~ Earnings per Share of $1.04 for Fourth Quarter and $3.15 for Full
Year ~ ~ Fourth Quarter Sales Increase 7.9% and Same-Store Sales
Increase 0.7% ~ BRENTWOOD, Tenn., Jan. 27 /PRNewswire-FirstCall/ --
Tractor Supply Company (NASDAQ:TSCO), the largest retail farm and
ranch store chain in the United States, today announced record
financial results for its fourth fiscal quarter and fiscal year
ended December 26, 2009. Additionally, the Company provided its
current outlook for fiscal 2010. Fourth Quarter Results For fourth
quarter 2009, net sales increased 7.9% to $862.5 million from
$799.5 million and same-store sales increased 0.7% compared to a
1.3% increase for the prior year's fourth quarter. The Company
continued to experience solid sales performance in core consumable
categories, including animal and pet-related products, as well as
key seasonal products. Gross margin increased 16.6% to $285.7
million, or 33.1% of sales, compared to $245.0 million, or 30.7% of
sales, in the prior year's fourth quarter. The increase in gross
margin percentage resulted primarily from a substantial decrease in
the LIFO provision and lower transportation costs. Selling, general
and administrative expenses, including depreciation and
amortization, increased 10.6% to $226.3 million, or 26.2% of sales,
compared to $204.7 million, or 25.6% of sales, in the prior year's
fourth quarter. This increase as a percent of sales was primarily
attributable to the deleveraging related to the lower same-store
sales increase and higher occupancy costs, partially offset by
reduced marketing costs. The Company's effective income tax rate
decreased to 35.0% compared to 38.2% in the prior year's fourth
quarter. This reduction in the tax rate resulted from the favorable
impact of certain federal tax credits and a lower percentage of
permanent tax differences relative to income before taxes. For
fourth quarter 2009, net income increased 54.8% to $38.3 million
from $24.7 million and earnings per share increased 55.2% to $1.04
per diluted share from $0.67 per diluted share in the fourth
quarter of the prior year. The Company opened 18 new stores in the
quarter compared to 21 new store openings and one relocation in the
prior year's fourth quarter. Jim Wright, Chairman and Chief
Executive Officer, stated, "We are delighted that we achieved
stronger-than-expected financial results for the year based on our
fourth quarter performance. Our team worked closely together to
deliver compelling value to our customers for their everyday basic
needs. For the ninth consecutive quarter, we have reduced
year-over-year inventory levels per store while maintaining
outstanding in-stock levels and improving inventory turns.
Throughout the year, the resiliency of our business model was
demonstrated as we continued differentiating our company in the
market and executing our retail strategy." Full Year Results For
fiscal 2009, net sales increased 6.6% to $3.21 billion from $3.01
billion and same-store sales decreased 1.1% compared to a 1.4%
increase for fiscal 2008. Gross margin increased 13.4% to $1,035.0
million, or 32.3% of sales, compared to $912.3 million, or 30.3% of
sales, in 2008. The increase in gross margin resulted primarily
from a substantial decrease in the LIFO provision and lower
transportation costs. Selling, general and administrative expenses,
including depreciation and amortization, increased 9.5% to $850.3
million, or 26.5% of sales, compared to $776.7 million, or 25.8% of
sales, in 2008. This increase as a percent to sales was primarily
attributable to the deleveraging related to the same-store sales
decrease and higher occupancy costs, partially offset by reduced
marketing costs. The Company's effective income tax rate decreased
to 36.9% compared to 38.6% in the prior year. This reduction in the
tax rate resulted from the favorable impact of certain federal tax
credits and a lower percentage of permanent tax differences
relative to income before taxes. For fiscal 2009, net income
increased 40.9% to $115.5 million from $81.9 million and earnings
per share increased 43.8% to $3.15 per diluted share from $2.19 per
diluted share for fiscal 2008. During fiscal 2009, the Company
opened 76 new stores, closed one store and relocated two stores.
