TRACTOR SUPPLY CO /DE/
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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ý
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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 30, 2013
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or
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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
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to
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Commission file number
000-23314
TRACTOR SUPPLY COMPANY
(Exact Name of Registrant as Specified in Its Charter)
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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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Not Applicable
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(615) 440-4000
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(Former name, former address and former fiscal year, if changed since last report)
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(Registrant's Telephone Number, Including Area Code)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES
þ
NO
o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
YES
þ
NO
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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þ
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Accelerated filer
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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
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o
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)
YES
o
NO
þ
Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date.
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Class
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Outstanding at April 27, 2013
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Common Stock, $.008 par value
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69,788,440
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TRACTOR SUPPLY COMPANY
INDEX
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Page No.
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Page
2
TRACTOR SUPPLY COMPANY
(in thousands, except per share amounts)
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March 30,
2013 |
December 29,
2012 |
March 31,
2012 |
|||||||||
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ASSETS
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(Unaudited)
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(Unaudited)
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||||||||
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Current assets:
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||||||||
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Cash and cash equivalents
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$
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57,022
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$
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138,630
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$
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126,695
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Restricted cash
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8,400
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8,400
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21,870
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Inventories
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1,142,900
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908,116
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1,031,780
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Prepaid expenses and other current assets
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51,855
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51,808
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50,337
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Deferred income taxes
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7,214
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23,098
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1,431
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Total current assets
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1,267,391
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1,130,052
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1,232,113
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Property and equipment:
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Land
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64,141
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61,522
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39,006
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Buildings and improvements
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522,280
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511,188
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472,750
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Furniture, fixtures and equipment
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356,730
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350,224
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319,816
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Computer software and hardware
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119,276
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109,121
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112,643
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Construction in progress
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61,801
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37,122
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20,525
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1,124,228
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1,069,177
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964,740
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Accumulated depreciation and amortization
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(540,934
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)
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(519,179
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)
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(476,070
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)
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Property and equipment, net
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583,294
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549,998
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488,670
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Goodwill
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10,258
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10,258
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10,258
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Deferred income taxes
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3,696
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—
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—
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|||||
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Other assets
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16,689
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16,500
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12,610
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Total assets
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$
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1,881,328
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$
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1,706,808
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$
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1,743,651
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$
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476,043
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$
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320,392
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$
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423,913
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Accrued employee compensation
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9,107
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48,400
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13,211
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Other accrued expenses
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135,192
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148,316
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121,861
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Current portion of capital lease obligations
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39
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38
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35
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Income taxes payable
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3,749
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43,359
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6,526
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Total current liabilities
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624,130
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560,505
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565,546
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Revolving credit loan
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105,000
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—
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—
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Capital lease obligations, less current maturities
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1,233
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1,242
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1,272
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Deferred income taxes
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—
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1,477
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10,497
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Deferred rent
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76,205
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76,236
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76,776
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Other long-term liabilities
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44,534
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42,374
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34,405
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Total liabilities
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851,102
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681,834
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688,496
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Stockholders’ equity:
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Preferred stock, $1.00 par value; 40 shares authorized; no shares issued
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—
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—
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—
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Common stock, $.008 par value; 200,000 shares authorized; 82,204, 81,695 and 81,065 shares issued; 69,490, 69,504 and 71,875 shares outstanding at March 30, 2013, December 29, 2012 and March 31, 2012, respectively
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658
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654
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649
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Additional paid-in capital
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386,793
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361,759
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317,717
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Treasury stock – at cost, 12,714, 12,191 and 9,190 shares at March 30, 2013, December 29, 2012 and March 31, 2012, respectively
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(759,035
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)
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(709,172
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)
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(441,516
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)
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Retained earnings
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1,401,810
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1,371,733
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1,178,305
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Total stockholders’ equity
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1,030,226
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1,024,974
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1,055,155
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Total liabilities and stockholders’ equity
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$
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1,881,328
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$
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1,706,808
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$
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1,743,651
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The accompanying notes are an integral part of these financial statements.
Page
3
TRACTOR SUPPLY COMPANY
(in thousands, except per share amounts)
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For the Fiscal Three Months Ended
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||||||
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March 30,
2013 |
March 31,
2012 |
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(Unaudited)
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Net sales
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$
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1,085,838
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$
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1,020,417
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Cost of merchandise sold
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733,747
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687,617
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Gross margin
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352,091
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332,800
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Selling, general and administrative expenses
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261,469
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246,668
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Depreciation and amortization
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22,699
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21,739
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Operating income
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67,923
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64,393
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Interest expense, net
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179
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583
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Income before income taxes
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67,744
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63,810
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Income tax expense
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23,738
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23,482
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Net income
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$
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44,006
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$
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40,328
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Net income per share – basic
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$
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0.63
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$
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0.56
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Net income per share – diluted
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$
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0.62
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$
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0.55
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Weighted average shares outstanding:
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Basic
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69,448
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71,594
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Diluted
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70,805
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73,494
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Dividends declared per common share outstanding
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$
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0.20
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$
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0.12
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The accompanying notes are an integral part of these financial statements.
