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--Reported Net Income Up 36%; Adjusted Net Income Up 29%
--Reported EPS of $0.63, Up 40%; Adjusted EPS of $0.63, Up 31%
--Company Raises Full Year 2012 Financial Outlook
Dollar General Corporation (DG) today reported record sales,
operating profit and net income for its fiscal 2012 first quarter (13
weeks) ended May 4, 2012.
"Dollar General is starting off 2012 with strong performance in the
first quarter due to excellent same-store sales growth of 6.7 percent,
representing the fifth consecutive quarter of accelerating improvement,"
said Rick Dreiling, chairman and chief executive officer. "We are
pleased to raise our full year financial outlook to now reflect adjusted
EPS of $2.68 to $2.78. Our first quarter was strong, and we are pleased
with our May sales performance."
"I believe we are positioned well to invest in the future of our
business as we continue to redefine small-box retailing and reinforce
Dollar General’s role as America’s general store," said Dreiling.
The Company’s net income increased by 36 percent to $213 million in the
2012 first quarter, compared to net income of $157 million in the 2011
first quarter. Adjusted net income, as defined below, increased 29
percent to $215 million in the 2012 first quarter, compared to $166
million in the 2011 first quarter. Diluted earnings per share ("EPS")
increased by 40 percent to $0.63 in the 2012 first quarter from $0.45 in
the 2011 quarter. Adjusted diluted EPS increased 31 percent to $0.63 in
the 2012 first quarter from $0.48 in the 2011 first quarter.
Adjusted net income is defined as net income excluding specifically
identified expenses. For the 2012 first quarter, acceleration of
equity-based compensation and other expenses relating to a secondary
offering of the Company’s stock and a loss resulting from the amendment
of the Company’s revolving credit facility were excluded. For the 2011
quarter, expenses related to certain litigation settlements and a net
loss on the repurchase of debt were excluded. The income tax effect of
adjustments is also excluded from both periods. A reconciliation of
adjusted net income to net income is presented in the accompanying
schedules.
Financial Highlights
Net sales increased 13.0 percent to $3.90 billion in the 2012 first
quarter compared to $3.45 billion in the 2011 first quarter. Same-store
sales increased 6.7 percent resulting from increases in both customer
traffic and average transaction amount.
Gross profit, as a percentage of sales, was 31.5 percent in both the
2012 and 2011 quarters. The gross profit rate was affected by several
positive factors including the favorable impact of higher markups,
improved distribution and transportation efficiencies and lower
inventory shrinkage, as a percentage of sales, offset by increased
apparel and other markdowns and a higher mix of consumables, which
generally have lower markups than non-consumables. The Company recorded
a $1.6 million LIFO charge in the 2012 quarter compared to a $3.6
million charge in the 2011 quarter.
Selling, general and administrative expenses ("SG&A"), as a percentage
of sales, were 21.6 percent in the 2012 first quarter compared to 22.2
percent in the 2011 first quarter, an improvement of 56 basis points.
Excluding the acceleration of equity-based compensation and other
expenses resulting from secondary offerings of the Company’s common
stock of $1.0 million in the 2012 quarter and litigation settlement
expenses of $13.1 million in the 2011 quarter, SG&A, as percentage of
sales, improved by 20 basis points largely due to the impact of
increased sales and improved utilization of retail store labor. Various
other cost reduction efforts affecting store rental and other expenses
also contributed to the improvement in SG&A, as a percentage of sales.
Costs associated with increased debit card usage, preopening costs
associated with two new distribution centers, higher workers’
compensation and general liability insurance and increased advertising
expenses partially offset the improvement in SG&A, as a percentage of
sales.
Operating profit increased by 19 percent to $384 million, or 9.9 percent
of sales, in the 2012 first quarter, compared to $322 million, or 9.3
percent of sales, in the 2011 first quarter. Excluding the acceleration
of equity-based compensation and other secondary offering expenses from
the 2012 quarter and the litigation settlement expenses from the 2011
quarter, operating profit increased by 15 percent to $385 million, or
9.9 percent of sales, compared to $335 million, or 9.7 percent of sales,
in the 2011 quarter.
Interest expense was $37 million in the 2012 first quarter compared to
$66 million in the 2011 first quarter. The decrease was due to lower
outstanding borrowings resulting from the Company’s debt repurchases and
lower all-in interest rates.
