Filed pursuant to Rule 424(b)(3)
File No. 333-85501
Prospectus Supplement No. 1
(To Prospectus dated August 30, 1999)
501,600 Shares
Dollar Tree Stores, Inc.
Common Stock
This prospectus supplement relates to the public offering, which is not
being underwritten, of 501,600 shares of our common stock which is held by some
of our current shareholders. This prospectus supplement should be read in
conjunction with the prospectus dated August 30, 1999, which is to be delivered
with this prospectus supplement.
The prices at which such shareholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions. We will not receive any of the proceeds from the sale of the
shares.
Our common stock is quoted on the Nasdaq National Market under the symbol
"DLTR" On May 15, 2000, the average of the high and low price for the common
stock was $60.25.
Investing in the common stock involves a high degree of risk. See "Risk
Factors" beginning on page S-4 of this prospectus supplement and page 4 of the
accompanying prospectus.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus supplement. Any representation to the
contrary is a criminal offense.
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The date of this prospectus supplement is May 16, 2000.
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ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement may add, update or change information in the
accompanying prospectus. If the information in this supplement is inconsistent
with the accompanying prospectus, then this supplement will apply and supersede
the information contained in the accompanying prospectus. For these purposes,
the prospectus supplement includes all information which we may, under the rules
of the Securities and Exchange Commission, incorporate by reference into this
prospectus supplement.
TABLE OF CONTENTS
Certain Introductory Matters..................................... S-2
Warning About Forward-Looking Statements......................... S-2
Risk-Factors..................................................... S-4
Experts.......................................................... S-10
Where You Can Find More Information.............................. S-11
CERTAIN INTRODUCTORY MATTERS
Dollar Tree(R), 98 CENTS Clearance Centers(R), Only $One(R), Dollar
Express(R) and the related logos are our registered trademarks. Other trademarks
referred to in this prospectus supplement are trademarks of their legal owners.
This prospectus supplement does not constitute an offer to sell or a
solicitation of an offer to buy any securities offered hereby by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to any
person to whom it is unlawful to make such offer or solicitation.
References to "we," "our" and "the company" generally refer to Dollar Tree
Stores, Inc. and its direct and indirect subsidiaries on a consolidated basis.
WARNING ABOUT FORWARD-LOOKING STATEMENTS
This prospectus supplement and the documents referred to in this prospectus
contain "forward-looking statements" as that term is used in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements -- which
typically use words such as believe, anticipate, expect, intend, plan or
estimate -- address future events, developments or results. For example, our
forward-looking statements include statements regarding:
o our anticipated comparable store net sales and growth plans;
o the integration of Dollar Express into our business and the effect of
Dollar Express on our operating results;
o our future operating costs, such as merchandise and shipping costs,
wages and rents;
o the reliability of our sources of supply in the future, particularly
China;
o the capacity and performance of our existing and planned distribution
centers, including opening and expansion schedules; and
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o our expectations regarding competition.
These forward-looking statements are subject to numerous risks and
uncertainties which may affect us, including:
o possible difficulties in meeting our expansion goals and anticipated
comparable store net sales;
o possible delays, costs and other difficulties in integrating Dollar
Express with our business;
o possible increases in merchandise costs, shipping rates, wage levels,
inflation and competition and other adverse economic factors;
o our vulnerability to changes in our foreign trade relations and import
tariffs and restrictions, particularly those affecting China; and
o the capacity and the performance of our distribution system and our
ability to expand its capacity in time to support our net sales
growth.
For additional discussion of the factors that could affect our actual
results, performance or actions, see "Risk Factors" on page S-4 of this
prospectus supplement and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" in the documents
incorporated by reference into this prospectus supplement.
Our forward-looking statements could be wrong in light of these and other
risks, uncertainties and assumptions. The future events, developments or results
described in this prospectus supplement or in the documents incorporated by
reference into this prospectus supplement could turn out to be materially
different from those we discuss or imply. We have no obligation to publicly
update or revise our forward-looking statements after the date on the front
cover of this prospectus supplement and you should not expect us to do so.
-------------------------------------------------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement. We have not authorized any other person
to provide you with different information. If anyone provides you with different
or inconsistent information, you should not rely on it. You should also be aware
that while we do, from time to time, communicate with securities analysts, it is
against our policy to disclose to them any material nonpublic information or
other confidential commercial information. Accordingly, you should not assume
that we agree with any statement or report issued by any analyst regardless of
the content of the statement or report. We also have a policy against issuing
financial forecasts or projections or confirming those issued by others. Thus,
to the extent that reports issued by securities analysts contain any
projections, forecasts or opinions, such reports are not our responsibility. You
should assume that the information appearing in this prospectus supplement is
accurate only as of the date on the front cover of this prospectus supplement.
Our business, financial condition, results of operations and prospects may have
changed since that date. Information on our web site or in our promotional
literature is not incorporated into this prospectus supplement and you should
not rely on that information.
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the specific risk factors listed below, together with
all other information included or incorporated in this prospectus supplement
before you decide to invest in our common stock. If any of the following risks,
or other risks not presently known to us or that we currently believe not to be
significant, develop into actual events, then our business, financial condition,
results of operations or prospects could be adversely affected in a material
way. If that happens, the market price of our common stock would likely decline,
and you could lose all or part of your investment.
We may not be able to meet our aggressive expansion goals
Our net sales growth will be jeopardized if we cannot continue to add
stores and store support systems in a profitable, timely and efficient manner.
