-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, b4GHk6Iy6DJa9BJbRAx3Ke31FWKEPMAVJQwesu7bk7RV9vlUfu7eWZmOqIuFqkZI F+jJynta78gKXmWXG1yP/w== 0000029534-94-000021.txt : 19940701 0000029534-94-000021.hdr.sgml : 19940701 ACCESSION NUMBER: 0000029534-94-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940430 FILED AS OF DATE: 19940614 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOLLAR GENERAL CORP CENTRAL INDEX KEY: 0000029534 STANDARD INDUSTRIAL CLASSIFICATION: 5331 IRS NUMBER: 610502302 STATE OF INCORPORATION: KY FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-04769 FILM NUMBER: 94534090 BUSINESS ADDRESS: STREET 1: 104 WOODMONT BLVD STE 500 CITY: NASHVILLE STATE: TN ZIP: 37205 BUSINESS PHONE: 6157832000 FORMER COMPANY: FORMER CONFORMED NAME: TURNER CAL DATE OF NAME CHANGE: 19710401 FORMER COMPANY: FORMER CONFORMED NAME: TURNER J L & SON INC DATE OF NAME CHANGE: 19710401 10-Q 1 FIRST QUARTER 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period April 30, 1994 Commission file number 0-4769 DOLLAR GENERAL CORPORATION (Exact name of registrant as specified in its charter) KENTUCKY 61-0502302 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 104 Woodmont Blvd. Suite 500 Nashville, Tennessee 37205 (Address of principal executive offices, zip code) Registrant's telephone number, including area code: (615) 783-2000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No____. The number of shares of common stock outstanding at May 16, 1994 was 53,014,870. 2 XXXBEGIN PAGE 2 HEREXXX Dollar General Corporation Form 10-Q For the Quarter Ended April 30, 1994 Index Part I. Financial Information Page No. Item 1. Financial Statements (unaudited): Consolidated Statements of Income for the three months ended April 30, 1994 and 1993 3 Consolidated Balance Sheets as of April 30, 1994, January 31, 1994 and April 30, 1993 4 Consolidated Statements of Cash Flows for the three months ended April 30, 1994 and April 30, 1993 5 Notes to Consolidated Financial Statements 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-10 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 11 Signatures 12 3 XXXBEGIN PAGE 3 HEREXXX PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the three months ended April 30, 1994 and 1993 (amounts in thousands except per share amounts) (unaudited) April 30, April 30, 1994 1993 Net Sales $287,086 $221,799 Cost of goods sold 207,106 159,310 ________ ________ Gross profit 79,980 62,489 Selling, general and administrative expense 64,304 52,354 ________ ________ Operating profit 15,676 10,135 Interest expense 392 506 ________ ________ Income before taxes on income 15,284 9,629 Provision for taxes on income 5,770 3,707 ________ ________ Net income 9,514 5,922 ________ ________ Net income per share $ .17 $ .11 ________ ________ Weighted average number of shares outstanding 54,755 53,570 ________ ________ Cash dividends per share As declared $ .05 $ .05 ________ ________ Adjusted to give appropriate retro- active effect to the five-for-four stock splits distributed on April 15, 1994 and September 17, 1993 $ .05 $ .03 ________ ________
The accompanying notes are an integral part of this statement. 4 XXXBEGIN PAGE 4 HEREXXX
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of April 30, 1994, January 31, 1994 and April 30, 1993 (amounts in thousands) ASSETS April 30, January 31, April 30, 1994 1994 1993 (unaudited) (unaudited) Current Assets: Cash and cash equivalents $ 30,282 $ 35,365 $ 17,427 Merchandise inventories 304,242 260,042 276,938 Deferred income taxes 9,893 9,664 8,335 Other current assets 8,465 8,397 7,000 Income Taxes 679 1,563 0 ________ ________ ________ Total current assets 353,561 315,031 309,700 ________ ________ ________ Property & equipment, at cost 132,492 124,827 98,350 Less: Accumulated depreciation 50,935 47,322 39,814 ________ ________ ________ 81,557 77,505 58,536 Other Assets 4,684 4,701 5,770 ________ ________ ________ $439,802 $397,237 $374,006 ________ ________ ________ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 1,303 $ 1,302 $ 1,301 Short-term borrowings 27,000 18,000 25,000 Accounts payable 101,060 81,038 101,347 Accrued expenses 46,547 47,906 36,799 Income taxes 0 0 6,249 ________ ________ ________ Total current liabilities 175,910 148,246 170,696 Long-term debt 4,801 5,711 6,104 Deferred income taxes 2,563 2,563 2,606 Shareholders' equity: Common stock 27,248 27,248 17,820 Additional paid-in capital 73,861 65,857 57,684 Retained earnings 158,031 151,165 123,833 ________ ________ ________ 259,140 244,270 199,337 Less treasury stock 2,612 3,553 4,737 ________ ________ ________ 256,528 240,717 194,600 ________ ________ ________ $439,802 $397,237 $374,006 ________ ________ ________
The accompanying notes are an integral part of this statement. 5 XXXBEGIN PAGE 5 HEREXXX
