Exhibit 99.1
Dollar Tree Stores, Inc. Reports Record First Quarter Earnings Per
Share Of $0.31; Company Reaffirms Second Quarter and Full Year
Guidance
CHESAPEAKE, Va.--(BUSINESS WIRE)--May 26, 2004--Dollar Tree
Stores, Inc. (NASDAQ: DLTR), the nation's leading operator of
single-price point dollar stores, reported record first-quarter
earnings per share of $0.31 for the period ended May 1, 2004. As
previously reported, sales for the quarter were $710.3 million, a
15.4% year-over-year increase.
"We are using our supply-chain systems to drive incremental
improvements throughout the organization," President and CEO Bob
Sasser said. "Our inventory controls are better, and the flow of
product into the distribution centers and stores is much improved over
last year. Point-of-sale data is allowing us to put more of the right
product into the stores, and replenish basic and seasonal goods in a
timely manner. Lower markdowns, improved shrink, and better inventory
management are tangible benefits that we saw this quarter."
Gross margin was 35.4%, equal to last year's first quarter.
Increased purchases of lower margin domestic goods and loss of
leverage on fixed occupancy costs were offset by improvements in
shrink and markdowns. Selling, general and administrative expenses, as
a percentage of sales, were 27.1%, compared to 26.5% in the same
quarter last year. Depreciation expense, as a percentage of sales,
increased 0.25% compared to last year's first quarter, due to
investments in stores, supply-chain technology, and continued
point-of-sale conversions. Loss of leverage on operating expenses was
partially offset by improvements in payroll and related expenses.
In November 2002, the Company's Board of Directors authorized a
$200 million share repurchase program. During the first quarter of
2004, the Company bought approximately 700,000 shares of its common
stock, for $20.9 million. Cumulative repurchases against the $200
million authorization now stand at approximately $59 million.
As previously announced, the Company estimates sales for the
second quarter to be in the range of $700-$715 million, based on
square footage growth of approximately 20% and comparable-store sales
growth of flat to slightly positive. Pre-tax profit margin for the
quarter is expected to be at least 7.0%. For the full year, the
Company estimates sales to be in the range of $3.2-$3.3 billion, based
on square footage growth of approximately 20% and comparable-store
sales growth of slightly positive to 3%. The Company continues to
expect earnings growth of at least 14% compared to last year.
On Wednesday, May 26, 2004, the Company will host a conference
call to discuss its earnings results at 4:45 p.m. EDT. The telephone
number for the call is 703-464-5612. A recorded version of the call
will be available until midnight Monday, May 31, and may be accessed
by dialing 703-925-2533, and the access code is 461114. A webcast of
the call is accessible through Dollar Tree's website,
www.DollarTree.com, as well as at Vcall's website, www.Vcall.com, and
will remain on-line until midnight Monday, May 31. Any financial and
statistical information related to the call can be accessed through
the "Investor Relations / SEC Filings / Non-GAAP Measures" section of
Dollar Tree's website.
The Company's regular, pre-recorded business update will be
available Tuesday, July 6, 2004, by 5:00 p.m. EDT, and will remain
on-line through Friday, July 9, 2004. Interested parties can access
the Company's update by dialing (757) 321-5TRE.
Dollar Tree operated 2,579 stores in 47 states as of May 1, 2004.
During the first fiscal quarter of 2004, the Company opened 79 stores,
closed 13 stores, and expanded or relocated 43 stores. The Company's
retail selling square footage totaled approximately 18.1 million at
May 1, 2004, a 30% increase compared to a year ago. The Company also
operates a coast-to-coast logistics network of nine distribution
centers. Dollar Tree is a member of the NASDAQ 100 index.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS: This press release
contains "forward-looking statements" as that term is used in the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements address future events, developments or results and
typically use words such as believe, anticipate, expect, intend, plan,
forecast, or estimate. For example, our forward-looking statements
include statements regarding second-quarter sales, square footage
growth and pre-tax profit margin, and full year sales, square footage
growth and earnings growth. For a discussion of the risks,
uncertainties and assumptions that could affect our future events,
developments or results, you should carefully review the "Risk
Factors," "Business," and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" sections in our Annual
Report on Form 10-K filed April 13, 2004 and our Quarterly Report on
Form 10-Q filed December 11, 2003. Also, carefully review "Risk
Factors" in our most recent prospectuses filed November 15, 2000 and
August 3, 2000. In light of these risks and uncertainties, the future
events, developments or results described by our forward-looking
statements in this document could turn out to be materially and
adversely different from those we discuss or imply. We are not
obligated to release publicly any revisions to any forward-looking
statements contained in this press release to reflect events or
circumstances occurring after the date of this report and you should
not expect us to do so.
