Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket
parts provider in North America, serving both professional installer and
do-it-yourself customers, today announced its financial results for the
fourth quarter ended January 2, 2016. Fourth quarter comparable cash
earnings per diluted share (Comparable Cash EPS) were $1.22. These
results exclude $0.08 of amortization of acquired intangible assets and
integration and restructuring costs of $0.40, primarily associated with
the acquisition of General Parts International, Inc. (General Parts).
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Comparable Fourth Quarter and Full Year Performance Summary
(1)
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Twelve Weeks Ended
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Fifty-Two Weeks Ended
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January 2,
2016
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January 3,
2015
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January 2,
2016
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January 3,
2015
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Comparable Sales (in millions)
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$
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2,033.5
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$
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2,086.8
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$
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9,737.0
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$
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9,693.5
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Comp Store Sales %
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(2.5
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%)
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1.1
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%
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0.0
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%
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2.0
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%
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Comparable Gross Profit (in millions)
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$
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909.2
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$
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936.2
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$
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4,422.8
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$
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4,385.8
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Comparable SG&A (in millions)
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$
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751.6
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$
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764.5
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$
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3,427.7
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$
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3,430.3
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Comparable Operating Income (in millions)
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$
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157.6
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$
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171.7
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$
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995.1
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$
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955.6
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Comparable Cash EPS
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$
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1.22
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$
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1.37
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$
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7.82
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$
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7.59
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Avg Diluted Shares (in thousands)
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73,861
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73,494
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73,733
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73,414
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(1)
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Fiscal 2015 and 2014 include certain non-comparable expenses
and Fiscal 2014 includes an additional week of business (53rd
week). The Comparable SG&A, Comparable Operating Income and
Comparable Cash EPS for the twelve weeks ended January 2, 2016 and
January 3, 2015, respectively, have been reported on a comparable
basis to exclude General Parts integration, store closure and
consolidation costs and support center restructuring costs of
$47.2 million and $36.7 million, respectively, and General Parts
amortization of acquired intangible assets of $9.7 million and
$9.9 million, respectively. The Comparable SG&A, Comparable
Operating Income and Comparable Cash EPS for the fiscal years
ended January 2, 2016 and January 3, 2015, respectively, have been
reported on a comparable basis to exclude General Parts
integration, store consolidation costs and support center
restructuring costs of $127.1 million and $82.2 million,
respectively, and General Parts amortization of acquired
intangible assets of $42.3 million and $42.7 million,
respectively. Comparable Sales and Comparable Gross Profit for the
twelve and fifty-two weeks ended January 3, 2015 have been
reported on a comparable basis to exclude the impact of the 53rd
week. For a better understanding of the Company's comparable
results, 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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“Fourth quarter sales results did not meet our expectations, however, we
demonstrated additional cost discipline to offset the softer than
expected sales and met our earnings expectations," said George Sherman,
President and Interim Chief Executive Officer. "We are a company
composed of 5,300 hyper-local businesses that serve the needs of our
valuable local customers. We recognize that the best way to
substantially improve our customers' experience is to empower our
terrific team members who touch those customers every day. We are
therefore adapting to a more empowered, field-centric organization that
aggressively pursues improved profitability while achieving better than
market top line growth. We are relentlessly pursuing opportunities to
reduce expenses and increase efficiency while providing our customers
with an exemplary experience that drives increased frequency. Through
these actions, we fully expect to generate greater profitability and
value for our shareholders."
