8-K 1 form8k-46638_82902.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------------------------ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 28, 2002 Dollar General Corporation ------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Tennessee 001-11421 61-0502302 -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation) Identification No.) 100 Mission Ridge Goodlettsville, Tennessee 37072 -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (615) 855-4000 ------------- (Former name or former address, if changed since last report) ITEM 9. REGULATION FD DISCLOSURE On August 28, 2002, Dollar General Corporation (the "Company") issued a news release with respect to its earnings for the second quarter of fiscal year 2002, ending August 2, 2002. The Company is filing this 8-K pursuant to the Securities and Exchange Commission's Regulation FD. A copy of the news release is attached hereto and is incorporated by reference as Exhibit 99.1. 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) August 28, 2002 By: /s/ Susan S. Lanigan --------------------------------- Susan S. Lanigan Vice President, General Counsel and Corporate Secretary Exhibit Index ------------- Exhibit No. Item 99.1 News release of August 28, 2002 Exhibit 99.1 Investor Contact: Media Contact: Emma Jo Kauffman Andrea Turner 615-855-5525 615-855-5209 DOLLAR GENERAL REPORTS INCREASED SALES AND EARNINGS FOR THE SECOND QUARTER OF 2002 GOODLETTSVILLE, Tennessee - August 28, 2002 - 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 ----------------------------------------------------------------------------- August 2, 2002 % of August 3, 2001 % of Net Sales 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 .............. 313,667 21.6 276,069 22.5 expenses 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 ------------------------------------------------------------------------------- August 2, 2002 % of Net Sales August 3, 2001 % of 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 net cash 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 ============ ============
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