AutoZone Fourth Quarter EPS Up 62% Over Prior Year
MEMPHIS, Tenn., Sept. 25, 2002 AutoZone, Inc. today reported fourth quarter earnings per share of $1.73, a 62% increase from earnings per share of $1.07 before restructuring and impairment charges in the fourth quarter of fiscal 2001. Including the charges in the fourth quarter of fiscal 2001, EPS increased 621% from $0.24. Sales for the fourth fiscal quarter (17 weeks) ended August 31, 2002, increased 12% to $1.84 billion from $1.64 billion reported for the year ago quarter (16 weeks). Excluding the fiscal 2001 sales of TruckPro, which was sold in December, total sales increased 16%. Same store sales, or sales for domestic auto parts stores open at least one year, increased 6.6% during the quarter. Gross margin for the quarter, as a percent of sales, increased 1.94 percentage points to 45.7%. Net operating expenses were 28.8% of sales, resulting in a record quarterly operating margin of 16.9%.For the year (53 weeks), AutoZone reported diluted earnings per share of$4.00, an increase of 68% from $2.38 in fiscal 2001 (52 weeks), excluding the nonrecurring charges in the prior year. Including the charges, reported earnings per share were up 160%. The $4.00 EPS is double the $2.00 per share earned in fiscal 2000. Annual sales rose 10.5% to $5.32 billion from $4.82 billion in the prior year; excluding the sales of TruckPro, total sales increased 13%. Same store sales for the year increased 8.8%. Gross margin as a percent of sales increased by 2.19 percentage points to 44.6%. Net operating expenses declined to 30.1% of sales, resulting in a record annual operating margin of 14.5%. Driven by strong earnings and declining working capital, return on invested capital reached 19.8%, while cash flow before share repurchases was $730 million.
"We are very pleased with our exceptional performance this year," said Steve Odland, Chairman, President, and Chief Executive Officer. "It took a concerted effort from all AutoZoners to make this happen. Clearly our focus on reminding consumers to maintain their cars and beginning to capture the $60 billion annual undone maintenance has been successful."
In the fourth quarter, AutoZone opened 30 new auto parts stores in the U.S., replaced 3 and closed 14. For the year, AutoZone opened 102 new auto parts stores in the U.S., replaced 15 and closed 53 for an end-of-year store count of 3,068. In addition, 12 new auto parts stores were opened in Mexico in the fourth quarter, for a total of 18 new stores in Mexico for the year. At year end, AutoZone had a total of 39 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 $2.3 billion. As of the end of the fourth quarter, aggregate share repurchases were $2.086 billion or 61.9 million shares, including $150 million or 2.2 million shares under forward purchase contracts. For the quarter, AutoZone repurchased 4.3 million shares at a cost of $287 million or $66.13 per share. For the year, AutoZone repurchased 12.6 million shares at a cost of $699 million or $55.51 per share. Subsequent to year end, the company purchased 1.1 million shares in partial settlement of the forward purchase contract outstanding at August 31, 2002, at an average cost of $69.91 per share.
Steve Odland, Chairman and CEO and Michael Archbold, CFO, confirm they will be certifying AutoZone's fiscal 2002 results when AutoZone files its Form 10-K, which is due November 29, 2002.
AutoZone will host a one-hour conference call Wednesday, September 25, 2002, beginning at 9 a.m. (CDT) to discuss this press release and the outlook for fiscal 2003. Investors may listen to the conference call live and review supporting slides on the AutoZone website, www.AutoZone.com, by clicking "About Us," "Investor Relations," "Conference Calls," or by going directly to http://www.AutoZone.com/Investors. The call will also be available by dialing (712) 271-3887. A replay of the call and slides will be available on AutoZone's website. In addition, a replay of the call will be available by dialing (402) 998-1323 through Tuesday, October 1, 2002.
