About Dollar General Corporation
Dollar General Corporation has been delivering value to shoppers for over 75 years. Dollar General helps shoppers Save time. Save money. Every day!® by offering products that are frequently used and replenished, such as food, snacks, health and beauty aids, cleaning supplies, clothing for the family, housewares and seasonal items at low everyday prices in convenient neighborhood locations. Dollar General operates 13,320 stores in 43 states as of February 3, 2017. In addition to high quality private brands, Dollar General sells products from America's most-trusted brands such as Procter & Gamble, Kimberly-Clark, Unilever, Kellogg's, General Mills, Nabisco, Hanes, PepsiCo and Coca-Cola. Learn more about Dollar General at www.dollargeneral.com.

Dollar General Reports Third Quarter EPS OF $0.23

December 04, 2003

GOODLETTSVILLE, Tenn., Dec. 4 /PRNewswire-FirstCall/ -- Dollar General Corporation (NYSE: DG) today reported net income for the third quarter of fiscal 2003 of $77.9 million, or $0.23 per diluted share, compared to $68.6 million, or $0.20 per diluted share, in the third quarter of fiscal 2002, an increase of 13.6 percent. Excluding restatement-related items from the prior year's results, net income in the quarter increased 46.3 percent when compared against net income of $53.2 million, or $0.16 per diluted share, in 2002. In the third quarter of 2002, the Company recorded approximately $24.3 million of net restatement-related pre-tax income, primarily from insurance proceeds.

Net sales during the third quarter of 2003 increased 12.5 percent to $1.69 billion compared to $1.50 billion in the third quarter of 2002. The increase resulted primarily from 577 net new stores and a same-store sales increase of 3.8 percent.

Gross profit during the quarter was $516.9 million, or 30.7 percent of sales, versus $428.6 million, or 28.6 percent of sales, in the prior year. The increase in the gross margin rate as a percent to sales is attributable to higher average markup on inventories, a decrease in distribution and transportation expenses as a percentage of sales, a decrease in the Company's provision for inventory shrinkage, strong sales of high margin seasonal inventories and a $7.8 million favorable non-recurring inventory adjustment primarily representing a change in the Company's estimated provision for inventory shrinkage. The non-recurring adjustment resulted from using an improved inventory ownership estimate due to the implementation, for financial reporting purposes, of an item level perpetual inventory system. The Company reiterated that it anticipates a challenging gross margin rate comparison versus last year's performance in its fourth quarter, which ends on January 30, 2004.

Selling, general and administrative expenses ("SG&A") for the quarter were $385.6 million, or 22.9 percent of sales, in the current year, versus $335.2 million, or 22.4 percent of sales, in the prior year. The increase in SG&A as a percent to sales is primarily due to increases in workers' compensation and general liability costs, store training expenses, and the accrual for bonuses.

Net interest expense during the current year period decreased by 30.9 percent to $8.0 million in the current year quarter compared to $11.5 million in the prior year. The decrease is primarily attributable to lower average debt outstanding in the current year quarter. The Company had $285.7 million in debt outstanding at October 31, 2003, compared to $518.3 million at November 1, 2002.

For the 39-week year-to-date period, net income was $198.2 million in fiscal 2003, or $0.59 per diluted share, compared to $156.9 million, or $0.47 per diluted share, in the comparable prior year period, an increase of 26.3 percent. Excluding net restatement-related items from both years, year-to-date net income increased 40.1 percent to $198.4 million, or $0.59 per diluted share, in fiscal 2003 compared to net income of $141.6 million, or $0.42 per diluted share, in the comparable prior year period. Year-to-date net sales increased 13.0 percent, including a same-store sales increase of 4.3 percent.

Return on invested capital for the trailing year increased to 13.8 percent from 12.6 percent in the previous year. Excluding restatement-related items, return on invested capital for the trailing year increased to 13.9 percent from 12.4 percent in the previous year. Return on assets for the trailing year increased to 12.7 percent from 10.3 percent in the previous year. Excluding restatement-related items, return on assets for the trailing year increased to 12.8 percent from 10.0 percent in the previous year.

