Prompt:
Human: As a reminder, before we begin, the Company has a slide deck to accompany the earnings call this quarter.
Because these statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the Company's current expectations.
I'm going to pass it over to Tom to begin.
Just as a preface, I think most of you who're on the call are aware that the major factor for the Company in this quarter is the -- really the same as it was in the first quarter and that is that we have not received either a proposed decision or a decision on our California General Rate Case, which was expected prior to January 1st of 2020.
I'm going to begin the results discussion on Slide 8 of the deck and talk a little bit about the quarter, and then on the year-to-date basis and then go on from there.
For the second quarter, I'll start at Slide 8, our net income decreased by $11.7 million to $5.3 million and that is a difference from a $0.35 gain in the second quarter of 2019 to an $0.11 gain in the second quarter of 2020, is that we had no rate relief from the California Commission.
And we estimate that if the rate relief would come in, there is two big factors here and it's the same two factors we talked about on the first quarter call.
There is a total of $29.1 million that we believe would have been achieved versus additional pre-tax income if the Commission has rendered a decision on a favorable basis to the Company.
And of that, for the second quarter, $10.9 million represents the pure delay of -- resulting from the settlement agreement that the Company filed with the consumer advocate back in October of 2019.
And so that is being tracked in an interim rate memorandum account for future recovery.
And then $18.2 million, which represents income from our disputed cost recovery regulatory mechanisms and those, remember, are mechanisms that we've had for many years, first of all, to decouple our sales from revenue.
We'll talk quite a bit more about that later in the call.
And then secondly, our regulatory mechanism for the pension and healthcare balancing accounts.
Because those are in dispute in the case, we didn't record them as we would normally have.
And had we recorded them in the quarter, we estimate an additional revenue of -- would have been $18.2 million.
Those regulatory mechanisms match up to some cost increases that we had in the quarter.
We had $6.5 million of increased water production expenses, of which $5.7 million would have been offset by those regulatory mechanisms and we had $2.1 million of increased pension benefit expenses which also would have been offset by those regulatory mechanisms, had they have been in place.
Other factors for the quarter, we saw a rebound in our unrealized benefit plan investment performance that was $3 million higher than in the second quarter of 2019.
And other things that happened which would be typical of a utility company in our situation, our depreciation expense went up very similar to the first quarter.
So it was up $2.2 million in the second quarter and that's related to increased plant investments in 2019, and we did have an increase in our maintenance costs of about $1 million.
Turning to Slide 9, on a year-to-date basis, very similar story and very similar explanation.
The numbers are different, but the explanation is the same.
So, our net income decreased by $24.4 million to a loss of $15 million on a year-to-date basis.
In terms of earnings per share, we have a loss of $0.31 per year to date as compared to a gain of $0.19 in 2019.
But, again, the two factors related to the rate case, we believe that had a rate case been adopted and it was favorable to the Company on these matters, the $19.8 million representing the delay of the settlement agreement amounts and $26 million related to our regulatory balancing accounts that we've been discussing.
For the year-to-date basis, our unrealized benefit plan investment performance was $4 million lower than in the first half of 2019 and that's really due to a comparatively strong market conditions in the first quarter of 2019.
And other impacts on a year-to-date basis, again, very similar.
We see depreciation expense increase $4.3 million and maintenance expense increase $1.6 million.
On Slide 10, this is a very similar slide to what we gave you in the first quarter earnings deck.
Our opinion of the estimated benefit from -- on a full year basis, from the California GRC has not changed.
As shown in the table on that chart, we believe the benefit is between $38.9 million at $42.2 million on an annual basis.
And so we continue to expect that when we get a decision in the case that that will be the benefit to the Company.
Our 2020 sales forecast, as we mentioned in last quarter, are about 7% lower than the 2019 adopted sales.
So in discussion of the WRAM and the MCBA, we believe that we're much more likely to be closer to adopted sales than we were in 2019.
And, as I mentioned earlier, we would have been allowed to record additional revenue of $5.6 million to $10.9 million in the second quarter if the settlement had have been adopted, with the low end of the revenue range linked with $5.2 million reduction in depreciation expense.
So, getting a little bit more granular on Slide 11 on the disputed GRC items.
I just wanted to point out that -- the two things that are the WRAM and the MCBA, we believe that on the -- in the second quarter, that's about $14.9 million that would have been recorded in those balancing accounts and the pension and medical cost balancing accounts, we believe, would have been $3.3 million.
And again, we're highly confident that past amounts that are recorded in those accounts are recoverable, regardless of the Commission's decision on a go-forward basis in our current General Rate Case.
And the other disputed items in the rate case, we don't believe are major factors in either the second quarter or the year-to-date results.
It certainly has been an interesting second quarter dealing with the COVID-19 pandemic as, I think most people know, utility workers are considered essential workers, and therefore, most of our employees, 90%-plus of our employees have been at work, in the field every day.
Accordingly, that makes protecting those employees as well as protecting our customers very, very important.
We are complying with all local regulations in our service areas, as well as we were an early mandator of mask and other PPE for all of our employees.
As you've probably seen in the press, California, and specifically, Southern California, LA counties and Kern counties have seen a surge in cases and we have seen increasing caseloads and hospitalizations in the past few weeks, as well as we've seen a handful of employees also contract the virus outside of work.
So in cases like that, we've been able to minimize any disruption of service.
Obviously, we isolate any employee that has any type of exposure, in order to keep them from getting other employees sick and we've have been successful in doing so.
Our Customer Centers in all four states have remain closed and will remain closed until further notice.
And we have suspended all collection activities in an effort to keep people supplied with water.
In addition, we've offered additional help through a direct grant program.
As you may recall, the Company allocated $0.5 million for charitable contributions.
Some of that went to work in local food banks and local food pantries throughout their service areas.
Another part of that grant went to what we called a direct aid or direct grant for customers who were struggling to pay their bills.
And so that's proven to be, I think, beneficial, and more importantly, I've received a lot of letters from customers who appreciate the fact that we were helping them out.
To date, we've had no disruption of service despite COVID-19 in addition to some of the rioting and stuff that we saw in Southern California at the end of May and in early June and so we have continued on track doing what we do best, which is providing clean drinking water for our customers.
Tommy, do you want to go through the business impacts of the pandemic?
So we have seen increased customer account aging.
And remember, this is due in part to the increased unemployment rate and also in part to the regulatory commissions telling us that we can't have collection activity.
The Company, I think as Marty may have noted last quarter, we voluntarily suspended collection activity before our state regulatory commissions required us to do that.
But nevertheless, there are now regulatory mandate to suspend collection activity.
And in California, that mandate, at this point, goes through April of 2021.
So it's going to be a long-term suspension of collection activity.
Our bills that are outstanding more than 90 days and those are the bills that would normally have been sent to collection, those bills increased to $3.4 million.
And in the past, when we've had those bills sent to collection only a portion of those amounts are typically uncollectible.
So we've raised our estimate on the balance sheet.
This is the bad debt reserve balance for doubtful accounts from $0.8 million to $1.6 million as of the end of the second quarter.
Our water sales have continued strong, particularly on the residential side.
That is offsetting a drag on sales in business, industrial, and public authority sales.
That last bit, I think, was school closures, for example, in the late spring.
We do see in resort areas in Hawaii, in particular, a decline in sales that we're observing there.
The California utility Cal Water, as we mentioned in the first quarter, activated the catastrophic event memorandum account that allows us to track costs associated with COVID.
And in the second quarter, we recorded approximately $600,000 of incremental operating expenses to the memorandum account.
Those are amounts that we will seek to recover in a later filing from the commission.
Memorandum account, as you'll recall, is not something that we typically book the revenue from until there is an authorization to recover that revenue.
In addition to the $600,000 of incremental operating expenses, when we do have bad debts and those do go to collection at the end of this period that will be included in our request to the Commission for recovery.
Hawaii has a very similar mechanism that we're working to put in place.
There has been a filing with the Hawaii Public Utilities Commission as well there.
Our liquidity is strong.
At the end of June, at the end of the quarter, we had $114 million in cash and additional current capacity on our lines of credit of more than $170 million.
Marty, you want to talk to us about all the fun stuff in California?
Boy, there is a lot going on in California.
Starting off with, some of you may have seen the CPUC, the California Public Utilities Commission extended its deadline for considering and concluding on our 2018 General Rate Case to September 30th.
That means, in order to meet that deadline, the Commission must issue a proposed decision no later than August 25th.
So we continue to monitor that and hopes that we can get that wrapped up.
As Tom pointed out earlier, we're feeling the financial consequences of not having rate relief and it gets pretty confusing each quarter to talk about our results with and without rate relief.
So we hope to get that wrapped up in the third quarter.
Perhaps more importantly, from a policy perspective, on June -- excuse me July 3rd, the CPUC issued an unexpected proposal in an unrelated case and I want to read to you the full name of this OIR and I'll come back and talk about it.