Fourth Quarter & Full Year 2015 Highlights
On a Comparable basis, total sales for the fourth quarter decreased 2.6%
to $2.03 billion, as compared with total sales during the fourth quarter
of fiscal 2014 of $2.09 billion. The sales decline was driven by the
comparable store sales decrease of 2.5% and the impact of previously
announced store closures executed in the fourth quarter partially offset
by new store openings. Our comparable store sales were negatively
impacted by approximately 90 basis points related to the year-over-year
timing of the New Year's day holiday which fell in the 53rd week last
year, 46 basis points due to foreign exchange currency fluctuations from
our Canadian business, as well as lower demand for seasonal categories
due to warmer winter weather, partially offset by the favorable
consolidation impact from Carquest stores. On a GAAP basis, total sales
for the fourth quarter were $2.03 billion for fiscal 2015 compared to
$2.24 billion for the fourth quarter of fiscal 2014. For fiscal 2015,
the Company's Comparable and GAAP total sales were $9.74 billion. On a
Comparable and GAAP basis, the Company's total sales for fiscal 2014
were $9.69 billion and $9.84 billion, respectively.
On both a Comparable and GAAP basis, the Company's Gross Profit rate was
44.7% of sales during the fourth quarter as compared to 44.9% during the
fourth quarter last year. The 15 basis-point decrease in gross profit
rate was primarily the result of supply chain expense deleverage due to
the comparable store sales decline, partially offset by lower shrink
expenses. On a Comparable and GAAP basis, the Company's gross profit
rate was 45.4% for fiscal 2015 versus 45.2% over the same period last
year.
The Company's Comparable SG&A rate was 37.0% of sales during the fourth
quarter as compared to 36.6% during the same period last year. The 33
basis-point increase was primarily the result of expense deleverage from
the comparable store sales decline partially offset by our continued
cost reduction initiatives and disciplined efforts to lower
administrative and support costs. On a GAAP basis, the Company's SG&A
rate was 39.8% of sales during the fourth quarter as compared to 38.3%
during the same period last year. For fiscal 2015, the Company's
Comparable SG&A rate was 35.2% versus 35.4% over the same period last
year. On a GAAP basis, the Company's SG&A rate was 36.9% for fiscal 2015
versus 36.6% over the same period last year.
The Company's Comparable Operating Income was $157.6 million during the
fourth quarter, a decrease of 8.2% versus the fourth quarter of fiscal
2014. As a percentage of sales, Comparable Operating Income in the
fourth quarter was 7.7% compared to 8.2% during the fourth quarter of
fiscal 2014. On a GAAP basis, the Company's operating income during the
fourth quarter of $100.7 million decreased 31.1% versus the fourth
quarter of fiscal 2014. On a GAAP basis, the Operating Income rate was
5.0% during the fourth quarter as compared to 6.5% during the fourth
quarter of fiscal 2014. For fiscal 2015, the Company's Comparable
Operating Income rate was 10.2% versus 9.9% during fiscal 2014. For
fiscal 2015, the Company's GAAP Operating Income rate was 8.5% versus
8.7% during fiscal 2014.
Operating cash flow decreased approximately 2.7% to $689.6 million in
fiscal 2015 from $709.0 million in fiscal 2014. Free cash flow decreased
to $454.9 million in fiscal 2015 from $480.5 million in fiscal 2014.
Capital expenditures in fiscal 2015 were $234.7 million as compared to
$228.4 million in fiscal 2014.
Store Information
As of January 2, 2016, the Company operated 5,171 stores and 122
Worldpac branches and served approximately 1,300 independently owned
Carquest stores. The below table summarizes the changes in the number of
the company-operated stores and branches during the fiscal 2015 year
ended January 2, 2016.
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AAP
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AI
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BWP
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CARQUEST
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WORLDPAC
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Total
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January 3, 2015
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3,888
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210
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38
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1,125
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111
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5,372
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New
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82
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5
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-
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23
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11
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121
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Closed
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(50
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)
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(2
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(2
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(35
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)
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-
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(89
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Consolidated
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(2
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)
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(25
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)
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(4
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(80
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-
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(111
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Converted
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184
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(4
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(20
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(160
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-
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-
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January 2, 2016
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4,102
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184
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12
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873
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122
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5,293
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2016 Key Assumptions
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New Stores
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65 to 75 new stores including Worldpac branches
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Carquest Store Consolidations, Conversions & Relocations
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325 to 350
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Comparable Store Sales(1)
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Low Single Digits
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Adjusted Operating Income Rate (2)
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12%
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Income tax rate
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37.5% to 38.0%
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One-time Integration & Restructuring Expenses (3)
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Approximately $75 million to $90 million
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Capital Expenditures
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$260 million to $280 million
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Free Cash Flow
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Minimum $500 million
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Diluted Share Count
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Approximately 74 million shares
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1.