Conference Call

The Company will host a conference call on Thursday, December 4, 2003, at 10 a.m. ET to discuss the quarter's results. The security code for the conference call is "Dollar General." If you wish to participate, please call 334-260-2280 at least 10 minutes before the conference call is scheduled to begin. A webcast of the call can also be accessed live on Dollar General's Web site at www.dollargeneral.com by clicking on the home page spotlight item. A replay of the conference call will be available until 5 p.m. ET on Thursday, December 18, online or by calling 334-323-7226. The access code for the replay is 40954 and the pass code is 86362.

About Dollar General

Dollar General is a Fortune 500® discount retailer with 6,709 neighborhood stores in 27 states as of November 28, 2003. Dollar General stores offer convenience and value to customers, by providing consumable basics, items that are frequently used and replenished, such as food, snacks, health and beauty aids and cleaning supplies, as well as an appealing selection of basic apparel, housewares and seasonal items at everyday low prices.

Non-GAAP Disclosures

This release includes certain financial information not derived in accordance with generally accepted accounting principles ("GAAP"), including net income, diluted earnings per share, SG&A expenses, operating profit margin, return on assets and return on invested capital, excluding restatement-related items. The Company includes these non-GAAP financial measures in order to indicate more clearly for investors the Company's comparative year-to-year operating results. The Compensation Committee of the Company's Board of Directors may use portions of this information for compensation purposes to ensure that employees are not inappropriately penalized or rewarded as a result of unusual items affecting the Company's financial statements. Management may also use this information to better understand the Company's underlying operating results. In addition, the return on invested capital, included in this release, may be considered a non-GAAP financial measure. Management believes that return on invested capital provides investors with additional useful information for evaluating the efficiency of the Company's capital deployed in its operations. None of this information should be considered a substitute for any measures derived in accordance with GAAP. The Company has included its calculation of return on invested capital and reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures in the accompanying schedules.

Forward-looking Information

This press release may contain forward-looking information, such as information regarding gross margin rate expectations. The words "believe," "anticipate," "project," "plan," "expect," "estimate," "objective," "forecast," "goal," "intend," "will likely result," or "will continue" and similar expressions generally identify forward-looking statements. 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 by, or implied 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; the Company's ability to comply with the terms of the Company's credit facilities (or obtain waivers for non-compliance); transportation and distribution delays or interruptions; the impact on transportation costs from the "driver hours of service" regulations adopted by the Federal Motor Carriers Safety Administration, which are scheduled to become effective on January 4, 2004; the Company's ability to negotiate effectively the cost and purchase of merchandise; inventory risks due to shifts in market demand; changes in product mix; interruptions in suppliers' businesses; costs and potential problems and interruptions associated with implementation of new or upgraded systems and technology; 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; seasonality of the Company's business; delays associated with building, opening and operating new stores; delays associated with building, opening, expanding and converting new or existing distribution centers; the impact of the SEC inquiry related to the restatement of certain of the Company's financial statements; and other risk factors discussed in our SEC filings, including in our most recent Annual Report on Form 10-K.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Except as may be required by law, the Company disclaims any 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. Readers are advised, however, to consult any further disclosures the Company may make on related subjects in its public disclosures or documents filed with the SEC.


                 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                         Consolidated Balance Sheets
                                (In thousands)

                                  October 31,    November 1,    January 31,
                                     2003            2002          2003
                                  (Unaudited)    (Unaudited)
    ASSETS
    Current assets:
     Cash and cash equivalents      $138,470        $ 37,101      $121,318
     Merchandise inventories       1,373,200       1,249,120     1,123,031
     Deferred income taxes            21,729          43,095        33,860
     Other current assets             65,301          61,077        45,699
      Total current assets         1,598,700       1,390,393     1,323,908

    Property and equipment,
     at cost                       1,667,438       1,581,427     1,577,823
     Less accumulated depreciation
      and amortization               687,951         581,162       584,001

      Net property and equipment     979,487       1,000,265       993,822

    Other assets, net                 11,007          20,506        15,423

      Total assets                $2,589,194      $2,411,164    $2,333,153

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
     Current portion of long-term
      obligations                    $17,295        $ 15,834       $16,209
     Accounts payable                440,505         410,426       341,303
     Accrued expenses and other      287,724         247,015       239,898
     Income taxes payable             14,553              --        67,091