The full name is called, Evaluating the Commission's 2010 Water Action Plan Objective of Achieving Consistency between Class A Water Utilities' Low-Income Rate Assistance Programs, Providing Rate Assistance to All Low Income Customers of Investor-Owned Water Utilities, and Affordability.
So it was an OIR looking at the consistency and the goals of achieving consistency of low income in rate assistance programs.
So this July 3rd proposed decision that kind of came out of [Indecipherable], if adopted would require Cal Water and other water utilities that are regulated by the CPUC to propose removing it's decoupling mechanism in the next General Rate Case.
This decision is troubling for a number of reasons.
First and foremost, it draws conclusions on a very, very limited set of data and evidence.
In fact we don't even know what was used to construct the data tables used by the Commission to draw these conclusions.
So we're very much involved and talking to the Commission last week and this week about this proposed decision and find it going in the wrong direction of the State's policy in support of conservation and the conservation goals of the state.
Just to remind everyone, California has Ag business that's over $60 billion.
It's the largest Ag state in the Union and we're growing in population from almost 40 million to 45 million over the next decade.
So the idea of getting rid of decoupling and basically implementing what's in this OIR essentially increases rates for most of the customers, including low income customers.
So we are just flat out against it and we're lobbying against it.
It's also unclear what the effect of this policy [Phonetic] decision could have on the current proposed decision that we're waiting for.
So legally, it should push into the next rate case cycle.
But we're looking into that and digging into that right now.
So, there'll be more to come on this -- on this PD that was issued here in early August.
We have a lot of efforts focused on basically asking for a halt to get more evidence on the record and to have a full examination of all the data that's available for the last 12 years of decoupling.
And we believe that the Commission would get to a different conclusion if they had all the evidence on the table.
Looking at the capital investments for the quarter, and this, frankly, was a highlight with everything going on that's been kind of negative news, it's nice to see that our capital program was up 9.5% compared to the same period last year.
So we had $133.5 million invested in the first half of 2020.
The Company previously estimated it would spend between $260 million and $290 million in capital during 2020.
While the Company has experienced some individual project slowdowns, we've seen other things like our main replacement program, being able to accelerate.
And so, overall, we have remained on track at least as of right now mid-year 2020.
Of course, that could change depending on how things go with the virus and if there is any more pending shutdowns that could affect our overall ability to get capital invested and put into the ground.
In addition, we've added an incremental $5 million in capital investment for our Rainier View acquisition that closed during the second quarter.
And if you turn the page, I want to talk about business development, which includes Rainier View.
The Washington Water Service Company and the Washington UTC, which is the Commission in Washington, approved our acquisition and we closed on that acquisition in June, which now makes Washington Water Service Company the largest investor-owned rate-regulated utility by the UTC in the state of Washington.
In addition, we have filed applications in Hawaii with the regulators for approval of our Kalaeloa system in O'ahu and our Kapalua system in Maui for the change in control and we anticipate those closing, hopefully, by the end of the first quarter 2021.
You'll see -- you see in the slides that Rainier View added approximately 18,500 customers, the Kalaeloa system will add about 200 customers, and per the history of us [Phonetic], that's the -- a former Barbers Point air base on O'ahu that's going to be redeveloped into residential and commercial properties.
And in the Kapalua Water & Wastewater System, which is just north of our Ka'anapali system on the island of Maui, which has a couple of large hotels, golf courses and developments.
So, you add those up, closing out the two in Hawaii, that would add just under 4% to our total customer connection count for the year of 2020 which we think is very healthy, given all we've been dealing with the pandemic and everything else.
So our business development team has continue to be busy and continue to do good work.
Tom, you want to go through the next couple of slides?
So on the capital investment history slide, which is Slide 19, we did update our 2021 projection to include an additional $5 million of investment in former Rainier View Water.
So you'll see a little bit of a bump there.
And if you flip to Slide 20, which is our regulated rate base.
We have now included the estimated increased rate base in 2020 as well as capital investments in 2021 for Rainier View.
And so those numbers have gone up just a little bit.
Obviously that's much smaller than our California operations and it doesn't change the shape of those curves, but we have updated those numbers.
As you can see, we continue to be on track, as Marty mentioned, and our expectation is that these are still the numbers, assuming the settlement gets adopted by the Commission.
I will add and apologies that it's not in the deck, but you'll notice on Slide 20, we have -- the third row is called advice letters included in the settlement of about $150 million that's the California settlement.
Yesterday, the Company filed with the Commission an advice letter to begin the recovery process on its Palos Verdes Water Reliability Project.
This is a 96 point -- I think it's a $96 million authorized advice letter for that very large project -- the largest project in the Company's history, and we did make that advice letter filings.
It is subject to a review process and we don't anticipate that that advice letter will be approved anytime soon.
We're targeting early 2021 for the approval of that advice letter, but for -- just for those of you who are looking at the rate base, and that the light green area, if you will, on that chart, the good news is that most of that has already now been filed for.
Well, you should get the sense there's probably three or four main things we're focused on in the third quarter.
First, the PD, the proposed decision on affordability and low-income assistance, staying focused on that, as well as our efforts to conclude on our 2018 General Rate Case.
This is one of the longest delayed rate cases, I think, we probably had in at least the last decades.
So we're anxious to get that wrapped up with the Commission and get put to bed.
Additionally, the COVID response, it seems to change every day and CDC requirements keep moving around, and we have to show up to work every day.
We're not a company that has a lot of employees sheltering in place.
We have to show up and continue to produce and provide water for our customers.
So making sure we continue to take every step possible to protect our employees and our customers as we deal with COVID and we go into the fall season, which includes going into the flu season.
And lastly, and this may become one of the more important items as we move later into the third quarter, we're moving into wildfire season and the real possibility of continued public safety power shut downs, and as we know, the power may go out, but people still need water.
And so the operations team has done a very good job preparing for wildfire and the PSPS season and we are well ready to handle any challenges that come our way.
So Q3 looks to be a very busy quarter for us and we look forward to sharing our results with you as we wrap up the quarter and report our results at the end of October.
 Assistant:

Chosen response:
compname posts q2 earnings per share $0.11.
q2 earnings per share $0.11.
due to an expected decrease in customer collections, has increased its estimate for future credit losses.


Prompt:
Human: I will provide comments on the strong start that we had to 2021, including the advancement of a number of strategic priorities to make DuPont a premier multi-industrial company, equipped for growth and value creation.
The health and well-being of our people remains our top priority.
The principles and protocols we've implemented globally and locally to help to protect our people and ensure business continuity as countries face multiple waves of infection and lockdowns.
As an innovation-led company, we believe in science and we're encouraging all employees to get vaccinated.
And where possible, we're working with public health authorities to facilitate access and distribution.
Starting on Slide 2, I will note that one of our priorities for generating value is consistent operating performance and financial results.
Lori will take you through the details in a moment.
But I'd like to highlight the 7% organic revenue growth that we reported, reflecting broad and strong demand in key markets such as semiconductors, smartphones, water, residential construction and automotive.
This revenue growth, along with continued cost discipline, led to strong operating leverage and EBITDA margin expansion in the quarter.
Our first-quarter financial results reflect the agility of our teams to navigate through a challenging environment while facing escalating raw material and logistics costs, as well as global supply constraints of key raw materials, most notably in our M&M segment.
With strong order trend continuing and confidence in our team's ability to navigate the supply chain challenges, we are raising our full-year guidance for net sales, operating EBITDA and adjusted EPS.
I will provide more details regarding this increase shortly.
In addition to our financial results, we advanced a number of our strategic priorities during the quarter.
First, as previously announced, we completed the merger of our nutrition and biosciences business with IFF, creating an industry-leading company in the food and beverage, home and personal care and health and wellness markets.
As you know, this transaction also unlocks significant value for DuPont and our shareholders.
As part of the transaction, we received 7.3 billion cash from IFF and retired slightly more than 197 million coupon shares, or about 27% of our outstanding shares at the time with no cash outlay.
We strengthened our balance sheet during the quarter by paying down our $3 billion term loan, and we will redeem $2 billion of our long-term debt later this month.
As a reminder, our next debt maturity will not be due until the fourth quarter of 2023.
In line with our balanced approach, we returned about 660 million of capital to shareholders during the first quarter through share repurchases and dividends.
Under our existing share buyback program, we executed 500 million in share repurchases during the first quarter.
As a reminder, we have about 500 million of repurchase authorization remaining under that program, which we intend to utilize by June 1 of this year.
Earlier this quarter, we also announced that our board of directors authorized a new 1.5 billion share buyback program, which expires on June 30, 2022.
We plan to be opportunistic under the new program as we move throughout the year.
With respect to dividends, we returned about 160 million in cash to shareholders during the quarter.
As we previously mentioned, going forward, we will target a payout ratio between 35 and 45%.
And we intend to work with our board to increase our dividend annually as we grow our earnings.
In March, we announced a definitive agreement to acquire Laird Performance Materials for $2.3 billion.
When completed, a planned acquisition of Laird advances DuPont's strategy of growing as a global innovation leader and strengthens our leadership position in advanced electronic materials.
