Exhibit 99.1
Dollar Tree Reports Record Fourth Quarter Earnings Per Share Of $0.79
CHESAPEAKE, Va.--(BUSINESS WIRE)--Feb. 23, 2005--Dollar Tree
Stores, Inc. (NASDAQ: DLTR), the nation's leading operator of
single-price point dollar stores, reported earnings per share of
$0.79, for the fiscal fourth quarter ended January 29, 2005, an
increase of $0.10 per share over fiscal fourth quarter ended January
31, 2004. Included in the results of the quarter just ended is $0.02
per share for a one-time tax benefit. As previously reported, sales
for the quarter were $987.5 million, a 10.6% increase compared to
$893.1 million, for the same period, one year ago.
"Much was accomplished during 2004," said President and CEO Bob
Sasser. "We improved our control over variable expenses and invested
in infrastructure to support our future growth, including the
completion of our POS installation and the addition of two new
distribution centers during the year. Our balance sheet and our cash
flow from operations are strong. We ended 2004 with nearly $320
million in cash and investments, and we believe that we are well
positioned in 2005 to better serve our customers, achieve profitable
growth, and deliver value to our shareholders."
For the fourth quarter, gross margin was 36.3%, down from 37.0% in
last year. The decrease primarily reflects the impact of higher
inbound freight costs, deleveraging of occupancy costs, and a higher
level of markdowns associated with clearing and valuing seasonal
goods.
Selling, general and administrative expenses, as a percentage of
sales, were 21.9% in the fourth quarter of 2004, compared to 22.3% in
the same quarter last year; this primarily reflects a decrease in
payroll costs, expressed as a percentage of sales, and our ongoing
efforts to reduce operating costs and control expenses.
Operating margin in this year's fourth quarter was 14.3%, versus
14.7% for the same period, one year ago.
For the year, sales totaled $3.126 billion, an 11.6% increase
year-over-year, on comparable-store sales growth of 0.5%. Operating
margin was 9.7%, versus 10.5% one year ago. Earnings per share were
$1.63.
The Company estimates sales for the first quarter of 2005 to be in
the range of $770-$790 million. Comparable store sales performance is
expected to be flat due to the loss of two weeks leading up to the
Easter Holiday Season. Based upon this sales forecast, earnings per
share are estimated to be in the range of $0.31 to $0.33.
For the full year, the Company estimates sales will range from
$3.435-$3.535 billion. This estimate is predicated on a square footage
growth of 14-16%. Comparable store sales are expected to be in the low
single digit range. These estimates are based on the Company's focus
on driving store productivity, leveraging technology enhancements, and
increasing inventory turns.
Earnings per share are forecast to be in the range of $1.77 to
$1.87.
On Wednesday, February 23, 2005, the Company will host a
conference call to discuss its earnings results at 9:00 a.m. EST. The
telephone number for the call is 703-639-1166. A recorded version of
the call will be available until midnight Tuesday, March 1, and may be
accessed by dialing 703-925-2533, and the access code is 635162. 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 Tuesday, March 1. 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 Thursday, April 7, 2005, by 5:00 p.m. EDT, and will remain
on-line through Monday, April 11, 2005. Interested parties can access
the Company's update by dialing (757) 321-5TRE.
