Dollar General Corporation
Dec 10, 2009

Dollar General Corporation Reports Third Quarter Financial Results

~Third Quarter Same-Store Sales Increased 9.2%~
~Gross Margin Expanded 112 Basis Points to 30.8%~
~SG&A as a Percentage of Sales Decreased 95 Basis Points~
~Net Income Increased to $75.6 Million~
~Adjusted EBITDA Increased 23% to $280 Million~

GOODLETTSVILLE, Tenn., Dec 10, 2009 (BUSINESS WIRE) -- Dollar General Corporation (NYSE: DG) today reported net income of $75.6 million, or $0.24 per diluted share, for its 13-week third quarter ended October 30, 2009, compared to a net loss of $7.3 million, or $0.02 per diluted share, in the comparable 2008 quarter. Net income for the 2009 third quarter increased by 151 percent from 2008 third quarter net income of $30.1 million, or $0.09 per share, excluding the impact of a $34.5 million ($37.4 million after tax) shareholder litigation settlement and related expenses.

Sales for the 2009 quarter increased 12.7 percent to $2.93 billion compared to $2.60 billion in the third quarter of fiscal 2008. Same-store sales increased 9.2 percent with customer traffic and average transaction amount contributing to the sales increase.

"This was another great quarter in what has so far been another very strong year for Dollar General," said Rick Dreiling, chairman and chief executive officer. "Our same-store sales growth of 9.2 percent in the third quarter reflects the positive customer response to the changes we are making in our store experience and merchandise category management. Overall, we believe that we are on track to deliver excellent results for the full year as we continue to provide our customers quality products and great value in a convenient neighborhood store."

For the 2009 quarter, gross profit, as a percentage of sales, was 30.8 percent, an increase of 112 basis points from the prior year quarter. Several factors contributed significantly to the gross profit rate expansion, including the impact of a $1.0 million LIFO credit in the 2009 third quarter compared to a $15.7 million LIFO provision in the 2008 third quarter. This change reflects a flattening of merchandise cost increases for comparable items based on trends and current estimates for the 2009 fiscal year. Overall purchase markups increased as the Company continued its focus on improving gross profit while maintaining an every day low price strategy. For example, changes to the mix of merchandise sold, including an increase in the sale of private brand items which generally deliver higher gross profit rates, have had a positive impact on the overall gross profit rate. In addition, distribution and transportation costs, as a percentage of sales, decreased as a result of lower fuel costs, higher sales volumes and improved process efficiencies. These increases in the 2009 third quarter gross profit rate were partially offset by higher markdowns.

Selling, general and administrative expenses ("SG&A") decreased to 23.5 percent as a percentage of sales in the 2009 third quarter, from 24.4 percent in the 2008 third quarter, a decrease of 95 basis points, primarily attributable to leverage attained from significantly higher net sales. As a percentage of sales, electricity, store occupancy, repairs and maintenance costs and professional fees (primarily legal expenses) were lower in the 2009 period. Workers' compensation costs and general liability insurance expense decreased in the 2009 third quarter as a result of our continued cost reduction and safety efforts. In addition, the 2008 quarter included hurricane-related losses and fixed asset impairment charges that did not recur in the 2009 third quarter. An increase in advertising costs partially offset these improvements in SG&A. The overall 8.3 percent increase in SG&A expense in the 2009 period compared to the 2008 period is primarily the result of amounts required to operate new stores and to support increased same-store sales levels.

The Company's third quarter 2009 operating profit increased by 108 percent to $216.2 million, or 7.4 percent of sales, compared to $103.7 million, or 4.0 percent of sales, in the 2008 third quarter. Third quarter 2009 operating profit increased 56 percent compared to 2008 third quarter operating profit, excluding the $34.5 million pre-tax litigation settlement discussed above, of $138.2 million, or 5.3 percent of sales.

Interest expense decreased by $10.8 million, or 11 percent, in the 2009 third quarter from the 2008 period due to lower interest rates on the Company's variable rate debt and lower outstanding borrowings as the result of the repurchase of $44.1 million of its senior subordinated notes in the fourth quarter of 2008.

Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization), as defined in the Company's credit agreements and calculated in the attached schedule, increased 22.7 percent to $280.4 million in the 2009 third quarter from $228.6 million in the 2008 third quarter.

39 Weeks Ended October 30, 2009 and October 31, 2008

For the 39-week 2009 period, the Company reported net income of $252.2 million, or $0.79 per diluted share, compared to net income of $26.3 million, or $0.08 per diluted share, in the comparable 2008 period. Net income for the 2009 39-week period increased by 296 percent from the 2008 39-week period net income of $63.7 million, or $0.20 per diluted share, excluding the impact of the $34.5 million charge ($37.4 million after tax) related to the litigation settlement and related expenses.

Total sales for the 2009 39-week period were $8.61 billion, an increase of $998.8 million, or 13.1 percent, compared to $7.61 billion in the comparable 2008 period. Same-store sales increased 10.3 percent with customer traffic and average transaction amount contributing to the sales increase.

For the 2009 39-week period, the gross profit rate increased 173 basis points to 30.9 percent from 29.2 percent in the 2008 period. The 2008 period included a non-cash LIFO charge of $31.8 million compared to a LIFO credit of $0.5 million in the comparable 2009 period, reflecting a flattening of merchandise cost increases for comparable items based on trends and current estimates for the 2009 fiscal year. In addition, overall average purchase markups were higher throughout the year-to-date period, while distribution and transportation costs and inventory shrink, as a percentage of sales, decreased. Increases to the gross profit rate were partially offset by increased markdowns.

For the 2009 39-week period, SG&A as a percentage of sales decreased 95 basis points to 23.1 percent. Operating profit increased 89 percent to $674.3 million, or 7.8 percent of sales, from $357.7 million, or 4.7 percent of sales, in the comparable 2008 period. Excluding the $34.5 million pre-tax litigation settlement in the 2008 period, operating profit increased 72 percent.

Interest expense in the 2009 39-week period decreased by $31.9 million, or 11 percent, from the 2008 period due to lower interest rates on the Company's variable rate debt, primarily on the senior secured term loan, and lower outstanding borrowings as the result of the repurchase of $44.1 million of the Company's senior subordinated notes in the fourth quarter of 2008.

The effective income tax rate for the 39-week period ended October 30, 2009 was 38.2 percent compared to a rate of 56.8 percent for the 39-week period ended October 31, 2008. The 2009 period benefited from a reduction in a deferred tax valuation allowance related to state income tax credits that did not occur in 2008. In addition, the 2008 period was negatively impacted by the charge related to the shareholder litigation discussed above, which was not deductible for income tax purposes.

Adjusted EBITDA, as defined in the Company's credit agreements and calculated in the attached schedule, increased by $240.6 million, or 38 percent, to $877.6 million in the 2009 period from $637.0 million in the 2008 period.

Merchandise Inventories

As of October 30, 2009, total merchandise inventories, at cost, were $1.68 billion compared to $1.62 billion as of October 31, 2008, an increase of approximately four percent in total and a decrease of one percent on an average per-store basis. Annual inventory turns increased to 5.2 times from 5.0 times in the year ago period.

Long-Term Obligations

As of October 30, 2009, outstanding long-term obligations, including the current portion, were $4.13 billion, including $2.29 billion outstanding under a senior secured term loan facility. There were no borrowings under the Company's asset-based revolving credit facility. The ratio of long-term obligations, net of cash, to Adjusted EBITDA, based on Adjusted EBITDA of $1.15 billion for the most recent four quarters, as calculated in the attached schedule, decreased to 3.3 to 1 as of October 30, 2009 from 4.5 to 1 as of October 31, 2008. At October 30, 2009, the senior secured incurrence test, as defined in the senior secured credit agreement, was 1.7 to 1.