The Laird business will complement our interconnect solutions business within E&I, and it will add critical capabilities and market-leading offerings in thermal management and electromagnetic shielding, which are essential to emerging electronic applications.
Our E&I team, along with our customers, are excited for this opportunity.
We recently received regulatory approval for the transaction in Germany and Brazil and cleared HSR in the U.S. last month.
As previously indicated, we expect the transaction will close in the third quarter of this year.
Finally, we announced previously that we have signed definitive agreements to sell our Biomaterials, Clean Technologies and Solamet businesses.
We anticipate receiving more than 900 million in gross proceeds from those divestitures, and we expect those transactions to close in the second half of this year.
Before turning it over to Lori to go through the details of the first quarter, I'd like to take a moment to provide some context regarding what we saw during the quarter in our key end markets that we serve.
Combined, the electronics and automotive markets account for nearly half of our revenues.
Electronics continues to perform very well, and auto is recovering nicely from its 2020 lows.
Within electronics, demand continues to be broad-based as the ramp-up of advanced technology nodes and a need for more memory to servers and data centers has accelerated.
The server market, which is a large consumer of semiconductor chips and circuit board chemistries, continues to show strength and is expected to remain robust as Internet network traffic continues to grow.
Furthermore, the deployment of 5G infrastructure by leading telecom companies in preparation for the next generation of ultra high-speed data transmission should help sustain demand for premium smartphones, which is further enhanced by our favorable content play.
With respect to the automotive end market, demand is well above the lows of 2020 but not yet back to 2019 levels, which sold 22.9 million vehicles produced in the first quarter and nearly 90 million units for the year.
The lack of stable supply of critical components, mainly semiconductors, impacted the ability of the auto OEMs to produce more vehicles and rebuild inventories during the quarter.
Even where we participate in the value chain within M&M, I think it's important to note that our first quarter engineering polymers volumes were not materially affected by the chip shortages as our demand from the Tier 1 and Tier 2 suppliers was not lessened as a result of the chip shortage.
However, our ability to supply customers was affected by supply constraints of key raw materials, predominantly in our nylon and polyester product lines.
This supply situation is gradually improving while we anticipate several critical products will continue to constrain our production through the end of the second quarter.
We expect that annual sales as a result of raw material constraints will be captured in the second half of the year.
Additionally, we believe that the automotive market will remain strong for the balance of the year as OEMs look to meet robust demand, as well as replenish global inventories, which are currently below historical averages.
Moving on to the water and construction end markets.
Collectively, these two markets account for approximately 20% of our total company sales.
Versus first quarter of 2019, demand for advanced water filtration and purification has strengthened, driven by solid growth in Asia Pacific.
Strength in residential and commercial water markets, as well as industrial and desalination segments has shown growth.
For construction, North America residential and do-it-yourself markets are up versus first quarter 2019.
And while demand within the commercial construction segment has improved from the lows experienced in 2020, it is not back to 2019 levels.
Lastly, demand within our industrial end markets versus 2019 levels is mixed.
Within the electrical infrastructure and Tyvek protective garment markets, demand is at or above 2019 levels.
However, demand in end markets such as aerospace and oil and gas is still below 2019 levels, but it's improved since the lows of the second and third quarter of last year.
Sequentially, our sales in the aero and oil and gas were up over 40%.
Our diversified portfolio of products and technologies will serve us as the global economy continues to recover from the pandemic.
We are continuing to invest at competitive levels in R&D and innovation to further solidify our strong market positions and maintain our position as the partner of choice for our customers in 2021 and beyond.
Let me cover our first-quarter financial results on Slide 4.
Net sales of 4 billion were up 8% versus the first quarter of 2020, up 7% on an organic basis.
Overall sales growth was driven by strong volume, up 7% versus first quarter of last year, with volume increases in all three reporting segments.
Currency provided a 3% tailwind in the quarter led by the euro.
Portfolio was a 2% headwind, primarily due to the sale of the trichlorosilane business last year.
Sales were up in all three segments, with E&I, M&M and W&P reflecting organic growth of 14%, 8% and 1%, respectively.
On a regional basis, organic sales were up 20% in Asia Pacific, our largest region from a sales perspective, with strong results in all three reporting segments.
Partially offsetting gains in Asia Pacific were organic sales decline in the U.S. and Canada and EMEA of 4 and 2%, respectively.
and Canada and EMEA were driven by softness for aramid fibers, specifically continued softness in aerospace and timing delays in defense, as well as auto builds, which were down in these regions.
I'll provide more color on our segment top line results on the next slide.
From an earnings perspective, we delivered operating EBITDA of 1.05 billion and adjusted earnings per share of $0.91 per share, up 15 and 90%, respectively.
Volume gains, as well as benefit from prior-year cost initiatives and currency drove 160 basis points of operating EBITDA margin expansion and 1.9 times operating leverage.
Incremental margins for the quarter were 46%.
I will walk you through the earnings per share later call in a moment.
Our total company gross margin for the quarter was 36.8%, flat on a year-over-year basis.
Gross margin improvement in E&I and M&M on higher volume and manufacturing productivity was offset by a margin decline in W&P, resulting from higher unit rates versus the prior year, driven primarily by lower production volumes of aramid fibers.
Gross margin expanded about 280 basis points sequentially, with margin improvement in all three segments.
From a segment perspective, E&I delivered operating EBITDA margin of 33.5% and 420 basis points of margin expansion versus the year-ago period on strong volume growth and a onetime discrete gain related to an asset sale.
Excluding the benefit of the asset sale, operating EBITDA margin would have been 31.7%, a year-over-year improvement of 240 basis points.
M&M delivered operating EBITDA margins of 22.9% and 320 basis points of margin expansion versus the year ago period on higher volumes and savings from productivity actions.
In W&P, operating EBITDA was flat versus the year ago period as sales gains and cost productivity actions were offset by higher manufacturing costs, primarily higher unit rates, driven by lower production of aramid fibers and increased supply chain costs.
For the quarter, cash flow from operating activities and free cash flow were 378 million and 95 million, respectively.
These amounts include one month of cash flow from our N&B business compared to three months of N&B cash burn in the prior year.
In addition, cash flow and free cash flow conversion was negatively impacted by a working capital headwind of about 300 million, led by higher accounts receivable balances, which were up in line with sales.
For the year, we continue to target free cash flow conversion of greater than 90%.
Slide 5 provides more details on the year-over-year changes in net sales.
Leading the way for the quarter was E&I with 15% volume growth, which had a record quarter.
Volume gains were led by double-digit growth on robust demand for semiconductors across Asia.
High fabrication utilization rates, driven by demand for new technologies and advanced nodes, along with the ongoing shift in digital transformation drove strong top line growth.
In addition, share gains from recent wins for CMP slurry and lithography materials improved results.
In interconnect solutions, double-digit growth was driven by higher material content in premium next-generation smartphones partially resulting from timing shifts that select OEM demand shifted earlier in the year this year, along with broader printed circuit board market recovery.
Within industrial solutions, double-digit volume gains in display materials due to new time launches more than offset continued weakness in aerospace.
The end markets within W&P were generally consistent with our expectations.
Sales gains were led by water solutions with double-digit volume growth, reflecting strong demand for our reverse osmosis and ultrafiltration technology, led by Asia.
Shelter solutions had low single-digit organic growth versus the year ago period, reflecting high single-digit organic growth in residential construction and retail channels for do-it-yourself application, offset partially by softness in commercial construction market.
Within safety solutions, pricing gains, favorable currency and strengthening demand for aramid fibers in industrial and automotive end market was more than offset by continued weakness in aerospace and year-over-year volume declines for Tyvek.
Lower Tyvek production volumes were a result of higher planned downtime in the quarter.
Also contributing to strong first-quarter top line growth was continued recovery of the global automotive market, which represents about 60% of our M&M segment from an end market perspective.
The most recent estimate of 1Q global auto builds were about 20.3 million units toward the quarter, up approximately 14% versus the first quarter of last year.
As a result, volume in our performance resins business was up over 20% versus the year-ago period.
Another bright spot in M&M was improved demand for microcircuit materials, which we aligned to the M&M segment earlier this year.
These specialized materials, along with adhesive growth, helped drive over 20% organic growth in advanced solutions growth in the year ago period.
Demand in our engineering polymers business was strong.
However, global supply constraints for key raw materials resulted in low single-digit volume decline.
Our teams are experienced in navigating trading challenges and have worked diligently with our customers and suppliers to help mitigate the impact incurred as a result.
Additionally, we expect to recover volume lost in the quarter due to these disruptions and raw material constraints as part of this unit.
Turning to Slide 6.
I mentioned that adjusted earnings per share for the quarter of $0.91 was up 90% versus the prior year.
The largest driver of our year-over-year growth was a significantly lower share count, mainly resulting from the N&B exchange offer.
The lower share count provided a $0.16 benefit versus the prior year.
Excluding the lower share count, adjusted earnings per share growth was still significant, up 56% versus the prior year.
