TRACTOR SUPPLY COMPANY REPORTS
FOURTH QUARTER AND FULL YEAR 2010 RESULTS
~ Fourth Quarter Same-Store Sales Increase 13.1% ~
~ Fourth Quarter Earnings per Share Increase 31.4% to $0.67 vs. $0.51 ~
~ Full Year Earnings per Share Increase 38.0% to $2.25 vs. $1.63 ~

Brentwood, Tennessee, January 26, 2011 – Tractor Supply Company (NASDAQ: TSCO), the largest retail farm and ranch store chain in the United States, today announced financial results for its fourth fiscal quarter and fiscal year ended December 25, 2010.  Additionally, the company provided its current outlook for fiscal 2011.

Fourth Quarter Results
Net sales increased 19.7% to $1.03 billion from $862.5 million in the prior year’s fourth quarter.  Same-store sales increased 13.1% compared to a 0.7% increase in the prior-year period.  This same-store sales increase was broad-based and driven by continued strength in consumable, usable and edible (CUE) products, principally animal and pet-related merchandise.  Seasonal items, predominantly heating and insulated outerwear, also performed well during the quarter.

Gross margin increased 18.6% to $336.9 million, or 32.6% of sales, compared to $284.2 million, or 32.9% of sales, in the prior year’s fourth quarter.  The decline in gross margin percentage primarily resulted from higher transportation costs and mix of merchandise, partially offset by improved direct product margin.  The ongoing direct product margin improvement resulted from strategic sourcing, inventory management, and more effective pricing.

Selling, general and administrative expenses, including depreciation and amortization, improved to 25.0% of sales for the fourth quarter compared to 26.2% of sales in the prior year’s fourth quarter.  The improvement as a percent of sales was primarily attributable to strong same-store sales.

Net income for the quarter was $50.2 million, or $0.67 per diluted share, compared to $37.3 million, or $0.51 per diluted share, in the prior year’s fourth quarter.  All references to per-share amounts reflect a two-for-one stock split that was effective on September 2, 2010.

Effective at the end of the fourth quarter, the Company changed its method of accounting for inventory from last-in, first-out (LIFO) to the average cost method.  The Company has applied this change in method of inventory costing retrospectively to all prior periods presented in this release in accordance with accounting principles relating to accounting changes.

The Company opened 27 new stores and closed two stores in the quarter compared to 18 new store openings and no closed stores in the prior year’s fourth quarter.

Jim Wright, Chairman and Chief Executive Officer, stated, “The team executed extremely well throughout the fourth quarter, further enabling us to exceed our goals for the year. Through broad-based sales strength and organizational discipline across the business, we achieved record sales and profitability. We served our customers with more effective merchandising, focused on key items, seasonal buys, and improved product placements.  We are pleased with our accomplishments and the momentum we carry into 2011 as the destination store for the rural lifestyle.” 

Full Year Results
For fiscal 2010, net sales increased 13.5% to $3.64 billion from $3.21 billion in fiscal 2009.  Same-store sales increased 7.0% compared to a 1.1% decrease for fiscal 2009.  Gross margin increased 15.5% to $1.20 billion compared to $1.04 billion in 2009.  As a percent of sales, gross margin was 33.1% compared to 32.5% for 2009.

Selling, general and administrative expenses, including depreciation and amortization, improved to 25.8% of sales compared to 26.5% of sales for 2009.

For fiscal 2010, net income was $168.0 million, or $2.25 per diluted share, compared to net income of $119.7 million, or $1.63 per diluted share, for fiscal 2009.  All references to per-share amounts reflect a two-for-one stock split that was effective on September 2, 2010.

During fiscal 2010, the Company opened 74 new stores and closed three stores compared to 76 new store openings, two relocations and one closure in fiscal 2009.

Fiscal 2011 Outlook
The Company anticipates net sales for fiscal 2011 will be approximately $4.00 billion to $4.07 billion, with same-store sales expected to increase approximately 2.5% to 4.5%.  The Company projects 2011 full year net earnings to range from $2.54 to $2.62 per diluted share.

For the full year, the Company expects approximately 80 to 85 new store openings.

Mr. Wright concluded, “We are excited about entering a new year with significant opportunities ahead for the business. We are beginning to benefit from the plans that we put in place over the past several years and, with continued solid execution, we expect to build on our momentum as we grow and improve our business. At the same time, we intend to leverage the strength of our balance sheet to continue investing in the business and returning value to our shareholders for the long-term.”