On November 30, 2009, the Company used proceeds from an initial public offering of its common shares, to redeem $176.7 million aggregate principal amount of its 10.625 percent senior notes due 2015 and $205.2 million aggregate principal amount of its 11.875 percent/12.625 percent senior subordinated toggle notes due 2017, at redemption prices of 110.625 percent and 111.875 percent, respectively, plus accrued and unpaid interest. In addition, on November 18, 2009, the Company gave a 30-day notice that it plans to redeem an additional $19.0 million aggregate principal amount of the senior notes at a redemption price of 110.625 percent plus accrued and unpaid interest.

Company Outlook

The Company is pleased with sales over the four day Thanksgiving weekend and quarter to date for the 13 weeks ending January 29, 2010 and is cautiously optimistic regarding the results for the remainder of the 2009 fiscal year. The economic environment continues to be very challenging for the average consumer as unemployment remains high (up 47 percent from 6.8 percent in November 2008 to 10.0 percent in November 2009) and consumers are concerned about job security. As a result, consumers are closely monitoring their financial health and many are delaying or avoiding discretionary purchases. The retail environment is highly competitive as companies' promotional efforts to generate sales remain aggressive. However, Dollar General believes that it is well positioned to meet these challenges, and that its stores are well prepared for the holiday season.

The Company currently expects to pay down debt of approximately $300 million in January 2010 with a portion of its expected excess cash. As previously announced, Dollar General expects to end the 2009 fiscal year with approximately 500 new stores and a combined 450 remodels and relocations. The Company currently anticipates total capital expenditures for the 2009 fiscal year in a range of $275 to $300 million. In 2010, the Company plans to open approximately 600 new stores and to remodel or relocate a total of approximately 500 stores.

Conference Call Information

The Company will hold a conference call on Thursday, December 10, 2009 at 9:00 a.m. CST/10:00 a.m. EST, hosted by Rick Dreiling, chairman and chief executive officer, and David Tehle, chief financial officer. If you wish to participate, please call (866) 710-0179 at least 10 minutes before the conference call is scheduled to begin. The pass code for the conference call is "Dollar General." The call will also be broadcast live online at www.dollargeneral.com under "Investor Information, Conference Calls and Investor Events." A replay of the conference call will be available through Thursday, December 24, 2009, and will be accessible online or by calling (334) 323-7226. The pass code for the replay is 46716851.

Non-GAAP Disclosure

Certain information provided in this press release and the accompanying tables has not been derived in accordance with generally accepted accounting principles ("GAAP"), including EBITDA (earnings before interest, income taxes, depreciation and amortization), Adjusted EBITDA (computed in accordance with the Company's senior secured credit agreements) and net income, earnings per share and operating profit in the 2008 periods, excluding the impact of the shareholder litigation. Reconciliations of these measures to measures calculated in accordance with GAAP and the calculations of the senior secured incurrence test (as defined in the credit agreements), the ratio of long-term obligations to Adjusted EBITDA, and the ratio of long-term obligations, net of cash, to Adjusted EBITDA are provided in the accompanying schedules. Non-GAAP information should not be considered a substitute for any information derived or calculated in accordance with GAAP.

The Company believes that providing comparisons to net income, earnings per share and operating profit, excluding the impact of the shareholder litigation settlement and related costs, in the 13-week and 39-week periods ended October 31, 2008, provides useful information to the reader in assessing the Company's operating performance. The Company believes that the presentation of EBITDA and Adjusted EBITDA is appropriate to provide additional information about the calculation of the senior secured incurrence test, a material financial ratio in the Company's credit agreements. Adjusted EBITDA is a material component of that ratio. In addition, the Company's liquidity needs are significant, primarily due to debt service and other obligations. Management believes that the ratio of long-term obligations to Adjusted EBITDA and the ratio of long-term obligations, net of cash, to Adjusted EBITDA are indicators of the Company's ability to meet these liquidity needs.