Other expenses include pretax losses of $1.6 million resulting from the
amendment of the Company’s senior secured revolving credit facility in
the 2012 first quarter and $2.2 million resulting from the repurchase of
$25 million aggregate principal amount of its senior notes in the 2011
first quarter.
The effective income tax rate in the 2012 first quarter was 38.2 percent
compared to 38.1 percent in the 2011 first quarter.
Merchandise Inventories
As of May 4, 2012, total merchandise inventories, at cost, were $2.00
billion compared to $1.77 billion as of April 29, 2011, an increase of 7
percent on a per-store basis. Annual inventory turns were 5.3 times
through the 2012 first quarter (based on a 53-week period).
Long-Term Obligations
As of May 4, 2012, outstanding long-term obligations, including the
current portion, were $2.88 billion, a decrease of $382 million from the
2011 first quarter.
Capital Expenditures
Total additions to property and equipment in 2012 were $146 million,
including: $41 million for improvements, upgrades, remodels and
relocations of existing stores; $36 million for stores purchased or
built by the Company; $33 million related to new leased stores; $31
million for distribution and transportation-related capital
expenditures; and $4 million for information systems upgrades and
technology-related projects. During the 2012 first quarter, the Company
opened 128 new stores and remodeled or relocated 224 stores. In
addition, a new distribution center in Alabama and a new leased
distribution center in California began shipping merchandise to stores
in the 2012 first quarter.
Share Repurchase Authorization
During the 2012 first quarter, the Company repurchased 6.8 million
shares of its common stock from Buck Holdings, L.P. (which is controlled
by affiliates of KKR and Goldman, Sachs & Co.) for $300 million. To
date, the Company has repurchased 11.7 million shares, utilizing $485
million of its total $500 million authorization for repurchases of
common stock.
Fiscal 2012 Financial Outlook
Based on first quarter results, the Company continues to expect total
sales for the 2012 fiscal year to increase 8 to 9 percent over the
53-week 2011 fiscal year, or 10 to 11 percent on a comparable 52-week
basis. Same-store sales, based on a comparable 52-week period, are
expected to increase 3 to 5 percent. Operating profit for 2012 is
expected to be between $1.62 billion and $1.66 billion, as compared to
the Company’s previous guidance of between $1.60 billion and $1.65
billion.
The Company expects full year interest expense to be in the range of
$145 million to $155 million. The Company intends to repurchase its
outstanding Senior Subordinated Notes through a refinancing at the first
scheduled call date in July 2012. If the Company does not repurchase the
notes, interest expense will likely exceed the guidance, and the
expected losses relating to those repurchases will not occur.
Diluted EPS for the 52-week fiscal year, adjusted to exclude any losses
resulting from redemption of the Senior Subordinated Notes, potential
charges or expenses relating to amendments to or refinancing of any
notes, loans or revolving credit facilities and any expenses resulting
from secondary stock offerings, is expected to be approximately $2.68 to
$2.78, based on approximately 336 million weighted average diluted
shares. This is an increase of $0.03 per share from the Company’s
previous guidance of $2.65 to $2.75 per share, based on approximately
335 million weighted average diluted shares. The full year 2012
effective tax rate is expected to be between 38 and 39 percent. The 2012
expected tax rate exceeds the 2011 rate due principally to the
expiration of federal jobs related tax credits for employees hired after
December 31, 2011 as well as certain federal jobs credits that only
applied to 2011.
The Company plans to open approximately 625 new stores, including 40
Dollar General Market stores in 2012. In addition, the Company plans to
remodel or relocate a total of approximately 550 stores. Square footage
is again expected to increase by approximately 7 percent. Capital
expenditures are expected to be in the range of $600 million to $650
million. Approximately 65 percent of capital spending is for investment
in store growth and development, including new stores, remodels,
relocations and purchases of existing store locations; approximately 15
percent is for transportation, distribution and special projects; the
remaining 20 percent is for maintenance capital.
The volatility of the macroeconomic environment continues to pressure
the consumer and impact the Company’s cost of purchasing and delivering
merchandise to its stores. Management continues to closely monitor
customers’ responses to the economic and competitive climates.
