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Tractor Supply Company Reports QUARTER RESULTS

The following excerpt is from the company's SEC filing.

Earnings per Share Increased

Sales Increased

Billion

Comparable Store Sales Increased

Brentwood, TN,

April 20, 2016

- Tractor Supply Company (NASDAQ: TSCO)

, the largest rural lifestyle retail store chain in the United States, today announced financial results for its

quarter ended

Quarter Results

Net sales

increased

$1.47 billion

$1.33 billion

in the prior year’s

quarter. Comparable store sales increased

compared to a

increase in the prior year period. T he increase in comparable store sales was driven by an increase in both traffic and ticket, with comparable store transaction count increasing

and average ticket increasing

. Sales were broad-based, with all of our major product categories and geographic regions generating positive comparable store sales. Solid performance in consumable, usable and edible (C.U.E.) products, specifically pet and livestock consumables benefited sales. Seasonal products including lawn and garden, riding lawn mowers and fencing also performed very well, driven in part by early spring weather in the first quarter of

Gross profit

$494.4 million

$444.6 million

quarter, and gross margin improved to

in the prior year period. The increase in gross margin was driven primarily by improved merchandise margin, which was partially offset by increased transportation costs. The improvement in merchandise margin resulted principally from our key margin initiatives of price management, imports and exclusive brands as well as cost negotiations and vendor support programs.

Selling, general and administrative (SG&A) expenses, including depreciation and amortization,

$386.2 million

$351.8 million

in the prior year period. As a percent of net sales, SG&A

decreased

basis points to

. SG&A benefited from the strong comparable store sales increase and effective expense control and payroll management.

Net income

$67.7 million

$58.0 million

and diluted earnings per share increased

quarter of the prior year.

The Company opened

new stores and closed

stores, all of which were Del’s stores, in the

new store openings and

store closure in the prior year period.

Greg Sandfort, President and Chief Executive Officer, stated, “We are pleased with our results and execution in the first quarter. Comparable store sales increased 4.9% and were balanced across product categories and regions. We know the seasons and weather can influence the timing of when our customers buy certain products, but we also know it is our job to manage the business accordingly. Once again, the team did an excellent job and we believe our first quarter results demonstrate the resiliency of our business model.”

Mr. Sandfort continued, “Although we are off to a solid start in the first quarter, we recognize the importance of the spring selling season to our first half performance. We believe we have the inventory, people and processes in place to continue to meet the needs of our customers and drive our business.”

Fiscal 2016 Outlook

The Company is reiterating the following guidance for the results of operations expected for fiscal 2016:

Net Sales

$6.9 billion - $7.0 billion

3.5% - 5.0%

Net Income

$455 million - $467 million

Earnings per Diluted Share

$3.40 - $3.48

Capital Expenditures

$230 million - $250 million

Included in this forecast are additional expenses related to the first year of operations for the new Casa Grande, Arizona distribution center and the continued transition of the Company’s Del’s stores to Tractor Supply stores. The forecast also considers the impact of the additional 53

week in fiscal 2016. Anticipated capital expenditures include spending to support 115 - 120 new store openings.

Conference Call Information

Tractor Supply Company will be hosting a conference call at 5:00 p.m. Eastern Time today to discuss the quarterly and full year results. The call will be broadcast simultaneously over the Internet on the Company’s website at

IR.TractorSupply.com

Please allow extra time prior to the call to visit the site and download the streaming media software required to listen to the Internet broadcast.

A replay of the webcast will also be available at

shortly after the conference call concludes.

About Tractor Supply Company

, Tractor Supply Company operated

stores in

states. The Company’s stores are focused on supplying the lifestyle needs of recreational farmers and ranchers and others who enjoy the rural lifestyle, as well as tradesmen and small businesses. Stores are located primarily in towns outlying major metropolitan markets and in rural communities. The Company offers the following comprehensive selection of merchandise: (1) equine, livestock, pet and small animal products, including items necessary for their health, care, growth and containment; (2) hardware, truck, towing and tool products; (3) seasonal products, including heating, lawn and garden items, power equipment, gifts and toys; (4) work/recreational clothing and footwear; and (5) maintenance products for agricultural and rural use.

Forward Looking Statements

As with any business, all phases of the Company’s operations are subject to influences outside its control. This information contains certain forward-looking statements, including statements regarding sales and earnings growth, estimated results of operations, capital expenditures, marketing, merchandising and strategic initiatives and new store and distribution center openings in future periods. These forward-looking statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to the finalization of the Company’s quarterly financial and accounting procedures, and may be affected by certain risks and uncertainties, any one, or a combination, of which could materially affect the results of the Company’s operations. These factors include, without limitation, general economic conditions affecting consumer spending, the timing and acceptance of new products in the stores, the timing and 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, failure of an acquisition to produce anticipated results, the ability to successfully manage expenses and execute our key gross margin enhancing initiatives, the availability of favorable credit sources, capital market conditions in general, the ability 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 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 information systems or theft of employee or customer data, ongoing and potential future legal or regulatory proceedings, management of our information systems, failure to 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. Forward-looking statements made by or on behalf of the Company are based on knowledge of its business and the environment in which it operates, but because of the factors listed above, actual results could differ materially from those reflected by any forward-looking statements. Consequently, all of the forward-looking statements made are qualified by these cautionary statements and those contained in the Company’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. There can be no assurance that the results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or its business and operations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