      Total current liabilities      760,077         673,275       664,501

    Long-term obligations            268,357         502,498       330,337
    Deferred income taxes             59,100          45,040        50,247
      Total liabilities            1,087,534       1,220,813     1,045,085

    Shareholders' equity:
     Preferred stock                      --              --            --
     Common stock                    168,415         166,691       166,670
     Additional paid-in capital      363,767         313,023       313,269
     Retained earnings               975,255         714,800       812,220
     Accumulated other
      comprehensive loss              (1,206)         (1,382)       (1,349)
                                   1,506,231       1,193,132     1,290,810
    Less other shareholders' equity    4,571           2,781         2,742

     Total shareholders' equity    1,501,660       1,190,351     1,288,068

     Total liabilities and
      shareholders' equity        $2,589,194      $2,411,164    $2,333,153


                 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Income
                   (In thousands, except per share amounts)
                                 (Unaudited)

                                           13 Weeks Ended
                        October 31,     % of Net   November 1,     % of Net
                            2003          Sales        2002          Sales

    Net sales           $1,685,346        100.00%  $1,497,702        100.00%
    Cost of goods sold   1,168,449         69.33    1,069,119         71.38
    Gross profit           516,897         30.67      428,583         28.62

    Selling, general and
     administrative        385,551         22.88      335,152         22.38
    Insurance proceeds          --            --      (25,041)        (1.67)
    Operating profit       131,346          7.79      118,472          7.91

    Interest expense, net    7,976          0.47       11,537          0.77
    Income before income
     taxes                 123,370          7.32      106,935          7.14

    Provision for taxes on
     income                 45,467          2.70       38,365          2.56
    Net income             $77,903          4.62%     $68,570          4.58%

    Earnings per share:
     Basic                   $0.23                      $0.21

     Diluted                 $0.23                      $0.20

    Weighted average shares:
     Basic                 335,411                    333,227

     Diluted               339,238                    334,970

    Dividends per share     $0.035                     $0.032


                 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Income
                   (In thousands, except per share amounts)
                                 (Unaudited)

                                          39 Weeks Ended
                        October 31,     % of Net   November 1,     % of Net
                            2003           Sales       2002          Sales

    Net sales           $4,905,504        100.00%  $4,340,841        100.00%
    Cost of goods sold   3,463,871         70.61    3,144,539         72.44
    Gross profit         1,441,633         29.39    1,196,302         27.56

    Selling, general
     and administrative  1,105,493         22.54      946,123         21.80
    Insurance proceeds          --            --      (29,541)        (0.68)
    Operating profit       336,140          6.85      279,720          6.44

    Interest expense, net   25,286          0.51       33,306          0.77
    Income before income
     taxes                 310,854          6.34      246,414          5.67

    Provision for taxes
     on income             112,683          2.30       89,554          2.06
    Net income            $198,171          4.04%    $156,860          3.61%

    Earnings per share:
     Basic                   $0.59                      $0.47

     Diluted                 $0.59                      $0.47

    Weighted average shares:
     Basic                 334,175                    332,986

     Diluted               336,892                    335,180

    Dividends per share     $0.105                     $0.096


                 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                                (In thousands)
                                 (Unaudited)

                                                        39 Weeks Ended
                                                   October 31,    November 1,
                                                      2003            2002
    Cash flows from operating activities:
     Net income                                      $198,171       $156,860
     Adjustments to reconcile net income to net
      cash provided by operating activities:
       Depreciation and amortization                  113,114        102,302
       Deferred income taxes                           20,912         68,424
       Tax benefit from stock option exercises         10,780          2,278
       Litigation settlement                               --       (161,800)
       Change in operating assets and liabilities:
         Merchandise inventories                     (250,169)      (118,097)
         Other current assets                         (19,602)        (2,774)
         Accounts payable                              99,202         87,963
         Accrued expenses and other                    49,039         10,105
         Income taxes                                 (52,538)        (3,137)
         Other                                          1,974        (14,124)
          Net cash provided by operating activities   170,883        128,000

    Cash flows from investing activities:
     Purchase of property and equipment               (96,923)      (104,727)
     Purchase of promissory notes                     (49,582)            --
     Proceeds from sale of property and equipment         195            379
        Net cash used in investing activities        (146,310)      (104,348)

