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 27, 2009
Date of Report
(Date of earliest event reported)
AutoZone, Inc.
(Exact name of registrant as specified in its charter)
Nevada |
1-10714 |
62-1482048 |
||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
123 South Front Street, Memphis, Tennessee |
38103 |
|||
| (Address of principal executive offices) | (Zip Code) |
(901) 495-6500
Registrant's telephone number, including area code
________________________________________________________________________________
(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 27, 2009, AutoZone, Inc. issued a press release announcing its earnings for the fiscal quarter ended May 9, 2009, 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: 99.1 Press Release dated May 27, 2009.
(d) Exhibits
SIGNATURES
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.
| AutoZone, Inc. |
||
| Dated: May 27, 2009 | By: | /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 27, 2009 | |
EXHIBIT 99.1
AutoZone 3rd Quarter Sales Increase 9.3%; EPS Increases 25.9% to $3.13
MEMPHIS, Tenn., May 27, 2009 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE:AZO) today reported net sales of $1.7 billion for its third quarter (12 weeks) ended May 9, 2009, an increase of 9.3% from fiscal third quarter 2008 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 7.4% for the quarter.
Net income for the quarter increased $15.1 million, or 9.5%, over the same period last year to $173.7 million, while diluted earnings per share increased 25.9% to $3.13 per share from $2.49 per share in the year-ago quarter.
For the quarter, gross profit, as a percentage of sales, was 50.2% (versus 50.2% last year). Gross margin benefited by approximately 15 basis points through leverage of distribution costs due to improved efficiencies and lower fuel costs, but was offset by the impact of promotional activities. Operating expenses, as a percentage of sales, were 31.8% (versus 32.2% last year). The lower operating expense ratio reflected leverage of store operating expenses due to higher sales volumes, offset in part by approximately 50 basis points from higher incentive compensation and investments to enhance our hub stores.
Under its share repurchase program, AutoZone repurchased 450 thousand shares of its common stock for $65 million during the third quarter, at an average price of $145 per share. Year-to-date the Company has purchased $713 million of stock, at an average price of $130 per share. The Company has $396 million remaining under its current share repurchase authorization.
The Company's GAAP inventory increased 6.4% over the same period last year. Inventory per store was $516 thousand versus $506 thousand last year, an increase of 2.0%. Net inventory, defined as merchandise inventories less accounts payable, decreased on a per store basis to $33 thousand from $56 thousand last year.
"We are pleased to report our eleventh consecutive quarter of double digit earnings per share growth. I would like to thank our AutoZoners across the organization for their commitment to excellence and for their diligence to ensure we meet or exceed our customers' expectations. While the current economic environment, combined with the reduction in fuel prices compared to last year, has clearly been beneficial to our industry's performance, we are very pleased with our organization's ability to capitalize on these favorable trends. At the end of the third quarter, our balance sheet was in excellent condition, and we remain committed to our disciplined approach of growing operating earnings while utilizing our capital effectively," said Bill Rhodes, Chairman, President and Chief Executive Officer.
During the quarter ended May 9, 2009, AutoZone opened 32 new stores, closed one store, and relocated four stores in the U.S. and opened 10 stores in Mexico. As of May 9, 2009, the Company had 4,172 stores in 48 states, the District of Columbia and Puerto Rico in the U.S. and 168 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, service stations, and public sector accounts. 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, Wednesday, May 27, 2009, 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 Wednesday, June 3, 2009 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 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 t ables.
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 30, 2008, for more information related to those risks.
