Mar 26, 2002
Dollar General Hosts Analyst Meeting
GOODLETTSVILLE, Tenn., Mar 26, 2002 /PRNewswire-FirstCall via COMTEX/ -- Dollar General Corporation (NYSE: DG) is hosting its 2002 Analyst Meeting in Nashville, Tennessee today. In addition to providing management presentations regarding its strategy and 2002 initiatives, the Company intends to reaffirm financial guidance provided in its earnings release announced on March 18, 2002.
The Company projects revenues in 2002 to increase 14 percent to 16 percent and earnings in 2002, excluding restatement-related expenses, to increase 13 percent to 15 percent.
In 2002, the Company expects same-store sales to increase 5 percent to 7 percent. The Company currently anticipates opening approximately 600 new stores, closing 60 to 80 stores, and remodeling or relocating approximately 100 stores.
This year, the Company expects to increase its selection of highly consumable and seasonal merchandise. In addition, the Company intends to expand its assortment of perishable items, such as milk and bread, to more than 1,000 stores. Also, the Company intends to utilize independent inventory services to establish perpetual inventories in all stores by October 2002. The Company believes that its merchandising initiatives, a new merchandising planning system and improved allocation processes supported by perpetual inventories in all stores will increase average retail inventory turn in 2002.
The Company's new store growth plans and improved distribution and transportation processes are based on leveraging of existing resources. The Company does not plan to open a new distribution center this year, making 2002 the first year since 1996 that the Company has not opened a distribution center. This year, the Company expects to complete the three-year installation of new IBM registers in all stores, as well as the installation of a satellite communications network to all of its stores and distribution centers. Supported by more efficient distribution and transportation processes, the Company anticipates that these systems will enable it to reduce its store delivery cycle by at least one day.
The Company intends to continue its investment in store payroll to improve store conditions and to enhance employee training. The Company plans to implement new store controls and invest in a new loss prevention system and new processes to improve inventory shrinkage results in 2002.
The Company currently expects to incur capital expenditures during 2002 of approximately $150 million. In September 2002 the Company's synthetic leases, in the amount of $383 million, will mature and the Company's $175 million revolving credit facility will expire. The Company is currently in the process of arranging financing to replace these facilities and expects to complete this refinancing before the expiration of such facilities. During the second half of 2002, the Company may also have to fund the settlement of the class action litigation in an amount of up to $162 million (which expense was recognized in the fourth quarter of 2000). The Company anticipates that its existing cash balances, cash flow from operations, and borrowings under its existing financing facilities and replacement financing facilities will provide sufficient resources to meet these obligations.
As of February 1, 2002, Dollar General operated 5,540 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); the Company's ability to enter into new credit facilities on terms acceptable to the Company prior to the expiration in September 2002 of the terms of the Company's existing credit facilities, 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; 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.
SOURCE Dollar General Corporation
CONTACT: Investor - Kiley Fleming, +1-615-855-5525, or Media - Andrea
Turner, +1-615-855-5209, both of Dollar General Corporation