x
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QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the quarterly period ended
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March
27, 2010
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the transition period from
|
to
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Delaware
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13-3139732
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(State
or Other Jurisdiction of
|
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(I.R.S.
Employer Identification No.)
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Incorporation
or Organization)
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||
200
Powell Place, Brentwood, Tennessee
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37027
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(Address
of Principal Executive Offices)
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(Zip
Code)
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|
Registrant's
Telephone Number, Including Area Code:
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(615)
440-4000
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Large
accelerated filer
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þ
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Accelerated
filer
|
o
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Non-accelerated
filer
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o (Do not check if
a smaller reporting company)
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Smaller
reporting company
|
o
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Class
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Outstanding
at April 24, 2010
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|||
Common
Stock, $.008 par value
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36,342,000 |
Page No.
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||
PART
I.
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Financial
Information
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|
Item
1.
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Financial
Statements
|
|
Consolidated
Balance Sheets – March 27, 2010 (unaudited), December 26,
2009 and March 28, 2009 (unaudited)
|
||
Consolidated
Statements of Income (unaudited) – For the Fiscal Three Months Ended
March 27, 2010 and March 28, 2009
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||
Consolidated
Statements of Cash Flows (unaudited) – For the Fiscal Three Months Ended
March 27, 2010 and March 28, 2009
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||
Notes
to Unaudited Consolidated Financial Statements
|
||
Item 2.
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Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
|
Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
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|
Item
4.
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Controls
and Procedures
|
|
PART
II.
|
Other
Information
|
|
Item
1.
|
Legal
Proceedings
|
|
Item
1A.
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Risk
Factors
|
|
Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
|
|
Item
3.
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Defaults
Upon Senior Securities
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|
Item
4.
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[Removed
and Reserved]
|
|
Item
5.
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Other
Information
|
|
Item
6.
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Exhibits
|
|
Signature
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March
27,
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December
26,
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March
28,
|
||||||||||
2010
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2009
|
2009
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||||||||||
ASSETS
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(Unaudited)
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(Unaudited)
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||||||||||