Conference Call Information
The Company will hold a conference call on Monday afternoon, June 4,
2012 at 3:30 p.m. CT/4:30 p.m. ET, hosted by Rick Dreiling, chairman and
chief executive officer, and David Tehle, chief financial officer. If
you wish to participate, please call (866) 710-0179 at least 10 minutes
before the conference call is scheduled to begin. The pass code for the
conference call is "Dollar General." The call will also be broadcast
live online at www.dollargeneral.com
under "Investor Information, Conference Calls and Investor Events." A
replay of the conference call will be available through Monday, June 18,
2012, and will be accessible online or by calling (334) 323-7226. The
pass code for the replay is 58216843.
Non-GAAP Disclosure
Certain financial information provided in this press release and the
accompanying tables has not been derived in accordance with generally
accepted accounting principles ("GAAP"), including adjusted net income
and adjusted diluted EPS. The Company has also provided calculations of
EBITDA and Adjusted EDITDA, which are non-GAAP measures.
Reconciliations of all of these non-GAAP measures to the most directly
comparable measures calculated in accordance with GAAP are provided in
the accompanying schedules. In addition, for reference, the schedules
also include calculations of SG&A and operating profit, as adjusted to
exclude certain expenses. In addition to historical results, guidance
for fiscal 2012 is based on comparable adjustments.
The Company believes that providing comparisons to net income and
diluted earnings per share, adjusted for the items shown in the
accompanying reconciliations, provides useful information to the reader
in assessing the Company’s operating performance. The Company believes
that the presentation of EBITDA and adjusted EBITDA is appropriate to
provide additional information about the calculation of the senior
secured incurrence test, a material financial ratio in the Company’s
credit agreements. Adjusted EBITDA is a material component of that ratio.
The non-GAAP measures discussed above are not measures of financial
performance or condition, liquidity or profitability in accordance with
GAAP, and should not be considered as alternatives to net income,
diluted earnings per share, operating income, cash flows from operations
or any other performance measures determined in accordance with GAAP.
Additionally, EBITDA and adjusted EBITDA are not intended to be measures
of free cash flow for management’s discretionary use, as they do not
consider certain cash requirements such as interest payments, tax
payments, debt service requirements and replacement of fixed assets.
These non-GAAP measures have limitations as analytical tools and should
not be considered in isolation or as substitutes for analysis of the
Company’s financial results as reported under GAAP.
Forward-Looking Statements
This press release contains forward-looking information, such as the
information in the sections entitled "Fiscal 2012 Financial Outlook" as
well as other statements regarding our outlook, plans and intentions. A
reader can identify forward-looking statements because they are not
limited to historical fact or they use words such as "may," "should,"
"could," "believe," "anticipate," "project," "plan," "schedule," "on
track," "expect," "estimate," "objective," "forecast," "goal," "focus,"
"intend," "committed," "continue," or "will likely result" and similar
expressions that concern our strategy, plans, intentions or beliefs
about future occurrences or results. These matters involve risks,
uncertainties and other factors that may cause the actual performance of
the Company to differ materially from that which was expected. The
Company derives many of these statements from its operating budgets and
forecasts, which are based on many detailed assumptions that the Company
believes are reasonable. However, it is very difficult to predict the
effect of known factors, and the Company cannot anticipate all factors
that could affect its actual results that may be important to an
investor. All forward-looking information should be evaluated in the
context of these risks, uncertainties and other factors. Important
factors that could cause actual results to differ materially from the
expectations expressed in or implied by such forward-looking statements
include, but are not limited to:
--
failure to successfully execute the Company’s growth strategy,
including delays in store growth and difficulties executing sales and
operating profit margin initiatives;
--
the failure of the Company’s new store base to achieve sales and
operating levels consistent with the Company’s expectations;
