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Press release from Business Wire

Dollar Tree, Inc. Reports Third Quarter Results

<ul> <li class='bwlistitemmargb'> Diluted earnings per share increased 19.2% to $0.87 </li> <li class='bwlistitemmargb'> Consolidated net sales increased 11.9% </li> <li class='bwlistitemmargb'> Comparable store sales increased 4.8% </li> </ul>

Thursday, November 17, 2011

Dollar Tree, Inc. Reports Third Quarter Results07:30 EST Thursday, November 17, 2011 CHESAPEAKE, Va. (Business Wire) -- Dollar Tree, Inc. (NASDAQ: DLTR), North America's leading operator of discount variety stores selling everything for $1 or less, reported its results for the quarter ended October 29, 2011 (“third quarter”) . Third-Quarter Results Consolidated net sales for the third quarter were $1.60 billion, an 11.9% increase compared to $1.43 billion reported for the quarter ended October 30, 2010 (“third quarter 2010”). Comparable store sales increased 4.8%, on top of an 8.7% increase for the third quarter 2010. Earnings per diluted share for the third quarter were $0.87, an increase of 19.2% compared to the $0.73 earnings per diluted share reported for the quarter ended October 30, 2010. "I am very pleased with the Company's performance in the third quarter," said President and CEO Bob Sasser. “Dollar Tree achieved double-digit growth in sales, operating margin and earnings per share against a very strong performance last year. Our merchandising and store teams continue to deliver exciting products at great values and a fun, friendly, convenient shopping experience for our customers.” Operating margin increased 40 basis points for the quarter to 10.3%. Cash and investments at quarter-end totaled $280.2 million, compared with $392.0 million at the end of the third quarter 2010. During the third quarter, the Company repurchased 3.3 million shares for $249.1 million. Year-to-date, the Company repurchased 5.2 million shares for $345.9 million. The Company has $1.5 billion remaining on its share repurchase authorization. During the third quarter, Dollar Tree opened 98 stores, expanded or relocated 24 stores, and closed 5 stores. Retail selling square footage increased 8.7% compared to a year ago, to 37.4 million square feet. 39-Week Period Results Year-to-date through the three quarters ended October 29, 2011, the Company's consolidated net sales were $4.68 billion, a 12.7% increase compared with the same period in 2010. Comparable store sales increased 5.5%, on top of a 7.3% increase through three quarters last year. Year-to-date earnings per diluted share were $2.45, compared with earnings per diluted share of $1.82 through three quarters last year. As we have previously disclosed, in the first quarter 2010 we recorded a nonrecurring, non-cash charge of $26.3 million relating to a retail inventory accounting change. Excluding this charge our earnings through three quarters last year were $1.95. Guidance The Company estimates sales for the fourth quarter of 2011 to be in the range of $1.89 billion to $1.94 billion, based on low to mid single digit positive comparable store sales. Diluted earnings per share are estimated to be in the range of $1.50 to $1.57. Full year sales are now estimated to be in the range of $6.57 billion to $6.62 billion. Diluted earnings per share are expected to be $3.94 to $4.01. The Company reported earnings per diluted share for fiscal 2010 of $3.10, including the aforementioned non-recurring, non-cash charge in the first quarter 2010. Excluding the charge, earnings per diluted share were $3.23 for fiscal 2010. On Thursday, November 17, 2011, the Company will host a conference call to discuss its earnings results at 9:00 a.m. EST. The telephone number for the call is 800-750-4984. A recorded version of the call will be available until midnight Thursday, November 24, and may be accessed by dialing 888-203-1112, and the access code is 4249405. A webcast of the call is accessible through Dollar Tree's website, www.dollartreeinfo.com/investors/news/events, and will remain online until midnight Thursday, November 24. Dollar Tree, a Fortune 500 Company, operated 4,335 stores in 48 states and 5 Canadian Provinces as of October 29, 2011. To learn more about the Company, visit www.DollarTree.com. A WARNING ABOUT FORWARD-LOOKING STATEMENTS: Our press release contains "forward-looking statements" as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address future events, developments or results and typically use words such as believe, anticipate, expect, intend, plan, forecast, or estimate. For example, our forward-looking statements include statements regarding fourth quarter and full year sales and fourth quarter and full year diluted earnings per share