99 Cents Only Stores LLC announced its financial results for each of the fourth quarter and full-year fiscal 2015 ended January 30, 2015. As previously announced, the Company changed its fiscal year from the Saturday closest to the end of March, to the Friday closest to the end of January in order to be in line with its retail industry peers. As a result of the change in the Company’s fiscal year, for purposes of this release, the comparable prior year financial statements have been recast to conform to the new fiscal calendar.

Financial Results

For the fourth quarter of fiscal 2015, a 13-week period, the Company’s net sales increased $6.9 million to $512.6 million, compared to $505.7 million in the fourth quarter of fiscal 2014, a 14-week period. On a comparable 13-week basis, net sales increased 8.1% during the fourth quarter. Same-store sales increased 2.8%, calculated on a comparable 13-week period, with increases in both customer traffic and average ticket.  Same-store sales performance was driven by a significant increase in seasonal sales resulting from a wider selection of product offerings. Net loss was $2.3 million in the fourth quarter of fiscal 2015, compared to net loss of $14.7 million for the fourth quarter of fiscal 2014.

Net loss decreased in the fourth quarter of fiscal 2015 as compared to prior year, primarily due to a previously disclosed workers’ compensation charge in the fourth quarter of fiscal 2014.  Net loss as a percentage of total sales was (0.4)% for the fourth quarter of fiscal 2015 compared to net loss as a percentage of total sales of (2.9)% for the fourth quarter of fiscal 2014.  Adjusted EBITDA was $34.6 million in the fourth quarter of fiscal 2015, compared to $50.0 million in the fourth quarter of fiscal 2014. The reduction in Adjusted EBITDA was primarily due to higher inventory shrinkage expenses and distribution and transportation expenses in the current fourth quarter and an extra week of sales in the prior year fourth quarter. Adjusted EBITDA margin was 6.7%, compared to 9.9% over the same period.

For the full-year fiscal 2015, a 52-week period, the Company’s net sales increased $87.3 million, to $1,926.9 million, compared to $1,839.6 million in fiscal 2014, a 53-week period. On a comparable 52-week basis, net sales increased 6.3% during fiscal 2015. Same-store sales increased 0.4%, calculated on a comparable 52-week period of the prior year.  Net income was $5.5 million for fiscal 2015, compared to net loss of $10.9 million in fiscal 2014.  Net income as a percentage of total sales was 0.3% for fiscal 2015, compared to a net loss as a percentage of total sales of (0.6)% for fiscal 2014. Adjusted EBITDA was $143.7 million in fiscal 2015, compared to $155.1 million in fiscal 2014. Adjusted EBITDA margin was 7.5%, compared to 8.4% over the same period.

Average sales per store open at least 12 months on a trailing 52-week period was $5.4 million in fiscal 2015 equal to that in fiscal 2014.  Average net sales per estimated saleable square foot (computed for stores open at least 12 months) on a trailing 52-week period was $328 per square foot for fiscal 2015, compared to $330 per square foot for fiscal 2014.

Commenting on the results, Stéphane Gonthier, President and CEO stated, “We are pleased with the progress that we have made during what was a transformative year, as we executed on key elements of our long-term strategic plan. We opened a record 40 net new stores during the year and completed a major store remodeling program under our “Go Taller” initiative, while at the same time upgrading many of our legacy IT systems. We made significant progress in enhancing our seasonal and general merchandise offerings and continue to work hard on expanding the selection of everyday consumables in our stores.  We are also pleased that we have been able to attract a number of experienced store and regional operational team members to the Company, and we have added key members to the executive team. I would like to thank all of our corporate and regional office employees, along with the store managers and their teams for their efforts and dedication and I look forward to great success in the upcoming year.”

Store Openings

During the fourth quarter of fiscal 2015, the Company opened 21 net new stores.  As of the end of the fourth quarter of fiscal 2015, the Company operated 383 stores, an increase of 11.7% in store count over the end of fiscal 2014. Total net selling square footage was 6.2 million as of the end of fiscal 2015, an increase of 10.4% over the end of fiscal 2014.

Q4 FY15 Accounting Items

In the fourth quarter of fiscal 2015, the Company recorded a charge for additional inventory shrinkage based upon the results of annual physical inventory counts completed during the quarter. This resulted in a net charge to cost of sales and a corresponding reduction in inventory of approximately $10.0 million, which was primarily related to the implementation of certain strategic initiatives, including the “Go Taller” store remodeling program.

Change in Presentation of Financial Statements

In the first quarter of fiscal 2015, the Company changed the presentation of its financial statements to include receiving, distribution, warehouse costs and transportation to and from stores in its cost of sales.  Previously, these costs were included in selling, general and administrative expenses.  Depreciation expense related to these costs, which was historically included in selling, general and administrative expense, is now included in cost of sales.  Also, depreciation and amortization expense included in selling, general and administrative expense will no longer be presented separately.  Reclassifications of $28.5 million and $103.6 million from selling, general and administrative expense to cost of sales were made for the comparable fourth quarter of fiscal 2014 and full-year fiscal 2014, respectively, to conform to current year presentation.  This change does not change previously reported operating income or net income.

This change in presentation of financial statements was made in order to be in line with the Company’s peers in the retail industry.