AutoZone EPS up 71% in Third Quarter
MEMPHIS, Tenn., May 21 AutoZone, Inc.today reported sales of $1.225 billion for its third fiscal quarter (12 weeks) ended May 4, 2002, an increase of 11% from fiscal 2001, excluding the sales of the TruckPro subsidiary which was sold in December. Same store sales, or sales for domestic auto parts stores open at least one year, increased 9.5% during the quarter, including 9% for retail sales and 18% for commercial sales. AutoZone stores in Mexico continue to report high same store sales increases. Net income for the quarter increased 61% to $102 million, while diluted earnings per share increased 71% to $0.96 from $0.56 reported in the year-ago quarter. For the third quarter, cash flow before share repurchases was $244 million, up 33% from the prior year.
For the fiscal year-to-date period (36 weeks), sales were $3.48 billion, an increase of 10% from the prior year, with a same store sales increase of 10%, including a 9% increase for retail sales and 17% for commercial sales. Year-to-date net income increased 68% to $250 million, while diluted earnings per share for the period increased 76% to $2.29 from $1.30. Return on invested capital for the trailing twelve months increased to 17.2%.
"We are very pleased with our continuing strong performance through the third quarter, even as we begin to anniversary our initiatives which have already generated such strong improvements in prior quarters," said Steve Odland, Chairman, President, and Chief Executive Officer. "In addition to these marketing, merchandising, and operating initiatives which continued to drive strong same store sales by reminding customers to maintain their vehicles, positive external factors like more older cars on the road, more miles being driven, the aging SUV and light truck population, and $60 billion of annual unperformed maintenance bode well for growth in the DIY market. We also are focused on providing the tools and training that our AutoZoners need to provide the highest level of customer service. AutoZone continues to experience very encouraging results from our increased efforts toward commercial customers and we remain optimistic about the opportunities in Mexico.
"We continue to focus on decreasing costs, through relentless expense discipline. Our cash flow and financial returns continue to improve. The strong, growing cash flow provided by our business, when combined with increased hurdle rates for new investments, should continue to drive improved return on invested capital and shareholder value."
During the quarter, AutoZone opened 19 new, replaced 2 and closed 4 stores in the U.S. and opened 4 new stores in Mexico. Year-to-date, AutoZone has opened 72 new, replaced 12 and closed 39 auto parts stores in the U.S., while opening 6 new stores in Mexico.
During the quarter, AutoZone's Board of Directors authorized an increase in the share repurchase program of $300 million to an aggregate authorization of $2.0 billion. Total share repurchases under the share repurchase program are $1.76 billion or 57.4 million shares at an average price of $30.62, including $108.8 million or 2.0 million shares under forward purchase contracts at the end of the third quarter. The amounts outstanding under the forward contracts have subsequently been settled.
AutoZone will host a one-hour conference call beginning at 9 a.m. (CDT) tomorrow to discuss the results of the quarter. Investors may listen to the conference call live and review supporting slides on the AutoZone website, www.autozone.com, by clicking "Investor Relations," "Conference Calls." The call will also be available by dialing (712) 271-3887. A replay of the call and supporting slides will be available on the AutoZone website. In addition, a telephone replay will be available by dialing (402) 998-0456 through Wednesday, May 29, 2002, at 11 p.m. (CDT).
AutoZone sells auto and light truck parts, chemicals and accessories through 3,052 AutoZone stores in 44 states plus the District of Columbia in the U.S. and 27 AutoZone stores in Mexico and also sells the ALLDATA brand automotive diagnostic and repair software. On the web, AutoZone sells diagnostic and repair information through alldatadiy.com, and auto and light truck parts through AutoZone.com.
