FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: January 7, 2003
Date of Earliest Event Reported: January 6, 2003
DOLLAR TREE STORES, INC.
(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER: 0-25464
VIRGINIA 54-1387365
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 Volvo Parkway
Chesapeake, VA 23320
(Address of principal executive offices)
Registrant's telephone number, including area code: (757) 321-5000
Item 8. CHANGE IN FISCAL YEAR
On January 6, 2003, the Board of Directors of Dollar Tree Stores, Inc. approved
a change in Dollar Tree's fiscal year from a calendar year to a retail fiscal
year ending on the Saturday closest to January 31, effective for the year
beginning February 2, 2003. Unaudited information with respect to the transition
period, January 1, 2003 through February 1, 2003, will be included in Dollar
Tree's Quarterly Report on Form 10-Q for the fiscal quarter ending May 3, 2003.
Dollar Tree's press release issued January 7, 2003, which includes the
announcement of the fiscal year change, is attached as Exhibit 99.1. In
addition, Dollar Tree's historical financial data for the first three quarters
of 2002 presented on the new fiscal year basis is attached as Exhibit 99.2.
Item 5. OTHER INFORMATION
On January 6, 2003, the Board of Directors of Dollar Tree Stores, Inc.
unanimously appointed a new member, Eileen R. Scott, to the Company's
Board. Scott currently serves as CEO for Pathmark Stores, Inc. Ms. Scott's
appointment brings the size of Dollar Tree's Board to nine.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit # Description
99.1 Dollar Tree Stores, Inc.'s press release regarding its
fourth-quarter 2002 sales results and 2003 growth plans, its
Board appointment of a new director, and its Board approval of
a fiscal year change.
99.2 Dollar Tree Stores, Inc.'s unaudited historical financial data
for the quarters ended April 30, 2002, July 31, 2002, and
October 31, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
DATE: January 7, 2003
DOLLAR TREE STORES, INC.
By:
--------------------------------
Frederick C. Coble
Chief Financial Officer
EXHIBIT 99.1
PRESS RELEASE
DOLLAR TREE REPORTS RECORD SALES, UNVEILS 2003 GROWTH PLANS
Board Also Appoints New Director, Approves New Fiscal Year
CHESAPEAKE, Va. - January 7, 2003 - Dollar Tree Stores, Inc. (NASDAQ: DLTR), the
nation's largest $1.00 discount variety store chain, reported fourth-quarter
2002 sales of $827.5 million, in-line with the Company's previous guidance, and
a 15.8% increase compared to $714.8 million in 2001's fourth quarter.
"I am pleased with our sales performance in this challenging environment," said
CEO Macon Brock, Jr. "Customers shopped late this quarter, which helped us
overcome the short selling period between Thanksgiving and Christmas. Our more
basic seasonal mix was a big success, and our sell-through was better than
expected. Dollar Tree delivered a consistent sales performance throughout 2002
despite an unsteady retail environment."
For 2002, sales totaled $2.33 billion, a 17.1% increase from last year's $1.99
billion; comparable-store sales for the year rose 1%, and for the quarter
declined 0.3%.
On January 6, 2003, the Company's Board of Directors approved a switch from a
calendar year to a traditional retail fiscal calendar, effective for the fiscal
year beginning February 2, 2003. This change better aligns the Company's
reporting periods with its new supply-chain management systems. Later today, the
Company will be filing an 8-K that presents the first three quarters of 2002 on
the new fiscal calendar basis; later this year, the Company expects to file an
8-K presenting its fiscal fourth quarter of 2002, which will include the
transition period of January 1, 2003 through February 1, 2003. The first fiscal
quarter of 2003, which runs from February 2 through May 3, includes Easter. The
Company anticipates fiscal first quarter sales will be in the range of $590 to
$610 million.
For fiscal 2003, the Company plans to grow its retail selling square footage by
22%, in-line with previous guidance. Most of the 2003 square footage growth
should occur during the first three quarters. The Company is targeting sales and
earnings growth to exceed 15% in fiscal 2003.
In other news, Dollar Tree's Board of Directors unanimously appointed a new
member, Eileen R. Scott, to the Company's Board. Scott currently serves as CEO
for Pathmark Stores, Inc., of Carteret, N.J. Prior to being named CEO, she
served as Pathmark's Executive Vice President of Store Operations, and has held
various senior level merchandising and operations positions during her 33-year
career at Pathmark. Ms. Scott's appointment brings the size of Dollar Tree's
Board to nine.