EBITDA, Adjusted EBITDA, and net income, earnings per share and operating profit, excluding the impact of the shareholder litigation settlement and related costs, are not measures of financial performance or condition, liquidity or profitability in accordance with GAAP, and should not be considered as alternatives to net income, operating income, cash flows from operations or any other performance measures determined in accordance with GAAP. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow for management's discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, debt service requirements and replacement of fixed assets. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of the Company's financial results as reported under GAAP. Likewise, the ratio of long-term obligations to Adjusted EBITDA and the ratio of long-term obligations, net of cash, to Adjusted EBITDA should not be considered substitutes for any of the ratios referenced in the Company's credit agreements or any ratio computed in accordance with GAAP. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies.

For more discussion regarding the financial ratios in the Company's credit agreements, the reasons management believes EBITDA and Adjusted EBITDA are useful to investors, and the limitations of these non-GAAP measures, please see the Company's Amendment No. 4 to Registration Statement on Form S-1 (File No. 333-161464) filed with the SEC on November 9, 2009.

Forward-Looking Statements

This press release contains forward-looking information, such as the information in the section entitled "Company Outlook." The words "believe," "anticipate," "project," "plan," "schedule," "on track," "expect," "estimate," "objective," "forecast," "goal," "intend," "committed," "will likely result," or "will continue" and similar expressions generally identify forward-looking statements. These matters involve risks, uncertainties and other factors that may cause the actual performance of the Company to differ materially from that expressed or implied by these forward-looking statements. All forward-looking information should be evaluated in the context of these risks, uncertainties and other factors. Factors that may result in actual results differing materially from such forward-looking information include, but are not limited to:

Forward-looking statements speak only as of the date made. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances arising after the date on which they were made. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, the Company.

About Dollar General Corporation

Dollar General is the largest discount retailer in the United States by number of stores with more than 8,700 neighborhood stores in 35 states. Dollar General helps shoppers Save time. Save money. Every day!(R) by offering quality private and national branded items that are frequently used and replenished, such as food, snacks, health and beauty aids, cleaning supplies, basic apparel, house wares and seasonal items at everyday low prices in convenient neighborhood stores. Dollar General is among the largest retailers of top-quality products made by America's most trusted manufacturers such as Procter & Gamble, Kimberly-Clark, Unilever, Kellogg's, General Mills, Nabisco, PepsiCo and Coca-Cola. The Company store support center is located in Goodlettsville, Tennessee. Dollar General's Web site can be reached at www.dollargeneral.com.

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
October 30,October 31,January 30,
200920082009
ASSETS
Current assets:
Cash and cash equivalents $ 337,019 $ 150,590 $ 377,995
Merchandise inventories 1,680,273 1,619,922 1,414,955
Income taxes receivable 31,268 42,986 6,392
Deferred income taxes - - 4,600
Prepaid expenses and other current assets 68,754 72,799 66,183
Total current assets 2,117,314 1,886,297 1,870,125
Net property and equipment 1,305,858 1,288,848 1,268,960
Goodwill 4,338,589 4,337,152 4,338,589
Intangible assets, net 1,293,280 1,336,774 1,325,558
Other assets, net 77,491 91,030 85,967
Total assets $ 9,132,532 $ 8,940,101 $ 8,889,199
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $ 26,762 $ 8,455 $ 14,158
Accounts payable 852,988 720,126 678,421
Accrued expenses and other 381,346 439,583 375,045
Income taxes payable 3,659 1,824 7,611
Deferred income taxes 46,178 22,669 -
Total current liabilities 1,310,933 1,192,657 1,075,235
Long-term obligations 4,105,252 4,172,467 4,122,956
Deferred income taxes 547,180 542,260 556,101
Other liabilities 298,622 256,103 289,288
Total liabilities 6,261,987 6,163,487 6,043,580
Redeemable common stock 15,131 13,150 13,924
Shareholders' equity:
Preferred stock - - -
Common stock 278,202 277,938 278,114
Additional paid-in capital 2,497,939 2,487,071 2,489,647
Retained earnings 115,878 21,510 103,364
Accumulated other comprehensive loss (36,605 ) (23,055 ) (39,430 )
Total shareholders' equity 2,855,414 2,763,464 2,831,695
Total liabilities and shareholders' equity $ 9,132,532 $ 8,940,101