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Comparable store sales estimate excludes sales to independently
owned Carquest locations and includes the impact of Carquest store
consolidations.
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2.
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Adjusted Operating Income excludes one-time expenses related to the
integration of General Parts, restructuring expenses and the
recurring amortization of General Parts' intangible assets. Adjusted
Operating Income is a non-GAAP measure. 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 Adjusted Operating Income 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 Adjusted Operating
Income to investors and prospective investors to evaluate Advance’s
operating performance across periods adjusting for non-operating
items. Adjusted Operating Income might not be calculated in the same
manner as, and thus might not be comparable to, similarly titled
measures reported by other companies. Adjusted Operating Income
should not be used by investors or third parties as the sole basis
for formulating investment decisions, as it excludes a number of
important cash and non-cash recurring items.
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3.
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The $75 million to $90 million estimate of incremental one-time
costs includes $65 million to $75 million related to ongoing
integration efforts and an additional $10 million to $15 million
related to supply chain optimization work which includes the closure
of the Company's Sutton, MA distribution center and additional
activities contemplated as part of the first phase of work. The
Company will provide additional details of its multi-year supply
chain optimization work and potential future one-time costs as it
finalizes those plans. One-time integration related costs are
expected to exceed the initial $190 million estimate previously
shared at the time of the GPI acquisition as we have trued up
estimates, expanded the scope and taken additional structural
actions to drive improved efficiency and profitability.
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Dividend
On February 9, 2016, the Company's Board of Directors declared a regular
quarterly cash dividend of $0.06 per share to be paid on April 1, 2016
to stockholders of record as of March 18, 2016.
Investor Conference Call
The Company will host a conference call on Thursday, February 11, 2016,
at 8:30 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 12, 2017.
About Advance Auto Parts
Headquartered in Roanoke, Va., Advance Auto Parts, Inc., a leading
automotive aftermarket parts provider in North America, serves both
professional installer and do-it-yourself customers. As of January 2,
2016 Advance operated 5,171 stores and 122 Worldpac branches and served
approximately 1,300 independently owned Carquest branded stores in the
United States, Puerto Rico, the U.S. Virgin Islands and Canada. Advance
employs approximately 73,000 Team Members. 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, key assumptions for
2016 financial performance including adjusted operating income;
statements regarding the benefits and other effects of the acquisition
of General Parts and the combined company’s plans, objectives and
expectations; statements regarding expected growth and future
performance of Advance Auto Parts, Inc. (AAP), including store growth,
capital expenditures, comparable store sales, gross profit rate, SG&A,
adjusted operating income, free cash flow, income tax rate, General
Parts integration costs and store consolidation costs, synergies,
expenses to achieve synergies and adjusted operating income rate
targets; expectations regarding leadership changes and their impact on
the company’s strategies, opportunities and results; statements
regarding enhancements to shareholder value; statements regarding
strategic plans or initiatives, growth or profitability; and all other
statements that are not statements of 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
General Parts acquisition, including synergies, may not be fully
realized or may take longer to realize than expected; the possibility
that the General Parts acquisition may not advance AAP’s business
strategy; the risk that AAP may experience difficulty integrating
General Parts’ employees, business systems and technology; the potential
diversion of AAP’s management’s attention from AAP’s other businesses