Page
4
TRACTOR SUPPLY COMPANY
(in thousands)
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For the Fiscal Three Months Ended
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||||||
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March 30,
2013 |
March 31,
2012 |
|||||
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(Unaudited)
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||||||
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Cash flows from operating activities:
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|||||
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Net income
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$
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44,006
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$
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40,328
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Adjustments to reconcile net income to net cash used in operating activities:
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|||||||
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Depreciation and amortization
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22,699
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21,739
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|||
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(Gain) loss on disposition of property and equipment
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(156
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)
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87
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Stock compensation expense
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3,397
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4,559
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|||
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Excess tax benefit of stock options exercised
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(11,993
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)
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(9,934
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)
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Deferred income taxes
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10,711
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4,106
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|||
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Change in assets and liabilities:
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|||
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Inventories
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(234,784
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)
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(200,961
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)
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|||
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Prepaid expenses and other current assets
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(47
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)
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1,391
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Accounts payable
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155,651
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157,504
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Accrued employee compensation
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(39,293
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)
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(35,050
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)
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|||
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Other accrued expenses
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(14,296
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)
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(9,933
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)
|
|||
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Income taxes payable
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(27,617
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)
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4,586
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|||
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Other
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(3,577
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)
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1,280
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|||
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Net cash used in operating activities
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(95,299
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)
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(20,298
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)
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|||
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Cash flows from investing activities:
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|||
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Capital expenditures
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(49,335
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)
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(31,829
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)
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Proceeds from sale of property and equipment
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185
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—
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Net cash used in investing activities
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(49,150
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)
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(31,829
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)
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Cash flows from financing activities:
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Borrowings under revolving credit agreement
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125,000
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—
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|||
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Repayments under revolving credit agreement
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(20,000
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)
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—
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|||
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Excess tax benefit of stock options exercised
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11,993
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9,934
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|||
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Principal payments under capital lease obligations
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(8
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)
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(10
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)
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Repurchase of shares to satisfy tax obligations
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(3,942
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)
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(6,581
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)
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|||
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Repurchase of common stock
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(49,863
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)
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(4,143
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)
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Net proceeds from issuance of common stock
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13,590
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11,274
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Cash dividends paid to stockholders
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(13,929
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)
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(8,617
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)
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Net cash provided by financing activities
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62,841
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1,857
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|||
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Net decrease in cash and cash equivalents
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(81,608
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)
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(50,270
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)
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Cash and cash equivalents at beginning of period
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138,630
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|
176,965
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Cash and cash equivalents at end of period
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$
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57,022
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$
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126,695
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Supplemental disclosures of cash flow information:
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Cash paid during the period for:
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Interest
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$
|
148
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$
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28
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Income taxes
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41,650
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14,412
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|||
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Non-cash accruals for construction in progress
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17,515
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2,254
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The accompanying notes are an integral part of these financial statements.
Page
5
TRACTOR SUPPLY COMPANY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended
December 29, 2012
. The results of operations for our interim periods are not necessarily indicative of results for the full fiscal year.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
Our financial instruments consist of cash and cash equivalents, restricted cash, short-term receivables, trade payables and long-term debt instruments. Due to their short-term nature, the carrying values of cash and cash equivalents, restricted cash, short-term receivables and trade payables approximate current fair value at each balance sheet date. We had
$105.0 million
in borrowings under the revolving credit facility at
March 30, 2013
. We had no borrowings under the revolving credit facility at
December 29, 2012
or
March 31, 2012
. Based on timing of the cash flows and comparison to current market interest rates, the carrying value of our revolving credit facility approximates fair value.
Share-based compensation includes stock option and restricted stock unit awards and certain transactions under our Employee Stock Purchase Plan (the “ESPP”). Share-based compensation expense is recognized based on grant date fair value of all options and restricted stock unit awards plus a discount on shares purchased by employees as a part of the ESPP. The discount under the ESPP represents the difference between the grant date market value and the employee’s purchase price.
There were no significant modifications to the Company's share-based compensation plans during the fiscal
three
months ended
March 30, 2013
.
For the
first
quarters of fiscal
2013
and
2012
, share-based compensation expense was
$3.4 million
and
$4.6 million
, respectively.
Stock Options
The following summarizes information concerning stock option grants during each of the first
three
months of fiscal
2013
and
2012
:
|
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Fiscal three months ended
|
||||||
|
|
March 30,
2013 |
March 31,
2012 |
|||||
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Stock options granted
|
493,363
|
|
544,991
|
|
|||
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Weighted average exercise price
|
$
|
103.32
|
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$
|
85.08
|
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Weighted average fair value per option
|
$
|
29.33
|
|
$
|
26.11
|
|
|
As of
March 30, 2013
, total unrecognized compensation expense related to non-vested stock options was approximately
$25.7 million
with a remaining weighted average expense recognition period of
1.5
years.
Page
6
Restricted Stock Units
The following summarizes information concerning restricted stock unit grants during each of the first
three
months of fiscal
2013
and
2012
:
|
|
Fiscal three months ended
|
||||||
|
|
March 30,
2013 |
March 31,
2012 |
|||||
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Restricted stock units granted
|
24,290
|
|
33,951
|
|
|||
|
Weighted average fair value per share
|
$
|
102.99
|
|
$
|
85.08
|
|
|
As of
March 30, 2013
, total unrecognized compensation expense related to non-vested restricted stock units was approximately
$5.2 million
with a remaining weighted average expense recognition period of
1.9
years.
We present both basic and diluted net income per share on the face of the condensed consolidated statements of income. Basic net income per share is calculated by dividing net income by the weighted average number of shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average dilutive shares outstanding. Dilutive shares are computed using the treasury stock method for stock options and restricted stock units.
Net income per share is calculated as follows (in thousands, except per share amounts):
|
|
Fiscal three months ended March 30, 2013
|
Fiscal three months ended March 31, 2012
|
|||||||||||||||||||
|
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Income
|
Shares
|
Per Share
Amount
|
Income
|
Shares
|
Per Share
Amount
|
|||||||||||||||
|
Basic net income per share:
|
|
|
|
|
|
|
|||||||||||||||
|
Net income
|
$
|
44,006
|
|
69,448
|
|
$
|
0.63
|
|
$
|
40,328
|
|
71,594
|
|
$
|
0.56
|
|
|||||
|
Diluted net income per share:
|
|||||||||||||||||||||
|
Dilutive stock options and restricted stock units outstanding
|
—
|
|
1,357
|
|
(0.01
|
)
|
—
|
|
1,900
|
|
(0.01
|
)
|
|||||||||
|
Net income
|
$
|
44,006
|
|
70,805
|
|
$
|
0.62
|
|
$
|
40,328
|
|
73,494
|
|
$
|
0.55
|
|
|||||
Anti-dilutive stock options excluded from the above calculations totaled approximately
0.7 million
and
0.3 million
for the fiscal three months ended
March 30, 2013
and
March 31, 2012
, respectively.