$ 8,889,199
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
For the Quarter (13 Weeks) Ended
October 30, % of NetOctober 31,% of Net
2009Sales2008Sales
Net sales $ 2,928,751 100.00 % $ 2,598,938 100.00 %
Cost of goods sold 2,025,669 69.16 % 1,826,651 70.28 %
Gross profit 903,082 30.84 % 772,287 29.72 %
Selling, general and administrative expenses 686,843 23.45 % 634,055 24.40 %
Litigation settlement and related costs - - 34,500 1.33 %
Operating profit 216,239 7.38 % 103,732 3.99 %
Interest income (26 ) 0.00 % (619 )

(0.02

%)

Interest expense 87,612 2.99 % 98,393 3.79 %
Other (income) expense 513 0.02 % 266 0.01 %
Income before income taxes 128,140 4.38 % 5,692 0.22 %
Income taxes 52,491 1.79 % 12,998 0.50 %
Net income (loss) $ 75,649 2.58 % $ (7,306 )

(0.28

%)

Earnings (loss) per share:
Basic $ 0.24 $ (0.02 )
Diluted $ 0.24 $ (0.02 )
Weighted average shares outstanding:
Basic 317,945 317,570
Diluted 320,558 317,570
For the 39 Weeks Ended
October 30,% of NetOctober 31,% of Net
2009 Sales2008Sales
Net sales $ 8,610,595 100.00 % $ 7,611,820 100.00 %
Cost of goods sold 5,946,113 69.06 % 5,388,421 70.79 %
Gross profit 2,664,482 30.94 % 2,223,399 29.21 %
Selling, general and administrative expenses 1,990,157 23.11 % 1,831,241 24.06 %
Litigation settlement and related costs - - 34,500 0.45 %
Operating profit 674,325 7.83 % 357,658 4.70 %
Interest income (135 ) 0.00 % (2,793 )

(0.04

%)

Interest expense 266,792 3.10 % 298,698 3.92 %
Other (income) expense (215 ) 0.00 % 856 0.01 %
Income before income taxes 407,883 4.74 % 60,897 0.80 %
Income taxes 155,638 1.81 % 34,569 0.45 %
Net income $ 252,245 2.93 % $ 26,328 0.35 %
Earnings per share:
Basic $ 0.79 $ 0.08
Diluted $ 0.79 $ 0.08
Weighted average shares outstanding:
Basic 317,919 317,464
Diluted 319,454 317,896
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
For the 39 Weeks Ended
October 30,October 31,
20092008
Cash flows from operating activities:
Net income $ 252,245 $ 26,328

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 194,045 184,155
Deferred income taxes 40,298 30,057
Noncash share-based compensation 9,249 7,206
Noncash inventory adjustments and asset impairment 2,697 35,587
Tax benefit of stock options (308 ) (576 )
Other noncash gains and losses 6,514 3,736
Change in operating assets and liabilities:
Merchandise inventories (262,993 ) (364,697 )
Prepaid expenses and other current assets (3,048 ) (7,218 )
Accounts payable 162,867 169,276
Accrued expenses and other 19,427 192,983
Income taxes (28,828 ) (24,606 )
Other (1,038 ) 8,911
Net cash provided by operating activities 391,127 261,142
Cash flows from investing activities:
Purchases of property and equipment (186,859 ) (159,709 )
Purchases of short-term investments - (9,903 )
Sales of short-term investments - 61,547
Proceeds from sale of property and equipment 682 971
Net cash used in investing activities (186,177 ) (107,094 )
Cash flows from financing activities:
Issuance of common stock 2,018 2,268
Issuance of long-term obligations 1,080 -
Repayments of borrowings under revolving credit facility - (102,500 )
Repayments of long-term obligations (7,921 ) (3,223 )
Repurchases of common stock and stock options (1,680 ) (788 )
Payment of cash dividends and related amounts (239,731 ) -
Tax benefit of stock options 308 576
Net cash used in financing activities (245,926 ) (103,667 )
Net increase (decrease) in cash and cash equivalents (40,976 ) 50,381
Cash and cash equivalents, beginning of period 377,995 100,209
Cash and cash equivalents, end of period $ 337,019 $ 150,590
Supplemental cash flow information:
Cash paid for:
Interest $ 200,766 $ 231,193
Income taxes $ 154,844 $ 1,131
Supplemental schedule of noncash investing and financing activities:

Purchases of property and equipment awaiting processing for payment, included in Accounts payable

$ 19,174 $ 20,259
Expiration of equity repurchase rights $ - $ 2,548
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Selected Additional Information
(Unaudited)

Sales by Category ($ in thousands)

For the 13 Weeks Ended
October 30, 2009October 31, 2008% Change
Consumables $ 2,137,504 $ 1,864,015 14.7 %
Seasonal 370,026 320,706 15.4 %
Home products 207,798 206,780 0.5 %
Apparel 213,423 207,437 2.9 %
Net sales $2,928,751$2,598,93812.7%
For the 39 Weeks Ended
October 30, 2009October 31, 2008% Change
Consumables $ 6,186,509 $ 5,340,925 15.8 %
Seasonal 1,149,775 1,027,352 11.9 %
Home products 636,875 630,815 1.0 %
Apparel 637,436 612,728 4.0 %
Net sales $8,610,595$7,611,82013.1%
New Store Activity
39 Weeks Ended
October 30, 2009October 31, 2008
Beginning store count 8,362 8,194
New store openings 386 175
Store closings (28 ) (23 )
Net new stores 358 152
Ending store count 8,720 8,346
Total selling square footage (000's) 61,565 58,637
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Dollars in millions)
(Unaudited)
Senior Secured Incurrence Test
October 30,October 31,
20092008
Senior secured debt $ 2,317.6 $ 2,324.7
Less: cash 337.0 150.6
Senior secured debt, net of cash $ 1,980.6 $ 2,174.1
Adjusted EBITDA $ 1,154.5 $ 890.3

Ratio of senior secured debt, net of cash, to Adjusted EBITDA

1.7x 2.4x
Calculation of Ratio of Long-Term Obligations to Adjusted EBITDA
October 30,October 31,
20092008
Total long-term obligations $ 4,132.0 $ 4,180.9
Adjusted EBITDA $ 1,154.5 $ 890.3
Ratio of long-term obligations to Adjusted EBITDA 3.6x 4.7x
Calculation of Ratio of Long-Term Obligations, net of Cash, to Adjusted EBITDA
October 30,October 31,
20092008
Total long-term obligations $ 4,132.0 $ 4,180.9
Less: cash $ 337.0 $ 150.6
Total long-term obligations, net of cash $ 3,795.0 $ 4,030.3
Adjusted EBITDA $ 1,154.5 $ 890.3

Ratio of long-term obligations, net of cash to Adjusted EBITDA

3.3x 4.5x
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
13 Weeks Ended39 Weeks Ended52 Weeks Ended
October 30,October 31,October 30,October 31,October 30,October 31,
(In millions)200920082009200820092008
Net income (loss) $ 75.6 $ (7.3 ) $ 252.2 $ 26.3 $ 334.1 $ 81.7
Add (subtract):
Interest income (0.0 ) (0.6 ) (0.1 ) (2.8 ) (0.4 ) (4.1 )
Interest expense 87.6 98.4 266.7 298.7 359.9 403.1
Depreciation and amortization 59.5 58.9 182.4 174.6 242.9 231.0
Income taxes 52.5 13.0 155.7 34.5 207.4 67.1
EBITDA 275.2 162.4 856.9 531.3 1,143.9 778.8
Adjustments:
Gain on debt retirement - - - - (3.8 ) (5.0 )
(Gain) loss on hedging instruments 1.0 0.3 (1.0 ) 0.9 (0.8 ) 1.2
Contingent gain on distribution center leases - - - - (5.0 ) -

