Advance Auto Parts, Inc. (NYSE: AAP), the largest automotive aftermarket
parts provider in North America, serving both the do-it-yourself and
professional installer markets, today announced its financial results
for the fourth quarter and fiscal year ended December 28, 2013. Fourth
quarter comparable earnings per diluted share (EPS) were $0.94, an
increase of 6.8% versus the fourth quarter last year. These fourth
quarter results exclude transaction expenses of $0.24 associated with
the acquisition of General Parts International, Inc. (GPI) and $0.03 of
integration costs associated with the integration of B.W.P.
Distributors, Inc. (BWP). Full year comparable diluted EPS of $5.67,
increased 8.6% from fiscal 2012. These full year results exclude
transaction expenses of $0.28 associated with the acquisition of GPI and
$0.07 of integration costs associated with the integration of BWP.
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Comparable Fourth Quarter Performance Summary (1)
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Twelve Weeks Ended
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Fifty-Two Weeks Ended
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December 28,
2013
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December 29,
2012
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December 28,
2013
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December 29,
2012
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Sales (in millions)
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$
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1,408.8
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$
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1,329.2
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$
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6,493.8
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$
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6,205.0
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Comp Store Sales %
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0.1
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%
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(1.9
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%)
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(1.5
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%)
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(0.8
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%)
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Gross Profit %
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49.8
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%
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49.9
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%
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50.1
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%
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49.9
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%
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Comparable SG&A %
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41.7
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%
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41.4
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%
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39.4
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%
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39.3
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%
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Comparable Operating Income %
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8.1
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%
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8.5
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%
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10.7
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%
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10.6
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%
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Comparable Diluted EPS
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$
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0.94
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$
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0.88
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$
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5.67
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$
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5.22
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Avg Diluted Shares (in thousands)
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73,248
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74,002
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73,414
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74,062
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(1)
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The Comparable SG&A%, Comparable Operating Income % and Comparable
Diluted EPS results have been reported on a comparable basis to
exclude the impact of transaction expenses of $21.9 million and
$27.0 million in the fourth quarter and fiscal 2013, respectively,
associated with our acquisition of GPI on January 2, 2014 and
integration costs of $3.1 million and $8.0 million in the fourth
quarter and fiscal 2013, respectively, associated with our
integration of BWP. Included in the transaction costs in each
period presented is $2.0 million that is classified as interest
expense. Refer to the presentation of the respective financial
measures on a GAAP basis and reconciliation of the financial
results reported on a comparable basis to the GAAP basis in the
accompanying financial tables in this press release.
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"I would like to thank all our Team Members for their hard work during
the fourth quarter and the 2013 fiscal year," said Darren R. Jackson,
Chief Executive Officer. "The acquisition of General Parts was another
strategic step forward for our great company positioning Advance as the
largest parts provider in North America with considerable sales growth
and earnings opportunities. Operationally, we were very encouraged with
the progress we made in 2013 which resulted in improved fourth quarter
sales performance and record operating profits in 2013. We look forward
to 2014 with excitement as we begin the integration of General Parts and
build on our performance from 2013.”
Fourth Quarter and Fiscal 2013 Highlights
Total sales for the fourth quarter increased 6.0% to $1.41 billion, as
compared with total sales during the fourth quarter of fiscal 2012 of
$1.33 billion. The sales increase was driven by the net addition of 151
new stores over the past 12 months, the acquisition of BWP and a
comparable same store sales increase of 0.1%. For fiscal 2013, total
sales increased 4.7% to $6.49 billion, compared with total sales of
$6.21 billion during fiscal 2012. For fiscal 2013, comparable store
sales decreased 1.5%.
The Company's gross profit rate was 49.8% of sales during the fourth
quarter as compared to 49.9% during the fourth quarter last year. The 8
basis-point decrease in gross profit rate was the result of a higher mix
of commercial sales, which has a lower gross margin rate driven
primarily by the acquisition of BWP partially offset by increased
merchandise margins due to lower acquisition costs and improvements in
supply chain efficiencies. For fiscal 2013, the Company's gross profit
rate was 50.1%, a 15 basis-point increase from fiscal 2012.
The Company's comparable SG&A rate was 41.7% of sales during the fourth
quarter as compared to 41.4% during the same period last year. The 36
basis-point increase was the result of higher incentive compensation and
increased new store openings partially offset by lower administrative
and support costs and improved labor productivity. For fiscal 2013, the
Company's comparable SG&A rate was 39.4% versus 39.3% during fiscal
2012. On a GAAP basis, the Company's SG&A rate was 43.4% of sales during
the fourth quarter as compared to 41.4% during the same period last year
primarily due to transaction expenses associated with the acquisition of
GPI. On a GAAP basis, the Company's SG&A rate was 39.9% for fiscal 2013
versus 39.3% during fiscal 2012.
