x
|
QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Delaware
(State
or other jurisdiction of
incorporation
or organization)
|
54-2049910
(I.R.S.
Employer
Identification No.)
|
Large accelerated filer x | Accelerated filer p |
Non-accelerated filer p (Do not check if a smaller reporting company) | Smaller reporting company p |
ITEM 1. |
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS OF
ADVANCE AUTO PARTS,
INC. AND SUBSIDIARIES
|
July
12,
|
December
29,
|
|||||||
Assets
|
2008
|
2007
|
||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 19,459 | $ | 14,654 | ||||
Receivables,
net
|
90,146 | 84,983 | ||||||
Inventories,
net
|
1,686,443 | 1,529,469 | ||||||
Other
current assets
|
41,685 | 53,719 | ||||||
Total
current assets
|
1,837,733 | 1,682,825 | ||||||
Property
and equipment, net of accumulated depreciation of
|
||||||||
$793,102
and $753,024
|
1,058,273 | 1,047,944 | ||||||
Assets
held for sale
|
3,654 | 3,274 | ||||||
Goodwill
|
34,603 | 33,718 | ||||||
Intangible
assets, net
|
28,185 | 26,844 | ||||||
Other
assets, net
|
11,532 | 10,961 | ||||||
$ | 2,973,980 | $ | 2,805,566 | |||||
Liabilities and
Stockholders' Equity
|
||||||||
Current
liabilities:
|
||||||||
Bank
overdrafts
|
$ | - | $ | 30,000 | ||||
Current
portion of long-term debt
|
675 | 610 | ||||||
Financed
vendor accounts payable
|
153,342 | 153,549 | ||||||
Accounts
payable
|
884,946 | 688,970 | ||||||
Accrued
expenses
|
339,142 | 301,414 | ||||||
Other
current liabilities
|
52,367 | 51,385 | ||||||
Total
current liabilities
|
1,430,472 | 1,225,928 | ||||||
Long-term
debt
|
452,266 | 505,062 | ||||||
Other
long-term liabilities
|
52,643 | 50,781 | ||||||
Commitments
and contingencies
|
||||||||
Stockholders'
equity:
|
||||||||
Preferred
stock, nonvoting, $0.0001 par value,
|
||||||||
10,000
shares authorized; no shares issued or outstanding
|
- | - | ||||||
Common
stock, voting, $0.0001 par value, 200,000
|
||||||||
shares
authorized; 102,143 shares issued and 95,366 outstanding
|
||||||||
in
2008 and 101,072 shares issued and 99,060 outstanding in
2007
|
10 | 10 | ||||||
Additional
paid-in capital
|
307,014 | 274,659 | ||||||
Treasury
stock, at cost, 6,777 and 2,012 shares
|
(237,491 | ) | (74,644 | ) | ||||
Accumulated
other comprehensive loss
|
(1,437 | ) | (701 | ) | ||||
Retained
earnings
|
970,503 | 824,471 | ||||||
Total
stockholders' equity
|
1,038,599 | 1,023,795 | ||||||
$ | 2,973,980 | $ | 2,805,566 |
Twelve
Week Periods Ended
|
Twenty-Eight
Week Periods Ended
|
|||||||||||||||
July
12,
|
July
14,
|
July
12,
|
July
14,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
sales
|
$ | 1,235,783 | $ | 1,169,859 | $ | 2,761,915 | $ | 2,637,979 | ||||||||
Cost of sales, including
purchasing and warehousing costs
|
634,945 | 606,998 | 1,417,626 | 1,365,715 | ||||||||||||
Gross
profit
|
600,838 | 562,861 | 1,344,289 | 1,272,264 | ||||||||||||
Selling,
general and administrative expenses
|
472,879 | 445,051 | 1,072,052 | 1,019,761 | ||||||||||||
Operating
income
|
127,959 | 117,810 | 272,237 | 252,503 | ||||||||||||
