FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
(X) Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1999
( ) Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
Commission File Number: 0-25464
DOLLAR TREE STORES, INC.
(Exact name of registrant as specified in its charter)
Virginia 54-1387365
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 Volvo Parkway
Chesapeake, Virginia 23320
(Address of principal executive offices)
Telephone Number (757) 321-5000
(Registrant's telephone number, including area code)
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 ( )
As of May 7, 1999, there were 61,282,402 shares of the Registrant's Common Stock
outstanding.
<PAGE>
DOLLAR TREE STORES, INC.
and subsidiaries
INDEX
PART I. FINANCIAL INFORMATION Page
----
Item 1. Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets
March 31, 1999 and December 31, 1998.............................. 3
Condensed Consolidated Income Statements
Three months ended March 31, 1999 and 1998........................ 4
Condensed Consolidated Statements of Cash Flows
Three months ended March 31, 1999 and 1998........................ 5
Notes to Condensed Consolidated Financial Statements............... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk........ 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................................. 12
Item 5. Other Information................................................. 12
Item 6. Exhibits and Reports on Form 8-K.................................. 13
Signatures.................................................. 13
<PAGE>
<TABLE>
DOLLAR TREE STORES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<CAPTION>
(Unaudited)
March 31, December 31,
1999 1998
------------ ------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents......................... $ 17,799 $ 71,119
Merchandise inventories........................... 174,100 140,949
Deferred tax asset................................ 7,099 6,709
Prepaid expenses and other current assets......... 6,439 7,287
------- -------
Total current assets........................ 205,437 226,064
------- -------
Net property and equipment............................ 126,442 122,385
Deferred tax asset.................................... 2,291 2,194
Goodwill, net of accumulated amortization............. 42,069 42,551
Other assets.......................................... 6,037 6,427
------- -------
TOTAL ASSETS................................ $382,276 $399,621
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt................. $ 18,500 $ 16,500
Accounts payable.................................. 41,430 52,158
Income taxes payable.............................. 5,936 21,353
Other current liabilities......................... 16,556 26,343
------- -------
Total current liabilities................... 82,422 116,354
------- -------
Long-term debt........................................ 30,000 30,000
Other liabilities..................................... 8,516 9,043
------- -------
Total liabilities........................... 120,938 155,397
------- -------
Shareholders' equity:
Common stock, par value $0.01. Authorized
100,000,000 shares, 61,261,736 shares issued
and outstanding at March 31, 1999 and
60,878,818 shares issued and outstanding
at December 31, 1998............................ 613 609
Additional paid-in capital........................ 59,402 53,010
Retained earnings................................. 201,323 190,605
------- -------
Total shareholders' equity.................. 261,338 244,224
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.. $382,276 $399,621
======= =======
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
3
<PAGE>
<TABLE>
DOLLAR TREE STORES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share data)
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
---------------------
1999 1998
---- ----
<S> <C> <C>
Net sales............................................. $221,202 $175,531
Cost of sales......................................... 142,125 112,867
------- -------
Gross profit.................................... 79,077 62,664
------- -------
Selling, general, and administrative
expenses:
Operating expenses................................ 54,941 44,910
Depreciation and amortization..................... 6,211 4,398
------- -------
Total selling, general
and administrative expenses................... 61,152 49,308
------- -------
Operating income...................................... 17,925 13,356
Interest expense...................................... 496 735
------- -------
Income before income taxes............................ 17,429 12,621
Provision for income taxes............................ 6,711 4,890
------- -------
Net income...................................... $ 10,718 $ 7,731
======= =======
Net income per share (note 2):
Basic net income per share........................ $ 0.18 $ 0.13
======= =======
Weighted average number of common
shares outstanding:............................. 61,041 60,418
======= =======
Diluted net income per share...................... $ 0.16 $ 0.12
======= =======
Weighted average number of common
shares and dilutive potential common shares
outstanding:.................................... 67,407 66,819
======= =======
