UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 1-11735
99 CENTS ONLY STORES
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-2411605
(State or other jurisdiction (I.R.S. Employer
or organization) Identification No.)
4000 EAST UNION PACIFIC AVENUE
CITY OF COMMERCE, CALIFORNIA 90023
(Address of principal executive offices)
Registrant's telephone number, including area code: (213) LUCKY-99
NONE
Former name, address and fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.
Common Stock, No Par Value, 14,816,635 shares as of August 13, 1996
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<PAGE>
99 CENTS ONLY STORES
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 6,146,000 $ 3,057,000
Short-term investments 26,731,000 -
Accounts receivable, net of
allowance for doubtful accounts
of $34,000 and $52,000, as of
December 31, 1995 and June 30, 1996,
respectively 1,398,000 1,360,000
Inventories 30,903,000 34,313,000
Other 628,000 324,000
------------ -----------
Total current assets 65,806,000 39,054,000
PROPERTY AND EQUIPMENT, at cost:
Land 5,107,000 5,107,000
Buildings and improvements 8,553,000 8,553,000
Leasehold Improvements 5,773,000 5,025,000
Fixtures and equipment 4,549,000 3,992,000
Transportation equipment 421,000 421,000
Construction in progress 160,000 -
------------ -----------
24,563,000 23,098,000
Less - Accumulated depreciation
and amortization (6,258,000) (5,311,000)
------------ -----------
18,305,000 17,787,000
OTHER ASSETS:
Deferred income taxes 4,925,000 378,000
Deposits 231,000 231,000
Receivable from affiliated entity 107,000 107,000
Other - 41,000
------------ -----------
5,263,000 757,000
------------ -----------
$ 89,374,000 $57,598,000
============ ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ -----------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Current portion of capital
lease obligation $ 634,000 $ 612,000
Accounts payable 4,141,000 5,750,000
Accrued expenses:
Payroll and payroll-related 614,000 818,000
Sales tax 377,000 900,000
Liability for claims 763,000 959,000
Other 26,000 20,000
Workers' compensation 1,237,000 1,209,000
Income taxes payable 1,587,000 96,000
----------- -----------
Total current liabilities 9,379,000 10,364,000
----------- -----------
LONG-TERM LIABILITIES:
Deferred rent 1,382,000 1,346,000
Accrued interest 1,228,000 965,000
Capital lease obligation,
net of current portion 9,043,000 9,365,000
----------- -----------
11,653,000 11,676,000
=========== ===========
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, no par value
Authorized - 1,000,000 shares
Issued and outstanding - none - -
Common stock, no par value:
Authorized - 40,000,000 shares
Issued and outstanding - 9,929,135 shares
at December 31, 1995, and 14,816,635
shares at June 30, 1996 65,522,000 195,000
Retained earnings 2,820,000 35,363,000
----------- -----------
68,342,000 35,558,000
----------- -----------
$89,374,000 $57,598,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
<PAGE>
99 CENTS ONLY STORES
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES:
99 Cents Only Stores $34,136,000 $29,807,000 $66,392,000 $56,899,000
Other retail - 165,000 - 492,000
Bargain Wholesale 9,037,000 6,370,000 19,057,000 12,508,000
----------- ----------- ----------- -----------
43,173,000 36,342,000 85,449,000 69,899,000
COST OF SALES 28,239,000 24,291,000 57,049,000 46,721,000
----------- ----------- ----------- -----------
Gross profit 14,934,000 12,051,000 28,400,000 23,178,000
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 9,607,000 8,302,000 18,673,000 16,055,000
----------- ----------- ----------- -----------
Operating income 5,327,000 3,749,000 9,727,000 7,123,000
INTEREST EXPENSE, NET 63,000 189,000 252,000 378,000
----------- ----------- ----------- -----------
Income before pro forma
provision for
income taxes 5,264,000 3,560,000 9,475,000 6,745,000
PRO FORMA PROVISION FOR
INCOME TAXES 2,162,000 1,408,000 3,881,000 2,646,000
----------- ----------- ----------- -----------
PRO FORMA NET INCOME $ 3,102,000 $ 2,152,000 $ 5,594,000 $ 4,099,000
=========== =========== =========== ===========
PRO FORMA EARNINGS PER
COMMON SHARE $0.23 $0.42
=========== ===========
PRO FORMA WEIGHTED AVERAGE
NUMBER OF COMMON SHARES
OUTSTANDING 13,698,000 13,247,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
99 CENTS ONLY STORES