Other,
net:
|
||||||||||||||||
Interest
expense
|
(7,250 | ) | (7,392 | ) | (19,575 | ) | (18,666 | ) | ||||||||
Other
(expense) income, net
|
(92 | ) | 508 | (64 | ) | 850 | ||||||||||
Total
other, net
|
(7,342 | ) | (6,884 | ) | (19,639 | ) | (17,816 | ) | ||||||||
Income
before provision for income taxes
|
120,617 | 110,926 | 252,598 | 234,687 | ||||||||||||
Provision
for income taxes
|
45,231 | 42,502 | 95,126 | 90,162 | ||||||||||||
Net
income
|
$ | 75,386 | $ | 68,424 | $ | 157,472 | $ | 144,525 | ||||||||
Basic
earnings per share
|
$ | 0.79 | $ | 0.64 | $ | 1.66 | $ | 1.36 | ||||||||
Diluted
earnings per share
|
$ | 0.79 | $ | 0.64 | $ | 1.65 | $ | 1.35 | ||||||||
Average
common shares outstanding
|
95,008 | 106,486 | 94,996 | 106,034 | ||||||||||||
Dilutive
effect of share-based compensation
|
762 | 984 | 723 | 965 | ||||||||||||
Average
common shares outstanding - assuming dilution
|
95,770 | 107,470 | 95,719 | 106,999 |
Twenty-Eight
Week Periods Ended
|
||||||||
July
12,
|
July
14,
|
|||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 157,472 | $ | 144,525 | ||||
Adjustments
to reconcile net income to net cash provided by
|
||||||||
operating
activities:
|
||||||||
Depreciation
and amortization
|
78,692 | 79,436 | ||||||
Amortization
of deferred debt issuance costs
|
191 | 120 | ||||||
Share-based
compensation
|
10,007 | 10,412 | ||||||
Loss
on disposal of property and equipment, net
|
610 | 3,990 | ||||||
Benefit
for deferred income taxes
|
(1,827 | ) | (13,385 | ) | ||||
Excess
tax benefit from share-based compensation
|
(4,629 | ) | (10,618 | ) | ||||
Net
(increase) decrease in:
|
||||||||
Receivables,
net
|
(4,886 | ) | 3,101 | |||||
Inventories,
net
|
(156,528 | ) | (97,167 | ) | ||||
Other
assets
|
11,490 | (626 | ) | |||||
Net
increase in:
|
||||||||
Accounts
payable
|
195,976 | 84,976 | ||||||
Accrued
expenses
|
56,504 | 69,978 | ||||||
Other
liabilities
|
6,952 | 5,242 | ||||||
Net
cash provided by operating activities
|
350,024 | 279,984 | ||||||
Cash
flows from investing activities:
|
||||||||
Purchases
of property and equipment
|
(105,983 | ) | (115,652 | ) | ||||
Insurance
proceeds related to damaged property
|
- | 3,251 | ||||||
Proceeds
from sales of property and equipment
|
4,146 | 1,150 | ||||||
Other
|
(3,413 | ) | - | |||||
Net
cash used in investing activities
|
(105,250 | ) | (111,251 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Decrease
in bank overdrafts
|
(30,000 | ) | (18,435 | ) | ||||
(Decrease)
increase in financed vendor accounts payable
|
(207 | ) | 27,152 | |||||
Dividends
paid
|
(17,397 | ) | (19,093 | ) | ||||
Borrowings
under credit facilities
|
239,700 | 136,800 | ||||||
Payments
on credit facilities
|
(292,100 | ) | (263,600 | ) | ||||
Proceeds
from the issuance of common stock, primarily exercise
|
||||||||
of
stock options
|
18,166 | 32,599 | ||||||
Excess
tax benefit from share-based compensation
|
4,629 | 10,618 | ||||||
Repurchase
of common stock
|
(162,429 | ) | (3,426 | ) | ||||
Other
|
(331 | ) | 171 | |||||
Net
