DOLLAR TREE, INC. (DLTR) filed Quarterly Report for the period ended 2009-10-31.
Dollar Tree Stores, Inc is an operator of discount variety stores offering merchandise at a fixed price point of $1.00 or less. Its stores successfully operate in major metropolitan areas, mid-sized cities and small towns and perform well in a variety of locations. They offer a wide range of quality everyday general merchandise in many categories, including housewares, seasonal goods, candy and food, toys, health and beauty care, gifts, party goods, stationery, books, personal accessories, and other consumer items. Dollar Tree, Inc. has a market cap of $4.39 billion; its shares were traded at around $49.1 with a P/E ratio of 16.9 and P/S ratio of 0.9.
Highlight of Business Operations:
Net cash used in investing activities increased $53.1 million primarily due to short-term investment activity in the prior year. In the prior year we liquidated our short-term investments due to market conditions. The net proceeds from this liquidation of $40.5 million were put into cash equivalent money market accounts. In the current year, capital expenditures have increased $9.6 million resulting from an increase in new stores opened in the current year as compared to the prior year.
In the current year, financing activities used cash of $127.0 million. The use of cash resulted from share repurchases in the current year partially offset by stock option exercises and employee stock plan purchases. In the prior year, financing activities provided cash of $16.3 million as a result of employee stock plan purchases and limited stock option exercises. There were no share repurchases in the 39 weeks ended November 1, 2008.
At October 31, 2009, our long-term borrowings were $267.5 million, our capital lease commitments were $0.4 million and we had $300.0 million available on the revolving credit portion of our Unsecured Credit Agreement. We also have $121.5 million and $50.0 million Letter of Credit Reimbursement and Security Agreements, under which approximately $113.7 million was committed to letters of credit issued for routine purchases of imported merchandise as of October 31, 2009.
During the 13 and 39 weeks ended October 31, 2009, we repurchased approximately 1.4 million and 3.5 million shares of common stock for approximately $69.3 million and $154.6 million, respectively. We did not repurchase any shares during the 13 and 39 weeks ended November 1, 2008. As of October 31, 2009, we had approximately $299.1 million remaining under repurchase authorizations.
On March 20, 2008, we entered into two $75.0 million interest rate swap agreements. These interest rate swaps are used to manage the risk associated with interest rate fluctuations on a portion of our variable rate debt. Under these agreements, we pay interest to financial institutions at a fixed rate of 2.8%. In exchange, the financial institutions pay us at a variable rate, which equals the variable rate on the debt, excluding the credit spread. These swaps qualify for hedge accounting treatment and expire in March 2011. The fair value of these swaps as of October 31, 2009 is a liability of $4.4 million. The fair value of these swaps as of November 1, 2008 was an asset of $0.1 million.
DLTR is in the portfolios of John Griffin of Blue Ridge Capital, John Hussman of Hussman Economtrics Advisors, Inc..
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