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,406,000 $ 6,667,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for doubtful accounts 18,000 -
Depreciation and amortization 947,000 776,000
Loss on disposition of property
and equipment - 10,000
Provision (benefit) for deferred
income taxes (4,547,000) -
Changes in assets and liabilities
associated with operating activities:
Accounts receivable (56,000) 74,000
Inventories 3,410,000 2,704,000
Other assets (263,000) 50,000
Deposits - 11,000
Accounts payable (1,609,000) (64,000)
Accrued expenses (917,000) (781,000)
Worker's compensation 28,000 73,000
Income taxes payable 1,491,000 (125,000)
Deferred rent 36,000 267,000
Accrued interest 263,000 245,000
------------ ------------
Net cash provided by operating
activities 11,207,000 9,907,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,465,000) (1,196,000)
Investments in short-term securities (26,731,000) -
------------ ------------
Net cash used in investing
activities (28,196,000) (1,196,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of capital lease obligation (300,000) (281,000)
Net proceeds from initial public offering 65,327,000 -
Payment of notes payable to shareholders (35,363,000) -
Payment of dividend payable (4,586,000) -
Distributions to shareholders (5,000,000) (6,800,000)
<PAGE>
------------ ------------
Net cash provided by (used in)
financing activities 20,078,000 (7,081,000)
------------ ------------
NET INCREASE IN CASH 3,089,000 1,630,000
CASH, beginning of period 3,057,000 212,000
------------ ------------
CASH, end of period $ 6,146,000 $ 1,842,000
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
99 CENTS ONLY STORES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
conformity with generally accepted accounting principles. However, certain
information and footnote disclosures normally included in financial statements
prepared in conformity with generally accepted accounting principles have been
omitted or condensed pursuant to the rules and regulations of the Securities
and Exchange Commission (SEC). These statements should be read in conjunction
with the Company's December 31, 1995 audited and pro forma financial statements
and notes thereto included in the Company's Form S-1 registration statement
dated March 26, 1996, including all amendments thereto. In the opinion of
management, these interim financial statements reflect all adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation
of the financial position and results of operations for each of the periods
presented. The results of operations and cash flows for such periods are not
necessarily indicative of results to be expected for the full year.
2. PUBLIC OFFERING OF STOCK
In May 1996, the Company completed its initial public offering of
4,887,500 shares (including 637,500 shares from the exercise of the over-
allotment option granted to the underwriters) of common stock. Of the net
proceeds of approximately $65.3 million, the Company used approximately $39.9
million to pay notes issued and dividends payable declared to the Existing
Shareholders. The Company intends to use the balance of the net proceeds to
continue to accelerate the expansion of its retail operations and for general
corporate purposes. Any net proceeds not immediately used for such purposes
have been invested in short term investment grade securities.
3. PRO FORMA PRESENTATION
Through April 30, 1996, the Company had elected treatment as an S
corporation under provisions of the Internal Revenue Code. Effective May 1,
1996, the Company terminated its S corporation election and became a C
corporation.
<PAGE>
A. Pro Forma Statements of Income
As an S corporation, the Company's income, whether distributed or not, was
taxed at the shareholder level for federal income tax purposes. For
California franchise tax purposes, as an S corporation, the Company was
taxed at 1.5 percent of taxable income.
Because of the Company's change in tax status, historical results of
operations, including income taxes, and related earnings per share
information may not, in all cases, be comparable to or indicative of
current and future results. Therefore, pro forma information, which shows
results as if the Company had always been a C Corporation, is presented on
the face of the accompanying statements of income.