resulting from the General Parts acquisition; the impact of the General
Parts acquisition on third-party relationships, including customers,
wholesalers, independently owned and jobber stores and suppliers; AAP’s
ability to attract, develop and retain executives and other employees;
changes in regulatory, social and political conditions, as well as
general economic conditions; competitive pressures; demand for AAP’s and
General Parts' 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 January 3, 2015 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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January 2,
2016
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January 3,
2015
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Assets
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Current assets:
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Cash and cash equivalents
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$
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90,782
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$
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104,671
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Receivables, net
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597,788
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579,825
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Inventories, net
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4,174,768
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3,936,955
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Other current assets
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77,408
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119,589
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Total current assets
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4,940,746
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4,741,040
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Property and equipment, net
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1,434,577
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|
1,432,030
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Goodwill
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989,484
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|
995,426
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Intangible assets, net
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687,125
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748,125
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Other assets, net
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82,633
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45,737
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$
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8,134,565
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$
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7,962,358
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Liabilities and Stockholders' Equity
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Current liabilities:
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Current portion of long-term debt
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$
|
598
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$
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582
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Accounts payable
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3,203,922
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3,095,365
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Accrued expenses
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553,163
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520,673
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Other current liabilities
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39,794
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37,796
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Total current liabilities
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3,797,477
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3,654,416
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Long-term debt
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1,213,161
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1,636,311
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Deferred income taxes
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433,925