Higher segment earnings provided a $0.13 tailwind in the quarter versus the prior year, along with benefits this year with a lower base tax rate and reduced interest expense.
Our base tax rate for the quarter of 19.4% was lower than forecasted as a result of a few discrete tax benefits in the quarter.
Our tax rate in the quarter was significantly lower than last year, resulting from the absence of certain discrete tax headwinds incurred in the prior year.
For the full-year 2021, we now expect our base tax rate to be in the range of 21 to 22%, down slightly from the 21 to 23% that we previously estimated at the beginning of the year.
Turning to Slide 7.
I will provide some commentary on our balance sheet and cash position.
I mentioned earlier that net working capital provided headwinds in free cash flow in the quarter.
However, I would like to point out that net working capital productivity gains of about 600 million that we have made in the first quarter of last year, decreasing net working capital for about 3.5 billion at March 2020 to 2.9 billion at March of 2021.
Both of these were driving down past due receivables and inventory.
From a debt perspective, we have stated that we are committed to maintaining our current strong investment-grade credit profile.
We started the year with $15.6 billion in current debt.
And as Ed mentioned, we paid down our $3 billion term loan in February, and we will pay down $2 billion of debt later this month.
Moving on to cash.
Our cash generated from operations last year put us in a strong cash position coming into this year, and that balance grew with a $7.3 billion special cash payment from the transaction with IFF.
In addition, we expect to receive over 900 million in gross proceeds this year from the previously announced sale of the non-core businesses.
Our current deployment plan for 2021 includes a balanced capital allocation approach.
Along with our plan for internal investment this year, we plan to grow through targeted M&A in areas of secular growth and will fund the $2.3 billion planned acquisition of Laird performance materials with cash on hand.
We intend to continue to return cash to shareholders.
Along with our dividend policy, we completed 500 million of share repurchases in the first quarter at an average price of about $73 per share and will remain opportunistic with our remaining share repurchase authorization throughout the rest of the year.
On a go-forward basis, our target run and maintain cash balance is about $1.5 billion.
And from a leverage perspective, our net debt-to-EBITDA target remains at 2.75 times.
Let me close with our financial outlook on Slide 8, which includes our view of the second quarter and full-year 2021.
We are raising our full-year guidance range for net sales, operating EBITDA and adjusted EPS.
At the midpoint of the range provided, we now expect net sales for the year to be about $15.8 billion, which reflects year-over-year growth of 10%, up from our previous estimate of 8% growth.
We expect to improve leverage and now expect operating EBITDA for the year to be about 4.03 billion, at the midpoint of the range provided, a year-over-year increase of 17%.
These revised estimates reflect our solid start to the year and confidence in our team's ability to continue to navigate global supply key challenges.
We are also raising our adjusted earnings per share range for the full year by $0.30 per share and now expect adjusted earnings per share of $3.67 per share, at the midpoint of the range provided.
In addition to the strong operating performance of our businesses, the share repurchases we are completing under our existing programs and the narrowing of our estimated tax range [Inaudible] while contributing to the revised [Inaudible].
For the second-quarter 2021, we expect net sales to be about 3.975 billion, and we expect the operating EBITDA to be about $1 billion, both at the midpoints of the ranges provided and both well above results in the second quarter last year.
At the midpoint of the range provided, we expect adjusted earnings per share for the second quarter of 2021 of $0.94 per share, which now reflects the full reduction in shares resulting from the N&B exchange offer and our weighted average shares.
[Operator Instructions] Operator, please provide the Q&A instructions.
 Assistant:

Chosen response:
qtrly earnings per share from continuing operations $0.89; qtrly adjusted earnings per share $0.91.
qtrly net sales $3.98 billion versus $3.67 billion.
raises full year 2021 guidance for net sales, operating ebitda and adjusted eps.
on a regional basis, organic sales growth in quarter was led by asia pacific more than offsetting declines in us & canada and emea.
electronics & industrial reported a record quarter with net sales of $1.3 billion, up 17%.
expect similar top-line trends continuing from q1 into q2 coupled with slight escalation in raw materials and logistics costs.


Prompt:
Human: dollargeneral.com under News & Events.
We also may reference certain financial measures that have not been derived in accordance with GAAP.
dollargeneral.com under News & Events.
Despite the challenging operating environment, our team remains steadfast in their dedication to fulfilling our mission of serving others by providing affordable, convenient and close to home access to everyday essentials, and I could not be more proud of their efforts.
Throughout the pandemic, our priority has been the health and safety of our employees and customers, while meeting the critical needs of the communities we serve as an essential retailer.
Protective equipment dedicated certain store hours for the most vulnerable members of our communities and, most recently, removed barriers for our frontline associates to receive the vaccine.
In total, we invested approximately $248 million in response to the pandemic in 2020, including about $167 million in appreciation bonuses for eligible front-line employees to demonstrate our appreciation for their exceptional performance during an incredibly challenging year.
At Dollar General, we remain committed to being part of the solution, and believe we are uniquely positioned to continue supporting our customers through our network of more than 17,000 stores located within five miles of approximately 75% of U.S. population.
At the same time, we remain focused on advancing our operating priorities and strategic initiatives as we continue to meet the evolving needs of our customers and further position Dollar General for long-term sustainable growth.
To that end, we are excited to share an update on some of our plans for 2021.
First, we plan to further the rollout of several value-creating initiatives, including our non-consumables initiative, Fast Track and the completion of our initial rollout of DG Fresh.
In addition, while still early, we are very pleased with the results of our pOpshelf stores, which have far exceeded our initial expectations for both sales and gross margin.
As a result, we plan to accelerate our pace of new store openings for pOpshelf in 2021 and expect to incorporate this concept into a number of our larger format Dollar General locations as we look to capitalize on the significant growth opportunity we see for this differentiated concept.
We are also pleased to highlight key changes to our development strategy, including plans to build on the success of our Dollar General Plus Store or DGP, and the introduction of two new store formats, which we began testing in 2020.
Similar to our larger footprint, DGP concept, the first new format has selling space of approximately 8,500 square feet, which compares to about 7,300 square feet of selling space for our traditional store.
Beginning later this year, this new format along with our DGP concept will become our base prototype for nearly all new stores, replacing both our traditional and higher, cooler count DGTP format, allowing for a more optimized assortment and room to accommodate future growth.
Our second new format is even larger with approximately 9,500 square selling feet, and will be deployed opportunistically across new store relocation and remodel opportunities.
Notably, on average, our DGP and new store formats are outperforming the chain on a comp sales basis and have considerably higher sales volumes compared to both the traditional and DGTP store, which bodes well for the future as we look to increase their unit counts in the years ahead.
Finally, we are pleased to provide an update on a number of our new small box store opportunities we see available in the Continental United States, which represents an increase compared to our prior estimate.
Jeff will discuss these updates in more detail later in the call.
But first, let's recap some of the highlights for the fourth quarter and full year.
The quarter was once again highlighted by strong growth on both the top and bottom lines.
We're pleased that, for the quarter, our three non-consumable categories once again delivered a combined comp sales increase well in excess of our consumable business.
Of note, this represents our 11th consecutive quarter of year-over-year comp sales growth in our combined non-consumable categories, which we believe speaks to the strong and sustained momentum in these product categories.
From a monthly cadence perspective, comp sales in December increased in the high-single digit range with similar mid-teens growth in both November and January.
In total, fourth quarter net sales increased 17.6% to $8.4 billion, primarily driven by comp sales growth of 12.7%.
These results include significant growth in average basket size and units in particular, partially offset by decline in customer traffic.
And while customers continue to consolidate trips, on average, they are spending more with us compared to last year.
Once again, this quarter, we increased our market share in highly consumable product sales, as measured by syndicated data, driven by a meaningful increase in both units and dollars.
Importantly, our data suggests an increase in new customers this quarter as compared to Q4 of 2019.
These new customers continue to skew younger, higher income and more ethnically diverse, underscoring the broadening appeal of our value and convenience proposition.
We continue to be encouraged by the retention rates of new customers and we are working to drive even higher levels of engagement with more personalized marketing and continued execution of our key initiatives.
We're particularly pleased that we delivered significant operating margin expansion, which contributed the fourth quarter diluted earnings per share of $2.62, an increase of 24.8% over the prior year.
For the full year, net sales increased 21.6% to $33.7 billion, including net sales growth of 28.1% in our combined non-consumable categories.
Comp sales for the year increased 16.3%, representing our 31st consecutive year of same-store sales growth.
In 2020, we celebrated the opening of our 17,000 store and the launch of our newest store concept pOpshelf.
In total, we completed a record 2,780 real estate projects during the year, exceeding our initial target of 2,580 projects as we continue to build and strengthen the foundation for future growth.
From a position of strength, we also made targeted investments in other key areas, including the acceleration of certain strategic initiatives to strengthen our competitive position and further differentiate and distance Dollar General from the rest of the discount retail landscape.
Collectively, our fourth quarter and full year results reflect strong and disciplined execution across many fronts and further validate our belief that we are pursuing the right strategies to enable sustainable growth while creating meaningful long-term shareholder value.