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
4
<PAGE>
<TABLE>
DOLLAR TREE STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
-------------------
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income................................................... $ 10,718 $ 7,731
------- -------
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization............................ 6,211 4,398
Loss on disposal of property and equipment............... (195) 333
Provision for deferred income taxes...................... (487) 257
Changes in assets and liabilities increasing
(decreasing) cash and cash equivalents:
Merchandise inventories.............................. (33,151) (39,430)
Prepaid expenses and other current assets............ 848 (362)
Other assets......................................... 269 (484)
Accounts payable..................................... (10,455) (5,048)
Income taxes payable................................. (12,018) (13,942)
Other current liabilities............................ (9,796) 3,771
Other liabilities.................................... (365) 453
------- -------
Total adjustments.................................. (59,139) (50,054)
------- -------
Net cash used in operating activities.............. (48,421) (42,323)
------- -------
Cash flows from investing activities:
Capital expenditures......................................... (9,813) (10,316)
Proceeds from sale of property and equipment................. 27 136
------- -------
Net cash used in investing activities.............. (9,786) (10,180)
------- -------
Cash flows from financing activities:
Proceeds from long-term debt................................. 2,000 22,200
Repayment of long-term debt and facility fees................ - (12,200)
Net change in notes payable to bank.......................... - 1,325
Principal payments under capital lease obligations........... (110) (95)
Proceeds from stock issued pursuant to
stock-based compensation plans............................. 2,997 2,083
------- -------
Net cash provided by financing activities.......... 4,887 13,313
------- -------
Net decrease in cash and cash equivalents...................... (53,320) (39,190)
Cash and cash equivalents at beginning of period............... 71,119 45,018
------- -------
Cash and cash equivalents at end of period..................... $ 17,799 $ 5,828
======= =======
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
5
<PAGE>
DOLLAR TREE STORES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The condensed consolidated financial statements of Dollar Tree Stores, Inc.
and subsidiaries (the Company) at March 31, 1999, and for the three-month period
then ended, are unaudited and reflect all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of management, necessary for a
fair presentation of the financial position and operating results for the
interim period. The condensed consolidated income statement and statement of
cash flows at March 31, 1998 reflect the results of operations and cash flows
for Dollar Tree Stores, Inc. for the three-month period then ended combined with
the Step Ahead Investments, Inc. (Step Ahead) three-month period ended April 26,
1998. The condensed consolidated balance sheet as of March 31, 1998 reflects the
financial position of Dollar Tree Stores, Inc. on that date combined with the
financial position of Step Ahead as of April 26, 1998. The condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto, together with management's
discussion and analysis of financial condition and results of operations for the
year ended December 31, 1998, contained in the Company's Annual Report on Form
10-K. The results of operations for the three-month period ended March 31, 1999
are not necessarily indicative of the results to be expected for the entire year
ending December 31, 1999.
2. NET INCOME PER SHARE
The following table sets forth the calculation of basic and diluted net
income per share:
<TABLE>
<CAPTION>
1999 1998
---- ----
(In thousands, except
per share data)
<S> <C> <C>
Basic net income per share:
Net income....................................... $ 10,718 $ 7,731
------- -------
Weighted average number of common shares
outstanding.................................... 61,041 60,418
------- -------
Basic net income per share.................. $ 0.18 $ 0.13
======= =======
Diluted net income per share:
Net income....................................... $ 10,718 $ 7,731
------- -------
Weighted average number of common shares
outstanding.................................... 61,041 60,418
Dilutive effect of stock options and warrants
(as determined by applying
the treasury stock method).................... 6,366 6,401
------- -------
Weighted average number of common shares and
dilutive potential common shares outstanding... 67,407 66,819
------- -------
Diluted net income per share.......................... $ 0.16 $ 0.12
======= =======
</TABLE>
6
<PAGE>
3. STORE OPENING COSTS
In accordance with Statement of Position (SOP) 98-5, Reporting on the Costs
of Start-up Activities, effective January 1, 1999, the Company expenses store
opening costs as incurred. The impact of the implementation of this SOP was not
material to the Company's financial results.