The Senior Credit Facility provides for borrowings up to
$250 million
(with sublimits of
$250 million
and
$20 million
for letters of credit and swingline loans, respectively). This agreement is unsecured and matures in
October 2016
, with proceeds available to be used for working capital, capital expenditures, dividends, share repurchases and other matters. At
March 30, 2013
, there were
$105.0 million
outstanding borrowings and
$46.0 million
outstanding letters of credit under the Senior Credit Facility. Borrowings bear interest at either the bank’s base rate or LIBOR plus an additional amount ranging from
0.40%
to
1.00%
per annum, adjusted quarterly based on our leverage ratio (
0.50%
at
March 30, 2013
). We are also required to pay quarterly in arrears, a commitment fee for unused capacity ranging from
0.08%
to
0.20%
per annum, adjusted quarterly based on our leverage ratio (
0.10%
at
March 30, 2013
). The agreement requires quarterly compliance with respect to fixed charge coverage and leverage ratios. As of
March 30, 2013
, we were in compliance with all debt covenants.
The Company’s Board of Directors has authorized common stock repurchases under the share repurchase program up to
$1.0 billion
, exclusive of any fees, commissions, or other expenses related to such repurchases, through
April 2015
. The repurchases may be made from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability, and other market conditions. Repurchased shares will be held in treasury. The program may be limited or terminated at any time without prior notice.
Page
7
We repurchased
522,500
and
54,700
shares of common stock under the share repurchase program for a total cost of
$49.9 million
and
$4.1 million
during the
first
quarter of fiscal
2013
and fiscal
2012
, respectively. As of
March 30, 2013
, we had remaining authorization under the share repurchase program of
$241.3 million
exclusive of any fees, commissions, or other expenses.
During the first
three
months of fiscal
2013
, the Board of Directors declared the following dividend:
|
Date Declared
|
Dividend Amount
Per Share
|
Stockholders of Record Date
|
Date Paid
|
|||||
|
February 6, 2013
|
$
|
0.20
|
|
February 25, 2013
|
March 12, 2013
|
|||
It is the present intention of the Board of Directors to continue to pay a quarterly cash dividend; however, the declaration and payment of future dividends will be determined by the Board of Directors in its sole discretion and will depend upon the earnings, financial condition, and capital needs of the Company, along with other factors which the Board of Directors deems relevant.
On
May 1, 2013
, our Board of Directors declared a quarterly cash dividend of
$0.26
per share of the Company’s common stock. The dividend will be paid on
June 4, 2013
to stockholders of record as of the close of business on
May 20, 2013
.
Our effective income tax rate
decreased
to
35.0%
in the
first
three months of fiscal 2013 compared to
36.8%
for the
first
three months of fiscal
2012
. The decrease was principally due to the favorable impact of the reversal of reserves for uncertain tax positions and the reinstatement of the federal Work Opportunity Tax Credit that was approved by Congress in the early part of our first quarter, both of which are treated as discrete items in the quarter. The Company expects the full year effective tax rate will be approximately
36.5%
.
Construction and Real Estate Commitments
At
March 30, 2013
, we had contractual commitments related to a new distribution center in Macon, GA totaling approximately
$7.6 million
, contractual commitments related to construction projects for new stores totaling approximately
$5.4 million
, and contractual commitments related to the construction of our new store support center of approximately
$55.3 million
.
Letters of Credit
At
March 30, 2013
, there were
$46.0 million
outstanding letters of credit under the Senior Credit Facility and an
$8.4 million
outstanding letter of credit at a financial institution outside of the Senior Credit Facility which is collateralized by a time deposit classified as restricted cash.
Effective April 1, 2013, the outstanding letter of credit at the financial institution outside of the Senior Credit Facility of
$8.4 million
increased to
$18.3 million
, and the restriction on the
$8.4 million
in restricted cash lapsed.
Litigation
The Company responded to a Request for Information from the United States Environmental Protection Agency (“EPA”) in the first quarter of fiscal 2009 relating to certain recreational vehicles and non-road spark ignition engines sold by the Company. In the first quarter of fiscal 2011, the Environmental Enforcement Section of the Department of Justice (“DOJ”), on behalf of the EPA, informed the Company that it believed the Company had violated the Clean Air Act by importing or causing the importation of certain engines that were noncompliant, and that unless the DOJ and the Company were able to reach a settlement, the DOJ was prepared to commence a civil action. The engines were purchased by the Company pursuant to agreements with vendors under which the vendors represented that their products complied with all applicable laws and regulations and under which the vendors agreed to indemnify the Company for any liabilities or costs relating to, among other matters, the noncompliance or alleged noncompliance of their products. The Company notified these vendors of the EPA's position and has worked with these vendors to provide additional information to the DOJ and EPA regarding the alleged violations. As a result of this process, the Company believes it has provided evidence that many of the products identified by the DOJ and EPA in early 2011 were, in fact,
Page
8
in compliance with the Clean Air Act and that most of the remaining issues relate to products purchased from
one
vendor. The vendor of these products and the Company are engaged in settlement discussions with the DOJ and EPA that would call for the payment of a civil penalty by and certain injunctive relief against the Company. In addition, the EPA in May 2012 provided the Company with a summary of preliminary findings based on inspections of certain products sold by the Company. In the fourth quarter of 2012, the EPA informed the Company of its position that many of the issues identified in its preliminary findings constitute violations of the Clean Air Act. The Company is working with the vendors of these products to provide additional information to EPA. The Company intends to seek reimbursement from its vendors for any penalties paid as part of a settlement of these matters. The Company does not expect the resolution of these matters to have a material adverse effect on its financial condition, results of operations or cash flows. We do not believe it is reasonably possible that a loss in excess of the amount accrued will be incurred.
