Advance Auto Parts 2004 Annual Report Download
Download and view the complete annual report
Please find the complete 2004 Advance Auto Parts annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
 |
 |
READYWITHAWINNINGTEAM
2004AnnualReport
®
5 673 AIR PO RT R OA D, R OA NO K E, V IR GI NI A 24 012
540.362.4911www.AdvanceAutoParts.com
®
2004ANNUALREPORT
®
Table of contents
-
Page 1
® READY฀WITH฀A฀WINNING฀TEAM฀ 2004฀Annual฀Report฀ -
Page 2
...฀ industry฀ dynamics฀to฀grow฀sales฀and฀build฀our฀bottom฀line. With฀over฀37,000฀Team฀Members฀in฀more฀than฀2,650฀ stores฀and฀facilities฀across฀39฀states,฀Puerto฀Rico฀and฀ the฀ Virgin฀ Islands,฀ Advance฀ Auto฀ Parts฀ is฀ ready฀ and... -
Page 3
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries 5-Year฀Financial฀ ฀ Statement฀of฀Operations฀Data: Net฀sales...Financial฀Review฀of฀this฀annual฀report 2004 ฀ ฀ 2003 289,441 - - - (10...Discount฀stores฀by฀one-thirteenth฀to฀ reflect฀our฀ownership฀of฀Discount... -
Page 4
...Advance฀Auto฀Parts฀is฀ready฀with฀results.฀2004฀ was฀ another฀ record฀ year฀ for฀ our฀ Company฀ ฀ due฀ to฀ our฀ team's฀ commitment฀ to฀ provide฀ ฀ our฀ customers฀ with฀ legendary฀ service...programs...฀ sales฀ ...annual฀report. Above฀Photo... -
Page 5
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries accionistas Advance฀Auto฀Parts฀está฀lista฀con฀los฀resultados.฀2004฀fue฀otro฀ año฀récord฀para฀nuestra฀CompañÃa,฀gracias฀al฀compromiso฀que฀ asumió฀nuestro฀equipo฀para฀proporcionar฀a฀nuestros... -
Page 6
...฀seven฀days฀a฀week฀in฀every฀store! 2500 1000 Ralph฀Castanza,฀Senior฀Vice฀President,฀Store฀Operations-Northeast Number of Stores 1,729 500 0 " 2000 2001 2002 2003 2004 4 -
Page 7
...in฀ several฀ of฀ our฀ major฀ markets฀ including฀ Orlando,฀ Florida;฀ Nashville,฀Tennessee;฀and฀Austin฀and฀San฀Antonio,฀Texas.฀ ฀ Our฀new฀stores฀continue฀to฀achieve฀even฀higher฀sales฀in฀their฀first฀year.฀Our฀focus฀on฀opening฀stores... -
Page 8
...฀superior฀availability.฀Advance฀Auto฀Parts฀customers when฀they฀need฀them. Greg฀Haan,฀Vice฀President-Merchandising Dennis฀Schrader,฀Division฀ Commercial฀Sales฀Manager,฀ discusses฀parts฀with฀a฀ commercial฀customer. Page฀6-7฀Photo: Assistant฀Store... -
Page 9
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries right฀now Growing฀Our฀Commercial฀Program: consumers฀expect฀the฀highest-quality฀brand฀name know฀that฀they฀can฀count฀on฀us฀for฀high-quality฀parts฀ î‹ î‹ à¸€à¸€ In฀2004,฀we฀added฀320฀new฀... -
Page 10
Ready฀with "" (pictured฀above) prices Our฀pricing฀philosophy฀has฀one฀focus-the฀best฀value฀for฀our฀customers.฀By฀working฀hard฀to฀ensure฀ that฀our฀customers฀save฀money,฀we฀are฀strengthening฀our฀position฀as฀their฀#1฀choice฀for฀all฀... -
Page 11
...Advance฀Auto฀Parts. ฀฀ This฀program...implemented฀in฀2004,฀is฀...Parts฀Pro฀Michael฀Short฀installing฀windshield฀wipers. continue฀ looking฀ for฀ new฀ ways฀ to฀ meet฀ customer฀ demands฀ so฀ that฀ we฀ can฀ grow฀ our฀ sales฀ by฀ Page฀9฀Photo... -
Page 12
...with " people By฀training฀and฀developing฀our฀team,฀we฀will฀continue฀to฀build฀on฀the฀legendary฀service฀for฀which฀Advance฀ Auto฀Parts฀is฀known,฀producing฀a฀high-performance฀workforce฀that฀will฀take฀our฀Company฀into฀the฀future. Doug... -