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 broadcast simultaneously over the Internet on the Company’s homepage at TractorSupply.com and can be accessed under the link “Investor Relations.”  The webcast will be archived shortly after the conference call concludes through February 9, 2011.

About Tractor Supply Company
At December 25, 2010, Tractor Supply Company operated 1,001 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 small animal products, including items necessary for their health, care, growth and containment; (2) hardware and seasonal products, including lawn and garden power equipment; (3) truck, towing and tool products; (4) work/recreational clothing and footwear for the entire family; (5) maintenance products for agricultural and rural use; and (6) home décor, candy, snack food and toys.

 
 
 

 
 
Forward Looking Statements:
 
As with any business, all phases of the Company’s operations are subject to influences outside its control.  This information 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 ability to manage expenses, 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, on-going and potential legal or regulatory 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
   
FISCAL YEAR ENDED
 
   
December 25, 2010
   
December 26, 2009 *
   
December 25, 2010
   
December 26, 2009 *
 
                                                 
         
% of
         
% of
         
% of
         
% of
 
         
Sales
         
Sales
         
Sales
         
Sales
 
Net sales                                      
  $ 1,032,649       100.0 %   $ 862,532       100.0 %   $ 3,638,336       100.0 %   $ 3,206,937       100.0 %
Cost of merchandise sold
    695,732       67.4       578,348       67.1       2,434,671       66.9       2,165,048       67.5  
Gross margin
    336,917       32.6       284,184       32.9       1,203,665       33.1       1,041,889       32.5  
                                                                 
Selling, general and administrative expenses
    239,731       23.2       208,827       24.2       867,644       23.9       784,066       24.4  
Depreciation and amortization
    18,484       1.8       17,501       2.0       69,797       1.9       66,258       2.1  
                                                                 
Income from operations
    78,702       7.6       57,856       6.7       266,224       7.3       191,565       6.0  
Interest expense, net
    687       --       505       0.1       1,284       --       1,644       0.1  
                                                                 
Income before income taxes
    78,015       7.6       57,351       6.6       264,940       7.3       189,921       5.9  
Income tax expense
    27,806       2.7       20,077       2.3       96,968       2.7       70,176       2.2  
Net income
    50,209       4.9 %     37,274       4.3 %     167,972       4.6 %     119,745       3.7 %
                                                                 
Net income per share:
                                                               
Basic
  $ 0.69             $ 0.52             $ 2.31             $ 1.66          
Diluted
  $ 0.67             $ 0.51             $ 2.25             $ 1.63          
                                                                 
Weighted average shares outstanding (000’s):
                                                               
Basic
    72,812               72,180               72,597               71,981          
Diluted
    75,135               73,630               74,686               73,297          
                                                                 
                                                                 
* 2009 amounts adjusted to reflect the change in inventory accounting method from LIFO to average cost.
 


 
 
 

 
Consolidated Balance Sheets
(Unaudited)
(in thousands)

 
   
December 25,
2010
   
December 26,
2009*
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 257,339     $ 172,851  
Short-term investments
    15,913       --  
Inventories
    736,520       676,466  
Prepaid expenses and other current assets
    33,945       30,747  
Total current assets
    1,043,717       880,064  
                 
Property and equipment, net
    395,789       370,245  
Goodwill
    10,258       10,258  
Deferred income taxes
    5,750       11,091  
Other assets
    ­ 7,960       ­ 4,922  
                 
TOTAL ASSETS
  $ 1,463,474     $ 1,276,580  
                 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
  $ 247,388     $ 261,635  
Accrued employee compensation
    34,576       22,725  
Other accrued expenses
    127,386       100,695  
Current portion of capital lease obligations
    91       392  
Income taxes payable
    8,269       7,265  
Deferred income taxes
    8,854       11,505  
Total current liabilities
    426,564       404,217  
                 
Revolving credit loan
    --       --  
Capital lease obligations
    1,316       1,407  
Deferred rent
    70,697       63,470  
Other long-term liabilities
    31,655       28,335  
Total liabilities
    530,232       497,429  
                 
Stockholders’ equity:
               
Common stock
    631       619  
Additional paid-in capital
    235,283       190,649  
Treasury stock
    (257,376 )     (219,204 )
Retained earnings
    954,704       807,087  
Total stockholders’ equity
    933,242       779,151  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 1,463,474     $ 1,276,580  
                 
                 
*2009 amounts adjusted to reflect the change in inventory accounting method from LIFO to average cost. Additionally, prepaid expenses and other current assets and accounts payable reclassified to conform to the current period presentation.
 