We are also involved in various litigation matters arising in the ordinary course of business. We expect these matters will be resolved without material adverse effect on our consolidated financial position, results of operations or cash flows. We believe that any estimated loss related to such matters has been adequately provided in accrued liabilities to the extent probable and reasonably estimable.
Tractor Supply Company has one reportable segment which is the retail sale of farm and ranch products. The Company manages the business on the basis of
one
operating segment. The following chart indicates the percentage of sales represented by each of our major product categories for the fiscal
three
months ended
March 30, 2013
and
March 31, 2012
:
|
|
Fiscal three months ended
|
||||
|
|
March 30, 2013
|
March 31, 2012
|
|||
|
Product Category:
|
|
|
|||
|
Livestock and Pet
|
49
|
%
|
45
|
%
|
|
|
Hardware, Tools and Truck
|
22
|
|
22
|
|
|
|
Seasonal, Gift and Toy Products
|
16
|
|
19
|
|
|
|
Clothing and Footwear
|
9
|
|
9
|
|
|
|
Agriculture
|
4
|
|
5
|
|
|
|
Total
|
100
|
%
|
100
|
%
|
|
General
The following discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended
December 29, 2012
. The following discussion and analysis also contains certain historical and forward-looking information. The forward-looking statements included herein are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”). All statements, other than statements of historical facts, which address activities, events or developments that we expect or anticipate will or may occur in the future, including such things as estimated results of operations in future periods, the declaration and payment of dividends, future capital expenditures (including their amount and nature), business strategy, expansion and growth of our business operations and other such matters are forward-looking statements. These forward-looking statements may be affected by certain risks and uncertainties, any one, or a combination of which, could materially affect the results of our operations. To take advantage of the safe harbor provided by the Act, we are identifying certain factors that could cause actual results to differ materially from those expressed in any forward-looking statements, whether oral or written.
As with any business, many aspects of our operations are subject to influences outside our control. These factors include, without limitation, 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, the ability to manage expenses, the availability of favorable credit sources, capital market conditions in general, failure to open new stores in the manner and number 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
Page
9
to attract, train and retain qualified employees, product liability and other claims, changes in federal, state or local regulations, potential judgments, fines, legal fees and other costs, breach of privacy, ongoing and potential future legal or regulatory proceedings, management of our information systems, failure to secure or develop and implement new technologies, the failure of customer-facing technology systems, business disruption including from the implementation of supply chain technologies, effective tax rate changes and results of examination by taxing authorities, the ability to maintain an effective system of internal control over financial reporting and changes in accounting standards, assumptions and estimates. We discuss in greater detail risk factors relating to our business in Item 1A of our Annual Report on Form 10-K for the fiscal year ended
December 29, 2012
. Forward-looking statements are based on our knowledge of our business and the environment in which we operate, but because of the factors listed above or other factors, 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 there can be no assurance that the actual results or developments anticipated will be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business and operations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no 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.
Results of Operations
Fiscal
Three
Months (First Quarter) Ended
March 30, 2013
and
March 31, 2012
Net sales increased
6.4%
to
$1.09 billion
for the first
three
months of fiscal
2013
from
$1.02 billion
for the first
three
months of fiscal
2012
. Same-store sales for the first
three
months of fiscal
2013
were
$1.02 billion
, a
0.5%
increase
over the first
three
months of fiscal
2012
. This compares to a very strong
11.5%
same-store sales increase for the first quarter of fiscal
2012
. The
2013
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. C.U.E. products represent certain high-velocity, consumable items from several of our major product categories. Additionally, the Company experienced strong sales of winter seasonal merchandise due to the extended cold weather during the quarter. These increases were principally offset by lower sales of spring seasonal merchandise as compared to the prior year's first quarter, which had an early spring. We estimate that same-store sales were favorably impacted by approximately 140 basis points due to inflation, principally in livestock feed and dry pet food.
In addition to same-store sales growth in the first three months of fiscal
2013
, sales from stores opened less than one year were $62.1 million for the first three months of fiscal
2013
, which represented 6.1 percentage points of the
6.4%
increase over total first quarter fiscal
2012
net sales.
The following chart summarizes our store growth for the fiscal
three
months ended
March 30, 2013
and
March 31, 2012
:
|
Fiscal three months ended
|
|||||
|
March 30, 2013
|
March 31, 2012
|
||||
|
Store Count, Beginning of Period
|
1,176
|
|
1,085
|
|
|
|
New Stores Opened
|
22
|
|
33
|
|
|
|
Stores Closed
|
(1
|
)
|
(1
|
)
|
|
|
Store Count, End of Period
|
1,197
|
|
1,117
|
|
|
The following chart indicates the percentage of sales represented by each of our major product categories for the fiscal
three
months ended
March 30, 2013
and
March 31, 2012
:
|
Fiscal three months ended
|
|||||
|
March 30,
2013 |
March 31,
2012 |
||||
|
Product Category:
|
|||||
|
Livestock and Pet
|
49
|
%
|
45
|
%
|
|
|
Hardware, Tools and Truck
|
22
|
|
22
|
|
|
|
Seasonal, Gift and Toy Products
|
16
|
|
19
|
|
|
|
Clothing and Footwear
|
9
|
|
9
|
|
|
|
Agriculture
|
4
|
|
5
|
|
|
|
Total
|
100
|
%
|
100
|
%
|
|
Page
10
Gross margin
increased
5.8%
to
$352.1 million
for the first
three
months of fiscal
2013
from
$332.8 million
in the first
three
months of fiscal
2012
. As a percent of sales, gross margin
decreased
20
basis points to
32.4%
for the first
three
months of fiscal
2013
compared to
32.6%
for the comparable period in fiscal
2012
. The decrease in gross margin as a percent of sales resulted from the continued mix shift to lower-margin C.U.E. products, the softness in sales of higher margin spring seasonal merchandise, and increased transportation costs. Transportation costs increased due to a larger volume of imports and the impact from the mix shift to more freight-intensive C.U.E. products. These decreases were partially offset by the favorable impact from key margin-driving initiatives.