As a single price point retailer, we cannot increase our sales price. We rely on
new and larger stores to increase sales. Not including our merger with Dollar
Express in May 2000, we expect to add 225 to 235 stores during 2000 and expand
total square footage of our stores by approximately 23% to 25%. We have also
added 106 single-price point stores and 25 multi-price point stores in the
merger. (For a discussion of the Dollar Express merger, see "We may experience
difficulties..." and "Costs associated with the Dollar Express merger..." on the
following page.) Management believes that we are well positioned to add new
stores and support systems. However, we may not achieve our targets for opening
new stores, and we may not expand profitably and efficiently. Any of these
events could have a material adverse effect on our business and results of
operations.
Managing our growth has become more complex because we are now
operating in 35 states from coast to coast. We may not anticipate all the
challenges that our expanding operations will impose on our systems and
personnel. Our growth depends in part on whether we can:
o supply an increasing number of stores with the proper mix and amount
of merchandise;
o successfully add and operate larger stores, with which we have less
experience;
o hire, train and retain an increasing number of qualified employees --
including associates, managers, and executives -- at affordable rates
of compensation;
o find, sign leases for, build-out improvements for and open suitable
store sites on a timely basis and on favorable economic terms,
including in new geographic markets, where we have no or limited
experience, and in our established geographic markets, where new
stores may draw sales away from our existing stores; and
o expand and upgrade distribution centers and internal store support
systems in an efficient, timely and economical manner without
materially slowing our rate of growth.
We may experience difficulties in integrating Dollar Express with our operations
The anticipated benefits of the merger with Dollar Express will not be
achieved unless we can combine our operations in an efficient and effective
manner. We may experience delays, unexpected costs and other difficulties in
integrating Dollar Express. These difficulties may have a material adverse
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effect on the business and operating results of the combined company. The Dollar
Express merger requires the integration of Dollar Express's merchandise
purchasing, store operations, shipping and receiving operations, real estate
leasing functions, and management team with those of Dollar Tree. We believe
that the continued employment of Dollar Express's operations personnel and
certain members of Dollar Express's management team is critical to the
successful integration and operation of the combined company. We may not be able
to retain these employees. Moreover, full integration of the two organizations
will require considerable time and effort on the part of Dollar Tree's
management.
Costs associated with the Dollar Express merger will reduce our net income
We anticipate that the costs associated with the Dollar Express merger and
integration will be approximately $6.0 to $7.0 million. These costs will have a
material adverse effect on the operating results of the combined company,
especially in the second quarter of 2000 when they will be charged to
operations. Moreover, we may not have anticipated all of the costs that will be
generated by the merger and integration process. We expect that the merger will
be accretive to our net income per share in 2000 before consideration of
one-time costs associated with the merger and integration. However, because we
believe such costs will exceed the financial synergies we realize in 2000, we
expect the merger to be dilutive in 2000 when we include such costs. To achieve
these synergies, we must improve the quality and decrease the cost of Dollar
Express's merchandise as well as identify and eliminate redundant operations. We
may experience delays in, or be unable to achieve, our expected financial
synergies.
We could encounter unforeseen disruptions or costs in receiving merchandise in
our distribution centers and shipping it to our stores
Our future success depends on our ability to obtain merchandise from
suppliers and ship it to our stores in a timely and cost efficient manner. There
is little excess capacity in our current distribution system and our rapid
growth, including the stores we added in the Dollar Express merger, places
significant pressure on this critical function. Moreover, we may experience
higher than expected costs and disruptions in integrating the Dollar Express
distribution system with our own. We may not be able to anticipate or respond to
all the changing demands of our expanding operations and some of these demands
may be beyond our ability to control. Disruptions, delays or costs relating to
our receiving and distribution systems could have a material adverse effect on
our business or results of operations.
We currently operate distribution centers in Chesapeake, Virginia; Olive
Branch, Mississippi; Chicago, Illinois; Stockton, California; and Philadelphia,
Pennsylvania. We plan to open a distribution center in Savannah, Georgia in the
first quarter of 2001. Some of the factors that could have an adverse effect on
our distribution and receiving systems, business and results of operations are:
o Dollar Express distribution system. Dollar Express ships inventory to
its stores more frequently than Dollar Tree. Within a short
time-frame, we must understand Dollar Express's challenging
distribution requirements, manage their distribution network, and
integrate the Dollar Express distribution system with our own. We
expect this will require a significant commitment from our management
team. Among other things, we must modify our inventory management
system to cope with Dollar Express's demands and improve the
performance of Dollar Express's distribution system to Dollar Tree's
standards. Dollar Express's existing distribution system is not
adequate to support the future operation of their stores.
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o Expansion, replacement and addition of distribution centers. We must
expand, replace and build new distribution centers on a tight and
demanding time schedule in order to accommodate our aggressive growth
plans.
o Continuing costs associated with replaced distribution centers. In
1998, we replaced our Memphis, Tennessee distribution center with our
fully automated distribution center located in Mississippi. In January
2000, we replaced our Sacramento, California distribution center with
our new facility located in Stockton, California. We will remain
liable for rent and pass-through costs under the Memphis lease until
September 2005 and the Sacramento lease until June 2008. The lease for
the main Philadelphia distribution center does not expire until
December 31, 2002. We may not be able to secure an acceptable
long-term sublease for these sites or other leased sites we may
replace in the future.
o Natural or man-made disasters. A fire, explosion, hurricane, tornado,
flood, earthquake or other disaster at any of our distribution
facilities could result in a significant disruption in our
distribution system, particularly because there will be little excess
capacity in our system for the foreseeable future. The facilities in
California and Mississippi are susceptible to earthquakes. The
facilities in Mississippi, Virginia and Georgia are susceptible to
hurricanes.
