~ Fourth Quarter Sales Increased 20.1% and Same-Store Sales Increased 7.6% ~
~ Fourth Quarter Earnings per Share Increased 43.3% to $0.96 vs. $0.67 ~
~ Full Year Earnings per Share Increased 33.8% to $3.01 vs. $2.25 ~

Brentwood, Tennessee, February 1, 2012 – 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 31, 2011.  Additionally, the company provided a current outlook for fiscal 2012.
Fourth Quarter Results
Net sales increased 20.1% to $1.24 billion from $1.03 billion in the prior year’s fourth quarter.  The fourth quarter included an extra sales week as part of the Company’s 53-week calendar in 2011, which benefited fourth quarter sales by 6.6%.  Same-store sales increased 7.6% compared to a 13.1% increase in the prior-year period.  The 7.6% increase includes an estimated 110 basis point benefit from one additional comparable sales day in the fourth quarter of 2011 versus the prior year.  The same-store sales increase was driven primarily by continued strong results in key consumable, usable and edible (C.U.E.) products, principally animal- and pet-related merchandise, as well as various seasonal categories.  Additionally, same-store sales were favorably impacted by inflation, principally in C.U.E. categories.
Gross margin dollars increased 19.7% to $403.2 million from $336.9 million in the prior year’s fourth quarter.  As a percent of sales, gross margin decreased slightly to 32.5% from 32.6% in the prior year.  The decrease in gross margin as a percent of sales resulted primarily from increased transportation costs and the mix shift to C.U.E. products, as well as a charge for a product line that is being discontinued in several hundred stores.  These decreases in gross margin were partially offset by the favorable impact of gross margin initiatives and improved inventory shrink.
Selling, general and administrative expenses, including depreciation and amortization, improved to 23.5% of sales compared to 25.0% of sales in the prior year’s fourth quarter.  The improvement as a percent of sales was primarily attributable to strong same-store sales growth and leverage provided by the 53rd week.  Additionally, the Company exhibited strong expense control with respect to store operating costs and marketing expenditures, partially offset by additional reserves for sales tax audit exposure and the write down of certain e-commerce assets as the Company embarks on a re-platform initiative of its e-commerce site.
Net income for the quarter was $70.5 million, or $0.96 per diluted share, compared to net income of $50.2 million, or $0.67 per diluted share, in the fourth quarter of the prior year.  The Company estimates that the 53rd week in 2011 represented a benefit of approximately $0.09 per diluted share.
The Company opened 31 new stores and relocated one store compared to 27 new store openings and two store closures in the prior year’s fourth quarter.
Jim Wright, Chairman and Chief Executive Officer, stated, “We are delighted that we again achieved strong double-digit increases in both sales and earnings on top of last year’s record results.  Our performance demonstrates that our capability of adapting our assortments to meet consumer demand has been greatly enhanced by the structural improvements we have made to the business in recent years.  Our ability to effectively manage inventory allocation and regionalization continues to reduce our exposure to weather trends and positions us to capitalize on opportunities.”

Full Year Results
Net sales increased 16.3% to $4.23 billion from $3.64 billion in fiscal 2010.  Same-store sales increased 8.2% compared to a 7.0% increase in fiscal 2010.  Gross margin increased 16.9% to $1.41 billion, or 33.2% of sales, compared to $1.20 billion, or 33.1% of sales for fiscal 2010.
Selling, general and administrative expenses, including depreciation and amortization, increased 12.5% to $1.05 billion, or 24.9% of sales, compared to $937.4 million, or 25.8% of sales, for 2010.
For fiscal 2011, net income was $222.7 million, or $3.01 per diluted share, compared to net income of $168.0 million, or $2.25 per diluted share, for fiscal 2010.  The Company estimates that the 53rd week in 2011 represented a benefit of approximately $0.09 per diluted share.
During fiscal 2011, the Company opened 85 new stores, relocated three stores and closed one store compared to 74 new store openings and three store closures during fiscal 2010.
Fiscal 2012 Outlook
The Company anticipates net sales for fiscal 2012 will range between $4.56 billion and $4.66 billion, with same-store sales expected to increase 3% to 5%.  The Company projects 2012 full year net income to range from $3.38 to $3.46 per diluted share.  For the full year, the Company expects 90 to 95 new store openings.
Mr. Wright concluded, “Our performance continues to demonstrate the strength and flexibility of Tractor Supply Company’s business model.  We believe we are planning and executing better than ever and that we have the right product and marketing programs in place for the spring season.  As we continue to enhance the merchandise assortments, our marketing and the in-store shopping experience, we believe we are increasingly being viewed by our customers as the destination of choice for their rural lifestyle needs.”
Conference Call Information
Tractor Supply Company will be hosting a conference call at 5:00 p.m. Eastern Time today to discuss the quarterly 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 and will be available through February 15, 2012.
About Tractor Supply Company
At December 31, 2011, Tractor Supply Company operated 1,085 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, truck, towing and tool products; (3) seasonal products, including lawn and garden items, power equipment, gifts and toys; (4) maintenance products for agricultural and rural use; and (5) work/recreational clothing and footwear.



