Advance Auto Parts Reports Third Quarter Results.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 fiscal third quarter ended October 6, 2007. Earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the third quarter were $.57. Excluding severance costs and asset write-offs associated with the Company's expense reduction initiatives, earnings per diluted share were $.61 compared to $.56 last year, an 8.9% increase. In the third quarter, sales increased to $1.16 billion from $1.10 billion last year. Comparable-store sales increased 1.1% in the quarter, comprised of a 1.0% decrease 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. ) and an 8.0% increase in do-it-for-me (DIFM DIFM Do It for Me (as opposed to Do It Yourself) DIFM Due-In From Maintenance DIFM Digital Instantaneous Frequency Measurement DIFM Distributed Interactive Fire Mission ). The 1.1% comparable-store sales increase compared to a 1.4% increase in last year's third quarter. "We are pleased to report that we are on track with the initiatives that we announced at the end of our last quarter. Although we anticipate it will take time, we believe the results of those initiatives are beginning to have a positive impact on our sales, earnings, and return on invested capital," said Jack Brouillard, Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . Third quarter gross margin was 47.9% of sales, a 28 basis point decrease compared to last year. The decrease was primarily due to a less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. merchandise sales mix sales mix See product mix. as compared to last year. In addition, fewer discounts were earned as merchandise purchases were less than year ago levels and the Company had a greater proportion of commercial sales. Third quarter selling, general and administrative (SG&A) expenses were 39.3% of sales compared to 38.9% last year. Excluding severance and asset write-off costs, SG&A expenses were 38.7%, a decrease of 18 basis points as compared to last year. Year to date sales increased to $3.80 billion from $3.60 billion last year. Year to date comparable-store sales increased 1.2% comprised of a 0.4% decrease in do-it-yourself (DIY) and a 6.2% increase in do-it-for-me (DIFM). The year to date 1.2% comparable-store sales increase compares to a 2.3% increase last year. Year to date earnings per diluted share were $1.92, compared to $1.82 last year. Year to date gross margin was 48.1% of sales, a 29 basis point improvement from last year. Year to date SG&A expenses were 38.8% of sales as compared to 38.4% in 2006, a 41 basis point increase. Share Repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. In the third quarter, the Company repurchased 6.2 million shares at an average price of $33.26 for a total of $207 million. The Company currently has $335 million available under the share repurchase authorization approved by the Board of Directors in August 2007. Store Information During the third quarter, the Company opened 43 new stores, of which 4 are Autopart International (AI) stores. The Company also relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. 5 stores and closed 2 stores. Year to date, the Company has opened 156 new stores, of which 17 are AI stores. The Company has also relocated 24 stores and closed 10 stores. 2007 Guidance The Company forecasts fourth quarter earnings per share in the range of $.36 to $.40 as compared to $.33 last year, an increase of 9% to 21%. This guidance is based on comparable store sales growth of 0 to 2%. Gross margin is expected to be in line with fourth quarter last year. SG&A expenses are expected to leverage within the 0 to 2% sales guidance. The Company anticipates full year 2007 earnings per diluted share to be in the range of $2.28 to $2.32. Excluding the severance costs and asset write-offs of $.04 per share incurred in the third quarter, earnings per diluted share for the year are expected to be $2.32 to $2.36 as compared to $2.16 last year, an increase of 7% to 9%. The Company expects free cash flow for the year to be in the range of $200 to $220 million. Investor Conference Call The Company will host a conference call on Thursday November 1, 2007 at 8:00 a.m. Eastern Standard Time to discuss its quarterly results. To listen to the live call, please log on to the Company's Web site, www.AdvanceAutoParts.com, or dial (866) 908-1AAP. The call will be archived on the Company's Web site until November 1, 2008. About Advance Auto Parts Headquartered in Roanoke, Va., Advance Auto Parts is the second-largest retailer of automotive aftermarket 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. , based on store count and sales. As of October 6, 2007, the Company operated 3,228 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. The Company serves both the do-it-yourself and professional installer markets. Certain statements contained in this release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , 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, comparable-store sales, gross margin and SG&A rates, and earnings per share for fourth quarter 2007 and fiscal year 2007. 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 reports, 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] (a) Average common shares outstanding is calculated based on the weighted average number of shares outstanding for the quarter. At October 6, 2007 and October 7, 2006, we had 100,927 and 105,208 shares outstanding, respectively. NOTE: These preliminary condensed consolidated statements of operations have been prepared on a basis consistent with our previously prepared statements of operations filed with the Securities and Exchange Commission for our prior quarter and annual reports , but do not include the footnotes required by GAAP for complete financial statements. [TABLE OMITTED] (a) Average common shares outstanding is calculated based on the weighted average number of shares outstanding for the year. At October 6, 2007 and October 7, 2006, we had 100,927 and 105,208 shares outstanding, respectively. NOTE: These preliminary condensed consolidated statements of operations have been prepared on a basis consistent with our previously prepared statements of operations filed with the Securities and Exchange Commission for our prior quarter and annual reports , but do not include the footnotes required by GAAP for complete financial statements. [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 reports, but do not include the footnotes required by GAAP for complete financial statements. [TABLE OMITTED] Note: Management uses free cash flow as a measure of our liquidity and believes it is a useful indicator to stockholders of our ability to implement our growth strategies and service our debt. Free cash flow is a non-GAAP measure and should be considered in addition to, but not as a substitute for, information contained in our condensed consolidated statement of cash flows. The Company also included additional non-GAAP measures in this release, including adjusted earnings per diluted share and adjusted selling, general and administrative expenses. The Company believes these non-GAAP measures are useful to investors as they more clearly indicate the Company's comparable operating results, but this information should not be considered a substitute for any measures derived in accordance with GAAP. |
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