Certain statements contained in this press release are forward-looking statements. These statements discuss, among other things, business strategies and future performance. These forward-looking statements are subject to risks, uncertainties and assumptions, including, without limitation, competition, product demand, the economy, inflation, gasoline prices, the ability to hire and retain qualified employees, consumer debt levels, war and the prospect of war, including terrorist activity, and availability of commercial transportation. Actual results may materially differ from anticipated results. Please refer to the Risk Factors section of AutoZone's amended Form S-3 dated April 25, 2002, for more information related to those risks. AutoZone undertakes no obligation to publicly release any revisions to any forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this release or to reflect the occurrence of unanticipated events.
AutoZone's 3rd Quarter Highlights- Fiscal 2002
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
12 Weeks Ended 12 Weeks Ended 36 Weeks Ended
May 4, 2002 May 5, 2001 May 4, 2002
Net sales $1,224,810 $1,139,957 $3,482,173
Cost of goods sold 682,826 657,379 1,949,153
Gross profit 541,984 482,578 1,533,020
Operating expenses 359,551 349,512 1,073,934
Restructuring and impairment
charges -- 5,200 --
Operating profit 182,433 127,866 459,086
Interest expense, net 17,419 23,841 55,124
Income before taxes 165,014 104,025 403,962
Taxes 62,700 40,500 153,800
Net income $102,314 $63,525 $250,162
Net income per share:
Basic $0.98 $0.57 $2.35
Diluted $0.96 $0.56 $2.29
Shares outstanding:
Basic 103,961 112,364 106,264
Diluted 106,644 113,037 109,015
AutoZone's 3rd Quarter Highlights- Fiscal 20021
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Trailing 12 Trailing 12
36 Weeks Ended months months
May 5, 2001 May 4, 2002 May 5, 2001
Net sales $3,177,522 $5,122,836 $4,670,167
Cost of goods sold 1,852,046 2,902,003 2,724,242
Gross profit 1,325,476 2,220,833 1,945,925
Operating expenses 1,004,362 1,568,481 1,425,236
Restructuring and impairment
charges 5,200 121,489 5,200
Operating profit 315,914 530,863 515,489
Interest expense, net 72,365 83,424 100,720
Income before taxes 243,549 447,439 414,769
Taxes 94,500 170,800 160,500
Net income $149,049 $276,639 $254,269
Net income per share:
Basic $1.30 $2.58 $2.17
Diluted $1.30 $2.52 $2.16
Shares outstanding:
Basic 114,330 107,250 117,334
Diluted 114,861 109,754 117,950
Selected Balance Sheet Information
(in thousands)
May 4, May 5, August 25,
2002 2001 2001
Merchandise inventories $1,291,189 $1,214,942 $1,242,896
Current assets 1,371,977 1,293,616 1,328,511
Property and equipment, net 1,691,593 1,770,310 1,710,443
Total assets 3,444,247 3,447,166 3,432,512
Accounts payable 932,106 782,007 945,666
Current liabilities 1,348,016 1,111,821 1,266,654
Stockholders' equity 774,915 889,646 866,213
Debt 1,251,134 1,392,729 1,225,402
Working capital 23,961 181,795 61,857
Selected Cash Flow Information
(in thousands)
12 Weeks 12 Weeks 36 Weeks 36 Weeks
Ended Ended Ended Ended
May 4, 2002 May 5, 2001 May 4, 2002 May 5, 2001
Depreciation &
amortization $26,404 $30,451 $82,497 $91,694
Capital spending $41,223 $44,234 $81,845 $137,305
Cash flow before share
repurchases $244,039 $184,194 $386,710 $118,798
Share repurchases $243,231 $56,878 $412,442 $261,590
Trailing 12 Trailing 12
Months Months
May 4, 2002 May 5, 2001