The Company's comparable operating income during the fourth quarter of
$113.8 million increased 0.6% versus the fourth quarter of fiscal 2012.
On a rate basis, comparable operating income in the fourth quarter was
8.1% of total sales as compared to 8.5% during the fourth quarter of
fiscal 2012. For fiscal 2013, the Company's comparable operating income
rate was 10.7% versus 10.6% during fiscal 2012. On a GAAP basis, the
Company's operating income during the fourth quarter of $90.8 million
decreased 19.7% versus the fourth quarter of fiscal 2012. On a rate
basis, operating income was 6.4% of total sales during the fourth
quarter as compared to 8.5% during the fourth quarter of fiscal 2012.
For fiscal 2013, on a GAAP basis, the Company's operating income rate
was 10.2% versus 10.6% during fiscal 2012.
During fiscal 2013, the Company generated $545.3 million in operating
cash flow, a 20.4% reduction as compared to $685.3 million in fiscal
2012. Free cash flow in fiscal 2013 was $183.1 million versus $412.3
million last year. This decrease in free cash flow was primarily due to
the Company’s acquisition of BWP and an increase in owned inventory
partially offset by a reduction in capital expenditures. Capital
expenditures in fiscal 2013 were $195.8 million as compared to $271.2
million in fiscal 2012.
“We are pleased that we were able to exceed our comparable EPS
expectations for both the fourth quarter and fiscal 2013,” said Mike
Norona, Executive Vice President and Chief Financial Officer. “Despite
the softer sales environment for a large part of the year, our sales
acceleration in the fourth quarter combined with our gross profit
improvements and disciplined focus on expense management throughout the
year allowed us to increase our fiscal 2013 comparable earnings per
share 8.6% over last year. We look forward to carrying our momentum into
2014 as we begin the journey of successfully integrating our acquisition
of General Parts.”
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Comparable Key Financial Metrics and Statistics (1)(2)
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Twelve Weeks Ended
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Fifty-Two Weeks Ended
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December 28,
2013
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December 29,
2012
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FY 2013
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FY 2012
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Sales Growth %
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6.0
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%
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0.1
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%
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4.7
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%
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0.6
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%
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Sales per Store (3)
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$
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1,656
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$
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1,664
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$
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1,656
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$
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1,664
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Comparable Operating Income per Store (4)
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$
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177
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$
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176
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$
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177
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$
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176
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Comparable Return on Invested Capital (5)
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19.0
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%
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19.4
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%
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19.0
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%
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19.4
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%
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Gross Margin Return on Inventory (6)
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9.9
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9.3
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9.9
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9.3
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Total Store Square Footage, end of period
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29,701
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27,806
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29,701
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27,806
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Total Team Members, end of period
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54,278
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53,473
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54,278
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53,473
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(1)
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Operating Income per Store and Return on Invested Capital have been
reported on a comparable basis to exclude the impact of transaction
expenses associated with our acquisition of GPI on January 2, 2014
and integration costs associated with our integration of BWP. Refer
to the presentation of the financial metrics on a GAAP basis and
reconciliation of the financial results reported on a comparable
basis to the GAAP basis in the accompanying financial tables in this
press release.
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(2)
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In thousands except for gross margin return on inventory and total
Team Members. The financial metrics presented are calculated on an
annual basis and accordingly reflect the last four quarters
completed, except for Sales Growth % and where noted.
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(3)
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Sales per store is calculated as net sales divided by an average of
beginning and ending store count.
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(4)
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Operating income per store is calculated as operating income divided
by an average of beginning and ending store count.
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(5)
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Return on invested capital (ROIC) is calculated in detail in the
supplemental financial schedules.
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(6)
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Gross margin return on inventory is calculated as gross profit
divided by an average of beginning and ending inventory, net of
accounts payable and financed vendor accounts payable
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Store Information
During the fourth quarter, the Company opened 55 stores, and closed 24
stores including planned consolidations of 17 BWP stores and 5 Autopart
International stores. For fiscal 2013, the Company opened 172 Advance
Auto Part and Autopart International stores in addition to the
acquisition of 124 BWP stores and closed 41 stores including planned
consolidations of 20 BWP stores and 13 Autopart International stores.
