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TheStreet Open House

Family Dollar Reports First Quarter Results

Stock quotes in this article: FDO

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company does not undertake to update or revise these forward-looking statements even if experience or future changes make it clear that projected results expressed or implied in such statements will not be realized, except as may be required by law.

Earnings Conference Call Information

The Company plans to host a conference call with investors today, January 3, 2013, at 10:00 a.m. ET to discuss the results. The Company will also provide an update on various business initiatives and discuss plans and expectations for the rest of fiscal 2013. After some prepared remarks by management, participants will have an opportunity to ask questions. The Company’s responses to questions, as well as other matters discussed during the conference call, may include information that has not been disclosed previously.

If you wish to participate, please call (888) 329-8903 for domestic US calls and (719) 325-2320 for international calls at least 10 minutes before the call is scheduled to begin. The passcode for the conference call is 7056645 or “FAMILY DOLLAR.”

A live webcast of the conference call can be accessed at the following link:

http://www.familydollar.com/investors.aspx?p=irhome .

A replay of the webcast will be available at the address noted above after 11:00 a.m. ET, January 3, 2012.

About Family Dollar

For more than 50 years, Family Dollar has been providing value and convenience to customers in easy-to-shop neighborhood locations. Family Dollar’s mix of name brands and quality, private brand merchandise appeals to shoppers in more than 7,500 stores in rural and urban settings across 45 states. Helping families save on the items they need with everyday low prices creates a strong bond with customers, who often refer to their neighborhood store as “my Family Dollar.” Headquartered in Matthews, North Carolina, just outside of Charlotte, Family Dollar is a Fortune 300, publicly held company with common stock traded on the New York Stock Exchange under the symbol FDO. For more information, please visit www.familydollar.com.

FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
         
 
For the First Quarter Ended*
(in thousands, except per share amounts)    

November 24, 2012

 

% of Net Sales

 

November 26, 2011

 

% of Net Sales

 
Net sales $ 2,421,688 100.00 % $ 2,148,287 100.00 %
 
Cost of sales   1,594,894   65.86 %   1,390,715   64.74 %
 
Gross profit 826,794 34.14 % 757,572 35.26 %
 
Selling, general and administrative expenses   699,825   28.90 %   627,585   29.21 %
 
Operating profit 126,969 5.24 % 129,987 6.05 %
 
Investment income 75 0.00 % 234 0.01 %
 
Interest expense 7,122 0.29 % 6,712 0.31 %
 
Other income   6,362   0.26 %   4,923   0.23 %
 
Income before income taxes 126,284 5.21 % 128,432 5.98 %
 
Income taxes   46,005   1.90 %   48,082   2.24 %
 
Net income $ 80,279 3.32 % $ 80,350 3.74 %
 
Net income per common share - basic $ 0.69 $ 0.68
Weighted average shares - basic 115,521 117,649
 
Net income per common share - diluted $ 0.69 $ 0.68
Weighted average shares - diluted 116,197 118,591
 
Dividends declared per common share $ 0.21 $ 0.18
 
 
*Certain reclassifications of the amounts for fiscal 2012 have been made to conform to the presentation for fiscal 2013.

FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
     
As of
November 24, November 26,
(in thousands, except per share and share amounts) 2012 2011
Assets
Current assets:
Cash and cash equivalents $ 112,267 $ 103,706
Short-term investment securities 9,560 51,630
Restricted cash and investments 80,884
Merchandise inventories 1,592,068 1,301,577
Deferred income taxes 71,557 56,477
Income tax refund receivable 7,181
Prepayments and other current assets   75,082   77,397
Total current assets 1,941,418 1,597,968
 
Property and equipment, net 1,636,189 1,355,287
Investment securities 23,489 94,543
Other assets   86,350   73,353
 
Total assets $ 3,687,446 $ 3,121,151
 
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings $ 209,000 $ 75,000
Current portion of long-term debt 16,200 16,200
Accounts payable 752,231 719,175
Accrued liabilities 316,347 271,262
Income taxes   32,618   7,753
Total current liabilities 1,326,396 1,089,390
 
Long-term debt 500,158 516,207
Other liabilities 277,738 263,245
Deferred gain 154,611
Deferred income taxes 75,950 104,608
Commitments and contingencies
 
Shareholders' equity:

Preferred stock, $1 par; authorized and unissued 500,000 shares

Common stock, $.10 par; authorized 600,000,000 shares

11,993 11,897
Capital in excess of par 282,957 243,414
Retained earnings 1,290,436 941,572
Accumulated other comprehensive loss (1,795) (6,697)
Common stock held in treasury, at cost   (230,998)   (42,485)
Total shareholders' equity   1,352,593   1,147,701
 
Total liabilities and shareholders' equity $ 3,687,446 $ 3,121,151

FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
       
For the First Quarter Ended
(in thousands)

November 24, 2012

November 26, 2011

Cash flows from operating activities:
Net income $ 80,279 $ 80,350
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 57,175 49,135
Amortization of deferred gain (2,857 )
Deferred income taxes 17,919 28,595
Excess tax benefits from stock-based compensation (12,654 ) (10,572 )
Stock-based compensation 4,413 5,423
Loss on disposition of property and equipment, 2,860 7,173
including impairment
Changes in operating assets and liabilities:
Merchandise inventories (165,906 ) (146,917 )
Prepayments and other current assets (27,472 ) (5,953 )
Other assets (2,073 ) 616
Accounts payable and accrued liabilities 10,003 (54,325 )
Income taxes 761 5,924
Other liabilities   9,784       (6,172 )
  (27,768 )     (46,723 )
 
Cash flows from investing activities:
Purchases of investment securities (10,720 ) (12,182 )
Sales of investment securities 7,542 68,592
Net change in restricted cash 46,009
Capital expenditures (196,386 ) (130,862 )
Net proceeds from sale-leaseback 1,132
Proceeds from dispositions of property and equipment   162     96  
  (152,261 )   (74,356 )
 
Cash flows from financing activities:
Revolving credit facility borrowings 598,000 173,000
Repayment of revolving credit facility borrowings (404,000 ) (98,000 )
Repayment of long-term debt (16,200 ) (16,200 )
Repurchases of common stock (24,980 ) (27,435 )
Change in cash overdrafts 43,138 41,819
Proceeds from exercise of employee stock options 15,578 20,752
Excess tax benefits from stock-based compensation 12,654 10,572
Payment of dividends   (24,227 )     (21,128 )
  199,963       83,380  
 
Net change in cash and cash equivalents 19,934 (37,699 )
Cash and cash equivalents at beginning of period   92,333     141,405  
Cash and cash equivalents at end of period $ 112,267   $ 103,706  

FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
Selected Additional Information
     
 
NET SALES BY CATEGORY:
For the First Quarter Ended
November 24, November 26,
(in thousands) 2012   2011   % Change  
Consumables $ 1,789,285 $ 1,509,536 18.5 %
Home products 242,335 246,000 -1.5 %
Apparel and accessories 178,026 186,214 -4.4 %
Seasonal and electronics   212,042     206,537   2.7 %
TOTAL $ 2,421,688 $ 2,148,287 12.7 %
 
 
STORES IN OPERATION:
For the First Quarter Ended
November 24, November 26,
2012   2011  
Beginning Store Count 7,442 7,023
New Store Openings 125 101
Store Closings   (1 )   (4 )
Ending Store Count 7,566 7,120
Total Square Footage (000s) 64,927 60,846
Total Selling Square Footage (000s) 54,245 50,760




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