Economic conditions such as inflation could adversely affect our business
Our future success depends on our ability to manage the effect of future
changes in economic conditions in the United States -- where we both buy and
sell merchandise -- and in China and Asia --where we buy a large portion of our
merchandise. Inflation, particularly in the areas of operating, labor and
merchandise costs, affects our business significantly. Past increases in minimum
wage and trans-Pacific ocean shipping rates have had an important effect on our
results of operations. Any future increases are also expected to have an impact
on our results of operations. As a fixed price point retailer, we cannot raise
the price of our merchandise to offset cost increases. Instead, we attempt to
offset a cost increase in one area by finding cost savings or operating
efficiencies in another area. We may not realize future cost savings or
operating efficiencies that will offset future cost increases. Our failure to
realize offsetting cost savings or operating efficiencies could have a material
adverse effect on our business and results of operations.
We rely on imported merchandise, especially from China
Our future success depends on whether we can import an increasing quantity
of merchandise at favorable costs. Merchandise imported directly from overseas
manufacturers and agents accounts for approximately 40% to 45% of total
purchases at retail. In addition, our management believes that a small portion
of the non-consumable goods that we purchase from domestic vendors is imported.
China is the primary source of our imports. While we do not expect to
significantly increase imports as a percentage of our merchandise, imported
goods are less expensive than domestic goods and have contributed significantly
to our historically favorable profit margins.
In the event Chinese or other imported merchandise becomes more expensive
or unavailable, we believe we could find alternative sources of supply. However,
the transition to alternative sources may
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not occur in time to meet our demands. Products from alternative sources could
also be of lesser quality and more expensive than those we currently import. As
a result, a disruption in the flow of imported merchandise or an increase in the
cost of those goods could have a material adverse effect on our business and
results of operations. Imported goods present significant risks including:
o disruptions in the flow of imported goods because of factors such as:
o material shortages, work stoppages, strikes and political unrest;
o economic crises, such as those experienced by the countries of
Southeast Asia beginning in 1998;
o shipping container shortages;
o international disputes, such as tensions resulting from China's claims
to sovereignty over Taiwan and NATO's bombing of China's embassy in
Yugoslavia; and
o increases in the cost of purchasing or shipping foreign
merchandise, resulting from failure to renew normal trade
relations with China, formerly known as "most favored nation"
trading status;
o import duties, import quotas and other trade sanctions;
o shipping rate increases imposed by the trans-Pacific shipping cartel;
and
o poor compliance by certain foreign manufacturers with U.S. laws
governing the design, manufacture, packaging and labeling of products.
Chinese goods imported into the United States currently enjoy favorable
duties because the United States grants China normal trade relations. China's
favorable trade status is reviewed on an annual basis and is currently extended
through July 2, 2000. In November 1999, the United States and China finalized an
agreement concerning China's future membership in the World Trade Organization.
In conjunction with this process, President Clinton has asked Congress to remove
normal trade relations with China from annual review. However, there continues
to be significant political opposition to the permanent extension of normal
trade relations with China. Failure to renew normal trade relations could have a
material adverse effect on our business and results of operations. For example,
administration officials testified in June 1999 that ending normal trade
relations with China would raise tariffs on Chinese products from their current
overall trade-weighted average of 4% to an estimated 44%. Even if normal trade
relations with China become permanent, the United States could impose punitive
trade sanctions on Chinese goods for a variety of reasons. In 1995, the United
States threatened to impose punitive trade tariffs on certain categories of
Chinese goods in response to China's failure to protect the intellectual
property of U.S. businesses. Although no punitive import duties are currently
imposed, these duties could equal as much as 100% of the cost of certain Chinese
goods. Depending on the goods affected, an increase in tariffs or the imposition
of trade restrictions could impose significantly higher purchasing costs on our
company.
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Our operating results, including comparable store net sales, could fluctuate
significantly
We have experienced fluctuations in our net sales growth, comparable
store net sales, operating income and net income, and we expect those
fluctuations to continue. Changes in our quarterly and annual operating results,
including comparable store net sales, could cause the price of our common stock
to fluctuate substantially. We experience a disproportionately large amount of
our net sales and a substantial majority of our income during the Christmas and
Easter seasons. If for any reason our net sales were below seasonal norms during
the Christmas or Easter season, our operating results would be materially
adversely affected. Our results of operations, including comparable store net
sales, fluctuate for a variety of reasons, including:
o shifts in the timing of certain holidays;
o the timing of new store openings;
o the net sales contributed by new and expanded stores;
o changes in our merchandise mix;
o competition; and
o economic and weather conditions.
Over the past few years annual comparable store net sales have increased at
least 5% each year. We believe that future comparable store net sales increases,
if any, will be lower than those experienced in the past. Our business plan
calls for a two to three percent increase in comparable store net sales in 2000.
In any quarter, however, comparable store net sales may be lower than our annual
average.
We may have difficulty obtaining enough quality, low-cost merchandise to sell
profitably at our fixed $1.00 price point
Our future success depends on our ability to buy larger quantities of
quality merchandise at low prices. We cannot maintain our gross profit margins
if the cost of our merchandise increases significantly because we sell only at
the fixed $1.00 price point at substantially all of our stores. Any disruptions
in the availability of quality, low-cost merchandise in sufficient quantities to
maintain our growth could have a material adverse effect on our business and
results of operations. Quality, low-cost merchandise may not be available in the
future, or it may not be available in the quantities necessary for our
expansion. We do not have long term or continuing contracts for the purchase of
merchandise and must continuously seek out buying opportunities from both our
existing suppliers and new sources, for which we compete with other retailers
including wholesalers, discount chains, mass merchandisers, food markets, drug
chains and club stores.
We expect to encounter increasing competition in the future
The retail industry is highly competitive. Our competitors include mass
merchandisers (such as Wal-Mart), discount stores (such as Dollar General),
closeout stores (such as Odd Lots and Big Lots) and other variety stores. In
past years, other single-price point retailers have not been significant
competitors.
