x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
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March 26, 2011
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
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to
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Delaware
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13-3139732
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(State or Other Jurisdiction of
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(I.R.S. Employer Identification No.)
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Incorporation or Organization)
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200 Powell Place, Brentwood, Tennessee
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37027
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant's Telephone Number, Including Area Code:
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(615) 440-4000
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Large accelerated filer
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þ
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Class
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Outstanding at April 23, 2011
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|||
Common Stock, $.008 par value
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72,244,620 |
Page No.
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PART I.
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3
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Item 1.
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3
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3
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4
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5
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6
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Item 2.
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13
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Item 3.
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18
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Item 4.
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18
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PART II.
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19
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Item 1.
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19
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Item 1A.
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19
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Item 2.
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19
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Item 3.
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19
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Item 4.
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20
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Item 5.
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20
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Item 6.
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20
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Signature
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21
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March 26,
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December 25,
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March 27,
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||||||||||
2011
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2010
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2010
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||||||||||
ASSETS
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(Unaudited)
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(Unaudited)
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||||||||||
Current assets:
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||||||||||||
Cash and cash equivalents
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$ | 140,448 | $ | 257,339 | $ | 138,060 | ||||||
Short-term investments
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15,913 | 15,913 | -- | |||||||||
Inventories
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941,377 | 736,520 | 832,881 | |||||||||
Prepaid expenses and other current assets
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40,698 | 33,945 | 38,772 | |||||||||
Total current assets
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1,138,436 | 1,043,717 | 1,009,713 | |||||||||
Property and equipment, net of accumulated depreciation
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413,818 | 395,789 | 365,838 | |||||||||
Goodwill
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10,258 | 10,258 | 10,258 | |||||||||
Deferred income taxes
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2,780 | 5,750 | 13,674 | |||||||||
Other assets
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11,861 | 7,960 | 4,856 | |||||||||
Total assets
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$ | 1,577,153 | $ | 1,463,474 | $ | 1,404,339 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||
Current liabilities:
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||||||||||||
Accounts payable
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$ | 406,408 | $ | 247,388 | $ | 394,955 | ||||||
Accrued employee compensation
|
17,021 | 34,576 | 12,604 | |||||||||
Other accrued expenses
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122,442 | 127,386 | 90,291 | |||||||||
Current portion of capital lease obligations
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58 | 91 | 360 | |||||||||
Income taxes payable
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-- | 8,269 | 308 | |||||||||
Deferred income taxes