cash used in financing activities
|
(239,969 | ) | (97,214 | ) | ||||
Net
increase in cash and cash equivalents
|
4,805 | 71,519 | ||||||
Cash and cash
equivalents, beginning of period
|
14,654 | 11,128 | ||||||
Cash and cash
equivalents, end of period
|
$ | 19,459 | $ | 82,647 |
Twenty-Eight
Week Periods Ended
|
||||||||
July
12,
|
July
14,
|
|||||||
2008
|
2007
|
|||||||
Supplemental
cash flow information:
|
||||||||
Interest
paid
|
$ | 19,041 | $ | 18,164 | ||||
Income
tax payments, net
|
74,826 | 74,431 | ||||||
Non-cash
transactions:
|
||||||||
Accrued
purchases of property and equipment
|
19,075 | 19,183 | ||||||
Repurchases
of common stock not settled
|
3,377 | 472 | ||||||
Changes
in other comprehensive (loss) income
|
(736 | ) | 1,963 | |||||
Adoption
of FIN No. 48, net of tax
|
- | 2,275 |
1. |
Basis
of Presentation:
|
July
12,
2008
|
December
29,
2007
|
|||||||
(28
weeks ended)
|
(52
weeks ended)
|
|||||||
Warranty
reserve, beginning of period
|
$ | 17,757 | $ | 13,069 | ||||
Reserves
established
|
24,958 | 24,722 | ||||||
Reserves
utilized and other adjustments, net
|
(18,111 | ) | (20,034 | ) | ||||
Warranty
reserve, end of period
|
$ | 24,604 | $ | 17,757 |
Cost of
Sales
|
SG&A
|
||||||
●
|
Total
cost of merchandise sold including:
|
●
|
Payroll
and benefit costs for retail and corporate
|
||||
–
|
Freight
expenses associated with moving
|
team
members;
|
|||||
merchandise
inventories from our vendors to
|
●
|
Occupancy
costs of retail and corporate facilities;
|
|||||
our
distribution center,
|
●
|
Depreciation
related to retail and corporate assets;
|
|||||
–
|
Vendor
incentives, and
|
●
|
Advertising;
|
||||
–
|
Cash
discounts on payments to vendors;
|
●
|
Costs
associated with our commercial delivery
|
||||
●
|
Inventory
shrinkage;
|
program,
including payroll and benefit costs,
|
|||||
●
|
Defective
and warranty costs;
|
and
transportation expenses associated with moving
|
|||||
●
|
Costs
associated with operating our distribution
|
merchandise
inventories from our retail stores to
|
|||||
network,
including payroll and benefit costs,
|
our
customer locations;
|
||||||
occupancy
costs and depreciation; and
|
●
|
Freight
expenses associated with moving
|
|||||
●
|
Freight
expenses associated with moving
|
merchandise
inventories from our Local Area
|
|||||
merchandise
inventories from our distribution
|
Warehouses,
or LAWs, and Parts Delivered Quickly
|
||||||
center to our retail stores. |
warehouses,
or PDQs, to our retail stores after the
|
||||||
customer
has special-ordered the merchandise;
|
|||||||
●
|
Self-insurance
costs;
|
||||||
●
|
Professional
services; and
|
||||||
●
|
Other
administrative costs, such as credit card
|
||||||
service
fees, supplies, travel and
lodging.
|
2. |
Goodwill
and Intangible Assets:
|
Acquired
intangible assets
|
||||||||||||||||
Subject
to Amortization
|
Not
Subject
to
Amortization
|
|||||||||||||||
Customer
|
Trademark
and
|
Intangible
|
||||||||||||||
Relationships
|
Other
|
Tradenames
|
Assets,
net
|
|||||||||||||
Gross
carrying amount