Impact of markdowns related to inventory clearance activities, net of purchase accounting adjustments

(1.0 ) - (6.6 ) - (31.5 ) (4.5 )

SG&A related to store closing and inventory clearance activities

- - - - - 0.2
Operating losses (cash) of stores to be closed - - - - - 1.1
Hurricane-related expenses and write-offs - 2.0 - 2.0 0.2 2.0
Monitoring and consulting fees to affiliates 1.4 1.8 4.4 6.5 6.5 8.5
Stock option and restricted stock expense 3.3 2.7 9.4 7.2 12.2 7.9
Indirect merger-related costs 0.5 6.7 5.7 19.1 7.3 23.7
Litigation settlement and related costs - 34.5 - 34.5 (2.5 ) 34.5
Other noncash charges (including LIFO) - 18.2 8.8 35.5 28.0 41.6
Other - - - - - 0.3
Total Adjustments 5.2 66.2 20.7 105.7 10.6 111.5
Adjusted EBITDA $ 280.4 $ 228.6 $ 877.6 $ 637.0 $ 1,154.5 $ 890.3
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)
For the Quarter (13 Weeks) Ended
October 30,% of NetOctober 31,% of Net Increase
2009Sales2008Sales$

%

Net sales $ 2,928,751 $ 2,598,938
Operating profit $ 216,239 7.38 % $ 103,732 3.99 % $ 112,507 108

%

Add: litigation settlement and related costs

- - 34,500 1.33 %

Operating profit, excluding litigation settlement and related costs

$ 216,239 7.38 % $ 138,232 5.32 % $ 78,007 56

%

Net income (loss) $ 75,649 2.58 % $ (7,306 )

(0.28

%)

$ 82,955

NA

Add: litigation settlement and related costs

- - 34,500 1.33 %
Income tax effect - - 2,909 0.11 %

Net income, excluding litigation settlement and related costs

$ 75,649 2.58 % $ 30,103 1.16 % $ 45,546 151

%

Earnings (loss) per share:
Basic $ 0.24 $ (0.02 ) $ 0.26 NA
Diluted $ 0.24 $ (0.02 ) $ 0.26 NA

Earnings per share, excluding litigation settlement and related costs:

Basic $ 0.24 $ 0.09 $ 0.15 167

%

Diluted $ 0.24 $ 0.09 $ 0.15 167

%

Weighted average shares outstanding:
Basic 317,945 317,570
Diluted 320,558 317,570
For the 39 Weeks Ended
October 30,% of NetOctober 31,% of Net
2009Sales2008Sales
Net sales $ 8,610,595 $ 7,611,820
Operating profit 674,325 7.83 % 357,658 4.70 % $ 316,667 89

%

Add: litigation settlement and related costs

- - 34,500 0.45 %

Operating profit, excluding litigation settlement and related costs

$ 674,325 7.83 % $ 392,158 5.15 % $ 282,167 72

%

Net income $ 252,245 2.93 % $ 26,328 0.35 % $ 225,917 858

%

Add: litigation settlement and related costs

- - 34,500 0.45 %
Income tax effect - - 2,909 0.04 %

Net income, excluding litigation settlement and related costs

$ 252,245 2.93 % $ 63,737 0.84 % $ 188,508 296

%

Earnings per share:
Basic $ 0.79 $ 0.08 $ 0.71 NA
Diluted $ 0.79 $ 0.08 $ 0.71 NA

Earnings per share, excluding litigation settlement and related costs:

Basic $ 0.79 $ 0.20 $ 0.59 295

%

Diluted $ 0.79 $ 0.20 $ 0.59 295

%

Weighted average shares outstanding:
Basic 317,919 317,464
Diluted 319,454 317,896

SOURCE: Dollar General Corporation

Dollar General Corporation
Investor Contact:
Mary Winn Gordon, 615-855-5536
or
Emma Jo Kauffman, 615-855-5525
or
Media Contact:
Tawn Miller, 615-855-5209

Copyright Business Wire 2009