As a mature retailer in growth mode, we are also laying the groundwork for future initiatives, which we believe will unlock additional growth opportunities as we move forward.
We operate in one of the most attractive sectors in retail.
And in an environment where customers continue to seek safe and convenient experiences, we believe our unique store footprint, further enhanced through our multiyear initiatives, provides a distinct competitive advantage and positions us well for continued success.
Overall, I am proud of our associates and all that we've achieved over the past year.
We feel very good about the underlying business and I'm excited about the opportunities that lie ahead.
Now that Todd has taken you through a few highlights of the quarter and full year, let me take you through some of its important financial details.
Unless we specifically note otherwise, all comparisons are year-over-year.
All references to earnings per share refer to diluted earnings per share and all years noted refer to the corresponding fiscal year.
As Todd already discussed sales, I will start with gross profit, which was positively impacted in the quarter by a significant increase in sales, including the impact of COVID-19.
Gross profit as a percentage of sales was 32.5% in the fourth quarter, an increase of 77 basis points, which represents our seventh consecutive quarter of year-over-year gross margin rate expansion.
This increase was primarily attributable to: a reduction in markdowns as a percentage of sales, higher initial markups on inventory purchases, a greater proportion of sales coming from non-consumable categories and a reduction in shrink as a percentage of sales.
These factors were partially offset by: increased transportation and distribution costs, which were impacted by increased volume, some of which is attributable to the COVID-19 pandemic as well as higher transportation rates and discretionary employee bonus expense for our distribution center and private fleet employees.
SG&A as a percentage of sales was 22.2%, an increase of 48 basis points.
This increase was primarily driven by incremental costs related to COVID-19, including appreciation bonuses paid to our frontline retail employees and health and safety-related expenses as well as increased incentive compensation expense and hurricane-related expenses.
These items were partially offset by certain expenses, which were lower as a percentage of sales, including occupancy costs, retail labor and depreciation and amortization.
Moving down the income statement.
Operating profit for the fourth quarter increased 21% to $872 million.
As a percent of sales, operating profit was 10.4%, an increase of 30 basis points.
Operating profit in the fourth quarter was positively impacted by COVID-19, primarily through higher sales.
The benefit from higher sales was partially offset by approximately $96 million or 110 basis points of incremental investments that we made in response to the pandemic, including approximately $69 million in appreciation bonuses for eligible frontline employees and additional measures taken to further protect our employees and customers.
Our effective tax rate for the quarter was 22.7% and compares to 23% in the fourth quarter last year.
Finally, as Todd noted earlier, earnings per share for the fourth quarter increased 24.8% to $2.62, which contributed to full year earnings per share of $10.62, an increase of 59.9%.
Turning now to our balance sheet and cash flow, which remain strong and provide us the financial flexibility to further support our customers and employees during these unprecedented times while continuing to invest for the long term and provide meaningful returns to shareholders.
Merchandise inventories were $5.2 billion at the end of the year, an increase of 12.2% overall and 6.3% on a per-store basis.
While a lot of stocks remain higher than we would like for certain high-demand products, we continue to make good progress with improving our in-stock position and are pleased with our overall inventory levels.
In 2020, we generated significant cash flow from operations totaling $3.9 billion, an increase of $1.6 billion or 73.2%.
Total capital expenditures for the year were $1 billion and included our planned investments in new stores, remodels and relocations, distribution and transportation projects and spending related to our strategic initiatives.
During the quarter, we repurchased 4.3 million shares of our common stock for $900 million and paid a quarterly dividend of $0.36 per common share outstanding at a total cost of $87 million.
With today's announcement of an incremental share repurchase authorization, we have remaining authorization of approximately $2.4 billion under the repurchase program.
Our capital allocation priorities continue to serve us well and remain unchanged.
Our first priority is investing in high-return growth opportunities, including new store expansion and our strategic initiatives.
We also remain committed to returning significant cash to shareholders through anticipated share repurchases and quarterly dividend payments, all while maintaining our current investment-grade credit rating and managing to a leverage ratio of approximately 3 times adjusted debt to EBITDA.
Moving to our financial outlook for 2021.
We continue to operate in a time of uncertainty regarding the severity and duration of the COVID-19 pandemic, including its impact on the economy, consumer behavior and our business.
Despite continued uncertainty, we are providing select annual guidance in an effort to provide the best view we reasonably can, based on what we currently know.
That said, there could be a number of potential headwinds and tailwinds this year, which are not incorporated into our guidance as the timing, degree and potential impacts on our business are currently unclear, including, but not limited to: the recently approved government stimulus package; other unknown external factors related to the ongoing health crisis, including its impact on consumer behavior and additional changes to minimum wage rates.
With this in mind, we currently expect the following for 2021: net sales in the range of a 2% decline to flat; a same-store sales decline of 4% to 6% but which reflects growth of approximately 10% to 12% on a two-year stack basis; and earnings per share in the range of $8.80 to $9.50, which reflects a compound annual growth rate between 15% and 20% or between 14% and 19% on an adjusted basis over a two-year period, which is well above our long-term goal of delivering at least 10% annual earnings per share growth on an adjusted basis.
Our earnings per share guidance assumes an effective tax rate in the range of 22% to 23%.
Capital spending is expected to be in the range of $1.05 billion to $1.15 billion as we continue to invest in our strategic initiatives and core business to support and drive future growth.
We also plan to repurchase a total of approximately $1.8 billion of our common stock this year, reflecting our strong liquidity position and confidence about the long-term growth opportunity for our business.
Let me now provide some additional context as it relates to our expectations.
Given the unusual situation, I will elaborate on our comp sales trends thus far in Q1.
Despite approximately 8,400 lost store operating days as a result of closures due to winter weather across the country, same-store sales for the month of February increased 5.7%, reflecting a healthy comp sales increase of 11.2% on a two-year stack basis.
From the end of February through March 16, comp sales decreased approximately 16% as we are in the midst of lapping our most difficult monthly comp sales comparison of the year.
As a reminder, comp sales growth for the month of March in 2020 was 34.5%.
Looking ahead, we remain cautious in our 2021 sales outlook, given the continued significant uncertainty that still exists as well as the unique comparisons against last year.
That said, as you think about the sales cadence of 2021, our performance is expected to be stronger in the second half, given a more difficult sales comparison in the first half and particularly in Q1.
Turning to gross margin.
In 2020, gross margins benefited from a greater proportion of sales coming from our higher-margin non-consumable categories, driven by a full year net sales percentage increase of these categories well in excess of our consumables business.
We expect our sales mix will ultimately shift toward our consumables categories in 2021, resulting in pressure on our rate.
However, the timing of when this dynamic may occur and its corresponding impact to gross margin are currently uncertain.
Gross margins in 2020 also benefited from a reduction in markdowns, including the benefit of higher sell-through rates as a result of significant customer demand in seasonal and other clearance-sensitive non-consumable categories.
In 2021, we expect our markdown rates will increase somewhat from the abnormally low levels we saw in 2020, which likely will create some gross margin pressure compared to last year.
In addition, while we continue to see the effect of higher carrier rates and fuel costs, our ongoing efforts to improve efficiencies and reduce expenses, including further expansion of our private fleet, are expected to help partially mitigate these cost pressures in 2021.
Also, please keep in mind that the second and third quarters represent the most challenging laps of the year from a gross profit rate perspective, following improvements of 167 basis points in Q2 2020 and 178 basis points in Q3 2020.
In terms of SG&A, while we expect to incur ongoing expenses related to the pandemic in 2021, overall, we anticipate a meaningful reduction in COVID-19-related costs compared to last year.
However, the leverage from these reduced costs is expected to be offset by deleverage associated with lower comp sales and approximately $60 million to $70 million in incremental year-over-year investments related to our strategic initiatives as we further their rollouts.
With regard to our strategic initiatives, in aggregate, we anticipate they will positively contribute to operating profit and margin in 2021, driven by NCI and DG Fresh as we expect the benefits to gross margin from our initiatives will more than offset the associated expense.
Finally, we estimate operating profit will be negatively impacted by approximately $35 million to $40 million in Q1 as a result of lost sales from storage closures and expenses related to the widespread winter weather that we experienced in February.
In closing, we are very proud of the team's execution and performance, which resulted in exceptional fourth quarter and full year results.
As always, we continue to be disciplined in how we manage expenses and capital, with the goal of delivering consistent, strong financial performance while strategically investing for the long term.
We remain confident in our business model and our ongoing financial priorities to drive profitable same-store sales growth, healthy new store returns, strong free cash flow and long-term shareholder value.
Let me take the next few minutes to update you on our operating priorities, including our strategic initiatives and plans for 2021.
Our first operating priority is driving profitable sales growth.
The team did a fantastic job in 2020.
[Technical Issues] NCI consists of a new and expanded product offering in key non-consumable categories.
The NCI offering was available in more than 5,800 stores at the end of 2020, including nearly 400 stores in our light version.
This compares to our prior expectation of more than 5,600 stores at year-end.
