Dollar General Reports Increased Sales and Earnings for the 39-Week Period
GOODLETTSVILLE, Tennessee - January 14, 2002 - Dollar General Corporation (NYSE: DG) today reported that net income for the 39-week period ended November 2, 2001, increased 7.1 percent to $110.1 million, or $0.33 per diluted share, compared with $102.8 million, or $0.31 per diluted share, for the 39-week period ended October 27, 2000.
"Despite the demands of the restatement process, our results year-to-date reflect our employees' dedication to serving our customers and operating our stores well. Our 39-week period same-store sales increase of 7.6 percent is a result of better in-stocks of consumable basic merchandise, more effective merchandise flow and a better presentation of seasonal merchandise resulting from last year's store layout changes," said Cal Turner, Chairman and CEO. "In addition to generating strong sales increases, this year we have:
- installed new satellite technology in approximately 2,500 stores and new registers in approximately 2,200 stores to improve the quality and consistency of data transmission;
- established UPC inventories in approximately 500 stores, positioning the foundation for better store inventory management;
- opened a new distribution center in April in Zanesville, Ohio which now serves approximately 740 stores;
- created a B2B website to communicate with suppliers and transportation providers, improving product flow and distribution center in-stock levels;
- begun a process to sell through aged inventory and improve inventory turn.
Total sales for the 39-weeks ended November 2, 2001, increased 20.2 percent to $3.74 billion from $3.11 billion for the 39-week period ended October 27, 2000. For the 39-week calendar period ended November 2, 2001, same-store sales increased 7.6 percent. As of November 2, 2001, the Company had opened 523 new stores and closed 38 stores.
Gross profit increased 18.6 percent to $1.03 billion, or 27.7 percent of sales, compared with $0.87 billion, or 28.0 percent of sales, in the prior year. The reduction in gross margin was due in part to the continued shift in the Company's sales to lower margin consumable basic items.
Selling, General and Administrative Expenses ("SG&A") were $823.2 million, or 22.0 percent of sales, versus $672.3 million, or 21.6 percent of sales, during the comparable period in the prior year, an increase of 22.4 percent. The Company recorded $18.3 million in expenses, primarily professional fees, in the current year period related to the restatement of certain previously released financial data. Excluding the restatement related expenses, SG&A would have been $804.9 million, or 21.5 percent of sales, an increase of 19.7 percent over the prior year.
Interest expense decreased 1.4 percent to $35.0 million, or 1.0 percent of sales, compared with $35.5 million, or 1.1 percent of sales, in the prior year.
The Company's effective tax rate was 37.4 percent in the current year period and 37.3 percent in the prior year period.
Net income, including restatement-related expenses, increased 7.1 percent to $110.1 million, or $0.33 per diluted share compared with $102.8 million, or $0.31 per diluted share during the comparable period in the prior year. Excluding restatement-related expenses, net income for the 39-week period ended November 2, 2001, increased 18.2 percent to $121.5 million, or $0.36 per diluted share.
LIFO merchandise inventories increased 12.7 percent to $1.25 billion at November 2, 2001, from $1.11 billion at October 28, 2000.
Dollar General currently operates approximately 5,550 neighborhood stores in 27 states with distribution centers in Florida, Kentucky, Mississippi, Missouri, Ohio, Oklahoma and Virginia.
This press release contains historical and forward-looking information. The words "believe," "anticipate," "project," "plan," "expect," "estimate," "objective," "forecast," "goal," "intend," "will likely result," or " will continue" and similar expressions identify forward looking statements. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company believes the assumptions underlying these forward-looking statements are reasonable; however, any of the assumptions could be inaccurate, and therefore, actual results may differ materially from those projected in the forward-looking statements. The factors that may result in actual results differing from such forward-looking information include, but are not limited to: the Company's ability to maintain adequate liquidity through its cash resources and credit facilities, including its ability to refinance or replace such facilities on favorable terms at the maturity thereof; the Company's ability to comply with the terms of the Company's credit facilities (or obtain waivers for non-compliance); general transportation and distribution delays or interruptions; inventory risks due to shifts in market demand; changes in product mix; interruptions in suppliers' businesses; fuel price and interest rate fluctuations; a deterioration in general economic conditions caused by acts of war or terrorism; temporary changes in demand due to weather patterns; delays associated with building, opening and operating new stores; the results of the Company's restatement and audit process; and the impact of the litigation and regulatory proceedings related to the restatement of the Company's financial statements, including the funding of the settlement of such litigation and the risk that the conditions to the effectiveness of such settlements, including the results of the plaintiffs' confirmatory discovery and the approval by the courts, may not be realized.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statements contained herein to reflect events or circumstances occurring after the date of this release or to reflect the occurrence of unanticipated events.