Current
assets:
|
||||||||||||
Cash and cash
equivalents
|
$ | 138,060 | $ | 172,851 | $ | 36,981 | ||||||
Inventories
|
755,617 | 601,249 | 730,127 | |||||||||
Prepaid expenses and other
current
assets
|
38,772 | 42,320 | 33,596 | |||||||||
Deferred income
taxes
|
13,470 | 17,909 | 4,142 | |||||||||
Total current
assets
|
945,919 | 834,329 | 804,846 | |||||||||
Property
and equipment, net of accumulated depreciation
|
365,838 | 370,245 | 364,718 | |||||||||
Goodwill
|
10,258 | 10,258 | 10,258 | |||||||||
Deferred
income
taxes
|
13,672 | 11,091 | 15,145 | |||||||||
Other
assets
|
4,856 | 4,922 | 5,469 | |||||||||
Total
assets
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$ | 1,340,543 | $ | 1,230,845 | $ | 1,200,436 | ||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||||
Current
liabilities:
|
||||||||||||
Accounts
payable
|
$ | 394,955 | $ | 273,208 | $ | 382,620 | ||||||
Accrued
expenses
|
102,895 | 123,420 | 90,445 | |||||||||
Current portion of capital lease
obligations
|
360 | 392 | 521 | |||||||||
Income taxes
payable
|
872 | 7,605 | 2,217 | |||||||||
Total current
liabilities
|
499,082 | 404,625 | 475,803 | |||||||||
Revolving
credit
loan
|
-- | -- | 40,000 | |||||||||
Capital
lease obligations, less current
maturities
|
1,324 | 1,407 | 1,694 | |||||||||
Deferred
rent
|
64,350 | 63,470 | 57,655 | |||||||||
Other
long-term
liabilities
|
30,611 | 28,140 | 19,622 | |||||||||
Total
liabilities
|
595,367 | 497,642 | 594,774 | |||||||||
Stockholders’
equity:
|
||||||||||||
Preferred stock, 40,000 shares
authorized, $1.00 par value; no shares issued
|
-- | -- | -- | |||||||||
Common stock, 100,000,000 shares
authorized; $.008 par value; 41,610,367 shares issued and 36,303,932
shares outstanding at March 27, 2010, 41,309,743 shares issued and
36,076,408 shares outstanding at December 26, 2009 and
40,933,916 shares issued and 35,838,631 shares outstanding at
March 28, 2009
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333 | 330 | 327 | |||||||||
Additional paid-in
capital
|
202,477 | 190,938 | 172,225 | |||||||||
Treasury stock, at cost,
5,306,435 shares at March 27, 2010,
5,233,335 shares at
December 26, 2009 and 5,095,285 shares at March 28,
2009
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(223,007 | ) | (219,204 | ) | (213,033 | ) | ||||||
Retained
earnings
|
765,373 | 761,139 | 646,143 | |||||||||
Total stockholders’
equity
|
745,176 | 733,203 | 605,662 | |||||||||
Total liabilities and
stockholders’
equity
|
$ | 1,340,543 | $ | 1,230,845 | $ | 1,200,436 |
For the fiscal three months
ended
|
||||||||
March
27,
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March
28,
|
|||||||
2010
|
2009
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|||||||
(Unaudited)
|
||||||||
Net
sales
|
$ | 710,917 | $ | 650,171 | ||||
Cost
of merchandise
sold
|
482,033 | 449,135 | ||||||
Gross
margin
|
228,884 | 201,036 | ||||||
Selling,
general and administrative
expenses
|
197,810 | 183,650 | ||||||
Depreciation
and
amortization
|
16,654 | 16,201 | ||||||
Operating
income
|
14,420 | 1,185 | ||||||
Interest
expense,
net
|
318 | 414 | ||||||
Income before income
taxes
|
14,102 | 771 | ||||||
Income
tax
expense
|
4,794 | 301 | ||||||
Net
income
|
$ | 9,308 | $ | 470 | ||||
Net
income per share –
basic
|
$ | 0.26 | $ | 0.01 | ||||
Net
income per share –
diluted
|
$ | 0.25 | $ | 0.01 | ||||
Weighted
average shares outstanding:
|
||||||||
Basic
|
36,155 | 35,951 | ||||||
Diluted
|
37,000 | 36,553 | ||||||
Dividends
declared per common share
outstanding
|
$ | 0.14 | $ | -- |
For the fiscal three months
ended
|
||||||||
March
27,
|
March
28,
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|||||||
2010
|
2009
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|||||||
(Unaudited)
|
||||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 9,308 | $ | 470 | ||||
Adjustments
to reconcile net income to net cash used in operating
activities:
|
||||||||
Depreciation and
amortization
|
16,654 | 16,201 | ||||||
Loss on sale of property and
equipment
|
407 | 59 | ||||||
Stock compensation
expense
|
3,154 | 3,302 | ||||||
Deferred income
taxes
|
