Advance Auto Parts First Quarter Comparable Store Sales Increase 8.2%; Free Cash Flow Increases 34% to $201 Million.ROANOKE, Va. -- Advance Auto Parts Founded in 1932, Advance Auto Parts (NYSE: AAP), headquartered in Roanoke, Virginia, is the second-largest retailer of automotive replacement parts and accessories in the United States. AAP had 2005 sales of approx. $4. , Inc. (NYSE NYSE See: New York Stock Exchange : AAP AAP - Association of American Publishers ), a leading retailer of automotive aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. parts, accessories, batteries, and maintenance items, today announced its financial results for the first quarter ended April 25, 2009. First quarter earnings per diluted share were $0.98 including a $0.04 charge related to store divestures which were not included in, and continue to be excluded from, the Company's 2009 annual outlook. Excluding the impact of the store divestures, diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) increased 19% to $1.02 which was a $0.16 increase over the prior year. [TABLE OMITTED] [TABLE OMITTED] First Quarter Highlights Total sales for the first quarter increased 10.3% to $1.68 billion, compared with total sales of $1.53 billion in the first quarter of fiscal year 2008. The sales increase reflected the net addition of 114 new stores in the past 12 months and a comparable store sales increase of 8.2% during the quarter compared to an increase of 0.6% during the first quarter last year. The comparable store sales gain was comprised of a 17.5% increase in Commercial sales and a 4.4% increase in do-it-yourself (DIY DIY abbr. do-it-yourself DIY or d.i.y. Brit, Austral & NZ do-it-yourself DIY abbr DIY do it yourself a DIY shop/job. ) sales. This compares to a 10.6% increase in Commercial and a 3.0% decrease in DIY during the first quarter last year. As a result of the 53(rd) week in fiscal 2008, the Company experienced a calendar shift in fiscal 2009 which added approximately 100 basis-points to the Company's total comparable stores sales increase during the first quarter. The calendar shift will reverse and reduce the Company's total comparable store sales growth during the back half of 2009. The Company's gross profit rate was 48.8% of sales in the first quarter as compared to 47.5% in the prior year, which reflects a 133 basis-point improvement. The 133 basis-point improvement was primarily due to continued investments in pricing capabilities, merchandising capabilities and parts availability, combined with changes to better align Team Member incentives resulting in better store execution. The Company's first quarter SG&A rate was 39.5% of sales in the first quarter as compared to 38.0% last year. The 142 basis-point increase was driven by higher incentive compensation, store divesture Di`ves´ture n. 1. Divestiture. expenses and continued strategic capability investments to improve the Company's gross profit rate and accelerate the Commercial business. The higher incentive compensation and store divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). expenses drove over 100 basis-points of the increase during the quarter. These increases were partially offset by occupancy and advertising expense leverage as a result of the Company's 8.2% comparable store sales increase. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. for the quarter increased 37% to $292.7 million from $213.6 million in the first quarter 2008. Free cash flow for the quarter increased 34% to $201.4 million from $150.5 million in first quarter 2008. This increase was primarily driven by improved working capital management, an increase in net income and a decrease in capital expenditures. As a result of the increased free cash flow, the Company paid down debt by $176.1 million during the first quarter. Capital expenditures were $50.2 million for the quarter. This compares to $58.9 million in 2008, a decrease of $8.7 million primarily due to the timing of new store development. "Our strong start to 2009 is traced directly back to our 49,000 Team Members," said Darren R. Jackson, Chief Executive Officer. "Our commitment and focus on the customer and our four strategies compel us to increase our investments to transform our business. Our commitment to our customers, confidence in our Team Members and our strong results allow us to move forward at an accelerated pace." "Based on our first quarter results, we remain confident in our strategic initiatives to accelerate growth and improve profitability. As a result, we will continue to accelerate our rate of investment to strengthen our core strategic capabilities. We now expect each 1% increase in comparable store sales will add approximately $0.05 in EPS on an annual basis and a 10 basis-point improvement in operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: is still expected to add approximately $0.03 of EPS to our comparable fiscal 2008 EPS of $2.65," said Mike Norona, Executive Vice President and Chief Financial Officer. [TABLE OMITTED] [TABLE OMITTED] Store Information During the first quarter, the Company opened 46 stores, including 11 Autopart International stores. The Company also closed 9 stores and relocated 3 stores. As of April 25, 2009, the Company's total store count was 3,405, including 135 Autopart International stores. 