"The Board is excited to welcome a person of Eileen's character and
professionalism," Brock commented. "She brings with her a wealth of operational
and management experience in the consumer products retail business. Her career
at Pathmark is remarkable, rising literally from cashier to CEO. She will bring
a fresh perspective to Dollar Tree's expansion plans and operational focus."
On Thursday, January 23, 2003, the Company will release its quarterly earnings
results and host a conference call to discuss those results at 4:45 p.m. EST.
The telephone number for the call is 610-769-8817, passcode DLTR. A recorded
version of the call will be available until midnight Tuesday, January 28 and may
be accessed by dialing 402-220-0194, passcode DLTR. 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,
January 28.
Dollar Tree Stores, Inc. operates 2,263 stores in 40 states as of December 31,
2002. During the fourth quarter of 2002, the Company opened 87 stores (including
its first stores in Maine and South Dakota), closed 3 stores and expanded or
relocated 28 stores. For 2002, the Company opened 318 stores, closed 30, and
expanded or relocated 111. At year-end 2002, the Company's retail selling square
footage totaled approximately 13.0 million, up 2.9 million from December 31,
2001.
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 or estimate. For example, our forward-looking statements
include statements regarding our square footage, sales, and earnings growth
plans. 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 March 14, 2002 and our Quarterly Report on Form 10-Q filed
November 14, 2002. 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.
CONTACT: Dollar Tree Stores, Inc., Chesapeake
Erica Robb or Adam Bergman, 757-321-5000
www.DollarTree.com
EXHIBIT 99.2
DOLLAR TREE STORES, INC.
AND SUBSIDIARIES
HISTORICAL FINANCIAL DATA
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 31, July 31, April 30,
2002 2002 2002
---- ---- ----
ASSETS
Current assets:
Cash and cash equivalents......................................... $ 99,030 $ 137,408 $ 136,958
Short-term investments............................................ 1,500 16,500 --
Merchandise inventories........................................... 546,373 435,015 404,424
Deferred tax asset................................................ 11,675 8,974 10,159
Income taxes receivable........................................... -- 3,660 --
Prepaid expenses and other current assets......................... 12,981 17,224 30,221
--------- ------- -------
Total current assets.......................................... 671,559 618,781 581,762
Property and equipment, net............................................ 337,783 310,781 296,389
Deferred tax asset..................................................... 8,684 8,165 7,686
Goodwill............................................................... 38,358 38,358 38,358
Other assets........................................................... 17,671 17,488 17,512
--------- ------- -------
TOTAL ASSETS.................................................. $ 1,074,055 $ 993,573 $ 941,707
========= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt................................. $ 25,000 $ 25,000 $ 25,000
Accounts payable.................................................. 134,401 114,809 105,067
Income taxes payable.............................................. 17,877 -- 1,947
Other current liabilities......................................... 57,874 49,189 46,605
Current installments of obligations under
capital leases.................................................. 4,046 3,983 3,922
--------- ------- -------
Total current liabilities..................................... 239,198 192,981 182,541
Long-term debt, excluding current portion.............................. 6,000 6,000 6,000
Obligations under capital leases, excluding current
installments......................................................... 18,013 19,049 20,067
Other liabilities ..................................................... 28,076 24,300 22,049
--------- ------- -------
Total liabilities............................................. 291,287 242,330 230,657
--------- ------- -------
Shareholders' equity:
Common stock...................................................... 1,142 1,141 1,135
Additional paid-in capital........................................ 216,729 215,757 199,727
Accumulated other comprehensive loss.............................. (1,322) (968) (486)
Unearned compensation............................................. (125) (137) (150)
Retained earnings................................................. 566,344 535,450 510,824
--------- ------- -------
Total shareholders' equity.................................... 782,768 751,243 711,050
Commitments............................................................ -- -- --
--------- ------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.................... $ 1,074,055 $ 993,573 $ 941,707
========= ======= =======
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DOLLAR TREE STORES, INC.
