Advance Auto Parts 2014 Annual Report Download - page 36

29
Quarterly Consolidated Financial Results (in thousands, except per share data)
16-Weeks
Ended
4/20/2013
12-Weeks
Ended
7/13/2013
12-Weeks
Ended
10/5/2013
12-Weeks
Ended
12/28/2013
16-Weeks
Ended
4/19/2014
12-Weeks
Ended
7/12/2014
12-Weeks
Ended
10/4/2014
13-Weeks
Ended
1/3/2015
Net Sales $ 2,015,304 $ 1,549,553 $ 1,520,144 $ 1,408,813 $ 2,969,499 $ 2,347,697 $ 2,289,456 $ 2,237,209
Gross profit 1,008,206 779,223 762,940 701,777 1,353,122 1,062,108 1,034,442 1,003,941
Net income 121,790 116,871 103,830 49,267 147,726 139,488 122,177 84,434
Net income per share:
Basic $ 1.66 $ 1.60 $ 1.42 $ 0.68 $ 2.02 $ 1.91 $ 1.67 $ 1.15
Diluted $ 1.65 $ 1.59 $ 1.42 $ 0.67 $ 2.01 $ 1.89 $ 1.66 $ 1.15
Liquidity and Capital Resources
Overview
Our primary cash requirements to maintain our current operations include payroll and benefits, the purchase of inventory,
contractual obligations, capital expenditures and the payment of income taxes. In addition, we have used available funds for
acquisitions, to repay borrowings under our credit agreement, to periodically repurchase shares of our common stock under our
stock repurchase programs and for the payment of quarterly cash dividends. We have funded these requirements primarily
through cash generated from operations, supplemented by borrowings under our credit facilities and notes offerings as needed.
We believe funds generated from our expected results of operations, available cash and cash equivalents, and available
borrowing under our credit facility will be sufficient to fund our primary obligations for the next fiscal year. Cash holdings in
our foreign affiliates are not significant relative to our overall operations and therefore would not restrict our liquidity needs for
our domestic operations.
As of January 3, 2015, our cash and cash equivalents balance was $104.7 million, a decrease of $1,007.8 million compared
to December 28, 2013. This decrease in cash was primarily a result of cash used in the acquisition of GPI, partially offset by
cash generated from operations and net borrowings under credit facilities. Additional discussion of our cash flow results,
including the comparison of 2014 activity to 2013, is set forth in the Analysis of Cash Flows section.
As of January 3, 2015, our outstanding indebtedness was $1,636.9 million, or $583.3 million higher when compared to
December 28, 2013, as a result of additional borrowings of $490.0 million under our term loan and $93.4 million under our
credit facility. Additionally, we had $124.3 million in letters of credit outstanding, which reduced the available borrowings on
our revolver to $782.3 million as of January 3, 2015. The letters of credit generally have a term of one year or less and
primarily serve as collateral for our self-insurance policies.
GPI Acquisition and Exit Activities
We borrowed $1,006.0 million under a term loan and revolving credit facility, which we used along with cash on-hand to
fund the $2.08 billion acquisition of GPI on January 2, 2014 as discussed elsewhere in this Annual Report on Form 10-K. In
addition to the normal operations of GPI, we expect to incur $190.0 million of GPI integration expenses through the end of
2018 with the majority of the expenses being incurred by the end of 2016. We expect $160.0 million of these expenses to be
offset during this period by savings from acquisition synergies. During 2014, we incurred $73.2 million of GPI integration
expenses partially offset by $61.0 million of synergies.
Capital Expenditures
Our primary capital requirements have been the funding of our new store development (leased and owned locations),
maintenance of existing stores and investments under our Superior Availability and Service Leadership strategies, including
supply chain and information technology. We lease approximately 85% of our stores. Our capital expenditures were $228.4
million in 2014, an increase of $32.7 million from 2013. In addition to routine capital expenditures, our capital investments
during 2014 included the acquisition of GPI and nine independent stores for $2,060.8 million, net of cash acquired.
Our future capital requirements will depend in large part on the number and timing of new stores we open within a given
year and the investments we make in existing stores, information technology, supply chain network and the integration of GPI.