SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended November 18, 2000,February 10, 2001, or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _______ to ________.
Commission file number 1-10714
AUTOZONE, INC.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
123 South Front Street
Memphis, Tennessee 38103
(Address of principal executive offices) (Zip Code)
(901) 495-6500
Registrant's telephone number, including area code
(not applicable)
Former name, former address and former fiscal year, if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date.
Common Stock, $.01 Par Value -- 113,791,190111,674,609 shares as of December 7, 2000.
March 10, 2001.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AUTOZONE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS
Nov. 18,Feb. 10, Aug. 26,
20002001 2000
(Unaudited)
Current assets:
Cash and cash equivalents $ 7,0417,110 $ 6,969
Accounts receivable 24,77222,984 21,407
Merchandise inventories 1,179,9991,159,161 1,108,978
Prepaid expenses 25,07729,551 30,214
Deferred income taxes 19,469 19,586 19,212
Total current assets 1,256,3581,238,392 1,186,780
Property and equipment:
Property and equipment 2,339,8302,371,747 2,320,376
Less accumulated depreciation and amortization 590,416 615,639 561,936
1,749,4141,756,108 1,758,440
Other assets:
Cost in excess of net assets acquired 324,470322,446 324,494
Deferred income taxes 48,12051,335 52,182
Other assets 31,346 22,844 11,322
403,936 396,625 387,998
$ 3,409,7083,391,125 $ 3,333,218
=================== =========
Current liabilities:
Accounts payable $ 791,611659,284 $ 788,825
Accrued expenses 221,504224,662 227,682
Income taxes payable 34,259 53,217 18,037
Total current liabilities 1,047,374937,163 1,034,544
Long-term debt 1,408,3781,520,045 1,249,937
Other liabilities 58,10555,344 56,558
Stockholders' equity 895,851 878,573 992,179
$ 3,409,7083,391,125 $ 3,333,218
========== ==========
========= =========
See Notes to Condensed Consolidated Financial Statements
AUTOZONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
Twelve Weeks Ended Twenty-four Weeks Ended
Nov. 18, Nov. 20,Feb. 10, Feb. 12, Feb. 10, Feb.12,
20002001 19992000
20012000
Net sales $ 1,063,566973,999 $ 1,006,472924,164 $ 2,037,565 $ 1,930,636
Cost of sales, including warehouse
and delivery expenses 618,001 584,956576,666 535,737 1,194,667 1,120,693
Operating, selling, general and
administrative expenses 334,797 320,053 315,768 308,414 654,850 624,182
Operating profit 110,768 105,74877,280 80,013 188,048 185,761
Interest expense, net 22,980 25,544 14,604 16,452 48,524 31,056
Income before income taxes 87,788 91,14451,736 63,561 139,524 154,705
Income taxes 34,000 20,000 35,100 24,500 54,000 59,600
Net income $ 53,78831,736 $ 56,04439,061 $ 85,524 $ 95,105
======= =======
========= ========= ========= =========
Weighted average shares
for basic earnings per share 116,717 139,261113,908 138,056 115,312 138,659
Effect of dilutive stock options 333588 7951,029 461 911
Adjusted weighted average shares
for diluted earnings per share 117,050 140,056114,496 139,085 115,773 139,570
======= ================ ========= ========= =========
Basic earnings per share $ .460.28 $ 0.400.28 $ 0.74 $ 0.69
======= ================ ========== ========= =========
Diluted earnings per share $ .460.28 $ 0.400.28 $ 0.74 $ 0.68
======= ================ ========== ========= =========
See Notes to Condensed Consolidated Financial Statements
AUTOZONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
TwelveTwenty-four Weeks Ended
Nov. 18, Nov. 20,Feb. 10, Feb. 12,
20002001 19992000
Cash flows from operating activities:
Net income $ 53,78885,524 $ 56,04495,105
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 30,464 30,12461,243 �� 60,956
Net increase in merchandise inventories (71,021) (51,141)(50,183) (17,736)
Net increase (decrease)decrease in current liabilities 12,830 (9,776)(97,381) (46,224)
Other --- net 1,518 (5,681) 1,285 11,593
Net cash provided by (used in) operating activities 27,579 26,536(6,478) 103,694
Cash flows from investing activities:
Purchases of property and equipment (55,048) (66,686)(93,071) (126,008)
Proceeds from sale of property and equipment 39,499 1,43641,740 9,337
Increase in other assets (18,269)(13,980)
Notes receivable from officers (200) (263) (3,600) (4,000)
