Ross 2008 Annual Report Download - page 27

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25
weighted average diluted shares outstanding, largely due to the repurchase of common stock under our stock repurchase
program. Diluted earnings per share in fiscal 2007 were $1.90, compared to $1.70 in fiscal 2006 on a 53-week basis.
This 12% increase in diluted earnings per share is attributable to an approximate 8% increase in net earnings and a
3% reduction in weighted average diluted shares outstanding, largely due to the repurchase of common stock under
our stock repurchase program.
Financial Condition
Liquidity and Capital Resources
Our primary sources of funds for our business activities are cash flows from operations and short-term trade credit. Our primary
ongoing cash requirements are for merchandise inventory purchases, capital expenditures in connection with opening new
stores, and investments in distribution centers and information systems. We also use cash to repurchase stock under our stock
repurchase program and to pay dividends.
($000) 2008 2007 2006
Cash flows from operating activities $ 583,439 $ 353,559 $ 506,867
Cash flows used in investing activities (218,763) (244,743) (235,941)
Cash flows used in financing activities (300,901) (218,624) (95,305)
Net increase (decrease) in cash and cash equivalents $ 63,775 $ (109,808) $ 175,621
Operating Activities
Net cash provided by operating activities was $583.4 million, $353.6 million and $506.9 million in fiscal 2008, 2007 and 2006,
respectively. The primary source of cash provided by operating activities in fiscal 2008, 2007 and 2006 was net earnings plus
non-cash expenses for depreciation and amortization.
Working capital (defined as current assets less current liabilities) was $358.5 million at the end of fiscal 2008, compared to
$387.4 million at the end of fiscal 2007. The decrease in working capital in fiscal 2008 compared to fiscal 2007 is primarily due
to lower average in-store inventories.
Our primary source of liquidity is the sale of our merchandise inventory. We regularly review the age and condition of our
merchandise and are able to maintain current merchandise inventory in our stores through replenishment processes and
liquidation of slower-moving merchandise through clearance markdowns.
Investing Activities
In fiscal 2008, 2007 and 2006, our capital expenditures were $224.4 million, $236.1 million and $223.9 million, respectively.
Our capital expenditures included fixtures and leasehold improvements to open new stores, implement information technology
systems, build or expand distribution centers and install material handling equipment and related distribution center systems,
and various other expenditures related to our stores, buying and corporate offices. In fiscal 2008 we also purchased land in
South Carolina with the intention of building a new distribution center in the future. We opened 77, 97, and 66 new stores in
fiscal 2008, 2007 and 2006, respectively, and relocated one store in 2007 and two stores in 2006. In addition, in 2006, we
exercised our option to purchase our Fort Mill, South Carolina distribution center from the lessor.
In fiscal 2008 we had purchases of investments of $37.0 million and sales of investments of $42.5 million. In fiscal 2007 we
had purchases of investments of $146.1 million and sales of investments of $137.1 million. In fiscal 2006 we had purchases of
investments of $71.9 million and sales of investments of $59.3 million.