About Dollar General Corporation 

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 August 4, 2023, the company’s 19,488 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/


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