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446,351
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Other long-term liabilities
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229,354
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222,368
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Total stockholders' equity
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2,460,648
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|
2,002,912
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$
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8,134,565
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$
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7,962,358
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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. The
Company retrospectively adopted ASU 2015-17 in the fourth quarter
of 2015, which requires the presentation of all deferred income
taxes as long-term.
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Advance Auto Parts, Inc. and Subsidiaries
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Condensed Consolidated Statements of Operations
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Fiscal Fourth Quarters Ended
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January 2, 2016 and January 3, 2015
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(in thousands, except per share data)
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(unaudited)
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Q4 2015
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Q4 2014
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Comparable Adjustments (a)
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As Reported
|
|
Comparable
Adjustments (a)
|
|
Comparable
|
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As Reported
|
|
53rd Week
|
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Integration
Costs
|
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Comparable
|
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(12 weeks)
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(12 weeks)
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(13 weeks)
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(12 weeks)
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Net sales
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$
|
2,033,545
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$
|
—
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$
|
2,033,545
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|
$
|
2,237,209
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|
$
|
(150,386
|
)
|
|
$
|
—
|
|
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$
|
2,086,823
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|
Cost of sales
|
|
1,124,373
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|
|
—
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|
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1,124,373
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|
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1,233,268
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|
|
(82,606
|
)
|
|
—
|
|
|
1,150,662
|
|
|
Gross profit
|
|
909,172
|
|
|
—
|
|
|
909,172
|
|
|
1,003,941
|
|
|
(67,780
|
)
|
|
—
|
|
|
936,161
|
|
|
Selling, general and administrative expenses
|
|
808,494
|
|
|
(56,881
|
)
|
|
751,613
|
|
|
857,864
|
|
|
(46,720
|
)
|
|
(46,655
|
)
|
|
764,489
|
|
|
Operating income
|
|
100,678
|
|
|
56,881
|
|
|
157,559
|
|
|
146,077
|
|
|
(21,060
|
)
|
|
46,655
|
|
|
171,672
|
|
|
Other, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(13,809
|
)
|
|
—
|
|
|
(13,809
|
)
|
|
(17,002
|
)
|
|
1,291
|
|
|
—
|
|
|
(15,711
|
)
|
|
Other (expense) income, net
|
|
(3,044
|
)
|
|
—
|
|
|
(3,044
|
)
|
|
1,883
|
|
|
(212
|
)
|
|
—
|
|
|
1,671
|
|
|
Total other, net
|
|
(16,853
|
)
|
|
—
|
|
|
(16,853
|
)
|
|
(15,119
|
)
|
|
1,079
|
|
|
—
|
|
|
(14,040
|
)
|
|
Income before provision for income taxes
|
|
83,825
|
|
|
56,881
|
|
|
140,706
|
|
|
130,958
|
|
|
(19,981
|
)
|
|
46,655
|
|
|
157,632
|
|
|
Provision for income taxes
|
|
29,006
|
|
|
21,615
|
|
|
50,621
|
|
|
46,524
|
|
|
(7,610
|
)
|
|
17,729
|
|
|
56,643
|
|
|
Net income
|
|
$
|
54,819
|
|
|
$
|
35,266
|
|
|
$
|
90,085
|
|
|
$
|
84,434
|
|
|
$
|
(12,371
|
)
|
|
$
|
28,926
|
|
|
$
|
100,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (b)
|
|
$
|
0.75
|
|
|
$
|
0.48
|
|
|
$
|
1.23
|
|
|
$
|