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14,287 | 8,854 | 16,930 | |||||||||
Total current liabilities
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560,216 | 426,564 | 515,448 | |||||||||
Capital lease obligations, less current maturities
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1,302 | 1,316 | 1,324 | |||||||||
Deferred rent
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71,704 | 70,697 | 64,350 | |||||||||
Other long-term liabilities
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31,825 | 31,655 | 30,819 | |||||||||
Total liabilities
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665,047 | 530,232 | 611,941 | |||||||||
Stockholders’ equity:
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||||||||||||
Preferred stock, 40,000 shares authorized, $1.00 par value; no shares issued
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-- | -- | -- | |||||||||
Common stock, 100,000,000 shares authorized; $.008 par value; 79,425,728 shares issued and 72,354,582 shares outstanding at March 26, 2011, 78,835,508 shares issued and 72,775,862 shares outstanding at December 25, 2010 and 77,914,299 shares issued and 72,607,864 shares outstanding at March 27, 2010
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636 | 631 | 624 | |||||||||
Additional paid-in capital
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254,064 | 235,283 | 202,186 | |||||||||
Treasury stock – at cost, 7,071,146 shares at March 26, 2011, 6,059,646 shares at December 25, 2010 and 5,306,435 shares at March 27, 2010
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(310,522 | ) | (257,376 | ) | (223,007 | ) | ||||||
Retained earnings
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967,928 | 954,704 | 812,595 | |||||||||
Total stockholders’ equity
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912,106 | 933,242 | 792,398 | |||||||||
Total liabilities and stockholders’ equity
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$ | 1,577,153 | $ | 1,463,474 | $ | 1,404,339 |
For the fiscal
three months ended
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||||||||
March 26,
2011
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March 27,
2010
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|||||||
(Unaudited)
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||||||||
Net sales
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$ | 836,576 | $ | 710,917 | ||||
Cost of merchandise sold
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562,970 | 479,986 | ||||||
Gross margin
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273,606 | 230,931 | ||||||
Selling, general and administrative expenses
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226,575 | 197,810 | ||||||
Depreciation and amortization
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18,265 | 16,654 | ||||||
Operating income
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28,766 | 16,467 | ||||||
Interest expense, net
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243 | 318 | ||||||
Income before income taxes
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28,523 | 16,149 | ||||||
Income tax expense
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10,188 | 5,567 | ||||||
Net income
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$ | 18,335 | $ | 10,582 | ||||
Net income per share – basic
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$ | 0.25 | $ | 0.15 | ||||
Net income per share – diluted
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$ | 0.24 | $ | 0.14 | ||||
Weighted average shares outstanding:
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||||||||
Basic
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72,704 | 72,309 | ||||||
Diluted
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74,927 | 74,000 | ||||||
Dividends declared per common share outstanding
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$ | 0.07 | $ | 0.07 |
For the fiscal
three months ended
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||||||||
March 26,
2011
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March 27,
2010
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|||||||
(Unaudited)
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||||||||
Cash flows from operating activities:
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||||||||
Net income
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$ | 18,335 | $ | 10,582 | ||||
Adjustments to reconcile net income to net cash used in operating activities:
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||||||||
Depreciation and amortization
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18,265 | 16,654 | ||||||
Loss on sale of property and equipment
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45 | 407 | ||||||
Stock compensation expense
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3,612 | 3,154 | ||||||
Deferred income taxes
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8,403 | 2,842 | ||||||
Change in assets and liabilities:
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||||||||
Inventories
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(204,857 | ) | (156,415 | ) | ||||
Prepaid expenses and other current assets
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(6,753 | ) | (8,028 | ) | ||||
Accounts payable
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159,020 | 133,320 | ||||||
Accrued employee compensation
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(17,555 | ) | (10,121 | ) | ||||
Other accrued expenses
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(12,366 | ) | (10,404 | ) | ||||
Income taxes payable
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(8,269 | ) | (6,957 | ) | ||||
Other