Page 13
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries who฀know฀their฀stuff Growing฀Our฀Winning฀Team: î‹ à¸€à¸€ Our฀ Performance฀ Management฀ programs...their฀Arcadia,฀Florida฀store...in฀2004฀for฀...Sales฀Team฀Member 5.-Roque฀Alvarado,฀Store฀Manager Page฀11฀Photo... -
Page 14
We're฀ready฀in Advance฀Auto฀Parts฀has฀a฀rich฀history฀of฀strong,฀forward-thinking฀leaders.฀Our฀18฀senior฀executives฀lead฀ by฀example฀with฀discipline฀and฀integrity.฀With฀an฀average฀of฀15฀years฀... -
Page 15
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries ...Reports฀of฀Independent฀Registered฀Public฀Accounting฀Firm ฀ Management's฀Responsibility฀for฀Financial฀Statements M ฀ arket฀for฀Registrant's฀Common฀Equity,฀Related฀Stockholder฀ Matters฀and฀Issuer฀Purchases... -
Page 16
...฀elsewhere฀in฀this฀report. Fiscal฀Year (1)(2) 2004 (in฀thousands,฀except฀per฀share฀data) 2003 2002 2001 2000 Statement฀of฀Operations฀Data: Net฀sales฀ ...Cost฀of฀sales฀ ...Supply฀chain฀initiatives (3)฀...Gross฀profit฀...Selling,฀general฀and... -
Page 17
...week).฀In฀2004,฀as฀a฀result฀of฀the฀53rd฀week฀in฀2003,฀the฀comparable฀store฀sales฀calculation฀excludes฀week฀one฀of฀sales฀from฀2003. (18)฀ ฀ Closed฀stores฀in฀2002฀include฀133฀Discount฀and฀Advance฀stores฀closed฀as฀part฀of฀the... -
Page 18
...฀ operated฀ under฀ the฀ "Advance฀ Auto฀ Parts"฀ trade฀ name฀ except฀ for฀ certain฀ stores฀in฀the฀state฀of฀Florida,฀which฀operated฀under฀the฀ "Advance฀Discount฀Auto฀Parts"฀or฀"Discount฀Auto฀Parts"฀ ฀ trade฀ names.฀ These฀ stores... -
Page 19
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries •฀ C ฀ onsistent฀ growth฀ and฀ execution฀ of฀ our฀ commercial฀ delivery฀program Enhanced฀advertising฀and฀focus฀on฀serving฀the฀customer Training฀and฀development฀of฀our฀team฀members;฀and •฀ ฀... -
Page 20
...฀ incentives฀ earned฀ under฀ long-term฀ supply฀ agreements฀ as฀ a฀ reduction฀ to฀cost฀of฀sales.฀These฀incentives฀are฀recognized฀based฀on฀ the฀cumulative฀purchases฀as฀a฀percentage฀of฀total฀estimated฀ purchases฀over฀the฀life฀of฀the... -
Page 21
... vendor฀ programs.฀ We฀ seek฀ to฀ avoid฀ fluctuation฀ in฀ merchandise฀ costs฀ and฀ instability฀ of฀ supply฀ by฀ entering฀ into฀ long-term฀ purchasing฀ agreements฀ with฀ vendors฀ when฀ we฀ believe฀ it฀ ฀ is฀advantageous. Selling,฀General฀and... -
Page 22
...฀ 2003.฀ The฀ increase฀in฀selling,฀general฀and฀administrative฀expenses฀as฀ a฀percentage฀of฀net฀sales฀in฀2004฀was฀primarily฀a฀result฀of฀ increased฀expenses฀associated฀with฀our฀self-insurance฀programs,฀ including฀ the฀ increased฀ costs... -
Page 23
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries ฀ Interest฀expense฀for฀2004฀was฀$20.1฀million,฀or฀0.5%฀of฀ net฀ sales,฀ as฀ compared฀ to฀ $37.6฀ million,฀ or฀ 1.1%฀ of฀ net฀ sales... notes฀ and฀ senior฀ discount฀ debentures฀ during฀ the฀ ... -
Page 24
...2004 Net฀sales฀...Discount฀ acquisition฀ to฀ our฀ Advance฀ Auto฀ Parts...2004,฀we฀entered฀ into฀a฀short-term฀financing฀program฀with฀a฀bank,฀allowing฀ us฀ to฀ extend฀ our฀ payment฀ terms฀ on฀ certain฀ merchandise฀ purchases.฀Under฀this฀program... -