1.15
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.39
|
|
|
$
|
1.37
|
|
|
Diluted earnings per share (b)
|
|
$
|
0.74
|
|
|
$
|
0.48
|
|
|
$
|
1.22
|
|
|
$
|
1.15
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.39
|
|
|
$
|
1.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding (b)
|
|
73,263
|
|
|
73,263
|
|
|
73,263
|
|
|
72,997
|
|
|
72,997
|
|
|
72,997
|
|
|
72,997
|
|
|
Average diluted common shares outstanding (b)
|
|
73,861
|
|
|
73,861
|
|
|
73,861
|
|
|
73,494
|
|
|
73,494
|
|
|
73,494
|
|
|
73,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
The comparable adjustments to Selling, general and
administrative expenses for Q4 2015 include General Parts
integration, store closure and consolidation costs and support
center restructuring costs of $47.2 million and General Parts
amortization of acquired intangible assets of $9.7 million. The
comparable adjustments to Q4 2014 include adjustments to remove
the impact of the 53rd week of operations and adjustments to
Selling, general and administrative expenses for General Parts
integration and store consolidation costs of $36.7 million and
General Parts amortization of acquired intangible assets of $9.9
million.
|
|
|
|
|
|
(b)
|
|
Average common shares outstanding is calculated based on the
weighted average number of shares outstanding during the quarter.
At January 2, 2016 and January 3, 2015, we had 73,314 and 73,074
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
|
|
Fiscal Years Ended
|
|
January 2, 2016 and January 3, 2015
|
|
(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Adjustments (a)
|
|
|
|
|
|
As Reported
|
|
Comparable
Adjustments (a)
|
|
Comparable
|
|
As Reported
|
|
53rd Week
|
|
Integration
Costs
|
|
Comparable
|
|
|
|
(52 weeks)
|
|
|
|
(52 weeks)
|
|
(53 weeks)
|
|
|
|
|
|
(52 weeks)
|
|
Net sales
|
|
$
|
9,737,018
|
|
|
$
|
—
|
|
|
$
|
9,737,018
|
|
|
$
|
9,843,861
|
|
|
$
|
(150,386
|
)
|
|
$
|
—
|
|
|
$
|
9,693,475
|
|
|
Cost of sales
|
|
5,314,246
|
|
|
—
|
|
|
5,314,246
|
|
|
5,390,248
|
|
|
(82,606
|
)
|
|
—
|
|
|
5,307,642
|
|
|
Gross profit
|
|
4,422,772
|
|
|
—
|
|
|
4,422,772
|
|
|
4,453,613
|
|
|
(67,780
|
)
|
|
—
|
|
|
4,385,833
|
|
|
Selling, general and administrative expenses
|
|
3,596,992
|
|
|
(169,340
|
)
|
|
3,427,652
|
|
|
3,601,903
|
|
|
(46,720
|
)
|
|
(124,930
|
)
|
|
3,430,253
|
|
|
Operating income
|
|
825,780
|
|
|
169,340
|
|
|
995,120
|
|
|
851,710
|
|
|
(21,060
|
)
|
|
124,930
|
|
|
955,580
|
|
|
Other, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(65,408
|
)
|
|
—
|
|
|
(65,408
|
)
|
|
(73,408
|
)
|
|
1,291
|
|
|
—
|
|
|
(72,117
|
)
|
|
Other (expense) income, net
|
|
(7,484
|
)
|
|
—
|
|
|
(7,484
|
)
|
|
3,092
|
|
|
(212
|
)
|
|
—
|
|
|
2,880
|
|
|
Total other, net
|
|
(72,892
|
)
|
|
—
|
|
|
(72,892
|
)
|
|
(70,316
|
)
|
|
1,079
|
|
|
—
|
|
|
(69,237
|
)
|
|
Income before provision for income taxes
|
|
752,888
|
|
|
169,340
|
|
|
922,228
|
|
|
781,394
|
|
|
(19,981
|
)
|
|
124,930
|
|
|
886,343
|
|
|
Provision for income taxes
|
|
279,490
|
|
|
64,349
|
|
|
343,839
|
|
|
287,569
|
|
|
(7,610
|
)
|
|
47,473
|
|
|
327,432
|
|
|
Net income
|
|
$
|
473,398
|
|
|
$
|
104,991
|
|
|
$
|
578,389
|
|
|
$
|
493,825
|
|
|
$
|
(12,371
|
)
|
|
$
|
77,457
|
|
|
$
|
558,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (b)
|
|
$
|
6.45
|
|
|
$
|
1.42
|
|
|
$
|
7.87
|
|
|
$
|
6.75
|
|
|
$
|
(0.17
|
)
|
|
$
|
1.06
|
|
|
$
|
7.64
|
|
|
Diluted earnings per share (b)
|
|
$
|
6.40
|
|
|
$
|
1.42
|
|
|
$
|
7.82
|
|
|
$
|
6.71
|
|
|
$
|
(0.17
|
)
|
|
$
|
1.05
|
|
|
$
|
7.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding (b)
|
|
73,190
|
|
|
73,190
|
|
|
73,190
|
|
|
72,932
|
|
|
72,932
|
|
|
72,932
|
|
|
72,932
|
|
|
Average diluted common shares outstanding (b)
|
|
73,733
|
|
|
73,733
|
|
|
73,733
|
|
|
73,414
|
|
|
73,414
|
|
|
73,414
|
|
|
73,414
|
|
|
|
|
|
|
(a)
|
|
The comparable adjustments to Selling, general and
administrative expenses for 2015 include General Parts
integration, store closure and consolidation costs and support
center restructuring costs of $127.1 million and General Parts
amortization of acquired intangible assets of $42.3 million. The
comparable adjustments to 2014 include adjustments to remove the
impact of the 53rd week of operations and adjustments to Selling,
general and administrative expenses for General Parts integration
and store consolidation costs of $82.2 million and General Parts
amortization of acquired intangible assets of $42.7 million.
