(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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( )
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Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
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Virginia
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26-2018846
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Yes (X)
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No ( )
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Yes (X)
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No ( )
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Large accelerated filer (X)
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Accelerated filer ( )
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Non accelerated filer ( )
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Smaller reporting company ( )
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Yes ( )
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No (X)
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Page
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Item 1.
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Financial Statements:
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Unaudited Condensed Consolidated Income Statements for the 13 weeks Ended April 30, 2011 and May 1, 2010
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3
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Unaudited Condensed Consolidated Balance Sheets as of April 30, 2011, January 29, 2011 and May 1, 2010
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4
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Unaudited Condensed Consolidated Statements of Cash Flows for the 13 Weeks Ended April 30, 2011 and May 1, 2010
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5
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Notes to Unaudited Condensed Consolidated Financial Statements
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6
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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10
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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13
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Item 4.
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Controls and Procedures
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14
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Item 1.
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Legal Proceedings
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14
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Item 1A.
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Risk Factors
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15
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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15
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Item 3.
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Defaults Upon Senior Securities
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15
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Item 4.
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Removed and Reserved
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15
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Item 5.
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Other Information
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15
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Item 6.
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Exhibits
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16
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Signatures
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17
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13 Weeks Ended
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||||||||
April 30,
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May 1,
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|||||||
(In millions, except per share data)
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2011
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2010
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||||||
Net sales
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$ | 1,545.9 | $ | 1,352.6 | ||||
Cost of sales, excluding non-cash
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||||||||
beginning inventory adjustment
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1,005.1 | 876.1 | ||||||
Non-cash beginning inventory adjustment
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- | 26.3 | ||||||
Gross profit
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540.8 | 450.2 | ||||||
Selling, general and administrative
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||||||||
expenses
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379.1 | 347.6 | ||||||
Operating income
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161.7 | 102.6 | ||||||
Interest expense, net
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0.9 | 1.4 | ||||||
Other income, net
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(0.7 | ) | (0.9 | ) | ||||
Income before income taxes
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161.5 | 102.1 | ||||||
Provision for income taxes
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60.5 | 38.5 | ||||||
Net income
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$ | 101.0 | $ | 63.6 | ||||
Net income per share:
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||||||||
Basic
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$ | 0.82 | $ | 0.49 | ||||
Diluted
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$ | 0.82 | $ | 0.49 |
April 30,
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January 29,
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May 1,
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||||||||||
(In millions)
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2011
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2011
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2010
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|||||||||
ASSETS
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||||||||||||
Current assets:
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||||||||||||
Cash and cash equivalents
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$ | 371.3 | $ | 311.2 | $ | 338.6 | ||||||
Short-term investments
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139.0 | 174.8 | 51.5 | |||||||||
Merchandise inventories
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771.2 | 803.1 | 707.7 | |||||||||
Other current assets
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44.0 | 44.2 | 47.0 | |||||||||
Total current assets
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1,325.5 | 1,333.3 | 1,144.8 | |||||||||
Property, plant and equipment, net
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760.2 | 741.1 | 719.4 | |||||||||
Goodwill
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175.0 | 173.1 | 133.3 | |||||||||
Deferred tax assets
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25.1 | 38.0 | 43.5 | |||||||||
Other assets, net
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95.5 | 95.0 | 101.7 | |||||||||
Total Assets
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$ | 2,381.3 | $ | 2,380.5 | $ | 2,142.7 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
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||||||||||||
Current liabilities:
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||||||||||||
Current portion of long-term debt
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$ | 16.5 | $ | 16.5 | $ | 17.5 | ||||||
Accounts payable
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276.0 | 261.4 | 258.6 | |||||||||
Other current liabilities
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170.6 | 190.5 | 154.4 | |||||||||
Income taxes payable
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41.6 | 64.4 | 37.7 | |||||||||
Total current liabilities
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504.7 | 532.8 | 468.2 | |||||||||
Long-term debt, exluding current portion
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250.0 | 250.0 | 250.0 | |||||||||
Income taxes payable, excluding current portion
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15.4 | 15.2 | 15.0 | |||||||||
Other liabilities
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124.5 | 123.5 | 116.5 | |||||||||
