<PAGE>
Exhibit 99.1
PRESS RELEASE
DOLLAR TREE REPORTS SECOND QUARTER EARNINGS OF $0.22 PER SHARE,
EXCLUDING MERGER-RELATED ITEMS
CHESAPEAKE, VA -- July 19, 2000 -- Dollar Tree Stores, Inc. (Nasdaq: DLTR), the
nation's leading $1.00 price point retailer, reported that earnings per share,
excluding merger-related items, increased to $0.22 for the second quarter of
2000 compared to $0.15 for the second quarter of 1999.
These results represent the first reporting of the combined operations
of Dollar Tree and Dollar Express, Inc. The merger of the two companies, which
was completed on May 5, 2000, was accounted for as a pooling-of-interests.
Sales for the quarter increased 33.5% to $384.5 million compared to
sales of $288.1 million for the second quarter of 1999. As previously reported,
net sales were beneficially impacted by a 14.3% increase in comparable store net
sales.
For the quarter, gross margin was 35.6% compared to 35.9% for the
second quarter of 1999. Excluding merger-related costs, gross margin was 35.9%
compared to 36.0% for the second quarter of 1999. As a percentage of net sales,
merchandise costs increased due to higher freight costs in 2000 compared to the
prior year, offset by leverage of occupancy costs.
For the quarter, operating expenses, as a percentage of sales, were
23.7% compared to 24.1% in the second quarter of 1999. Excluding merger-related
expenses, operating expenses were 22.8%, as a percent of net sales, compared to
23.9% in the second quarter of 1999. The improvement in operating expenses and
the leverage of occupancy costs resulted from the increase in comparable store
net sales.
For the quarter ended June 30, 2000, pro forma net earnings per
common share were $0.19, compared to $0.13 for the prior year period.
Year-to-date net sales, pro forma net earnings available to common
shareholders and net earnings per common share were $711.6 million, $33.7
million, and $0.31 for 2000 compared to $546.2 million, $28.0 million and
$0.26 for 1999. Management expects that the Dollar Express operations will be
slightly dilutive to its earnings per share for the third quarter of 2000.
Macon Brock, President and CEO, stated "Our second quarter results were
driven by a strong Easter selling season and quality basic consumer products.
For the remainder of the year, we look forward to continually improving our
consumer offerings, and ending the year with our usual broad assortment of
seasonal goods."
Dollar Tree Stores, Inc. is the nation's leading $1.00 discount variety
store chain. As of June 30, 2000, Dollar Tree operates 1,634 stores in 35
states, having opened 73 new stores and closed four stores in the second
quarter.
<PAGE>
THIS NEWS RELEASE CONTAINS "FORWARD-LOOKING STATEMENTS", AS THAT TERM IS USED
IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, REGARDING THE MERGER
BETWEEN DOLLAR TREE AND DOLLAR EXPRESS AND RESULTS OF OPERATIONS FOR FUTURE
PERIODS. SUCH FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES THAT MAY CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER
MATERIALLY FROM ANTICIPATED RESULTS OR OTHER EXPECTATIONS DESCRIBED IN SUCH
STATEMENTS, INCLUDING THE FAILURE OF THE COMBINED COMPANY TO INTEGRATE
SUCCESSFULLY. ADDITIONALLY, FORWARD-LOOKING STATEMENTS ARE SUBJECT TO, BUT
NOT LIMITED TO, THE RISKS INDICATED IN THE COMPANY'S FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION.
CONTACT: Dollar Tree Stores, Inc., Chesapeake
Eric Coble or Erica Robb, 757/321-5000
<PAGE>
Dollar Tree Stores, Inc.
Comparative Detail
For the Three- and Six-month Periods Ended June 30
(in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
NET NET
SALES EARNINGS
----- --------
SECOND QUARTER 2000
<S> <C> <C>
Dollar Tree $341,833 $23,718
Dollar Express 42,670 951
------- ------
Combined (excluding merger-
related items) $384,503 24,669
=======
Merger-related items, net of tax (3,134)
Extraordinary loss, net of tax (387)
-------
Pro forma net earnings
(combined companies) $21,148
=======
YEAR-TO-DATE 2000
Dollar Tree $633,432 $38,537
Dollar Express 78,182 84
------- ------
Combined (excluding merger-
related items) $711,614 38,621
=======
Merger-related items, net of tax (3,134)
Extraordinary loss, net of tax (387)
-------
Pro forma net earnings
(combined companies) $35,100
=======
</TABLE>
<PAGE>
DOLLAR TREE STORES, INC.