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However, we expect that our expansion plans as well as the expansion plans of
other single-price point retailers such as 99 Cents Only Stores based in
Southern California will bring us increasingly into direct competition.
Moreover, there are no significant economic barriers to other companies becoming
single-price point retailers. Increased competition may have a material adverse
effect on our business, comparable store net sales and results of operations.
The substantial number of shares that are eligible for public sale may adversely
affect our stock price
There are relatively few restrictions on the resale of our common stock,
and a large number of shares of common stock are eligible for public sale. Sales
of substantial amounts of these shares in the public market, or the perception
that such sales could occur, could have a material adverse impact on the market
price for our common stock. Significant sources of future public sales of our
common stock include:
o Option shares. As of April 26, 2000, there were outstanding options
under our stock option plans for the purchase of up to approximately
4.1 million shares. About 1.9 million of these option shares have
vested and could be purchased. Substantially all of the shares
issuable under our stock option plans have been registered under the
Securities Act, and the vast majority of these shares are freely
tradable without restriction.
o Warrant shares. Before we went public in 1995, we issued warrants for
the purchase of up to 5,584,900 shares. These warrants can be
exercised at any time. Upon exercise, these warrant shares will be
restricted.
o Restricted shares. As of April 26, 2000, approximately 11.7 million
shares of our common stock were held by persons who acquired them
through private transactions that were not registered under the
Securities Act. The prospectus to which this supplement relates is
part of a registration statement registering 501,600 of such shares
for ongoing resale. In addition, up to 6 million additional restricted
shares were issued in connection with our Dollar Express merger.
The holders of our restricted shares, including warrant shares, can generally
require that the company register their shares for resale, subject to certain
limitations. Even when shares are not registered for resale, the SEC permits the
holder of common stock who has held shares for one year to sell the stock into
the public market subject to certain volume and other limitations and allows a
person who has held shares for two years to sell without limitation. However,
our affiliates are always subject to the volume limit.
Our common stock price may be volatile, which could result in substantial losses
to investors in our common stock
The trading price of our common stock has been and is likely to continue to
be highly volatile and subject to wide fluctuations in response to a variety of
internal and external factors, some of which are beyond our control, including:
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o trade and political relations with China;
o the inflation rate, interest rates, shipping rates, increase in the
minimum wage and general economic conditions;
o quarterly variations in our operating results, including those which
may result from our merger with Dollar Express;
o sale of shares of our option shares, warrant shares, and restricted
shares into the public market; and
o changes in financial estimates by securities analysts.
Shareholders may not be able to resell their common stock at or above the public
offering price as a result of a possible decline in price after this offering.
Moreover, the stock market has experienced significant price and volume
fluctuations over the past several years that have often been unrelated or
disproportionate to the operating performance of particular companies. The
trading prices of many companies' stocks, including ours, are at or near
historical highs. These trading prices may not be sustained.
Our articles of incorporation and by-laws could delay or discourage an
acquisition or sale of Dollar Tree
Our articles of incorporation and by-laws contain provisions that may delay
or discourage a takeover attempt that a shareholder might consider in his best
interest. These provisions, among other things:
o classify our board of directors into three classes, each of which
serves for different three-year periods;
o provide that only the board of directors, chairman or president may
call special meetings of the shareholders;
o establish certain advance notice procedures for nominations of
candidates for election as directors and for shareholder proposals to
be considered at shareholders' meetings;
o require a vote of the holders of more than two-thirds of the shares
entitled to vote in order to remove a director or amend the foregoing
and certain other provisions of the articles of incorporation and
bylaws; and
o permit the board of directors, without further action of the
shareholders, to issue and fix the terms of preferred stock, which may
have rights senior to those of the common stock.
EXPERTS
The consolidated financial statements of Dollar Tree Stores, Inc. and
subsidiaries as of December 31, 1999 and 1998 and for each of the years in the
three-year period ended December 31, 1999 have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
LLP, independent certified public accountants, incorporated by reference herein
and upon the authority of said firm as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from our web site at http://www.dollartree.com or at the SEC's web site at
http://www.sec.gov.
We have filed a registration statement and related exhibits with the SEC
under the Securities Act. The registration statement contains additional
information about us and our common stock. You may inspect the registration
statement and exhibits without charge at the office of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549, and you may obtain copies from the SEC at
prescribed rates.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus supplement, and later information filed
with the SEC will update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until our offering is completed.
o Our Annual Report on Form 10-K for the year ended December 31, 1999,
filed March 17, 2000, including certain information in our definitive
Proxy Statement in connection with our 1999 Annual Meeting of
Shareholders and certain information in our Annual Report to
Shareholders for the fiscal year ended December 31, 1999;
o Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000, filed May 10, 2000;
o Our Current Reports on Form 8-K filed on April 11 and April 27, 2000;
and
o The description of our common stock contained in its registration
statement on Form 8- A filed February 28, 1995, including any
amendments or reports filed for the purpose of updating such
descriptions.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Dollar Tree Stores, Inc.
Shareholder Services
500 Volvo Parkway
Chesapeake, Virginia 23320
(757) 321-5000
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501,600 Shares
Dollar Tree Stores, Inc.
Common Stock
This prospectus relates to the public offering, which is not being
underwritten, of 501,600 shares of our common stock which is held by some of our
current shareholders.
The prices at which such shareholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions. We will not receive any of the proceeds from the sale of the
shares.
Our common stock is quoted on the Nasdaq National Market under the symbol
"DLTR" On August 27, 1999, the average of the high and low price for the common
stock was $36.00.
Investing in the common stock involves a high degree of risk. See "Risk
Factors" beginning on page 4.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is August 30, 1999.
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CERTAIN INTRODUCTORY MATTERS
References to "we," "our" and "the company" generally refer to Dollar Tree
Stores, Inc. and its direct and indirect subsidiaries on a consolidated basis.
