Dollar
General Corp. (DG, Financial) filed Quarterly Report for the period ended 2011-04-29.
Dollar General Corp. has a market cap of $11.98 billion; its shares were traded at around $35.07 with a P/E ratio of 18.7 and P/S ratio of 0.9.
· Interest expense decreased by $6.4 million to $65.6 million in the 2011 first quarter. In the quarter, we repurchased an additional $25 million of our 10.625% senior notes due 2015, resulting in a pretax loss of $2.2 million. Total long-term obligations as of April 29, 2011 were $3.26 billion.
· Net income was $157.0 million, or $0.45 per diluted share, compared to net income of $136.0 million, or $0.39 per diluted share, in the 2010 quarter.
As discussed in more detail below, in recent years we have generated significant cash flows from operating activities. We have used a portion of these cash flows to pay down debt and to invest in new store growth through our traditional leased stores. We currently estimate that in 2011, the average cost per traditional leased store including improvements, equipment and fixtures will be as follows: $185,000 for new stores, $175,000 for relocated stores, and $90,000 for remodeled stores. These costs include strategic merchandising sales initiatives related to an increased number of in-store coolers, additional fixtures and equipment, and higher leasehold improvement costs for stores in metropolitan areas. Initial inventory, net of payables, increases the investment in new leased stores by approximately $75,000. In addition, during 2010 we made a strategic decision to purchase certain of our leased stores. This program has continued into 2011. We believe that the current environment in the real estate markets provides an opportunity to make these investments at levels which are expected to result in favorable returns and positively impact our operating results.
Selling, General and Administrative (SG&A) Expense. SG&A expense was 22.2% as a percentage of sales in the 2011 period compared to 22.8% in the 2010 period, a decrease of 60 basis points. SG&A in the 2011 period included expenses totaling $13.1 million, or 38 basis points, for accruals related to the expected settlement of legal matters related to an employment case and a terminated derivatives contract. SG&A in the 2010 period included expenses totaling $15.0 million, or 48 basis points, relating to a secondary offering of our common stock, consisting of $0.7 million of legal and other transaction expenses and $14.3 million relating to the acceleration of certain equity appreciation rights. Retail salaries and store repairs and maintenance increased at a rate lower than our 10.9% increase in sales. In addition, decreases in total advertising costs contributed to the overall decrease in SG&A as a percentage of sales, as did other cost reduction and productivity initiatives. SG&A, as a percentage of sales, was also favorably impacted by the increase in sales. These improvements were partially offset by depreciation and amortization expenses, which increased at a higher rate than the increase in sales, primarily due to increased investment in store fixtures and equipment resulting from recent merchandising initiatives such as raising the height of our store shelves, as well as the purchase of stores.
We have two senior secured credit facilities (the Credit Facilities) which provide financing of up to $2.995 billion as of April 29, 2011. The Credit Facilities consist of a $1.964 billion senior secured term loan facility (Term Loan Facility) and a senior secured asset-based revolving credit facility (ABL Facility). Total commitments under the ABL Facility are equal to $1.031 billion (of which up to $350.0 million is available for letters of credit), subject to borrowing base availability. The ABL Facility includes borrowing capacity available for letters of credit and for short-term borrowings referred to as swingline loans.
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General Corp. (DG, Financial) filed Quarterly Report for the period ended 2011-04-29.
Dollar General Corp. has a market cap of $11.98 billion; its shares were traded at around $35.07 with a P/E ratio of 18.7 and P/S ratio of 0.9.
Highlight of Business Operations:
· Total sales increased 10.9% to $3.45 billion. Sales in same-stores increased 5.4% driven by increases in customer traffic and average transaction amount. Average sales per square foot for all stores over the 52-week period ended April 29, 2011 were approximately $203, up from $197 for the comparable prior 52-week period.· Interest expense decreased by $6.4 million to $65.6 million in the 2011 first quarter. In the quarter, we repurchased an additional $25 million of our 10.625% senior notes due 2015, resulting in a pretax loss of $2.2 million. Total long-term obligations as of April 29, 2011 were $3.26 billion.
· Net income was $157.0 million, or $0.45 per diluted share, compared to net income of $136.0 million, or $0.39 per diluted share, in the 2010 quarter.
As discussed in more detail below, in recent years we have generated significant cash flows from operating activities. We have used a portion of these cash flows to pay down debt and to invest in new store growth through our traditional leased stores. We currently estimate that in 2011, the average cost per traditional leased store including improvements, equipment and fixtures will be as follows: $185,000 for new stores, $175,000 for relocated stores, and $90,000 for remodeled stores. These costs include strategic merchandising sales initiatives related to an increased number of in-store coolers, additional fixtures and equipment, and higher leasehold improvement costs for stores in metropolitan areas. Initial inventory, net of payables, increases the investment in new leased stores by approximately $75,000. In addition, during 2010 we made a strategic decision to purchase certain of our leased stores. This program has continued into 2011. We believe that the current environment in the real estate markets provides an opportunity to make these investments at levels which are expected to result in favorable returns and positively impact our operating results.
Selling, General and Administrative (SG&A) Expense. SG&A expense was 22.2% as a percentage of sales in the 2011 period compared to 22.8% in the 2010 period, a decrease of 60 basis points. SG&A in the 2011 period included expenses totaling $13.1 million, or 38 basis points, for accruals related to the expected settlement of legal matters related to an employment case and a terminated derivatives contract. SG&A in the 2010 period included expenses totaling $15.0 million, or 48 basis points, relating to a secondary offering of our common stock, consisting of $0.7 million of legal and other transaction expenses and $14.3 million relating to the acceleration of certain equity appreciation rights. Retail salaries and store repairs and maintenance increased at a rate lower than our 10.9% increase in sales. In addition, decreases in total advertising costs contributed to the overall decrease in SG&A as a percentage of sales, as did other cost reduction and productivity initiatives. SG&A, as a percentage of sales, was also favorably impacted by the increase in sales. These improvements were partially offset by depreciation and amortization expenses, which increased at a higher rate than the increase in sales, primarily due to increased investment in store fixtures and equipment resulting from recent merchandising initiatives such as raising the height of our store shelves, as well as the purchase of stores.
We have two senior secured credit facilities (the Credit Facilities) which provide financing of up to $2.995 billion as of April 29, 2011. The Credit Facilities consist of a $1.964 billion senior secured term loan facility (Term Loan Facility) and a senior secured asset-based revolving credit facility (ABL Facility). Total commitments under the ABL Facility are equal to $1.031 billion (of which up to $350.0 million is available for letters of credit), subject to borrowing base availability. The ABL Facility includes borrowing capacity available for letters of credit and for short-term borrowings referred to as swingline loans.
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