Depreciation &
amortization $122,136 $130,413
Capital spending $113,836 $206,818
Cash flow before share
repurchases $658,544 $347,689
Share repurchases $516,949 $525,007
Other Selected Financial
Information
(in thousands) May 4, May 5, August 25,
2002 2001 2001
Cumulative share repurchases ($):
On balance sheet $1,649,182 $1,132,504 $1,236,733
Forward contracts 108,789 130,765 131,092
Total $1,757,971 $1,263,269 $1,367,825
Cumulative share repurchases
(shares):
On balance sheet 55,421 42,953 47,162
Forward contracts 1,999 5,761 3,894
Total 57,420 48,714 51,056
Shares outstanding, end of quarter 102,979 111,861 109,408
Condensed Consolidated Statements of Operations -
Before Restructuring Charges
(in thousands, except per share data)
12 Weeks 12 Weeks 36 Weeks
Ended Ended Ended
May 4, 2002 May 5, 2001 May 4, 2002
Net sales $1,224,810 $1,139,957 $3,482,173
Cost of goods sold 682,826 657,379 1,949,153
Gross profit 541,984 482,578 1,533,020
Operating expenses 359,551 349,512 1,073,934
Operating profit 182,433 133,066 459,086
Interest expense, net 17,419 23,841 55,124
Income before taxes 165,014 109,225 403,962
Taxes 62,700 42,500 153,800
Net income $102,314 $66,725 $250,162
Net income per share:
Basic $0.98 $0.59 $2.35
Diluted $0.96 $0.59 $2.29
Shares outstanding:
Basic 103,961 112,364 106,264
Diluted 106,644 113,037 109,015
Condensed Consolidated Statements of Operations -
Before Restructuring Charges
(in thousands, except per share data)
36 Weeks Trailing 12 Trailing 12
Ended months months
May 5, 2001 May 4, 2002 May 5, 2001
Net sales $3,177,522 $5,122,836 $4,670,167
Cost of goods sold 1,852,046 2,871,870 2,724,242
Gross profit 1,325,476 2,250,966 1,945,925
Operating expenses 1,004,362 1,568,481 1,425,236
Operating profit 321,114 682,485 520,689
Interest expense, net 72,365 83,424 100,720
Income before taxes 248,749 599,061 419,969
Taxes 96,500 229,800 162,500
Net income $152,249 $369,261 $257,469
Net income per share:
Basic $1.33 $3.44 $2.19
Diluted $1.33 $3.36 $2.18
Shares outstanding:
Basic 114,330 107,250 117,334
Diluted 114,861 109,754 117,950
Store Count & Square Footage
12 Weeks 12 Weeks 36 Weeks 36 Weeks
Ended Ended Ended Ended
May 4, May 5, May 4, May 5,
2002 2001 2002 2001
Domestic auto parts stores:
Store count:
Stores opened 19 23 72 82
Stores closed 4 1 39 3
Replacement stores 2 5 12 13
Total domestic auto
parts stores 3,052 2,994 3,052 2,994
Stores with commercial
sales 1,652 1,492 1,652 1,492
Square footage (in
thousands) 19,596 19,223 19,596 19,223
Auto parts stores in Mexico:
Stores opened 4 3 6 3
Total auto parts stores
in Mexico 27 16 27 16
TruckPro stores (total) -- 49 -- 49
Note: TruckPro was sold
on Dec. 19, 2001
Sales & Inventory Statistics
(Domestic auto parts):
12 Weeks 12 Weeks 36 Weeks 36 Weeks
Ended Ended Ended Ended
May 4, May 5, May 4, May 5,
2002 2001 2002 2001
Sales per average store ($ in
thousands) $393 $362 $1,105 $1,021
Sales per average sq foot $61 $57 $172 $159
Same store sales - rolling 13
periods
Total 9% 5% 10% 3%
Organic vs acquired:
Organic 9% 3% 9% 1%
Acquired 14% 13% 15% 12%
Retail vs commercial
Retail 9% 4% 9% 2%
Commercial 18% 11% 17% 11%
Inventory turns:
Based on average
inventories 2.3 X 2.3 X
Based on ending
inventories 2.2 X 2.2 X
Inventory turns, net of
payables:
Based on average
inventories 7.7 X 6.6 X
Based on ending
inventories 8.2 X 6.5 X
Accounts payable/inventory
(total company) 72% 64%