The resulting net addition in fiscal 2013 was 255 stores. As of
December 28, 2013, the Company's total store count was 4,049 including
217 Autopart International stores.
2014 Annual Financial Outlook Key Assumptions(1)
Fiscal 2014 will be a 53-week year. Unless otherwise stated, the
financial outlook and certain key assumptions for fiscal 2014 provided
below are on a 52-week basis.
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New Stores
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120 to 140 Advance Auto Parts stores, Autopart International stores
and WORLDPAC branches
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Comparable Store Sales (2)
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Flat to low single digits
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Comparable Cash EPS(3)(4)
-- including synergies of $45 - $55 million related to the
acquisition of GPI(5)
-- excluding the amortization of intangible assets associated with
the acquisition of GPI
-- excluding the impact of the 53rd week in fiscal 2014
-- excluding one-time integration costs associated with the
integration of BWP
-- excluding one-time expenses to achieve synergies related to the
acquisition of GPI
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$7.20 - $7.40
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One-time Expenses to Achieve Synergies(6)
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Approximately $55 - $65 million
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BWP Integration Costs
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$12 - $15 million
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Capital Expenditures(7)
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$325 to $350 million
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Free Cash Flow(8)
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Minimum $450 million
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Diluted Share Count
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Approximately 73 million shares
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EPS Impact of 53rd Week in Fiscal 2014
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$0.16 - $0.18
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(1)
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Unless specified, the 2014 annual outlook assumptions exclude any
purchase accounting adjustments associated with the acquisition of
GPI. Purchase accounting adjustments are not determinable at this
time due to the limited time since the close of the acquisition.
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(2)
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Advance calculates comparable store sales based on the change in
store sales starting once a store has been open for 13 complete
accounting periods (approximately one year) and by including
e-commerce sales. We include sales from relocated stores in
comparable store sales from the original date of opening. Acquired
stores are included in our comparable store sales once the stores
have completed 13 complete accounting periods after the acquisition
date (approximately one year). Accordingly, the previously acquired
BWP stores will be included in 2014 comparable store sales whereas
the GPI stores acquired on January 2, 2014 will be excluded from
2014 comparable store sales.
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(3)
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Comparable Cash EPS is defined as Cash EPS in addition to the
exclusion of other non-comparable items, including one-time expenses
to achieve synergies related to the GPI acquisition, integration
costs associated with the integration of BWP and the impact of the
53rd week fiscal 2014. Cash EPS is EPS excluding the amortization of
GPI's intangible assets. Both Comparable Cash EPS and Cash EPS are
non-GAAP measures. Because of the forward-looking nature of these
non-GAAP financial measures, specific quantifications of the amounts
that would be required to reconcile these non-GAAP financial
measures to their most directly comparable GAAP financial measures
are not available at this time. Management believes Comparable Cash
EPS is an important measure in assessing the overall performance of
the business and utilizes this metric in its ongoing reporting. On
that basis, Management believes it is useful to provide Comparable
Cash EPS to investors and prospective investors. Comparable Cash EPS
and Cash EPS might not be calculated in the same manner as, and thus
might not be comparable to, similarly titled measures reported by
other companies.
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(4)
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In 2014, Advance will report its performance on a consolidated
basis. To develop the Comparable Cash EPS guidance, Advance used the
following 2013 consolidated comparable information: 1) estimated
sales in the range of $9.4 to $9.5 billion, 2) gross profit rate in
the range of 45.5% to 46.0%, and 3) SG&A rate in the range of 36.5%
to 37.0%. This 2013 comparable consolidated supporting information
has been provided solely for guidance purposes only and represents
Advance’s current estimate and is subject to change pending the
completion of the accounting close and audit for GPI’s 2013 year.
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(5)
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Total run rate cost synergies related to the acquisition of GPI are
estimated to be $160 million by approximately the end of the third
year following the close of the acquisition. These synergies will be
driven primarily through the areas of procurement as well as
corporate, store and supply chain efficiencies.
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(6)
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Total one-time expenses to achieve synergies related to the
acquisition of GPI are estimated to be approximately $190 million
over a five year period with the majority of the costs being
incurred within the first three years.
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(7)
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The capital investments for 2014 are expected to be in the range of
$325 - 350 million inclusive of approximately $50 - $60 million of
capital expenditures related to the acquisition of GPI.
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(8)
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Free cash flow estimate excludes the acquisition price of GPI.
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“Our 2014 annual comparable cash EPS outlook will be in the range of
$7.20 to $7.40,” said Mike Norona, Executive Vice President and Chief
Financial Officer. “We will continue to build on our 2013 progress as we
focus on continued sales growth, serving our customers and improving our
operating profit as we leverage the size and scale of the combination to
deliver on the compelling financial potential of the General Parts
acquisition.”
