AutoZone 2004 Annual Report Download - page 17

18’04฀Annual฀Report
฀ Fiscal฀Year฀Ended฀August
(in฀thousands,฀except฀per฀share฀data฀and฀selected฀operating฀data) 2004(1) ฀ 2003(2) ฀ 2002(3) ฀ 2001(4) ฀ 2000
Income฀Statement฀Data
Net฀sales $฀5,637,025 $฀5,457,123 $฀5,325,510 $฀4,818,185 $฀4,482,696
Cost฀of฀sales,฀including฀warehouse฀and฀delivery฀expenses 2,880,446 2,942,114 2,950,123 2,804,896 2,602,386
Operating,฀selling,฀general฀and฀administrative฀expenses 1,757,873 ฀ 1,597,212 ฀ 1,604,379 ฀ 1,625,598 ฀ 1,368,290
Operating฀profit 998,706 917,797 771,008 387,691 512,020
Interest฀expense—net 92,804 ฀ 84,790 ฀ 79,860 ฀ 100,665 ฀ 76,830
Income฀before฀income฀taxes 905,902 833,007 691,148 287,026 435,190
Income฀taxes 339,700 ฀ 315,403 ฀ 263,000 ฀ 111,500 ฀ 167,600
Net฀income $฀ 566,202 ฀ $฀ 517,604 ฀ $฀ 428,148 ฀ $฀ 175,526 ฀ $฀ 267,590
Diluted฀earnings฀per฀share $฀ 6.56 ฀ $฀ 5.34 ฀ $฀ 4.00 ฀฀ $฀ 1.54 ฀ $฀ 2.00
Adjusted฀weighted฀average฀shares฀for฀diluted฀earnings฀per฀share 86,350 ฀ 96,963 ฀ 107,111 ฀ 113,801 ฀ 133,869
Balance฀Sheet฀Data(5)
Current฀assets $฀1,755,757 $฀1,671,354 $฀1,513,936 $฀1,395,240 $฀1,245,146
Working฀capital฀(deficit) (62,358) (90,572) (83,443) 61,857 152,236
Total฀assets 3,912,565 3,766,826 3,541,599 3,499,241 3,391,584
Current฀liabilities 1,818,115 1,761,926 1,597,379 1,333,383 1,092,910
Debt 1,869,250 1,546,845 1,194,517 1,225,402 1,249,937
Stockholders’฀equity $฀ 171,393 $฀ 373,758 $฀ 689,127 $฀ 866,213 $฀ 992,179
Selected฀Operating฀Data(5)
Number฀of฀domestic฀auto฀parts฀stores฀at฀beginning฀of฀year 3,219 ฀ 3,068 ฀ 3,019 ฀ 2,915 ฀ 2,711
New฀stores 202 160 102 107 208
Replacement฀stores 46 15 16 30
Closed฀stores 1฀ 9 ฀ 53 ฀ 3 ฀ 4
Net฀new฀stores 201 ฀ 151 ฀ 49 ฀ 104 ฀ 204
Number฀of฀domestic฀auto฀parts฀stores฀at฀end฀of฀year 3,420 3,219 3,068 3,019 2,915
Number฀of฀Mexico฀auto฀parts฀stores฀at฀end฀of฀year 63 ฀ 49 ฀ 39 ฀ 21 ฀ 13
Number฀of฀total฀auto฀parts฀stores฀at฀end฀of฀year 3,483 ฀ 3,268 ฀ 3,107 ฀ 3,040 ฀ 2,928
Total฀domestic฀auto฀parts฀store฀square฀footage฀(000s) 21,689 20,500 19,683 19,377 18,719
Average฀square฀footage฀per฀domestic฀auto฀parts฀store 6,342 6,368 6,416 6,418 6,422
Increase฀in฀domestic฀auto฀parts฀store฀square฀footage 6% 4% 2% 4% 8%
Increase฀in฀domestic฀auto฀parts฀comparable฀store฀net฀sales 0% 3% 9% 4% 5%
Average฀net฀sales฀per฀domestic฀auto฀parts฀store฀(000s) $฀ 1,647 $฀ 1,689 $฀ 1,658 $฀ 1,543 $฀ 1,517
Average฀net฀sales฀per฀domestic฀auto฀parts฀store฀square฀foot $฀ 259 $฀ 264 $฀ 258 $฀ 240 $฀ 236
Total฀domestic฀employees฀at฀end฀of฀year 48,294 47,727 44,179 44,557 43,164
Inventory฀turnover(6) 1.87x 2.04x 2.25x 2.39x 2.32x
Net฀inventory฀turnover(7) 20.34x 16.40x 12.51x 10.11x 8.38x
After-tax฀return฀on฀invested฀capital(8) 25.1% 23.4% 19.8% 13.4% 12.9%
Net฀cash฀provided฀by฀operating฀activities $฀ 638,379 $฀ 720,807 $฀ 736,170 $฀ 467,300 $฀ 505,610
Cash฀flow฀before฀share฀repurchases฀and฀changes฀in฀debt(9) $฀ 509,447 $฀ 561,563 $฀ 726,159 $฀ 399,312 $฀ 272,029
Return฀on฀average฀equity 208% 97% 55% 19% 23%
(1)฀ ฀Fiscal฀2004฀operating฀results฀include฀$42.1฀million฀in฀pre-tax฀gains฀from฀warranty฀negotiations฀with฀certain฀vendors฀and฀the฀change฀in฀classification฀of฀certain฀vendor฀funding฀to฀
increase฀operating฀expenses฀and฀decrease฀cost฀of฀sales฀by฀$138.2฀million฀in฀accordance฀with฀Emerging฀Issues฀Task฀Force฀Issue฀No.฀02-16฀(“EITF฀02-16”)฀regarding฀vendor฀funding,฀
which฀was฀adopted฀during฀fiscal฀2003.
