Napa Auto Parts 2005 Annual Report Download - page 8

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6
Automotive Parts Group
The Automotive Parts Group also includes Balkamp, Inc.,
amajority-owned subsidiary that purchases, packages and
distributes over 30,000 service and supply items through the
NAPA system. Additionally, under the name Rayloc, we operate
five plants where automotive parts are remanufactured and
distributed through the NAPA system. Furthermore, we
operate Johnson Industries, an independent distributor of
ACDelco, Motorcraft and other aftermarket parts, equipment
and supplies.
Our market extends throughout North America. NAPA
Canada/UAP, Inc. is one of Canada’s leading automotive
distributors as well as Canada’s largest heavy-vehicle parts
distributor. The operating programs and marketing initiatives
utilized in our Canadian operations are fully integrated with
our U.S. NAPA system. We are represented in Mexico by Auto
Todo, one of that country’s largest automotive aftermarket
organizations. Our operations in Canada and Mexico made
good progress in 2005 and we are encouraged by their
prospects of continued growth.
2005 PERFORMANCE
2005 was another good year for the Automotive Parts Group,
with revenues increasing 6%. This follows a strong year in 2004
and we are encouraged by the positive momentum gained by
this group over the last two years. The on-going commitment
to key growth initiatives, combined with the strength of the
economy, contributed to our performance in 2005. Through
continued emphasis on these initiatives, which further enhance
our service capabilities and product offerings, the Automotive
Parts Group is well positioned for additional growth in 2006.
GROWTH INITIATIVES
We serve a large and growing automotive aftermarket industry.
The Wholesale or Do-it-for-Me (DIFM) market represents
professional service and repair facilities and accounts for an
estimated 75% of the industry. The Retail market represents
the Do-it-Yourself (DIY) customer and is approximately 25%
of the industry. The Automotive group works in concert with
our NAPA AUTO PARTS stores to continually grow our business
with both wholesale and retail customers.
THE AUTOMOTIVE PARTS GROUP IS ONE OF NORTH AMERICA’S LEADING DISTRIB-
UTORS OF AUTOMOTIVE REPLACEMENT PARTS, ACCESSORY ITEMS AND SERVICE
ITEMS. THIS GROUP CONSISTS OF 58 NAPA DISTRIBUTION CENTERS IN THE UNITED
STATES SERVING APPROXIMATELY 5,800 NAPA AUTO PARTS STORES OF WHICH
APPROXIMATELY 1,000 ARE COMPANY-OWNED.
2001
4.25
2002
4.34
2003
4.48
2004
4.74
2005
5.01
Automotive Parts Group Net Sales
in billions of dollars