As a percent of sales, SG&A expenses, including depreciation and amortization,
improved
20
basis points to
26.1%
in the first
three
months of fiscal
2013
from
26.3%
in the first
three
months of fiscal
2012
. The improvement as a percent of sales was attributable to lower year-over-year incentive compensation expense. Total SG&A expenses
increased
5.9%
to
$284.2 million
from
$268.4 million
in the first
three
months of fiscal
2012
. This change is due primarily to new store growth and corporate support services.
Our effective income tax rate
decreased
to
35.0%
in the
first
three months of fiscal 2013 compared to
36.8%
for the
first
three months of fiscal
2012
. The decrease was principally due to the favorable impact of the reversal of reserves for uncertain tax positions and the reinstatement of the federal Work Opportunity Tax Credit that was approved by Congress in the early part of our first quarter, both of which are treated as discrete items in the quarter. The Company expects the full year effective tax rate will be approximately
36.5%
.
Net income for the first
three
months of fiscal
2013
increased
9.1%
to
$44.0 million
compared to
$40.3 million
in the first
three
months of fiscal
2012
. Net income per diluted share for the first
three
months of fiscal
2013
increased to
$0.62
from
$0.55
in the first
three
months of fiscal
2012
.
Liquidity and Capital Resources
In addition to normal operating expenses, our primary ongoing cash requirements are for new store expansion, remodeling and relocation programs, distribution center and store support center capacity and improvements, information technology, inventory purchases, share repurchases and cash dividends. Our primary ongoing sources of liquidity are existing cash balances, funds provided from operations, borrowings available under our Senior Credit Facility, capital and operating leases and normal trade credit. Our inventory and accounts payable levels typically build in the first and third fiscal quarters in anticipation of the spring and cold-weather selling seasons, respectively.
At
March 30, 2013
, the Company had working capital of
$643.3 million
, which
increased
$73.8 million
from
December 29, 2012
and
decreased
$23.3 million
from
March 31, 2012
. The shifts in working capital were attributable to changes in the following components of current assets and current liabilities (in millions):
|
|
March 30,
2013 |
December 29,
2012 |
Variance
|
March 31,
2012 |
Variance
|
||||||||||||||
|
Current assets:
|
|
|
|
|
|
||||||||||||||
|
Cash and cash equivalents
|
$
|
57.0
|
|
$
|
138.6
|
|
$
|
(81.6
|
)
|
$
|
126.7
|
|
$
|
(69.7
|
)
|
||||
|
Restricted cash
|
8.4
|
|
8.4
|
|
—
|
|
21.9
|
|
(13.5
|
)
|
|||||||||
|
Inventories
|
1,142.9
|
|
908.1
|
|
234.8
|
|
1,031.8
|
|
111.1
|
|
|||||||||
|
Prepaid expenses and other current assets
|
51.9
|
|
51.8
|
|
0.1
|
|
50.3
|
|
1.6
|
|
|||||||||
|
Deferred income taxes
|
7.2
|
|
23.1
|
|
(15.9
|
)
|
1.4
|
|
5.8
|
|
|||||||||
|
|
1,267.4
|
|
1,130.0
|
|
137.4
|
|
1,232.1
|
|
35.3
|
|
|||||||||
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Accounts payable
|
476.0
|
|
320.4
|
|
155.6
|
|
423.9
|
|
52.1
|
|
|||||||||
|
Accrued employee compensation
|
9.1
|
|
48.4
|
|
(39.3
|
)
|
13.2
|
|
(4.1
|
)
|
|||||||||
|
Other accrued expenses
|
135.2
|
|
148.3
|
|
(13.1
|
)
|
121.9
|
|
13.3
|
|
|||||||||
|
Income taxes payable
|
3.8
|
|
43.4
|
|
(39.6
|
)
|
6.5
|
|
(2.7
|
)
|
|||||||||
|
|
624.1
|
|
560.5
|
|
63.6
|
|
565.5
|
|
58.6
|
|
|||||||||
|
Working capital
|
$
|
643.3
|
|
$
|
569.5
|
|
$
|
73.8
|
|
$
|
666.6
|
|
$
|
(23.3
|
)
|
||||
Page
11
In comparison to
December 29, 2012
, working capital as of
March 30, 2013
was impacted most significantly by changes in our cash, inventory, accounts payable, accrued employee compensation and income taxes payable.
|
•
|
The decrease in cash is primarily attributable to an increase in inventory purchases, common stock repurchases and capital expenditures, principally due to new store construction and construction of the new distribution center in Macon, GA.
|
|
•
|
The increase in inventories and accounts payable resulted primarily from the purchase of additional inventory to support new store growth as well as a seasonal build in anticipation of the spring selling season.
|
|
•
|
The decrease in accrued employee compensation is primarily due to the payment of annual incentive compensation and the timing of payroll disbursements.
|
|
•
|
The decrease in income taxes payable reflects quarterly income tax payments.