|
$ | 9,800 | $ | 885 | $ | 20,550 | $ | 31,235 | ||||||||
Net
book value at December 29, 2007
|
$ | 7,464 | $ | 580 | $ | 18,800 | $ | 26,844 | ||||||||
Addition
|
200 | - | 1,750 | 1,950 | ||||||||||||
2008
amortization
|
(541 | ) | (68 | ) | - | (609 | ) | |||||||||
Net
book value at July 12, 2008
|
$ | 7,123 | $ | 512 | $ | 20,550 | $ | 28,185 |
2008
|
$ 592
|
|
2009
|
1,173
|
|
2010
|
1,059
|
|
2011
|
967
|
|
2012
|
967
|
AAP
Segment
|
AI
Segment
|
Total
|
||||||||||
Balance
at December 29, 2007
|
$ | 16,093 | $ | 17,625 | $ | 33,718 | ||||||
Fiscal
2008 activity
|
- | 885 | 885 | |||||||||
Balance
at July 12, 2008
|
$ | 16,093 | $ | 18,510 | $ | 34,603 |
3. |
Receivables,
net:
|
July
12,
2008
|
|
December
29,
2007
|
||||
Trade
|
$ |
17,741
|
$ |
14,782
|
||
Vendor
|
75,257
|
71,403
|
||||
Other
|
2,276
|
2,785
|
||||
Total
receivables
|
95,274
|
88,970
|
||||
Less:
Allowance for doubtful accounts
|
(5,128
|
) |
(3,987
|
) | ||
Receivables,
net
|
$ |
90,146
|
$ |
84,983
|
4. |
Inventories,
net:
|
July
12,
|
December
29,
|
|||||
2008
|
2007
|
|||||
Inventories
at FIFO, net
|
$ | 1,581,776 | $ | 1,435,697 | ||
Adjustments
to state inventories at LIFO
|
104,667 | 93,772 | ||||
Inventories
at LIFO, net
|
$ | 1,686,443 | $ | 1,529,469 |
5. |
Long-term
Debt:
|
July
12,
2008
|
December
29,
2007
|
|||||||
Revolving
facility at variable interest rates
|
||||||||
(3.71%
and 5.93% at July 12, 2008 and December 29,
|
||||||||
2007,
respectively) due October 2011
|
$ | 248,600 | $ | 451,000 | ||||
Term
loan at variable interest rates
|
||||||||
(3.67%
and 6.19% at July 12, 2008 and December 29,
|
||||||||
2007,
respectively) due October 2011
|
200,000 | 50,000 | ||||||
Other
|
4,341 | 4,672 | ||||||
452,941 | 505,672 | |||||||
Less:
Current portion of long-term debt
|
(675 | ) | (610 | ) | ||||
Long-term
debt, excluding current portion
|
$ | 452,266 | $ | 505,062 |
6. |
Stock
Repurchase
Program:
|
7. |
Postretirement
Plan:
|
Twelve
Weeks Ended
|
Twenty-Eight
Weeks Ended
|
|||||||||||||||
July
12,
|
July
14,
|
July
12,
|
July
14,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Interest
cost
|
$ | 115 | $ | 127 | $ | 268 | $ | 296 | ||||||||
Amortization
of negative prior service cost
|
(134 | ) | (134 | ) | (313 | ) | (313 | ) | ||||||||
Amortization
of unrecognized net gain
|
(3 | ) | - | (7 | ) | - | ||||||||||
Net
periodic postretirement benefit cost
|
$ | (22 | ) | $ | (7 | ) | $ | (52 | ) | $ | (17 | ) | ||||
8. |
Share-Based
Compensation
Plans:
|
9. |
Fair
Value
Measurements:
|
·
|
Level
1 – Quoted prices (unadjusted) in active markets for identical assets or
liabilities.
|
·
|
Level
2 – Inputs other than quoted prices that are observable for assets and
liabilities, either directly or indirectly. These inputs include quoted
prices for similar assets or liabilities in active markets and quoted
prices for identical or similar assets or liabilities in markets that are
less active.
|
·
|
Level
3 – Unobservable inputs for assets or liabilities reflecting the reporting
entity’s own assumptions.