Total liabilities
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894.6 | 921.5 | 849.7 | |||||||||
Commitments and contingencies
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||||||||||||
Shareholders' equity
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1,486.7 | 1,459.0 | 1,293.0 | |||||||||
Total Liabilities and Shareholders' Equity
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$ | 2,381.3 | $ | 2,380.5 | $ | 2,142.7 | ||||||
Common shares outstanding
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122.3 | 123.4 | 127.2 |
13 Weeks Ended
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||||||||
April 30,
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May 1,
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|||||||
(In millions)
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2011
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2010
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||||||
Cash flows from operating activities:
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||||||||
Net income
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$ | 101.0 | $ | 63.6 | ||||
Adjustments to reconcile net income to net cash
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||||||||
provided by operating activities:
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||||||||
Depreciation and amortization
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39.2 | 39.3 | ||||||
Other non-cash adjustments to net income
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23.8 | 26.3 | ||||||
Changes in operating assets and liabilities
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(7.7 | ) | (93.4 | ) | ||||
Net cash provided by operating activities
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156.3 | 35.8 | ||||||
Cash flows from investing activities:
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||||||||
Capital expenditures
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(58.3 | ) | (45.1 | ) | ||||
Purchase of short-term investments
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(6.0 | ) | (29.0 | ) | ||||
Proceeds from sales of short-term investments
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41.8 | 5.4 | ||||||
Purchase of restricted investments
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- | (36.4 | ) | |||||
Proceeds from sales of restricted investments
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- | 36.4 | ||||||
Other
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0.4 | - | ||||||
Net cash used in investing activities
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(22.1 | ) | (68.7 | ) | ||||
Cash flows from financing actvities:
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||||||||
Payments for share repurchases
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(88.6 | ) | (220.8 | ) | ||||
Proceeds from stock issued pursuant to stock-based
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||||||||
compensation plan
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3.9 | 13.3 | ||||||
Tax benefit of stock-based compensation
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9.8 | 7.5 | ||||||
Other
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(0.1 | ) | (0.1 | ) | ||||
Net cash used in financing activities
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(75.0 | ) | (200.1 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents
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0.9 | - | ||||||
Net increase(decrease) in cash and cash equivalents
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60.1 | (233.0 | ) | |||||
Cash and cash equivalents at beginning of period
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311.2 | 571.6 | ||||||
Cash and cash equivalents at end of period
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$ | 371.3 | $ | 338.6 | ||||
Supplemental disclosure of cash flow information:
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||||||||
Cash paid for:
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||||||||
Interest
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$ | 1.4 | $ | 1.6 | ||||
Income taxes
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$ | 59.5 | $ | 49.4 |
13 Weeks Ended
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||||||||
April 30,
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May 1,
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|||||||
(In millions, except per share data)
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2011
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2010
|
||||||
Basic net income per share:
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||||||||
Net income
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$ | 101.0 | $ | 63.6 | ||||
Weighted average number of
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||||||||
shares outstanding
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122.6 | 129.3 | ||||||
Basic net income per share
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$ | 0.82 | $ | 0.49 | ||||
Diluted net income per share:
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||||||||
Net income
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$ | 101.0 | $ | 63.6 | ||||
Weighted average number of
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||||||||
shares outstanding
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122.6 | 129.3 | ||||||
Dilutive effect of stock options and
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||||||||
restricted stock units (as determined
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||||||||
by applying the treasury stock method)
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0.9 | 1.0 | ||||||
Weighted average number of shares and
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||||||||
dilutive potential shares outstanding
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123.5 | 130.3 | ||||||
Diluted net income per share
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$ | 0.82 | $ | 0.49 |
13 Weeks Ended
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||||||||
April 30,
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May 1,
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|||||||
(In millions)
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2011
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2010
|
||||||
Net income
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$ | 101.0 | $ | 63.6 | ||||
Foreign currency translation adjustments
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$ | 4.9 | $ | - | ||||
Fair value adjustment-derivative cash
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||||||||
flow hedging instrument, net of tax
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0.4 | 0.5 | ||||||
Total comprehensive income
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$ | 106.3 | $ | 64.1 |
·
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our anticipated sales, including comparable store net sales, net sales growth, earnings growth and new store growth;
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·
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costs of pending and possible future legal claims;
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·
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the average size of our stores and their performance compared with other store sizes;
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·
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the effect of the continued shift in merchandise mix to include more consumables and the continued roll-out of frozen and refrigerated merchandise on gross profit margin and sales;
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·
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the possible effect of the current economic downturn, inflation and other economic changes on our costs and profitability, including future changes in domestic and foreign freight costs, shipping rates, fuel costs and wage and benefit costs;
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·
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our cash needs, including our ability to fund our future capital expenditures and working capital requirements; and,
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·
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the future reliability of, and cost associated with, our sources of supply, particularly imported goods such as those sourced from China and Hong Kong.
