to take advantage of that. And as Dave mentioned, we bought a pretty big
piece of property in Texas and that was our facility, the [distribution
center], which we own outright, or the shareholders own outright, and the
shareholders also own the distribution center we are in, in the City of
Commerce; they own that outright as well.
Operator: Our next question comes from Dan Wewer from CIBC World
Markets. Dan, go ahead with your question.
(Dan Wewer): Thanks. If I did my math correctly, the 60 basis points
of distribution costs is a little short of $1.2 million for the quarter,
about $600,000 a month. How will that ramp up as you begin to add personnel
to the facility to support the store openings later this year?
Andy Farina: This is Andy. I don't think you did your math correctly.
The total cost of the Texas [distribution center] was 60 basis points
against sales and that is less than a million dollars.
(Dan Wewer): So it would be .006 times $196 million?
Andy Farina: No, on the retail.
(Dan Wewer): Oh, okay. And how will that ramp up going forward as you
begin to add personnel?
Andy Farina: I'm not seeing it any different than the guidance that we
said, about a million per quarter. As retail stores open up, we'll be
adding some fixed costs, you know, roughly personnel for receiving and for
picking and lumpers that put the things together for the trucks.
Eric Schiffer: This is Eric. As Andy says, as we get 9 or so stores,
even with the additional labor that would go into the [distribution center]
to help pick the orders for those stores, we feel we'll be able to recover
those basis point costs when we get up to about 9 stores, which we feel
we'll get to fairly quickly this summer. We expect to open the first stores
again in late June. We'll have more of an announcement on that going
forward and people that want to come down to that Grand Opening, we'd love
to have people come join us. Thank you.
Operator: Our next question comes from Myron Kaplan from Kaplan,
Nathan & Company. Please go ahead with your question.
(Myron Kaplan): Yeah, hi guys. Very good quarter. I want to ask you about
your merchandising initiatives, especially the offerings of foods that you
have been making and that you have been expanding, the deli, the dairy,
including milk, frozen and gourmet?
David Gold: The food items we have really make the customer come back
more often. I think what happens is, the more consumables we get, should it
be toothpaste or should it be a food item or should it be any item like
that, it really helps the people come back more often. Because we want to
make it like a one-stop type of place that they can shop at. We're also
coming out with a bridal section. We also have a movie section in place
right now. The bridal section is coming next, and we have an emergency
section for batteries, candles, flashlights and things like that. We have
always been an idea company since the day we started, and we always come up
with new exciting things so a customer can always come in and always find
something different. We just came out with phone cards. We think we have
the best deal in the country on phone cards. For 99 cents in any 24-hour
period, on one phone at home, you could call any place in the United States
as often as you want, you can call within the state you're at and it's 99
cents a day for 24 hours. It's a tremendous deal that helped a lot in the
last few weeks that we've had them.
(Myron Kaplan): So you're seeing some good traffic deals and you're able
to sell quite a number of phone cards.
David Gold: The cards are a really great deal. If someone has a
college student, it's a great deal. You just give him 30 cards and total
cost will be $30 a month and they can gab all they want. Yes, it's helped.
All these items that we add to the product mix; all these are plus
business. Thank you.
Operator: Our next question comes from Scott Sultan from North Point
Partners. Please go ahead with your question. Scott, you can go ahead with
your question now.
Scott Sultan: It was answered. Thank you.
Operator: At this time we have no further questions.
Eric Schiffer: This is Eric. I want to thank everybody for listening
in. The main thing is, if you come out to the West Coast, please come see
the stores. They're quite different from anything else in the country.
We're really proud of the folks that work in the stores. So thank you very
much. We appreciate your support. We'll be happy to answer any questions
later on. Take care.