Condensed Consolidated Income Statements
For the Three Months and Six Months Ended June 30
(Amounts in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Second Quarter Year-to-Date
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $384,503 $288,148 $711,614 $546,239
Cost of sales 246,458 184,389 459,996 352,780
Merger-related costs 1,100 443 1,100 443
Gross profit 136,945 103,316 250,518 193,016
35.6% 35.9% 35.2% 35.3%
Operating expenses 87,697 68,854 169,358 131,371
22.8% 23.9% 23.8% 24.1%
Merger-related expenses 3,266 607 3,266 607
Depreciation/amortization 9,556 7,622 18,249 14,354
Operating income 36,426 26,233 59,645 46,684
9.5% 9.1% 8.4% 8.5%
Interest expense, net 618 1,325 1,118 2,189
Earnings before
income taxes 35,808 24,908 58,527 44,495
9.3% 8.6% 8.2% 8.1%
Income tax expense* 14,273 9,811 23,040 15,286
Pro forma net earnings
before extraordinary item* 21,535 15,097 35,487 29,209
Loss on debt extinguishment,
net of tax benefit of $242 387 - 387 -
Pro forma net earnings* 21,148 15,097 35,100 29,209
5.5% 5.2% 4.9% 5.3%
Pro forma net earnings
available to common
shareholders** $20,811 $14,355 $33,687 $28,027
5.4% 5.0% 4.7% 5.1%
Pro forma net earnings per common share*:
Basic $ 0.20 $ 0.15 $ 0.34 $ 0.29
Weighted average
number of shares 101,615 98,398 100,323 98,194
<PAGE>
Diluted $ 0.19 $ 0.13 $ 0.31 $ 0.26
Weighted average
number of shares 111,748 107,803 110,197 107,713
</TABLE>
* Amounts include a pro forma adjustment for C-corporation income taxes relating
to ONLY $ONE of $271 for the second quarter of 1999 and $505 for year-to-date
1999.
** Amounts include accretion of the Dollar Express cumulative preferred stock to
redemption value, accrued preferred stock dividends and amortization of the
discount on preferred stock. The amounts deducted from net earnings available to
common shareholders is $337 and $742 for the quarters ended June 30, 2000 and
1999, respectively, and $1,413 and $1,182 for the six-months ended June 30, 2000
and 1999, respectively.
<PAGE>
DOLLAR TREE STORES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30, Dec. 31, June 30,
2000 1999 1999
---- ---- ----
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Cash and cash equivalents $ 55,417 $ 181,587 $ 40,072
Merchandise inventories 284,517 192,838 205,504
Other current assets 21,207 20,681 16,316
------- ------- -------
Total current assets 361,141 395,106 261,892
Property and equipment, net 184,374 157,368 144,745
Goodwill, net 41,385 42,394 41,587
Other assets, net 15,879 16,365 11,112
------- ------- -------
Total assets $602,779 $611,233 $459,336
======= ======= =======
Accounts payable $ 79,455 $ 73,878 $ 67,308
Income taxes payable 4,768 29,193 4,420
Other current liabilities 27,609 38,132 23,536
Current portion
of long-term debt 25,025 28,070 25,070
------- ------- -------
Total current liabilities 136,857 169,273 120,334
------- ------- -------
Long-term debt, excluding
current portion 18,000 49,138 55,922
Other liabilities 35,452 41,413 14,534
------- ------- -------
Total liabilities 190,309 259,824 190,790
------- ------- -------
Preferred stock of Dollar
Express - 35,171 29,326
Shareholders' equity 412,470 316,238 239,220
------- ------- -------
Total liabilities and
shareholders' equity $602,779 $611,233 $459,336
======= ======= =======
STORE DATA:
Number of stores open at
end of period 1,634 1,507 1,403
Total gross square footage
(in thousands) 8,799 7,638 6,769
</TABLE>
