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 Increased Sales and Earnings For The Second Quarter of 2002

August 28, 2002

GOODLETTSVILLE, Tenn., Aug. 28 /PRNewswire-FirstCall/ -- Dollar General Corporation (NYSE: DG) today reported net income for the second quarter of fiscal 2002 of $42.4 million, or $0.13 per diluted share, an increase of 56.3 percent compared to $27.1 million, or $0.08 per diluted share, in the second quarter of fiscal 2001. In the second quarter of 2002, the Company recorded approximately $5.2 million of restatement-related pre-tax income, primarily from insurance proceeds. In the second quarter of 2001, the Company incurred restatement-related expenses of $8.7 million. Excluding the restatement-related items from both years, net income during the current year second quarter increased 20.0 percent to $39.1 million, or $0.12 per diluted share, compared to net income of $32.6 million, or $0.10 per diluted share, in the comparable prior year quarter.

Net sales during the second quarter increased 18.6 percent to $1.45 billion compared to $1.23 billion in the second quarter of 2001. The increase resulted primarily from 563 net new stores and a same-store sales increase of 9.6 percent. Gross profit during the quarter was $387.4 million, or 26.7 percent of sales versus $331.3 million, or 27.0 percent of sales during the comparable period in the prior year. Excluding the restatement- related items noted above, S,G&A expenses for the quarter were $314.4 million, or 21.6 percent of sales, in the current year, versus $267.4 million, or 21.8 percent of sales, in the prior year.

Net income for the 26-week year-to-date period was $88.3 million in fiscal 2002, or $0.26 per diluted share, compared to $63.3 million, or $0.19 per diluted share, in the second quarter of fiscal 2001. Excluding net restatement-related items from both years, year-to-date net income increased 28.1 percent to $88.4 million, or $0.26 per diluted share, in fiscal 2002 compared to net income of $69.0 million, or $0.21 per diluted share, in the comparable prior year period. Year-to-date net sales increased 17.1 percent, including a same-store sales increase of 8.1 percent.

"Dollar General's strong same-store sales clearly reflect our management team's progress in improved store readiness for our customers," said Cal Turner, Chairman and CEO. "Of special pride to me is our improvement in inventory management and cash flow."

In July and August of 2002, Mr. Turner made voluntary payments to the Company totaling approximately $6.8 million in cash. Of such amount, approximately $6.0 million represented the value on April 10, 2002, of stock Mr. Turner acquired on April 7, 1999 and April 20, 2000 upon the exercise of stock options (net of the strike price of such options), which stock Mr. Turner continues to own, and approximately $800,000 represented the value of performance-based bonuses received by Mr. Turner in April 1999 and April 2000. Mr. Turner voluntarily paid such amounts to the Company because the options vested and the performance bonuses were paid based on performance measures that were attained under the Company's originally reported financial results for the period covered by the Company's restatement. Those measures would not have been attained under the restated results. Mr. Turner said, "I am making these payments voluntarily with the complete conviction that it is the right thing to do."

In addition, Cal Turner, Chairman and CEO, and Jim Hagan, Executive Vice President and CFO, have today signed and submitted to the U.S. Securities and Exchange Commission ("SEC") sworn certifications with regard to the Company's fiscal 2001 annual report, subsequent proxy materials, reports on form 8-K, and the Company's fiscal 2002 first and second quarter reports filed with the SEC.

As of August 2, 2002, Dollar General operated 5,891 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; the Company's ability to comply with the terms of the Company's credit facilities (or obtain waivers for non-compliance); 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 SEC inquiry related to the restatement 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 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.

                 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                       Selected Additional Information

                       Sales by Category (in thousands)
                                 (Unaudited)

                            Quarter Ended                26 Weeks Ended
                  August 2,   August 3,  %       August 2,   August 3,    %
                   2002        2001    Change      2002         2001    Change

    Highly
     consumable $ 892,507  $ 737,778   21.0%  $ 1,743,744  $ 1,459,070  19.5%
    Hardware and
     seasonal     226,328    185,082   22.3%      431,091      353,885  21.8%
    Basic
     clothing     146,620    131,200   11.8%      288,921      261,832  10.3%
    Home products 188,272    171,194   10.0%      379,383      352,971   7.5%

Total

       sales   $1,453,727 $1,225,254   18.6%   $2,843,139   $2,427,758  17.1%



                  New Store Activity for the 26 Weeks Ended
                                 (Unaudited)

                                             26 Weeks Ended     26 Weeks Ended
                                             August 2, 2002     August 3, 2001
    Beginning store count                          5,540              5,000
    New store openings                               372                354
    Store closings                                    21                 26
    Net new stores                                   351                328
    Ending store count                             5,891              5,328
    Total selling square footage                  39,760             36,032



                          Customer Transaction Data
                                 (Unaudited)

                                     Quarter Ended         26 Weeks Ended
                                 August 2,  August 3,   August 2,    August 3,
                                  2002       2001         2002          2001
    Same-store customer
     transactions                 7.6%       4.5%         6.5%          4.8%
    Average customer
     transaction                $8.33      $8.17        $8.33         $8.19




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

                                                August 2, 2002   February 1,
                                                  (Unaudited)        2002
    ASSETS
    Current assets:
     Cash and cash equivalents                  $     39,517   $    261,525
     Merchandise inventories                       1,058,200      1,131,023
     Deferred income taxes                            25,552        105,091
     Income taxes receivable                          55,573          6,820
     Other current assets                             65,263         51,588

