UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities
Exchange Act of 1934
May 20, 2008
Date of Report
(Date of earliest event reported)
AutoZone, Inc.
(Exact name of registrant as specified in its charter)
|
Nevada |
1-10714 |
62-1482048 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
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123 South Front Street, Memphis, Tennessee |
38103 |
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| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (901) 495-6500
________________________________________________________________________________
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02. Results of Operations and Financial Condition.
On May 20, 2008, AutoZone, Inc. issued a press release announcing its earnings for the fiscal quarter ended May 3, 2008, which is furnished as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
The following exhibit is furnished with this Current Report pursuant to Item 2.02:
(d) Exhibits
99.1 Press Release dated May 20, 2008.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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AutoZone, Inc.
(Registrant) |
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May 20, 2008
(Date) |
/s/ WILLIAM T. GILES
William T. Giles Chief Financial Officer, Executive Vice President, Information Technology and Store Development |
| Exhibit Index | ||
| 99.1 | Press release dated May 20, 2008 | |
EXHIBIT 99.1
AutoZone 3rd Quarter Sales Increase 3.0 Percent; EPS increases 14.7 Percent
MEMPHIS, Tenn., May 20, 2008 (PRIME NEWSWIRE) -- AutoZone, Inc. (NYSE:AZO) today reported net sales of $1.5 billion for its third quarter (12 weeks) ended May 3, 2008, an increase of 3.0% from fiscal third quarter 2007. Domestic same store sales, or sales for stores open at least one year, decreased 0.3% for the quarter.
Net income for the quarter increased 4.6% over the same period last year to $158.6 million, while diluted earnings per share increased 14.7% to $2.49 per share from $2.17 per share in the year-ago quarter.
For the quarter, gross profit, as a percentage of sales, was 50.2% (versus 49.9% last year). The improvement in gross margin was primarily due to ongoing category management efforts and supply chain efficiencies, which were partially offset by higher shrink expense. Additionally, operating expenses, as a percentage of sales, were 32.2% (versus 31.9% last year). Higher occupancy costs versus last year were the primary contributor to the increase in comparable operating expenses.
The Company's GAAP inventory increased 6.4% over the same period last year. However, adjusted inventory per store, which includes supplier owned pay-on-scan inventory, as of May 3, 2008, was $508 thousand versus $504 thousand last year, an increase of 0.8%. Net inventory, defined as merchandise inventories less accounts payable, decreased on a per store basis to $56 thousand from $73 thousand last year.
AutoZone did not repurchase any shares of its common stock during the third quarter. The Company has $108 million remaining under its current share repurchase authorization. For the fiscal year-to-date, the Company has repurchased 2.9 million shares of its common stock for $350 million.
"I would like to thank all our AutoZoners across North America for their ongoing commitment to delivering exceptional customer service. Through their efforts, we were able to deliver our seventh consecutive quarter of double digit earnings per share growth, despite a challenging macro environment that included record high gas prices. We continue to refine our retail offering as evidenced by our improved customer satisfaction survey results, and our efforts to enhance our commercial offerings were rewarded by the highest quarterly commercial sales growth since our third quarter of fiscal 2004. As our operating model remains strong, we will maintain our disciplined approach to growing operating earnings and utilizing our capital effectively," said Bill Rhodes, Chairman, President and Chief Executive Officer.
During the quarter ended May 3, 2008, AutoZone opened 32 new stores and replaced three stores in the U.S. and opened two stores in Mexico. As of May 3, 2008, the Company had 4,032 stores in 48 states, the District of Columbia and Puerto Rico in the U.S. and 130 stores in Mexico.
AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, and service stations. AutoZone also sells the ALLDATA brand diagnostic and repair software. On the web, AutoZone sells diagnostic and repair information, and auto and light truck parts through www.autozone.com. AutoZone does not derive revenue from automotive repair or installation.
AutoZone will host a conference call this morning, Tuesday, May 20, 2008, beginning at 10:00 a.m. (EDT) to discuss its third quarter results. Investors may listen to the conference call live and review supporting slides on the AutoZone corporate website, www.autozoneinc.com, by clicking "Investor Relations," "Conference Calls." The call will also be available by dialing (210) 839-8923. A replay of the call and slides will be available on AutoZone's website. In addition, a replay of the call will be available by dialing (203) 369-1211 through Tuesday, May 27, 2008 at 11:59 p.m. (EDT).
This release includes certain financial information not derived in accordance with generally accepted accounting principles ("GAAP"). These non-GAAP measures include return on invested capital, adjusted inventory, adjusted inventory per store, adjusted debt, and adjusted debt/EBITDAR. The Company believes that the presentation of these non-GAAP measures provides information that is useful to investors as it indicates more clearly the Company's comparative year-to-year operating results, but this information should not be considered a substitute for any measures derived in accordance with GAAP. Management targets the Company's debt levels to a ratio of adjusted debt to EBITDAR and manages cash flows available for share repurchase by monitoring cash flows before share repurchases, as shown on the attached tables. The Company believes this is important information for the management of its debt levels and share repurchases. We have included a reconciliation of this additional information to the most comparable GAAP measures in the accompanying reconciliation tables.
