-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JJmukGZ8xh9ltU2b54Kt+jBEGnL3wHnyIzTT2G5OFizwTw7IyzeUwWCgbTttcuRq h1hKSxpnXwW4X1cjCvyXOg== 0001157523-04-005251.txt : 20040527 0001157523-04-005251.hdr.sgml : 20040527 20040527083609 ACCESSION NUMBER: 0001157523-04-005251 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040527 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040527 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOLLAR GENERAL CORP CENTRAL INDEX KEY: 0000029534 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 610502302 STATE OF INCORPORATION: TN FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11421 FILM NUMBER: 04833629 BUSINESS ADDRESS: STREET 1: 100 MISSION RIDGE CITY: GOODLETTSVILLE STATE: TN ZIP: 37072 BUSINESS PHONE: 6158554000 MAIL ADDRESS: STREET 1: 100 MISSION RIDGE CITY: GOODLETTSVILLE STATE: TN ZIP: 37072 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 8-K 1 a4650214.txt DOLLAR GENERAL CORPORATION 8-K COMBO 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): May 27, 2004 ------------- 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 -------------- ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Financial Statements. None. (b) Pro Forma Financial Information. None. (c) Exhibits. See Exhibit Index immediately following the signature page hereto. ITEM 9. REGULATION FD DISCLOSURE On May 27, 2004, Dollar General Corporation (the "Company") issued a news release regarding results of operations and financial condition for the first quarter ended April 30, 2004, and the conference call to be held to discuss such results. The news release is attached hereto as Exhibit 99 and incorporated by reference as if fully set forth herein. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION The information set forth in Item 9 above is incorporated by reference as if fully set forth herein. SIGNATURE 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. Date: May 27, 2004 DOLLAR GENERAL CORPORATION ------------ By: /s/ Susan S. Lanigan -------------------------------------- Susan S. Lanigan Senior Vice President, General Counsel and Corporate Secretary EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99 News release dated May 27, 2004. EX-99 2 a4650214ex99.txt PRESS RELEASE Exhibit 99 Financial and Media Contact: Emma Jo Kauffman (615) 855-5525 Dollar General Reports Increased Earnings for the First Quarter of 2004 GOODLETTSVILLE, Tenn.--May 27, 2004--Dollar General Corporation (NYSE:DG) today reported that net income for the first quarter of fiscal 2004 increased 12.5 percent to $67.8 million, or $0.20 per diluted share, compared with $60.3 million, or $0.18 per diluted share, in the first quarter of fiscal 2003. Net sales during the first quarter of 2004 increased 11.4 percent to $1.75 billion from $1.57 billion in the first quarter of 2003. The increase resulted primarily from 601 net new stores and a same-store sales increase of 3.0 percent. Gross profit during the current year period was $512.3 million, or 29.3 percent of sales, versus $451.9 million, or 28.8 percent of sales, during the comparable period in the prior year. The improvement in gross margin is primarily the result of a higher average markup on beginning inventories and inventories purchased during the quarter, partially offset by increased markdowns. Selling, general and administrative expenses ("SG&A") during the current year period were $397.7 million, or 22.8 percent of sales, versus $349.0 million, or 22.2 percent of sales, during the comparable period in the prior year. The increase in SG&A as a percent to sales is primarily the result of expenses related to the Company's 2004 store work-flow project, increases in the cost of workers' compensation and other insurance programs, and increases in store occupancy costs primarily due to increased rental expense on the Company's leased facilities. Net interest expense during the current year period was $6.4 million versus $9.4 million in the prior year. The Company's effective tax rate was 37.2 percent in the current year period versus 35.5 percent in the comparable prior year period. The increase in the Company's tax rate in the current year period is due in part to the expiration of certain federal jobs tax credits. The tax rate in the first quarter of 2003 was lower than normal due to a $0.8 million adjustment to state income tax valuation reserves resulting from a tax law change. Merchandise inventories at April 30, 2004 increased 6.4 percent over the prior year quarter end, while inventory turns increased to 4.0 times in 2004 versus 3.9 times in 2003. As of April 30, 2004, the Company had cash and cash equivalents of $256.9 million and total debt, including current portions, of $278.5 million, resulting in a net debt position of $21.6 million at the end of the current year quarter compared to a net debt position of $266.6 million as of May 2, 2003 and a net cash position of $116.3 million as of January 30, 2004. The change from January 30, 2004 to April 30, 2004 is primarily due to repurchases of the Company's common stock during the quarter. During the current year quarter, the Company repurchased approximately 8.1 million shares of its common stock at a total cost of $152.6 million. The Company has repurchased a total of approximately 10.5 million shares to date, including 0.9 million shares purchased after April 30, 2004 with respect to its 12 million share repurchase authorization which expires on March 13, 2005. Non-GAAP Disclosures - -------------------- The tables accompanying this release include certain financial information not derived in accordance with generally accepted accounting principles ("GAAP"), including return on invested capital and return on assets, each of which is calculated using certain financial results that exclude restatement-related items. In addition, return on invested capital may be considered a non-GAAP financial measure. None of this information should be considered a substitute for any measures derived in accordance with