DOLLAR GENERAL CORPORATION
UNAUDITED INCOME STATEMENTS
(000's)
---For the First Quarter Ended---
(restated) (restated)
April 28, April 30,
May 4, 2001 2000 1999
Sales $1,202,504 $997,079 $844,593
Cost of Sales 881,079 727,672 615,397
Gross Margin 321,425 269,407 229,196
Selling, General & Administrative
Expense 251,990 213,341 173,990
Operating Income 69,435 56,066 55,206
Interest Expense 11,600 9,263 4,540
Pre-Tax Income 57,835 46,803 50,666
Taxes 21,602 17,468 18,590
Net Income $36,233 $29,335 $32,076
======= ======= =======
Diluted earnings per share $0.11 $0.09 $0.10
Weighted average diluted shares 335,184 334,293 337,309
---For the Second Quarter Ended---
(restated) (restated)
August 3, July 28, July 30,
2001 2000 1999
Sales $1,225,254 $1,017,418 $915,210
Cost of Sales 893,971 733,368 665,292
Gross Margin 331,283 284,050 249,918
Selling, General & Administrative
Expense 276,069 226,988 188,388
Operating Income 55,214 57,062 61,530
Interest Expense 11,957 12,732 6,254
Pre-Tax Income 43,257 44,330 55,276
Taxes 16,157 16,544 20,257
Net Income $27,100 $27,786 $35,019
======= ======= =======
Diluted earnings per share $0.08 $0.08 $0.10
Weighted average diluted shares 335,402 333,038 339,615
---For the Third Quarter Ended---
(restated) (restated)
November 2, October 27, October 29,
2001 2000 1999
Sales $1,309,125 $1,094,360 $950,419
Cost of Sales 927,944 776,016 675,449
Gross Margin 381,181 318,344 274,970
Selling, General & Administrative
Expense 295,103 231,933 198,507
Operating Income 86,078 86,411 76,463
Interest Expense 11,480 13,537 8,312
Pre-Tax Income 74,598 72,874 68,151
Taxes 27,861 27,198 24,976
Net Income $46,737 $45,676 $43,175
======= ======= =======
Diluted earnings per share $0.14 $0.14 $0.13
Weighted average diluted shares 334,857 334,097 338,390
---For the Year-To-date Ended---
(restated) (restated)
November 2, October 27, October 29,
2001 2000 1999
Sales $3,736,883 $3,108,857 $2,710,222
Cost of Sales 2,702,994 2,237,056 1,956,138
Gross Margin 1,033,889 871,801 754,084
Selling, General & Administrative
Expense 823,162 672,262 560,885
Operating Income 210,727 199,539 193,199
Interest Expense 35,037 35,532 19,106
Pre-Tax Income 175,690 164,007 174,093
Taxes 65,620 61,210 63,823
Net Income $110,070 $102,797 $110,270
======== ======== ========
Diluted earnings per share $0.33 $0.31 $0.33
Weighted average diluted shares 335,148 333,809 338,438
DOLLAR GENERAL CORPORATION
BALANCE SHEETS
($000's)
(unaudited)
November 2 February 2
2001 2001
Assets
Current Assets:
Cash and cash equivalents $74,819 $162,310
Merchandise inventories 1,133,215 896,235
Deferred income taxes 90,307 21,514
Other current assets 48,600 44,868
TOTAL CURRENT ASSETS 1,346,941 1,124,927
Property & equipment, at cost 1,454,268 1,339,554
Less: Accumulated depreciation 456,478 366,460
997,790 973,094
Merchandise inventories 116,000 116,000
Other assets, net 8,535 68,441
TOTAL ASSETS $2,469,266 $2,282,462
========== ==========
Liabilities & Shareholders' Equity
Current Liabilities
Current portion of long-term
obligations $391,089 $9,035
Accounts payable 381,843 297,262
Accrued expenses and other 223,508 214,192
Income taxes 10,492 17,446
Litigation settlement payable 162,000 0
TOTAL CURRENT LIABILITIES 1,168,932 537,935
Long-Term obligations 347,174 720,764
Litigation settlement payable 0 162,000
TOTAL LIABILITIES 1,516,106 1,420,699
Shareholders' Equity:
Common stock 166,302 165,646
Additional paid-in capital 300,622 283,925
Accumulated other comprehensive loss (3,552) 0
Retained earnings 492,473 414,318
Less: Common stock purchased by
employee
deferred compensation trust 2,685 2,126
TOTAL SHAREHOLDERS' EQUITY 953,160 861,763
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $2,469,266 $2,282,462