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(2,681 | ) | 3,991 | |||||
Net cash used in operating activities
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(44,801 | ) | (20,975 | ) | ||||
Cash flows from investing activities:
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||||||||
Capital expenditures
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(28,905 | ) | (12,940 | ) | ||||
Proceeds from sale of property and equipment
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56 | 288 | ||||||
Net cash used in investing activities
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(28,849 | ) | (12,652 | ) | ||||
Cash flows from financing activities:
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||||||||
Borrowings under revolving credit agreement
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-- | 142 | ||||||
Repayments under revolving credit agreement
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-- | (142 | ) | |||||
Excess tax benefit on stock option exercises
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4,830 | 2,298 | ||||||
Principal payments under capital lease obligations
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(47 | ) | (115 | ) | ||||
Restricted stock units withheld to satisfy tax obligations
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(872 | ) | (657 | ) | ||||
Repurchase of common stock
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(53,146 | ) | (3,803 | ) | ||||
Net proceeds from issuance of common stock
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11,105 | 6,187 | ||||||
Cash dividends paid to stockholders
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(5,111 | ) | (5,074 | ) | ||||
Net cash used in financing activities
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(43,241 | ) | (1,164 | ) | ||||
Net decrease in cash and cash equivalents
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(116,891 | ) | (34,791 | ) | ||||
Cash and cash equivalents at beginning of period
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257,339 | 172,851 | ||||||
Cash and cash equivalents at end of period
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$ | 140,448 | $ | 138,060 | ||||
Supplemental disclosures of cash flow information:
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||||||||
Cash paid during the period for:
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||||||||
Interest
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$ | 33 | $ | 36 | ||||
Income taxes
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8,253 | 6,764 | ||||||
Non-cash accruals for construction in progress
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7,422 | -- |
For the fiscal three months ended
March 27, 2010
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||||||||||||
As Previously
Reported
|
Effect of
Change
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As
Adjusted
|
||||||||||
Consolidated Statements of Cash Flows
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||||||||||||
Net income
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$ | 9,308 | $ | 1,274 | $ | 10,582 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities:
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||||||||||||
Deferred income taxes
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1,858 | 984 | 2,842 | |||||||||
Inventories
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(154,368 | ) | (2,047 | ) | (156,415 | ) | ||||||
Income taxes payable
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(6,733 | ) | (224 | ) | (6,957 | ) | ||||||
Other
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3,978 | 13 | 3,991 | |||||||||
Net cash used in operating activities
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$ | (20,975 | ) | $ | -- | $ | (20,975 | ) | ||||
March 26,
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December 25,
|
March 27,
|
||||||||||
2011
|
2010
|
2010
|
||||||||||
Land
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$ | 30,350 | $ | 30,350 | $ | 27,646 | ||||||
Buildings and improvements
|
385,188 | 380,228 | 351,939 | |||||||||
Furniture, fixtures and equipment
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263,228 | 256,369 | 231,155 | |||||||||
Computer software and hardware
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100,630 | 94,878 | 92,661 | |||||||||
Construction in progress
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38,398 | 20,961 | 12,509 | |||||||||
817,794 | 782,786 | 715,910 | ||||||||||
Accumulated depreciation and amortization
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(403,976 | ) | (386,997 | ) | (350,072 | ) | ||||||
$ | 413,818 | $ | 395,789 | $ | 365,838 |
Fiscal three months ended
|
||||||||
March 26, 2011
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March 27, 2010
|
|||||||
Stock options granted
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524,455 | 866,952 | ||||||
Weighted average exercise price
|
$ | 51.70 | $ | 26.21 | ||||
Weighted average fair value
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$ | 17.61 | $ | 10.22 |
Fiscal three months ended
March 26, 2011
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Fiscal three months ended
March 27, 2010
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|||||||||||||||||||||||
Income
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Shares
|
Per Share
Amount
|
Income
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Shares
|
Per Share
Amount
|
|||||||||||||||||||
Basic net income per share:
|
||||||||||||||||||||||||
Net income
|
$ | 18,335 | 72,704 | $ | 0.25 | $ | 10,582 | 72,309 | $ | 0.15 | ||||||||||||||
Dilutive stock options and restricted stock units outstanding