and fourth quarter comparable-store sales. For a discussion of the risks, uncertainties and assumptions that could affect our future events, developments or results, you should carefully review the “Risk Factors,” "Business," and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections in our Annual Report on Form 10-K filed March 17, 2011, the “Management's Discussion and Analysis of Financial Condition and Results of Operations” and other sections in our Quarterly Report on Form 10-Q filed August 18, 2011 and in our other filings with the Securities and Exchange Commission. We are not obligated to release publicly any revisions to any forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this report and you should not expect us to do so.   DOLLAR TREE, INC.Condensed Consolidated Income Statements(Dollars in millions, except per share data)(Unaudited)         Third Quarter EndedNine Months EndedOctober 29,October 30,October 29,October 30,   2011   2010   2011   2010   Net sales $ 1,596.6 $ 1,426.6 $ 4,684.9 $ 4,157.1   Cost of sales, excluding non-cash beginning inventory adjustment 1,036.0 920.6 3,041.1 2,691.1 Non-cash beginning inventory adjustment - - - 26.3     Gross profit 560.6 506.0 1,643.8 1,439.7 35.1% 35.5% 35.1% 34.6%   Selling, general & administrative expenses 395.7 365.1 1,163.7 1,068.4 24.8% 25.6% 24.8% 25.7%   Operating income 164.9 140.9 480.1 371.3 10.3% 9.9% 10.2% 8.9%   Interest expense, net 0.6 1.6 2.2 4.6 Other (income) expense, net 0.1 (5.4) (0.1) (5.1)   Income before income taxes 164.2 144.7 478.0 371.8 10.3% 10.1% 10.2% 8.9%   Income tax expense 59.7 51.5 177.6 137.0 Income tax rate 36.4% 35.6% 37.2% 36.8%   Net income $ 104.5 $ 93.2 $ 300.4 $ 234.8 6.5% 6.5% 6.4% 5.6%   Net earnings per share: Basic $ 0.87 $ 0.73 $ 2.47 $ 1.84 Weighted average number of shares 119.8 126.9 121.6 127.8   Diluted $ 0.87 $ 0.73 $ 2.45 $ 1.82 Weighted average number of shares 120.7 127.8 122.4 128.7     DOLLAR TREE, INC.Condensed Consolidated Balance Sheets(Dollars in millions)(Unaudited)       October 29,January 29,October 30   2011   2011   2010   Cash and cash equivalents $ 280.2 $ 311.2 $ 309.5 Short-term investments - 174.8 82.5 Merchandise inventories 1,005.4 803.1 934.9 Other current assets   46.9   44.2   39.5 Total current assets 1,332.5 1,333.3 1,366.4   Property and equipment, net 816.5 741.1 741.4 Goodwill 173.5 173.1 133.3 Deferred tax assets 15.0 38.0 40.0 Other assets, net   93.7   95.0   81.0   Total assets $ 2,431.2 $ 2,380.5 $ 2,362.1     Current portion of long-term debt $ 15.5 $ 16.5 $ 16.5 Accounts payable 351.9 261.4 303.2 Other current liabilities 209.0 190.5 227.3 Income taxes payable, current   10.7   64.4   19.5 Total current liabilities 587.1 532.8 566.5   Long-term debt, excluding current portion 250.0 250.0 250.0 Income taxes payable, long-term 15.2 15.2 14.8 Other liabilities   132.0   123.5   118.6   Total liabilities   984.3   921.5   949.9   Shareholders' equity   1,446.9   1,459.0   1,412.2   Total liabilities and shareholders' equity $ 2,431.2 $ 2,380.5 $ 2,362.1   STORE DATA: Number of stores open at end of period 4,335 4,101 4,009 Total selling square footage (in millions) 37.4 35.1 34.4     DOLLAR TREE, INC.Condensed Consolidated Statements of Cash Flows(Dollars in millions)(Unaudited)     Nine Months EndedOctober 29,   October 30,   2011     2010     Cash flows from operating activities: Net income $ 300.4   $ 234.8   Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 119.9 117.6 Other non-cash adjustments 49.3 40.5 Changes in working capital   (150.9 )   (218.1 ) Total adjustments   18.3     (60.0 ) Net cash provided by operating activities   318.7     174.8     Cash flows from investing activities: Capital expenditures (196.8 ) (146.7 ) Purchase of short-term investments (6.0 ) (60.8 ) Proceeds from maturities of short-term investments 180.8 6.1 Purchase of restricted investments (5.3 ) (36.4 ) Proceeds from maturities of restricted investments 5.3 52.0 Other   -     (0.2 ) Net cash used in investing activities   (22.0 )   (186.0 )   Cash flows from financing activities: Proceeds from stock issued pursuant to stock-based compensation plans 9.3 18.3 Payments for share repurchases (345.9 ) (275.9 ) Tax benefit of stock-based compensation 10.5 7.8 Principal payments under long-term debt and capital lease obligations   (1.5 )   (1.1 ) Net cash used in financing activities   (327.6 )   (250.9 ) Effect of exchange rate changes on cash and cash equivalents   (0.1 )   -   Net decrease in cash and cash equivalents (31.0 ) (262.1 ) Cash and cash equivalents at beginning of period   311.2     571.6   Cash and cash equivalents at end of period $ 280.2   $ 309.5     Dollar Tree, Inc., ChesapeakeTimothy J. Reid, 757-321-5284www.DollarTree.com