 
 
 

Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
 
   
FISCAL YEAR ENDED
 
   
December 25,
2010
   
December 26,
2009*
 
Cash flows from operating activities:
           
Net income
  $ 167,972     $ 119,745  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    69,797       66,258  
Loss on sale of property and equipment
    1,062       213  
Stock compensation expense
    11,771       12,130  
Deferred income taxes
    2,690       (11,139 )
Change in assets and liabilities:
               
Inventories
    (60,054 )     (4,745 )
Prepaid expenses and other current assets
    (3,201 )     11,164  
Accounts payable
    (14,247 )     (25,193 )
Accrued employee compensation
    11,851       12,476  
Other accrued expenses
    26,691       9,838  
Income taxes payable
    1,004       7,801  
Other
    7,272       16,769  
                 
Net cash provided by operating activities
    222,608       215,317  
                 
Cash flows from investing activities:
               
Capital expenditures
    (96,511 )     (73,974 )
Proceeds from sale of property and equipment
    313       97  
Purchases of short-term investments
    (15,913 )     --  
                 
Net cash used in investing activities
    (112,111 )     (73,877 )
                 
Cash flows from financing activities:
               
Borrowings under revolving credit agreement
    --       274,033  
Repayments under revolving credit agreement
    --       (274,033 )
Excess tax benefit of stock options exercised
    9,815       4,280  
Principal payments under capital lease obligations
    (392 )     (548 )
Restricted stock units withheld to satisfy tax obligations
    (783 )     --  
Repurchase of common stock
    (38,172 )     (15,289 )
Net proceeds from issuance of common stock
    23,878       5,979  
Cash dividends paid to stockholders
    (20,355 )     --  
                 
Net cash used in financing activities
    (26,009 )     (5,578 )
                 
Net increase in cash and equivalents
    84,488       135,862  
                 
Cash and cash equivalents at beginning of period
    172,851       36,989  
                 
Cash and cash equivalents at end of period
  $ 257,339     $ 172,851  
                 
Supplemental disclosures of cash flow information:
               
Cash paid during the period for:
               
Interest
  $ 305     $ 838  
Income taxes
    82,821       66,888  
                 
* Reclassified certain amounts within cash flows from operating activities to conform to the current period presentation.
 

 
Selected Financial and Operating Information


   
FOURTH QUARTER
ENDED
   
FISCAL YEAR
ENDED
 
   
December 25,
2010
   
December 26,
2009
   
December 25,
2010
   
December 26,
2009
 
   
(Unaudited)
   
(Unaudited)
 
Sales Information:
                       
Same-store sales increase (decrease)
    13.1 %     0.7 %     7.0 %     (1.1 )%
Non-comp sales (% of total sales)
    5.5 %     6.6 %     5.6 %     7.2 %
                                 
Average transaction value
  $ 44.00     $ 42.24     $ 42.07     $ 42.06  
Comp average transaction value increase (decrease)
    3.9 %     (4.1 )%     (0.3 )%     (6.0 )%
Comp average transaction count increase
    8.8 %     5.1 %     7.4 %     5.3 %
                                 
Store Count Information:
                               
Beginning of period
    976       912       930       855  
New stores opened
    27       18       74       76  
Stores closed
    (2 )     --       (3 )     (1 )
End of period
    1,001       930       1,001       930  
                                 
Relocated stores
    --       --       --       2  
                                 
Pre-opening costs (000’s)
  $ 1,923     $ 1,209     $ 7,143     $ 7,455  
                                 
Balance Sheet Information:
                               
Average inventory per store (000’s) (a)
  $ 708.7     $ 706.5     $ 708.7     $ 706.5  
Inventory turns (annualized)
    3.41       3.02       3.09       2.88  
Financed inventory (a)
    37.7 %     37.4 %     37.7 %     37.4 %
Share repurchase program:
                               
  Cost (000’s)
  $ 15,280     $ 4,515     $ 38,172     $ 15,289  
  Average purchase price per share (b)
  $ 40.88     $ 23.03     $ 34.96     $ 18.24  
                                 
                                 
(a) Assumes average inventory cost, excluding inventory in transit.
 