The pro forma provision for income taxes included in the accompanying
statements of income shows results as if the Company had always been
subject to taxes as a C Corporation and had adopted Statement of Financial
Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes,"
prior to fiscal 1991.
Under SFAS 109, deferred income tax assets or liabilities are computed
based on temporary differences between the financial statement and income
tax bases of assets and liabilities using the enacted marginal income tax
rate in effect for the year in which the differences are expected to
reverse. Deferred income tax expenses or credits are based on the changes
in the deferred income tax assets or liabilities from period to period.
Under SFAS 109, deferred tax assets may be recognized for temporary
differences that will result in deductible amounts in future periods and
for loss carry forwards. A valuation allowance is recognized if, based on
the weight of available evidence, it is more likely than not that some
portion or all of the deferred tax asset will not be realized.
For the three and six month periods ended June 30, 1996 and 1995, the pro
forma provision for income taxes was based upon a combined federal and
state tax rate of 41 percent, offset by the impact of various tax credits.
B. Pro Forma Earnings Per Common Share
Pro forma earnings per common share have been computed by dividing pro
forma net income by the pro forma weighted average number of common shares
outstanding plus the dilutive effect of common stock equivalents. Pro
forma weighted average number of common shares outstanding also includes
amounts(weighted from the beginning of the period to the initial public
offering) for shares offered as a part of the public offering; the
proceeds from such shares being used to fund a $39.9 million distribution
to shareholders.
<PAGE>
Pursuant to the rules of the SEC, historical per share data are not
presented and pro forma per share data are presented for the latest
interim period only in the accompanying statements of income. Also
pursuant to these rules the number of common shares issuable due to
options granted during the twelve months preceding the Company's public
offering are included in the calculation of shares outstanding using the
treasury stock method from the beginning of all periods presented.
4. CHANGE IN TAX STATUS/INCOME TAX PROVISION
As discussed in Note 3 above, effective May 1, 1996, the Company
terminated its S corporation election and became a C corporation. As such, the
actual taxes due by the Company through June 30, 1996 are based on S
corporation tax rates for income from January 1, 1996 through April 30, 1996
and C corporation tax rates from May 1, 1996 through June 30, 1996.
In connection with the Company's change in tax status, the Company
recorded an increase in the deferred tax asset of $4,570,000. As a C
corporation, the computation of deferred taxes is based on federal C
corporation tax rates, which are not applicable to S corporations, and C
corporation state tax rates, which are significantly larger than S corporation
state tax rates. In accordance with SFAS 109, the gain resulting from the
increase in the deferred tax asset is included as a credit to tax expense
during the three and six month periods ended June 30, 1996.
The historical provision (benefit) for income taxes and resulting
historical net income, based on S corporation and C corporation tax rates as
discussed above and including the effect of the increase in the deferred tax
asset as discussed above, for the three and six month periods ended June 30,
1996 follows:
<TABLE>
<CAPTION>
Three Month Six Month
Period Ended Period Ended
June 30, 1996 June 30, 1996
------------- -------------
<S> <C> <C>
Income before provision (benefit)
for income taxes $ 5,264,000 $ 9,475,000
------------- -------------
Historical provision (benefit) for
income taxes:
During period as an S corporation 22,000 75,000
During period as an C corporation 1,564,000 1,564,000
Change in tax status (4,570,000) (4,570,000)
_____________ _____________
(2,984,000) (2,931,000)
------------- -------------
Historical net income $ 8,248,000 $ 12,406,000
============= =============
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
99 Cents Only Stores is a leading deep-discount retailer of general
merchandise at a single price point. The Company has been engaged since 1976
in the purchase and sale of name-brand, close-out and regularly available
general merchandise. Since that time, the Company has distributed its
merchandise on a wholesale basis through its Bargain Wholesale division. In
1982, the Company opened the first of its 99 Cents Only Stores and as of the
date of this 10-Q operates a chain of 39 99 Cents Only Stores. The Company's
growth has primarily come from new store openings and growth in its Bargain
Wholesale division.