Certain statements contained in this press release are forward-looking statements. Forward-looking statements typically use words such as "believe," "anticipate," "should," "intend," "plan," "will," "expect," "estimate," "project," "positioned," "strategy," and similar expressions. These are based on assumptions and assessments made by our management in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: competition; product demand; the economy; credit markets; the ability to hire and retain qualified employees; consumer debt levels; inflation; weather; raw material costs of our suppliers; energy prices; war and the prospect of war, including terrorist activity; availability of consumer transportation; construction delays; access to available and feasible financing; and changes in laws or r egulations. Forward-looking statements are not guarantees of future performance and actual results; developments and business decisions may differ from those contemplated by such forward-looking statements, and such events could materially and adversely affect our business. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results may materially differ from anticipated results. Please refer to the Risk Factors section of AutoZone's Form 10-K for the fiscal year ended August 25, 2007, for more information related to those risks.
AutoZone's 3rd Quarter Highlights - Fiscal 2008
Condensed Consolidated Statements of Operations
3rd Quarter
(in thousands, except per share data)
GAAP Results
----------------------------
12 Weeks Ended
May 3, 2008 May 5, 2007
----------- -----------
Net sales $1,517,293 $1,473,671
Cost of sales 755,287 738,272
---------- ----------
Gross profit 762,006 735,399
Operating, SG&A expenses 488,972 470,422
---------- ----------
Operating profit (EBIT) 273,034 264,977
Interest expense, net 25,331 27,115
---------- ----------
Income before taxes 247,703 237,862
Income taxes 89,065 86,271
---------- ----------
Net income $ 158,638 $ 151,591
========== ==========
Net income per share:
Basic $ 2.51 $ 2.19
Diluted $ 2.49 $ 2.17
Weighted average shares outstanding:
Basic 63,237 69,142
Diluted 63,792 69,901
Year-to-date 3rd Quarter, FY 2008
(in thousands, except per share data)
GAAP Results
----------------------------
36 Weeks Ended
May 3, 2008 May 5, 2007
----------- -----------
Net sales $4,312,192 $4,167,097
Cost of sales 2,155,943 2,107,191
---------- ----------
Gross profit 2,156,249 2,059,906
Operating, SG&A expenses 1,448,954 1,383,010
---------- ----------
Operating profit (EBIT) 707,295 676,896
Interest expense, net 81,980 81,025
---------- ----------
Income before taxes 625,315 595,871
Income taxes 227,455 217,374
---------- ----------
Net income $ 397,860 $ 378,497
========== ==========
Net income per share:
Basic $ 6.24 $ 5.39
Diluted $ 6.19 $ 5.33
Weighted Average Shares outstanding:
Basic 63,764 70,233
Diluted 64,325 70,980
Selected Balance Sheet Information
(in thousands) August 25,
May 3, 2008 May 5, 2007 2007
----------- ----------- -----------
Merchandise inventories $ 2,106,473 $ 1,979,238 $ 2,007,430
Current assets 2,386,938 2,230,781 2,270,455
Property and equipment, net 2,255,741 2,134,272 2,177,842
Total assets 5,026,904 4,722,498 4,804,709
Accounts payable 1,873,706 1,686,814 1,870,668
Current liabilities 2,383,967 2,160,150 2,285,894
Debt 1,932,000 1,938,942 1,935,618
Stockholders' equity 455,829 459,355 403,200
Working capital 2,971 70,631 (15,439)
---------------------------------------------------------------------
Adjusted Debt / EBITDAR (Trailing 4 Qtrs)
---------------------------------------- May 3, 2008 May 5, 2007
---------- ----------
Net income $ 615,034 $ 591,949
Add: Interest 120,071 115,921
Taxes 350,559 342,145
---------- ----------
EBIT 1,085,664 1,050,015
Add: Depreciation 167,515 153,470
Rent expense 164,106 144,202
Option expense 18,098 18,220
---------- ----------
EBITDAR $1,435,383 $1,365,907
Debt $1,932,000 $1,938,942
Capital lease obligations 72,943 28,576
Add: adjusted rent x 6 984,636 848,412*
---------- ----------
Adjusted debt $2,989,579 $2,815,930
========== ==========
Adjusted debt to EBITDAR 2.1 2.1
* For fiscal 2007 adjusted rent is defined as GAAP rent expense
less the rent expense associated with operating leases converted
to capital leases in fiscal 2007.