This compares to 91 new store openings and one relocated store in
fiscal 2008. Fiscal 2010 Outlook The Company anticipates net sales
for fiscal 2010 will be approximately $3.42 billion to $3.48
billion, with same-store sales expected to increase approximately
0.5% to 2.5%. The Company projects 2010 full year net earnings to
range from $3.30 to $3.42 per diluted share. Exclusive of the LIFO
provision, the Company projects full year net earnings to range
from $3.50 to $3.62 per diluted share. For the full year, the
Company expects approximately 70 to 80 new store openings. Mr.
Wright concluded, "We expect the retail environment to remain
challenging and we will maintain a relentless focus on serving our
customers and managing our business proactively this year. We have
a solid capital structure, with a very strong balance sheet and no
long-term debt. As a result of our strategies and financial
strength, we are well positioned to achieve top- and bottom-line
growth while continuing to deliver strong cash flows in 2010."
Conference Call Information Tractor Supply Company will be hosting
a conference call at 5:00 p.m. Eastern Time today to discuss the
financial results. The call will be simultaneously webcast over the
Internet on the Company's homepage at TractorSupply.com and can be
accessed under the subheading "Investor Relations." The webcast
will be archived shortly after the conference call concludes
through February 10, 2010. About Tractor Supply Company At December
26, 2009, Tractor Supply Company operated 930 stores in 44 states.
The Company's stores are focused on supplying the lifestyle needs
of recreational farmers and ranchers. The Company also serves the
maintenance needs of those who enjoy the rural lifestyle, as well
as tradesmen and small businesses. Stores are located in towns
outlying major metropolitan markets and in rural communities. The
Company offers the following comprehensive selection of
merchandise: (1) equine, pet and animal products, including items
necessary for their health, care, growth and containment; (2)
maintenance products for agricultural and rural use; (3) hardware
and tool products; (4) seasonal products, including lawn and garden
power equipment; (5) truck and towing products; and (6)
work/recreational clothing and footwear for the entire family.
Forward Looking Statements As with any business, all phases of the
Company's operations are subject to influences outside its control.
This press release contains certain forward-looking statements,
including statements regarding estimated results of operations in
future periods. These forward-looking statements are subject to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and are subject to the finalization of the Company's
year-end financial and accounting procedures, and may be affected
by certain risks and uncertainties, any one, or a combination, of
which could materially affect the results of the Company's
operations. These factors include general economic conditions
affecting consumer spending, the timing and acceptance of new
products in the stores, the mix of goods sold, purchase price
volatility (including inflationary and deflationary pressures), the
ability to increase sales at existing stores, the ability to manage
growth and identify suitable locations and negotiate favorable
lease agreements on new and relocated stores, the availability of
favorable credit sources, capital market conditions in general,
failure to open new stores in the manner currently contemplated,
the impact of new stores on our business, competition, weather
conditions, the seasonal nature of our business, effective
merchandising initiatives and marketing emphasis, the ability to
retain vendors, reliance on foreign suppliers, the ability to
attract, train and retain qualified employees, product liability
and other claims, potential legal proceedings, management of our
information systems, effective tax rate changes and results of
examination by taxing authorities, and the ability to maintain an
effective system of internal control over financial reporting.