References to "Dollar Tree" and "98 CENTS Clearance Centers" generally refer to
the distinct store types.
Dollar Tree(R), 98 CENTS Clearance Centers(R), Only $One(R) and their
respective logos are registered trademarks of the Company. Other trademarks
referenced herein are trademarks of their respective legal owners.
No person has been authorized to give any information or to make any
representations other than those contained in this prospectus in connection with
the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by Dollar
Tree, any selling shareholder or by any other person. Neither the delivery of
this prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that information herein is correct as of any time
subsequent to the date hereof. This prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any security other than the securities
covered by this prospectus, nor does it constitute an offer to or solicitation
of any person in any jurisdiction in which such offer or solicitation may not
lawfully be made.
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A WARNING ABOUT FORWARD-LOOKING STATEMENTS
We have made "forward-looking statements" in this document (and certain
documents we refer to 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. The assumptions, beliefs and current information
could be mistaken.
Forward-looking statements include the information concerning our
operations, economic performance and financial condition and also include any
statements preceded by, followed by or including words such as "believe,"
"anticipate," "expect," "intend," "plan" or "estimate." Any statements
concerning the anticipated performance of the Company in future periods could be
inaccurate and are subject to risks relating to, among other things:
o possible difficulties in meeting our expansion goals, including
anticipated store openings, growth in same-store sales, and
development of large-format stores;
o dependence on imports and vulnerability to import tariffs and
restrictions, particularly non-renewal of normal trade relations, the
possible imposition of punitive duties, and factors relating to China;
o adverse economic factors and increases in our costs, including
shipping rate increases, possible increases in the minimum wage, and
general inflation;
o potentially limited availability of low-cost, high-quality
merchandise;
o the capacity and the performance of our distribution system and its
ability to cope with our expansion plans as well as unforeseen
difficulties;
o increasing competition in the discount retail market; and
o the potential failure of the computer systems that support our
business (including systems supporting our vendors and suppliers both
in the United States and abroad) to recognize the year 2000.
For additional discussion of the factors that could affect our actual
results, performance or actions, see "Risk Factors" in this prospectus and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business" in the documents incorporated by reference into this
prospectus.
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THE COMPANY
Dollar Tree's principal executive offices are located at 500 Volvo Parkway,
Chesapeake, Virginia 23320. Dollar Tree's telephone number is (757) 321-5000.
RISK FACTORS
An investment in our company involves a high degree of risk. You should
carefully consider the specific risk factors listed below, together with the
cautionary statements on the inside front cover of this prospectus and the other
information included or incorporated in this prospectus before purchasing the
common stock.
We may not be able to meet our aggressive expansion goals
Our continued growth will be jeopardized if we cannot continue to
aggressively and steadily expand the number of our stores and related support
systems in a profitable and efficient manner. We expect to add 230 to 235 stores
during 1999, bringing our total number of stores to 1,386 to 1,391. Management
believes that the Company is well positioned to operate our new stores and
expand our support systems profitably and efficiently. However, we may not
achieve our targets for opening new stores in this or future years and we may
not anticipate all the changing demands that our expanding operations will
impose on our systems and personnel. Our failure to efficiently and profitably
execute our expansion plans could have a material adverse effect on our business
and results of operations.
We expect the primary source of our future revenue growth to be new store
openings. As a fixed $1.00 price point retailer, we cannot increase the sales
price of our merchandise to support revenue growth. Moreover, we believe that
future increases in sales at our existing stores, if any, will be lower than
those experienced in the past, increasing the importance of new store openings
to our growth.
Managing our future growth has become more complex because we are now
operating "large format" stores to supplement our traditional Dollar Tree
stores. The new format includes stores ranging from 7,000 to 14,000 square feet
in size and generally sells more consumable merchandise. Through recent mergers
we have also added sixty-six "98 Cents Clearance Center" stores on the West
Coast and twenty-four "Only $One" stores in New York -- substantially all of
which are large format stores.
In expanding our store base and deploying the larger format, we are likely
to encounter numerous challenges. Some of these challenges may be difficult to
manage in the context of our aggressive growth plans. Still others may be
impossible to manage as they are entirely controlled by outside economic
factors. Our success depends on whether we can, among other things:
o supply an ever increasing number of stores with the proper mix and
amount of merchandise -- a task made even more difficult now that we
operate stores from coast to coast and use two store formats,
o hire, train and retain an increasing number of qualified employees --
including associates, managers, and executives -- at affordable rates
of compensation,
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o obtain an increasing quantity of high quality, low cost merchandise,
o identify, secure leases for, build-out, and open suitable store sites
on a timely basis and on favorable terms,
o successfully locate and operate stores in new geographic markets,
where we have no or only limited store operations, and in our
established geographic markets, where some of our new stores may
compete with our existing stores for customers, and
o expand internal store support systems, such as new distribution
centers, in an efficient, timely and economical manner.
Adverse economic conditions such as inflation could affect our business
Our future success depends on our ability to manage the effect of future
changes in economic conditions both in the United States -- where we sell
merchandise -- and in Asia -- where we buy a large portion of our merchandise.
Inflation, particularly in the areas of operating, labor and merchandise costs,
also affects our business significantly. For example, increases in hourly
minimum wage rate and trans-Pacific shipping rates in recent years have
increased our payroll and shipping costs.
The federally mandated minimum wage increased by $0.50 per hour on October
1, 1996 and by an additional $0.40 per hour on September 1, 1997. These changes
increased payroll costs by approximately $5 million in 1998. Proposals now
before the U.S. Congress call for increasing the federal minimum wage by an
additional $1.00 an hour over two or three years. We expect that this or any
comparable increase in the minimum wage, if eventually passed into law, would
significantly increase our payroll costs.