Net cash used in investing activities (34,018) (68,850)(65,574) (120,671)
Cash flows from financing activities:
Net proceeds from debt 158,441 194,224270,108 233,931
Purchase of Treasury Stock (154,640) (151,935)(204,712) (219,280)
Proceeds from sale of Common Stock 1,543 8324,549 3,244
Other 1,167 2,248
Net cash provided by financing activities 6,511 72,193 43,121 17,895
Net increase in cash and cash equivalents 72 807141 918
Cash and cash equivalents at beginning of period 6,969 5,918
Cash and cash equivalents at end of period $ 7,0417,110 $ 6,7256,836
====== ============== ========
See Notes to Condensed Consolidated Financial Statements
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A-Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Certain prior year amounts have been reclassified to conform with the fiscal 2001 presentation. Operating results for the twelvetwenty-four weeks ended November 18, 2000,February 10, 2001, are not necessarily indicative of the results that may be expected for the fiscal year ending August 25, 2001. For further information, refer to the financial statements and footnotes included in the Company's annual report on Form 10-K for the year ended August 26, 2000.
Note B-Adoption of a New Accounting Standard
On August 27, 2000, the Company adopted Statement of Financial Accounting Standards Number 133, "Accounting for Derivative Instruments and Hedging Activities," (SFAS 133) as amended. SFAS 133 requires the Company to recognize all derivative instruments in the balance sheet at fair value. The adoption of SFAS 133 impacts the accounting for ourthe Company's interest rate hedging program. The Company reduces its exposure to increases in interest rates by entering into interest rate swap contracts. All of the Company's interest rate swaps are designated as cash flow hedges.
Upon adoption of SFAS 133, the Company recorded the fair value of the interest rate swaps in its Consolidated Balance Sheet. On an on-going basis, the Company will reflect the current fair value of interest rate swaps on ourin its balance sheet. The related gains or losses on these swaps are deferred in stockholders' equity (as a component of comprehensive income). These deferred gains and losses are recognized in income in the period in which the related interest rates being hedged have beenare recognized in expense. However, to the extent that the change in value of an interest rate swap contract does not perfectly offset the change in the value of the interest rate being hedged, that ineffective portion is immediately recognized in income.
Note C-Inventories
Inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must necessarily be based on management's estimates of expected year-end inventory levels and costs. The decline in the gross profit percentage in the twelve weeks ended February 10, 2001, as compared to the comparable prior year period is primarily due to inventory corrections related to business process changes.
Note D-Financing Arrangements
The Company's long-term debt as of November 18, 2000,Feb. 10, 2001, and August 26, 2000, consisted of the following (in thousands):following:
Nov. 18,Feb. 10, Aug. 26,
20002001 2000
6% Notes due November 2003 $150,000 $150,000$ 150,000 $ 150,000
6.5% Debentures due July 2008 190,000 190,000
Bank Term Loan due 115,000
December 2003 weighted
average rate of 7.70% at
February 10, 2001
Commercial Paper,
weighted average rate of 6.8%6.7% at
November 18, 2000February 10, 2001, and 6.8% at
August 26, 2000 903,491822,407 767,300
Unsecured Bank Loans 143,000221,500 120,000
Other 21,887 21,138 22,637
$1,408,378 $1,249,937$ 1,520,045 $ 1,249,937
========= =================
In November 1998, the Company sold $150 million of 6% Notes due November 2003 at a discount. Interest on the Notes is payable semi-annually on May 1 and November 1 each year. In July 1998, the Company sold $200 million of 6.5% Debentures due July 2008 at a discount. Interest on the Debentures is payable semi-annually on January 15 and July 15 of each year. Proceeds from the Notes and Debentures were used to repay portions of the Company's long-term variable rate bank debt and for general corporate purposes. In July 2000, the Company purchased $10 million of its 6.5% Debentures due July 2008, resulting in a $1.9 million gain.