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-- | 2,223 | (0.01 | ) | -- | 1,691 | (0.01 | ) | ||||||||||||||||
Diluted net income per share:
|
||||||||||||||||||||||||
Net income
|
$ | 18,335 | 74,927 | $ | 0.24 | $ | 10,582 | 74,000 | $ | 0.14 |
Date Declared
|
Dividend Amount
Per Share
|
Stockholders of
Record Date
|
Date Paid
|
|||
February 4, 2011
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$ | 0.07 |
February 22, 2011
|
March 8, 2011
|
Fiscal three months ended
|
||||||||
March 26, 2011
|
March 27, 2010
|
|||||||
Product Category:
|
||||||||
Livestock and Pet
|
46 | % | 45 | % | ||||
Hardware, Tools and Truck
|
23 | 23 | ||||||
Seasonal, Gift and Toy Products
|
17 | 17 | ||||||
Clothing and Footwear
|
9 | 10 | ||||||
Agriculture
|
5 | 5 | ||||||
Total
|
100 | % | 100 | % |
March 26,
2011
|
December 25,
2010
|
Variance
|
March 27,
2010
|
Variance
|
||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 140.4 | $ | 257.3 | $ | (116.9 | ) | $ | 138.0 | $ | 2.4 | |||||||||
Short-term investments
|
15.9 | 15.9 | -- | -- | 15.9 | |||||||||||||||
Inventories
|
941.4 | 736.5 | 204.9 | 832.9 | 108.5 | |||||||||||||||
Prepaid expenses and other current assets
|
40.7 | 34.0 | 6.7 | 38.8 | 1.9 | |||||||||||||||
1,138.4 | 1,043.7 | 94.7 | 1,009.7 | 128.7 | ||||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Accounts payable
|
406.4 | 247.4 | 159.0 | 395.0 | 11.4 | |||||||||||||||
Accrued employee compensation
|
17.0 | 34.6 | (17.6 | ) | 12.6 | 4.4 | ||||||||||||||
Other accrued expenses
|
122.4 | 127.4 | (5.0 | ) | 90.3 | 32.1 | ||||||||||||||
Current portion of capital lease obligations
|
0.1 | 0.1 | -- | 0.3 | (0.2 | ) | ||||||||||||||
Income taxes payable
|
-- | 8.3 | (8.3 | ) | 0.3 | (0.3 | ) | |||||||||||||
Deferred income taxes
|
14.3 | 8.8 | 5.5 | 16.9 | (2.6 | ) | ||||||||||||||
560.2 | 426.6 | 133.6 | 515.4 | 44.8 | ||||||||||||||||
Working capital
|
$ | 578.2 | $ | 617.1 | $ | (38.9 | ) | $ | 494.3 | $ | 83.9 |
Fiscal three months ended
|
||||||||||||
March 26,
2011
|
March 27,
2010
|
Variance
|
||||||||||
Net income
|
$ | 18.3 | $ | 10.6 | $ | 7.7 | ||||||
Depreciation and amortization
|
18.3 | 16.7 | 1.6 | |||||||||
Inventories and accounts payable
|
(45.8 | ) | (23.1 | ) | (22.7 | ) | ||||||
Stock compensation expense
|
3.6 | 3.2 | 0.4 | |||||||||
Prepaid expenses and other current assets
|
(6.8 | ) | (8.1 | ) | 1.3 | |||||||
Accrued expenses
|
(29.9 | ) | (20.5 | ) | (9.4 | ) | ||||||
Income taxes payable
|
(8.3 | ) | (7.0 | ) | (1.3 | ) | ||||||
Other, net
|
5.8 | 7.2 | (1.4 | ) | ||||||||
Net cash used in operations
|
$ | (44.8 | ) | $ | (21.0 | ) | $ | (23.8 | ) |
Fiscal three months ended
|
||||||||
March 26,
2011
|
March 27,
2010
|
|||||||
Distribution center capacity and improvements
|
$ | 11.8 | $ | 0.1 | ||||
New/relocated stores and stores not yet opened
|
11.5 | 6.1 | ||||||
Existing stores
|
3.0 | 2.8 | ||||||
Information technology
|
2.5 | 3.9 | ||||||
Corporate and other
|
0.1 | -- | ||||||
$ | 28.9 | $ | 12.9 |
Date Declared
|
Dividend Amount
Per Share
|
Stockholders of
Record Date
|
Date Paid
|
|||
February 4, 2011
|
$ | 0.07 |
February 22, 2011
|
March 8, 2011
|
-
|
Revenue recognition and sales returns
|
-
|
Sales tax audit reserve
|
-
|
Inventory valuation
|
-
|
Tax contingencies
|
-
|
Share-based compensation
|
-
|
Goodwill
|
-
|
Self-insurance reserves
|
-
|
Long-lived assets
|
Item 4.
Controls and Procedures
|
Period
|
Number of
Shares
Purchased
|
Average
Price Paid
Per Share
|
Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
Maximum Dollar
Value of Shares
That May Yet Be
Purchased Under
the Plans or
Programs
|
||||||||
December 26, 2010 – January 22, 2011
|
-- | $ | -- | -- | $ | 142,800,349 | ||||||
January 23, 2011 – February 19, 2011
(a)
|
388,268 | 52.85 | 371,500 | 123,163,208 | ||||||||
February 20, 2011 – March 26, 2011
|
640,000 | 52.34 | 640,000 | 89,680,789 | ||||||||
As of March 26, 2011
|
1,028,268 | $ | 52.53 | 1,011,500 | $ | 89,680,789 | ||||||
(a)
We withheld 16,768 shares during the first quarter to satisfy employee tax obligations on the vesting of restricted stock units in the amounts of $0.9 million in the first quarter at an average price of $51.99. For further discussion, see Note 9 – Share-Based Compensation of this Form 10-Q.
|
10.42
|
Compensation Recoupment Policy.
|
31.1
|
Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
The following financial information from our Quarterly Report on Form 10-Q for the first quarter of fiscal 2011, filed with the SEC on May 3, 2011, formatted in Extensible Business Reporting Language (XBRL): (i) the consolidated balance sheets at March 26, 2011; December 25, 2010; and March 27, 2010, (ii) the consolidated statements of income for the fiscal three months ended March 27, 2011 and March 27, 2010, (iii) the consolidated statements of cash flows for the fiscal three months ended March 26, 2011 and March 27, 2010, and (iv) the Notes to Condensed Consolidated Financial Statements (tagged as blocks of text).
(1)
|
Date:
|
May 3, 2011
|
By:
|
/s/ Anthony F. Crudele
|
Anthony F. Crudele
|
|||
Executive Vice President - Chief Financial Officer and Treasurer
|
|||
(Duly Authorized Officer and Principal Financial Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Tractor Supply Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: | May 3, 2011 | /s/ James F. Wright |
James F. Wright | ||
Chairman of the Board and Chief Executive Officer | ||
1.
|
I have reviewed this quarterly report on Form 10-Q of Tractor Supply Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: | May 3, 2011 | /s/ Anthony F. Crudele |
Anthony F. Crudele
|
||
Executive Vice President -
Chief Financial Officer and Treasurer
|
||
(1)
|
The Report fully complies with the requirements of section 13(a) and 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
May 3, 2011
|