Given our strong performance to-date, we plan to expand this offering to about 5,700 additional stores this year, bringing the total number of NCI stores to more than 11,000 by year-end.
This total includes over 2,100 stores in our light version, which incorporates a vast majority of the NCI assortment but through a more streamlined approach.
Moving to our newest concept, pOpshelf, which further builds on our success in learnings with NCI.
pOpshelf aims to engage customers by offering a fun, affordable and differentiated treasure hunt experience delivered through continually refreshed merchandise, a differentiated in-store experience and exceptional value with about 95% of our items priced at $5 or less.
We opened our first five locations in 2020.
And as Todd mentioned, given our strong results to date, we plan to accelerate the rollout of pOpshelf in 2021.
In fact, we are now targeting to have a total of up to 50 pOpshelf stores opened by year-end compared to our previous goal of about 30 total locations.
In addition to these stores, we also plan to incorporate this concept in up to 25 Dollar General stores in 2021.
In terms of our store-within-a-store concept, a smaller footprint pOpshelf shop will be prominently positioned in the center of the store, and we will display both Dollar General and pOpshelf branding on exterior entrances to build and maximize awareness.
From these initial stores, our goal is to test, learn and ultimately expand to more locations over time as we look to leverage the unique strengths of these complementary formats and build on our early success with pOpshelf by making it more available to a broader range of customers.
Turning now to DG Fresh, which is a strategic, multiphase shift to self-distribution of frozen and refrigerated goods.
The primary objective of DG Fresh is to reduce product costs on our frozen and refrigerated items, and we continue to be very pleased with the product cost savings we are seeing.
In fact, DG Fresh continues to be the largest contributor to the gross margin benefit we are realizing from higher initial markups on inventory purchases, and we expect this benefit to grow as we continue to scale this transformational initiative.
Another important goal of DG Fresh is to increase sales in these categories.
We are pleased with the success we are seeing on this front, driven by higher overall in-stock levels and the introduction of new products in select stores being serviced by DG Fresh.
Given our success to-date, we are further accelerating the rollout of additional offerings with the recent introduction of even more products, including both national and private brands as we look to further optimize our assortment while increasing our relevance with customers.
And while produce is not included in our initial rollout plans, we believe DG Fresh provides a potential path forward to expanding our produce offering to more than 10,000 stores over time as we look to further capitalize on our extensive self-distribution capabilities.
In total, we were self-distributing to more than 16,000 stores from 10 facilities at the end of 2020.
This compares to our previous expectation of over 14,000 stores at year-end.
Overall, we remain well on-track to complete our initial rollout across the chain in 2021.
Moving to our cooler expansion program, which continues to be our most impactful merchandising initiative.
During 2020, we added more than 62,000 cooler doors across our store base.
In total, we expect to install more than 65,000 cooler doors in 2021 as we continue to build on our multiyear track record for growth in cooler doors and associated sales.
As a reminder, in 2019, we began incorporating high-capacity coolers into the majority of our new, remodeled and relocated stores, creating additional opportunities to drive higher on-shelf availability and deliver a wider product selection, all enabled by DG Fresh.
Next, a quick update on our FedEx relationship.
This convenient customer package pickup and dropoff service is now available in over 8,500 stores, with plans to be in a total of over 9,500 stores by year-end, further advancing our long track record of serving rural communities.
In addition to the gross margin benefits associated with NCI and DG Fresh, we continue to pursue additional opportunities to enhance gross margin, including improvements in private brand sales, global sourcing and supply chain efficiencies.
With regards to our supply chain, our plans for 2021 include further expansion of our private fleet, which accounted for more than 20% of our outbound fleet at the end of 2020.
Reducing stem miles is also an important contributor to these efforts, and the recent opening of our Walton, Kentucky dry distribution center is expected to drive additional efficiencies as we move ahead.
We also plan to open two additional DG Fresh facilities in 2021 as we look to further optimize our fresh network and support future growth.
In addition, we anticipate our combination DG Fresh and dry distribution center in Blair, Nebraska will be completed in late [Technical Issues] contribute to a further reduction in stem miles over time.
Finally, while we are very pleased with our progress in 2020, shrink reduction remains an important area of opportunity.
We continue to build on our success with electronic article surveillance by increasing the number of items tagged while further leveraging technology to drive even higher levels of in-store execution.
Our second priority is capturing growth opportunities.
Our proven high-return, low-risk real estate model continues to be a core strength of our business.
In 2020, we completed a total of 2,780 real estate projects, including 1,000 new stores, 1,670 remodels and 110 relocations.
Additionally, we now have produce in more than 1,100 stores.
For 2021, we expect to open 1,050 new stores, remodel 1,750 stores and relocate 100 stores, representing 2,900 real estate projects in total.
We also plan to add produce in approximately 700 stores, bringing the total number of stores that carry produce to more than 1,800.
In addition, as Todd noted earlier, we continue to advance the evolution of our store base with plans to build on the success of our DGP format, including the introduction of two new format types.
With about 8,500 square feet of selling space, both our first new format and DGP concept allow for expanded higher capacity cooler counts, an extended queue line and a broader product assortment, including NCI, a larger health and beauty section and produce in select stores.
In total, we expect more than 550 of our overall real estate projects this year to be in one of these format types as we look to further enhance our value and convenience proposition, particularly in rural America.
The second new format consists of about 9,500 square feet of selling space.
In addition to an extended queue line and broader assortment, this larger layout also includes nearly 50 high-capacity coolers and expanded produce offering, fresh meat and additional checkout lanes, including a self-checkout bullpen with multiple stations.
We believe this even larger format better positions us to meet the growing needs of our customers, particularly in highly underserved markets, and we are targeting more than 100 locations by year-end.
Overall, these larger formats allow us to incorporate our best and most impactful initiatives and are designed to expand high-growth, traffic-building categories in a more customer-friendly format all while continuing to drive strong returns.
Moving to an update on the number of new store opportunities.
Through a combination of our growing relevance with customers, format innovation, an evolving retail landscape and leveraging new technologies, we estimate there are now approximately 13,000 additional small-box store opportunities in the Continental U.S. which are available for a Dollar General store.
This compares to our prior estimate of nearly 12,000 opportunities and is inclusive of our 2021 new unit pipeline.
Although these opportunities are available to all small-box retailers, as a leader in small-box retail, combined with our proven track record of new unit development and format innovation, we believe we are well positioned to capture a disproportionate share as we move ahead.
And while we continue to evaluate, we currently estimate pOpshelf could add approximately 3,000 additional store opportunities in the Continental U.S., with about another 1,000 additional opportunities available for our smaller footprint DGX format.
When taken together, we estimate there are a total of approximately 17,000 new store opportunities available across our format types which we believe represents a long runway for new unit growth.
Overall, our real estate pipeline remains robust, and we are excited about the significant new store opportunities ahead.
Next, our digital initiative, which is an important complement to our brick-and-mortar footprint as we continue to deploy and leverage technology to further enhance the customer in-store experience.
Overall, our strategy consists of building a digital ecosystem that is specifically tailored to provide our customers with an even more convenient, frictionless and personalized shopping experience.
We made significant progress in 2020, highlighted by the accelerated rollout of DG Pickup, our Buy Online Pick Up In-store offering to more than 17,000 stores providing another convenient access point for those seeking a more contactless shopping experience.
During the year, we also saw continued growth in customer engagement across our digital ecosystem, including our digital coupon offering, shopping list feature, cart calculator shopping and budgeting tool, eCommerce site, DG Go!
mobile checkout and our mobile app, which ended the year with nearly 4 million monthly active users.
Looking ahead, our plans include providing more relevant, meaningful and personalized offerings with the goal of driving even higher levels of customer engagement and loyalty.
Our third operating priority is to leverage and reinforce our position as a low-cost operator.
Over the years, we've established a clear and defined process to control spending, which governs our disciplined approach to spending decisions.
This zero-based budgeting approach, internally branded as Save to Serve, keeps the customer at the center of all we do, while reinforcing our cost control mindset.
Our Fast Track initiative is a great example of this approach, where our goals include: increasing labor productivity in our stores, enhancing customer convenience and further improving on-shelf availability.
We continue to be pleased with the labor productivity improvements we are seeing as a result of our efforts around both rolltainer and case pack optimization, which have led to the more efficient stocking of our stores.
The second component of Fast Track is self-checkout, which provides customers with another flexible and convenient checkout solution while also driving greater efficiencies for our store associates.
Self-checkout was available in more than 1,600 stores at the end of 2020, with plans for an aggressive expansion as we move ahead.
In fact, we expect to introduce this offering into the vast majority of our stores by the end of 2022.
Our underlying principles are to keep the business simple but move quickly to capture growth opportunities while controlling expenses and always seeking to be a low-cost operator.
Our fourth operating priority is investing in our diverse teams through development, empowerment and inclusion.
As a growing retailer, we continue to create new jobs in the communities we serve.
And for those associates already on our team, this growth is resulting in numerous opportunities for career advancement.