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS for the three months ended April 30, 1994 and 1993 (amounts in thousands) (unaudited) April 30, April 30, 1994 1993 Cash flows from operating activities: Net income $ 9,514 $ 5,922 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,684 2,496 Deferred income taxes ( 229) ( 700) Change in operating assets and liabilities: Merchandise inventories ( 44,200) (60,095) Accounts payable, trade 20,022 37,322 Accrued expenses ( 1,359) ( 871) Income taxes 884 2,234 Other 138 ( 1,930) _________ ________ Net cash provided (used) by operating activities ( 11,546) (15,622) _________ ________ Cash flows used in investing activities: Purchase of property & equipment ( 7,922) ( 5,002) _________ ________ Cash flows provided by financing activities: Issuance of short-term borrowings 17,000 30,000 Repayments of short-term borrowings ( 8,000) (15,000) Repayments of long-term debt ( 909) ( 908) Payments of cash dividend ( 2,648) ( 1,664) Proceeds from exercise of stock options 4,780 550 Tax benefits from exercise of stock options 4,162 590 Other 0 ( 563) _________ ________ Net cash provided by financing activities 14,385 13,005 _________ ________ Net increase (decrease) in cash and equivalents ( 5,083) ( 7,619) Cash and cash equivalents at beginning of year 35,365 25,046 _________ ________ Cash and cash equivalents at end of period $ 30,282 $ 17,427 _________ ________
The accompanying notes are an integral part of this statement. 6 XXXBEGIN PAGE 6 HEREXXX NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The accompanying financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by generally accepted accounting principles or those normally made in the Company's Annual Report on Form 10-K. Accordingly, the reader of the Form 10-Q may wish to refer to the Company's Form 10-K for the year ended January 31, 1994 for additional information. The accompanying financial statements have been prepared in accordance with the Company's customary accounting practices and have not been audited. All subsidiaries are included. In management's opinion, all adjustments (all of which are normal recurring accruals) necessary for a fair presentation of the results of operations for the three month periods ended April 30, 1994 and 1993, respectively have been made. Because of the seasonal nature of the Company's business, the results for interim periods are not necessarily indicative of the results to be expected for the year. 2. Net Income Per Common Share Net income per common share is based upon the actual weighted average number of common shares outstanding during each period plus the assumed exercise of dilutive stock options as follows:
Three Months Ended April 30 Shares (000's) 1994 1993 Actual weighted average number of shares outstanding during the period 52,612 50,747 Equivalent number of shares representing the dilutive effect of stock options using the "treasury stock method" 2,143 2,823 ______ ______ Weighted Average Shares 54,755 53,570 ______ ______
7 XXXBEGIN PAGE 7 HEREXXX 3. Changes in shareholder's equity for the three months ended April 30, 1994 and 1993 were as follows (dollars in thousands except per share amounts):
Additional Retained Treasury Common Stock Paid-In Capital Earnings Stock 8 XXXBEGIN PAGE 8 HEREXXX ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The nature of the Company's business is highly seasonal. Historically, sales in the fourth quarter have been substantially higher than sales achieved in each of the first three quarters of the fiscal year. Thus, expenses, and to a greater extent operating income, vary greatly by quarter. Caution, therefore, is advised when evaluating results of a period shorter than a full year or when comparing any period other than to the same period of the previous year. NET SALES. Net sales for the first three months of fiscal 1995 increased $65.3 million, or 29.4%, to $287.1 million from $221.8 million for the comparable period of fiscal 1994. The increase resulted from 199 net additional stores being open during the first nine months of fiscal 1995 as compared to the same prior year period and an increased of 15.8% in same store sales. The Company regards same stores as those opened prior to the beginning of the previous fiscal year which have remained open throughout the previous fiscal year and the period reported. Management believes that the same store sales increase is a continued reflection of the success of its everyday low price strategy and merchandise selection and generally improved economic conditions. GROSS PROFIT. Gross profit for the first three months of fiscal 1995 was $80.0 million, or 27.9% of net sales, compared to $62.4 million, or 28.2% of net sales, for the comparable period in the prior fiscal year. The decline resulted from greater merchandise markdowns and lower purchase discounts, which were partially offset by a smaller LIFO charge. The estimate of shrink was virtually unchanged from the prior year and the LIFO charge was 0.15% of net sales compared to 0.64% a year ago. Cost of goods sold is determined in the first, second and third quarters utilizing estimates of inventory shrinkage, inflation and markdowns. Adjustments of these estimates based upon actual results are included in cost of goods sold in the fourth quarter. 