Dividend
On February 5, 2014, the Company's Board of Directors declared a regular
quarterly cash dividend of $0.06 per share to be paid on April 4, 2014
to stockholders of record as of March 21, 2014.
Investor Conference Call
The Company will host a conference call on Thursday, February 6, 2014,
at 10:00 a.m. Eastern 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 February 6, 2015.
About Advance Auto Parts
Headquartered in Roanoke, Va., Advance Auto Parts, Inc., the largest
automotive aftermarket parts provider in North America, serves both the
do-it-yourself and professional installer markets. Following the closing
of the General Parts International, Inc. acquisition, Advance operates
5,297 company-operated stores, 105 Worldpac branches, and services
approximately 1,400 independently owned Carquest branded stores. Advance
has approximately 71,000 Team Members in 49 states, Puerto Rico, the
Virgin Islands and Canada. Additional information about the Company,
employment opportunities, customer services, and on-line shopping for
parts, accessories and other offerings can be found on the Company's
website at www.AdvanceAutoParts.com.
Forward Looking Statements
Certain statements contained in this release are forward-looking
statements, as that term is used in the Private Securities Litigation
Reform Act 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 forward
looking statements include, but are not limited to, statements regarding
the benefits and other effects of the acquisition of GPI; the combined
company’s plans, objectives and expectations; expected growth and future
performance of AAP, including store growth, capital expenditures,
comparable store sales, SG&A, operating income, gross profit rate, free
cash flow, integration costs for BWP and General Parts, synergies,
expenses to achieve synergies, estimated consolidated data for 2013
profitability and comparable cash earnings per diluted share for fiscal
year 2014; earnings per share impact for the 53rd week of fiscal 2014
and other statements that are not historical facts. These
forward-looking statements are subject to significant risks,
uncertainties and assumptions, and actual future events or results may
differ materially from such forward-looking statements. Such differences
may result from, among other things, the risk that the benefits of the
GPI acquisition, including synergies, may not be fully realized or may
take longer to realize than expected; the possibility that the GPI
acquisition may not advance AAP’s business strategy; the risk that AAP
may experience difficulty integrating GPI’s employees, business systems
and technology; the potential diversion of AAP’s management’s attention
from AAP’s other businesses resulting from the GPI acquisition; the
impact of the GPI acquisition on third-party relationships, including
customers, wholesalers, independently owned and jobber stores and
suppliers; changes in regulatory, social and political conditions, as
well as general economic conditions; competitive pressures; demand for
AAP’s and GPI’s products; the market for auto parts; the economy in
general; inflation; consumer debt levels; the weather; business
interruptions; information technology security; availability of suitable
real estate; dependence on foreign suppliers; and other factors
disclosed in AAP’s 10-K for the fiscal year ended December 29, 2012 and
other filings made by AAP with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these
forward-looking statements. AAP intends these forward-looking statements
to speak only as of the time of this communication and does not
undertake to update or revise them as more information becomes available.
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Advance Auto Parts, Inc. and Subsidiaries
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Condensed Consolidated Balance Sheets
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(in thousands)
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(unaudited)
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|
|
|
|
|
|
|
|
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December 28,
2013
|
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December 29,
2012
|
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|
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Assets
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|
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Current assets:
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|
|
|
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Cash and cash equivalents
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$
|
1,112,471
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|
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$
|
598,111
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Receivables, net
|
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277,595
|
|
|
229,866
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Inventories, net
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|
2,556,557
|
|
|
2,308,609
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|
Other current assets
|
|
42,761
|
|
|
47,614
|
|
Total current assets
|
|
3,989,384
|
|
|
3,184,200
|
|
|
|
|
|
|
|
Property and equipment, net
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|
1,283,970
|
|
|
1,291,759
|
|
Assets held for sale
|
|
2,064
|
|
|
788
|
|
Goodwill
|
|
199,835
|
|
|
76,389
|
|
Intangible assets, net
|
|
49,872
|
|
|
28,845
|
|
Other assets, net
|
|
39,649
|
|
|
31,833
|
|
|
|
$
|
5,564,774
|
|
|
$
|
4,613,814
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
916
|
|
|
$
|
627
|
|
Accounts payable
|
|
2,180,614
|
|
|
2,029,814
|
|
Accrued expenses
|
|
428,625
|
|
|
379,639
|
|
Other current liabilities
|
|
154,630
|
|
|
149,558
|
|
Total current liabilities
|
|
2,764,785
|
|
|
2,559,638
|
|
|
|
|
|
|
|
Long-term debt
|
|
1,052,668
|
|
|
604,461
|
|
Other long-term liabilities
|
|
231,116
|
|
|
239,021
|
|
Total stockholders' equity
|
|
1,516,205
|
|
|
1,210,694
|
|
|
|
$
|
5,564,774
|
|
|
$
|
4,613,814
|
|
|
|
|
|
|
|
|
|
NOTE: These preliminary condensed consolidated balance sheets 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, or GAAP, for complete
financial statements.
