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/