4. SUBSEQUENT EVENTS
On April 1, 1999, the Board of Directors granted options to employees to
purchase 835,375 shares of the Company's Common Stock.
On April 1, 1999, the Company entered into an interest rate swap agreement
related to the $19.0 million Loan Agreement (Loan Agreement) with the
Mississippi Business Finance Corporation. This swap agreement converts the
variable rate to a fixed rate and reduces the Company's exposure to interest
rate fluctuations. Under this agreement, the Company pays interest to the bank
which provided the swap at a fixed rate of 5.53%. In addition, the bank pays the
Company at a variable interest rate, which approximates the rate on the Loan
Agreement, which was 5.00% at March 31, 1999. The swap, effective through April
1, 2009, is for the entire amount outstanding under the Loan Agreement. The bank
which provided the swap has the option to cancel it on April 1, 2006.
During April 1999, the Company entered into an agreement to sublease the
Memphis distribution facility through March 2000 with an option for the
sublessee to renew the lease through March 2001.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
A WARNING ABOUT FORWARD LOOKING STATEMENTS: We have made "forward-looking
statements" in this document as that term is used in the Private Securities
Litigation Reform Act of 1995. Such statements are based on the beliefs and
assumptions of our management, and on information currently available to our
management. Our assumptions, beliefs and current information could be mistaken.
Forward-looking statements include any statements preceded by, followed by or
including words such as "believe," "anticipate," "expect," "intend," "plan,"
"view" or "estimate." Forward-looking statements also include, and are subject
to risks relating to, our future operations, performance, or financial condition
such as:
- comparable store net sales trends,
- expansion plans and store openings,
- dependence on imports and vulnerability to foreign economic and
political conditions as well as import restrictions, duties and tariffs,
- increases in shipping costs, the minimum wage, and other costs,
- our ability to sublease the Memphis facility beyond March 2000, and
- Year 2000 compliance.
Any statements concerning our future operations, performance, or financial
condition could be inaccurate or incorrect.
7
<PAGE>
Three Months Ended March 31, 1999 Compared To The Three Months Ended March 31,
1998
Before the merger with Dollar Tree, Step Ahead reported first quarter
financial results based on a three-month period that ended on April 26, 1998.
Dollar Tree's three-month period ended on March 31, 1998. For the purposes of
this report, March 31, 1998 results reflect the combination of these three-month
periods.
Net Sales. Net sales increased 26.0% to $221.2 million for the three months
ended March 31, 1999 from $175.5 million for the three months ended March 31,
1998. We attribute this $45.7 million increase to sales at 257 net new stores
opened in 1999 and 1998 which are not included in our comparable store net sales
calculation and a 5.4% increase in comparable same store sales in the first
quarter of 1999.
We opened 48 new stores and closed one store during the first quarter of
1999, compared to 39 new stores opened and two stores closed in the first
quarter of 1998. We plan to expand by 215 to 225 stores in 1999. Our management
anticipates that future net sales growth will come mostly from new store
openings.
The comparable store net sales calculation includes sales at the 98 Cent
Clearance Center stores, acquired in a pooling-of-interests transaction in
December 1998. We believe that our comparable store net sales increased largely
because sales related to the Easter holiday were partially shifted into the
first quarter with the holiday falling on April 3, 1999, compared to April 12 in
1998. The shift of this holiday is likely to have an opposite effect on our
comparable store net sales during the second quarter, since a portion of the
sales increase related to Easter has already occurred during the first quarter
of 1999. Our management therefore expects a lower comparable store net sales
increase for the quarter ending June 30, 1999.
Most retailers can increase the price of their merchandise as well as sell
more merchandise in order to increase their comparable store net sales. As a
fixed price point retailer, we do not have the ability to raise our prices, so
our comparable store net sales increase only when we sell more merchandise. We
believe that our future comparable store net sales increases, if any, will be
lower than those we have experienced in the past. Our internal business plan
continues to call for a two to three percent increase in comparable store net
sales for calendar year 1999.