In May 1998, a trans-Pacific ocean-shipping cartel imposed a freight rate
increase on U.S. imports from Asia. Effective May 1, 1999, the cartel imposed a
further rate increase. We believe the new rates will increase our shipping costs
by approximately $4 million in 1999.
As a fixed price point retailer, we cannot raise the price of our
merchandise to offset cost increases. Instead, we attempt to offset a cost
increase in one area by finding cost savings or operating efficiencies in
another area. We cannot assure you that we will be able to realize future cost
savings or operating efficiencies that will offset all future cost increases.
Our failure to realize offsetting cost savings or operating efficiencies could
have a material adverse effect on our business and results of operations.
We rely heavily on imported merchandise, especially from China
Our future success also depends on whether we can import an increasing
quantity of quality merchandise at favorable costs. We rely heavily on foreign
direct and indirect imports, which account for a majority of our inventory.
China is the source of a substantial majority of our direct imports and, we
believe, it is also the largest source of our indirect imports. We primarily
import goods from Hong Kong and Taiwan (through which our Chinese imports flow),
Thailand, Mexico, Indonesia, Italy and India.
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Imported goods are less expensive than domestic goods and have contributed
significantly to our profit margins. However, imported goods present significant
risks including:
o disruptions in the sourcing and supply of foreign goods,
o increases in the cost of purchasing or shipping foreign merchandise,
and
o inconsistent compliance by certain foreign manufacturers with U.S.
laws governing the design, manufacture, packaging and labeling of
products.
These risks may arise because of a variety of political and economic factors,
including:
o loss of normal trade relations, formerly known as "most favored
nation" trading status, import duties, import quotas, and other trade
sanctions,
o a lack of preparedness in China and other Asian countries for the Year
2000 problem, which could result in an unstable supply of electricity,
water, and other utilities and services provided by foreign
governments,
o material shortages, work stoppages and strikes,
o economic crises, such as those experienced by the countries of
Southeast Asia beginning in 1998,
o international disputes, such as the tensions between China and Taiwan
and those which followed NATO's bombing of China's embassy in
Yugoslavia, and
o internal political unrest.
Chinese goods imported into the United States have been subject to
favorable duties because China is granted normal trade relations. The American
government reviews China's trade status on an annual basis and renewed normal
trade relations with China on July 27, 1999 for another year. However, there is
significant political opposition to the extension of normal trade relations with
China because of a variety of issues, including China's trade surplus with the
United States, its failure to open its markets adequately to U.S. businesses,
its human rights record, its alleged interference in U.S. national elections,
and its acquisition and sale of weapons and sensitive U.S. military technology.
U.S. government officials testified in June 1999 that ending normal trade
relations with China would raise tariffs on Chinese products from their current
trade-weighted average of 4% to an estimated 44%, and, depending on the extent
of tariffs and the nature of goods affected, such an increase could impose
significantly higher purchasing costs on our company.
In addition, the United States could impose trade sanctions on Chinese
goods. In 1995, the United States threatened to impose punitive trade tariffs on
certain categories of Chinese goods in response to China's failure to protect
the intellectual property of American businesses.
In the event the potential risks described above actually arise, we believe
we could find alternative sources of supply to our imports that become
unavailable or too costly. However, the
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transition to alternative sources of supply may not occur in time to meet our
demands and products from alternative sources may be of lesser quality and more
expensive than those we currently import, which could have a material adverse
effect on our business and results of operations.
We may have difficulty obtaining enough quality, low-cost merchandise
Our future success depends upon our ability to select and purchase quality
merchandise at attractive prices to maintain a balance of regularly available
core products and a changing mix of fresh merchandise at the $1.00 price point.
We have historically been able to locate and purchase quality merchandise, but
such merchandise may not be available in the future, or it may not be available
in quantities necessary to accommodate the expansion of our company. We do not
have continuing contracts for the purchase of merchandise and must continuously
seek out buying opportunities from both our existing suppliers and new sources,
for which we compete with wholesalers, discount chains, mass merchandisers, food
markets, drug chains, club stores, other retailers and various small
privately-held companies and individuals. Although we are not dependent on any
single supplier or group of suppliers, our business and results of operations
could be adversely affected by a disruption in the availability of sufficient
quantities of high quality, affordable merchandise.
We could encounter unforeseen disruptions or costs in receiving and distribution
Our future success also depends on whether we obtain inventory from
suppliers and ship them to our stores in a timely and cost efficient manner.
Substantially all of our inventory is shipped or pickedup directly from
suppliers and delivered to our distribution centers in Chesapeake, Virginia,
Olive Branch, Mississippi, North Highlands, California and Chicago, Illinois.
The inventory is then processed and distributed to our stores. The orderly
operation of our receiving and distribution process depends on effective
management of our distribution centers and strict adherence to shipping
schedules (especially those from Asia).
Our rapid growth places significant pressure on our distribution and
receiving systems. Some of the factors that could have an adverse effect on our
distribution and receiving systems are:
o Expansion, replacement and addition of distribution centers. The
distribution center in North Highlands, California is currently near
its maximum capacity. During the first quarter of 2000, we expect to
replace the North Highlands facility with a leased distribution center
now under construction in Stockton, California. Management expects the
Stockton facility will eventually service 300 to 400 large format
stores when it is fully automated. In the foreseeable future, we will
be required to expand, replace and build other distribution centers on
a tight and demanding time schedule in order to accommodate our
aggressive growth plans.
o Costs associated with replaced distribution center sites. We will
remain liable for rent and pass-through costs under the North
Highlands lease until June 2008, at a current annual cost of
approximately $641,000. We may not be able to secure an acceptable
sublease for this site or other leased sites we may replace in the
future.