|
|
|
|
(b)
|
|
Average common shares outstanding is calculated based on the
weighted average number of shares outstanding during the
year-to-date period. At January 2, 2016 and January 3, 2015, we
had 73,314 and 73,074 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
|
|
Fiscal Years Ended
|
|
January 2, 2016 and January 3, 2015
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
January 2,
2016
|
|
January 3,
2015
|
|
|
|
(52 weeks)
|
|
(53 weeks)
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income
|
|
$
|
473,398
|
|
|
$
|
493,825
|
|
|
Depreciation and amortization
|
|
269,476
|
|
|
284,693
|
|
|
Share-based compensation
|
|
36,929
|
|
|
21,705
|
|
|
(Benefit) provision for deferred income taxes
|
|
(9,219
|
)
|
|
48,468
|
|
|
Excess tax benefit from share-based compensation
|
|
(13,002
|
)
|
|
(10,487
|
)
|
|
Other non-cash adjustments to net income
|
|
15,542
|
|
|
15,912
|
|
|
(Increase) decrease in:
|
|
|
|
|
|
Receivables, net
|
|
(21,476
|
)
|
|
(48,209
|
)
|
|
Inventories, net
|
|
(244,096
|
)
|
|
(227,657
|
)
|
|
Other assets
|
|
7,423
|
|
|
(63,482
|
)
|
|
Increase (decrease) in:
|
|
|
|
|
|
Accounts payable
|
|
119,164
|
|
|
216,412
|
|
|
Accrued expenses
|
|
35,103
|
|
|
(28,862
|
)
|
|
Other liabilities
|
|
20,400
|
|
|
6,673
|
|
|
Net cash provided by operating activities
|
|
689,642
|
|
|
708,991
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Purchases of property and equipment
|
|
(234,747
|
)
|
|
(228,446
|
)
|
|
Business acquisitions, net of cash acquired
|
|
(18,889
|
)
|
|
(2,060,783
|
)
|
|
Proceeds from sales of property and equipment
|
|
270
|
|
|
992
|
|
|
Net cash used in investing activities
|
|
(253,366
|
)
|
|
(2,288,237
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
(Decrease) increase in bank overdrafts
|
|
(2,922
|
)
|
|
16,219
|
|
|
Net (payments) borrowings on credit facilities
|
|
(423,400
|
)
|
|
583,400
|
|
|
Dividends paid
|
|
(17,649
|
)
|
|
(17,580
|
)
|
|
Proceeds from the issuance of common stock, primarily for employee
stock purchase plan
|
|
5,174
|
|
|
6,578
|
|
|
Tax withholdings related to the exercise of stock appreciation rights
|
|
(13,112
|
)
|
|
(7,102
|
)
|
|
Excess tax benefit from share-based compensation
|
|
13,002
|
|
|
10,487
|
|
|
Repurchase of common stock
|
|
(6,665
|
)
|
|
(5,154
|
)
|
|
Contingent consideration related to previous business acquisitions
|
|
—
|
|
|
(10,047
|
)
|
|
Other
|
|
(380
|
)
|
|
(890
|
)
|
|
Net cash (used in) provided by financing activities
|
|
(445,952
|
)
|
|
575,911
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
(4,213
|
)
|
|
(4,465
|
)
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
(13,889
|
)
|
|
(1,007,800
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
104,671
|
|
|
1,112,471
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
90,782
|
|
|
$
|
104,671
|
|
|
|
|
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
|
|
Fiscal Years Ended
|
|
January 2, 2016 and January 3, 2015
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 2,
2016
|
|
|
January 3,
2015
|
|
|
|
|
(52 weeks)
|
|
|
(53 weeks)
|
|
Cash flows from operating activities
|
|
|
$
|
689,642
|
|
|
|
$
|
708,991
|
|
|
Purchases of property and equipment
|
|
|
(234,747
|
)
|
|
|
(228,446
|
)
|
|
Free cash flow
|
|
|
$
|
454,895
|
|
|
|
$
|
480,545
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
Adjusted Debt to EBITDAR:
|
|
|
|
|
|
(In thousands, except adjusted debt to EBITDAR ratio)
|
|
Four Quarters Ended
|
|
|
|
|
January 2,
2016
|
|
January 3,
2015
|
|
|
|
|
(Four Quarters Ended)
|
|
(53 Weeks Ended)
|
|
Total debt
|
|
$
|
1,213,759
|
|
|
$
|
1,636,893
|
|
Add:
|
Capitalized lease obligation (rent expense * 6)
|
|
3,190,728
|
|
|
3,038,904
|
|
Adjusted debt
|
|
4,404,487
|
|
|
4,675,797
|
|
|
|
|
|
|
|
|
Operating income
|
|
825,780
|
|
|
851,710
|
|
Add:
|
Comparable adjustments (a)
|
|
127,059
|
|
|
82,234
|
|
|
Depreciation and amortization
|
|
269,476
|
|
|
284,693
|
|
EBITDA
|
|
1,222,315
|
|
|
1,218,637
|
|
Rent expense (less favorable lease amortization of $4,786 and
$4,972, respectively)
|
|
531,788
|
|
|
506,484
|
|
EBITDAR
|
|
$
|
1,754,103
|
|
|
$
|
1,725,121
|
|
|
|
|
|
|
|
|
Adjusted Debt to EBITDAR
|
|
2.5
|
|
|
2.7
|
|
|
|
|
|
(a)
|
|
The comparable adjustments to the four quarters ended January
2, 2016 include General Parts integration, store closure and
consolidation costs and support center restructuring costs of
$127.1 million. The comparable adjustments to Fiscal 2014 include
General Parts integration and store consolidation costs of $82.2
million.