|
Fair
Value Measurements at Reporting Date Using
|
||||||||||||||||
July
12, 2008
|
Quoted
Prices in
Active
Markets
for
Identical
Assets
|
Significant
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
|||||||||||||
Interest
rate swaps
|
$ | 8,533 | $ | - | $ | 8,533 | $ | - |
10. |
Comprehensive
Income:
|
Twelve
Weeks Ended
|
Twenty-Eight
Weeks Ended
|
|||||||||||||||
July
12,
2008
|
July
14,
2007
|
July
12,
2008
|
July
14,
2007
|
|||||||||||||
Net
income
|
$ | 75,386 | $ | 68,424 | $ | 157,472 | $ | 144,525 | ||||||||
Unrealized
gain (loss) on hedge
|
||||||||||||||||
arrangements,
net of tax
|
2,430 | 2,671 | (541 | ) | 2,155 | |||||||||||
Changes
in net unrecognized other
|
||||||||||||||||
postretirement
benefit cost, net of tax
|
(84 | ) | (82 | ) | (195 | ) | (192 | ) | ||||||||
Comprehensive
income
|
$ | 77,732 | $ | 71,013 | $ | 156,736 | $ | 146,488 |
11. |
Segment
and Related
Information:
|
Twelve
Week Periods Ended
|
Twenty-Eight
Week Periods Ended
|
|||||||||||||||
July
12,
|
July
14,
|
July
12,
|
July
14,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
sales
|
||||||||||||||||
AAP
|
$ | 1,195,016 | $ | 1,135,986 | $ | 2,676,068 | $ | 2,568,099 | ||||||||
AI
|
40,767 | 33,873 | 85,847 | 69,880 | ||||||||||||
Total
net sales
|
$ | 1,235,783 | $ | 1,169,859 | $ | 2,761,915 | $ | 2,637,979 | ||||||||
Income
(loss) before provision (benefit) for
income
taxes
|
||||||||||||||||
AAP
|
$ | 118,278 | $ | 109,858 | $ | 250,524 | $ | 235,289 | ||||||||
AI
|
2,339 | 1,068 | 2,074 | (602 | ) | |||||||||||
Total
income (loss) before provision (benefit) for
|
||||||||||||||||
income
taxes
|
$ | 120,617 | $ | 110,926 | $ | 252,598 | $ | 234,687 | ||||||||
Provision
(benefit) for income taxes
|
||||||||||||||||
AAP
|
$ | 44,270 | $ | 41,803 | $ | 94,278 | $ | 90,414 | ||||||||
AI
|
961 | 699 | 848 | (252 | ) | |||||||||||
Total
provision (benefit) for income taxes
|
$ | 45,231 | $ | 42,502 | $ | 95,126 | $ | 90,162 | ||||||||
Segment
assets
|
||||||||||||||||
AAP
|
$ | 2,816,317 | $ | 2,735,565 | $ | 2,816,317 | $ | 2,735,565 | ||||||||
AI
|
157,663 | 139,824 | 157,663 | 139,824 | ||||||||||||
Total
segment assets
|
$ | 2,973,980 | $ | 2,875,389 | $ | 2,973,980 | $ | 2,875,389 |
·
|
We
recorded earnings per diluted share of $0.79 compared to $0.64 for the
same quarter of fiscal 2007. This 23% increase was primarily driven by an
8.6% increase in operating income and approximately 13 million shares
repurchased over the past four fiscal
quarters.
|
·
|
We
generated sales growth of 5.6% through a combination of new stores opened
over the last year and a 2.9% comparable store sales increase. This
comparable sales increase was driven by a 13.5% comparable sales increase
in our commercial business which was partially offset by a 0.8% decline in
the DIY, or do-it-yourself,
business.
|
·
|
Our
operating cash flow increased to $350.0 million for the twenty-eight weeks
ended July 12, 2008, an increase of $70.0 million over the comparable
period last year.
|
·
|
We
repurchased 0.2 million shares of common stock for $7.5 million under our
$250 million stock repurchase program. During the twenty-eight weeks ended
July 12, 2008, we repurchased 4.8 million shares of common stock for
$162.8 million, of which 4.6 million shares of common stock were
repurchased under our previous $500 million stock repurchase
program.