--
risks and challenges in connection with sourcing merchandise from
domestic and foreign vendors, as well as trade restrictions;
--
the Company’s level of success in gaining and maintaining broad market
acceptance of its private brands and in achieving its other
initiatives;
--
unfavorable publicity or consumer perception of the Company’s products;
--
the Company’s debt levels and restrictions in its debt agreements;
--
economic conditions, including their effect on the financial and
capital markets, the Company’s suppliers and business partners,
employment levels, consumer demand, disposable income, credit
availability and spending patterns, inflation and the cost of goods;
--
increases in commodity prices (including, without limitation, cotton,
wheat, corn, sugar, oil, paper, nuts and resin);
--
levels of inventory shrinkage;
--
seasonality of the Company’s business;
--
increases in costs of fuel or other energy, transportation or
utilities costs and in the costs of labor, employment and healthcare;
--
the impact of changes in or noncompliance with governmental laws and
regulations (including, but not limited to, product safety, healthcare
and unionization) and developments in and outcomes of legal
proceedings, investigations or audits;
--
disruptions, unanticipated expenses or operational failures in the
Company’s supply chain including, without limitation, a decrease in
transportation capacity for overseas shipments or work stoppages or
other labor disruptions that could impede the receipt of merchandise;
--
delays or unanticipated expenses in constructing new distribution
centers;
--
damage or interruption to the Company’s information systems;
--
changes in the competitive environment in the Company’s industry and
the markets where the Company operates;
--
natural disasters, unusual weather conditions, pandemic outbreaks,
boycotts, war and geo-political events;
--
the incurrence of material uninsured losses, excessive insurance costs
or accident costs;
--
the Company’s failure to protect its brand name;
--
the Company’s loss of key personnel or the Company’s inability to hire
additional qualified personnel;
--
interest rate and currency exchange fluctuations;
--
a data security breach;
--
the Company’s failure to maintain effective internal controls;
--
changes to income tax expense due to changes in or interpretation of
tax laws, or as a result of federal or state income tax examinations;
--
changes to or new accounting guidance, such as changes to lease
accounting guidance or a requirement to convert to international
financial reporting standards;
--
the factors disclosed under "Risk Factors" in the Company’s Annual
Report on Form 10-K filed with the Securities and Exchange Commission
("SEC") on March 22, 2012 or any subsequent quarterly filings on Form
10-Q; and
--
such other factors as may be discussed or identified in this press
release.
All forward-looking statements are qualified in their entirety by these
and other cautionary statements that the Company makes from time to time
in its other SEC filings and public communications. The Company cannot
assure the reader that it will realize the results or developments the
Company anticipates or, even if substantially realized, that they will
result in the consequences or affect the Company or its operations in
the way the Company expects. Forward-looking statements speak only as of
the date made. The Company undertakes no obligation to update or revise
any forward-looking statement to reflect events or circumstances arising
after the date on which they were made, except as otherwise required by
law. As a result of these risks and uncertainties, readers are cautioned
not to place undue reliance on any forward-looking statements included
herein or that may be made elsewhere from time to time by, or on behalf
of, the Company.
About Dollar General Corporation
Dollar General Corporation has been delivering value to shoppers for
more than 70 years. Dollar General helps shoppers Save time. Save money.
Every day!(R) by offering products that are frequently used and
replenished, such as food, snacks, health and beauty aids, cleaning
supplies, basic apparel, house wares and seasonal items at low everyday
prices in convenient neighborhood locations. With 10,052 stores in 40
states as of May 4, 2012, Dollar General has more retail locations than
any retailer in America. In addition to high quality private brands,
Dollar General sells products from America’s most-trusted manufacturers
such as Procter & Gamble, Kimberly-Clark, Unilever, Kellogg’s, General
Mills, Nabisco, Hanes, PepsiCo and Coca-Cola. Learn more about Dollar
General at www.dollargeneral.com.