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|
|
Advance Auto Parts, Inc. and Subsidiaries
|
|
Condensed Consolidated Statements of Operations
|
|
Twelve Week Periods Ended
|
|
December 28, 2013 and December 29, 2012
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(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
Comparable
Adjustments (a)
|
|
Comparable
|
|
As Reported
|
|
|
|
|
December 28,
2013
|
|
December 28,
2013
|
|
December 28,
2013
|
|
December 29,
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
1,408,813
|
|
|
$
|
—
|
|
|
$
|
1,408,813
|
|
|
$
|
1,329,201
|
|
|
Cost of sales, including purchasing and warehousing costs
|
|
|
707,036
|
|
|
—
|
|
|
707,036
|
|
|
666,046
|
|
|
Gross profit
|
|
|
701,777
|
|
|
—
|
|
|
701,777
|
|
|
663,155
|
|
|
Selling, general and administrative expenses
|
|
|
610,933
|
|
|
(23,002
|
)
|
|
587,931
|
|
|
549,959
|
|
|
Operating income
|
|
|
90,844
|
|
|
23,002
|
|
|
113,846
|
|
|
113,196
|
|
|
Other, net:
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(9,986
|
)
|
|
1,987
|
|
|
(7,999
|
)
|
|
(7,992
|
)
|
|
Other income (expense), net
|
|
|
1,009
|
|
|
—
|
|
|
1,009
|
|
|
(159
|
)
|
|
Total other, net
|
|
|
(8,977
|
)
|
|
1,987
|
|
|
(6,990
|
)
|
|
(8,151
|
)
|
|
Income before provision for income taxes
|
|
|
81,867
|
|
|
24,989
|
|
|
106,856
|
|
|
105,045
|
|
|
Provision for income taxes
|
|
|
32,600
|
|
|
5,509
|
|
|
38,109
|
|
|
39,990
|
|
|
Net income
|
|
|
$
|
49,267
|
|
|
$
|
19,480
|
|
|
$
|
68,747
|
|
|
$
|
65,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (b)
|
|
|
$
|
0.68
|
|
|
$
|
0.27
|
|
|
$
|
0.94
|
|
|
$
|
0.89
|
|
|
Diluted earnings per share (b)
|
|
|
$
|
0.67
|
|
|
$
|
0.27
|
|
|
$
|
0.94
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding (b)
|
|
|
72,761
|
|
|
72,761
|
|
|
72,761
|
|
|
73,221
|
|
|
Average common shares outstanding - assuming dilution (b)
|
|
|
73,248
|
|
|
73,248
|
|
|
73,248
|
|
|
74,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
The comparable adjustments includes $21.9 million of
transaction expenses associated with our acquisition of General
Parts International, Inc. (GPI) on January 2, 2014, of which $2.0
million was interest related, and $3.1 million of integration
costs associated with our integration of B.W.P. Distributors, Inc.
(BWP).
|
|
|
|
|
|
(b)
|
|
Average common shares outstanding is calculated based on the
weighted average number of shares outstanding during the quarter.
At December 28, 2013 and December 29, 2012, we had 72,840 and
73,383 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 report, with the exception
of the footnotes required by GAAP for complete financial statements and
inclusion of certain non-GAAP adjustments and measures as described in
footnote (a) above. Management believes the reporting of comparable
results is important in assessing the overall performance of the
business and is therefore useful for investors and prospective investors.