|
Ø
|
Commercial
Acceleration
|
Ø
|
DIY
Transformation
|
Ø
|
Availability
Excellence
|
Ø
|
Superior
Experience
|
Twelve
Weeks Ended
|
Twenty-Eight
Weeks Ended
|
Fiscal
Years Ended
|
||||||||||||||||||||||
July
12,
|
July
14,
|
July
12,
|
July
14,
|
December
29,
|
December
30,
|
|||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
2007
|
2006
|
|||||||||||||||||||
Operating Results:
|
||||||||||||||||||||||||
Total
net sales (in
000s)
|
$ | 1,235,783 | $ | 1,169,859 | $ | 2,761,915 | $ | 2,637,979 | $ | 4,844,404 | $ | 4,616,503 | ||||||||||||
Total
commercial net sales (in
000s)
|
$ | 357,495 | $ | 305,153 | $ | 796,167 | $ | 688,446 | $ | 1,290,602 | $ | 1,155,953 | ||||||||||||
Comparable
store net sales growth (1)
|
2.9% | 1.2% | 1.6% | 0.9% | 0.7% | 1.6% | ||||||||||||||||||
DIY
comparable store net sales growth (1)
|
(0.8%) | (0.2%) | (2.0%) | (0.3%) | (1.1%) | (0.8%) | ||||||||||||||||||
Commercial
comparable store net sales growth (1)
|
13.5% | 5.4% | 11.9% | 4.8% | 6.2% | 10.7% | ||||||||||||||||||
Gross
profit
|
48.6% | 48.1% | 48.7% | 48.2% | 47.9% | 47.7% | ||||||||||||||||||
Selling,
general & administrative expenses (SG&A)
|
38.3% | 38.0% | 38.8% | 38.7% | 39.3% | 39.0% | ||||||||||||||||||
Operating
margin
|
10.4% | 10.1% | 9.9% | 9.6% | 8.6% | 8.7% | ||||||||||||||||||
Diluted
earnings per share
|
$ | 0.79 | $ | 0.64 | $ | 1.65 | $ | 1.35 | $ | 2.28 | $ | 2.16 | ||||||||||||
Key Statistics and Metrics:
|
||||||||||||||||||||||||
Number
of stores, end of period
|
3,325 | 3,187 | 3,325 | 3,187 | 3,261 | 3,082 | ||||||||||||||||||
Total
store square footage, end of period (in
000s)
|
24,431 | 23,480 | 24,431 | 23,480 | 23,982 | 22,753 | ||||||||||||||||||
Total
team members, end of period
|
47,050 | 45,505 | 47,050 | 45,505 | 44,141 | 44,421 | ||||||||||||||||||
Average
net sales per store (in
000s)(2)
|
$ | 1,526 | $ | 1,544 | $ | 1,526 | $ | 1,544 | $ | 1,527 | $ | 1,551 | ||||||||||||
Average
net sales per square foot (2)
|
$ | 207 | $ | 209 | $ | 207 | $ | 209 | $ | 207 | $ | 210 | ||||||||||||
Operating
income per team member (in 000s)(2)(3)
|
$ | 9.42 | $ | 9.35 | $ | 9.42 | $ | 9.35 | $ | 9.40 | $ | 9.29 | ||||||||||||
SG&A
expenses per store (in
000s)
(2)
|
$ | 601 | $ | 605 | $ | 601 | $ | 605 | $ | 601 | $ | 604 | ||||||||||||
Gross
margin return on inventory (2)(4)
|
$ | 3.63 | $ | 3.55 | $ | 3.63 | $ | 3.55 | $ | 3.39 | $ | 3.38 |
(1)
|
Beginning
in fiscal 2008, the Company includes in its comparable store sales the net
sales from stores operated in Puerto Rico and Virgin Islands, or Offshore,
and AI stores. The comparable periods have been adjusted
accordingly.
|
(2)
|
These
financial metrics presented for each quarter and year-to-date period are
calculated on an annual basis and accordingly reflect the last four fiscal
quarters completed.
|
(3)
|
Operating
income per team member is calculated as operating income divided by an
average of beginning and ending number of team
members.
|
(4)
|
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.