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
-----------------------------------
May 4, April 29, February 3,
2012 2011 2012
---------------- ------------------ ------------------
ASSETS
Current assets:
Cash and cash equivalents $ 132,530 $ 602,463 $ 126,126
Merchandise inventories 2,000,864 1,767,121 2,009,206
Income taxes receivable 5,210 - -
Prepaid expenses and other current assets 135,131 137,313 139,742
----------------------------------------- --------- --------- ---------
Total current assets 2,273,735 2,506,897 2,275,074
----------------------------------------- --------- --------- ---------
Net property and equipment 1,878,172 1,562,596 1,794,960
---------------------------------------------------------------- --------- --------- ---------
Goodwill 4,338,589 4,338,589 4,338,589
---------------------------------------------------------------- --------- --------- ---------
Other intangible assets, net 1,231,866 1,251,289 1,235,954
-------------------------------------------------------------- --------- --------- ---------
Other assets, net 47,846 55,493 43,943
---------------------------------------------------------------- --------- --------- ---------
Total assets $ 9,770,208 $ 9,714,864 $ 9,688,520
================================================================ == ========= === ========= === =========
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term obligations $ 459 $ 1,039 $ 590
Accounts payable 985,924 933,710 1,064,087
Accrued expenses and other 360,349 380,422 397,075
Income taxes payable 50,355 32,217 44,428
Deferred income taxes 14,166 39,842 3,722
----------------------------------------- --------- --------- ---------
Total current liabilities 1,411,253 1,387,230 1,509,902
----------------------------------------- --------- --------- ---------
Long-term obligations 2,880,920 3,262,597 2,617,891
---------------------------------------------------------------- --------- --------- ---------
Deferred income taxes 649,532 606,071 656,996
---------------------------------------------------------------- --------- --------- ---------
Other liabilities 231,427 230,043 229,149
---------------------------------------------------------------- --------- --------- ---------
Total liabilities 5,173,132 5,485,941 5,013,938
---------------------------------------------------------------- --------- --------- ---------
Commitments and contingencies
Redeemable common stock 5,644 9,267 6,087
---------------------------------------------------------------- --------- --------- ---------
Shareholders’ equity:
Preferred stock - - -
Common stock 290,782 298,844 295,828
Additional paid-in capital 2,967,014 2,948,506 2,960,940
Retained earnings 1,336,298 987,901 1,416,918
Accumulated other comprehensive loss (2,662 ) (15,595 ) (5,191 )
----------------------------------------- --------- -- --------- --- --------- ---
Total shareholders’ equity 4,591,432 4,219,656 4,668,495
----------------------------------------- --------- --------- ---------
Total liabilities and shareholders’ equity $ 9,770,208 $ 9,714,864 $ 9,688,520
================================================================ == ========= === ========= === =========
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
For the Quarter (13 Weeks) Ended
--------------------------------------------------------
May 4, % of Net April 29, % of Net
2012 Sales 2011 Sales
-------------- ------------ --------------- ------------
Net sales $ 3,901,205 100.00 % $ 3,451,697 100.00 %
Cost of goods sold 2,672,949 68.52 % 2,364,300 68.50 %
---------------------------------------------- --------- ------ ---- --------- ------ ----
Gross profit 1,228,256 31.48 % 1,087,397 31.50 %
Selling, general and administrative expenses 843,932 21.63 % 765,779 22.19 %
---------------------------------------------- --------- ------ ---- --------- ------ ----
Operating profit 384,324 9.85 % 321,618 9.32 %
Interest expense 37,074 0.95 % 65,572 1.90 %
Other (income) expense 1,671 0.04 % 2,272 0.07 %
---------------------------------------------- --------- ------ ---- --------- ------ ----
Income before income taxes 345,579 8.86 % 253,774 7.35 %
Income tax expense 132,164 3.39 % 96,805 2.80 %
---------------------------------------------- --------- ------ ---- --------- ------ ----
Net income $ 213,415 5.47 % $ 156,969 4.55 %
============================================== === ========= ====== ==== ==== ========= ====== ====
Earnings per share:
Basic $ 0.64 $ 0.46
Diluted $ 0.63 $ 0.45
Weighted average shares:
Basic 336,080 341,522
Diluted 339,490 345,393
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
For the Quarter (13 Weeks) Ended
---------------------------------------
May 4, April 29,
2012 2011
