Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. FAMILY DOLLAR STORES INC (34408) 10-Q published on Jul 01, 2015 at 5:01 pm
Reporting Period: May 29, 2015
On June 16, 2015, Dollar Tree and Family Dollar also announced they signed an Agreement Containing Consent Orders proposed by the FTC staff. The agreement includes a draft Decision and Order, which remains subject to acceptance and final approval by the FTC Commissioners, and would permit Dollar Tree to acquire Family Dollar subject to an obligation to complete the divestiture within a specified period following the closing of the acquisition of Family Dollar. Dollar Tree has informed Family Dollar that Dollar Tree intends to close the merger in early July 2015, shortly after the FTC accepts the Decision and Order for public comment.
The Company awards stock options at prices not less than the fair market value of the Company's common stock on the grant date, as estimated by the Black-Scholes option-pricing model. Stock options granted prior to October 2014 expire five years from the grant date, and stock options granted during and after October 2014 expire ten years from the grant date. All stock options are exercisable to the extent of 40% after the second anniversary of the grant and an additional 30% at each of the following two anniversary dates on a cumulative basis. Compensation cost is recognized on a straight-line basis, net of estimated forfeitures, over the requisite service period.
As a result of continued pressures on our merchandise margins, deleveraging of expenses, and professional fees incurred related to the pending merger with Dollar Tree, Inc. ("Dollar Tree"), our net income decreased to $79.9 million from $81.1 million, and our diluted net income per common share decreased to $0.70 from $0.71, in the third quarter of fiscal 2015, as compared to the third quarter of fiscal 2014. Excluding $4.7 million of merger-related costs in the third quarter of fiscal 2015 and $24.5 million of restructuring charges in the third quarter of fiscal 2014, as discussed below, our net income decreased to $84.6 million from $96.5 million and our diluted net income per common share decreased to $0.74 from $0.85.
During the first three quarters of fiscal 2015, to help supplement our operating cash flows and to support our growth initiatives, we borrowed and repaid $1.12 billion under our unsecured revolving credit facilities and had an average daily outstanding
balance of $108.8 million. Working capital at the end of the third quarter of fiscal 2015 was $1.01 billion, as compared to $789.4 million at the end of the third quarter of fiscal 2014. The increase in working capital was primarily due to the decrease in borrowings on our unsecured revolving credit facilities, as we required less funding for dividends, capital expenditures, and stock repurchases.
In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-03 Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015 requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, however does not impact the recognition and measurement of debt issuance costs. The ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, and early adoption is permitted. The Company plans to adopt ASU 2015-03 during the first quarter of fiscal 2017 and does not expect the ASU to have a material impact on the Consolidated Condensed Financial Statements.