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News Release

Lowe's Reports 51% Increase in Fourth Quarter Net Earnings

Fourth Quarter Diluted Earnings Per Share Increased 50% Fourth Quarter Sales Increased 20% Fiscal 1999 Sales Increased 19% to $15.9 Billion Fiscal 1999 Diluted Earnings Per Share Increased 34%

WILKESBORO, N.C., Feb. 18 -- Lowe's Companies, Inc. (NYSE: LOW), the world's second largest home improvement retailer, today reported net earnings of $148.9 million for the quarter ended January 28, 2000, a 51 percent increase over the same period a year ago. Diluted earnings per share increased 50 percent to $0.39 from $0.26 in the fourth quarter of 1998. For the fiscal year ended January 28, 2000, net earnings grew 38 percent to $689.8 million while diluted earnings per share increased 34 percent to $1.79, excluding the one-time charge of $0.04 per share for costs related to the merger with Eagle Hardware & Garden, Inc. ("Eagle") on April 2, 1999.

Sales for the quarter increased 20 percent to $3.79 billion, up from $3.17 billion in the fourth quarter of 1998. Sales at the company's comparable stores increased 6.2 percent during the quarter. For the fiscal year ended January 28, 2000, sales increased 19 percent to $15.91 billion. Comparable store sales increased 6.2 percent in fiscal 1999.

Fourth quarter comparable store sales were negatively impacted by the inclement winter weather experienced in several states. Through mid-January, comparable store sales were in excess of 7.5 percent. Snow and ice in the last two weeks of January, particularly in North Carolina, South Carolina and Virginia, had a significant impact on the reported fourth quarter comp number.

"Despite the forces of mother nature, we had a great fourth quarter and a great 1999," commented Robert L. Tillman, Lowe's chairman and CEO. "We opened our first stores west of the Rocky Mountains, successfully integrated the Eagle stores into Lowe's operating systems, and coupled a strong sales quarter with phenomenal earnings performance. Congratulations to our over 80,000 associates whose dedication to superior customer service made this performance possible!"

As announced in the third quarter, Lowe's has elected to change its method of determining the cost of inventories from the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method. As a result, prior year numbers included in this release have been restated under the FIFO method of accounting in accordance with generally accepted accounting principles. No earnings restatement is needed for the current fiscal year since no LIFO adjustment was incurred this year.

Also, because Lowe's merger with Eagle is accounted for as a pooling of interests, prior year results included in this release have been restated to reflect the combined results of both companies.

During the quarter, Lowe's opened 31 new stores and relocated 5 stores. The company also opened a remodeled Eagle location under the Lowe's name. As of January 28, 2000, Lowe's operates 576 stores in 37 states. Retail square footage grew to 57.0 million, a 19 percent increase over the same period a year ago.

This news release may include "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Although the company believes that comments reflected in such forward- looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Possible risks and uncertainties regarding these statements include, but are not limited to, the direction of general economic trends, the availability of real estate for expansion and its successful development, fluctuations in prices and availability of commodities, unanticipated increases in competition with home improvement chains, adverse weather conditions that affect sales, not fully realized cost savings from the Eagle merger, and greater than anticipated costs associated with the integration of the two businesses.

                              Lowe's Companies, Inc.
                Consolidated Statements of Current and Retained Earnings
                         In Thousands, Except Per Share Data


                                             Quarter Ended
                              January 28, 2000           January 29, 1999
    Current Earnings        Amount       Percent       Amount       Percent

    Net sales           $3,789,269        100.00   $3,168,821        100.00

    Cost of sales        2,692,612         71.06    2,294,441         72.41

    Gross margin         1,096,657         28.94      874,380         27.59

    Expenses:

    Selling, general and
     administrative        710,862         18.76      591,439         18.66

    Store opening costs     39,051          1.03       27,878          0.88

    Depreciation            91,276          2.41       76,456          2.41

    Interest                20,528          0.54       21,210          0.67

    Nonrecurring merger
     costs                      --            --           --            --

    Total expenses         861,717         22.74      716,983         22.62

    Pre-tax earnings       234,940          6.20      157,397          4.97

    Income tax provision    86,008          2.27       58,479          1.85

    Net earnings        $  148,932          3.93   $   98,918          3.12

    Shares outstanding -
     Basic                 382,351                    371,729

    Basic earnings per
     share              $     0.39                 $     0.27

    Shares outstanding -
     Diluted               384,772                    376,724

    Diluted earnings per
     share              $     0.39                 $     0.26


    Retained Earnings
    Balance at beginning
     of period          $2,626,367                 $2,048,335
    Net earnings           148,932                     98,918
    Cash dividends         (13,335)                   (10,526)
    Balance at end of
     period             $2,761,964                 $2,136,727