As of August 31, 2002, AutoZone sells auto and light truck parts, chemicals and accessories through 3,068 AutoZone stores in 44 states plus the District of Columbia, 39 AutoZone stores in Mexico and online at AutoZone.com. AutoZone also sells automotive diagnostic and repair software through ALLDATA, and alldatadiy.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, consumer debt levels, war and the prospect of war, including terrorist activity, and availability of commercial transportation. Please refer to the Form 10-Q for the fiscal quarter ended May 4, 2002, for more information related to these risks. Actual results may materially differ from anticipated results. 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 4th Quarter Highlights- Fiscal 2002
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
17 Weeks 16 Weeks 53 Weeks 52 Weeks
Ended Ended Ended Ended
August 31, August 25, August 31, August 25,
2002 2001 2002 2001
Net sales $1,843,337 $1,640,663 $5,325,510 $4,818,185
Cost of goods sold 1,000,970 952,850 2,950,123 2,804,896
Gross profit 842,367 687,813 2,375,387 2,013,289
Operating expenses 530,445 494,547 1,604,379 1,498,909
Restructuring and
impairment charges -- 121,489 -- 126,689
Operating profit 311,922 71,777 771,008 387,691
Interest expense,net 24,736 28,300 79,860 100,665
Income before taxes 287,186 43,477 691,148 287,026
Taxes 109,200 17,000 263,000 111,500
Net income $177,986 $26,477 $428,148 $175,526
Net income per share:
Basic $1.77 $0.24 $4.10 $1.56
Diluted $1.73 $0.24 $4.00 $1.54
Shares outstanding:
Basic 100,356 109,468 104,446 112,834
Diluted 102,827 111,415 107,111 113,801
Selected Balance Sheet Information
(in thousands)
August 31, 2002 August 25, 2001
Merchandise inventories $1,375,584 $1,242,896
Current assets 1,450,128 1,328,511
Property and equipment,
net 1,661,728 1,710,443
Total assets 3,477,791 3,432,512
Accounts payable 1,145,533 945,666
Current liabilities 1,533,571 1,266,654
Stockholders' equity 689,127 866,213
Debt 1,194,517 1,225,402
Working capital (83,443) 61,857
Selected Cash Flow Information
(in thousands)
17 Weeks 16 Weeks 53 Weeks 52 Weeks
Ended Ended Ended Ended
August 31, August 25, August 31, August 25,
2002 2001 2002 2001
Depreciation &
amortization $35,758 $39,639 $118,255 $131,333
Capital spending $35,394 $31,991 $117,239 $169,296
Cash flow before share
repurchases $343,158 $271,834 $729,868 $390,632
Share repurchases $286,541 $104,507 $698,983 $366,097
Other Selected Financial Information
(in thousands)
August 31, 2002 August 25, 2001
Cumulative share
repurchases ($):
On balance sheet $1,935,716 $1,236,733
Forward contracts 150,058 131,092
Total $2,085,774 $1,367,825
Cumulative share
repurchases (shares):
On balance sheet 59,753 47,162
Forward contracts 2,181 3,894
Total 61,934 51,056
Shares outstanding, end
of quarter 99,268 109,408
After-tax return on
invested capital 19.8% 14.3%
Condensed Consolidated Statements of
Operations - Before Restructuring Charges
(in thousands, except per share data)
17 Weeks 16 Weeks 53 Weeks 52 Weeks
Ended Ended Ended Ended
August 31, August 25, August 31, August 25,
2002 2001 2002 2001
Net sales $1,843,337 $1,640,663 $5,325,510 $4,818,185
Cost of goods sold 1,000,970 922,717 2,950,123 2,774,763
Gross profit 842,367 717,946 2,375,387 2,043,422
Operating expenses 530,445 494,547 1,604,379 1,498,909
Operating profit 311,922 223,399 771,008 544,513
Interest expense,net 24,736 28,300 79,860 100,665
Income before taxes 287,186 195,099 691,148 443,848
Taxes 109,200 76,000 263,000 172,500
Net income $177,986 $119,099 $428,148 $271,348
Net income per share:
Basic $1.77 $1.09 $4.10 $2.40
Diluted $1.73 $1.07 $4.00 $2.38
Shares outstanding:
Basic 100,356 109,468 104,446 112,834
Diluted 102,827 111,415 107,111 113,801
AutoZone's 4th Quarter Fiscal 2002
Selected Operating Highlights
Store Count & Square Footage
17 Weeks 16 Weeks 53 Weeks 52 Weeks
Ended Ended Ended Ended
August 31, August 25, August 31, August 25,
2002 2001 2002 2001
Domestic auto parts stores:
Store count:
Stores opened 30 25 102 107
Stores closed 14 -- 53 3
Replacement stores 3 3 15 16
Total domestic auto parts
stores 3,068 3,019 3,068 3,019
Stores with commercial
sales 2,009 1,630 2,009 1,630
Square footage
(in thousands) 19,683 19,377 19,683 19,377
Auto parts stores in Mexico:
Stores opened 12 5 18 8
Total auto parts stores
in Mexico 39 21 39 21
TruckPro stores (total) -- 49 -- 49
Note: TruckPro was sold on
Dec. 19, 2001
Sales & Inventory Statistics (Domestic auto parts):
17 Weeks 16 Weeks 53 Weeks 52 Weeks
Ended Ended Ended Ended
August 31, August 25, August 31, August 25,
2002 * 2001 2002 * 2001
Sales per average store ($ in
thousands) $553 $519 $1,658 $1,543
Sales per average sq foot $86 $81 $258 $240
Same store sales - rolling 13
periods
Total 6.6% 7.7% 8.8% 4.4%
Retail vs commercial
Retail 5.4% 7.3% 7.9% 3.8%
Commercial 17.7% 11.6% 17.0% 11.0%
Inventory turns:
Based on average
inventories 2.2 X 2.4 X
Based on ending
inventories 2.1 X 2.2 X
Inventory turns, net of
payables:
Based on average
inventories 8.7 X 7.5 X
Based on ending
inventories 13.8 X 10.2 X
Accounts payable/inventory
(total company) 83% 76%
* Excludes extra week of sales