LOS ANGELES — 99 Cents Only Stores here said a series of accounting changes has resulted in a delay in filing its 10-K report for the fiscal year that ended March 30.
The company said it is "working diligently" to complete the financial statement and plans to file the data "as soon as practicable." The filing was originally scheduled for June 28.
Based on preliminary results, the company said sales for the fiscal year, calculated on a comparable 52-week basis, rose approximately 9% to $1.7 billion, while same-store sales were up approximately 4%. For the fourth quarter sales increased 9.7% to $435 million, calculated on a 13-week basis, while same-store sales rose 4%, benefiting by 50 basis points because the Easter season occurred twice during the fiscal year — with the holiday falling on April 8, 2012, and March 31, 2013 (the day after the fiscal year ended).
99 Cents Only also said it expects average annual sales per comparable store to be approximately $5.3 million, compared with $5.2 million in fiscal 2012, and annual sales per square foot to be $321, compared with $309 a year earlier.
Read more: 99 Cents Only Eyes 10% Growth
Explaining the delay in filing the 10-K, the company said it is in the process of upgrading its inventory accounting systems. After implementing the system during the second half of fiscal 2013 at 81 of its 316 stores, 99 Cents Only said it had identified potential overstatements in total inventory over the entire store base of up to $20 million. Accordingly, the company said it is reviewing the nature of this potential overstatement of its inventory balance and its effect on consolidated financial statements for current and prior periods.
The company also said that, during the fourth quarter, it changed the way it estimates its excess and obsolescence inventory, and that it is reviewing its inventory valuation related to purchase accounting in connection with its acquisition in 2012, and certain compensation expense accounting to determine whether any adjustments to prior periods may be necessary.
It scheduled a July 8 conference call with bondholders to discuss the matters.
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