Page 25
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries payment฀ at฀ an฀ agreed฀ upon฀ discount฀ rate.฀ At฀ January฀ 1,฀ 2005,฀ $56.9฀ million฀ was฀ payable฀ to฀ the฀ bank฀ by฀ us฀ under฀ ฀ this฀program.฀This฀program฀will฀allow฀us฀to฀further... -
Page 26
...฀assets฀of฀Trak฀Auto฀Parts,฀Inc. ฀ For฀ fiscal฀ 2004,฀ net฀ cash฀...program a฀ $56.9฀ million฀ cash฀ inflow฀ associated฀ with฀ inventory฀ purchased฀under฀our฀vendor฀financing฀program... our฀ senior฀ discount฀ debentures฀and฀senior...to฀long-term... -
Page 27
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries credit฀ with...฀fiscal฀2004,฀we฀... our฀ domestic฀ subsidiaries฀ (including฀ Discount฀ and฀ its฀ subsidiaries)฀and฀is... prepay,฀ redeem฀or฀purchase฀debt,฀(3)฀incur฀liens฀or...and฀asset฀sales,฀ (7)฀ engage... -
Page 28
...from฀Moody's฀Investor฀Service.฀The฀current฀ ...tends฀ to฀ enhance฀sales฀by฀causing฀automotive฀parts฀to฀fail. Recent฀Accounting...฀ Statement฀ No.฀ 4,฀ "Reporting฀ Gains฀ Losses฀ from฀ Extinguishment...annual฀period฀beginning฀after฀ June฀15,฀2004... -
Page 29
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries ฀ In฀ November฀ 2004,฀ ...beginning฀of฀the฀first฀ interim฀or฀annual฀reporting฀period฀that฀begins฀after฀June฀15... interest฀rates฀with฀respect฀to฀our฀long-term฀debt.฀Our฀longterm฀debt฀currently฀... -
Page 30
... 2008 Fiscal฀ 2009 Thereafter Total Fair฀Market฀ Liability Long-term฀debt: ฀ Variable฀rate฀...฀ Weighted-average฀interest฀rate...฀ from฀ time฀ to฀ time฀ in฀ our฀ other฀ reports฀ and฀ documents฀ filed฀ with฀ the฀ Securities฀and฀Exchange฀... -
Page 31
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries Consolidated฀Balance฀Sheets January฀1,฀2005฀and฀January฀3,฀2004 January฀1,฀ 2005 (in฀thousands,฀except฀per฀share฀data) January฀3,฀ 2004 Assets Current฀assets: Cash฀and฀cash฀equivalents฀...... -
Page 32
...January฀3,฀2004,฀and฀December฀28,฀2002 Fiscal฀Years฀Ended 2004 (in...sales,฀including฀purchasing฀and฀warehousing฀costs฀... $3,770,297 2,016,926 1,753,371 1,424,613 - - 328,758 (20,069) (3,230) - 289 (23,010) 305,748 117,721 188,027 ฀ ฀ ฀ Gross฀profit฀...Selling... -
Page 33
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries Consolidated฀Statements฀of฀Changes฀in฀Stockholders'฀Equity For฀the฀Years฀Ended฀January฀1,฀2005,฀January฀3,฀2004...฀issued฀under฀employee฀฀ ฀ stock฀purchase฀plan฀...Repayment฀of฀฀ ฀ management฀... -
Page 34
...฀3,฀2004,฀and฀December฀28,฀2002 Fiscal฀Years฀Ended 2004 ...Amortization฀of฀bond฀discount฀...฀ Non-cash฀...Purchases฀of฀property฀and฀equipment฀ ...฀ Acquisitions,฀net฀of฀cash฀acquired฀...฀ Proceeds฀from฀sales...an฀integral฀part฀of฀these฀statements.... -
Page 35
... stores฀ operate฀under฀the฀"Advance฀Auto฀Parts"฀trade฀name฀except฀ for฀ certain฀ stores฀ in฀ the฀ state฀ of฀ Florida฀ which฀ operate฀ under฀the฀"Advance฀Discount฀Auto฀Parts"฀or฀"Discount฀Auto฀ Parts"฀trade฀names.฀These฀stores฀offer... -
Page 36