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
(in thousands, except per share amounts)

December 31, 2011
December 25, 2010
December 31, 2011
December 25, 2010
(14 weeks)
(13 weeks)
(53 weeks)
(52 weeks)
% of
% of
% of
% of
Net sales
  $ 1,240,028       100.0 %   $ 1,032,649       100.0 %   $ 4,232,743       100.0 %   $ 3,638,336       100.0 %
Cost of merchandise sold
    836,862       67.5       695,732       67.4       2,825,871       66.8       2,434,671       66.9  
Gross margin
    403,166       32.5       336,917       32.6       1,406,872       33.2       1,203,665       33.1  
Selling, general and administrative expenses
    267,959       21.6       239,731       23.2       973,822       23.0       867,644       23.9  
Depreciation and amortization
    23,662       1.9       18,484       1.8       80,347       1.9       69,797       1.9  
Income from operations
    111,545       9.0       78,702       7.6       352,703       8.3       266,224       7.3  
Interest expense, net
    1,036       0.1       687       --       2,087       --       1,284       --  
Income before income taxes
    110,509       8.9       78,015       7.6       350,616       8.3       264,940       7.3  
Income tax expense
    39,997       3.2       27,806       2.7       127,876       3.0       96,968       2.7  
Net income
  $ 70,512       5.7 %   $ 50,209       4.9 %   $ 222,740       5.3 %   $ 167,972       4.6 %
Net income per share:
  $ 0.99             $ 0.69             $ 3.10             $ 2.31          
  $ 0.96             $ 0.67             $ 3.01             $ 2.25          
Weighted average shares outstanding (000’s):
    71,190               72,812               71,777               72,597          
    73,256               75,135               73,921               74,686          
Dividends declared per common share outstanding
  $ 0.12             $ 0.07             $ 0.43             $ 0.28          


Consolidated Balance Sheets
(in thousands)

December 31, 2011
December 25, 2010
Current assets:
Cash and cash equivalents
$ 176,965     $ 257,339  
Restricted cash
  21,870       --  
Short-term investments
  --       15,913  
  830,819       736,520  
Prepaid expenses and other current assets
  51,728       33,945  
Deferred income taxes
  8,867       --  
Total current assets
  1,090,249       1,043,717  
Property and equipment, net
  480,855       395,789  
  10,258       10,258  
Deferred income taxes
  --       5,750  
Other assets
­ 13,470
­ 7,960
$ 1,594,832     $ 1,463,474  
Current liabilities:
Accounts payable
$ 266,409     $ 247,388  
Accrued employee compensation
  48,261       34,576  
Other accrued expenses
  134,048       127,386  
Current portion of capital lease obligations
  33       91  
Income taxes payable
  11,874       8,269  
Deferred income taxes
  --       8,854  
Total current liabilities
  460,625       426,564  
Capital lease obligations
  1,284       1,316  
Deferred income taxes
  13,827       --  
Deferred rent
  75,731       70,697  
Other long-term liabilities
  35,075       31,655  
Total liabilities
  586,542       530,232  
Stockholders’ equity:
Common stock
  643       631  
Additional paid-in capital
  298,426       235,283  
Treasury stock
  (437,373 )     (257,376 )
Retained earnings
  1,146,594       954,704  
Total stockholders’ equity
  1,008,290       933,242  
$ 1,594,832     $ 1,436,474  