The Company has a commercial paper program that allows borrowings up to $1.3 billion. In connection with the program, in May 2000, the Company hasentered into a credit facility with a group of banks for up to $650 million that extends until May 2005 and a 364-day $650 million credit facility with another group of banks. The 364-day facility includes a renewal feature as well as an option to extinguish the then outstanding debt one year from the maturity date. Borrowings under the commercial paper program reduce availability under the credit facilities. Outstanding commercial paper and unsecuredshort term bank loans at November 18, 2000,February 10, 2001, of $1.05$1.04 billion are classified as long-term debt as the Company has the ability and intention to refinance them on a long-term basis.
The rate of interest payable under the credit facilities is a function of the London Interbank Offered Rate (LIBOR) or the lending bank's base rate (as defined in the agreement) or a competitive bid rate at the option of the Company. The Company has agreed to observe certain covenants under the terms of its credit agreements, including limitations on total indebtedness, restrictions on liens and minimum fixed charge coverage.
DuringIn December 2000, the Company entered into a $115 million 3-year unsecured bank term loan with a group of banks. The rate of interest payable is a function of the London Interbank Offered Rate (LIBOR) or the lending banks base rate (as defined in the agreement) at the option of the Company.
In addition, during fiscal year 2001, the Company entered into unsecured bank loans with maturity dates from JanuaryFebruary to MarchApril 2001 and interest rates ranging from 6.94%5.83% to 7.44%. As of November 18, 2000, $143February 10, 2001, $221.5 million was outstanding under these agreements.
Note E-Stockholders' Equity
The Company presents basic and diluted earnings per share (EPS) in accordance with the Statement of Financial Accounting Standards No. 128, "Earnings Per Share." Basic EPS is computed as net earnings divided by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock-based compensation including stock options.
As of November 18, 2000,February 10, 2001, the Company's Board of Directors had authorized the Company to repurchase up to $1.35 billion of common stock in the open market. Since January 1998, approximately $1.03$1.08 billion of common stock has been repurchased under the plan. At times, the Company utilizes equity instrument contracts to facilitate its repurchase of common stock. At November 18, 2000,February 10, 2001, the Company held equity instrument contracts that relate to the purchase of approximately 9.07.5 million shares of common stock at an average cost of $22.84$22.77 per share.
Note F-Comprehensive Income
Comprehensive income includes changes in the fair value of certain derivative financial instruments which qualify for hedge accounting. Comprehensive income totaled $55.4$29.9 million for the quarter ended November 18, 2000February 10, 2001 compared to $56.0$39.1 million in the comparable period of fiscal 2000. Comprehensive income totaled $85.3 million for the twenty-four week period ended February 10, 2001 compared to $95.1 in the comparable period of fiscal 2000. The difference between net income and comprehensive income for the quarter ended November 18, 2000February 10, 2001 is the result of $1.6$1.8 million of unrealized gainslosses on swap contracts in the quarter recognized in accordance with Statement of Financial Accounting Standard (SFAS) No. 133. The difference between net income and comprehensive income for the twenty-four week period ended February 10, 2001 is the result of $.2 million of unrealized losses on swap contracts in the twenty-four week period recognized in accordance with Statement of Financial Accounting Standard (SFAS) No. 133. Upon the adoption of SFAS 133 on August 27, 2000, the Company recorded unrealized interest hedge gains of $2.4 million. For additional information on the adoption of SFAS 133, see Note B of the Notes to theCondensed Consolidated Financial Statements in this Form 10-Q.
Note G-Sale and Leaseback Transaction
During the first quarter ended November 18, 2000,of fiscal 2001, the Company sold properties which were leased back from the purchaser under a 22-year operating lease agreement. Gains realized from the sale and leaseback transaction were deferred and are being recognized over the life of the leases. The leases contain renewal options and generally provide that the Company will pay property taxes, common area maintenance, insurance and repairs. A portionAs of theFebruary 10, 2001, net proceeds of $14.0 million from this transaction are held in escrow until such time as suitable replacement properties can be purchased in an exchange under section 1031 of the Internal Revenue Code.