DOLLAR TREE STORES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
May 1, Jan. 31, May 3,
2004 2004 2003
---------- ---------- ----------
Cash and cash equivalents $ 146,690 $ 168,685 $ 89,873
Short-term investments 97,500 - 87,185
Merchandise inventories 565,219 525,643 496,904
Other current assets 29,094 28,241 27,260
---------- ---------- ----------
Total current assets 838,503 722,569 701,222
---------- ---------- ----------
Property and equipment, net 636,887 613,214 520,204
Intangibles, net 123,596 123,738 38,358
Other assets, net 21,646 20,785 18,759
---------- ---------- ----------
Total assets $1,620,632 $1,480,306 $1,278,543
========== ========== ==========
Current portion of long-term debt $ 19,000 $ 25,000 $ 25,000
Accounts payable 139,059 114,972 89,644
Other current liabilities 85,408 88,095 76,531
Income taxes payable 30,085 37,035 14,049
---------- ---------- ----------
Total current liabilities 273,552 265,102 205,224
---------- ---------- ----------
Long-term debt, excluding current
portion 250,000 142,568 142,422
Other liabilities 62,291 58,114 50,585
---------- ---------- ----------
Total liabilities 585,843 465,784 398,231
---------- ---------- ----------
Shareholders' equity 1,034,789 1,014,522 880,312
---------- ---------- ----------
Total liabilities and
shareholders' equity $1,620,632 $1,480,306 $1,278,543
========== ========== ==========
STORE DATA:
Number of stores open at end
of period 2,579 2,513 2,319
Total selling square footage
(in thousands) 18,070 16,878 13,879
DOLLAR TREE STORES, INC.
Condensed Consolidated Income Statements
(Dollars in thousands, except per share data)
First Quarter ended
----------------------
May 1, May 3,
2004 2003
--------- ---------
Net sales $710,330 $615,568
Cost of sales 459,189 397,780
Gross profit 251,141 217,788
35.4% 35.4%
Selling, general & administrative expenses 192,482 163,297
27.1% 26.5%
Operating income 58,659 54,491
8.3% 8.9%
Interest expense, net (2,078) (1,248)
Other income (expense) 610 83
Income before income taxes 57,191 53,326
8.1% 8.7%
Income tax expense 22,041 20,531
Net income 35,150 32,795
4.9% 5.3%
Net earnings per share:
Basic $ 0.31 $ 0.29
Weighted average number of shares 113,814 114,258
Diluted $ 0.31 $ 0.29
Weighted average number of shares 114,667 114,531
DOLLAR TREE STORES, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
Quarter ended
---------------------
May 1, May 3,
2004 2003
---------- ----------
Cash flows from operating activities:
Net income $ 35,150 $ 32,795
---------- ----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 28,533 23,169
Other non-cash adjustments 3,936 5,323
Changes in working capital (23,531) (115,586)
---------- ----------
Total adjustments 8,938 (87,094)
---------- ----------
Net cash provided by (used in)
operating activities 44,088 (54,299)
---------- ----------
Cash flows from investing activities:
Capital expenditures (52,544) (63,336)
Purchase of short-term investments (97,500) (28,360)
Proceeds from maturities of short-term
investments - 4,700
Acquisition of favorable lease rights (251) -
Proceeds from sale of property and equipment - 29
---------- ----------
Net cash used in investing activities (150,295) (86,967)
---------- ----------
Cash flows from financing activities:
Proceeds from long-term debt 250,000 -
Repayment of long-term debt and facility fees (148,568) (6,000)
Principal payments under capital lease
obligations (1,140) (1,657)
Proceeds from stock issued pursuant to stock-
based compensation plans 4,828 1,494
Payments for share repurchases (20,908) -
---------- ----------
Net cash provided by (used in)
financing activities 84,212 (6,163)
---------- ----------
Net decrease in cash and cash equivalents (21,995) (147,429)
Cash and cash equivalents at beginning of period 168,685 237,302
---------- ----------
Cash and cash equivalents at end of period $ 146,690 $ 89,873
========== ==========
CONTACT: Dollar Tree Stores, Inc., Chesapeake
Erica Robb or Adam Bergman, 757-321-5000
www.DollarTree.com