In fact, more than 12,000 of our current store managers are internal promotes, and we continue to innovate on the development opportunities we can offer our teams, including continued expansion of our private fleet and those associated with DG Fresh as well as pOpshelf.
In addition, we transitioned to a virtual learning environment in 2020, resulting in the continued development of our people, including nearly 3 million training hours for our employees, all supported by our award-winning training and development programs.
Importantly, we believe these efforts continue to yield positive results across our store base, as evidenced by continued record low store manager turnover, record staffing levels, healthy applicant flows and a robust internal promotion pipeline.
We believe the opportunity to start and develop a career with a growing and purpose-driven company is a unique competitive advantage and remains our greatest currency in attracting and retaining talent.
Overall, we are making great progress against our operating priorities and strategic initiatives.
We have a robust set of initiatives in place for 2021 and are confident in our plans to drive long-term sustainable growth while creating meaningful value for our shareholders.
In closing, I am proud of our team's performance and our 2020 results, which further demonstrate our unique combination of value and convenience, continues to resonate with customers and positions us well going forward.
I look forward to all that we can accomplish together in the year ahead.
 Assistant:

Chosen response:
q4 earnings per share $2.62.
q4 same store sales rose 12.7 percent.
q4 sales $8.4 billion versus refinitiv ibes estimate of $8.28 billion.
board of directors increases share repurchase program authorization.
as of january 29, 2021, total merchandise inventories, at cost, were $5.2 billion compared to $4.7 billion as of january 31, 2020.
sees fiscal year 2021 net sales in range of a 2% decline to flat.
sees fy 2021 earnings per share $8.80 to $9.50.
sees fiscal year 2021 share repurchases of approximately $1.8 billion.
sees fiscal year 2021 capital expenditures in range of $1.05 billion to $1.15 billion.
reiterating its plans to execute 2,900 real estate projects in fiscal year 2021.
dollar general - from jan 30, 2021 through feb 26, 2021 same-store sales increased about 5.7% versus first accounting period of fiscal year 2020.
believes consumer behavior driven by covid-19 had significant positive effect on qtrly net sales and same-store sales.
dollar general - from feb 27, 2021 through march 16, 2021, same-store sales decreased about 16% versus comparable timeframe in 2020 fiscal year.


Prompt:
Human: This release is available on the company's website at dhigroupinc.com.
Lastly, during today's call, management will refer to specific financial measures, including adjusted EBITDA, adjusted EBITDA margin, and net debt that are not prepared in accordance with U.S. GAAP.
We appreciate your interest in DHI.
I want to begin by saying a few words about the impact of COVID-19 and our response to this global pandemic.
First, I want to express our heartfelt concern to all of those who have been impacted.
And to everyone listening today, I hope you and your family and friends are staying safe and healthy.
In the past several weeks, DHI has jumped into action to aid our community by launching COVID-19 Resource Centers on each of our brand sites, assisting both clients and candidates alike with information relevant to their needs in these challenging times.
And just last week, we launched a campaign to provide free recruitment services to U.S. hospitals to help them find technologists in fields like electronic medical records, healthcare administration, and computer system processing.
As the COVID-19 pandemic continues to unfold, our foremost concern at DHI is to ensure the health and safety of our employees, their families, and our worldwide community.
As such, we have taken extraordinary measures to maintain continuity of our operations and to continue to safely operate at full capacity while complying with the local, state, and country-mandated protection directives.
All of our employees are working from their residences using the best possible remote communication and collaboration tools.
And our team members, including sales and support, marketing and R&D, continue to be highly effective.
DHI has had a video meeting culture for many years, given the global nature of our team.
And as a technology company, we have significant experience operating in a remote work environment.
Well before this pandemic, 95% of our employees were utilizing company laptops with the ability to work from home.
The vast majority of our sales team routinely meets with clients remotely versus in-person.
And our R&D team uses online dev ops tools to promote code to production.
And as a result, we delivered two of our most significant product releases this year while our employees were working from home.
While the current environment is certainly challenging the way that we all live and work, DHI's business model gives us some level of protection and stability in these uncertain times, as 90% of our revenues are generated through annual subscription-based contracts.
Additionally, our business has a seasonality that has benefited us, with our largest two quarters for bookings being the fourth quarter and first quarter of each year.
As a result, as of March 31, we had already booked over 2/3 of our total revenue for fiscal 2020.
Despite this difficult environment, DHI was able to exceed its target of a 20% adjusted EBITDA margin in the first quarter.
We also took the precautionary step to ensure sufficient liquidity by drawing down an additional $25 million on our credit facility in early March while still maintaining a significant cushion to our covenants.
As we continue to work through these unprecedented times, with some of our competitors announcing layoffs, I want to emphasize that the strengths of our business model put us in a very different category and much stronger position than many of these other companies.
DHI is a specialist, not a generalist.
We match clients with technologists and their unique skill sets.
DHI is a subscription model, not pay-as-you-go.
DHI provides permanent hires, not hourly workers.
And DHI focuses on the enterprise market, less on the SMB space.
We believe our unique business model positions us well to weather this storm.
Additionally, over the past several weeks, we've seen a stable number of tech job postings as enterprises look to accelerate the use of technology in their business.
Now more than ever, businesses realize they need an online business model, a way of delivering services without being face-to-face, and a way to manage their remote employees effectively.
As a result, we continue to see a number of businesses looking for technologists to help accelerate these efforts.
Every week, we review a report that details the total number of new tech job postings as compiled by scraping the career pages for U.S. corporate websites each night.
Over the past several weeks, the total number of job postings has remained in line with the trailing 12-month trend.
The types of skills requested have shifted, with cybersecurity and systems engineering seeing an increased demand, but the overall volume of postings has remained relatively consistent.
Over the longer-term, if you look at the U.S. Bureau of Labor Statistics trend line for tech jobs over the past 20 years, including through the dotcom bubble and Great Recession, there has been a constant increase in technologist positions in this country.
The market for technologists was at close to zero unemployment level before the pandemic, and we expect this high level of demand for these skill sets to continue.
And DHI is well-positioned for this opportunity even in this challenging environment as a result of the significant progress we made over the past year in building the leading marketplace for matching technologists with our clients.
In 2019, we delivered over 20 marquee product releases and dozens of minor releases.
During the first quarter, we continued to deliver a high pace of product innovation, including integrating IntelliSearch with our Dice Job Management Console.
This marquee release demonstrates the value of our patent-pending technology skills data model.
When a client posts a new tech job, IntelliSearch automatically generates a list of qualified candidates from our database.
The technologist recruitment process is all about gaining access to the right skill sets, and this powerful tool allows our clients to save time in their search process.
We also moved 100% of our audience to a new Dice home page that includes a modern layout and navigation scheme.
Additionally, we added a private email feature, which enables Dice candidates to protect their personal email address and only share it with recruiters when they choose.
On our path to transform Dice into an indispensable career marketplace, trust is a cornerstone of that experience.
Dice private email encourages candidates to make their profiles visible and up-to-date, increasing the breadth of talent visible to our clients.
The complete makeover of the Dice client experience over the past year, including IntelliSearch, Candidate Match, Job Management, Job Search, Job Alerts, Multi Location Search, and now our new Dice Home Page and Private E-mail, are delivering more value every day.
We also launched job alerts on eFC in the first quarter.
With this release, eFC and Dice are now on a common DHI job search and alerts platform, illustrating our code once, deploy many strategy across our brands.
Helping candidates find jobs that fit their skills and interests is the top priority of our job search engineering team.
The new job alerts release is a significant step forward toward our objective of having a best-in-class search experience for our candidates.
Finally, we also launched CJ Favorites in the quarter.
This feature allows clearance jobs clients to keep tabs on top candidate prospects, receive alerts when they are active on the site, and engage when they are receptive to contact.
CJ continues to be our testbed for key market-leading features.
Looking ahead, we have a clear product roadmap in front of us for each one of our platforms.
We are working now to add recruiter profile and remote jobs to Dice, and IntelliSearch and Candidate Match to eFinancial Careers.
There is no question that the importance of defining and searching for remote jobs has surged in popularity over the past few weeks, and I'm grateful that our team has accelerated the delivery of the remote jobs feature.
Simultaneously, we are working on delivering significant workflow automation features in ClearanceJobs.
We expect these additional features to be live in this second quarter.
Speaking of ClearanceJobs, I would like to update you on our progress in pursuing direct government contracts, one of our key growth initiatives we launched last year.
ClearanceJobs has done an excellent job growing year-over-year in the cleared professional market.
However, less than 1% of its revenue historically has come from direct contracts with government agencies.
Last year, we launched an initiative to identify U.S. government agencies we could be working with and understand more about their hiring needs for technology professionals.
As you'd suspect, these government organizations have just as much demand for technologists as the government contractors we serve today.
As such, we put together a plan targeting the agencies we wanted to approach first, and we've seen some early success.
We're making excellent headway, and I'm very proud of the effort of the ClearanceJobs team as they take on this entirely new customer segment.
We expect more government agencies to sign on as customers throughout 2020.