Note H-Contingencies
AutoZone, Inc. is a defendant in a class action lawsuit entitled "Melvin Quinnie on behalf of all others similarly situated v. AutoZone, Inc., and DOES 1 through 100, inclusive" filed in the Superior Court of California, County of Los Angeles, in November 1998. The plaintiff claims that the defendants failed to pay overtime to store managers as required by California law and failed to pay terminated managers in a timely manner as required by California law. The plaintiff is seeking injunctive relief, restitution, statutory penalties, prejudgment interest, and reasonable attorneys' fees, expenses and costs. On April 3, 2000, the court certified the class as consisting of all AutoZone store managers, and Chief managers who became AutoZone employees in standardized stores on January 1, 1999, for their claims since January 1, 1999, only. The Company and the plaintiffs' attorneys have reached a settlement that is subject to the execution of a mutually acceptable settlement agreement and court approval. In the event that final settlement is not reached or appealedapproved by the court, the Company will continue to vigorously defend against this action. The potential damages recoverable by any single plaintiff are minimal. However, if the plaintiff class were to prevail on all of its claims, the aggregate amount of damages could be substantial.
AutoZone, Inc. and its wholly-owned subsidiary, Chief Auto Parts Inc., are defendants in a purported class action lawsuit entitled "Paul D. Rusch, on behalf of all others similarly situated, v. Chief Auto Parts Inc., and AutoZone, Inc." filed in the Superior Court of California, County of Los Angeles, in May 1999. The plaintiffs claim that the defendants have failed to pay their store managers overtime pay from March 1997 to present. The plaintiffs are seeking back overtime pay, interest, an injunction against the defendants committing such practices in the future, costs, and attorneys' fees. The Company and the plaintiffs' attorneys have reached a settlement that is subject to the execution of a mutually acceptable settlement agreement and court approval. In the event that final settlement is not reached or appealedapproved by the court, the Company will continue to vigorously defend against this action. The potential damages recoverable by any single plaintiff are minimal. However, if the plaintiff class were to be certified and prevail on all of its claims, the aggregate amount of damages could be substantial.
AutoZone, Inc. is a defendant in a lawsuit entitled "Coalition for a Level Playing Field, L.L.C., et al., v. AutoZone, Inc., et alal..," filed in the U.S. District Court for the Eastern District of New York in February, 2000. The case was filed by over 100 plaintiffs, which are principally automotive aftermarket warehouse distributors and jobbers, against eight defendants, which are principally automotive aftermarket parts retailers. The plaintiffs claim that the defendants have knowingly received volume discounts, rebates, slotting and other allowances, fees, free inventory, sham advertising and promotional payments, a share in the manufacturers' profits, and excessive payments for services purportedly performed for the manufacturers in violation of the Robinson-Patman Act. Plaintiffs seek approximately $1 billion in damages (including statutory trebling) and a permanent injunction prohibiting defendants from committing further violations of the Robinson-Patman Act and from opening up any further stores to compete with plaintiffs as long as defendants continue to violate the Act. The Company believes this suit to be without merit and will vigorously defend against it.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Twelve Weeks Ended November 18, 2000,February 10, 2001, Compared to
Twelve Weeks Ended November 20, 1999February 12, 2000
Net sales for the twelve weeks ended November 18, 2000,February 10, 2001, increased by $57.1$49.8 million, or 5.7%5.4%, over net sales for the comparable period of fiscal 2000. Comparable store sales, or sales for domestic auto parts stores opened at least one year, increased 2%. At November 18, 2000,February 10, 2001, the Company had 2,9562,972 domestic auto parts stores in operation compared with 2,7962,837 stores at November 20, 1999.February 12, 2000.
Gross profit for the twelve weeks ended November 18, 2000,February 10, 2001, was $445.6$397.3 million, or 41.9%40.8% of net sales, compared with $421.5$388.4 million, or 41.9%42.0% of net sales, during the comparable period for fiscal 2000. The decline in gross profit is primarily due to inventory corrections recorded in the second quarter related to business process changes.