========== ==========
DOLLAR GENERAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's)
(Unaudited)
---For the 39-Weeks Ended---
(restated)
November 2, 2001 October 27, 2000
Cash flows from operating activities:
Net income $110,070 $102,797
Adjustments to reconcile net income
to net cash
provided by (used in) operating
activities
Depreciation and amortization 92,104 83,737
Deferred income taxes (5,795) (12,792)
Tax benefit from
stock option exercises 5,243 15,021
Change in operating assets and
liabilities:
Merchandise inventories (236,980) (155,814)
Other Current Assets (3,732) 2,517
Accounts payable 84,581 (45,479)
Accrued expenses and other 5,759 7,449
Income taxes (6,954) (14,626)
Other (2,549) 537
Net cash provided by (used
in) operating activities 41,747 (16,653)
Cash flows from investing activities:
Purchase of property and equipment (100,184) (193,315)
Proceeds from sale of property and
equipment 230 97,535
Net cash provided by (used
in) investing activities (99,954) (95,780)
Cash flows from financing activities:
Issuance of short-term borrowings 0 221,369
Repayments of short-term borrowings 0 (160,000)
Issuance of long-term obligations 0 199,584
Repayments of long-term obligations (8,925) (109,472)
Payments of cash dividend (31,910) (29,522)
Proceeds from exercise of stock
options 11,557 29,239
Repurchase of common stock 0 (65,549)
Purchase of common stock for
deferred compensation plan (6) 0
Net cash provided by (used
in) financing activities (29,284) 85,649
Net decrease in cash and
cash equivalents (87,491) (26,784)
Cash and cash equivalents beginning
of period 162,310 54,742
Cash and cash equivalents end of
period $74,819 $27,958
Supplemental schedule of noncash
investing and financing activities:
Purchase of property and equipment
under capital lease obligations $17,393 $110,114
DOLLAR GENERAL CORPORATION
KEY OPERATIONAL DATA
(000's)
---For the First Quarter Ended---
May 4 April 28
2001 2000 % Chg
Sales by Category:
Highly Consumable $721,292 $545,633 32.2%
Hardware and Seasonal $168,804 $137,695 22.6%
Basic Clothing $130,632 $120,910 8.0%
Home Products $181,776 $192,841 -5.7%
TOTAL SALES $1,202,504 $997,079 20.6%
---For the Second Quarter Ended---
August 3 July 28
2001 2000 % Chg
Sales by Category:
Highly Consumable $737,778 $583,003 26.5%
Hardware and Seasonal $185,082 $143,120 29.3%
Basic Clothing $131,200 $120,320 9.0%
Home Products $171,194 $170,975 0.1%
TOTAL SALES $1,225,254 $1,017,418 20.4%
---For the Third Quarter Ended---
November 2 October 27
2001 2000 % Chg
Sales by Category:
Highly Consumable $796,271 $638,372 24.7%
Hardware and Seasonal $185,028 $148,415 24.7%
Basic Clothing $148,617 $133,818 11.1%
Home Products $179,209 $173,756 3.1%
TOTAL SALES $1,309,125 $1,094,361 19.6%
---For 39 Weeks Ended---
November 2 October 27
2001 2000 % Chg
Sales by Category:
Highly Consumable $2,255,342 $1,767,008 27.6%
Hardware and Seasonal $538,913 $429,230 25.6%
Basic Clothing $410,448 $375,048 9.4%
Home Products $532,180 $537,571 -1.0%
TOTAL SALES $3,736,883 $3,108,857 20.2%
---For 39-Weeks Ended---
November 2 October 27
New Store Activity: 2001 2000
Beginning Store Count 5,000 4,294
New Store Openings 523 646
Store Closings 38 46
Net New Stores 485 600
Ending Store Count 5,485 4,894
Total Selling Square Footage 37.1 million 33.1 million
For the 39-weeks ended November 2, 2001, the average customer purchased
approximately 6 items at a total cost of $8.25.
1Q 2Q 3Q YTD
Same-store Customer Transactions 5.1% 4.5% 7.0% 5.5%
Average Customer Purchase $8.22 $8.17 $8.35 $8.25
CONTACT:
Investor Contact,
Kiley Fleming, CFA,
+1-615-855-5525,
or
Media Contact,
Andrea Turner,
+1-615-855-5209,
both of Dollar General Corporation