    Cash flows from financing activities:
     Net borrowings under revolving credit facilities      --        168,400
     Repayments of long-term obligations              (11,808)      (393,378)
     Payment of cash dividends                        (35,136)       (31,972)
     Proceeds from exercise of stock options           39,660          4,844
     Other financing activities                          (137)         4,030
        Net cash used in financing activities          (7,421)      (248,076)

    Net increase (decrease) in cash
     and cash equivalents                              17,152       (224,424)
    Cash and cash equivalents, beginning of period    121,318        261,525

    Cash and cash equivalents, end of period         $138,470        $37,101

    Supplemental schedule of noncash investing and
     financing activities:
     Purchase of property and equipment under capital
      lease obligations                                  $551         $8,134


                 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                       Selected Additional Information

                       Sales by Category (in thousands)
                                 (Unaudited)

                           13 Weeks Ended             39 Weeks Ended
                  October 31, November 1,  %     October 31, November 1,  %
                      2003       2002    Change      2003       2002    Change
    Highly
     consumable   $1,076,913   $959,873   12.2%  $3,094,797 $2,703,617   14.5%
    Seasonal         237,365    196,213   21.0%     737,952    627,303   17.6%
    Home products    207,570    187,250   10.9%     614,746    566,634    8.5%
    Basic clothing   163,498    154,366    5.9%     458,009    443,287    3.3%
    Total sales   $1,685,346 $1,497,702   12.5%  $4,905,504 $4,340,841   13.0%


                              New Store Activity
                                 (Unaudited)

                                                 39 Weeks Ended
                                        October 31, 2003   November 1, 2002
    Beginning store count                    6,113             5,540
    New store openings                        601                575
    Store closings                             61                 39
    Net new stores                            540                536
    Ending store count                       6,653              6,076
    Total selling square footage (000's)    44,998             41,011


                          Customer Transaction Data
                                 (Unaudited)

                             13 Weeks Ended                39 Weeks Ended
                          October 31,   November 1,   October 31, November 1,
                              2003          2002          2003        2002
    Same-store customer
     transactions            +3.4%         +6.5%         +3.9%       +6.2%
    Average customer
     purchase                $8.38         $8.31         $8.37       $8.33


                 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                    Reconciliation of Non-GAAP Disclosures
                   (In thousands, except per share amounts)
                                 (Unaudited)

                             13 Weeks Ended                39 Weeks Ended
                          October 31,   November 1,   October 31, November 1,
                              2003          2002          2003        2002
    Net Income and
     Earnings Per Share
    Net income in accordance
     with GAAP               $77,903      $68,570      $198,171    $156,860
    Restatement-related
     items in SG&A                 2          783           371       5,406
    Restatement-related
     insurance proceeds           --      (25,041)           --     (29,541)
    Total restatement-related
     items                         2      (24,258)          371     (24,135)
    Tax effect                   (13)       8,924          (146)      8,879
    Total restatement-related
     items, net of tax           (11)     (15,334)          225     (15,256)
    Net income, excluding
     restatement-related
     items                   $77,892      $53,236      $198,396    $141,604

    Weighted average diluted
     shares outstanding      339,238      334,970       336,892     335,180
    Diluted earnings per
     share, excluding
     restatement-related items $0.23        $0.16         $0.59       $0.42

    Selling, General and
     Administrative Expenses
    SG&A in accordance with
     GAAP                   $385,551     $335,152    $1,105,493    $946,123
    Less restatement-related
     items                         2          783           371       5,406
    SG&A, excluding
     restatement-related
     items                  $385,549     $334,369    $1,105,122    $940,717

    SG&A, excluding
     restatement-related
     items,% to sales           22.9%        22.3%         22.5%       21.7%


    Operating Profit Margin
    Operating profit in
     accordance with GAAP   $131,346     $118,472      $336,140    $279,720
    Restatement-related items      2      (24,258)          371     (24,135)
    Operating profit,
     excluding
     restatement-related
     items                  $131,348      $94,214      $336,511    $255,585

    Operating profit,
     excluding
     restatement-related
     items, % to sales           7.8%         6.3%          6.9%        5.9%


                 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                             Non-GAAP Disclosures
                 Return on Invested Capital  (Unaudited) (a)

    ($ in thousands, except per share amounts)