Operating, selling, general and administrative expenses for the twelve weeks ended November 18, 2000,February 10, 2001, increased by $19.0$11.6 million over such expenses for the comparable period for fiscal 2000, and increaseddecreased as a percentage of net sales from 31.4%33.4% to 31.5%32.9%. The increasedecrease in the expense ratio was due primarily to increased payroll, benefits, fuel, utilitiesfavorable legal settlements and advertising costs. These increases werea reduction in bonus accruals, partially offset by continuing expense leverage in the acquired stores.higher utility, fuel and bad debt costs.
Interest expense for the twelve weeks ended November 18, 2000,February 10, 2001, was $23.0$25.5 million compared with $14.6$16.5 million during the comparable period of 2000. The increase in interest expense was primarily due to higher levels of borrowings as a result of the stock repurchases and higher interest rates.
The Company's effective income tax rate was 38.7% of pre-tax income for the twelve weeks ended November 18, 2000February 10, 2001, and 38.5 % for the twelve weeks ended November 20, 1999.February 12, 2000.
Twenty-four Weeks Ended February 10, 2001, Compared to
Twenty-four Weeks Ended February 12, 2000
Net sales for the twelve weeks ended February 10, 2001, increased by $106.9 million, or 5.5%, over net sales for the comparable period of fiscal 2000. Comparable store sales, or sales for domestic auto parts stores opened at least one year, increased 2%.
Gross profit for the twenty-four weeks ended February 10, 2001, was $842.9 million, or 41.4% of net sales, compared with $809.9 million, or 42.0% of net sales, during the comparable period for fiscal 2000.
Operating, selling, general and administrative expenses for the twenty-four weeks ended February 10, 2001, increased by $30.7 million over such expenses for the comparable period for fiscal 2000, and decreased as a percentage of net sales from 32.3% to 32.1%. The decrease in the expense ratio was due primarily to favorable legal settlements and a reduction in bonus accruals, partially offset by increases in utilities and bad debt costs.
Interest expense for the twenty-four weeks ended February 10, 2001, was $48.5 million compared with $31.1 million during the comparable period of 2000. The increase in interest expense was primarily due to higher levels of borrowings as a result of the stock repurchases and higher interest rates.
The Company's effective income tax rate is due to increased profitability in higher tax rate jurisdictions.
was 38.7% of pre-tax income for the twenty-four weeks ended February 10, 2001 and 38.5 % for the twenty-four weeks ended February 12, 2000.
Liquidity and Capital Resources
For the twelvetwenty-four weeks ended November 18, 2000,February 10, 2001, net cash of $27.6$6.5 million was provided byused in the Company's operations versus $26.5$103.7 million provided by operations for the comparable period of fiscal year 2000. The comparative decrease in cash provided by operations is primarily due to an increase in the working capital requirements.
Additionally, $34.0$65.6 million was used in investing activities by the Company compared with $68.9$120.7 million in the comparable period of fiscal year 2000. The decrease in investing activities as compared to the first quartertwenty-four weeks of the prior year is primarily due to the receipt of $39.5 million from the sale of real estate pursuant to a sale and leaseback transaction. Of these proceeds, $18.3$14.0 million is being held in restricted cash accounts, as the Company anticipates deferring a portion of its tax expense related to this transaction by replacing these properties. Capital expenditures for the twelvetwenty-four weeks ended November 18, 2000,February, 10, 2001, were $55.0$93.1 million. Year-to-date, the Company opened 41 net59 new domestic auto parts stores, including 5closed 2 stores thatand replaced 8 existing stores. The Company expects to operate approximately 3,090 domestic auto parts stores at the end of the fiscal year.
As of November 18, 2000,February 10, 2001, the Company's Board of Directors had authorized the Company to repurchase up to $1.35 billion of common stock in the open market. Since January 1998, approximately $1.03$1.08 billion of common stock has been repurchased under the plan. At times, the Company utilizes equity instrument contracts to facilitate its repurchase of common stock. At November 18, 2000,February 10, 2001, the Company held equity instrument contracts that relate to the purchase of approximately 9.07.5 million shares of common stock at an average cost of $22.84$22.77 per share.