(b) Reflects a split effected purchase price.
 

 
 

Supplemental LIFO Information
 (Unaudited)
(in thousands, except per share amounts)
 

   
2010
   
2009
   
2008
 
   
As Reported
   
As Previously Reported (b)
   
As Adjusted
   
As Previously Reported (b)
   
As Adjusted
 
Operating Results:
                             
Net sales
  $ 3,638,336     $ 3,206,937     $ 3,206,937     $ 3,007,949     $ 3,007,949  
Gross margin
    1,203,665       1,034,957       1,041,889       912,261       955,055  
Selling, general and administrative expenses
    867,644       784,066       784,066       715,961       715,961  
Depreciation and amortization
    69,797       66,258       66,258       60,731       60,731  
                                         
Operating income
    266,224       184,633       191,565       135,569       178,363  
Interest expense, net
    1,284       1,644       1,644       2,133       2,133  
                                         
Income before income taxes
    264,940       182,989       189,921       133,436       176,230  
Income tax provision
    96,968       67,523       70,176       51,506       68,237  
                                         
Net income
  $ 167,972     $ 115,466     $ 119,745     $ 81,930     $ 107,993  
                                         
Net income per diluted share (a)
  $ 2.25     $ 1.58     $ 1.63     $ 1.09     $ 1.44  
                                         
Operating Data (percent of net sales):
                                       
Gross margin
    33.08 %     32.27 %     32.49 %     30.33 %     31.75 %
Operating income
    7.32 %     5.76 %     5.97 %     4.51 %     5.93 %
Net income
    4.62 %     3.60 %     3.73 %     2.72 %     3.59 %
                                         
Balance Sheet Data (at end of period):
                                       
Inventory
  $ 736,520     $ 601,249     $ 676,466     $ 603,435     $ 671,720  
Total assets
    1,463,474       1,219,272       1,276,580       1,075,997       1,143,301  
Current liabilities
    426,564       393,052       404,217       388,484       413,922  
Total liabilities
    530,232       486,069       497,429       465,867       491,502  
Stockholder’s Equity
    933,242       733,203       779,151       610,130       651,799  

   
2007
   
2006
 
   
As Previously Reported (b)
   
As Adjusted
   
As Previously Reported (b)
   
As Adjusted
 
Operating Results:
                       
Net sales
  $ 2,703,212     $ 2,703,212     $ 2,369,612     $ 2,369,612  
Gross margin
    852,708       857,940       746,146       752,237  
Selling, general and administrative expenses
    641,603       641,603       555,834       555,834  
Depreciation and amortization
    51,064       51,064       42,292       42,292  
                                 
Operating income
    160,041       165,273       148,020       154,111  
Interest expense, net
    5,037       5,037       2,688       2,688  
                                 
Income before income taxes
    155,004       160,236       145,332       151,423  
Income tax provision
    58,763       60,777       54,324       56,677  
                                 
Net income
  $ 96,241     $ 99,459     $ 91,008     $ 94,746  
                                 
Net income per diluted share (a)
  $ 1.20     $ 1.24     $ 1.11     $ 1.15  
                                 
Operating Data (percent of net sales):
                               
Gross margin
    31.54 %     31.74 %     31.49 %     31.75 %
Operating income
    5.92 %     6.11 %     6.25 %     6.50 %
Net income
    3.56 %     3.68 %     3.84 %     4.00 %
                                 
Balance Sheet Data (at end of period):
                               
Inventory
  $ 635,988     $ 661,479     $ 594,851     $ 615,110  
Total assets
    1,057,971       1,083,185       998,258       1,010,639  
Current liabilities
    367,125       376,733       341,477       341,470  
Total liabilities
    492,634       502,242       399,354       399,347  
Stockholder’s Equity
    565,337       580,943       598,904       611,292  
                                 
                                 
(a)All references to per-share amounts reflect a two-for-one stock split that was effective on September 2, 2010.
 
(b)Certain previously reported consolidated balance sheet amounts have been reclassified to conform to current period presentation.
 



The following information was filed by Tractor Supply Co (TSCO) on Wednesday, January 26, 2011 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

View differences made from one year to another to evaluate Tractor Supply Co's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 10-K Annual Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Tractor Supply Co.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account