CSK Auto Corporation Reports Financial Results
4 June 1998
CSK Auto Corporation Reports First Quarter Fiscal 1998 Financial Results
PHOENIX, June 3 -- CSK Auto Corporation, , the
parent company of CSK Auto, Inc., today reported financial results for the
first quarter of fiscal 1998.
Net sales for the thirteen weeks ended May 3, 1998 totaled $238.4 million,
an increase of 18.3% from $201.6 million for the first quarter of fiscal 1997,
primarily reflecting an increase in the number of stores operated. As a
result of the acquisition of Trak Auto West in December 1997 and new store
openings, the Company operated 730 locations at quarter-end 1998 versus 586
locations at quarter-end last year. Comparable store sales for the first
quarter of fiscal 1998 were flat compared to the prior-year period, due to
heavy rains and cooler temperatures.
Operating profit, excluding one-time charges, totaled $14.7 million for
the first quarter of fiscal 1998, compared with operating profit of
$7.0 million for the first quarter of fiscal 1997. During the first quarter
of 1998, the Company incurred a $3.1 million one-time expense associated with
the integration of the December 1997 Trak Auto West acquisition and a
$3.6 million non-recurring charge associated with the termination of a
management agreement as a result of the Company's initial public offering in
March 1998. Including these one-time charges, operating profit for the first
quarter of fiscal 1998 totaled $8.0 million.
Net income, excluding the above-mentioned charges and an extraordinary
item of $6.8 million, was $3.4 million, or $0.12 per common share, for the
first quarter of 1998, compared to a net loss of $1.6 million, or $0.10 per
common share, for the first quarter of fiscal 1997. Including the one-time
charges, the Company reported a net loss of $7.5 million, or $0.32 per common
share, for the first quarter of fiscal 1998. The $6.8 million extraordinary
charge, net of tax, was associated with premiums paid to noteholders and the
write-off of debt-issuance costs produced by the early retirement of debt as a
result of the Company's initial public offering.
"We are pleased with our first quarter results, which were bolstered by
continued improvement in gross profit margins," said Maynard Jenkins, Chairman
and Chief Executive Officer of CSK Auto Corporation. "This strong performance
caps off a very exciting and eventful quarter for our Company, with the
successful completion of our initial public offering and the progress made in
integrating our recent Trak Auto West acquisition. The store conversions were
completed on schedule."
Mr. Jenkins also noted that, during the first quarter, the Company opened
16 new stores, relocated 12 stores and closed 4 stores in addition to those
closed for relocation.
On March 17, 1998, the Company completed an initial public offering of
approximately 8.6 million shares of common stock. The offering raised
approximately $159.1 million of proceeds, net of underwriting discounts and
offering expenses, which were used to reduce debt. Pro forma net income for
the first quarter of fiscal 1998 was approximately $4.1 million, or $0.14 per
fully diluted common share, assuming that the initial public offering and
related retirement of indebtedness had occurred on the first day of fiscal
1998 and adjusting for the non-recurring items described above.
CSK Auto Corporation is the parent company of its wholly owned subsidiary,
CSK Auto, Inc., which is a specialty retailer in the automotive aftermarket
operating 730 stores in 12 Western states as of May 3, 1998.
CSK AUTO CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share data)
As Adjusted for Pro
Thirteen Weeks Ended One-Time Charges forma
May 3, May 4, May 3, May 3,
1998 1997 1998 1998
Net sales $238,423 $201,613 $238,423 $238,423
Cost and expenses:
Cost of sales 130,706 117,501 130,706 130,706
Operating and
administrative 93,023 77,095 93,023 93,023
Transition and
integration expenses 3,075 -- -- --
Write-off of unamortized
management fee 3,643 -- -- --
230,447 194,596 223,729 223,729
Operating profit 7,976 7,017 14,694 14,694
Interest expense 9,198 9,725 9,198 8,088
Income (loss) before
income taxes and
extraordinary item (1,222) (2,708) 5,496 6,606
Income tax expense
(benefit) (470) (1,059) 2,116 2,543
Income (loss) before
extraordinary item (752) (1,649) 3,380 4,063
Extraordinary loss,
net of $4,236 of
income taxes (6,767) -- -- --
Net income (loss) $(7,519) $(1,649) $3,380 $4,063
Basic earnings per share:
Income (loss) before
extraordinary item $(0.03) $ (0.10) $0.12 $ 0.15
Extraordinary loss,
net of income taxes (0.29) -- -- --
Net income (loss) $(0.32) $(0.10) $0.12 $ 0.15
Shares used in computing
per share amounts 23,568,058 17,105,000 27,738,388 27,738,388
Diluted earnings
per share:
Income (loss) before
extraordinary item $(0.03) $ (0.10) $0.12 $ 0.14
Extraordinary loss,
net of income taxes (0.28) -- -- --
Net income (loss) $(0.32) $(0.10) $0.12 $ 0.14
Shares used in computing
per share amounts 23,568,058 17,105,000 28,434,650 28,434,650