|
Twelve
Weeks
Ended
July
12, 2008
|
Twenty-Eight
Weeks
Ended
July
12, 2008
|
|||||||
Number
of stores at beginning of period
|
3,179 | 3,153 | ||||||
New
stores
|
26 | 56 | ||||||
Closed
stores
|
(2) | (6) | ||||||
Number
of stores, end of period
|
3,203 | 3,203 | ||||||
Relocated
stores
|
4 | 7 | ||||||
Stores
with commercial programs
|
2,659 | 2,659 |
Twelve
Weeks
Ended
July
12, 2008
|
Twenty-Eight
Weeks
Ended
July
12, 2008
|
|||||||
Number
of stores at beginning of period
|
112 | 108 | ||||||
New
stores
|
10 | 14 | ||||||
Closed
stores
|
- | - | ||||||
Number
of stores, end of period
|
122 | 122 | ||||||
Stores
with commercial programs
|
122 | 122 |
Twelve
Week Periods Ended
|
Twenty-Eight
Week Periods Ended
|
|||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
July
12,
|
July
14,
|
July
12,
|
July
14,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
sales
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost
of sales, including purchasing and
|
||||||||||||||||
warehousing
costs
|
51.4 | 51.9 | 51.3 | 51.8 | ||||||||||||
Gross
profit
|
48.6 | 48.1 | 48.7 | 48.2 | ||||||||||||
Selling,
general and administrative expenses
|
38.3 | 38.0 | 38.8 | 38.7 | ||||||||||||
Operating
income
|
10.4 | 10.1 | 9.9 | 9.6 | ||||||||||||
Interest
expense
|
(0.6 | ) | (0.7 | ) | (0.7 | ) | (0.7 | ) | ||||||||
Other
income, net
|
(0.0 | ) | 0.0 | (0.0 | ) | 0.0 | ||||||||||
Provision
for income taxes
|
3.7 | 3.6 | 3.4 | 3.4 | ||||||||||||
Net
income
|
6.1 | % | 5.8 | % | 5.7 | % | 5.5 | % |
Twenty-Eight
Week Periods Ended
|
||||||||
July
12, 2008
|
July
14, 2007
|
|||||||
(in
millions)
|
||||||||
Cash
flows from operating activities
|
$ | 350.0 | $ | 280.0 | ||||
Cash
flows from investing activities
|
(105.2 | ) | (111.3 | ) | ||||
Cash
flows from financing activities
|
(240.0 | ) | (97.2 | ) | ||||
Net
increase in cash and
|
||||||||
cash
equivalents
|
$ | 4.8 | $ | 71.5 |
·
|
an
increase in net income of $12.9 million during the twenty-eight weeks
ended July 12, 2008 as compared to the comparable period in 2007;
and
|
·
|
a
$51.6 million increase in cash flows from less owned inventory reflective
of the increase in our accounts payable ratio. Because
inventory has increased due to our parts availability initiative and
initial build-up in certain premium branded product, our accounts payable
has increased at a slightly higher pace as a result of this initial
build-up.
|
·
|
a
decrease in net borrowings under our term loan and revolving credit
facility of $74.4 million.
|
·
|
an
additional $159.0 million of common stock repurchases under our stock
repurchase program;
|
·
|
a
decrease of $27.4 million in the financed vendor accounts
payable;
|
·
|
a
decrease of $14.4 million from the issuance of common stock, primarily
resulting from the decrease in exercise of stock options;
and
|
·
|
an
$11.6 million cash outflow resulting from the timing of bank
overdrafts.
|
Period
|
Total
Number of Shares Purchased
|
Average
Price
Paid
per
Share (1)
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(2)
|
Maximum
Dollar Value that May Yet Be Purchased Under the Plans or Programs
(2)(3)
|
||||||||||||
April
20, 2008, to May 17, 2008
|
- | $ | - | - | $ | 250,000 | ||||||||||
May
18, 2008, to June 14, 2008
|
7 | 38.92 | 7 | 249,711 | ||||||||||||
June
15, 2008, to July 12, 2008
|
194 | 37.14 | 194 | 242,506 | ||||||||||||
Total
|
201 | $ | 37.20 | 201 | $ | 242,506 | ||||||||||
(1)
|
Average
price paid per share excludes related expenses paid on previous
repurchases.
|
(2)
|
All
of the above repurchases were made on the open market at prevailing market
rates plus related expenses under our stock repurchase program, which
authorized the repurchase of up to $250 million in common stock. Our stock
repurchase program was authorized by our Board of Directors and publicly
announced on May 15, 2008 which replaced the remaining portion of the $500
million stock repurchase program authorized by our Board of Directors and
publicly announced on August 8,
2007.
|
(3)
|
The
maximum dollar value yet to be purchased under our stock repurchase
program excludes related expenses paid on previous purchases or
anticipated expenses on future
purchases.
|
1.
