Napa Auto Parts 2006 Annual Report Download - page 25

23
Quarterly Results of Operations
The preparation of interim consolidated nancial statements
requires management to make estimates and assumptions for the
amounts reported in the interim condensed consolidated nancial
statements. Specically, the Company makes certain estimates in
its interim consolidated nancial statements for the accrual of bad
debts, inventory adjustments and discounts and volume incentives
earned. Bad debts are accrued based on a percentage of sales,
and volume incentives are estimated based upon cumulative and
projected purchasing levels. Inventory adjustments are accrued on
an interim basis and adjusted in the fourth quarter based on the
annual October 31 book-to-physical inventory adjustment. The
methodology and practices used in deriving estimates for interim
reporting typically result in adjustments upon accurate determina-
tion at year-end. The effect of these adjustments in 2006 and
2005 was not signicant.
The following is a summary of the quarterly results of operations
for the years ended December 31, 2006 and 2005:
ree Months Ended
March 31, June 30, Sept. 30, Dec. 31,
(in thousands except for per share data)
2006
Net Sales $2,553,552 $2,661,805 $2,699,641 $2,542,944
Gross Profit 803,477 825,182 831,295 815,541
Net Income 113,925 120,680 121,333 119,467
Earnings
Per Share:
Basic .66 .70 .71 .70
Diluted .66 .70 .71 .70
2005
Net Sales $2,342,201 $2,475,657 $2,555,503 $2,409,689
Gross Profit 736,480 761,257 778,502 787,847
Net Income 106,598 110,967 110,876 108,993
Earnings
Per Share:
Basic .61 .64 .64 .63
Diluted .61 .63 .63 .63
Forward-Looking Statements
Some statements in this report, as well as in other materials we
le with the SEC or otherwise release to the public and in materials
that we make available on our website, constitute forward-looking
statements that are subject to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Senior ofcers
may also make verbal statements to analysts, investors, the media
and others that are forward-looking. Forward-looking statements
may relate, for example, to future operations, prospects, strategies,
nancial condition, economic performance (including growth and
earnings), industry conditions and demand for our products and
services. The Company cautions that its forward-looking state-
ments involve risks and uncertainties, and while we believe that
our expectations for the future are reasonable in view of currently
available information, you are cautioned not to place undue reliance
on our forward-looking statements. Actual results or events may
differ materially from those indicated as a result of various impor-
tant factors. Such factors include, but are not limited to, changes in
general economic conditions, the growth rate of the market for the
Company’s products and services, the ability to maintain favorable
supplier arrangements and relationships, competitive product and
pricing pressures, including internet related initiatives, the effec-
tiveness of the Company’s promotional, marketing and advertising
programs, changes in laws and regulations, including changes in
accounting and taxation guidance, the uncertainties of litigation, as
well as other risks and uncertainties discussed from time to time in
the Company’s lings with the SEC.
Forward-looking statements are only as of the date they are made,
and the Company undertakes no duty to update its forward-looking
statements. You are advised, however, to review any further
disclosures we make on related subjects in our Forms 10-Q and
Form 8-K reports to the SEC.