Bargain Wholesale's growth over the last three years ending December 31,
1995 was primarily attributable to an increased focus on large domestic and
international accounts and expansion into new geographic markets. The Company
intends to continue to expand its wholesale division by continuing this focus
and increasing its marketing and promotional programs. The Company generally
realizes a lower gross profit margin on Bargain Wholesale net sales than on 99
Cents Only Stores net sales. However, Bargain Wholesale complements the
Company's retail operations by allowing the Company to purchase in larger
volumes at more favorable pricing and to generate additional net sales with
relatively small incremental increases in operating expenses.
Initial Public Offering
In May 1996, the Company completed its initial public offering of
4,887,500 shares (including 637,500 shares from the exercise of the over-
allotment option granted to the underwriters) of common stock. Of the net
proceeds of approximately $65.3 million, the Company used approximately $39.9
million to pay notes issued and dividends payable declared to the Existing
Shareholders. The Company intends to use the balance of the net proceeds to
continue to accelerate the expansion of its retail operations and for general
corporate purposes. Any net proceeds not immediately used for such purposes
have been invested in short-term investment grade securities.
Effect Of Change In Form From An S Corporation To a C Corporation
As part of its initial public offering, the Company changed in form from
an S Corporation to a C Corporation which will affect its operations and
financial condition by increasing the level of federal and state income taxes.
As an S Corporation, the Company's income, whether or not distributed, was
taxed at the shareholder level for federal income tax purposes. For California
franchise tax purposes, S Corporations were taxed at 1.5% of taxable income for
the first four months of 1996. Currently, the top federal tax rate for C
Corporations is 35% and the corporate tax rate in California is 9.3%. As such,
the change in form will affect the earnings and the cash flows of the Company.
The pro forma provision for income taxes in the accompanying statements of
income shows results as if the Company had always been a C Corporation and had
adopted Statement of Financial Accounting Standards No. 109 "Accounting for
Income Taxes" prior to January 1, 1991. (See Note 4 of Notes to Financial
Statements.)
<PAGE>
Three Months Ended June 30, 1996 Compared to Three Months Ended June 30, 1995
Net sales: Total net sales increased $6.8 million, or 18.8%, from $36.3
million in the 1995 period to $43.2 million in the 1996 period. 99 Cents Only
Stores net sales increased approximately $4.3 million, or 14.5%, from $29.9
million in the 1995 period to $34.1 million in the 1996 period, and Bargain
Wholesale net sales increased approximately $2.7 million, or 41.9%, from $6.4
million in the 1995 period to $9.0 million in the 1996 period. The increase in
99 Cents Only Stores net sales was primarily attributable to the positive
effect of 1 new store and 1 store relocation opened during each of the second
and fourth quarters of 1995 and 2 new stores opened during the first quarter of
1996, and a 0.4% or $0.1 million increase in comparable store net sales from
the 1995 period to the 1996 period. The increase in Bargain Wholesale net
sales was primarily attributable to an increased focus on large domestic and
international accounts, expansion into new geographic markets and increased
marketing activity during the 1996 period.
GROSS PROFIT: Gross profit increased approximately $2.9 million, or
23.9%, from $12.1 million in the 1995 period to $14.9 million in the 1996
period. The increase in gross profit was due to higher net sales. As a
percentage of net sales, gross profit increased from 33.2% in the 1995 period
to 34.6% in the 1996 period reflecting a favorable change in product mix.
SELLING, GENERAL AND ADMINISTRATIVE: SG&A increased by $1.3 million, or
15.7%, from $8.3 million in 1995 to $9.6 million in 1996, primarily due to
increased costs associated with new store growth. SG&A decreased as a
percentage of net sales from 22.8% in 1995 to 22.3% in 1996. The decrease as
of percentage of net sales in 1996 resulted primarily from spreading SG&A over
a larger revenue base.
OPERATING INCOME: As a result of the items discussed above, operating
income increased $1.6 million, or 42.1%, from $3.7 million in 1995 to $5.3
million in 1996.