(2)฀ ฀Fiscal฀2003฀operating฀results฀include฀$8.7฀million฀in฀pre-tax฀gains฀from฀warranty฀negotiations,฀a฀$4.7฀million฀pre-tax฀gain฀associated฀with฀the฀settlement฀of฀certain฀liabilities฀and฀the฀
repayment฀of฀a฀note฀associated฀with฀the฀sale฀of฀the฀TruckPro฀business฀in฀December฀2001,฀and฀a฀$4.6฀million฀pre-tax฀gain฀as฀a฀result฀of฀the฀disposition฀of฀properties฀associated฀with฀
the฀2001฀restructuring฀and฀impairment฀charges.฀Fiscal฀2003฀was฀also฀impacted฀by฀the฀adoption฀of฀EITF฀02-16,฀which฀decreased฀pre-tax฀earning฀by฀$10.0฀million,฀increased฀
operating฀expenses฀by฀$52.6฀million฀and฀decreased฀cost฀of฀sales฀by฀$42.6฀million.
(3)฀ ฀53฀weeks.฀Comparable฀store฀sales,฀average฀net฀sales฀per฀domestic฀auto฀parts฀store฀and฀average฀net฀sales฀per฀store฀square฀foot฀for฀fiscal฀2002฀have฀been฀adjusted฀to฀exclude฀net฀
sales฀for฀the฀53rd฀week.
(4)฀ ฀Fiscal฀2001฀operating฀results฀include฀pre-tax฀restructuring฀and฀impairment฀charges฀of฀$156.8฀million,฀or฀$0.84฀per฀diluted฀share฀after฀tax.
(5)฀ ฀To฀conform฀to฀current฀year฀presentation,฀certain฀prior฀year฀amounts฀have฀been฀adjusted฀to฀reflect฀the฀impact฀of฀reclassifications฀on฀the฀consolidated฀statements฀of฀cash฀flows฀and฀the฀
consolidated฀balance฀sheet.฀Prior฀presentations฀had฀netted฀certain฀amounts฀within฀accounts฀payable;฀these฀amounts฀have฀now฀been฀reclassified฀for฀all฀periods฀presented฀impacting฀
reported฀cash฀and฀cash฀equivalents,฀accounts฀payable฀and฀accrued฀expenses.
(6)฀ ฀Inventory฀ turnover฀is฀calculated฀as฀cost฀of฀sales฀divided฀by฀the฀average฀ of฀ the฀beginning฀ and฀ending฀merchandise฀ inventories,฀which฀excludes฀merchandise฀ under฀pay-on-scan฀
arrangements.
(7)฀ ฀Net฀inventory฀turnover฀is฀calculated฀as฀cost฀of฀sales฀divided฀by฀the฀average฀of฀the฀beginning฀and฀ending฀merchandise฀inventories,฀which฀excludes฀merchandise฀under฀pay-on-scan฀
arrangements,฀less฀the฀average฀of฀the฀beginning฀and฀ending฀accounts฀payable.
(8)฀ ฀After-tax฀return฀on฀invested฀capital฀is฀calculated฀as฀after-tax฀operating฀profit฀(excluding฀rent฀and฀restructuring฀and฀impairment฀charges)฀divided฀by฀average฀invested฀capital฀(which฀
includes฀a฀factor฀to฀capitalize฀operating฀leases).฀See฀Reconciliation฀of฀Non-GAAP฀Financial฀Measures฀in฀Management’s฀Discussion฀and฀Analysis฀of฀Financial฀Condition฀and฀Results฀
of฀Operations.
(9)฀ ฀Cash฀flow฀before฀share฀repurchases฀is฀calculated฀as฀the฀change฀in฀cash฀and฀cash฀equivalents฀less฀the฀change฀in฀debt฀plus฀treasury฀stock฀purchases.฀See฀Reconciliation฀of฀Non-GAAP฀
Financial฀Measures฀in฀Management’s฀Discussion฀and฀Analysis฀of฀Financial฀Condition฀and฀Results฀of฀Operations.
Selected฀Financial฀Data