AutoZone's 3rd Quarter Highlights - Fiscal 2009
Condensed Consolidated Statements of Operations
3rd Quarter
(in thousands, except per share data) GAAP Results
------------------------------
12 Weeks Ended 12 Weeks Ended
May 9, 2009 May 3, 2008
-------------- --------------
Net sales $ 1,658,160 $ 1,517,293
Cost of sales 825,253 755,287
-------------- --------------
Gross profit 832,907 762,006
Operating, SG&A expenses 527,675 488,972
-------------- --------------
Operating profit (EBIT) 305,232 273,034
Interest expense, net 31,482 25,331
-------------- --------------
Income before taxes 273,750 247,703
Income taxes 100,061 89,065
-------------- --------------
Net income $ 173,689 $ 158,638
============== ==============
Net income per share:
Basic $ 3.18 $ 2.51
Diluted $ 3.13 $ 2.49
Weighted average shares outstanding:
Basic 54,652 63,237
Diluted 55,456 63,792
Year-to-date 3rd Quarter, FY 2009
(in thousands, except per share data) GAAP Results
------------------------------
36 Weeks Ended 36 Weeks Ended
May 9, 2009 May 3, 2008
-------------- --------------
Net sales $ 4,584,330 $ 4,312,192
Cost of sales 2,290,934 2,155,943
-------------- --------------
Gross profit 2,293,396 2,156,249
Operating, SG&A expenses 1,534,930 1,448,954
-------------- --------------
Operating profit (EBIT) 758,466 707,295
Interest expense, net 94,554 81,980
-------------- --------------
Income before taxes 663,912 625,315
Income taxes 242,989 227,455
-------------- --------------
Net income $ 420,923 $ 397,860
============== ==============
Net income per share:
Basic $ 7.45 $ 6.24
Diluted $ 7.36 $ 6.19
Weighted Average Shares outstanding:
Basic 56,498 63,764
Diluted 57,179 64,325
Selected Balance Sheet Information
(in thousands)
May 9, May 3, August 30,
2009 2008 2008
---------- ---------- ----------
Cash and cash equivalents $ 94,287 $ 81,654 $ 242,461
Merchandise inventories 2,240,511 2,106,473 2,150,109
Current assets 2,607,984 2,386,938 2,586,301
Property and equipment, net 2,301,794 2,255,741 2,289,656
Total assets 5,296,176 5,026,904 5,257,112
Accounts payable 2,098,308 1,873,706 2,043,271
Current liabilities* 3,135,961 2,383,967 2,519,320
Total debt, including short term 2,405,900 1,932,000 2,250,000
Stockholders' equity (45,119) 455,829 229,687
Working capital (527,977) 2,971 66,981
* Current liabilities at May 9, 2009 include $456.6 million of short
term debt obligations ($300.0 million bank term loan and $156.6
million in commercial paper borrowings) that we are currently in the
process of refinancing on a long term basis. Prior to May 9, 2009, we
classified short term debt obligations as long-term as we had the
ability and intent to replace these short term obligations with
long-term financing under our $1.0 billion of revolving credit
facilities, expiring May 5, 2010. We expect to renegotiate our
revolving credit facility during the fourth quarter to extend beyond
12 months, at which time we will reclassify these obligations as long
term.
---------------------------------------------------------------------
Adjusted Debt / EBITDAR (Trailing 4 Qtrs) May 9, 2009 May 3, 2008
----------------------------------------- ----------- -----------
Net income $ 664,670 $ 615,034
Add: Interest 129,319 120,071
Taxes 381,316 350,559
----------- -----------
EBIT 1,175,305 1,085,664
Add: Depreciation 176,074 167,515
Rent expense 179,054 164,106
Option expense 19,249 18,098
----------- -----------
EBITDAR $ 1,549,682 $ 1,435,383
Debt $ 2,405,900 $ 1,932,000
Capital lease obligations 57,227 72,943
Add: rent x 6 1,074,324 984,636
----------- -----------
Adjusted debt $ 3,537,451 $ 2,989,579
=========== ===========
Adjusted debt to EBITDAR 2.3 2.1
Selected Cash Flow Information
(in thousands)
12 Weeks 12 Weeks 36 Weeks 36 Weeks
Ended Ended Ended Ended
May 9, 2009 May 3, 2008 May 9, 2009 May 3, 2008
----------- ----------- ----------- -----------
Depreciation $ 41,309 $ 38,152 $ 123,273 $ 116,709
Capital spending $ 61,941 $ 58,371 $ 160,087 $ 153,516
Cash flow before
share repurchases:
Net increase
(decrease) in cash
and cash
equivalents $ (13,686) $ (11,811) $ (148,174) $ (5,000)