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·
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Our profitability is vulnerable to cost increases.
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·
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Litigation may adversely affect our business, financial condition and results of operations.
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·
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Changes in federal, state or local law, or our failure to comply with such laws, could increase our expenses and expose us to legal risks.
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·
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We could encounter disruptions or additional costs in obtaining and distributing merchandise.
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·
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We may be unable to expand our square footage as profitably as planned.
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·
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Sales below our expectations during peak seasons may cause our operating results to suffer materially.
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·
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Our sales and profits rely on imported merchandise, which may increase in cost or become unavailable.
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·
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A downturn in economic conditions could adversely affect our sales.
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·
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Our profitability is affected by the mix of products we sell.
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·
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Pressure from competitors may reduce our sales and profits.
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·
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Certain provisions in our Articles of Incorporation and Bylaws could delay or discourage a takeover attempt that may be in a shareholder’s best interest.
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·
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Merchandise costs, including freight, increased approximately 30 basis points in the quarter due to higher freight costs compared to the prior year quarter resulting from higher ocean freight rates and diesel fuel costs partially offset by improved initial merchandise mark-on.
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·
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Occupancy and distribution costs decreased approximately 15 basis points in the current year quarter resulting from the leveraging of the comparable store net sales increase
.
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·
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Payroll-related expenses decreased approximately 75 basis points due primarily to the leverage associated with the comparable store sales increase and lower health insurance costs in the current quarter.
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·
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Depreciation decreased approximately 35 basis points and store operating costs decreased approximately 15 basis points primarily due to the leveraging associated with the increase in comparable store net sales in the current quarter.
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13 Weeks Ended
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||||||||
April 30,
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May 1,
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|||||||
(In millions)
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2011
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2010
|
||||||
Net cash provided by (used in):
|
||||||||
Operating activities
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$ | 156.3 | $ | 35.8 | ||||
Investing activities
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(22.1 | ) | (68.7 | ) | ||||
Financing activities
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(75.0 | ) | (200.1 | ) |
·
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employment-related matters;
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·
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infringement of intellectual property rights;
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·
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product safety matters, which may include product recalls in cooperation with the Consumer Products Safety Commission or other jurisdictions;
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·
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personal injury/wrongful death claims; and
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·
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real estate matters related to store leases.
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Approximate
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||||||||||||||||
Total number
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dollar value of
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|||||||||||||||
of shares
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shares that may
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|||||||||||||||
purchased as
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yet be purchased
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|||||||||||||||
Total number
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Average
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part of publicly
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under the plans
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|||||||||||||
of shares
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price paid
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announced plans
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or programs
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|||||||||||||
Period
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purchased
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per share
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or programs
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(in millions)
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||||||||||||
January 31, 2011 to February 26, 2011
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402,000 | $ | 50.52 | 402,000 | $ | 325.6 | ||||||||||
February 27, 2011 to April 2, 2011
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1,250,800 | 51.54 | 1,250,800 | 261.2 | ||||||||||||
April 3, 2011 to April 30, 2011
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67,000 | 56.73 | 67,000 | 257.4 | ||||||||||||
Total
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1,719,800 | $ | 51.50 | 1,719,800 | $ | 257.4 |
DOLLAR TREE, INC.
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Date: May 19, 2011
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By:
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/s/ Kevin S. Wampler
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Kevin S. Wampler
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Chief Financial Officer
(principal financial and accounting officer)
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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(a)
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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
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(b)
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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.
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Date: May 19, 2011
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/s/ Bob Sasser
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Bob Sasser
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Chief Executive Officer
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(a)
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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)
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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)
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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
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(d)
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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
|
(a)
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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
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(b)
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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.
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Date: May 19, 2011
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/s/ Kevin S. Wampler
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Kevin S. Wampler
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Chief Financial Officer
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(1)
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The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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May 19, 2011
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/s/ Bob Sasser
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Date
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Bob Sasser
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Chief Executive Officer
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(1)
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The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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May 19, 2011
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/s/ Kevin W. Wampler
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Date
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Kevin S. Wampler
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Chief Financial Officer
|