Gross Profit. Gross profit increased $16.4 million, or 26.2%. Our gross
profit margin (gross profit expressed as a percentage of net sales) stayed the
same at 35.7% for both years.
SGA Expenses. Selling, general and administrative (SGA) expenses increased
$11.8 million or 24.0%. As a percentage of net sales, SGA expenses decreased to
27.6% for the first quarter of 1999 from 28.1% for the same period last year.
This relative decrease in costs happened partly because we were able to leverage
fixed costs across a higher sales volume because of a high comparable store
sales increase and because certain corporate expenses were lower as a percentage
of net sales than in the first quarter of 1998. Depreciation and amortization
increased $1.8 million to 2.8% as a percentage of net sales in the first quarter
of 1999 from 2.5% in the first quarter of 1998. This percentage increase is
mainly the result of depreciation related to the new distribution facility in
Olive Branch, Mississippi.
8
<PAGE>
Increases in expenses can have a negative impact on our operating results.
This is especially true since we cannot pass on increased expenses to our
customers by increasing our merchandise prices. Consequently, our future success
will depend in large part on our ability to control costs.
Proposals now before the U.S. Congress call for increasing the federal
minimum wage by $1.00 an hour over two or three years. Our management believes
that an increase in the minimum wage, if eventually passed into law, could have
a significant impact on our payroll costs.
Operating Income. Our operating income increased $4.6 million or 34.2%. As
a percentage of net sales, operating income increased to 8.1% in the first
quarter of 1999 from 7.6% in the same period in 1998. These increases were
attributable to the decrease in our SGA expenses, as a percentage of net sales,
discussed above.
Interest Expense. Interest expense decreased $0.2 million to $0.5 million
in the first quarter of 1999 from $0.7 million in the first quarter of 1998.
This decrease was primarily a result of lower levels of debt in 1999 compared to
1998, resulting from a higher cash position throughout the three months ended
March 31, 1999.
Liquidity and Capital Resources
Our business requires capital primarily to open new stores and operate
existing stores. Our working capital requirements for existing stores are
seasonal in nature and typically reach their peak in the months of September and
October. Historically, we have met our seasonal working capital requirements for
existing stores and funded our store expansion program from internally generated
funds and borrowings under our credit facilities.
On April 1, 1999, we entered into an interest rate swap agreement. This
transaction is discussed further in Item 3, "Quantitative and Qualitative
Disclosures About Market Risk."
The following table compares certain cash-related information for the first
quarters of 1999 and 1998:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
---- ----
(in millions)
<S> <C> <C>
Net cash provided by (used in):
Operations............................. $(48.4) $(42.3)
Investing activities................... (9.8) (10.2)
Financing activities................... 4.9 13.3
</TABLE>
For both periods, we generally expended net cash used in operations to
build inventory levels, while net cash used in investing activities was used
primarily to open new stores. Net cash provided by financing activities was
obtained from:
- the exercise of stock options in both years,
- in 1998, borrowings under our bank facility used to fund our seasonal
working capital needs, and
- in 1999, from the issuance of an additional $2 million in callable bonds
related to the construction of the Olive Branch distribution facility.
9
<PAGE>
At March 31, 1999, our borrowings under our bank facility, senior notes and
bonds were $48.5 million and we had an additional $135.0 million available
through our bank facility. Of the amount available, approximately $19.5 million
was committed to letters of credit issued for the routine purchase of foreign
merchandise.
Recent Developments
The following events occurred after the three months ended March 31, 1999.
- During April 1999, we entered into an agreement to sublease our Memphis
facility through March 2000 with an option for the sublessee to renew
the lease through March 2001.
- Effective May 1, 1999, our import shipping contracts were renewed at
higher rates, as had been previously disclosed. The new rates could
increase shipping costs by up to $4 million in 1999. Management believes
that these higher rates can be substantially offset by other costs
savings.