------------------- ------------------
Cash flows from operating activities:
Net income $ 213,415 $ 156,969
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 72,271 67,486
Deferred income taxes (1,119 ) 7,393
Tax benefit of stock options (18,589 ) (434 )
Loss on debt retirement, net 1,629 2,167
Non-cash share-based compensation 4,759 3,519
Other non-cash gains and losses 2,828 4,574
Change in operating assets and liabilities:
Merchandise inventories 6,499 (5,275 )
Prepaid expenses and other current assets 5,370 (32,369 )
Accounts payable (82,227 ) (25,922 )
Accrued expenses and other liabilities (30,218 ) 38,810
Income taxes 19,306 6,671
Other (1,285 ) (17 )
----------------------------------------- -------- ---- ------- ----
Net cash provided by operating activities 192,639 223,572
--------------------------------------------------------------------------------------------------- -------- -------
Cash flows from investing activities:
Purchases of property and equipment (145,857 ) (91,958 )
Proceeds from sales of property and equipment 119 367
------------------------------------------------------------------------------------ -------- -------
Net cash used in investing activities (145,738 ) (91,591 )
--------------------------------------------------------------------------------------------------- -------- ---- ------- ----
Cash flows from financing activities:
Repayments of long-term obligations (202 ) (27,151 )
Borrowings under revolving credit facility 584,900 -
Repayments of borrowings under revolving credit facility (321,800 ) -
Debt issue costs (7,663 ) -
Repurchases of common stock from principal shareholder (300,000 ) -
Equity transactions with employees, net of taxes paid (14,321 ) (247 )
Tax benefit of stock options 18,589 434
------------------------------------------------------------------------------------ -------- -------
Net cash used in financing activities (40,497 ) (26,964 )
--------------------------------------------------------------------------------------------------- -------- ---- ------- ----
Net increase in cash and cash equivalents 6,404 105,017
Cash and cash equivalents, beginning of period 126,126 497,446
--------------------------------------------------------------------------------------------------- -------- -------
Cash and cash equivalents, end of period $ 132,530 $ 602,463
=================================================================================================== ==== ======== ==== =======
Supplemental cash flow information:
Cash paid for:
Interest $ 21,737 $ 41,386
Income taxes $ 117,361 $ 82,664
Supplemental schedule of non-cash investing and financing
activities:
Purchases of property and equipment awaiting processing for $ 39,726 $ 35,649
payment, included in Accounts payable
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Selected Additional Information
(Unaudited)
Sales by Category (in thousands)
----------------------------------------------------------------------------------------
For the Quarter (13 Weeks) Ended
-----------------------------------
May 4, 2012 April 29, 2011 % Change
---------------- ------------------ --------
Consumables $ 2,877,282 $ 2,529,070 13.8 %
Seasonal 524,493 457,057 14.8 %
Home products 258,998 234,208 10.6 %
Apparel 240,432 231,362 3.9 %
--------- --------- -------- ----
Net sales $ 3,901,205 $ 3,451,697 13.0 %
===== ========= ===== ========= ======== ====
Store Activity
----------------------------------------------------------------------------------------
For the Quarter (13 Weeks) Ended
---------------------------------
May 4, 2012 April 29, 2011
------------------ --------------
Beginning store count 9,937 9,372
New store openings 128 139
Store closings (13 ) (15 )
--------- - -------- ----
Net new stores 115 124
--------- --------
Ending store count 10,052 9,496
========= ========
Total selling square footage (000’s) 72,928 68,131
========= ========
Growth rate 7 % 7 %
========= = ======== ====
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income and Adjusted Diluted Earnings Per Share
And Calculation of SG&A and Operating Profit, Excluding Certain
Items
(in millions, except per share amounts)
For the Quarter (13 Weeks) Ended
-------------------------------------------------------------
May 4, 2012 April 29, 2011 Increase
------------------------------ ------------------------------ ------------------
$ % of Net Sales $ % of Net Sales $ %
------- --------------- ------- --------------- ----- ----
Net sales $ 3,901.2 $ 3,451.7 $ 449.5 13.0 %
================================================================= ======= == =======
SG&A $ 843.9 21.63 % $ 765.8 22.19 % $ 78.2 10.2 %
Litigation settlements - (13.1 )
Secondary offering expenses (0.4 ) -