|
|
|
|
|
|
NOTE: Management believes its Adjusted Debt to EBITDAR ratio
(“leverage ratio”) is a key financial metric and believes its debt
levels are best analyzed using this measure. The Company’s goal
was to quickly pay down debt resulting from the GPI acquisition in
order to get back to a 2.5 times leverage ratio and maintain an
investment grade rating. The leverage ratio calculated by the
Company is a non-GAAP measure and should not be considered a
substitute for debt to net earnings, net earnings or debt as
determined in accordance with GAAP. The Company’s calculation of
its leverage ratio might not be calculated in the same manner as,
and thus might not be comparable to, similarly titled measures by
other companies.
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter Performance Summary on a
GAAP Basis(a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
Fiscal Years Ended
|
|
|
|
January 2,
2016
|
|
January 3,
2015
|
|
January 2,
2016
|
|
January 3,
2015
|
|
|
|
(12 weeks)
|
|
(13 weeks)
|
|
(52 weeks)
|
|
(53 weeks)
|
|
Sales (in millions)
|
|
$
|
2,033.5
|
|
|
$
|
2,237.2
|
|
|
$
|
9,737.0
|
|
|
$
|
9,843.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Comp Store Sales %
|
|
(2.5
|
%)
|
|
1.1
|
%
|
|
0.0
|
%
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit (in millions)
|
|
$
|
909.2
|
|
|
$
|
1,003.9
|
|
|
$
|
4,422.8
|
|
|
$
|
4,453.6
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A (in millions)
|
|
$
|
808.5
|
|
|
$
|
857.9
|
|
|
$
|
3,597.0
|
|
|
$
|
3,601.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (in millions)
|
|
$
|
100.7
|
|
|
$
|
146.1
|
|
|
$
|
825.8
|
|
|
$
|
851.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$
|
0.74
|
|
|
$
|
1.15
|
|
|
$
|
6.40
|
|
|
$
|
6.71
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg Diluted Shares (in thousands)
|
|
73,861
|
|
|
73,494
|
|
|
73,733
|
|
|
73,414
|
|
|
|
|
(a)
|
|
These financial measures for the twelve weeks ended January 2,
2016 have been reported on a GAAP basis which includes the impact
of General Parts integration, store closure and consolidation and
support center restructuring costs of $47.2 million and General
Parts amortization of acquired intangible assets of $9.7 million.
These financial measures for the thirteen weeks ended January 3,
2015 have been reported on a GAAP basis which includes the impact
of a 53rd week of operations, General Parts integration and store
consolidation costs of $36.7 million and General Parts
amortization of acquired intangible assets of $9.9 million. These
financial measures for the fiscal 2015 year ended January 2, 2016
have been reported on a GAAP basis which includes the impact of
General Parts integration, store closure and consolidation costs
and support center restructuring costs of $127.1 million and
General Parts amortization of acquired intangible assets of $42.3
million. These financial measures for the fiscal 2014 year ended
January 3, 2015 have been reported on a GAAP basis which includes
the impact of a 53rd week of operations, General Parts integration
and store consolidation costs of $82.2 million and General Parts
amortization of acquired intangible assets of $42.7 million. 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 our base business and is
therefore useful for investors and prospective investors.
|
|
|
|
|
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