- In April 1999, we were in the process of negotiating an operating lease
agreement to finance the construction of a new distribution center. This
facility, which is expected to be located in Stockton, California, will
replace the leased site located in the Sacramento, California area which
services the 98 Cent Clearance Center stores.
Year 2000 Compliance
We use a large number of computer software programs throughout our entire
organization, such as purchasing, distribution, retail store management,
financial business systems and various administrative functions. We developed
some of these programs in-house and bought others from vendors. If our software
applications are unable to appropriately interpret the upcoming calendar year
2000 and beyond, then we will likely need to modify or replace such applications
in order to ensure "Year 2000 compliance."
We have been evaluating and adjusting all known date-sensitive systems and
equipment for Year 2000 compliance. We divided our Year 2000 project into four
phases:
- inventory and initial assessment,
- remediation and testing,
- implementation and re-testing, and
- contingency planning.
The assessment and remediation and testing phases of the Year 2000 project
are complete and include both information technology systems, such as computer
equipment and software, as well as non-information technology equipment, such as
warehouse conveyor systems. We are in the process of re-testing our systems
after the implementation of certain modifications.
10
<PAGE>
Our plan provides for internal compliance of all mission-critical systems
by mid-1999. We believe that the majority of our internal systems are currently
Year 2000 compliant. Some programs and equipment were replaced beginning in late
1998 by routine upgrades which provided numerous system enhancements. These
replacement programs and equipment are Year 2000 compliant. The upgrades were
previously planned and were not accelerated due to Year 2000 issues. We have not
deferred any information technology projects to address the Year 2000 issue.
We plan to continue to rely primarily on internal resources to identify,
correct or reprogram and test systems for Year 2000 compliance. To date, we have
spent less than $150,000 in modifying our systems for the Year 2000; the total
costs of modifying our current systems are not expected to exceed $350,000.
These costs are not expected to have a material adverse effect on our financial
condition and results of operations in future periods.
Additionally, we are in the process of communicating with service providers
and domestic suppliers of merchandise to assess their Year 2000 readiness and
the extent to which we may be vulnerable to any third parties' failure to
correct their own Year 2000 issues. Many of these parties have stated that their
ability to supply us will not be affected by the Year 2000 issue. However, we
cannot be sure of their timely compliance and our operations could suffer due to
the failure of a significant third party to become Year 2000 compliant.
We feel we are unable to adequately assess the potential effect of Year
2000 problems on our international suppliers, particularly in China. Several
recent studies suggest that the preparedness of China and other Asian countries
is considerably less than that of the United States and Europe, particularly in
the fields of manufacturing and utilities. We cannot predict the duration or
severity of any disruptions which may occur in China or the home countries of
our other overseas suppliers. In addition, we are currently evaluating the
preparedness of third parties who handle our international merchandise shipping.
A failure in our normal merchandise supply chain from China or other overseas
suppliers could have a material adverse effect on our business.
Although we anticipate that minimal business disruption will occur as a
result of Year 2000 issues, possible consequences include, but are not limited
to, loss of communications links with store locations, customs delays, loss of
electric power, inability to process transactions, or engage in similar normal
business activities. In addition, the United States and other world economies
could witness unusual purchasing patterns or other disruptions if large numbers
of consumers believe interruptions in power, communications, water or food
supplies are likely, regardless of the actual risks. Any such disruptions could
affect our business operations. We also feel we are currently unable to estimate
reasonably likely worst-case effects of the arrival of the Year 2000 and do not
currently have a contingency plan in place for such occurrence. We intend to
analyze reasonably likely worst-case scenarios and the need for such contingency
planning once the upgrade and testing of internal systems and review of third
party preparedness described above have been completed.
The cost of the conversions and the completion dates are based on
management's best estimates and may be updated as additional information becomes
available. The above section, even if incorporated into other documents or
disclosures, is a Year 2000 readiness disclosure as defined under the Year 2000
Information and Readiness Disclosure Act of 1998.