|
Election
of nominees to our board of directors. All nominees were elected as
indicated by the following vote
counts:
|
Nominee
|
Votes
For
|
Votes
Withheld
|
||
John
C. Brouillard
|
86,090,155
|
616,912
|
||
Lawrence
P. Castellani
|
86,632,691
|
74,376
|
||
Darren
R. Jackson
|
86,631,916
|
75,151
|
||
Nicholas
J. LaHowchic
|
86,634,876
|
72,191
|
||
William
S. Oglesby
|
86,634,256
|
72,811
|
||
Gilbert
T. Ray
|
86,313,629
|
393,438
|
||
Carlos
A. Saladrigas
|
85,677,741
|
1,029,326
|
||
Francesca
M. Spinelli
|
86,632,512
|
74,555
|
2.
|
The
stockholders voted upon and approved the ratification of Deloitte &
Touche LLP as our independent registered public accounting firm for 2008.
The vote on the proposal was as
follows:
|
For
|
Against
|
Abstentions
|
||
86,653,348
|
48,177
|
5,542
|
||
EXHIBITS |
3.1
|
(1)
|
Restated
Certificate of Incorporation of Advance Auto Parts, Inc. ("Advance
Auto")(as amended on May 19, 2004).
|
|
|
|||
3.2
|
(2)
|
Bylaws
of Advance Auto (as amended on August 6, 2008).
|
|
10.32 |
(3)
|
First Amendment effective June 4, 2008 to Employment Agreement between Advance Auto and Darren R. Jackson. | |
10.33 |
(3)
|
Form of Employment Agreement effective June 4, 2008 between Advance Auto and Kevin P. Freeland, Elwyn G. Murray III, Michael A. Norona, and Jimmie L. Wade. | |
10.34 |
(3)
|
Attachment C to Employment Agreement effective June 4, 2008 between Advance Auto and Kevin P. Freeland. | |
10.35 |
(3)
|
Attachment C to Employment Agreement effective June 4, 2008 between Advance Auto and Michael A. Norona. | |
10.36 |
(3)
|
Attachment C to Employment Agreement effective June 4, 2008 between Advance Auto and Jimmie L. Wade. | |
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
||
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
||
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
|
||
(1) Filed
on May 20, 2004 as an exhibit to Current Report on Form 8-K of Advance
Auto.
|
|||
(2) Filed
on August 12, 2008 as an exhibit to Current Report on Form 8-K
of Advance Auto.
|
|||
(3) Filed
on June 4, 2008 as an exhibit to Current Report on Form 8-K of
Advance Auto.
|
ADVANCE AUTO PARTS, INC. | ||
|
|
|
August 20, 2008 | By: |
/s/
Michael A. Norona
|
Michael A. Norona Executive
Vice President, Chief Financial Officer and
Secretary
|
Exhibit
Number
|
Exhibit
Description
|
|
3.1
|
(1)
|
Restated
Certificate of Incorporation of Advance Auto (as amended on May 19,
2004).
|
3.2
|
(2)
|
Bylaws
of Advance Auto (as amended on August 6, 2008).
|
10.32
|
(3)
|
First Amendment effective June 4, 2008 to Employment Agreement between Advance Auto and Darren R. Jackson. |
10.33
|
(3)
|
Form of Employment Agreement effective June 4, 2008 between Advance Auto and Kevin P. Freeland, Elwyn G. Murray III, Michael A. Norona, and Jimmie L. Wade. |
10.34
|
(3)
|
Attachment C to Employment Agreement effective June 4, 2008 between Advance Auto and Kevin P. Freeland. |
10.35
|
(3)
|
Attachment C to Employment Agreement effective June 4, 2008 between Advance Auto and Michael A. Norona. |
10.36
|
(3)
|
Attachment C to Employment Agreement effective June 4, 2008 between Advance Auto and Jimmie L. Wade. |
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
|
|
(1)
Filed on May 20, 2004 as an exhibit to Current Report on Form 8-K of
Advance Auto.
|
||
(2)
Filed on August 12, 2008 as an exhibit to Current Report on Form 8-K of
Advance Auto.
|
||
(3)
Filed on June 4, 2008 as an exhibit to Current Report on Form 8-K of
Advance Auto.
|
||