                                               Year Ended
                            January 28, 2000             January 29, 1999
    Current Earnings      Amount         Percent       Amount       Percent

    Net sales          $15,905,595        100.00    $13,330,540      100.00

    Cost of sales       11,525,013         72.46      9,756,645       73.19

    Gross margin         4,380,582         27.54      3,573,895       26.81

    Expenses:

    Selling, general
     and administrative  2,772,428         17.43      2,341,410       17.56

    Store opening costs     98,448          0.62         75,571        0.57

    Depreciation           337,359          2.12        288,607        2.17

    Interest                84,852          0.54         80,941        0.61

    Nonrecurring merger
     costs                  24,378          0.15             --          --

    Total expenses       3,317,465         20.86      2,786,529       20.91

    Pre-tax earnings     1,063,117          6.68        787,366        5.90

    Income tax provision   390,322          2.45        286,992        2.15

    Net earnings       $   672,795          4.23    $   500,374        3.75

    Shares outstanding -
     Basic                 381,240                      370,812

    Basic earnings per
     share             $      1.76                  $      1.35

    Shares outstanding -
     Diluted               383,854                      375,751

    Diluted earnings per
     share             $      1.75                  $      1.34


    Retained Earnings
    Balance at beginning
     of period         $ 2,136,727                  $ 1,677,524
    Net earnings           672,795                      500,374
    Cash dividends         (47,558)                     (41,171)
    Balance at end of
     period             $2,761,964                  $ 2,136,727



    Lowe's Companies, Inc.
    Consolidated Balance Sheets
    In Thousands

                           January 28,       %        January 29,      %
                             2000          Total         1999        Total

    Assets
     Current Assets:
     Cash and Cash
      Equivalents         $  491,122         5.5%     $  228,874       3.2%
     Short-Term Investments   77,670         0.9          20,343       0.3
     Accounts Receivable
      - Net                  147,901         1.6         143,928       2.0
     Merchandise Inventory 2,812,361        31.2       2,384,700      33.6
     Deferred Income Taxes    53,145         0.6          41,814       0.6
     Other Current Assets    127,342         1.4          47,201       0.7
     Total Current Assets  3,709,541        41.2       2,866,860      40.4
     Property, Less Accumulated
      Depreciation         5,177,222        57.5       4,085,798      57.7
     Long-Term Investments    31,114         0.3          28,716       0.4
     Other Assets             94,446         1.0         105,508       1.5
     Total Assets         $9,012,323       100.0%     $7,086,882     100.0%

    Liabilities and Shareholders' Equity
     Current Liabilities:
     Short-Term
      Borrowings          $   92,475         1.0%     $  117,075       1.7%
     Current Maturities of
      Long-Term Debt          59,908         0.7         107,893       1.5
     Accounts Payable      1,566,946        17.4       1,220,543      17.2
     Employee Retirement
      Plans                  101,946         1.1          85,466       1.2
     Accrued Salaries and
      Wages                  164,003         1.8         123,545       1.7
     Other Current
      Liabilities            400,676         4.5         269,734       3.8
     Total Current
      Liabilities          2,385,954        26.5       1,924,256      27.1
     Long-Term Debt,
      Excluding Current
      Maturities           1,726,579        19.2       1,364,278      19.3
     Deferred Income Taxes   199,824         2.2         175,372       2.5
     Other Long-Term
      Liabilities              4,495         0.0           3,209       0.0
     Total Liabilities     4,316,852        47.9       3,467,115      48.9

     Shareholders' Equity:
     Preferred Stock
      - $5 Par Value,
       none issued                --                          --
     Common Stock
      - $.50 Par Value;
       Issued and Outstanding
       January 28, 2000
        382,359
       January 29, 1999
        374,388              191,179         2.1         187,194       2.6
      Capital in Excess of
       Par                 1,755,616        19.5       1,325,816      18.7
      Retained Earnings    2,761,964        30.6       2,136,727      30.2
      Unearned Compensation
       -Restricted Stock
       Awards                (12,868)       (0.1)        (30,387)     (0.4)
      Accumulated Other
       Comprehensive Income     (420)        0.0             417       0.0
      Total Shareholders'
       Equity              4,695,471        52.1       3,619,767      51.1
      Total Liabilities and
       Shareholders'
       Equity             $9,012,323       100.0%     $7,086,882     100.0%


    Lowe's Companies, Inc.
    Consolidated Statements of Cash Flows
    In Thousands