                                   52 Weeks Ended           52 Weeks Ended
                                  October 31, 2003         November 1, 2002
    Net income:
     39 weeks ended third
      quarter 2003 and 2002                $198,171                 $156,860
     13 weeks ended fourth
      quarter 2002 and 2001                 108,086                   97,443
     52 weeks ended third
      quarter 2003 and 2002                 306,257                  254,303
    Interest expense, net:
     39 weeks ended third
      quarter 2003 and 2002     $25,286                  $33,306
     13 weeks ended fourth
      quarter 2002 and 2001       9,333                   10,752
     52 weeks ended third
      quarter 2003 and 2002      34,619                   44,058
    Interest expense, net of tax             22,131                   28,112
    Rent expense:
     39 weeks ended third
      quarter 2003 and 2002     182,192                  158,444
     13 weeks ended fourth
      quarter 2002 and 2001      57,900                   46,961
     52 weeks ended third
      quarter 2003 and 2002     240,092                  205,405
    Rent expense, net of tax
     (52 weeks)                             153,486                  131,064

    Return, net of tax
     (52 weeks)                            $481,874                 $413,479

    Restatement-related items,
     net of tax:
     39 weeks ended third
      quarter 2003 and 2002         225                  (15,256)
     13 weeks ended fourth
      quarter 2002 and 2001       1,183                    6,526
     52 weeks ended third
      quarter 2003 and 2002       1,408       1,408       (8,730)     (8,730)
    Return, net of tax,
     excluding restatement-related
     items (52 weeks)                      $483,282                 $404,749

    Invested Capital:
     Average long-term
      obligations (b)          $356,499                 $649,108
     Average shareholders'
      equity (c)              1,343,994                1,081,049
     Average rent expense multiplied
      by eight (d)            1,781,988                1,539,496
     Invested capital                    $3,482,481               $3,269,653

    Return on invested capital                13.8%                    12.6%
    Return on invested capital,
     excluding restatement-related items      13.9%                    12.4%


    (a) The Company believes that the most directly comparable ratio
        calculated solely using GAAP measures is the ratio of net income to
        the sum of average long-term obligations, including current portion,
        and average shareholders' equity.  This ratio was 18.0% and 14.7% for
        the 52 weeks ended October 31, 2003, and November 1, 2002,
        respectively.

    (b) Average long-term obligations is equal to the average long-term
        obligations, including current portion, measured at the end of each of
        the last five fiscal quarters.

    (c) Average shareholders' equity is equal to the average shareholders'
        equity measured at the end of each of the last five fiscal quarters.

    (d) Average rent expense is computed using a rolling 2-year period.
        Average rent expense is multiplied by a factor of eight to capitalize
        operating leases in the determination of pretax invested capital.
        This is a conventional methodology utilized by credit rating agencies
        and investment bankers.


                 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                             Non-GAAP Disclosures
                         Return on Assets (Unaudited)

    ($ in thousands, except per share amounts)

                                   52 Weeks Ended           52 Weeks Ended
                                  October 31, 2003         November 1, 2002
    Net income:
     39 weeks ended third
      quarter 2003 and 2002                $198,171                 $156,860
     13 weeks ended fourth
      quarter 2002 and 2001                 108,086                   97,443
     52 weeks ended third
      quarter 2003 and 2002                 306,257                  254,303

    Restatement-related items,
     net of tax:
     39 weeks ended third
      quarter 2003 and 2002        225                   (15,256)
     13 weeks ended fourth
      quarter 2002 and 2001      1,183                     6,526
     52 weeks ended third
      quarter 2003 and 2002      1,408        1,408       (8,730)     (8,730)
    Net Income, excluding
     restatement-related
     items (52 weeks)                      $307,665                 $245,573

    Average Assets (a)                   $2,410,972               $2,457,355

    Return on Assets                          12.7%                    10.3%
    Return on Assets, excluding
     restatement-related items                12.8%                    10.0%

    (a) Average assets is equal to the average total assets measured at the
        end of each of the last five fiscal quarters.
SOURCE  Dollar General Corporation
CONTACT:  Investor - Emma Jo Kauffman, +1-615-855-5525, or Media - Andrea
Turner, +1-615-855-5209, both of Dollar General Corporation


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