(Financial tables to follow)

Condensed Consolidated Statements of Income

(Unaudited)

(in thousands, except per share amounts)

FIRST QUARTER ENDED

March 26, 2016

March 28, 2015

1,467,797

1,331,352

Cost of merchandise sold

973,353

886,747

494,444

444,605

Selling, general and administrative expenses

352,672

321,476

Depreciation and amortization

33,577

30,282

Operating income

108,195

92,847

Interest expense, net

Income before income taxes

107,070

91,981

Income tax expense

39,402

33,941

67,668

58,040

Net income per share:

Weighted average shares outstanding:

133,630

136,347

134,709

137,735

Dividends declared per common share outstanding

Condensed Consolidated Balance Sheets

(in thousands)

March 28, 2015

ASSETS

Current assets:

Cash and cash equivalents

74,501

57,133

Inventories

1,470,691

1,370,965

Prepaid expenses and other current assets

80,858

64,967

Total current assets

1,626,050

1,493,065

Property and equipment:

87,005

80,705

Buildings and improvements

838,336

713,132

Furniture, fixtures and equipment

534,335

466,663

Computer software and hardware

187,477

161,884

Construction in progress

37,137

52,523

Property and equipment, gross

1,684,290

1,474,907

Accumulated depreciation and amortization

(828,789

(725,155

Property and equipment, net

855,501

749,752

Goodwill

10,258

Deferred income taxes

55,798

49,385

Other assets

16,921

19,550

Total assets

2,564,528

2,322,010

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

582,745

585,551

Accrued employee compensation

10,994

Other accrued expenses

178,747

180,829

Current portion of long-term debt

10,000

Current portion of capital lease obligations

Income taxes payable

29,830

28,684

Total current liabilities

813,397

804,988

Long-term debt

238,641

60,000

Capital lease obligations, less current maturities

21,761

Deferred rent

86,960

80,946

Other long-term liabilities

51,066

52,437

Total liabilities

1,211,825

1,007,132

Stockholders’ equity:

Common stock

Additional paid-in capital

613,686

544,042

Treasury stock

(1,528,892

(1,185,030

Retained earnings

2,266,555

1,954,519

Total stockholders’ equity

1,352,703

1,314,878

Total liabilities and stockholders’ equity

Condensed Consolidated Statements of Cash Flows

Three Months Ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Loss on disposition of property and equipment

Share-based compensation expense

Excess tax benefit of stock options exercised

(3,090

(8,181

Change in assets and liabilities:

(186,316

(255,515

155,496

214,728

(31,690

(27,573

(15,879

(8,074

31,234

24,429

Net cash provided by operating activities

62,554

36,313

Cash flows from investing activities:

Capital expenditures

(36,732

(48,767

Proceeds from sale of property and equipment

Net cash used in investing activities

(36,712

(48,502

Cash flows from financing activities:

Borrowings under senior credit facility

475,000

110,000

Repayments under senior credit facility

(375,000

(50,000

Debt issuance costs

(1,380

Principal payments under capital lease obligations

Repurchase of shares to satisfy tax obligations

(1,078

Repurchase of common stock

(99,102

(47,945

Net proceeds from issuance of common stock

10,041

20,948

Cash dividends paid to stockholders

(26,714

(21,828

Net cash (used in) provided by financing activities

(15,154

18,188

Net change in cash and cash equivalents

10,688

Cash and cash equivalents at beginning of period

63,813

51,134

Cash and cash equivalents at end of period

Supplemental disclosures of cash flow information:

Cash paid during the period for:

Interest

Supplemental disclosures of non-cash activities:

Property and equipment acquired through capital lease

Non-cash accruals for construction in progress

15,652

21,181

Selected Financial and Operating Information

Sales Information:

New store sales (% of total sales)

Average transaction value

$42.48

$42.08

Comparable store average transaction value increase

Comparable store average transaction count increase

Total selling square footage (000’s)

$24,498

22,810

Exclusive brands (% of total sales)

Imports (% of total sales)

Store Count Information:

Beginning of period

New stores opened

Stores closed

End of period

Pre-opening costs (000’s)

$2,511

$2,767

Balance Sheet Information:

Average inventory per store (000’s)

$914.0

$905.5

Inventory turns (annualized)

Share repurchase program:

Cost (000’s)

$99,102

$47,945

Average purchase price per share

$83.70

$80.42

Capital Expenditures (millions):

New and relocated stores and stores not yet opened

Information technology

Existing stores

Distribution center capacity and improvements

Corporate and other

Assumes average inventory cost, excluding inventory in transit.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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