Forward-looking statements made by or on behalf of the Company are
based on knowledge of its business and the environment in which it
operates, but because of the factors listed above, actual results
could differ materially from those reflected by any forward-looking
statements. Consequently, all of the forward-looking statements
made are qualified by these cautionary statements and those
contained in the Company's Annual Report on Form 10-K and other
filings with the Securities and Exchange Commission. There can be
no assurance that the results or developments anticipated by the
Company will be realized or, even if substantially realized, that
they will have the expected consequences to or effects on the
Company or its business and operations. Readers are cautioned not
to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company does not undertake
any obligation to release publicly any revisions to these
forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated
events. (Financial tables to follow) Consolidated Statements of
Income (Unaudited) (in thousands, except per share amounts) FOURTH
QUARTER ENDED ----------------------------------------------
December 26, December 27, 2009 2008 -------------------
------------------- Net sales $862,532 100.0% $799,496 100.0% Cost
of merchandise sold 576,847 66.9 554,456 69.3 ------- ---- -------
---- Gross margin 285,685 33.1 245,040 30.7 Selling, general and
administrative expenses 208,827 24.2 188,659 23.6 Depreciation and
amortization 17,501 2.0 16,006 2.0 ------ --- ------ --- Income
from operations 59,357 6.9 40,375 5.1 Interest expense, net 505 0.1
406 0.1 --- --- --- --- Income before income taxes 58,852 6.8
39,969 5.0 Income tax expense 20,599 2.4 15,257 1.9 -- -- Net
income $38,253 4.4% $24,712 3.1% ======= === ======= === Net income
per share: Basic $1.06 $0.68 ===== ===== Diluted $1.04 $0.67 =====
===== Weighted average shares outstanding (000's): Basic 36,090
36,185 Diluted 36,815 36,824 FISCAL YEAR ENDED
------------------------------------------------- December 26,
December 27, 2009 2008 --------------------- ----------------------
Net sales $3,206,937 100.0% $3,007,949 100.0% Cost of merchandise
sold 2,171,980 67.7 2,095,688 69.7 --------- ---- --------- ----
Gross margin 1,034,957 32.3 912,261 30.3 Selling, general and
administrative expenses 784,066 24.4 715,961 23.8 Depreciation and
amortization 66,258 2.1 60,731 2.0 ------ --- ------ --- Income
from operations 184,633 5.8 135,569 4.5 Interest expense, net 1,644
0.1 2,133 0.1 ----- --- ----- --- Income before income taxes
182,989 5.7 133,436 4.4 Income tax expense 67,523 2.1 51,506 1.7 -
-- Net income $115,466 3.6% $81,930 2.7% ======== === ======= ===
Net income per share: Basic $3.21 $2.22 ===== ===== Diluted $3.15
$2.19 ===== ===== Weighted average shares outstanding (000's):
Basic 35,990 36,830 Diluted 36,649 37,464 Consolidated Balance
Sheets (Unaudited) (in thousands) December 26, December 27, 2009
2008 * ----------- ---------- ASSETS Current assets: Cash and cash
equivalents $172,851 $36,989 Inventories 601,249 603,435 Prepaid
expenses and other current assets 42,320 41,902 Deferred income
taxes 17,909 1,676 Total current assets 834,329 684,002 Property
and equipment, net 370,245 362,033 Goodwill 10,258 10,258 Deferred
income taxes 11,091 13,727 Other assets 4,922 5,977 TOTAL ASSETS
$1,230,845 $1,075,997 ========== ========== LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $273,208
$286,828 Accrued expenses 137,375 113,465 Current portion of
capital lease obligations 392 550 Income taxes currently payable
7,605 -- ----- --- Total current liabilities 418,580 400,843
Revolving credit loan -- -- Capital lease obligations 1,407 1,797
Straight line rent liability 45,515 38,016 Other long-term
liabilities 32,140 25,211 Total liabilities 497,642 465,867
Stockholders' equity: Common stock 330 327 Additional paid-in
capital 190,938 168,045 Treasury stock (219,204) (203,915) Retained
earnings 761,139 645,673 Total stockholders' equity 733,203 610,130
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,230,845 $1,075,997
========== ========== * Cash and cash equivalents and prepaid
expenses and other current assets have been reclassified to conform
to the current period presentation. Consolidated Statements of Cash
Flows (Unaudited) (in thousands) FISCAL YEAR ENDED
-------------------------------- December 26, December 27, 2009
2008 * ----------- ------------ Cash flows from operating
activities: Net income $115,466 $81,930 Adjustments to reconcile
net income to net cash provided by operating activities:
Depreciation and amortization 66,258 60,731 Loss (gain) on
disposition of property and equipment 213 (425) Stock compensation
expense 12,130 12,257 Deferred income taxes (13,597) 1,566 Change
in assets and liabilities: Inventories 2,186 32,553 Prepaid
expenses and other current assets (409) 1,007 Accounts payable
(13,620) 28,482 Accrued expenses 23,910 (2,136) Income taxes
currently payable 7,605 (5,928) Other 15,175 7,689 Net cash
provided by operating activities 215,317 217,726 ------- -------
Cash flows from investing activities: Capital expenditures (73,974)
(91,759) Proceeds from sale of property and equipment 97 3,324 ---
----- Net cash used in investing activities (73,877) (88,435)
------- ------- Cash flows from financing activities: Borrowings
under revolving credit agreement 274,033 853,903 Repayments under
revolving credit agreement (274,033) (908,903) Tax benefit of stock
options exercised 4,281 1,085 Principal payments under capital
lease obligations (548) (851) Repurchase of common stock (15,289)
(53,866) Net proceeds from issuance of common stock 5,978 3,150
----- ----- Net cash used in financing activities (5,578) (105,482)
------ -------- Net increase in cash and equivalents 135,862 23,809
Cash and cash equivalents at beginning of year 36,989 13,180 ------
------ Cash and cash equivalents at end of year $172,851 $36,989
======== ======= Supplemental disclosures of cash flow information:
Cash paid during the year for: Interest $838 $3,890 Income taxes
66,888 55,476 * Reclassified to conform to the current period
presentation. Selected Financial and Operating Information FOURTH
QUARTER ENDED FISCAL YEAR ENDED -----------------------------
---------------------------- December 26, December 27, December 26,
December 27, 2009 2008 2009 2008 ------------ ------------
------------ ------------ (Unaudited) (Unaudited) Sales
Information: ------------- Same-store sales increase (decrease)
0.7% 1.3% (1.1)% 1.4% Non-comp sales (% of total sales) 6.6% 8.2%
7.2% 8.9% Average transaction value $42.24 $43.90 $42.06 $44.55
Comp average transaction/ value increase (decrease) (4.1)% 0.3%
(6.0)% 1.3% Comp average transaction count increase 5.1% 1.0% 5.3%
0.1% Store Count Information: ------------- Beginning of period 912
834 855 764 New stores opened 18 21 76 91 Stores closed/ sold -- --
(1) -- --- --- --- --- End of year 930 855 930 855 === === === ===
Relocated stores -- 1 2 1 Pre-opening costs (000's) $1,209 $1,720
$7,455 $8,712 Balance Sheet Information: ------------- Average
inventory per store (000's) (a) $706.5 $759.0 $706.5 $759.0
Inventory turns 3.02 2.89 2.88 2.79 Financed inventory (a) 39.1%
43.0% 39.1% 43.0% Treasury shares: Shares purchased (000's) 98 318
419 1,598 Cost (000's) $4,515 $11,367 $15,289 $53,866 (a) Assumes
average inventory cost, excluding inventory in transit.
Supplemental LIFO Information (Unaudited) (in thousands, except per
share amounts) Fourth Quarter Ended Fiscal Year Ended
--------------------- -------------------- December December
December December 26, 27, 26, 27, 2009 2008 2009 2008 -------
------- -------- ------- LIFO provision, pre tax $(1,501) $20,288
$6,932 $42,795 Net income $38,253 $24,712 $115,466 $81,930 LIFO
provision, net of tax (976) 12,544 4,374 26,291 ---- -------
-------- -------- Net income without LIFO $37,277 $37,256 $119,840
$108,221 ======= ======= ======== ======== Earnings Per Diluted
Share: Net income $1.04 $0.67 $3.15 $2.19 LIFO provision, net of
tax (0.03) 0.34 0.12 0.70 ----- Net income without LIFO $1.01 $1.01
$3.27 $2.89 ===== ===== ===== ===== The non-GAAP financial
information presented herein should be considered supplemental to,
and not as a substitute for, or superior to, financial measures
calculated in accordance with GAAP. However, we believe that
non-GAAP reporting, giving effect to the adjustments shown in the
reconciliation above, provides meaningful information and therefore
we use it to supplement our GAAP guidance. We have chosen to
provide this supplemental information to investors, analysts and
other interested parties to enable them to perform additional
analyses of operating results, to illustrate the results of
operations giving effect to the non-GAAP adjustments shown in the
above reconciliations and to provide an additional measure of
performance. DATASOURCE: Tractor Supply Company CONTACT: Anthony F.
Crudele, Chief Financial Officer, Randy Guiler, Director, Investor
Relations, +1-615-440-4000; Investors: Cara O'Brien/Erica Pettit,
Media: Samantha Cohen, Financial Dynamics, +1-212-850-5600 Web
Site: http://www.mytscstore.com/
Copyright