11
<PAGE>
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued its Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS No. 133). SFAS No. 133 establishes
standards for derivative instruments and hedging activities and requires that
companies recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. Management is reviewing the impact of the implementation of
this pronouncement on our financial condition and results of operations.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
During April 1999, as a result of the favorable interest rate environment,
we entered into an interest rate swap agreement that converts a portion of our
variable rate debt to a fixed rate and reduces our exposure to interest rate
fluctuations. Under this agreement, we pay interest to the bank which provided
the swap at a fixed rate of 5.53%. In addition, the bank pays us at a variable
interest rate which is similar to the rate under the callable bonds and was
5.00% at March 31, 1999. The swap is for the entire amount outstanding under our
callable bonds, which was $18.5 million at March 31, 1999, and is effective
through April 1, 2009. The bank which provided the swap has the option to cancel
it on April 1, 2006.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
We previously reported in our 1998 Annual Report on Form 10-K a dispute
involving Michael and Pamela Alper and a corporation they control. No litigation
is currently pending against us in this matter.
We recalled approximately 155,000 retractable dog leashes which allegedly
caused several personal injuries, as previously reported in our 1998 Annual
Report on Form 10-K. There have been no other material developments regarding
this matter in 1999.
Additionally, the company is a party to ordinary routine litigation and
proceedings incidental to its business, including certain matters which may
occasionally be asserted by the U.S. Consumer Product Safety Commission, none of
which is individually or in the aggregate material to the company.
Item 5. OTHER INFORMATION.
In April 1999, Douglas Perry announced his retirement from Dollar Tree.
However, he will remain Chairman of the Board of Directors. Also in April 1999,
Bob Sasser was hired in the position of Chief Operating Officer.
12
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
None.
(b) Reports on Form 8-K.
The following reports on Form 8-K were filed during the first quarter of
1999.
1. Report on Form 8-K, filed February 5, 1999, included quarterly financial
data for the years 1997 and 1998 which has been restated on a combined basis to
account for the pooling of interests between Dollar Tree Stores, Inc. and Step
Ahead Investments, Inc.
2. Report on Form 8-K, filed February 18, 1999, includes 30 days of
post-merger combined financial results, reflecting the merger between Dollar
Tree Stores, Inc. and Step Ahead Investments, Inc.
Also, in April 1999, we filed one Form 8-K.
1. Report on Form 8-K, filed April 27, 1999, included a press release
regarding earnings for the quarter ended March 31, 1999.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
DATE: May 13, 1999
DOLLAR TREE STORES, INC.
By: /s/ Frederick C. Coble
------------------------
Frederick C. Coble
Senior Vice President,
Chief Financial Officer
(principal financial and
accounting officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE COMPANY'S
FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-END> MAR-31-1999 MAR-31-1998
<CASH> 17,799 5,828
<SECURITIES> 0 0
<RECEIVABLES> 1,455 1,016
<ALLOWANCES> 0 0
<INVENTORY> 174,100 148,913
<CURRENT-ASSETS> 205,437 167,330
<PP&E> 187,641 134,974
<DEPRECIATION> 61,199 42,036
<TOTAL-ASSETS> 382,276 308,871
<CURRENT-LIABILITIES> 82,422 89,100
<BONDS> 0 0
0 0
0 0
<COMMON> 613 404
<OTHER-SE> 260,725 172,215
<TOTAL-LIABILITY-AND-EQUITY> 382,276 308,871
<SALES> 221,202 175,531
<TOTAL-REVENUES> 221,202 175,531
<CGS> 142,125 112,867
<TOTAL-COSTS> 142,125 112,867
<OTHER-EXPENSES> 61,152 49,308
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 496 735
<INCOME-PRETAX> 17,429 12,621
<INCOME-TAX> 6,711 4,890
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 10,718 7,731
<EPS-PRIMARY> 0.18 0.13
<EPS-DILUTED> 0.16 0.12
</TABLE>