|
In comparison to
March 31, 2012
, working capital as of
March 30, 2013
was impacted most significantly by changes in our cash, inventories and accounts payable.
|
•
|
The decrease in cash is primarily attributable to common stock repurchases and capital expenditures, offset in part by increased earnings. Since the first quarter of fiscal 2012, we repurchased approximately 3.5 million shares of common stock under the share repurchase program at a total cost of $317.5 million. Capital expenditures of $170.4 million since the first quarter of fiscal 2012 reflect funding to support new store growth, construction of a new distribution center, technology upgrades to enhance our customer experience in our retail stores and on-line, as well as land and construction costs for our new store support center.
|
|
•
|
The increase in inventories and accounts payable is primarily a result of new store growth and increased inventory per store of 2.3%. The increase in inventory on a per store basis is related to inventory build in key spring seasonal categories as well as inflation.
|
Operations used net cash of
$95.3 million
and
$20.3 million
in the first
three
months of fiscal
2013
and fiscal
2012
, respectively. The
$75.0 million
increase
in net cash used in operations in the first three months of fiscal
2013
compared to the first three months of fiscal
2012
is due to changes in the following operating activities (in millions):
|
|
Fiscal three months ended
|
||||||||||
|
|
March 30,
2013 |
March 31,
2012 |
Variance
|
||||||||
|
Net income
|
$
|
44.0
|
|
$
|
40.3
|
|
$
|
3.7
|
|
||
|
Depreciation and amortization
|
22.7
|
|
21.7
|
|
1.0
|
|
|||||
|
Stock compensation expense
|
3.4
|
|
4.6
|
|
(1.2
|
)
|
|||||
|
Excess tax benefit of stock options exercised
|
(12.0
|
)
|
(9.9
|
)
|
(2.1
|
)
|
|||||
|
Deferred income taxes
|
10.7
|
|
4.1
|
|
6.6
|
|
|||||
|
Inventories and accounts payable
|
(79.1
|
)
|
(43.5
|
)
|
(35.6
|
)
|
|||||
|
Prepaid expenses and other current assets
|
—
|
|
1.4
|
|
(1.4
|
)
|
|||||
|
Accrued expenses
|
(53.6
|
)
|
(45.0
|
)
|
(8.6
|
)
|
|||||
|
Income taxes payable
|
(27.6
|
)
|
4.6
|
|
(32.2
|
)
|
|||||
|
Other, net
|
(3.8
|
)
|
1.4
|
|
(5.2
|
)
|
|||||
|
Net cash used in operations
|
$
|
(95.3
|
)
|
$
|
(20.3
|
)
|
$
|
(75.0
|
)
|
||
The
$75.0 million
increase
in net cash used by operations in the first
three
months of fiscal
2013
compared with the first
three
months of fiscal
2012
primarily relates to increased inventory levels and timings of accounts payable and income tax payments. Inventory, net of accounts payable, was a larger use of operating funds in the first three months of fiscal 2013 than in the same period last year due to an increase in seasonal inventory, timing of payments and inflation. Income taxes payable decreased due to timing of estimated tax payments.
Investing activities used cash of
$49.2 million
and
$31.8 million
in the first
three
months of fiscal
2013
and fiscal
2012
, respectively. The majority of the investing activity relates to our capital expenditures. Our significant store expansion, coupled with distribution network expansion and other required investments in infrastructure resulted in capital expenditures for the first
three
months of fiscal
2013
and fiscal
2012
as follows (in millions):
Page
12
|
|
Fiscal three months ended
|
||||||
|
|
March 30,
2013 |
March 31,
2012 |
|||||
|
Distribution center capacity and improvements
|
$
|
19.4
|
|
$
|
0.8
|
|
|
|
New and relocated stores and stores not yet opened
|
12.3
|
|
18.2
|
|
|||
|
Information technology
|
11.0
|
|
6.5
|
|
|||
|
Purchase of previously leased stores
|
3.3
|
|
3.2
|
|
|||
|
Existing stores
|
2.3
|
|
3.0
|
|
|||
|
Corporate and other
|
1.0
|
|
0.1
|
|
|||
|
|
$
|
49.3
|
|
$
|
31.8
|
|
|
The above table reflects
22
new stores in the first
three
months of fiscal
2013
, compared to
33
new stores during the first
three
months of fiscal
2012
. We expect to open approximately 100 to 105 new stores during fiscal
2013
. The increase in distribution center capacity and improvements in the first
three
month of fiscal
2013
compared to the first
three
months of fiscal
2012
is primarily due to the construction of our new Macon, GA distribution center, which is the relocation of our southeastern distribution center in Braselton, GA.
Financing activities provided cash of
$62.8 million
and
$1.9 million
in the first
three
months of fiscal
2013
and fiscal
2012
, respectively. This change in net cash
provided by
financing activities is largely due to
$105.0 million
in borrowings, net of repayments, under the revolving credit agreement partially offset by an incremental
$45.7 million
in common stock repurchases during the first
three
months of fiscal
2013
compared to the first
three
months of fiscal
2012
.
The Senior Credit Facility provides for borrowings up to
$250 million
(with sublimits of
$250 million
and
$20 million
for letters of credit and swingline loans, respectively). This agreement is unsecured and matures in
October 2016
, with proceeds available to be used for working capital, capital expenditures, dividends, share repurchases and other matters. At
March 30, 2013
, there were
$105.0 million
outstanding borrowings and
$46.0 million
outstanding letters of credit under the Senior Credit Facility. Borrowings bear interest at either the bank’s base rate or LIBOR plus an additional amount ranging from
0.40%
to
1.00%
per annum, adjusted quarterly based on our leverage ratio (
0.50%
at
March 30, 2013
). We are also required to pay quarterly in arrears, a commitment fee for unused capacity ranging from
0.08%
to
0.20%
per annum, adjusted quarterly based on our leverage ratio (
0.10%
at
March 30, 2013
). The agreement requires quarterly compliance with respect to fixed charge coverage and leverage ratios. As of
March 30, 2013
, we were in compliance with all debt covenants.
