Advance Auto Parts 2015 Annual Report Download - page 35

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of financial condition and results of operations should be read in conjunction with
“Selected Consolidated Financial Data,” our consolidated historical financial statements and the notes to those statements
that appear elsewhere in this report. Our discussion contains forward-looking statements based upon current expectations that
involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of
events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors,
including those set forth under the sections entitled “Forward-Looking Statements” and “Risk Factors” elsewhere in this
report.
Our fiscal year ends on the Saturday nearest December 31st of each year, which results in an extra week every several
years (fiscal 2014 contained 53 weeks). Our first quarter consists of 16 weeks, and the other three quarters consist of 12 weeks,
with the exception of the fourth quarter of fiscal 2014 which contained 13 weeks due to our 53-week fiscal year in 2014. Our
next 53-week fiscal year is 2020.
Unless otherwise noted, our financial results have been presented on a GAAP basis. In limited instances, we have
presented our financial results on a GAAP and non-GAAP (comparable) basis which is described further in the section entitled
"Reconciliation of Non-GAAP Financial Measures."
Introduction
We are a leading automotive aftermarket parts provider in North America, serving both "do-it-for-me", or Commercial, and
"do-it-yourself", or DIY, customers. As of January 2, 2016 we operated a total of 5,171 stores and 122 branches. We operated
primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. Our stores
operate primarily under trade names "Advance Auto Parts", "Autopart International" and "Carquest" and our distribution
branches operate under the "Worldpac" trade name. In addition, we served approximately 1,300 independently-owned Carquest
stores as of January 2, 2016. We acquired the Carquest and Worldpac operations as part of our acquisition of GPI on January 2,
2014.
Our stores and branches offer a broad selection of brand name, OEM and private label automotive replacement parts,
accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles and light and heavy
duty trucks. Through our integrated operating approach, we serve our Commercial and DIY customers from our store locations
and online at www.AdvanceAutoParts.com and www.Worldpac.com. Our DIY customers can elect to pick up merchandise
ordered online at a conveniently located store or have their purchases shipped directly to them. Our Commercial customers
consist primarily of delivery customers for whom we deliver products from our store locations to our Commercial customers’
places of business, including independent garages, service stations and auto dealers. Our Commercial customers can also
conveniently place their orders online.
Prior Acquisitions
On January 2, 2014, we acquired GPI in an all-cash transaction for $2.08 billion. GPI, formerly a privately-held company,
was a leading distributor and supplier of original equipment and aftermarket replacement products for Commercial markets
operating under the Carquest and Worldpac names. As of the acquisition date, GPI operated 1,233 Carquest stores and 103
Worldpac branches located in 45 states and Canada and served approximately 1,400 independently-owned Carquest stores. As
of the end of 2015, we have converted 170 and consolidated 178 of these stores into Advance Auto Parts locations.
On December 31, 2012, we acquired BWP, a privately-held company that supplied, marketed and distributed automotive
aftermarket parts and products principally to Commercial customers. Prior to the acquisition, BWP operated or supplied 216
locations in the Northeastern United States. Concurrent with the closing of the acquisition, we transferred one distribution
center and BWP’s rights to distribute to 92 independently owned locations to an affiliate of GPI. The integration of BWP stores
consisted of converting or consolidating those locations into Advance Auto Parts locations. As of the end of 2015, most of the
BWP stores have been integrated into the Advance Auto Parts operations.
For additional information on these acquisitions, refer to Note 3, "Acquisitions," in the Notes to our Consolidated Financial
Statements.