...Years฀Ended฀January฀1,฀2005,฀January฀3,฀2004,฀and฀December฀28,฀2002฀ (in฀thousands,฀except฀per฀share฀data) Merger฀and฀Integration฀Costs ฀ As฀ a฀ result฀ of฀ the฀ Discount฀ Auto฀ Parts฀ ("Discount")฀ acquisition฀in฀2001,฀the฀Company... -
Page 37
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries if฀ any,฀ of฀ the฀ ...2004,฀ the฀ Company฀ entered฀a฀short-term฀financing฀program฀with฀a฀bank฀allowing฀it฀to฀extend฀its฀payment฀terms฀on฀certain฀merchandise฀ purchases.฀ Under฀ this฀ program... -
Page 38
... Effectiveness฀ of฀ a฀ Purchased฀ Option฀ Used฀in฀a฀Cash...1,343 $189,331 January฀3,฀ 2004 $124,935 63 $124,998...฀for฀a฀term฀of฀54฀months. Segment฀Reporting ฀ The฀ Company฀ operates฀ in฀...disclosures฀ about฀ products,฀ services,฀ major฀ customers฀ ... -
Page 39
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries Business,฀ ... to฀ the฀ reseller฀ for฀ the฀ vendor's฀sales฀incentive฀offered฀to฀the฀consumer฀must฀not฀ be฀ ...first฀ interim฀ or฀ annual฀ period฀ beginning฀ after฀ June฀ 15,฀ 2004.฀ The฀ Company฀ ... -
Page 40
... required฀ to฀ provide฀ service฀ in฀ exchange฀ for฀...the฀ first฀ interim฀ or฀ annual฀ reporting฀ period฀ that฀ begins฀ ...Disposal฀ of฀ Long-Lived฀ Assets."฀ ....฀At฀January฀3,฀ 2004,฀Wholesale฀assets฀were...฀ ...Warranty฀allowances฀...Other... -
Page 41
Advance฀Auto฀Parts,฀Inc.฀...฀liabilities฀recorded฀through฀purchase฀accounting฀that฀reflect...Auto฀Supply฀Company,฀or฀Western,฀and฀the฀fiscal฀2001฀acquisition฀ of฀Discount...2004฀...... buyouts฀ and฀ are฀ established฀ by฀ a฀ charge฀ to฀ selling,฀... -
Page 42
... at฀ both฀ January฀ 1,฀ 2005฀ and฀ January฀ 3,฀ 2004.฀ Under฀ the฀ LIFO฀ method,฀ the฀ Company's฀ cost฀ of฀ sales฀ reflects฀ the฀ costs฀ of฀ the฀most฀currently฀purchased฀inventories฀while฀the฀inventory฀carrying฀balance฀represents฀the... -
Page 43
Advance฀Auto฀Parts...reported฀at฀the฀lower฀ of฀ the฀ carrying฀ amount฀ or฀ the฀ fair฀ market฀ value฀ less฀ selling฀ costs.฀ At฀ January฀ 1,฀ 2005฀ and฀ January฀ 3,฀ 2004,฀ the฀ Company's฀assets฀held฀for฀sale...฀senior฀discount฀ debentures... -
Page 44
...฀3,฀2004,฀฀ ฀ respectively)฀due฀September฀2009฀...Less:฀Current฀portion฀of฀long-term฀debt฀ ...Long-...exclusively฀for฀stock฀buybacks฀under฀the฀Company's฀stock฀ repurchase฀program,฀and฀a฀$200,000฀revolving฀facility,฀or฀ the฀ revolver฀ ... -
Page 45
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries ฀ ...purchase฀ debt,฀ (3)฀ incur฀ liens฀ or฀ engage฀ in฀ sale...฀ discount฀...฀ for฀ the฀ year฀ ended฀ January฀3,฀2004. ฀ During฀ the฀ remainder฀ of฀ fiscal...credit฀ facility฀ to฀ add฀ a฀ ฀ 43 -
Page 46
...the฀ credit฀ facility฀ to฀ add฀ a฀ ฀ new฀ $250...discount...annual฀maturities฀of฀long...Program ฀ During฀the฀third฀quarter฀of฀fiscal฀2004,฀the฀Company's฀ Board฀of฀Directors฀authorized฀a฀stock฀repurchase฀program...their฀financial฀reporting฀ amounts... -
Page 47
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries income฀ tax฀ reporting...2004 $฀ 38,441 (793) (100,989) $฀ (63,341) ฀ At฀January฀1,฀2005฀and฀January฀3,฀2004...฀ and฀ other฀ long-term฀ liabilities฀ in...income฀ taxes฀ and฀ sales,฀use฀and฀excise฀taxes.฀In... -