We believe that our existing cash balances, expected cash flow from future operations, borrowings available under the Senior Credit Facility, operating and capital leases and normal trade credit will be sufficient to fund our operations and our capital expenditure needs, including new store openings, store acquisitions, relocations and renovations, and distribution center capacity, over the next several years.
Share Repurchase Program
The Company's Board of Directors has authorized common stock repurchases under the share repurchase program up to
$1.0 billion
, exclusive of any fees, commissions, or other expenses related to such repurchases, through
April 2015
. The repurchases may be made from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability, and other market conditions. Repurchased shares will be held in treasury. The program may be limited or terminated at any time without prior notice.
We repurchased
522,500
and
54,700
shares of common stock under the share repurchase program at a total cost of
$49.9 million
and
$4.1 million
during the
first
quarter of fiscal
2013
and fiscal
2012
, respectively. As of
March 30, 2013
, we had remaining authorization under the share repurchase program of
$241.3 million
exclusive of any fees, commissions, or other expenses.
Dividends
We believe our ability to generate cash allows us to invest in the growth of our business and, at the same time, distribute a quarterly dividend. During the first
three
months of fiscal
2013
, the Board of Directors declared the following dividend:
Page
13
|
Date Declared
|
Dividend Amount
Per Share |
Stockholders of Record Date
|
Date Paid
|
|||||
|
February 6, 2013
|
$
|
0.20
|
|
February 25, 2013
|
March 12, 2013
|
|||
It is the present intention of the Board of Directors to continue to pay a quarterly cash dividend; however, the declaration and payment of future dividends will be determined by the Board of Directors in its sole discretion and will depend upon the earnings, financial condition, and capital needs of the Company, along with other factors which the Board of Directors deems relevant.
On May 1, 2013, our Board of Directors declared a quarterly cash dividend of
$0.26
per share of the Company’s common stock. The dividend will be paid on June 4, 2013 to stockholders of record as of the close of business on May 20, 2013.
Off-Balance Sheet Arrangements
Our off-balance sheet arrangements are limited to operating leases and outstanding letters of credit. We typically lease buildings for retail stores and offices rather than acquiring these assets which allows us to utilize financial capital to operate the business rather than invest in fixed assets. Letters of credit allow us to purchase inventory, primarily sourced overseas, in a timely manner and support certain risk management programs.
Significant Contractual Obligations and Commercial Commitments
At
March 30, 2013
, we had contractual commitments related to a new distribution center in Macon, GA totaling approximately
$7.6 million
, contractual commitments related to construction projects for new stores totaling approximately
$5.4 million
, and contractual commitments related to the construction of our new store support center of approximately
$55.3 million
.
There have been no other material changes in our contractual obligations and commercial commitments other than in the ordinary course of business since the end of fiscal
2012
.
At
March 30, 2013
, there were
$46.0 million
outstanding letters of credit under the Senior Credit Facility and an
$8.4 million
outstanding letter of credit at a financial institution outside of the Senior Credit Facility which is collateralized by a time deposit classified as restricted cash.
Effective April 1, 2013, the outstanding letter of credit at the financial institution outside of the Senior Credit Facility of
$8.4 million
increased to $18.3 million, and the restriction on the $8.4 million in restricted cash lapsed.
Significant Accounting Policies and Estimates
Management’s discussion and analysis of our financial position and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these financial statements requires management to make informed estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Our significant accounting policies, including areas of critical management judgments and estimates, have primary impact on the following financial statement areas:
|
-
|
Inventory valuation
|
-
|
Income tax contingencies
|
|
-
|
Self-insurance reserves
|
-
|
Long-lived assets
|
|
-
|
Sales tax audit reserve
|
|
|
See the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended
December 29, 2012
for a discussion of our critical accounting policies. Our financial position and/or results of operations may be materially different when reported under different conditions or when using different assumptions in the application of such policies. In the event estimates or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.
Page
14
Interest Rate Risk
We may be exposed to changes in interest rates primarily from the Senior Credit Facility. The Senior Credit Facility bears interest at either the bank’s base rate (
3.25%
at
March 30, 2013
and
March 31, 2012
) or LIBOR (
0.20%
at
March 30, 2013
and
0.24%
at
March 31, 2012
) plus an additional amount per annum adjusted quarterly (ranging from
0.40%
to
1.00%
) based on our leverage ratio (
0.50%
at
March 30, 2013
and
March 31, 2012
). We are also required to pay (quarterly in arrears) a commitment fee (ranging from
0.08%
to
0.20%
) based on the daily average unused portion of the credit line (
0.10%
at
March 30, 2013
and
March 31, 2012
). See Note 5 of the Notes to Unaudited Condensed Consolidated Financial Statements included herein for further discussion regarding the Senior Credit Facility.
Seasonality and Weather
Our business is seasonal. Historically, our sales and profits are the highest in the second and fourth fiscal quarters due to the sale of seasonal products. Extreme weather conditions, including snow and ice storms, flood and wind damage, hurricanes, tornadoes and droughts can have an impact on our sales and results of operations. Our strategy is to remain flexible and react to extreme weather conditions by changing assortments in stores affected by the weather conditions and redirecting inventories to these stores. We experience our highest inventory and accounts payable balances during our first fiscal quarter for purchases of seasonal products in anticipation of the spring selling season and again during our third fiscal quarter in anticipation of the cold-weather selling season.