2009 Store Divestitures During the first quarter, the Company completed a thorough examination of its entire real estate store portfolio based on profitability, cash flow, strategic market importance, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , store sales potential and current lease rates. As a result of this examination, the Company closed four stores during the quarter and expects to divest a total of 40 to 55 unprofitable stores in 2009 that are delivering unacceptable strategic or financial results. In the first quarter, the Company recorded a $0.04 EPS charge due to asset impairments for certain stores that were identified as part of this initiative and expenses associated with the four stores that were closed during the quarter. As disclosed in the fourth quarter 2008 earnings release, the incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. store divesture costs were not included in the Company's 2009 annual outlook. Currently, the Company estimates that the incremental store divestures will result in a $0.15 to $0.22 charge to EPS in fiscal 2009, with the majority of the expenses occurring during the second and third quarters. Dividend On May 19, 2009, the Company's Board of Directors declared a regular quarterly cash dividend of six cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. to be paid on July 10, 2009 to stockholders of record as of June 26, 2009. Annual Meeting Announcements The Company held its annual meeting of stockholders on May 20, 2009. During the meeting, the following individuals were elected to serve on the Company's Board of Directors for the next year: * John F. Bergstrom * John C. Brouillard * Darren R. Jackson * William S. Oglesby * Gilbert T. Ray * Carlos A. Saladrigas * Francesca M. Spinelli The other proposal approved by the stockholders was the ratification of the appointment by the Company's Audit Committee of Deloitte & Touche LLP LLP - Lower Layer Protocol as its independent registered public accounting firm for 2009. Investor Conference Call The Company will host a conference call on Thursday, May 21, 2009 at 10:00 a.m. Eastern Daylight Time to discuss its quarterly results. To listen to the live call, please log on to the Company's website, www.AdvanceAutoParts.com, or dial (866) 908-1AAP. The call will be archived on the Company's website until May 21, 2010. About Advance Auto Parts Headquartered in Roanoke, Va., Advance Auto Parts, Inc., a leading automotive aftermarket retailer of parts, accessories, batteries, and maintenance items in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , serves both the do-it-yourself and professional installer markets. As of April 25, 2009, the Company operated 3,405 stores in 40 states, Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. , and the Virgin Islands. Additional information about the Company, employment opportunities, customer services, and online lookup for parts and accessories can be found on the Company's website at www.AdvanceAutoParts.com. Certain statements contained in this release are forward-looking statements, as that statement is used in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements address future events or developments, and typically use words such as believe, anticipate, expect, intend, plan, forecast, outlook or estimate. These statements discuss, among other things, expected growth and future performance, including store growth, capital expenditures, comparable store sales, SG&A, operating income, gross profit rate, free cash flow, profitability and earnings per diluted share for fiscal year 2009. These forward-looking statements are subject to risks, uncertainties and assumptions including, but not limited to, competitive pressures, demand for the Company's products, the market for auto parts Auto parts are components of automobiles. They mainly are, in alphabetic order (only car specific articles or articles with car section):
-Financial Tables to Follow- [TABLE OMITTED] NOTE: These preliminary condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated balance sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. have been prepared on a basis consistent with our previously prepared balance sheets filed with the Securities and Exchange Commission for our prior quarter and annual report, but do not include the footnotes required by generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , or GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , for complete financial statements. [TABLE OMITTED] [TABLE OMITTED] NOTE: These preliminary condensed consolidated statements of cash flows have been prepared on a consistent basis with previously prepared statements of cash flows filed with the Securities and Exchange Commission for our prior quarter and annual report, but do not include the footnotes required by GAAP for complete financial statements. [TABLE OMITTED] [TABLE OMITTED] |
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