We are proud to announce that the Department of Defense has recently designated ClearanceJobs as an essential supplier, which they define as an essential service needed to ensure the continuing operation of government agencies.
Now, let me briefly touch on the progress we continue to make improving our go-to-market strategy and execution.
As I mentioned on our last call, during the fourth quarter, our new Chief Revenue Officer, Arie Kanofsky, added top-notch sales leadership to his team, and we created brand-new Dice Commercial sales teams in both Denver and New York.
These teams grew their pipelines very successfully, and we signed on many new clients based on their efforts for the first 10 weeks of the quarter.
Obviously, the state of the U.S. economy changed dramatically in mid-March, and these teams, which are 100% dedicated to building new business relationships, have seen what we believe is a temporary slowdown in their efforts as a result.
The insights we've gained in the first 10 weeks of the quarter, and the momentum we saw in signing new customers, gives us great confidence that our focus on commercial accounts will be the cornerstone for our growth as the business environment normalizes.
As I conclude my remarks, I want to reiterate that, as a specialist, we have built a better tool than our competitors for companies looking to hire technologists.
With our improved product offering and go-to-market strategy, we believe we can grow our revenue at or above the market growth rate over the longer-term.
While this growth won't happen overnight, and COVID-19 presents uncertainty, we are confident in our business plan and the continued progress we are making toward achieving our goal.
We remain incredibly excited about the market opportunity in front of us.
We believe the investments we made in 2019 and will continue to make in 2020, are positioning DHI as the industry leader in matching technologists with employers.
Let's jump right into the quarterly results.
For the first quarter, we reported total revenues, $6.6 million, which was down 3% from the fourth quarter and down 1% year-over-year when you exclude the impact of foreign exchange.
Dice revenue was $22.5 million in the first quarter, down 3% sequentially and down 3% year-over-year.
We ended the first quarter with 5,850 Dice recruitment package customers, which is down 3% sequentially and 4% year-over-year.
We continue to see an increase in our average monthly revenue per recruitment package customer, which was up 2% year-over-year to $1,153, or approximately $13,840 on an annual basis.
This is important, as over 90% of Dice revenue is recurring and comes from recruitment package customers.
Our Dice customer renewal rate was 67% for the first quarter, down 1 percentage point year-over-year, and our revenue renewal rate was 80%, which was also down 1 percentage point when compared to the same period last year.
As we look at our Dice customers, our strategy is to focus on these larger relationships, which creates a more stable customer base.
By moving upstream in terms of our marketing efforts, sales activities, and go-to-market approach, we believe we are putting ourselves in the best position for stability and growth.
As an example, currently 15% of our customers generate 50% of our recruitment package revenue, though no customer makes up even 1% of revenue.
We think this is a good balance of a strong, stable revenue base without having customer concentration risk.
First quarter revenue for eFinancial Careers was $7.2 million, down 6% from the fourth quarter and 10% year-over-year when excluding the impact of foreign exchange rates.
As expected, COVID-19 negatively impacted our performance for eFinancial Careers during the quarter.
In the APAC region, eFC's second largest geography, we experienced difficulties at the beginning of the quarter as the Coronavirus hit both Singapore and Hong Kong in the second week of January.
In the U.K. and European financial industry, we saw the slowdown toward the latter half of the quarter.
ClearanceJobs' first quarter revenue was $6.9 million, increase of 4% sequentially and 19% year-over-year.
This continued solid double-digit revenue growth year-over-year is reflective of its strong innovative products and competitive differentiation.
Turning to operating expenses, first quarter operating expenses were $41.9 million, which includes an impairment of the Dice trade name of $7.2 million, which I will address in a moment.
Excluding the impairment, operating expenses were $34.7 million, representing an increase of $1.2 million, or 3% year-over-year.
This increase in operating expenses was primarily driven by the current ramp-up of our sales and engineering capabilities.
As Art mentioned, we added several new sales reps to our commercial accounts team during the fourth quarter, which drove an increase in sales expense this quarter.
We also added additional engineering talent in the fourth quarter to accelerate the deployment of new product features, which drove increases in both product expense and capital expenditures.
In light of the current environment, we have reviewed our entire cost structure and have begun reducing non-headcount-related expenses, both operating expenses and capital expenditures.
This includes such areas as contractor and consulting spend, marketing spend, future headcount growth, and third-party vendor spend.
As an example, we have found several opportunities to extend critical vendor agreements prior to their expiration at lower per-month or per-user rates.
With regards to marketing, we believe we can still achieve our candidate and client engagement metrics with lower spend as overall digital advertising rates have come down.
We will continue to evaluate our cost structure and are confident in our ability to match our expenses with any revenue changes that might occur.
We had a tax benefit for the first quarter of approximately $900,000, resulting in an effective tax rate of 12%, which includes the impacts of the impairment losses and certain discreet tax items related to stock-based compensation.
As I mentioned, during the first quarter, we recorded an impairment charge of $7.2 million related to the Dice trade name.
This impairment charge was primarily driven by an increase to the weighted average cost of capital and a decline to the royalty rate used in valuing the Dice trade name, both assumptions resulting from the impacts of COVID-19.
Also, during the quarter, we recorded an impairment charge of $2 million due to liquidity concerns for a minority equity investment made in 2016 and 2017.
This brings the investment's value to zero.
We recognized a net loss for the first quarter of $6.6 million, or $0.13 per diluted share compared to net income of $1.6 million, or $0.03 per diluted share a year ago.
This quarter's earnings per share had a $0.16 detriment as a result of the impairment of intangible assets and equity investments, as well as certain discreet tax and other items.
Last year's earnings had a $0.04 detriment from disposition-related and discreet tax items.
Excluding those items, on a normalized basis, earnings per share for the quarter was $0.03 versus $0.07 last year.
Adjusted EBITDA margin for the first quarter was 21%, down from 23% in the same quarter last year.
We generated $2.9 million of operating cash flow in the first quarter compared to $3.2 million in the prior year quarter.
From a liquidity perspective, at year-end we had approximately $5 million of net debt and $10 million drawn on a $90 million revolver.
During the quarter, we drew down $27 million from our revolver, which puts us at 1.1 times leverage, which is well within our covenant of 2.5 times leverage.
We added cash to our balance sheet to ensure we can manage through these economic fluctuations.
At the end of the quarter, our total debt was $37 million.
We had $27.8 million of cash resulting in net debt of $9.2 million.
Even with this incremental borrowing, we still have sufficient borrowing capacity available to us under the facility.
Deferred revenue at the end of the quarter was $55.5 million, down 9% from a year ago.
This is due to more contracts having monthly or quarterly payment terms.
When we add the unbilled portion of our contracts to deferred revenue, our committed contract backlog at the end of the quarter was down 1% from the end of the first quarter last year.
As part of our share buyback program, we repurchased approximately 660,000 shares during first quarter for $1.6 million, or $2.49 per share.
This left roughly $3.3 million remaining of the current $7 million buyback program, which runs through May of this year.
I would like to note that DHI's Board of Directors has approved a new $5 million share buyback program, which will begin following the expiration of our current program and run through May of 2021.
We believe this approval is a recognition of the strength and the long-term prospects of our business.
Consistent with our previous programs, we will continue to evaluate investment opportunities in the business against buying back shares while also using it as an opportunity to offset the impacts of our employee equity incentive programs.
As we look ahead at the Dice brand, we are still signing large deals even in the current environment.
As Art mentioned, while it's still early in trying to understand what effect COVID-19 will have on our market, we've seen a stable number of tech job postings in the past few weeks as companies look to accelerate the use of technology in their business model.
For eFinancial Careers, while it operates in multiple geographies, we are seeing encouraging signs in several regions.
With eFC, we tend to have larger relationships.
As an example, approximately 75% of the global 50 banks are customers.
This provides more stability in the current environment.
In fact, in the last few weeks, we have signed or renewed many of those large customers, including Black Rock, Wells Fargo, and Deutsche Bank.
With regards to ClearanceJobs, they grew through the dot-com implosion of 2001 and the Great Recession of 2008 because their success is correlated to the U.S. Department of Defense budget which is, relatively speaking, immune to the environment we find ourselves in.
Looking forward, we will operate the business in a manner that balances costs with the revenue opportunity, maintains our employee base, and allows us to continue investing in our business to drive long-term growth and to support our customers in these challenging times.
As such, we're not providing specific guidance at this point.
We continue to manage the business to margins in the 20% range.
Let me sum up by saying that, while we find ourselves in extremely challenging times, we feel our business model provides us with some protection and predictability, and we are confident in the investments we have made in innovation and sales.
We remain focused on the continued execution of our business plan and look forward to reporting on our progress throughout the rest of 2020.
It is a pleasure to be part of such a great team.
 Assistant:

Chosen response:
compname says q1 revenue fell 1 percent to $36.6 million.
q1 revenue fell 1 percent to $36.6 million.
q1 loss per share $0.13.
as of march 31st, we had already booked over two-thirds of total revenue for fiscal 2020.