                                  January 28,      January 29,   January 30,
                                     2000             1999           1998
    Cash Flows From Operating Activities:
     Net Earnings                   $672,795        $500,374      $383,030
     Adjustments to Reconcile Net
      Earnings to Net Cash Provided
      By Operating Activities:
       Depreciation                  337,359         288,607       255,694
       Amortization of Original
        Issue Discount                   463             445           192
       Increase in Deferred Income
        Taxes                         13,439           8,226         8,024
       Loss on Disposition/Writedown
        of Fixed and Other Assets     51,520          24,018        14,263
       Changes in Operating Assets
        and Liabilities:
        Accounts Receivable - Net     (3,973)        (25,520)         (846)
        Merchandise Inventory       (427,661)       (399,660)     (130,246)
        Other Operating Assets       (77,704)         (7,937)        7,346
        Accounts Payable             346,403         184,660        57,658
        Employee Retirement Plans     76,024          75,675        61,860
        Other Operating Liabilities  182,223          92,757        33,999
     Net Cash Provided by Operating
      Activities                   1,170,888         741,645       690,974

    Cash Flows from Investing Activities:
     (Increase) Decrease in Investment Assets:
      Short-Term Investments         (50,998)         19,848        57,103
      Purchases of Long-Term
       Investments                   (12,413)        (19,866)      (15,384)
      Proceeds from Sale/Maturity of
       Long-Term Investments           2,531           2,644         4,811
     Increase in Other Long-Term
      Assets                         (36,643)        (21,723)       (9,940)
     Fixed Assets Acquired        (1,472,348)     (1,078,107)     (826,246)
     Proceeds from the Sale of
      Fixed and Other Long-Term
      Assets                          67,837          38,202        31,183
     Net Cash Used in Investing
      Activities                  (1,502,034)     (1,059,002)     (758,473)

    Cash Flows from Financing Activities:
     Net Increase (Decrease) in
      Short-Term Borrowings          (24,600)         18,971        17,199
      Long-Term Debt Borrowings      394,588         328,159       310,795
      Repayment of Long-Term Debt   (108,309)        (23,318)      (36,252)
      Proceeds from Stock Offering   348,300              --            --
      Proceeds from Stock Options
       Exercised                      30,973          14,473         1,988
      Cash Dividend Payments         (47,558)        (50,757)      (28,653)
      Net Cash Provided by Financing
       Activities                    593,394         287,528       265,077

    Net Increase (Decrease) in Cash
     and Cash Equivalents            262,248         (29,829)      187,578
    Cash and Cash Equivalents,
     Beginning of Year               228,874         258,703        61,125
    Cash and Cash Equivalents,
     End of Year                    $491,122        $228,874      $258,703

Supplemental Information:

STORE PERFORMANCE PERSPECTIVE

In 1992, Lowe's began a more detailed reporting on the transformation from a chain of small, contractor-oriented stores to a family of modern, home- improvement warehouses. In the fourth quarter of 1999, the transformation is nearly complete as the Large stores contributed 91% of sales and 91% of operating profits. The following tables are intended to assist in understanding the impact of that transformation.

Store Group Categories, presented in these tables, are defined as follows:

1. Yards : Focused Contractor Yards

2. Small : Average of 18,000 square feet

3. Medium : Average of 54,000 square feet

4. Large : Average of more than 100,000 square feet.

All stores in excess of 80,000 square feet.

Large store sales are reported on both a comparable (same-store) basis and new (open less than fourteen months) basis. A relocated store is removed from the comparable store computation until the fourteenth month following its grand opening.

Fourth Quarter 1999

    Table 1:  Store Group Unit Totals, End of Fourth Quarter


                             1999               1998            1997
                       % of               % of            % of
                       Total   Units     Total   Units    Total   Units
    Yards               6%      32         6%      32       7%     32

    Small               3%      20         6%      31      10%     49

    Medium              6%      37        11%      58      16%     76

    Large Comp         60%     342        55%     287      48%    228

    Large New          25%     145        22%     112      19%     92

    Total             100%     576       100%     520     100%    477


    Table 2:  Sales & Operating Profits* by Store Group, Fourth Quarter

                        1999                 1998                 1997
                  Sales       O.P.*    Sales      O.P.*     Sales     O.P.*
    Yards          3%          2%       3%          3%       3%        3%

    Small          1%          1%       3%          2%       5%        5%

    Medium         5%          6%       9%         13%      14%       21%

    Large Comp    68%         82%      64%         73%      57%       65%

    Large New     23%          9%      21%          9%      21%        6%

    Total        100%        100%     100%        100%     100%      100%

Operating Profits before corporate expense and intercompany charges, interest, and income taxes.

Lowe's Companies, Inc. is the second largest retailer of home improvement products in the world, serving nearly five million do-it-yourself retail and commercial business customers weekly through 576 stores in 37 states. Headquartered in Wilkesboro, N.C., the 53-year old company employs over 80,000 people. More information on the company is available on Lowe's web site at www.lowes.com .