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o Shipping disruptions. The economic crisis in Southeast Asia resulted
in a shipping container shortage in 1998. We can give no assurance
that shipping disruptions will not occur in the future. We may be
forced to alter our shipping schedules in the future to react to
shipping disruptions. In turn, this could create bottlenecks in the
receipt of goods by the distribution centers and adversely affect the
orderly and timely distribution of goods to our stores.
o Unionization of our work force. From time to time, the International
Brotherhood of Teamsters has actively attempted to organize our
employees at our Chesapeake and Chicago distribution centers.
Unionization of a portion of our distribution center workforce could
result in labor disagreements that could cause a disruption in the
receipt or distribution of merchandise.
o Natural or man-made disasters. A fire, explosion, hurricane, tornado,
flood, earthquake or other disaster at our distribution facilities
could result in a significant disruption in the receipt and
distribution of goods. The facilities in California and Mississippi
are susceptible to earthquakes and the facilities in Mississippi and
Virginia are susceptible to hurricanes. Although we maintain business
interruption and property and casualty insurance, a disaster could
significantly disrupt the distribution of goods to our stores for an
extended period of time.
Although management believes that our receiving and distribution process is
efficient and well-positioned to support our expansion plans, there is little
excess capacity in our current systems. We may not be able to anticipate or
respond to all the changing demands of our expanding operations or to events
beyond our control. Any of the foregoing risks could have a material adverse
effect our business and results of operations.
We expect to encounter increasing competition
The retail industry is highly competitive. Our competitors include mass
merchandisers (such as Wal-Mart), discount stores (such as Dollar General),
closeout stores (such as Odd Lots and Big Lots) and other variety stores. In
past years, our principal competitors have not been other single price point
retailers. However, we expect that the expansion plans of other single price
point retailers will bring us increasingly into direct competition. Increased
competition could have a material adverse effect on our business and results of
operations.
We may experience disruptions caused by the failure of computers to recognize
the year 2000
Our company and our suppliers use computer software programs for a variety
of essential tasks, such as purchasing, distribution, store management,
financial systems and various administrative functions. Software applications in
these computers may be unable to interpret the upcoming calendar year 2000 and
beyond properly. We are in the process of evaluating and adjusting or replacing
all of our known date-sensitive systems for year 2000 compliance. We believe the
total costs of modifying our current systems will not exceed $275,000 and that
we will not have to defer any information technology projects to address the
year 2000 issue. However, we cannot guarantee that unknown problems will not
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arise, resulting in remediation costs or disruptions of our business that could
have a material adverse effect on our business and results of operations.
Additionally, we are continuing to communicate 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 part 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 have evaluated the preparedness of
third parties who handle our international merchandise shipping for China. We
believe these third parties are substantially Year 2000 compliant.
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, and the 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. With the substantial
completion of the assessment, implementation and testing phases of our plan, we
are now in the process of analyzing reasonably likely worst-case scenarios in
order to establish appropriate contingency plans. We expect to establish any
needed contingency plans by early in the fourth quarter of 1999.
The Year 2000 problem, particularly a failure in our normal merchandise
supply chain from China or other overseas suppliers, could have a material
adverse effect on our business and results of operations.
Note: This section is a Year 2000 readiness disclosure as defined under the
Year 2000 Information and Readiness Disclosure Act of 1998.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of common stock in
this offering.
PLAN OF DISTRIBUTION
Dollar Tree is registering all 501,600 shares on behalf of certain selling
shareholders. All of the shares were issued by us in connection with our
acquisition of Tehan's Merchandising, Inc. Our wholly-owned subsidiary merged
with Tehan's Merchandising, which as the surviving corporation changed its
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name to Dollar Tree New York, Inc. and became our wholly-owned subsidiary.
Dollar Tree will receive no proceeds from this offering. The Selling
Shareholders named in the table below or pledgees, donees, transferees or other
successors-in-interest selling shares received from a named selling security
holder as a gift, partnership distribution or other non-sale-related transfer
after the date of this prospectus (collectively, the "Selling Shareholders") may
sell the shares from time to time. The Selling Shareholders will act
independently of the company in making decisions with respect to the timing,
manner and size of each sale. The sales may be made on one or more exchanges or
in the over-the-counter market or otherwise, at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The Selling Shareholders may effect such transactions
by selling the shares to or through broker-dealers. The shares may be sold by
one or more of, or a combination of, the following:
o a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction,
o purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus,
o an exchange distribution in accordance with the rules of such
exchange,
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
o in privately negotiated transactions, including but not limited to
exchange trusts or similar exchange vehicles.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In effecting sales,
broker-dealers engaged by the Selling Shareholders may arrange for other
broker-dealers to participate in the resales.
The Selling Shareholders may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
such transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with Selling Shareholders. The
Selling Shareholders also may sell shares short and redeliver the shares to
close out such short positions. The Selling Shareholders may enter into option
or other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer such shares pursuant to this prospectus. The Selling Shareholders also
may loan or pledge the shares to a broker-dealer. The broker-dealer may sell the
shares so loaned, or upon a default the broker-dealer may sell the pledged
shares pursuant to this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Shareholders. Broker-dealers
or agents may also receive compensation from the purchasers of the shares for
whom they act as agents or to whom they sell as principals, or both.
Compensation as to a particular broker-dealer might be in excess of customary
commissions and will be in amounts to be negotiated in connection with the sale.
Broker-dealers or agents and any other participating broker-dealers or the
Selling Shareholders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act in connection with sales of the shares.
