Comparable Store and Delivery Sales Rose 11%
WESTBOROUGH, Mass.--(BUSINESS WIRE)--Staples, Inc. (NASDAQ:SPLS), today announced a 50% increase in diluted earnings per share for the first fiscal quarter ended May 2, 1998 to $0.12 per share as compared with $0.08 per share (before merger related charges) in the prior year.
Total sales for the first quarter rose 31% to $1.5 billion as compared with $1.1 billion in the prior year. Comparable sales in the 641 stores and delivery hubs that have been open for more than one year increased 11% for the quarter.
Net income rose 49% to $31.3 million as compared with $20.9 million in the prior year period, before merger related charges.
Thomas G. Stemberg, Chairman and CEO commented, ''In addition to another quarter of strong sales and earnings growth, we were very pleased to announce this quarter the acquisition of the Quill Corporation and the purchase of 32 store leases in a number of markets, primarily in New Jersey. Staples continues to make significant investments in long-term sales and earnings growth while still achieving some of the best current results in the retail industry.''
The following are some of the other achievements the Company recorded in the first quarter:
-- The Company opened 41 stores and closed one. The Company ended the quarter with 613 stores in the United States, 109 stores in Canada, 42 stores in the United Kingdom and 18 stores in Germany.
-- The Company opened its second major new retail distribution facility in Killingly, CT.
Staples, Inc. is a $5 billion retailer of office supplies, furniture and technology to businesses from home based businesses to Fortune 50 companies in the United States, Canada, the United Kingdom and Germany. Staples, headquartered outside Boston, Mass., invented the office superstore concept and today is the largest operator of office superstores in the world. The Company, which has grown earnings per share at a 40% compounded rate over the last five years, has 30,000 employees serving the business customer through 782 office superstores, mail order catalogs and a contract business.
More information may be obtained from the Company's Investor Relations department by dialing (800) INV-SPL1 or from the Company's website at http://www.staples.com.
Certain information presented within this press release may constitute forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, which are discussed in the Company's most recent filing on Forms 10-K and 10-Q on file with the Securities and Exchange Commission.
Staples, Inc. and Subsidiaries
Consolidated
Statements of Income
(Dollar Amounts in Thousands,
Except Share Data)
13 Weeks Ended May 2, May 3, 1998 1997 $ % $ % Sales $ 1,517,472 100.00% $1,154,994 100.00% Cost of goods sold and occupancy costs 1,160,793 76.50% 886,239 76.73% Gross profit 356,679 23.50% 268,755 23.27% Operating expenses: Operating and selling 241,806 15.93% 184,794 16.00% Pre-opening 3,352 0.22% 2,862 0.25% General and administrative 54,391 3.58% 36,012 3.12% Amortization of goodwill 925 0.06% 572 0.05% Total operating expenses 300,474 19.80% 224,240 19.41% Operating income 56,205 3.70% 44,515 3.85% Other income (expense): Interest and other expense, net (4,944) (0.33%) (4,219) (0.37%) Merger-related costs 0 0.00% (20,562) (1.78%) Total other income (expense) (4,944) (0.33%) (24,781) (2.15%) Income before equity in loss of affiliates and income taxes 51,261 3.38% 19,734 1.71% Equity in gain/(loss) of affiliates 0 0.00% (5,953) (0.52%) Income before income taxes 51,261 3.38% 13,781 1.19% Income tax expense 20,011 1.32% 5,375 0.47% Net income before minority interest 31,250 2.06% 19,156 1.66% Minority interest 50 0.00% 0 0.00% Net income $ 31,300 2.06% $ 8,406 0.73% Earnings per common share - assuming dilution $ 0.12 $ 0.03 Number of shares used in computing net income per common share 281,754,828 251,361,238
Staples, Inc. and Subsidiaries
Consolidated
Balance Sheets
(Dollar Amounts in Thousands, Except
Share Data)
May 2, 1998 January 31, (Unaudited) 1998 ASSETS Current Assets: Cash and cash equivalents $ 229,131 $ 355,238 Short-term investments 1,167 2,666 Merchandise inventories 1,101,303 1,092,410 Receivables, net 184,191 151,885 Prepaid expenses and other current assets 57,729 64,134 Total current assets 1,573,521 1,666,333 Property and Equipment: Land and buildings 130,479 117,858 Leasehold improvements 302,427 288,213 Equipment 267,441 257,116 Furniture and fixtures 180,002 168,411 Total property and equipment 880,349 831,598 Less accumulated depreciation and amortization 283,384 257,627 Net property and equipment 596,965 573,971 Other Assets: Lease acquisition costs, net of amortization 79,148 43,244 Goodwill, net of amortization 136,745 139,753 Other 28,752 31,209 Total other assets 244,645 214,206 $2,415,131 $2,454,510 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 591,732 $ 641,851 Accrued expenses and other current liabilities 254,067 259,290 Debt maturing within one year 15,499 39,779 Total current liabilities 861,298 940,920 Long-Term Debt 208,342 208,876 Other Long-Term Obligations 42,930 37,103 Convertible Debentures 300,000 300,000 Stockholders' Equity: Preferred stock, $.01 par value-authorized 5,000,000 shares; no shares issued Common stock, $.0006 par value-authorized 500,000,000 shares; issued 256,352,015 shares at May 2, 1998 and 252,169,891 shares at January 31, 1998 106 106 Additional paid-in capital 595,399 593,895 Cumulative foreign currency translation adjustments (8,117) (10,315) Unrealized gain/(loss) on short-term investments 2 4 Retained earnings 415,432 384,132 Less: 59,149 shares of treasury stock, at cost (346) (346) Minority interest 85 135 Total stockholders' equity 1,002,561 967,611 $2,415,131 $2,454,510
Staples, Inc. and Subsidiaries
Consolidated
Statements of Cash Flows
(Dollar Amounts in
Thousands)
(Unaudited) 13 Weeks Ended May 2, May 3, 1998 1997 Operating Activities: Net income $ 31,300 $ 8,406 Adjustments to reconcile net income to net cash provided by/(used in) operating activities: Minority interest (50) 0 Depreciation and amortization 25,645 18,889 Equity in loss of affiliates 0 5,953 Net increase in deferred tax assets 2,795 (3,456) (Increase)/decrease in assets: Merchandise inventories (5,967) (16,760) Receivables (31,655) (7,023) Prepaid expenses and other assets 9,601 862 (Decrease)/increase in accounts payable, accrued expenses and other current liabilities (59,648) 29,786 Increase in other long-term obligations 5,666 2,276 (53,613) 30,527 Net cash (used in)/provided by operating activities (22,313) 38,933 Investing Activities: Acquisition of property and equipment (46,644) (36,174) Proceeds from sales and maturities of short-term investments 8,353 3,123 Purchase of short-term investments (6,854) 0 Investment in affiliates 762 (1,670) Acquisition of lease rights (36,826) (375) Other 6,242 (1,991) Net cash used in investing activities (74,967) (37,087) Financing Activities: Proceeds from sale of capital stock (4,133) 3,513 Proceeds from borrowings (334) 365,627 Payments on borrowings (24,814) (301,261) Net cash (used in)/provided by financing activities (29,281) 67,879 Effect of exchange rate changes on cash 454 (1,073) Net (decrease)/increase in cash and cash equivalents (126,107) 68,652 Cash and cash equivalents at beginning of period 355,238 98,143 Cash and cash equivalents at end of period $ 229,131 $ 166,795