       Total current assets                        1,244,105      1,556,047

     Property and equipment, at cost               1,547,346      1,473,693
     Less accumulated depreciation and amortization  548,073        484,778

       Net property and equipment                    999,273        988,915

    Other assets                                      21,851          7,423

       Total assets                             $  2,265,229   $  2,552,385

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
     Current portion of long-term obligations   $     15,132   $    395,675
     Accounts payable                                346,786        322,463
     Accrued expenses and other                      219,220        253,413
     Litigation settlement payable                        --        162,000

       Total current liabilities                     581,138      1,133,551

     Long-term obligations                           506,707        339,470
     Deferred income taxes                            46,030         37,646

    Shareholders' equity:
     Preferred stock                                      --             --
     Common stock                                    166,670        166,359
     Additional paid-in capital                      312,589        301,848
     Retained earnings                               656,894        579,265
     Accumulated other comprehensive loss             (2,012)        (3,228)
                                                   1,134,141      1,044,244
    Less other shareholders' equity                    2,787          2,526
       Total shareholders' equity                  1,131,354      1,041,718

       Total liabilities and shareholders'
        equity                                  $  2,265,229   $  2,552,385



                 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
           Condensed Consolidated Statements of Income (Unaudited)
               (Amounts in thousands except per share amounts)

                                            13 Weeks Ended
                                            % of                      % of

                      August 2, 2002    Net Sales August 3, 2001   Net Sales

    Net sales          $ 1,453,727        100.0%  $ 1,225,254        100.0%
    Cost of goods sold   1,066,300          73.3      893,971          73.0

      Gross profit         387,427          26.7      331,283          27.0
    Selling, general and
     administrative
     expenses              313,667          21.6      276,069          22.5
    Insurance proceeds      (4,500)         (0.3)          --            --

      Operating profit      78,260           5.4       55,214           4.5
    Interest expense        11,337           0.8       11,957           1.0

      Income before income
       taxes                66,923           4.6       43,257           3.5
    Provision for income
     taxes                  24,561           1.7       16,157           1.3

      Net income       $    42,362           2.9%  $   27,100           2.2%

    Earnings per share:
      Basic            $      0.13                 $     0.08

      Diluted          $      0.13                 $     0.08

    Weighted average shares:
      Basic                333,067                    332,330

      Diluted              335,737                    335,402

    Dividends per
     share             $      .032                 $     .032



                 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
           Condensed Consolidated Statements of Income (Unaudited)
               (Amounts in thousands except per share amounts)



                                           26 Weeks Ended

                                            % of                       % of
                     August 2, 2002     Net Sales  August 3, 2001   Net Sales
    Net sales          $ 2,843,139        100.0%  $ 2,427,758        100.0%
    Cost of goods sold   2,075,420          73.0    1,775,050          73.1

      Gross profit         767,719          27.0      652,708          26.9
    Selling, general and
     administrative
     expense               610,971          21.5      528,059          21.8
    Insurance proceeds      (4,500)         (0.2)          --            --
      Operating profit     161,248           5.7      124,649           5.1

    Interest expense        21,769           0.8       23,557           0.9

      Income before income
       taxes               139,479           4.9      101,092           4.2
    Provision for taxes on
     income                 51,189           1.8       37,759           1.6

      Net income        $   88,290           3.1%  $   63,333          2.6%

    Earnings per share:
      Basic             $     0.27                 $     0.19

      Diluted           $     0.26                 $     0.19

    Weighted average shares:
      Basic                332,866                    331,959

      Diluted              335,286                    335,293

    Dividends per
     share              $     .064                 $     .064



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

                                                        26 Weeks Ended
                                              August 2, 2002   August 3, 2001
    Cash flows from operating activities:
     Net income                                   $  88,290       $  63,333
     Adjustments to reconcile net income to
      netcash provided by operating
      activities:
       Depreciation and amortization                 66,019          60,980
       Deferred income taxes                         87,296          (7,135)
       Tax benefit from stock option exercises        2,120           4,656
       Litigation settlement                       (162,000)             --
       Change in operating assets and liabilities:
        Merchandise inventories                      72,823         (84,621)
        Other current assets                        (13,675)          2,269
        Accounts payable                             24,323          (2,478)
        Accrued expenses and other                  (11,206)            (59)
        Income taxes                                (59,464)        (21,995)
        Other                                       (13,914)         (5,131)

       Net cash provided by operating activities     80,612           9,819

    Cash flows from investing activities:
     Purchase of property and equipment             (70,445)        (73,942)
     Proceeds from sale of property and equipment       127             144

       Net cash used in investing activities        (70,318)        (73,798)

    Cash flows from financing activities:
     Net borrowings under revolving credit
      facilities                                    170,000              --
     Repayments of long-term obligations           (389,561)         (6,023)
     Payments of cash dividends                     (21,307)        (21,268)
     Proceeds from exercise of stock options          4,509          10,623
     Other financing activities                       4,057             (33)

       Net cash used in financing activities       (232,302)        (16,701)

    Net decrease in cash and cash equivalents      (222,008)        (80,680)
    Cash and cash equivalents, beginning of period  261,525         162,310

    Cash and cash equivalents, end of period     $   39,517      $   81,630

    Supplemental schedule of noncash investing
     and financing activities -
    Purchase of property and equipment
     under capital lease obligations             $    6,233      $   17,393


SOURCE Dollar General Corporation

-0- 08/28/2002

/CONTACT: investors, Emma Jo Kauffman, +1-615-855-5525, or media, Andrea Turner, +1-615-855-5209, both of Dollar General Corporation/


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