INTEREST EXPENSE: Interest expense relates to interest accrued on the
Company's capitalized warehouse lease, net of interest earned on the Company's
cash balances and short term investments. The change in interest expense
between 1995 and 1996 was due to interest income earned from proceeds of the
initial public offering of May 23, 1996. During 1995 and 1996, the Company had
no bank debt.
PRO FORMA PROVISION FOR INCOME TAXES: The pro forma provision for income
taxes in 1995 was $1.4 million, or 3.9% of net sales, compared to $2.2 million,
or 5% of net sales in 1996. The effective rate of the pro forma provision for
the income taxes was 41.1% in 1996. The effective rates are less than the
statutory rates in each period due to the benefit of certain tax credits. See
Note 4 of "Notes to Financial Statements."
PROFORMA NET INCOME: As a result of the items discussed above, pro forma
net income increased $950,000, or 44.1% from the $2.2 million in 1995 to $3.1
million in 1996 period.
<PAGE>
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
NET SALES: Total net sales increased $15.5 million, or 22.2%, from $69.9
million in the 1995 period to $85.4 million in the 1996 period. 99 Cents Only
Stores net sales increased approximately $9.5 million, or 16.7%, from $56.9
million in the 1995 period to $66.4 million in the 1996 period, and Bargain
Wholesale net sales increased approximately $6.5 million, or 52.4%, from $12.5
million in the 1995 period to $19.1 million in the 1996 period. The increase
in 99 Cents Only Stores net sales was primarily attributable to the positive
effect of a net increase of 1 new store and 1 store relocation opened during
each of the second and fourth quarters of 1995 and 2 new stores opened during
the first quarter of 1996, and a 3.2% or $1.7 million increase in comparable
store net sales from the 1995 period to the 1996 period. The increase in
Bargain Wholesale net sales was primarily attributable to an increased focus on
large domestic and international accounts, expansion into new geographic
markets and increased marketing activity during the 1996 period.
GROSS PROFIT: Gross profit increased approximately $5.2 million, or
22.5%, from $23.2 million in the 1995 period to $28.4 million in the 1996
period. The increase in gross profit was due to higher net sales. As a
percentage of net sales, gross profit remained consistent at 33.2% in the 1995
and 1996 period.
SELLING, GENERAL AND ADMINISTRATIVE: SG&A increased by $2.6 million, or
16.3%, from $16.1 million in 1995 to $18.7 million in 1996, primarily due to
increased costs associated with new store growth. SG&A decreased as a
percentage of net sales from 23.0% in 1995 to 21.9% in 1996. The decrease as
of percentage of net sales in 1996 resulted primarily from spreading SG&A over
a larger revenue base.
OPERATING INCOME: As a result of the items discussed above, operating
income increased $2.6 million, or 36.5%, from $7.1 million in 1995 to $9.7
million in 1996.
INTEREST EXPENSE: Interest expense relates to interest accrued on the
Company's capitalized warehouse lease, net of interest earned on the Company's
cash balances. The change in interest expense between 1995 and 1996 was due to
interest income earned from proceeds of the initial public offering of May 23,
1996. During 1995 and 1996, the Company had no bank debt.
PRO FORMA PROVISION FOR INCOME TAXES: The pro forma provision for income
taxes in 1995 was $2.6 million, or 3.8% of net sales, compared to $3.9 million,
or 4.5% of net sales in 1996. The effective rate of the pro forma provision
for the income taxes was 41.0% in 1996. The effective rates are less than the
statutory rates in each period due to the benefit of certain tax credits. See
Note 4 of "Notes to Financial Statements."
PROFORMA NET INCOME: As a result of the items discussed above, pro forma
net income increased $1.5 million, or 36.5% from the $4.1 million in 1995 to
$5.6 million in 1996.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its operations principally from cash provided by
operations, and has not generally relied upon external sources of financing.
The Company's capital requirements result primarily from purchases of
inventory, expenditures related to store openings and the working capital
requirements for new and existing stores. The Company takes advantage of
close-out and other special situation opportunities which frequently results in
large volume purchases, and as a consequence, its cash requirements are not
constant or predictable during the year and can be affected by the timing and
size of its purchases.
