Napa Auto Parts 2015 Annual Report Download - page 9

subsidiary of the Company; and an automotive parts distribution center and automotive parts stores in Mexico,
owned and operated by Autopartes NAPA Mexico (“NAPA Mexico”), a wholly-owned subsidiary of the Com-
pany.
The Company’s network of U.S. automotive parts stores was expanded in 2015 via the acquisition of select
store groups located in various regions of the United States. Additionally, the GPC Asia Pacific automotive busi-
ness acquired Auto Electrics Australia (“AEA”) and Global Automotive (“Global”) in April and August, 2015,
respectively. AEA is a specialist supplier of rotating electrical products, while Global has a regional network of
six stores. Collectively, these new store groups and automotive businesses are expected to generate annual rev-
enues of approximately $35 million USD.
The Company has a 15% interest in Mitchell Repair Information (“MRIC”), a subsidiary of Snap-on
Incorporated. MRIC is a leading automotive diagnostic and repair information company that links North Ameri-
can subscribers to its services and information databases. MRIC’s core product, “Mitchell ON-DEMAND”, is a
premier electronic repair information source in the automotive aftermarket.
The Company’s NAPA automotive parts distribution centers distribute replacement parts (other than body
parts) for substantially all motor vehicle makes and models in service in the United States, including imported
vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles and farm vehicles. In addition, the Company
distributes replacement parts for small engines, farm equipment and heavy duty equipment. The Company’s
inventories also include accessory items for such vehicles and equipment, and supply items used by a wide
variety of customers in the automotive aftermarket, such as repair shops, service stations, fleet operators,
automobile and truck dealers, leasing companies, bus and truck lines, mass merchandisers, farms, industrial
concerns and individuals who perform their own maintenance and parts installation. Although the Company’s
domestic automotive operations purchase from approximately 100 different suppliers, approximately 49% of
2015 automotive parts inventories were purchased from 10 major suppliers. Since 1931, the Company has had
return privileges with most of its suppliers, which have protected the Company from inventory obsolescence.
Distribution System. In 2015, the Company operated 59 domestic NAPA automotive parts distribution
centers located in 40 states and approximately 1,100 domestic company-owned NAPA AUTO PARTS stores
located in 45 states. The Company also operated domestically one TW Distribution heavy duty parts distribution
center and 14 company-owned Traction Heavy Duty parts stores located in four states. The Traction operations
are discussed further below in Related Operations. At December 31, 2015, the Company owned either a non-
controlling or controlling interest in six corporations, which operated approximately 114 auto parts stores in nine
states.
The Company’s domestic distribution centers serve approximately 4,900 independently owned NAPA
AUTO PARTS stores located throughout the United States. NAPA AUTO PARTS stores, in turn, sell to a wide
variety of customers in the automotive aftermarket. Collectively, these independent automotive parts stores
account for approximately 63% of the Company’s total U.S. Automotive sales and 23% of the Company’s total
sales, with no automotive parts store or group of automotive parts stores with individual or common ownership
accounting for more than 0.31% of the total sales of the Company.
NAPA Canada/UAP, founded in 1926, is a leader in the distribution and marketing of replacement parts and
accessories for automobiles and trucks and is also a significant supplier to the mining and forestry industries in
Canada. NAPA Canada/UAP employs approximately 3,900 people and operates a network of 9 NAPA automo-
tive parts distribution centers, three heavy duty parts distribution centers and one fabrication/remanufacturing
facility supplying approximately 601 NAPA stores and 105 Traction wholesalers. The NAPA stores and Traction
wholesalers in Canada include approximately 181 company owned stores, 12 joint ventures and 30 progressive
owners in which NAPA Canada/UAP owns a 50% interest and approximately 483 independently owned stores.
NAPA and Traction operations supply bannered installers and independent installers in all provinces of Canada,
as well as networks of service stations and repair shops operating under the banners of national accounts. UAP is
a licensee of the NAPA®name in Canada.
In Canada, Altrom Canada operates three import automotive parts distribution centers and 10 branches. In
the United States, Altrom America operates two import automotive parts distribution centers.
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