Acceleration of equity-based compensation (0.6 ) -
----------------------------------------- ------- -- -------
SG&A, excluding certain items $ 842.9 21.61 % $ 752.7 21.81 % $ 90.2 12.0 %
----------------------------------------------------------------- ------- ------- ------ -- ------- ------- ------
Operating profit $ 384.3 9.85 % $ 321.6 9.32 % $ 62.7 19.5 %
Litigation settlements - 13.1
Secondary offering expenses 0.4 -
Acceleration of equity-based compensation 0.6 -
----------------------------------------- ------- -------
Operating profit, excluding certain items $ 385.3 9.88 % $ 334.7 9.70 % $ 50.6 15.1 %
----------------------------------------------------------------- ------- ------- ------ -- ------- ------- ------
Net income $ 213.4 5.47 % $ 157.0 4.55 % $ 56.4 36.0 %
Litigation settlements - 13.1
Secondary offering expenses 0.4 -
Acceleration of equity-based compensation 0.6 -
Write-off of capitalized debt costs 1.6 -
Repurchase of long-term obligations - 2.2
----------------------------------------- ------- -------
Total adjustments 2.6 15.3
----------------------------------------- ------- -------
Income tax effect of adjustments (0.9 ) (6.0 )
----------------------------------------- ------- -- ------- --
Net adjustments 1.7 9.3
----------------------------------------- ------- -------
Adjusted net income $ 215.1 5.51 % $ 166.3 4.82 % $ 48.8 29.3 %
================================================================= ======= ======= ====== == ======= ======= ======
Diluted earnings per share:
As reported $ 0.63 $ 0.45
Adjusted $ 0.63 $ 0.48
Weighted average diluted shares 339.5 345.4
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
(In millions)
Quarter (13 Weeks) Ended Four Quarters Ended
------------------------ ---------------------------------
May 4, April 29, May 4, April 29,
2012 2011 2012 2011
----------- ----------- ---------------- ----------------
(53 Weeks) (52 Weeks)
Net income $ 213.4 $ 157.0 $ 823.1 $ 648.9
Add (subtract):
Interest income - - (0.1 ) (0.2 )
Interest expense 37.1 65.6 176.5 267.7
Depreciation and amortization 69.9 64.3 269.7 246.5
Income taxes 132.2 96.8 494.0 371.3
----- ----- ------- -------
EBITDA 452.6 383.7 1,763.2 1,534.2
----- ----- ------- -------
Adjustments:
Loss on debt retirements 1.6 2.2 59.7 16.8
Loss on hedging instruments - 0.1 0.3 0.4
Non-cash expense for share-based awards 4.8 3.5 16.6 13.4
Litigation settlement and related costs, net - 13.1 - 13.1
Indirect costs related to merger and stock offerings 0.4 - 1.3 0.5
Other non-cash charges (including LIFO) 3.2 5.5 51.0 15.2
Other 0.6 - 0.6 -
----- ----- ------- -------
Total Adjustments 10.6 24.4 129.5 59.4
----- ----- ------- -------
Adjusted EBITDA $ 463.2 $ 408.1 $ 1,892.7 $ 1,593.6
==== ===== ==== ===== === ======= === =======
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Dollars in millions)
Senior Secured Incurrence Test
--------------------------------------------------------------------------------------------------------
May 4, April 29,
2012 2011
------------------ ------------------
Senior secured debt $ 2,430.7 $ 1,984.0
Less: cash 132.5 602.5
-------- --------
Senior secured debt, net of cash $ 2,298.2 $ 1,381.5
-------- -------- -------- --------
Adjusted EBITDA $ 1,892.7 $ 1,593.6
-------- -------- -------- --------
1.2x 0.9x
Ratio of senior secured debt, net of cash, to Adjusted EBITDA
================ ================
Calculation of Ratio of Long-Term Obligations to Adjusted EBITDA
--------------------------------------------------------------------------------------------------------
May 4, April 29,
2012 2011
------------------ ------------------
Total long-term obligations $ 2,881.4 $ 3,263.6
-------- -------- -------- --------
Adjusted EBITDA $ 1,892.7 $ 1,593.6
-------- -------- -------- --------
Ratio of long-term obligations to Adjusted EBITDA 1.5x 2.0x
================== ==================
Calculation of Ratio of Long-Term Obligations, net of Cash, to
Adjusted EBITDA
------------------------------------------------------------------------------------------------
May 4, April 29,
2012 2011
------------------ ------------------
Total long-term obligations $ 2,881.4 $ 3,263.6
Less: cash 132.5 602.5
-------- --------
Total long-term obligations, net of cash $ 2,748.8 $ 2,661.1
-------- -------- -------- --------
Adjusted EBITDA $ 1,892.7 $ 1,593.6
-------- -------- -------- --------
1.5x 1.7x
Ratio of long-term obligations, net of cash, to Adjusted EBITDA
================ ================
SOURCE: Dollar General Corporation
Dollar General Corporation
Investor Contacts:
Mary Winn Gordon, 615-855-5536
or
Emma Jo Kauffman, 615-855-5525
or
Media Contact:
Tawn Earnest, 615-855-5209
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