Accordingly, any
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such commission, discount or concession received by them and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
discounts or commissions under the Securities Act. Because Selling Shareholders
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, the Selling Shareholders will be subject to the prospectus
delivery requirements of the Securities Act. In addition, any securities covered
by this prospectus which qualify for sale pursuant to Rule 144 promulgated under
the Securities Act may be sold under Rule 144 rather than pursuant to this
prospectus. The Selling Shareholders have advised the company that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities. There is
no underwriter or coordinating broker acting in connection with the proposed
sale of shares by Selling Shareholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares may not simultaneously engage in
market making activities with respect to our common stock for a period of two
business days prior to the commencement of such distribution. In addition, each
Selling Shareholder will be subject to applicable provisions of the Exchange Act
and the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the Selling Shareholders. The company will make
copies of this prospectus available to the Selling Shareholders and has informed
them of the need for delivery of copies of this prospectus to purchasers at or
prior to the time of any sale of the shares.
The company will file a supplement to this prospectus, if required,
pursuant to Rule 424(b) under the Securities Act upon being notified by a
Selling Shareholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or
dealer. Such supplement will disclose:
o the name of each such Selling Shareholder and of the participating
broker-dealer(s),
o the number of shares involved,
o the price at which such shares were sold,
o the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable,
o that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus, and
o other facts material to the transaction.
In addition, upon being notified by a Selling Shareholder that a donee or
pledgee intends to sell more than 500 shares, the company will file a supplement
to this prospectus.
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The company will bear all costs, expenses and fees in connection with the
registration of the shares. The Selling Shareholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The Selling
Shareholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act. The Selling Shareholders
have agreed to indemnify certain persons, including broker-dealers and agents,
against certain liabilities in connection with the offering of the shares,
including liabilities arising under the Securities Act.
SELLING SHAREHOLDERS
The following table sets forth the number of shares owned by each of the
Selling Shareholders. None of the Selling Shareholders has had a material
relationship with Dollar Tree within the past three years other than as a result
of the ownership of the shares or other securities of Dollar Tree. No estimate
can be given as to the amount of shares that will be held by the Selling
Shareholders after completion of this offering because the Selling Shareholders
may offer all or some of the shares and because there currently are no
agreements, arrangements or understandings with respect to the sale of any of
the shares. The shares offered by this prospectus may be offered from time to
time by the Selling Shareholders named below.
Number of Shares Percent of Number of Shares
Beneficially Outstanding Registered for
Name of Selling Shareholder Owned Shares Sale Hereby(1)
- --------------------------- ---------------- ----------- ----------------
Basil Tehan (2) 100,320 * 100,320
Fred Tehan (2) 100,320 * 100,320
Richard Tehan (2) 100,320 * 100,320
Robert Tehan (2) 100,320 * 100,320
Steven Tehan (2) 100,320 * 100,320
======= ====== =======
Total 501,600 * 501,600
* Represents beneficial ownership of less than 1%.
(1) This registration statement also shall cover any additional shares of stock
which become issuable in connection with the shares registered for sale
hereby by reason of any stock dividend, stock split, recapitalization or
other similar transaction effected without the receipt of consideration
which results in an increase in the number of Dollar Tree's outstanding
shares of common stock.
(2) The figure for each Selling Shareholder includes 5,016 shares held of
record by Steates, Remmell, Steates & Dziekan, a New York partnership, as
escrow agent under an Escrow Agreement dated June 30, 1999. Such shares
held by the escrow agent may be sold under this prospectus for the benefit
of the shareholder, provided the proceeds from such sale will be held until
at least June 30, 2000 as security for the shareholder's indemnification
obligations under the Escrow Agreement and the Merger Agreement dated June
15, 1999, as amended on June 22, 1999, with Dollar Tree.
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LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
Dollar Tree by Hofheimer Nusbaum, P.C., Norfolk, Virginia.
EXPERTS
The consolidated financial statements of Dollar Tree Stores, Inc. and
subsidiaries as of December 31, 1997 and 1998 and for each of the years in the
three-year period ended December 31, 1998 have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
LLP, independent certified public accountants, incorporated by reference herein
and upon the authority of said firm as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from our web site at http://www.dollartree.com or at the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until our
offering is completed.
1. Annual Report on Form 10-K for the year ended December 31, 1998, filed
March 25, 1999, including certain information in Dollar Tree's
Definitive Proxy Statement in connection with Dollar Tree's 1999
Annual Meeting of Shareholders and certain information in Dollar
Tree's Annual Report to Shareholders for the fiscal year ended
December 31, 1998;
2. Dollar Tree's Quarterly Reports on Form 10-Q for the quarter ended
March 31, 1999, filed May 13, 1999 and for the quarter ended June 30,
1999, filed August 10, 1999;
3. Dollar Tree's Current Reports on Form 8-K filed April 27, 1999, June
10, 1999, July 22, 1999 and August 18, 1999; and
4. The description of Dollar Tree common stock contained in its
registration statement on Form 8-A filed February 28, 1995, including
any amendments or reports filed for the purpose of updating such
descriptions.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Dollar Tree Stores, Inc.
Shareholder Services
500 Volvo Parkway
Chesapeake, Virginia 23320
(757) 321-5000
You should rely only on the information incorporated by reference or
provided in this prospectus or the prospectus supplement. We have authorized no
one to provide you with different information. You also should not assume that
the information in this prospectus or the prospectus supplement is accurate as
of any date other than the date on the front of the document.
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- -------------------------------
TABLE OF CONTENTS 501,600 Shares
- -------------------------------
Dollar Tree Stores, Inc.
Certain Introductory Matters 2
A Warning about Forward-Looking
Statements 3 Common Stock
The Company 4 ------------
Risk Factors 4 PROSPECTUS
Use of Proceeds 8 ------------
Plan of Distribution 9
Selling Shareholders 12 August 30, 1999
Legal Matters 13
Experts 13
Where You Can Find More Information 14
================================== ===================================
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