Subtract increase
(decrease) in debt (284,855) (163,000) 155,900 (3,618)
Subtract share
repurchases (65,440) -- (712,606) (349,990)
----------- ----------- ----------- -----------
Cash flow before
share repurchases
and changes in
debt $ 336,609 $ 151,189 $ 408,532 $ 348,608
=========== =========== =========== ===========
Trailing Trailing
4 quarters 4 quarters
May 9, 2009 May 3, 2008
----------- -----------
Depreciation $ 176,073 $ 167,515
Capital spending $ 250,159 $ 220,230
Cash flow before share repurchases:
Net increase (decrease) in cash and cash
equivalents $ 12,633 $ (919)
Subtract increase (decrease) in debt 473,900 (6,942)
Subtract share repurchases (1,211,812) (647,413)
----------- -----------
Cash flow before share repurchases and
changes in debt $ 750,545 $ 653,436
=========== ===========
Other Selected Financial Information
(in thousands)
May 9, 2009 May 3, 2008
----------- -----------
Cumulative share repurchases ($) $ 7,003,520 $ 5,791,708
Remaining share authorization ($) $ 396,480 $ 108,292
Cumulative share repurchases (shares) 111,558 102,152
Shares outstanding, end of quarter 54,567 63,268
---------------------------------------------------------------------
Trailing 4 Quarters
May 9, 2009 May 3, 2008
----------- -----------
Net income $ 664,670 $ 615,034
Add: After-tax interest 82,175 76,479
After-tax rent 113,780 104,527
----------- -----------
After-tax return 860,625 796,040
Average debt* 2,242,012 2,045,207
Average capital lease obligations* 62,645 52,936
Average equity* 139,142 334,846
Add: rent x 6 1,074,324 984,636
----------- -----------
Pre-tax invested capital $ 3,518,123 $ 3,417,625
=========== ===========
Return on Invested Capital (ROIC) 24.5% 23.3%
---------------------------------------------------------------------
* All averages are computed by taking trailing 14 periods balances.
AutoZone's 3rd Quarter Fiscal 2009
Selected Operating Highlights
Store Count & Square Footage
----------------------------
12 Weeks 12 Weeks 36 Weeks 36 Weeks
Ended Ended Ended Ended
May 9, 2009 May 3, 2008 May 9, 2009 May 3, 2008
----------- ----------- ----------- -----------
Domestic stores:
Store count:
Stores opened 32 32 82 100
Stores closed 1 -- 2 1
Replacement
stores 4 3 6 8
Total domestic
stores 4,172 4,032 4,172 4,032
Stores with
commercial
programs 2,276 2,233 2,276 2,233
Mexico stores:
Stores opened 10 2 20 7
Total stores in
Mexico 168 130 168 130
Total stores
chainwide 4,340 4,162 4,340 4,162
Square footage
(in thousands): 28,012 26,740
Square footage
per store 6,454 6,425
Sales Statistics
----------------
($ in thousands, except sales per average square foot)
12 Weeks 12 Weeks Trailing Trailing
Ended Ended 4 quarters 4 quarters
Total Auto Parts May 9, 2009 May 3, 2008 May 9, 2009 May 3, 2008
(Domestic and ----------- ----------- ----------- -----------
Mexico)
Total auto parts
sales $ 1,624,806 $ 1,485,506 $ 6,649,892 $ 6,181,724
% Increase
vs. LY 9.4% 2.8% 7.6% 3.3%
Sales per
average store $ 376 $ 358 $ 1,564 $ 1,516
Sales per
average square
foot $ 58 $ 56 $ 243 $ 236
Domestic Commercial
Total domestic
commercial
sales $ 188,636 $ 179,774 $ 772,296 $ 728,224
% Increase
vs. LY 4.9% 6.3% 6.1% 3.4%
All Other (ALLDATA
and E-Commerce)
All other sales $ 33,355 $ 31,787 $ 144,951 $ 133,175
% Increase
vs. LY 4.9% 9.7% 8.8% 9.1%
12 Weeks 12 Weeks 36 Weeks 36 Weeks
Ended Ended Ended Ended
May 9, 2009 May 3, 2008 May 9, 2009 May 3, 2008
----------- ----------- ----------- -----------
Domestic same
store sales 7.4% (0.3%) 3.9% 0.2%
Inventory Statistics (Total Stores)
-----------------------------------
as of as of
May 9, 2009 May 3, 2008
----------- -----------
Accounts payable/inventory 93.7% 88.9%
($ in thousands)
Inventory $ 2,240,511 $ 2,106,473
Inventory per store $ 516 $ 506
Net inventory (net of payables) $ 142,203 $ 232,767
Net inventory / store $ 33 $ 56
Trailing 4 quarters
May 9, 2009 May 3, 2008
----------- -----------
Inventory turns 1.6 x 1.5 x
CONTACT: AutoZone, Inc.
Financial:
Brian Campbell
(901) 495-7005
brian.campbell@autozone.com
Media:
Ray Pohlman
(901) 495-7962
ray.pohlman@autozone.com