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DOLLAR TREE, INC. Reports Operating Results (10-Q)

November 18, 2010 | About:

10qk

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DOLLAR TREE, INC. (DLTR) filed Quarterly Report for the period ended 2010-10-30.

Dollar Tree, Inc. has a market cap of $6.95 billion; its shares were traded at around $54.71 with a P/E ratio of 19.9 and P/S ratio of 1.3. Dollar Tree, Inc. had an annual average earning growth of 9.7% over the past 10 years.DLTR is in the portfolios of Chuck Akre of Akre Capital Management, LLC, John Griffin of Blue Ridge Capital, John Hussman of Hussman Economtrics Advisors, Inc., Ken Heebner of CAPITAL GROWTH MANAGEMENT LP, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, John Keeley of Keeley Fund Management, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC, Louis Moore Bacon of Moore Capital Management, LP, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

At October 30, 2010, our long-term borrowings were $266.5 million, our capital lease commitments were $0.2 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 $121.6 million was committed to letters of credit issued for routine purchases of imported merchandise as of October 30, 2010.

On March 19, 2010, we entered into an agreement to repurchase $200.0 million of our common shares under an Accelerated Share Repurchase Agreement (ASR). The entire $200.0 million was subject to a “collar” agreement. Under this agreement, we initially received 4.6 million shares through March 31, 2010, representing the minimum number of shares to be received based on a calculation using the “cap” or high-end of the price range of the collar. The maximum number of shares that could have been received under the agreement was 5.2 million. The number of shares was determined based on the weighted average market price of our common stock, less a discount, during a specified period of time. The repurchase period ranged from one and one-half to four months following the two week maximum hedge completion period. The ASR concluded on August 6, 2010 and the weighted average market price through August 6, 2010 as defined in the “collared” agreement was $41.41. Therefore, on August 6, 2010, we received an additional 0.4 million shares under the “collared” agreement resulting in 5.0 million total shares being repurchased under the ASR.

We also repurchased approximately 1.4 and 2.0 million shares of common stock for approximately $72.4 million and $90.8 million during the 13 and 39 weeks ended October 30, 2010. Approximately 0.3 million shares totaling $17.3 million had not settled as of October 30, 2010 and these amounts have been accrued in the accompanying condensed consolidated balance sheet as of October 30, 2010. We also had 0.1 million shares totaling $2.4 million that were accrued as share repurchases at January 30, 2010 that settled during the 39 weeks ended October 30, 2010. We repurchased approximately 2.1 and 5.2 million shares of common stock for approximately $69.3 million and $154.6 million during the 13 and 39 weeks ended October 31, 2009.

In June 2010, our Board of Directors authorized the repurchase of an additional $500.0 million of our common stock, which was in addition to the October 2007 authorization which had $42.2 million remaining at that time. As of October 30, 2010, we had $469.8 million remaining under the June 2010 repurchase authorization.

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 30, 2010 and October 31, 2009 was a liability of $1.6 million and $4.4 million, respectively.

In June 2010, our Board of Directors authorized the repurchase of an additional $500.0 million of our common stock, which was in addition to the October 2007 authorization which had $42.2 million remaining at that time. As of October 30, 2010, we had $469.8 million remaining under the June 2010 repurchase authorization.

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