|
|
|
Advance Auto Parts, Inc. and Subsidiaries
|
|
Condensed Consolidated Statements of Operations
|
|
Fifty-Two Week Periods Ended
|
|
December 28, 2013 and December 29, 2012
|
|
(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
Comparable Adjustments (a)
|
|
Comparable
|
|
As Reported
|
|
|
|
|
December 28,
2013
|
|
December 28,
2013
|
|
December 28,
2013
|
|
December 29,
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
6,493,814
|
|
|
$
|
—
|
|
|
$
|
6,493,814
|
|
|
$
|
6,205,003
|
|
|
Cost of sales, including purchasing and warehousing costs
|
|
|
3,241,668
|
|
|
—
|
|
|
3,241,668
|
|
|
3,106,967
|
|
|
Gross profit
|
|
|
3,252,146
|
|
|
—
|
|
|
3,252,146
|
|
|
3,098,036
|
|
|
Selling, general and administrative expenses
|
|
|
2,591,828
|
|
|
(32,987
|
)
|
|
2,558,841
|
|
|
2,440,721
|
|
|
Operating income
|
|
|
660,318
|
|
|
32,987
|
|
|
693,305
|
|
|
657,315
|
|
|
Other, net:
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(36,618
|
)
|
|
1,987
|
|
|
(34,631
|
)
|
|
(33,841
|
)
|
|
Other income, net
|
|
|
2,698
|
|
|
—
|
|
|
2,698
|
|
|
600
|
|
|
Total other, net
|
|
|
(33,920
|
)
|
|
1,987
|
|
|
(31,933
|
)
|
|
(33,241
|
)
|
|
Income before provision for income taxes
|
|
|
626,398
|
|
|
34,974
|
|
|
661,372
|
|
|
624,074
|
|
|
Provision for income taxes
|
|
|
234,640
|
|
|
9,268
|
|
|
243,908
|
|
|
236,404
|
|
|
Net income
|
|
|
$
|
391,758
|
|
|
$
|
25,706
|
|
|
$
|
417,464
|
|
|
$
|
387,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (b)
|
|
|
$
|
5.36
|
|
|
$
|
0.35
|
|
|
$
|
5.71
|
|
|
$
|
5.29
|
|
|
Diluted earnings per share (b)
|
|
|
$
|
5.32
|
|
|
$
|
0.35
|
|
|
$
|
5.67
|
|
|
$
|
5.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding (b)
|
|
|
72,930
|
|
|
72,930
|
|
|
72,930
|
|
|
73,091
|
|
|
Average common shares outstanding - assuming dilution (b)
|
|
|
73,414
|
|
|
73,414
|
|
|
73,414
|
|
|
74,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
The comparable adjustments include $27.0 million of transaction
expenses associated with our acquisition of GPI on January 2,
2014, of which $2.0 million was interest related, and $8.0 million
of integration costs associated with our integration of BWP.
|
|
|
|
|
|
(b)
|
|
Average common shares outstanding is calculated based on the
weighted average number of shares outstanding during the
year-to-date period. At December 28, 2013 and December 29, 2012,
we had 72,840 and 73,383 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 report with the exception of
the footnotes required by GAAP for complete financial statements and
inclusion of certain non-GAAP adjustments and measures as described in
footnote (a) above. Management believes the reporting of comparable
results is important in assessing the overall performance of the
business and is therefore useful for investors and prospective investors.
|
|
|
Advance Auto Parts, Inc. and Subsidiaries
|
|
Condensed Consolidated Statements of Cash Flows
|
|
Fifty-Two Week Periods Ended
|
|
December 28, 2013 and December 29, 2012
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
December 28,
2013
|
|
December 29,
2012
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income
|
|
$
|
391,758
|
|
|
$
|
387,670
|
|
|
Depreciation and amortization
|
|
207,795
|
|
|
189,544
|
|
|
Share-based compensation
|
|
13,191
|
|
|
15,236
|
|
|
(Benefit) provision for deferred income taxes
|
|
(2,237
|
)
|
|
26,893
|
|
|
Excess tax benefit from share-based compensation
|
|
(16,320
|
)
|
|
(23,099
|
)
|
|
Other non-cash adjustments to net income
|
|
3,278
|
|
|
4,281
|
|
|
(Increase) decrease in:
|
|
|
|
|
|
Receivables, net
|
|
(32,428
|
)
|
|
(89,482
|
)
|
|
Inventories, net
|
|
(203,513
|
)
|
|
(260,298
|
)
|
|
Other assets
|
|
11,011
|
|
|
8,213
|
|
|
Increase (decrease) in:
|
|
|
|
|
|
Accounts payable
|
|
113,497
|
|
|
376,631
|
|
|
Accrued expenses
|
|
63,346
|
|
|
40,936
|
|
|
Other liabilities
|
|
(4,128
|
)
|
|
8,756
|
|
|
Net cash provided by operating activities
|
|
545,250
|
|
|
685,281
