Dollar General Corporation (NYSE: DG) is proud to serve as America’s neighborhood general store. Founded in 1939, Dollar General lives its mission of Serving Others every day by providing access to affordable products and services for its customers, career opportunities for its employees, and literacy and education support for its hometown communities. As of March 3, 2023, the company’s 19,147 Dollar General, DG Market, DGX and pOpshelf stores across the United States and Mi Súper Dollar General stores in Mexico provide everyday essentials including food, health and wellness products, cleaning and laundry supplies, self-care and beauty items, and seasonal décor from our high-quality private brands alongside many of the world’s most trusted brands such as Coca Cola, PepsiCo/Frito-Lay, General Mills, Hershey, J.M. Smucker, Kraft, Mars, Nestlé, Procter & Gamble and Unilever. Learn more at DollarGeneral.com.
Dollar General Reports Earnings for the Third Quarter of 2002
December 26, 2002
GOODLETTSVILLE, Tenn., Nov. 26 /PRNewswire-FirstCall/ -- Dollar General Corporation (NYSE: DG) today reported net income for the third quarter of fiscal 2002 of $68.6 million, or $0.20 per diluted share, an increase of 46.7 percent compared to net income of $46.7 million, or $0.14 per diluted share, in the third quarter of fiscal 2001. In the third quarter of 2002, the Company recorded approximately $24.3 million of net restatement-related pre- tax income, primarily from insurance proceeds. In the third quarter of 2001, the Company incurred restatement-related expenses of $9.3 million. Excluding the restatement-related items from both years, net income during the current year third quarter was $53.2 million, or $0.16 per diluted share, compared to net income of $52.5 million, or $0.16 per diluted share, in the comparable prior year quarter.
Net sales during the third quarter increased 14.4 percent to $1.50 billion compared to $1.31 billion in the third quarter of 2001. The increase resulted primarily from 591 net new stores and a same-store sales increase of 5.2 percent. Gross profit during the quarter was $428.6 million, or 28.6 percent of sales versus $381.2 million, or 29.1 percent of sales during the comparable period in the prior year. Excluding the restatement-related items noted above, selling, general and administrative expenses for the quarter were $334.4 million, or 22.3 percent of sales, in the current year, versus $285.8 million, or 21.8 percent of sales, in the prior year.
Net income for the 39-week year-to-date period was $156.9 million in fiscal 2002, or $0.47 per diluted share, compared to $110.1 million, or $0.33 per diluted share, as of the third quarter of fiscal 2001. Excluding net restatement-related items from both years, year-to-date net income increased 16.5 percent to $141.6 million, or $0.42 per diluted share, in fiscal 2002 compared to net income of $121.5 million, or $0.36 per diluted share, in the comparable prior year period. Year-to-date net sales increased 16.2 percent, including a same-store sales increase of 7.2 percent.
"We have made progress in implementing our operational initiatives to improve store level execution and customer service," said Don Shaffer, Acting CEO, President and COO. "We are particularly pleased with the success of our inventory management initiatives resulting in improved inventory turns to 3.4 times compared to 3.1 times a year ago. These initiatives have also had a significant impact on our improved operating cash flows. However, in the quarter we were unable to achieve the desired leverage on operating expenses and our physical inventory results continue to be unacceptable. Despite the somewhat disappointing results of the third quarter, we are still hopeful that we can achieve the low end of our net income guidance for the year, which was an increase in net income excluding restatement-related items of 13 to 15 percent. To do so, we must have a strong profit performance in December. Given the uncertain retail environment, that strong performance is not assured."
As of November 23, Dollar General had completed its fiscal 2002 store openings with a total of 620 new stores. The Company plans to open 650 stores in fiscal 2003. As of November 1, 2002, Dollar General operated 6,076 neighborhood stores in 27 states with distribution centers in Florida, Kentucky, Mississippi, Missouri, Ohio, Oklahoma and Virginia.
Dollar General will host a conference call today at 5 p.m. EST to discuss the quarter's results. The passcode for the conference call is "Dollar General." If you wish to participate, please call (484) 630-6177 at least 10 minutes before the conference call is scheduled to begin. The call will also be broadcast live online at www.dollargeneral.com. A replay of the call will be available online or by dialing 402-998-1172 until midnight EST Friday, December 6.
This press release contains forward-looking information, including but not limited to information regarding annual earnings guidance. 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. A number of factors may result in actual results differing from such forward-looking information including, but 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, including, but not limited to, the impact of the recent management lockout of the west coast dockworkers and any ongoing work slowdown on the economy and on the Company's ability to receive inventory; 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; delays associated with building, opening and operating new stores; and the impact of the SEC inquiry related to the restatement of certain of the Company's financial statements.
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 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.