Page 48
...2004฀ and฀December฀28,฀2002,฀respectively.฀The฀cost฀of฀administering฀the฀installment฀sales฀program฀is฀included฀in฀selling...Auto฀subsidiary,฀together฀with฀ other฀ defendants,฀ including฀ automobile฀ manufacturers,฀ automotive฀ parts...฀ reported฀ ... -
Page 49
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries incurred฀ but฀ not฀ reported...฀ the฀ former฀ Discount฀ deferred฀ compensation฀... salary฀ and฀ bonus,฀ ฀ as฀ ...January฀1,฀2005฀and฀January฀3,฀ 2004,฀ $1,598฀ and฀ ...long-term฀portion฀in฀other฀long... -
Page 50
...฀ the฀amount฀of฀the฀reported฀obligation,฀annual฀expense฀and฀ projected฀benefit...2004,฀ the฀ Company฀ established฀ the฀ Advance฀Auto฀Parts,฀Inc.฀2004฀Long-Term฀Incentive฀Plan,฀ or฀ the฀ LTIP,฀ which฀ was฀ approved฀ at฀ its฀ 2004฀ Annual... -
Page 51
...,฀during฀fiscal฀2004,฀ the฀ Company฀ created฀ the฀ Advance฀ Auto฀ Parts,฀ Inc.฀ ... earned฀ in฀ the฀ form฀of฀an฀annual฀retainer฀for฀Board฀members฀and฀wages฀ for...referred฀to฀as฀ other฀ options,฀ to฀ purchase฀ up฀ to฀ 1,000฀ shares฀ ... -
Page 52
... payroll฀ deductions.฀ There฀ are฀ annual฀ limitations฀ on฀ team฀ member฀ purchases฀ of฀ either฀ $25,000฀ ...The฀ carrying฀ amount฀ for฀ variable฀ rate฀ long-term฀ debt฀ approximates฀ fair฀ value฀ for฀...years฀2004฀and฀2003: 2004(1) Net฀sales฀ ... -
Page 53
Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries Report฀of฀Independent฀Registered฀Public฀Accounting฀Firm To฀the฀Board฀of฀Directors฀and฀Stockholders฀of Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries Roanoke,฀Virginia ฀ We฀ have฀ audited฀ the฀ ... -
Page 54
...฀of Advance฀Auto฀Parts,฀Inc.฀and฀Subsidiaries Roanoke,฀Virginia ฀ We฀have฀audited฀management's฀assessment,฀included฀in฀the฀accompanying฀Management's฀Report฀on฀Internal฀Control฀ Over฀ Financial฀ Reporting,฀ that฀ Advance฀ Auto฀ Parts,฀ Inc... -
Page 55
... financial฀ information฀ presented฀ in฀ this฀ Annual฀ Report฀ have฀ been฀ ฀ prepared฀with฀integrity,฀consistency฀and฀objectivity฀and฀are฀the฀responsibility฀of฀the฀management฀of฀Advance฀Auto฀Parts,฀Inc.฀ (the฀ Company).฀ The฀ consolidated... -
Page 56
...฀of฀charge฀a฀copy฀of฀the฀Company's฀Annual฀Report฀on฀Form฀10-K฀as฀filed฀with฀the฀Securities฀ and฀Exchange฀Commission฀by฀writing฀to฀the฀Investor฀Relations฀Department,฀P.O.฀Box฀2710,฀Roanoke,฀Virginia฀24001฀or฀ by฀accessing฀the... -
Page 57
...฀Vice฀President,฀People,฀PETsMART,฀Inc. Retired฀Chairman฀and฀Chief฀Executive฀Officer,฀ Advance฀Auto฀Parts,฀Inc. Committee฀Membership: 1 Audit฀Committee,฀2Compensation฀Committee,฀ 3 Finance฀Committee,฀4Nominating฀and฀ Corporate฀Governance฀Committee... -
Page 58
® 5 673 ฀ A I R P O RT ฀ R O A D , ฀ R O A N O K E , ฀ V I R G I N I A ฀ 24 012 ฀ 540.362.4911฀www.AdvanceAutoParts.com -
Page 59
Advance Auto Parts, Inc. and Subsidiaries Supplement to 2004 Annual Report Management's Report on Internal Control over Financial Reporting Management of Advance Auto Parts, Inc. and its subsidiaries (the Company) is responsible for establishing and maintaining adequate internal control over ...