GAAP. The Company has included its calculation of return on invested capital and reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures in the accompanying schedules. The reasons why management believes this information is useful to investors, and the additional purposes for which management uses this information are disclosed in the Company's Form 10-K filed with the SEC on March 16, 2004. Conference Call - --------------- The Company will host a conference call today at 10 a.m. EDT to discuss the quarter's results. The security code for the conference call is "Dollar General." If you wish to participate, please call (334) 260-2280 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 conference call will be available until 5 p.m. EDT on Thursday, June 10, online or by calling (334) 323-7226. The access code for the replay is 40954 and the pass code is 86362. About Dollar General - -------------------- Dollar General is a Fortune 500(R) discount retailer with 6,930 neighborhood stores as of April 30, 2004. Dollar General stores offer convenience and value to customers by offering consumable basic items that are frequently used and replenished, such as food, snacks, health and beauty aids and cleaning supplies, as well as a selection of basic apparel, housewares and seasonal items at everyday low prices. The Company store support center is located in Goodlettsville, Tennessee. Dollar General's Web site can be reached at www.dollargeneral.com. - --------------------- DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (Dollars in thousands) April 30, May 2, January 30, 2004 2003 2004 ---------- ---------- ---------- (Unaudited) (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 256,883 $ 75,946 $ 398,278 Merchandise inventories 1,277,185 1,200,701 1,157,141 Deferred income taxes 21,852 26,664 30,413 Other current assets 73,738 52,080 66,383 - ---------------------------------------------------------------------- Total current assets 1,629,658 1,355,391 1,652,215 - ---------------------------------------------------------------------- Property and equipment, at cost 1,775,496 1,606,447 1,709,722 Less: accumulated depreciation 757,849 618,336 720,498 - ---------------------------------------------------------------------- Net property and equipment 1,017,647 988,111 989,224 - ---------------------------------------------------------------------- Other assets, net 26,464 12,465 11,270 - ---------------------------------------------------------------------- Total assets $2,673,769 $2,355,967 $2,652,709 ====================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term obligations $ 16,880 $ 16,560 $ 16,670 Accounts payable 510,187 357,224 383,791 Accrued expenses and other 288,028 230,288 297,616 Income taxes payable 38,322 36,536 45,725 - ---------------------------------------------------------------------- Total current liabilities 853,417 640,608 743,802 - ---------------------------------------------------------------------- Long-term obligations 261,621 326,028 265,337 Deferred income taxes 70,648 51,584 66,650 Shareholders' equity: Preferred stock - - - Common stock 164,354 166,762 168,095 Additional paid-in capital 386,158 314,973 376,930 Retained earnings 943,404 860,879 1,037,409 Accumulated other comprehensive income (1,108) (1,311) (1,161) - ---------------------------------------------------------------------- 1,492,808 1,341,303 1,581,273 Other shareholders' equity (4,725) (3,556) (4,353) - ---------------------------------------------------------------------- Total shareholders' equity 1,488,083 1,337,747 1,576,920 - ---------------------------------------------------------------------- Total liabilities and shareholders' equity $2,673,769 $2,355,967 $2,652,709 ====================================================================== DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Income (Dollars in thousands, except per share amounts) (Unaudited) For the Quarter (13 Weeks) Ended --------------------------------------- % of % of April 30, Net May 2, Net 2004 Sales 2003 Sales ----------- ------- ----------- ------- Net Sales $1,747,959 100.00% $1,569,064 100.00% Cost of goods sold 1,235,709 70.69 1,117,158 71.20 - ---------------------------------------------------------------------- Gross profit 512,250 29.31 451,906 28.80 Selling, general and administrative 397,700 22.75 348,955 22.24 - ---------------------------------------------------------------------- Operating profit 114,550 6.55 102,951 6.56 Interest expense, net 6,442 0.37 9,411 0.60 - ---------------------------------------------------------------------- Income before taxes on income 108,108 6.18 93,540 5.96 Provisions for taxes on income 40,259 2.30 33,208 2.12 - ---------------------------------------------------------------------- Net income $ 67,849 3.88% $ 60,332 3.85% ====================================================================== Diluted earnings per share $ 0.20 $ 0.18 ========================================== =========== Weighted average diluted shares (000s) 337,257 334,597 ========================================== =========== Basic earnings per share $ 0.20 $ 0.18 ========================================== =========== Weighted average basic shares (000s) 334,109 333,243 ========================================== =========== Dividends per share $ 0.040 $ 0.035 ========================================== =========== DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Dollars in thousands) (Unaudited) For the Quarter (13 Weeks) Ended --------------------- April 30, May 2, 2004 2003 ---------- ---------- Cash flows from operating activities: Net income $ 67,849 $ 60,332 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 39,636 36,756 Deferred income taxes 12,559 8,500 Tax benefit from stock option exercises 2,172 224 Change in operating assets and liabilities: Merchandise inventories (120,044) (77,670) Other current assets (7,355) (6,381) Accounts payable 90,906 15,921 Accrued expenses and other (9,175) (9,198) Income taxes (7,422) (30,555) Other (15,512) 1,763 - ---------------------------------------------------------------------- Net cash provided by (used in) operating activities 53,614 (308) - ---------------------------------------------------------------------- Cash flows from investing activities: Purchase of property and equipment (51,060) (30,129) Proceeds from sale of property and equipment 29 66 - ---------------------------------------------------------------------- Net cash used in investing activities (51,031) (30,063) - ---------------------------------------------------------------------- Cash flows from financing activities: Repayments of long-term obligations (4,063) (4,086) Payment of cash dividends (13,319) (11,673) Proceeds from exercise of stock options 6,546 694 Repurchase of common stock (133,589) - Other financing activities 447 64 - ---------------------------------------------------------------------- Net cash used in financing activities (143,978) (15,001) - ---------------------------------------------------------------------- Net decrease in cash and cash equivalents (141,395) (45,372) Cash and cash equivalents, beginning of period 398,278 121,318 - ---------------------------------------------------------------------- Cash and cash equivalents, end of period $256,883 $ 75,946 ====================================================================== Supplemental schedule of noncash investing and financing activities: Repurchases of common stock included in accounts payable $ 18,996 $ - Purchases of property and equipment awaiting processing for payment, included in accounts payable $ 16,494 $ - Purchases of property and equipment under capital lease obligations $ 550 $ 117 ====================================================================== DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Selected Additional Information (Unaudited) Sales by Category (in thousands) -------------------------------- 13 Weeks Ended -------------------------------------------- April 30, May 2, % 2004 2003 Change -------------- -------------- -------------- Highly consumable $1,114,394 $990,030 12.6% Seasonal 260,438 237,119 9.8% Home products 214,773 199,469 7.7% Basic clothing 158,354 142,446 11.2% -------------- -------------- -------------- Total sales $1,747,959 $1,569,064 11.4% ============== ============== ============== New Store Activity ------------------ 13 Weeks Ended ---------------- --------------- April 30, 2004 May 2, 2003 ---------------- --------------- Beginning store count 6,700 6,113 New store openings 244 223 Store closings 14 7 Net new stores 230 216 Ending store count 6,930 6,329 Total selling square footage (000's) 47,004 42,761 Customer Transaction Data ------------------------- 13 Weeks Ended ----------------------------- April 30, 2004 May 2, 2003 -------------- -------------- Same-store customer transactions +3.6% +3.5% Average customer purchase (total stores) $ 8.41 $ 8.42 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Non-GAAP Disclosures Return on Invested Capital (a) (Unaudited) For the four quarters ended --------------------------- April 30, May 2, ($ in thousands) 2004 2003 ------------- ------------- Net income $ 308,517 $ 279,350 Add: Interest expense, net 28,534 41,618 Rent expense 256,930 224,214 Tax effect of interest and rent (107,302) (95,359) ------------- ------------- Interest and rent, net of tax 178,162 170,473 ------------- ------------- Return, net of tax $ 486,679 $ 449,823 ------------- ------------- Restatement-related items: Penalty and litigation settlement proceeds 10,000 (29,541) Restatement-related items in SG&A 628 1,405 Tax effect (255) 10,905 ------------- ------------- Restatement-related items, net of tax 10,373 (17,231) ------------- ------------- Return excluding restatement-related items $ 497,052 $ 432,592 ------------- ------------- Average Invested Capital: Average long-term obligations (b) $ 295,625 $ 492,253 Shareholders' equity (c) 1,461,311 1,207,236 Average rent x 8 (d) 1,924,571 1,655,648 ------------- ------------- Invested capital $3,681,507 $3,355,137 ------------- ------------- Return on invested capital 13.2% 13.4% ============= ============= Return on invested capital, excluding restatement-related items 13.5% 12.9% ============= ============= (a) The Company believes that the most directly comparable ratio calculated solely using GAAP measures is the ratio of net income to the sum of average long-term obligations, including current portion, and average shareholders' equity. This ratio was 17.6% and 17.5% for rolling four quarters ended April 30, 2004 and May 2, 2003, respectively. (b) Average long-term obligations is equal to the average long-term obligations, including current portion, measured at the end of each of the last five fiscal quarters. (c) Average shareholders' equity is equal to the average shareholders' equity measured at the end of each of the last five fiscal quarters. (d) Average rent expense is computed using a rolling two-year period. Average rent expense is multiplied by a factor of eight to capitalize operating leases in the determination of pretax invested capital. This is a conventional methodology utilized by credit rating agencies and investment bankers. DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Non-GAAP Disclosures Return on Assets (Unaudited) For the four quarters ended --------------------------- April 30, May 2, ($ in thousands) 2004 2003 ------------- ------------- Net income $ 308,517 $ 279,350 Restatement-related items, net of tax 10,373 (17,231) ------------- ------------- Net income, excluding restatement-related items $ 318,890 $ 262,119 ------------- ------------- Average assets (a) $2,527,404 $2,390,849 ------------- ------------- Return on assets 12.2% 11.7% ============= ============= Return on assets, excluding restatement- related items 12.6% 11.0% ============= ============= (a) Average assets is equal to the average total assets measured at the end of each of the last five fiscal quarters. -----END PRIVACY-ENHANCED MESSAGE-----