Purchase Price Volatility
Although we cannot determine the full effect of inflation and deflation on our operations, we believe our sales and results of operations are affected by both. We are subject to market risk with respect to the pricing of certain products and services, which include, among other items, steel, grain, petroleum, corn, cotton and other commodities as well as transportation services. Therefore, we may experience both inflationary and deflationary pressures on product cost, which may impact consumer demand and, as a result, sales and gross margin. Our strategy is to reduce or mitigate the effects of purchase price volatility principally by taking advantage of vendor incentive programs, economies of scale from increased volume of purchases, adjusting retail prices and selectively buying from the most competitive vendors without sacrificing quality. Should our strategy to mitigate purchase price volatility not be effective, our financial performance could be adversely impacted.
Disclosure Controls and Procedures
We carried out an evaluation required by the Securities Exchange Act of 1934, as amended (the “1934 Act”), under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the 1934 Act) as of
March 30, 2013
. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of
March 30, 2013
, our disclosure controls and procedures were effective.
Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The Company responded to a Request for Information from the United States Environmental Protection Agency (“EPA”) in the first quarter of fiscal 2009 relating to certain recreational vehicles and non-road spark ignition engines sold by the Company. In the first quarter of fiscal 2011, the Environmental Enforcement Section of the Department of Justice (“DOJ”), on behalf of the EPA, informed the Company that it believed the Company had violated the Clean Air Act by importing or causing the importation of certain engines that were noncompliant, and that unless the DOJ and the Company were able to reach a settlement, the DOJ was prepared to commence a civil action. The engines were purchased by the Company pursuant to agreements with vendors under which the vendors represented that their products complied with all applicable laws and regulations and under which the
Page
15
vendors agreed to indemnify the Company for any liabilities or costs relating to, among other matters, the noncompliance or alleged noncompliance of their products. The Company notified these vendors of the EPA's position and has worked with these vendors to provide additional information to the DOJ and EPA regarding the alleged violations. As a result of this process, the Company believes it has provided evidence that many of the products identified by the DOJ and EPA in early 2011 were, in fact, in compliance with the Clean Air Act and that most of the remaining issues relate to products purchased from one
vendor. The vendor of these products and the Company are engaged in settlement discussions with the DOJ and EPA that would call for the payment of a civil penalty by and certain injunctive relief against the Company. In addition, the EPA in May 2012 provided the Company with a summary of preliminary findings based on inspections of certain products sold by the Company. In the fourth quarter of 2012, the EPA informed the Company of its position that many of the issues identified in its preliminary findings constitute violations of the Clean Air Act. The Company is working with the vendors of these products to provide additional information to EPA. The Company intends to seek reimbursement from its vendors for any penalties paid as part of a settlement of these matters. The Company does not expect the resolution of these matters to have a material adverse effect on its financial condition, results of operations or cash flows. We do not believe it is reasonably possible that a loss in excess of the amount accrued will be incurred.
We are also involved in various litigation matters arising in the ordinary course of business. We expect these matters will be resolved without material adverse effect on our consolidated financial position, results of operations or cash flows. We believe that any estimated loss related to such matters has been adequately provided in accrued liabilities to the extent probable and reasonably estimable.
There have been no material changes to our risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended
December 29, 2012
.
Issuer Purchases of Equity Securities
The Company’s Board of Directors has authorized common stock repurchases under the share repurchase program up to $1.0 billion through April 2015. Stock repurchase activity during the
first
quarter of fiscal
2013
was as follows:
|
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 30, 2012 – January 26, 2013
|
317,500
|
|
$
|
91.88
|
|
317,500
|
|
$
|
261,992,605
|
|
||||
|
January 27, 2013 – February 23, 2013
|
128,123
|
|
99.95
|
|
90,000
|
|
253,131,721
|
|
||||||
|
February 24, 2013 – March 30, 2013
|
115,000
|
|
102.85
|
|
115,000
|
|
241,306,997
|
|
||||||
|
As of March 30, 2013
|
560,623
|
|
$
|
95.97
|
|
522,500
|
|
$
|
241,306,997
|
|
||||
We expect to implement the balance of the repurchase program through purchases made from time to time either in the open market or through private transactions, in accordance with regulations of the Securities and Exchange Commission.
None
Not applicable.
None.
Page
16
Exhibit
31.1 Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101
|
The following financial information from our Quarterly Report on Form 10-Q for the
first
quarter of fiscal
2013
, filed with the SEC on
May 6, 2013
, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets at
March 30, 2013
,
December 29, 2012
and
March 31, 2012
, (ii) the Condensed Consolidated Statements of Income for the fiscal
three
months ended
March 30, 2013
and
March 31, 2012
, (iii) the Condensed Consolidated Statements of Cash Flows for the fiscal
three
months ended
March 30, 2013
and
March 31, 2012
, and (iv) the Notes to Unaudited Condensed Consolidated Financial Statements.
|
Page
17
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
TRACTOR SUPPLY COMPANY
|
|
|
|
|
|
|
Date:
|
May 6, 2013
|
By:
|
/s/ Anthony F. Crudele
|
|
|
|
|
Anthony F. Crudele
|
|
|
|
|
Executive Vice President - Chief Financial Officer and Treasurer
|
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
Page
18
TABLE OF CONTENTS
Part I. Financial InformationItem 1. Financial StatementsNote 1 Basis Of Presentation:Note 2 Fair Value Of Financial Instruments:Note 3 Share-based Compensation:Note 4 - Net Income Per Share:Note 5 Credit Agreement:Note 6 Treasury Stock:Note 7 Dividends:Note 8 Income Taxes:Note 9 Commitments and Contingencies:Note 10 Segment Reporting:Item 2. Management's Discussion and Analysis Of Financial Condition and Results Of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPart II. Other InformationItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Mine Safety DisclosuresItem 5. Other InformationItem 6. Exhibits