9 XXXBEGIN PAGE 9 HEREXXX SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and administrative expense for the current quarter equaled $64.3 million, or 22.4% of sales versus $52.4 million or 23.6% of sales in the same period last year. This decrease was principally due to the 15.8% increase in same store sales exceeding the 14.9% increase in same store expenses. Advertising expense was also lower due to a change in advertising mix from utilizing print and broadcast media last fiscal year to employing almost solely printed advertising this fiscal year. INTEREST EXPENSE. Interest expense decreased 22.5% to $392 thousand for the first three months of fiscal 1995 from $506 thousand for the comparable prior year period. The decrease resulted from lower interest rates, which more than offset higher average borrowings. LIQUIDITY AND CAPITAL RESOURCES Cash flows from operating activities. Cash flows used in operating activities totaled $11.5 million during the first quarter of fiscal 1995 compared to $15.6 million in first quarter of fiscal 1994. This decrease in use of cash resulted from higher income and depreciation offset partially by increase in inventories of $44.2 million ($60.1 million in the prior year period). Trade payables increased by $20.0 million as compared to an increase of $37.3 million in first quarter 1994. This smaller relative increase in trade payables is due principally to a greater proportion of merchandise purchases being imported and financed by letters of credit rather than by trade credit. Cash flows from investing activities. Cash used for capital expenditures during the first quarter related to increase in stores in fiscal year 1995 was $7.9 million as compared to $5.0 million in the comparable period in 1994. The current year expenditures are primarily referable to opening, remodeling and relocating stores; providing new fixtures to stores; and costs associated with the construction of the new Ardmore, Oklahoma distribution center. Cash flows from financing activities. The Company's short-term borrowings during the first quarter of fiscal 1995 increased $9.0 million to $27.0 million compared to an increase of $15.0 million to $25.0 million during the same period of the prior fiscal year. The increased short-term borrowings were due to the cash used in operating activities discussed above. The Company's long-term obligations during the first quarter of fiscal 1995 decreased $0.9 million to $4.8 million compared to a decrease of $0.9 million to $6.1 million during the first quarter of fiscal 1994. 10 XXXBEGIN PAGE 10 HEREXXX Because the Company emphasizes seasonal events, such as Christmas and back-to-school, its working capital requirements vary significantly during the year. Bank credit facilities equaled $100.0 million at April 30, 1994 ($65 million revolving credit/term loan facility plus $35.0 million seasonal line of credit). The Company had no seasonal line of credit borrowings as of April 30, 1994 or 1993. The Company believes it can continue to meet its seasonal working capital and capital expenditure requirements through cash flows provided by operating activities supplemented by the revolving credit term loan facility and credit lines currently in place. The Company's liquidity position is set forth in the following table (dollar amounts in thousands):
April 30, January 31, April 30, 1994 1994 1993 Current ratio 2.0x 2.1x 1.8x Total debt/equity 12.9% 10.4% 16.7% Long-term debt/equity 1.9% 2.4% 3.1% Working capital $177,651 $166,785 $139,004 Average daily use of debt: (fiscal year to date) Short-term 28,876 34,102 19,562 Long-term 6,488 7,335 7,788 ________ ________ ________ Total 35,364 41,437 27,750 ________ ________ ________ Maximum outstanding short-term debt (fiscal year-to-date) $ 35,000 $ 70,909 $ 40,000
11 XXXBEGIN PAGE 11 HEREXXX PART II - OTHER INFORMATION Item 6. Exhibits and reports on Form 8-K (b) No reports on Form 8-K have been filed during the quarter ended April 30, 1994. 12 XXXBEGIN PAGE 12 HEREXXX SIGNATURES Pursuant to the requirements of the Securities Exchange act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DOLLAR GENERAL CORPORATION (Registrant) Date: May 14, 1994 By:/S/ C. Kent Garner C.Kent Garner, Vice President, Treasurer and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----