In May 1996, the Company completed its initial public offering of
4,887,500 shares (including 637,500 shares from the exercise of the over-
allotment option granted to the underwriters) of common stock. Of the net
proceeds of approximately $65.3 million, the Company used approximately $39.9
million to pay notes issued and dividends payable declared to the Existing
Shareholders. The Company intends to use the balance of the net proceeds to
continue to accelerate the expansion of its retail operations and for general
corporate purposes. Any net proceeds not immediately used for such purposes
have been invested in short term investment grade securities.
During the six months ended June 30, 1996, net cash provided by operations
was $11.2 million. This amount reflects a $3.4 million decrease in inventories
and an increase of $4.5 million in deferred income taxes. During this period,
net cash used in investing activities was $28.2, consisting primarily of
investments in short-term securities and expenditures for property and
equipment. Net cash provided by financing activities was $20.1 million. These
funds represented the net proceeds of the initial public offering in May 1996
of $65.3 million. The Company used approximately $39.9 million to pay notes
payable and dividends payable declared to Existing Shareholders. The remaining
funds represented payments of the capitalized warehouse lease and distributions
to Existing Shareholders to cover, in part, federal and state income taxes
payable by the Existing Shareholders with respect to the net income earned by
the Company prior to the initial public offering.
The Company has a $7.0 million bank credit facility bearing interest at
the bank's prime rate. Under the terms of the facility, the Company must
comply with certain financial and performance covenants including the
maintenance of profitability, minimum current ratio, a minimum net worth, a
maximum total liabilities to tangible net worth, a minimum fixed charge covered
ratio and a maximum capital expenditures. Noncompliance by the Company with
respect to any of the loan covenants constitutes an event of default that gives
the bank the right to call the credit facility and to pursue certain remedies.
As of June 30, 1996, the Company was in compliance with all such covenants.
The credit agreement expires in August 1996, at which time the Company expects
that it will be renewed.
The Company believes that it can adequately fund its planned capital
expenditures and working capital requirements for the next 12 months from net
cash provided by operations, availability under its credit facilities and net
proceeds from the initial public offering.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS. 27.01 Financial Data Schedule
--------
(b) FORM 8-K. None
--------
SIGNATURE
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 thereunto duly authorized.
99 CENTS ONLY STORES
Date: August 15, 1996 /s/ Carl L. Wood
----------------
Carl L. Wood
Chief Financial Officer
<PAGE>
EXHIBIT 27.1
<TABLE>
<S> <C>
<PERIOD TYPE> 6-MOS
<FISCAL YEAR END> DEC 31 1996
<PERIOD START> JAN 01 1996
<PERIOD END> JUN 30 1996
[CASH] 6,146,000
[SECURITIES] 26,731,000
[RECEIVABLES] 1,450,000
[ALLOWANCES] (52,000)
[INVENTORY] 30,903,000
<CURRENT ASSETS> 65,806,000
[PP&E] 24,563,000
[DEPRECIATION] (6,258,000)
<TOTAL ASSETS> 89,374,000
<CURRENT LIABILITIES> 9,379,000
[BONDS] 0
0
[PREFERRED] 0
[COMMON] 65,522,000
<OTHER SE> 2,820,000 <FN1>
<TOTAL LIABILITY AND EQUITY> 89,374,000
[SALES] 85,449,000
<TOTAL REVENUES> 85,449,000
[CGS] 57,049,000
<TOTAL COSTS> 18,673,000
<OTHER EXPENSES> 0
<LOSS PROVISION> 0
<INTEREST EXPENSE> 252,000
<INCOME PRETAX> 9,475,000
<INCOME TAX> 3,881,000 <FN2>
<INCOME CONTINUING> 5,594,000
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
<NET INCOME> 5,594,000
<EPS PRIMARY> .42
<EPS DILUTED> .42
</TABLE>
<FN1> Retained earnings.
<FN2> Represents pro forma adjustments to reflect conversion of Company from
S corporation to C corporation.