1,858 | (3,884 | ) | |||||
Change in assets and
liabilities:
|
||||||||
Inventories
|
(154,368 | ) | (126,692 | ) | ||||
Prepaid expenses and other
current assets
|
3,545 | 7,467 | ||||||
Accounts payable
|
121,747 | 95,792 | ||||||
Accrued expenses
|
(20,525 | ) | (10,661 | ) | ||||
Income taxes
payable
|
(6,733 | ) | 3,083 | |||||
Other
|
3,978 | 2,118 | ||||||
Net
cash used in operating activities
|
(20,975 | ) | (12,745 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Capital
expenditures
|
(12,940 | ) | (18,855 | ) | ||||
Proceeds from sale of property
and equipment
|
288 | 3 | ||||||
Net
cash used in investing activities
|
(12,652 | ) | (18,852 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Borrowings under revolving
credit agreement
|
142 | 199,576 | ||||||
Repayments under revolving
credit agreement
|
(142 | ) | (159,576 | ) | ||||
Tax benefit on stock option and
restricted stock unit exercises
|
2,298 | 316 | ||||||
Principal payments under capital
lease obligations
|
(115 | ) | (132 | ) | ||||
Restricted stock units
repurchased for payment of taxes
|
(657 | ) | -- | |||||
Repurchase of common
stock
|
(3,803 | ) | (9,118 | ) | ||||
Net proceeds from issuance of
common stock
|
6,187 | 523 | ||||||
Cash dividends paid to
stockholders
|
(5,074 | ) | -- | |||||
Net
cash (used in) provided by financing activities
|
(1,164 | ) | 31,589 | |||||
Net
decrease in cash and cash equivalents
|
(34,791 | ) | (8 | ) | ||||
Cash
and cash equivalents at beginning of period
|
172,851 | 36,989 | ||||||
Cash
and cash equivalents at end of period
|
$ | 138,060 | $ | 36,981 | ||||
Supplemental
disclosures of cash flow information:
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | 36 | $ | 363 | ||||
Income taxes
|
6,764 | 426 | ||||||
March
27,
|
December
26,
|
March
28,
|
||||||||||
2010
|
2009
|
2009
|
||||||||||
Land
|
$ | 27,646 | $ | 27,646 | $ | 25,410 | ||||||
Buildings and
improvements
|
351,939 | 350,505 | 328,421 | |||||||||
Furniture, fixtures and
equipment
|
231,155 | 226,967 | 199,886 | |||||||||
Computer software and
hardware
|
92,661 | 88,700 | 76,661 | |||||||||
Construction in
progress
|
12,509 | 11,562 | 20,804 | |||||||||
715,910 | 705,380 | 651,182 | ||||||||||
Accumulated depreciation and
amortization
|
(350,072 | ) | (335,135 | ) | (286,464 | ) | ||||||
$ | 365,838 | $ | 370,245 | $ | 364,718 |
Three months ended
|
||||||||
March
27,
2010
|
March
28,
2009
|
|||||||
Stock
options
granted
|
431,326 | 540,626 | ||||||
Weighted
average exercise
price
|
$ | 52.42 | $ | 34.24 | ||||
Weighted
average fair
value
|
$ | 20.45 | $ | 12.85 |
Three months ended
|
|||||
March
27,
2010
|
March
28,
2009
|
||||
Expected
price
volatility
|
38.8
|
% |
39.8
|
% | |
Risk-free
interest
rate
|
2.5
|
% |
1.6
|
% | |
Weighted
average expected lives in
years
|
5.4
|
5.2
|
|||
Forfeiture
rate
|
6.5
|
% |
6.8
|
% | |
Dividend
yield
|
0.0
|
%(a) |
0.0
|
% | |
Dividends
were declared on March 1, 2010 after the issuance of the stock
options.
|
Three
months ended
March 27, 2010
|
Three
months ended
March 28, 2009
|
|||||||||||||||||||||||
Income
|
Shares
|
Per
Share
Amount
|
Income
|
Shares
|
Per
Share
Amount
|
|||||||||||||||||||
Basic
net income per share:
|
||||||||||||||||||||||||
Net
income
|
$ | 9,308 | 36,155 | $ | 0.26 | $ | 470 | 35,951 | $ | 0.01 | ||||||||||||||
Dilutive
stock options and restricted stock units outstanding
|
-- | 845 | (0.01 | ) | -- | 602 | -- | |||||||||||||||||
Diluted
net income per share:
|
||||||||||||||||||||||||
Net
income
|
$ | 9,308 | 37,000 | $ | 0.25 | $ | 470 | 36,553 | $ | 0.01 |
Date Declared
|
Dividend
Amount
Per Share
|
Stockholders
of Record Date
|
Date Paid
|
|||
March
1, 2010
|
$ | 0.14 |
March
15, 2010
|
March
29, 2010
|
Three months ended
|
|||||
Product
Category:
|
March
27,
2010
|
March
28,
2009 (a)
|
|||
Livestock and Pet
|
45
|
% |
44
|
% | |
Hardware, Tool and Truck
|
23
|
24
|
|||
Seasonal
|
14
|
14
|
|||
Clothing and Footwear
|
10
|
10
|
|||
Agricultural
|
5
|
5
|
|||
Gift and Recreation
|
3
|
3
|
|||
Total
|
100
|
% |
100
|
% | |
(a) Reclassified
to conform to current year presentation.
|
Mar.
27,
2010
|
Dec.
26,
2009
|
Variance
|
Mar.