As of January 29, 2005, Dollar Tree operated 2,735 stores in 48
states. For the year, Dollar Tree opened 251 stores, closed 29 stores,
and expanded or relocated 128 stores. The Company's retail selling
square footage totaled approximately 20.4 million at January 29, 2005,
a 21% 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 total and comparable-store sales and
earnings for future periods, as well as our plans for square footage
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 9, 2004. Also, carefully review "Risk Factors" in our most
recent prospectuses filed November 15, 2000 and August 3, 2000. In
addition, our estimates of annual earnings for 2005 do not reflect the
impact of Financial Accounting Standard 123R regarding share-based
payments. 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 Income Statements
(Dollars in thousands, except per share data)
Fourth Quarter ended Year ended
------------------- -----------------------
Jan. 29, Jan. 31, Jan. 29, Jan. 31,
2005 2004 2005 2004
--------- --------- ----------- -----------
Net sales $987,478 $893,065 $3,126,009 $2,799,872
Cost of sales 629,291 562,739 2,011,699 1,787,052
Gross profit 358,187 330,326 1,114,310 1,012,820
36.3% 37.0% 35.6% 36.2%
Selling, general &
administrative expenses 216,616 199,185 811,407 719,223
21.9% 22.3% 26.0% 25.7%
Operating income 141,571 131,141 302,903 293,597
14.3% 14.7% 9.7% 10.5%
Interest expense, net (1,586) (1,492) (6,438) (5,734)
Other income 369 152 1,057 889
Income before income taxes 140,354 129,801 297,522 288,752
14.2% 14.5% 9.5% 10.3%
Income tax expense 50,949 49,973 111,521 111,169
Net income 89,405 79,828 186,001 177,583
9.1% 8.9% 6.0% 6.3%
Net earnings per share:
Basic $ 0.79 $ 0.70 $ 1.64 $ 1.55
Weighted average number
of shares 112,951 114,767 113,295 114,641
Diluted $ 0.79 $ 0.69 $ 1.63 $ 1.54
Weighted average number
of shares 113,656 115,767 113,986 115,581
DOLLAR TREE STORES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
Jan. 29, Jan. 31,
2005 2004
---------- ----------
Cash and cash equivalents $ 291,327 $ 168,685
Short-term investments 26,480 -
Merchandise inventories 615,483 525,643
Other current assets 36,597 28,241
---------- ----------
Total current assets 969,887 722,569
---------- ----------
Property and equipment, net 661,207 613,214
Intangibles, net 129,032 123,738
Other assets, net 8,367 20,785
---------- ----------
Total assets $1,768,493 $1,480,306
========== ==========
Current portion of long-term debt 19,000 25,000
Accounts payable 124,195 114,972
Other current liabilities 109,399 88,095
Income taxes payable 33,669 37,035
---------- ----------
Total current liabilities 286,263 265,102
---------- ----------
Long-term debt, excluding current portion 250,000 142,568
Other liabilities 62,267 58,114
---------- ----------
Total liabilities 598,530 465,784
---------- ----------
Shareholders' equity 1,169,963 1,014,522
---------- ----------
Total liabilities and shareholders' equity $1,768,493 $1,480,306
========== ==========
STORE DATA:
Number of stores open at end of period 2,735 2,513
Total selling square footage (in thousands) 20,444 16,878
DOLLAR TREE STORES, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
Year ended
--------------------
Jan. 29, Jan. 31,
2005 2004
--------- ---------
Cash flows from operating activities:
Net income $ 186,001 $ 177,583
--------- ---------
Adjustments to reconcile net income to net
cash provided by
operating activities:
Depreciation and amortization 121,709 101,495
Other non-cash adjustments 25,176 30,392
Changes in working capital (66,946) (75,185)
--------- ---------
Total adjustments 79,939 56,702
--------- ---------
Net cash provided by operating
activities 265,940 234,285
--------- ---------
Cash flows from investing activities:
Capital expenditures (171,234) (227,316)
Purchase of Greenbacks, Inc., net of cash
acquired of $1,248 - (100,523)
Purchase of short-term investments (136,980) (30,360)
Proceeds from maturities of short-term
investments 110,500 93,885
Acquisition of favorable lease rights (6,845) (105)
Investment in Ollie's - (4,000)
Settlement of merger related contingencies - 1,021
Proceeds from sale of property and equipment - 35
--------- ---------
Net cash used in investing activities (204,559) (267,363)
--------- ---------
Cash flows from financing activities:
Proceeds from long-term debt, net of facility
fees of $1,094 and $0 248,906 39,700
Repayment of long-term debt (148,568) (51,367)
Principal payments under capital lease
obligations (5,572) (7,994)
Proceeds from stock issued pursuant to stock-
based compensation plans 15,106 22,175
Payments for share repurchases (48,611) (38,053)
--------- ---------
Net cash provided by (used in) financing
activities 61,261 (35,539)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 122,642 (68,617)
Cash and cash equivalents at beginning of period 168,685 237,302
--------- ---------
Cash and cash equivalents at end of period $ 291,327 $ 168,685
========= =========
CONTACT: Dollar Tree Stores, Inc., Chesapeake
Kent Kleeberger, 757-321-5000
http://www.DollarTree.com