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Purchases of property and equipment
|
|
(195,757
|
)
|
|
(271,182
|
)
|
|
Business acquisitions, net of cash acquired
|
|
(186,137
|
)
|
|
(8,369
|
)
|
|
Sale of certain assets of acquired business
|
|
19,042
|
|
|
—
|
|
|
Proceeds from sales of property and equipment
|
|
745
|
|
|
6,573
|
|
|
Net cash used in investing activities
|
|
(362,107
|
)
|
|
(272,978
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Decrease in bank overdrafts
|
|
(2,926
|
)
|
|
(7,459
|
)
|
|
Net (payments) borrowings on credit facilities
|
|
—
|
|
|
(115,000
|
)
|
|
Issuance of senior unsecured notes
|
|
448,605
|
|
|
299,904
|
|
|
Payment of debt related costs
|
|
(8,815
|
)
|
|
(2,942
|
)
|
|
Dividends paid
|
|
(17,574
|
)
|
|
(17,596
|
)
|
|
Proceeds from the issuance of common stock, primarily exercise of
stock options
|
|
3,611
|
|
|
8,495
|
|
|
Tax withholdings related to the exercise of stock appreciation rights
|
|
(21,856
|
)
|
|
(26,677
|
)
|
|
Excess tax benefit from share-based compensation
|
|
16,320
|
|
|
23,099
|
|
|
Repurchase of common stock
|
|
(80,795
|
)
|
|
(27,095
|
)
|
|
Contingent consideration related to previous business acquisitions
|
|
(4,726
|
)
|
|
(10,911
|
)
|
|
Other
|
|
(627
|
)
|
|
4,089
|
|
|
Net cash provided by financing activities
|
|
331,217
|
|
|
127,907
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
514,360
|
|
|
540,210
|
|
|
Cash and cash equivalents, beginning of period
|
|
598,111
|
|
|
57,901
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
1,112,471
|
|
|
$
|
598,111
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
Advance Auto Parts, Inc. and Subsidiaries
|
|
Supplemental Financial Schedules
|
|
Fifty-Two Week Periods Ended
|
|
December 28, 2013 and December 29, 2012
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 28,
2013
|
|
December 29,
2012
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
$
|
545,250
|
|
|
$
|
685,281
|
|
|
Cash flows used in investing activities
|
|
(362,107
|
)
|
|
(272,978
|
)
|
|
Free cash flow
|
|
$
|
183,143
|
|
|
$
|
412,303
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
Fourth Quarter Performance Summary on a
GAAP Basis(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Weeks Ended
|
|
Fifty-Two Weeks Ended
|
|
|
|
December 28,
2013
|
|
December 29,
2012
|
|
December 28,
2013
|
|
December 29,
2012
|
|
|
|
|
|
|
|
|
|
|
|
Sales (in millions)
|
|
$
|
1,408.8
|
|
|
$
|
1,329.2
|
|
|
$
|
6,493.8
|
|
|
$
|
6,205.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Comp Store Sales %
|
|
0.1
|
%
|
|
(1.9
|
%)
|
|
(1.5
|
%)
|
|
(0.8
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit %
|
|
49.8
|
%
|
|
49.9
|
%
|
|
50.1
|
%
|
|
49.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
SG&A %
|
|
43.4
|
%
|
|
41.4
|
%
|
|
39.9
|
%
|
|
39.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income %
|
|
6.4
|
%
|
|
8.5
|
%
|
|
10.2
|
%
|
|
10.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$
|
0.67
|
|
|
$
|
0.88
|
|
|
$
|
5.32
|
|
|
$
|
5.22
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg Diluted Shares (in thousands)
|
|
73,248
|
|
|
74,002
|
|
|
73,414
|
|
|
74,062
|
|
|
(1)
|
|
These financial metrics have been reported on a GAAP basis
which include the impact of transaction expenses associated with
our acquisition of GPI on January 2, 2014 of $21.9 million for the
fourth quarter, of which $2.0 million was interest related, and
$27.0 million for fiscal 2013, of which $2.0 million was interest
related, and integration costs associated with our integration of
BWP of $3.1 million for the fourth quarter and $8.0 million for
fiscal 2013. These financial measures should be read in
conjunction with our financial measures presented on a comparable
basis earlier in this press release. Management believes the
reporting of financial results on a non-GAAP basis to remain
comparable is important in assessing the overall performance of
the business and is therefore useful for investors and prospective
investors.