Consolidated Statements of Cash Flows
(in thousands)
December 31, 2011
December 25, 2010
(53 weeks)
(52 weeks)
Cash flows from operating activities:
Net income
  $ 222,740     $ 167,972  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
    80,347       69,797  
Loss on disposal of property and equipment
    955       1,062  
Stock compensation expense
    15,041       11,771  
Deferred income taxes
    1,856       2,690  
Change in assets and liabilities:
    (94,299 )     (60,054 )
Prepaid expenses and other current assets
    (17,783 )     (3,201 )
Accounts payable
    19,021       (14,247 )
Accrued employee compensation
    13,685       11,851  
Other accrued expenses
    6,312       26,691  
Income taxes payable
    3,605       1,004  
    2,664       7,272  
Net cash provided by operating activities
    254,144       222,608  
Cash flows from investing activities:
Capital expenditures
    (166,156 )     (96,511 )
Proceeds from sale of property and equipment
    752       313  
Restricted cash deposits
    (21,870 )     --  
Purchases of short-term investments
    --       (15,913 )
Proceeds from sale of short-term investments
    15,913       --  
Net cash used in investing activities
    (171,361 )     (112,111 )
Cash flows from financing activities:
Excess tax benefit of stock options exercised
    17,435       9,815  
Principal payments under capital lease obligations
    (90 )     (392 )
Restricted stock units withheld to satisfy tax obligations
    (1,115 )     (783 )
Repurchase of common stock
    (179,997 )     (38,172 )
Net proceeds from issuance of common stock
    31,460       23,878  
Cash dividends paid to stockholders
    (30,850 )     (20,355 )
Net cash used in financing activities
    (163,157 )     (26,009 )
Net (decrease) increase in cash and cash equivalents
    (80,374 )     84,488  
Cash and cash equivalents at beginning of period
    257,339       172,851  
Cash and cash equivalents at end of period
  $ 176,965     $ 257,339  
Supplemental disclosures of cash flow information:
Cash paid during the period for:
  $ 614     $ 305  
Income taxes
    103,630       82,821  
Non-cash accruals for construction in progress
    (350 )     --  

Selected Financial and Operating Information

December 31, 2011 (a)
December 25, 2010 (a)
December 31, 2011 (a)
December 25, 2010 (a)
Sales Information:
Same-store sales increase
  7.6 %     13.1 %     8.2 %     7.0 %
Non-comp sales (% of total sales)
  5.7 %     5.5 %     5.6 %     5.6 %
Average transaction value
$ 45.20     $ 44.00     $ 43.33     $ 42.07  
Comp average transaction value increase (decrease)
  3.8 %     3.9 %     3.1 %     (0.3 )%
Comp average transaction count increase
  3.6 %     8.8 %     5.0 %     7.4 %
Store Count Information:
Beginning of period
  1,054       976       1,001       930  
New stores opened
  31       27       85       74  
Stores closed
  --       (2 )     (1 )     (3 )
End of period
  1,085       1,001       1,085       1,001  
Relocated stores
  1       --       3       --  
Pre-opening costs (000’s)
$ 1,744     $ 1,923     $ 7,334     $ 7,143  
Balance Sheet Information:
Average inventory per store (000’s) (b)
$ 723.4     $ 708.7     $ 723.4     $ 708.7  
Inventory turns (annualized)
  3.49       3.41       3.23       3.09  
Financed inventory (b)
  37.5 %     38.3 %     37.5 %     38.3 %
Share repurchase program:
   Cost (000’s)
$ 7,905     $ 15,280     $ 179,997     $ 38,172  
Average purchase price per share
$ 69.22     $ 40.88     $ 58.52     $ 34.96  
(a) Fourth quarter 2011 and fiscal 2011 are calculated based on a 14-week quarter and 53-week year, respectively. Comp calculations have been adjusted to reflect the corresponding comparable period. Fourth quarter 2010 and fiscal 2010 are calculated based on a 13-week quarter and 52-week year, respectively. The additional week in 2011 does not have a significant impact on comparability for those calculations that have not been adjusted for comp purposes.
(b)Assumes average inventory cost, excluding inventory in transit.

The following information was filed by Tractor Supply Co (TSCO) on Wednesday, February 1, 2012 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.

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