The Company anticipates that it will rely primarily on internally generated funds to support a majority of its capital expenditures, working capital requirements and stock repurchases. The balance will be funded through borrowings. The Company anticipates that it will be able to obtain such financing in view of its credit rating and favorable experiences in the debt market in the past.
The Company has a commercial paper program that allows borrowing up to $1.3 billion. In connection with the program, the Company had a credit facility with a group of banks for up to $650 million which extends until May 2005 and a 364-day $650 million credit facility with another group of banks. The 364-day facility included a renewal feature as well as an option to extinguish the then outstanding debt one year from the maturity date. Borrowings under the commercial paper program reducedreduce availability under the credit facilities. Outstanding commercial paper and unsecuredshort term bank loans at November 18, 2000,February 10, 2001 of $1.05$1.04 billion are classified as long term debt as the Company'sCompany has the ability and intention to refinance them on a long-term basis.
In December 2000, the Company entered into a $115 million 3-year unsecured bank term loan with a group of banks. The rate of interest payable is a function of the London Interbank Offered Rate (LIBOR) or the lending banks base rate (as defined in the agreement) at the option of the Company. In addition, during fiscal year 2001 the Company entered into unsecured bank loans with maturity dates from February to April 2001 and interest rates ranging from 5.83% to 7.44%. As of February 10, 2001, $221.5 million was outstanding under these agreements.
During the second quarter of fiscal 2001, the Company entered into a synthetic lease facility aggregating $30 million for the lease of new stores and the new ALLDATA headquarters complex which are under construction. As of February 10, 2001, approximately $10.6 million of lessor construction costs had been funded under this facility.
Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form 10-Q are forward-looking statements. These statements discuss, among other things, expected growth, domestic and international development and expansion strategy, business strategies, and future performance. The forward-looking statements are subject to risks, uncertainties and assumptions including, without limitation, competition, product demand, domestic and international economies, the ability to hire and retain qualified employees, consumer debt levels, inflation and the weather. Actual results may materially differ from anticipated results. Please refer to the Risk Factors section in the Annual Report on Form 10-K for fiscal year ended August 26, 2000, for more details.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Incorporated by reference to Part II, Item 7A, of the Form 10-K for the fiscal year ended August 26, 2000.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Stockholders was held on December 14, 2000.
(b) Not applicable.
(c) 1. Legal Proceedings.Election of Directors. All nominees for director were elected
pursuant to the following vote:
| Nominee | ||
| John C. Adams, Jr. | ||
| Andrew M. Clarkson | ||
| Charles M. Elson | ||
| N. Gerry House | ||
| Robert J. Hunt | ||
| J.R. Hyde, III | ||
| James F. Keegan | ||
| Edward S. Lampert | ||
| W. Andrew McKenna | ||
| Michael W. Michelson | ||
| Timothy D. Vargo |
2. For the approval of the amendment to the AutoZone, Inc. is a defendant in a class action lawsuit entitled "Melvin Quinnie on behalf2000 Executive Incentive Compensation Plan:
For: 98,950,324
Against: 2,922,354
Abstain: 382,200
3. For the approval of all others similarly situated v. AutoZone, Inc., and DOES 1 through 100, inclusive" filed in the Superior Court of California, County of Los Angeles, in November 1998. The plaintiff claims that the defendants failed to pay overtime to store managersErnst & Young LLP as required by California law and failed to pay terminated managers in a timely manner as required by California law. The plaintiff is seeking injunctive relief, restitution, statutory penalties, prejudgment interest, and reasonable attorneys' fees, expenses and costs. On April 3, 2000, the court certified the class as consisting of all AutoZone store managers, and Chief managers who became AutoZone employees in standardized stores on January 1, 1999, for their claims since January 1, 1999, only. The Company and the plaintiffs' attorneys have reached a settlement that is subject to the execution of a mutually acceptable settlement agreement and court approval. In the event that final settlement is not reached or appealed by the court, the Company will continue to vigorously defend against this action. The potential damages recoverable by any single plaintiff are minimal. However, if the plaintiff class were to prevail on all of its claims, the aggregate amount of damages could be substantial.independent auditors:
AutoZone, Inc. and its wholly-owned subsidiary, Chief Auto Parts Inc., are defendants in a purported class action lawsuit entitled "Paul D. Rusch, on behalf of all others similarly situated, v. Chief Auto Parts Inc., and AutoZone, Inc." filed in the Superior Court of California, County of Los Angeles, in May 1999. The plaintiffs claim that the defendants have failed to pay their store managers overtime pay from March 1997 to present. The plaintiffs are seeking back overtime pay, interest, an injunction against the defendants committing such practices in the future, costs, and attorneys' fees. The Company and the plaintiffs' attorneys have reached a settlement that is subject to the execution of a mutually acceptable settlement agreement and court approval. In the event that final settlement is not reached or appealed by the court, the Company will continue to vigorously defend against this action. The potential damages recoverable by any single plaintiff are minimal. However, if the plaintiff class were to be certified and prevail on all of its claims, the aggregate amount of damages could be substantial.For: 101,902,717
Against: 83,585
Abstain: 268,576
(d) Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
3.1 Restated Articles of Incorporation of AutoZone, Inc. Incorporated by reference to Exhibit 3.1 to the
Form
10-Q for the quarter ended February 13, 1999.
3.2 Second Amended and Restated By-laws of AutoZone, Inc. Incorporated by reference to Exhibit 3 to
the Form
8-K dated March 21, 2000.
*10.1 Agreement between AutoZone, Inc., and John C. Adams, Jr., dated October 19, 2000.
*10.2 Form of Employment and Non-Compete Agreement between AutoZone, Inc., and various executive officers.Steve Odland,
dated January 29, 2001
27.1 Financial Data Schedule (SEC Use Only)._____________*10.2 Promissory Note in favor of AutoZone, Inc., from Bruce Clark dated December 8, 2000.
*10.3 Offer letter to Daisy Vanderlinde dated February 5, 2001, as amended.
_____________
*Management contract or compensatory plan or arrangement.
(b) (1) The Company filed a Form 8-K under Regulation FD, dated SeptemberNovember 21, 2000, containing a
press release announcing its earnings
sales for the fiscal yearquarter ended August 26,November 18, 2000.
(2) The Company filed a Form 8-K under Regulation FD, dated October 10,December 5, 2000, stating thatcontaining a
press release announcing its Board of Directors had accelerated the expiration dateearnings for the Company's Rights Agreement to October 20,quarter ended November 18, 2000.
(3) The Company filed a Form 8-K dated November 15, 2000, disclosing certain statistical informationJanuary 11, 2001, containing a press release announcing
that Steve Odland would be the Chief Executive Officer of AutoZone, Inc., effective as of
January 29, 2001.
(4) The Company filed a Form 8-K under Regulation FD, dated January 19, 2001, containing a
Regulation FD.press release announcing revised expectations for the quarter ended February 10, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
AUTOZONE, INC.
By: /s/ ROBERT J. HUNT
Robert J. Hunt
Executive Vice President and
Chief Financial Officer-Customer Satisfaction
(Principal Financial Officer)
By: /s/ TRICIA K. GREENBERGER
Tricia K. Greenberger
Vice President, Controller
(Principal Accounting Officer)
Dated: December 14, 2000March 27, 2001
EXHIBIT INDEX
The following exhibits are filed as part of this report:
3.1 Restated Articles of Incorporation of AutoZone, Inc. Incorporated by reference to Exhibit 3.1
to the
Form 10-Q for the quarter ended February 13, 1999.
3.2 Second Amended and Restated By-laws of AutoZone, Inc. Incorporated by reference to
Exhibit 3 to
the Form 8-K dated March 21, 2000.
*10.2 Form of*10.1 Employment and Non-Compete Agreement between AutoZone, Inc., and various executive officers.Steve Odland,
dated January 29, 2001
27.1 Financial Data Schedule (SEC Use Only).*10.2 Promissory Note in favor of AutoZone, Inc., from Bruce Clark dated December 8, 2000.
*10.3 Offer letter to Daisy Vanderlinde dated February 5, 2001, as amended.
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