Selected Cash Flow Information
(in thousands)
12 Weeks Ended 36 Weeks Ended
May 3, 2008 May 5, 2007 May 3, 2008 May 5, 2007
----------- ----------- ----------- -----------
Depreciation $ 38,152 $ 36,946 $ 116,709 $ 108,605
Capital spending $ 58,377 $ 55,498 $ 153,522 $ 157,760
Cash flow before
share repurchases:
Net increase
(decrease) in cash
and cash equivalents$ (11,811) $ (3,489) $ (5,000) $ (8,985)
Subtract increase
(decrease) in debt (163,000) 84,638 (3,618) 81,785
Subtract share
repurchases -- (244,806) (349,990) (464,464)
--------- --------- --------- ---------
Cash flow before
share repurchases
and changes in debt $ 151,189 $ 156,679 $ 348,608 $ 373,694
========= ========= ========= =========
Trailing 4 Quarters
May 3, 2008 May 5, 2007
----------- -----------
Depreciation $ 167,515 $ 153,470
Capital spending $ 220,236 $ 239,172
Cash flow before share repurchases:
Net increase (decrease) in cash
and cash equivalents $ (919) $ (1,395)
Subtract increase (decrease) in debt (6,942) 113,817
Subtract share repurchases (647,413) (804,419)
--------- ---------
Cash flow before share repurchases
and changes in debt $ 653,436 $ 689,207
========= =========
Other Selected Financial Information
(in thousands) May 3, 2008 May 5, 2007
----------- -----------
Cumulative share repurchases ($) $5,791,708 $5,144,296
Remaining share authorization ($) $ 108,292 $ 255,704
Cumulative share repurchases (shares) 102,152 96,993
Shares outstanding, end of quarter 63,268 68,099
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Trailing 4 Quarters
May 3, 2008 May 5, 2007
----------- -----------
Net income $ 615,034 $ 591,949
Add: After-tax interest 76,479 73,461
After-tax rent 104,527 91,384
---------- ----------
After-tax return 796,040 756,794
Average debt* 2,045,207 1,931,309
Average capital lease obligations* 52,936 17,210
Average equity* 334,846 513,651
Add: rent x 6 984,636 865,212
---------- ----------
Pre-tax invested capital $3,417,625 $3,327,382
========== ==========
Return on Invested Capital (ROIC) 23.3% 22.7%
---------------------------------------------------------------------
* All averages are computed by taking trailing 14 periods balances.
AutoZone's 3rd Quarter Fiscal 2008
Selected Operating Highlights
Store Count & Square Footage
----------------------------
12 Weeks Ended 36 Weeks Ended
May 3, May 5, May 3, May 5,
2008 2007 2008 2007
-------- -------- -------- --------
Domestic stores:
Store count:
Stores opened 32 33 100 107
Stores closed -- -- 1 --
Replacement stores 3 5 8 15
Total domestic stores 4,032 3,881 4,032 3,881
Stores with commercial
programs 2,233 2,157 2,233 2,157
Square footage
(in thousands): 25,819 24,782 25,819 24,782
Square footage per store 6,404 6,385 6,404 6,385
Mexico stores:
Stores opened 2 2 7 10
Total stores in Mexico 130 110 130 110
Total stores chainwide 4,162 3,991 4,162 3,991
Sales Statistics (Domestic Stores Only)
---------------------------------------
12 Weeks Ended Trailing 4 quarters
May 3, 2008 May 5, 2007 May 3, 2008 May 5, 2007
----------- ----------- ----------- -----------
Total retail sales
($ in thousands) $1,253,332 $1,234,318 $5,242,014 $5,116,555
% Increase vs
LY retail sales 1.5% 3.8% 2.5% 3.5%
Total commercial
sales ($ in
thousands) $ 179,774 $ 169,195 $ 728,224 $ 704,487
% Increase vs. LY
commercial sales 6.3% (0.4%) 3.4% (1.4%)
Sales per average
store ($ in
thousands) $ 357 $ 363 $ 1,509 $ 1,536
Sales per average
square foot $ 56 $ 57 $ 236 $ 241
12 Weeks Ended 36 Weeks Ended
May 3, 2008 May 5, 2007 May 3, 2008 May 5, 2007
----------- ----------- ----------- -----------
Same store sales (0.3%) 0.4% 0.2% 0.2%
Inventory Statistics (Total Stores)
-----------------------------------
as of as of
May 3, 2008 May 5, 2007
----------- -----------
Accounts payable/inventory 88.9% 85.2%
($ in thousands)
Inventory* $2,106,473 $1,979,238
Pay-on-scan inventory 7,073 31,313
---------- ----------
Adjusted inventory $2,113,546 $2,010,551
Adjusted inventory per store $ 508 $ 504
Net inventory (net of payables) $ 232,767 $ 292,424
Net inventory / store $ 56 $ 73
Trailing 4 quarters
May 3, 2008 May 5, 2007
----------- -----------
Inventory turns** 1.5 x 1.6 x
* This is reported balance sheet inventory
** Inventory turns is calculated as cost of sales divided by the
average merchandise inventory balance over the previous year. The
calculation includes cost of sales related to pay-on-scan sales, which
were $29.4MM for the trailing 52 weeks ended May 3, 2008 and $121.0MM
for the trailing 52 weeks ended May 5, 2007.
CONTACT: AutoZone, Inc.
Financial:
Brian Campbell
(901) 495-7005
brian.campbell@autozone.com
Media:
Ray Pohlman
(901) 495-7962
ray.pohlman@autozone.com