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Selected Additional Information
Sales by Category (in thousands)
(Unaudited)
Quarter Ended 39 Weeks Ended
November 1, November 2, % November 1, November 2, %
Change Change
2002 2001 2002 2001
Highly
consumable $959,873 $796,271 21 % $2,703,617 $2,255,342 20 %
Hardware and
seasonal 196,213 185,028 6 % 627,303 538,913 16 %
Basic clothing 154,366 148,617 4 % 443,287 410,448 8 %
Home products 187,250 179,209 5 % 566,634 532,180 7 %
Total sales $1,497,702 $1,309,125 14 % $4,340,841 $3,736,883 16 %
New Store Activity for the 39 Weeks Ended
(Unaudited)
39 Weeks Ended 39 Weeks Ended
November 1, 2002 November 2, 2001
Beginning store count 5,540 5,000
New store openings 575 523
Store closings 39 38
Net new stores 536 485
Ending store count 6,076 5,485
Total selling square footage
(000's) 41,011 37,136
Customer Transaction Data
(Unaudited)
Quarter Ended 39 Weeks Ended
November 1, November 2, November 1, November 2,
2002 2001 2002 2001
Same-store customer
transactions 6.5 % 7.0 % 6.2 % 5.5 %
Average customer
transaction $8.31 $8.35 $8.33 $8.25
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
November 1, February 1, November 2,
2002 2002 2001
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $37,101 $261,525 $74,819
Merchandise inventories 1,249,120 1,131,023 1,133,215
Deferred income taxes 43,095 105,091 90,307
Other current assets 61,077 58,408 48,600
Total current assets 1,390,393 1,556,047 1,346,941
Property and equipment, at cost 1,581,427 1,473,693 1,454,268
Less accumulated depreciation and
amortization 581,162 484,778 456,478
Net property and equipment 1,000,265 988,915 997,790
Merchandise inventories -- -- 116,000
Other assets 20,506 7,423 8,535
Total assets $2,411,164 $2,552,385 $2,469,266
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $15,834 $395,675 $391,089
Accounts payable 410,426 322,463 381,843
Accrued expenses and other 246,815 253,413 223,508
Income Taxes -- -- 10,492
Litigation settlement payable 200 162,000 162,000
Total current liabilities 673,275 1,133,551 1,168,932
Long-term obligations 502,498 339,470 347,174
Deferred income taxes 45,040 37,646 --
Shareholders' equity:
Preferred stock -- -- --
Common stock 166,691 166,359 166,302
Additional paid-in capital 313,023 301,848 300,622
Retained earnings 714,800 579,265 492,473
Accumulated other comprehensive loss (1,382) (3,228) (3,552)
1,193,132 1,044,244 955,845
Less other shareholders' equity 2,781 2,526 2,685
Total shareholders' equity 1,190,351 1,041,718 953,160
Total liabilities and shareholders'
equity $2,411,164 $2,552,385 $2,469,266
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
(Amounts in thousands except per share amounts)
13 Weeks Ended
November 1, % of November 2, % of
2002 Net Sales 2001 Net Sales
Net sales $1,497,702 100.0 % $1,309,125 100.0 %
Cost of goods sold 1,069,119 71.4 927,944 70.9
Gross profit 428,583 28.6 381,181 29.1
Selling, general and
administrative expenses 335,152 22.4 295,103 22.5
Litigation settlement and
related proceeds (25,041) (1.7) -- --
Operating profit 118,472 7.9 86,078 6.6
Interest expense, net 11,537 0.8 11,480 0.9
Income before income taxes 106,935 7.1 74,598 5.7
Provision for income taxes 38,365 2.6 27,861 2.1
Net income $68,570 4.6 % $46,737 3.6 %
Earnings per share:
Basic $0.21 $0.14
Diluted $0.20 $0.14
Weighted average shares:
Basic 333,227 332,491
Diluted 334,970 334,857
Dividends per share $.032 $.032
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
(Amounts in thousands except per share amounts)
39 Weeks Ended
November 1, % of Net November 2, % of Net
2002 Sales 2001 Sales
Net sales $4,340,841 100.0 % $3,736,883 100.0 %
Cost of goods sold 3,144,539 72.4 2,702,994 72.3
Gross profit 1,196,302 27.6 1,033,889 27.7
Selling, general and
administrative expense 946,123 21.8 823,162 22.0
Litigation settlement
and related proceeds (29,541) (0.7) -- --
Operating profit 279,720 6.4 210,727 5.7
Interest expense, net 33,306 0.8 35,037 1.0
Income before income
taxes 246,414 5.7 175,690 4.7
Provision for taxes on
income 89,554 2.1 65,620 1.8
Net income $ 156,860 3.6 % $ 110,070 2.9 %
Earnings per share:
Basic $ 0.47 $ 0.33
Diluted $ 0.47 $ 0.33
Weighted average shares:
Basic 332,986 332,136
Diluted 335,180 335,148
Dividends per share $ .096 $ .096
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
39 Weeks Ended
November 1, November 2,
2002 2001
Cash flows from operating activities:
Net income $ 156,860 $ 110,070
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 102,302 92,104
Deferred income taxes 68,424 (5,795)
Tax benefit from stock option exercises 2,278 5,243
Litigation settlement (161,800) --
Change in operating assets and liabilities:
Merchandise inventories (118,097) (236,980)
Other current assets (2,774) (3,732)
Accounts payable 87,963 84,581
Accrued expenses and other 6,968 (1,195)
Other (14,124) (2,549)
Net cash provided by operating activities 128,000 41,747
Cash flows from investing activities:
Purchase of property and equipment (104,727) (100,184)
Proceeds from sale of property and equipment 379 230
Net cash used in investing activities (104,348) (99,954)
Cash flows from financing activities:
Net borrowings under revolving credit facilities 168,400 --
Repayments of long-term obligations (393,378) (8,925)
Payments of cash dividends (31,972) (31,910)
Proceeds from exercise of stock options 4,844 11,557
Other financing activities 4,030 (6)
Net cash used in financing activities (248,076) (29,284)
Net decrease in cash and cash equivalents (224,424) (87,491)
Cash and cash equivalents, beginning of period 261,525 162,310
Cash and cash equivalents, end of period $ 37,101 $ 74,819
Supplemental schedule of noncash investing and
financing activities - Purchase of property
and equipment under capital lease obligations $ 8,134 $ 17,393
SOURCE Dollar General Corporation
/CONTACT: investors, Emma Jo Kauffman, +1-615-855-5525, or media, Andrea Ewin Turner, +1-615-855-5209, both of Dollar General Corporation/