|
|
Key Financial Metrics and Statistics on a
GAAP Basis(1)(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Weeks Ended
|
|
Fifty-Two Weeks Ended
|
|
|
|
December 28,
2013
|
|
December 29,
2012
|
|
FY 2013
|
|
FY 2012
|
|
|
|
|
|
|
|
|
|
|
|
Sales Growth %
|
|
6.0
|
%
|
|
0.1
|
%
|
|
4.7
|
%
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Sales per Store
|
|
$
|
1,656
|
|
|
$
|
1,664
|
|
|
$
|
1,656
|
|
|
$
|
1,664
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income per Store
|
|
$
|
168
|
|
|
$
|
176
|
|
|
$
|
168
|
|
|
$
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Invested Capital
|
|
18.3
|
%
|
|
19.4
|
%
|
|
18.3
|
%
|
|
19.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin Return on Inventory
|
|
9.9
|
|
|
9.3
|
|
|
9.9
|
|
|
9.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Store Square Footage, end of period
|
|
29,701
|
|
|
27,806
|
|
|
29,701
|
|
|
27,806
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Team Members, end of period
|
|
54,278
|
|
|
53,473
|
|
|
54,278
|
|
|
53,473
|
|
|
(1)
|
|
These financial metrics have been reported on a GAAP basis
which include the impact of transaction expenses associated with
our acquisition of GPI on January 2, 2014 of $21.9 million for the
fourth quarter, of which $2.0 million was interest related, and
$27.0 million for fiscal 2013, of which $2.0 million was interest
related, and integration costs associated with our integration of
BWP of $3.1 million for the fourth quarter and $8.0 million for
fiscal 2013. These financial metrics and statistics should be read
in conjunction with our financial metrics and statistics presented
on a comparable basis earlier in this press release. Management
believes the reporting of financial results on a non-GAAP basis to
remain comparable is important in assessing the overall
performance of the business and is therefore useful for investors
and prospective investors.
|
|
(2)
|
|
In thousands except for gross margin return on inventory and
total Team Members. The financial metrics presented are calculated
on an annual basis and accordingly reflect the last four quarters
completed, except for Sales Growth % and where noted.
|
|
Detail of Return on Invested Capital
(ROIC) Calculation:
|
|
|
|
|
|
|
|
|
|
|
|
Last Four Quarters Ended
|
|
|
|
As Reported
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|
Comparable
Adjustments (1)
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|
Comparable
|
|
As Reported
|
|
|
|
December 28,
2013
|
|
December 28,
2013
|
|
December 28,
2013
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|
December 29,
2012
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
391,758
|
|
|
$
|
25,706
|
|
|
$
|
417,464
|
|
|
$
|
387,671
|
|
|
Add:
|
|
|
|
|
|
|
|
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After-tax interest expense and other, net
|
|
21,214
|
|
|
(1,058
|
)
|
|
20,156
|
|
|
20,649
|
|
|
After-tax rent expense
|
|
223,654
|
|
|
2,072
|
|
|
225,726
|
|
|
198,960
|
|
|
After-Tax Operating Earnings
|
|
636,626
|
|
|
26,720
|
|
|
663,346
|
|
|
607,280
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets (less cash)
|
|
4,234,003
|
|
|
—
|
|
|
4,234,003
|
|
|
3,806,779
|
|
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Less: Average liabilities (excluding total debt)
|
|
(2,895,984
|
)
|
|
5,502
|
|
|
(2,890,482
|
)
|
|
(2,594,945
|
)
|
|
Add: Capitalized lease obligation (rent expense * 6) (2)
|
|
2,145,654
|
|
|
—
|
|
|
2,145,654
|
|
|
1,921,722
|
|
|
Total Invested Capital
|
|
3,483,673
|
|
|
5,502
|
|
|
3,489,175
|
|
|
3,133,556
|
|
|
|
|
|
|
|
|
|
|
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ROIC
|
|
18.3
|
%
|
|
|
|
19.0
|
%
|
|
19.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Rent expense
|
|
$
|
357,609
|
|
|
$
|
—
|
|
|
$
|
357,609
|
|
|
$
|
320,287
|
|
|
Interest expense and other, net
|
|
$
|
33,920
|
|
|
$
|
(1,987
|
)
|
|
$
|
31,933
|
|
|
$
|
33,241
|
|
|
(1)
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The Company has also presented its ROIC calculation on a
comparable basis as a result of certain non-comparable items
included in its financial results in fiscal 2013. Refer to a
description of those adjustments in footnote (1) above.
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(2)
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Capitalized lease obligation is estimated as annualized rent
expense for the applicable period times six years.
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NOTE: Management uses ROIC to evaluate return on investments
to the business and believes it is a useful indicator to stockholders
given the future investments the Company plans to make in areas
including information technology, supply chain and stores. ROIC
is a non-GAAP measure and should be considered in addition to, but not
as a substitute for, information contained in our condensed consolidated
financial statements. Management believes our comparable results of
operations are a useful indicator to stockholders for consistency
purposes.
Copyright Business Wire 2014