28,
2009
|
Variance
|
||||||||||||||||
Current
assets:
|
||||||||||||||||||||
Cash and cash
equivalents
|
$ | 138.0 | $ | 172.9 | $ | (34.9 | ) | $ | 37.0 | $ | 101.0 | |||||||||
Inventories
|
755.6 | 601.2 | 154.4 | 730.1 | 25.5 | |||||||||||||||
Prepaid expenses and other
current assets
|
38.8 | 42.3 | (3.5 | ) | 33.6 | 5.2 | ||||||||||||||
Deferred income
taxes
|
13.5 | 17.9 | (4.4 | ) | 4.1 | 9.4 | ||||||||||||||
945.9 | 834.3 | 111.6 | 804.8 | 141.1 | ||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||
Accounts
payable
|
394.9 | 273.2 | 121.7 | 382.6 | 12.3 | |||||||||||||||
Accrued
expenses
|
102.9 | 123.4 | (20.5 | ) | 90.5 | 12.4 | ||||||||||||||
Current portion of capital
lease obligation
|
0.4 | 0.4 | -- | 0.5 | (0.1 | ) | ||||||||||||||
Income tax
payable
|
0.9 | 7.6 | (6.7 | ) | 2.2 | (1.3 | ) | |||||||||||||
499.1 | 404.6 | 94.5 | 475.8 | 23.3 | ||||||||||||||||
Working
capital
|
$ | 446.8 | $ | 429.7 | $ | 17.1 | $ | 329.0 | $ | 117.8 |
Three months ended
|
||||||||||||
March
27,
2010
|
March
28,
2009
|
Variance
|
||||||||||
Net
income
|
$ | 9.3 | $ | 0.5 | $ | 8.8 | ||||||
Depreciation
and
amortization
|
16.6 | 16.2 | 0.4 | |||||||||
Inventories
and accounts
payable
|
(32.6 | ) | (30.9 | ) | (1.7 | ) | ||||||
Stock
compensation
expense
|
3.2 | 3.3 | (0.1 | ) | ||||||||
Prepaid
expenses and other current assets
|
3.5 | 7.5 | (4.0 | ) | ||||||||
Accrued
expenses
|
(20.5 | ) | (10.7 | ) | (9.8 | ) | ||||||
Income
taxes
payable
|
(6.7 | ) | 3.1 | (9.8 | ) | |||||||
Other,
net
|
6.2 | (1.7 | ) | 7.9 | ||||||||
Net cash used in
operations
|
$ | (21.0 | ) | $ | (12.7 | ) | $ | (8.3 | ) |
Three months ended
|
||||||||
March
27,
2010
|
March
28,
2009
|
|||||||
New/relocated
stores and stores not yet opened
|
$ | 6.1 | $ | 10.9 | ||||
Existing
stores
|
2.8 | 4.0 | ||||||
Information
technology
|
3.9 | 3.7 | ||||||
Distribution
center capacity and improvements
|
0.1 | 0.3 | ||||||
$ | 12.9 | $ | 18.9 |
Date Declared
|
Dividend
Amount
Per Share
|
Stockholders
of
Record Date
|
Date Paid
|
|||
March
1, 2010
|
$ | 0.14 |
March
15, 2010
|
March
29, 2010
|
- Revenue
recognition and sales returns
|
- Sales
tax audit reserve
|
- Inventory
valuation
|
- Tax
contingencies
|
- Share-based
compensation
|
- Goodwill
|
- Self-insurance
reserves
|
- Long-lived
assets
|
Period
|
Number
of
Shares
Purchased
|
Average
Price
Paid
Per Share
|
Number
of
Shares
Purchased
as
Part
of Publicly
Announced
Plans
or
Programs
|
Maximum
Dollar
Value
of Shares
That
May Yet Be
Purchased
Under
the
Plans or
Programs
|
||||||||||||
December
27, 2009 – January 23, 2010
|
-- | $ | -- | -- | $ | 180,952,848 | ||||||||||
January
24, 2010 – February 20, 2010 (a)
|
80,491 | 51.65 | 67,500 | 177,454,869 | ||||||||||||
February
21, 2010 – March 27, 2010
|
5,600 | 54.04 | 5,600 | 177,152,388 | ||||||||||||
As
of March 27,
2010
|
86,091 | $ | 51.81 | 73,100 | $ | 177,152,388 | ||||||||||
(a) We
purchased 12,991 shares during the period that were not made pursuant to
our previously announced stock repurchase plan, but were purchased to fund
certain Company obligations under our equity compensation
plans. These shares, at an average price of $50.60, were withheld to
satisfy $0.7 million of employee tax obligations on the vesting of
restricted stock units. For further discussion, see Note 6 –
Share-Based Compensation” in Part I, Item 1 of this Form
10-Q.
|
Exhibits
|
|
Certification
of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
Certification
of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
Certification
of Chief Executive Officer and Chief Financial Officer under Section 906
of the Sarbanes-Oxley Act of
2002.
|
TRACTOR
SUPPLY COMPANY
|
|||
Date:
|
May 4, 2010
|
By:
|
/s/
Anthony F. Crudele
|
Anthony
F. Crudele
|
|||
Executive
Vice President – Chief Financial Officer and Treasurer
|
|||
(Duly
Authorized Officer and Principal Financial
Officer)
|