AND SUBSIDIARIES
HISTORICAL FINANCIAL DATA
CONDENSED CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share and store data)
(Unaudited)
Three months ended
----------------------------------------------
October 31, July 31, April 30,
2002 2002 2002
---- ---- ----
Net sales.............................................................. $ 556,864 $ 512,444 $ 509,668
Cost of sales ......................................................... 351,681 329,321 325,159
------- ------- -------
Gross Profit.................................................. 205,183 183,123 184,509
------- ------- -------
Selling, general and administrative
expenses............................................................. 153,906 141,883 138,793
------- ------- -------
Operating income.............................................. 51,277 41,240 45,716
------- ------- -------
Other income (expense):
Interest income...................................................... 660 792 1,064
Interest expense..................................................... (1,068) (1,061) (1,228)
Changes in fair value of non-hedging
interest rate swaps............................................... (635) (929) 110
------- ------- -------
Total other expense........................................... (1,043) (1,198) (54)
------- ------- -------
Income before income taxes.................................... 50,234 40,042 45,662
Provision for income taxes............................................. 19,340 15,416 17,580
------- ------- -------
Net income.................................................... $ 30,894 $ 24,626 $ 28,082
======= ======= =======
Net income per share:
Basic......................................................... $ 0.27 $ 0.22 $ 0.25
Diluted....................................................... $ 0.27 $ 0.21 $ 0.25
Weighted average number of common shares outstanding................... 114,124 113,922 112,801
Weighted average number of common shares and dilutive
potential common shares outstanding........................... 114,570 115,139 114,035
Store Data:
Comparable store net sales increase........................... 0.43% 3.08% 0.89%
Number of stores open at end of quarter....................... 2,211 2,114 2,048
Total selling square footage (in thousands)................... 12,542 11,547 10,889
2
DOLLAR TREE STORES, INC.
AND SUBSIDIARIES
HISTORICAL FINANCIAL DATA
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year-to-Date
--------------------------------------------
October 31, July 31, April 30,
2002 2002 2002
---- ---- ----
Cash flows from operating activities:
Net income...................................................... $ 83,602 $ 52,708 $ 28,082
Adjustments to reconcile net income to net cash.....................
used in operating activities:
Depreciation and amortization................................... 53,168 34,487 16,601
Loss on disposal of property and equipment...................... 1,661 1,314 1,008
Change in fair value of non-hedging interest
rate swaps.................................................... 1,454 819 (109)
Provision for deferred income taxes............................. (3,164) (167) (1,178)
Tax benefit of stock option exercises........................... 9,627 9,567 5,155
Other non-cash adjustments to net income........................ 291 201 129
Changes in assets and liabilities increasing
(decreasing) cash and cash equivalents:
Merchandise inventories....................................... (182,630) (71,272) (40,681)
Prepaid expenses and other current assets..................... 8,432 4,189 (8,808)
Refundable income taxes....................................... -- (3,660) --
Other assets.................................................. (2,553) (2,169) (2,012)
Accounts payable.............................................. 7,267 (12,325) (22,067)
Income taxes payable.......................................... 5,172 (3,513) (6,097)
Other current liabilities..................................... (19,939) (37,816) (35,869)
Other liabilities............................................. 6,870 4,310 3,778
------- ------- -------
Net cash used in operating activities.................. (30,742) (23,327) (62,068)
------- ------- -------
Cash flows from investing activities
Capital expenditures................................................ (107,867) (62,191) (29,762)
Purchase of short-term investments.................................. (16,500) (16,500) --
Proceeds from maturities of short-term investments.................. 15,000 -- --
Settlement of merger-related contingencies.......................... 75 75 42
Acquisition of favorable lease rights............................... 813 813 813
Proceeds from sale of property and equipment........................ (4) 223 252
------- ------- -------
Net cash used in investing activities...................... (108,483) (77,580) (28,655)
------- ------- -------
Cash flows from financing activities:
Repayment of long-term debt and facility fees....................... ( 6,025) (6,025) (6,025)
Principal payments under capital lease obligations.................. (2,870) (1,897) (940)
Proceeds from stock issued pursuant to stock-based
compensation plans................................................ 29,073 28,160 16,569
Repurchase of common stock.......................................... -- -- --
------- ------- -------
Net cash provided by (used in) financing ..................
activities............................................... 20,178 20,238 9,604
------- ------- -------
Net decrease in cash and cash equivalents................................ (119,047) (80,669) (81,119)
Cash and cash equivalents at beginning of period......................... 218,077 218,077 218,077
------- ------- -------
Cash and cash equivalents at end of period............................... $ 99,030 $ 137,408 $ 136,958
======= ======= =======
Supplemental disclosure of cash flow information: Cash paid for:
Interest........................................................ $ 3,063 $ 1,956 $ 1,314
Income taxes.................................................... $ 1,006 $ 15,587 $ 49,374
3