Advance Auto Parts (AAP) 8-K Advance Auto Parts Reports Fourth Quarter and Annual Results

Exhibit 99.1

Contact:
Shelly Whitaker, APR
Shelly.whitaker@advanceautoparts.com
Direct	540-561-8452
Fax	540-561-6445

ADVANCE AUTO PARTS REPORTS FOURTH QUARTER AND ANNUAL RESULTS

ROANOKE, Va., February 13, 2008 — Advance Auto Parts, Inc. (NYSE: AAP), a leading retailer of automotive aftermarket parts, accessories, batteries, and maintenance items, today announced its financial results for the fourth quarter and fiscal year ended December 29, 2007.

Fiscal Fourth-Quarter and Year End 2007 Performance Summary
	Fiscal Quarter Ended				Fiscal Year Ended
	December 2007		December 2006		2007		2006
Sales (in millions)	$	1,048.4	$	1,016.2	$	4,844.4	$	4,616.5
Comp Stores Sales %		(0.4%)		1.6%		0.8%		2.1%
Gross Profit %		47.1%		47.1%		47.9%		47.7%
SGA %		41.0%		40.8%		39.3%		39.0%
Operating Income %		6.1%		6.3%		8.6%		8.7%
Diluted EPS	$	0.35	$	0.33	$	2.28	$	2.16
Avg Diluted Shares (in 000s)		100,654		106,241		104,654		107,124

Fourth Quarter and Annual Highlights

Total revenue for the fourth quarter was over $1 billion.  Comparable-store sales declined by 0.4% compared to an increase of 1.6% last year.   The decrease was comprised of a 3.1% decrease in do-it-yourself (DIY) sales and an 8.2% increase in do-it-for-me (DIFM) sales.  This compares to a 0.3% decrease in DIY and a 7.9% increase in DIFM in the fourth quarter last year.

Fourth quarter gross margin was 47.1% of sales, which was flat compared to last year as a result of higher selling margin offset by higher shrinkage expense.

Fourth quarter selling, general and administrative (SG&A) expenses were 41.0% of sales compared to 40.8% last year, an increase of 24 basis points due to lower than anticipated sales and higher related occupancy expenses.

The Company reported quarterly interest expense of $8.2 million in the quarter compared to $7.8 million last year.   During the fourth quarter, two million Advance shares or 2% of the outstanding shares were repurchased for $75 million at an average price of $37.10.

Fourth quarter earnings per diluted share were $0.35 compared to $0.33 in the same quarter last year.

For the year, total revenue increased to $4.8 billion from $4.6 billion last year. The total year comparable-store sales increase of 0.8%, comprised of a 1.0% decrease in DIY sales and a 6.7% increase in DIFM sales, compares to a 2.1% increase last year.

For the year, gross margin was 47.9% of sales, a 23 basis-point improvement from last year. SG&A expenses were 39.3% of sales as compared to 39.0% in 2006.  Total year earnings per diluted share were $2.28, compared to $2.16 last year, an increase of 5.6%.   The company repurchased 8.3 million shares or 8% of its outstanding shares during fiscal year 2007 at an aggregate cost of $286 million, or $34.27 per share.  Since the end of 2007, the Company has repurchased another 4.6 million shares at an average price of $34.04 for a total expenditure of $155 million.

“The fourth quarter and fiscal year 2007 came up short of our financial expectations,” said Darren Jackson, President and Chief Executive Officer.   “That being said, we made significant progress in building the strategic roadmap to become a more customer-driven company.”

Key Financial Metrics
	Q4 2007		Q4 2006		FY 2007		FY 2006
Sales Growth %		3.2%		5.4%		4.9%		8.2%
DIY % Comp		(3.1%)		(0.3%)		(1.0%)		(0.3%)
DIFM % Comp		8.2%		7.9%		6.7%		10.8%
Sales per Sq Ft (1)	$	44	$	45	$	207	$	210
SG&A $ per Store (2)(3)	$	133	$	136	$	601	$	604
Inventory per Store (2)(4)	$	469	$	475	$	469	$	475

(1)	–	Sales per square foot is calculated as net sales divided by an average of beginning and ending square footage. Average square footage for each of the reported periods is as follows: Q4 2007 – 23,877,000; Q4 2006 – 22,519,000; FY 2007 – 23,368,000; and FY 2006 – 22,000,000.
(2)	–	$ in thousands.
(3)	–	SG&A per store is calculated as SG&A divided by the average of beginning and ending store count.
(4)	–	Inventory per store is calculated as total ending inventory divided by ending store count.

Total sales growth decreased compared to the prior fourth quarter and year due to lower comparable store sales and fewer new stores.  Lower comparable store sales for the fourth quarter resulted from a significant deceleration in DIY sales during the holiday season.  The Florida and Gulf Coast sales results continued to be difficult.   DIY accessories and motor oil sales experienced the largest declines in the quarter. DIFM sales remained consistently strong through the fourth quarter as a result of the renewed focus on this business and the initiatives that are driving greater parts availability.   All regions experienced solid DIFM growth in the quarter ranging from 5% to 11%.   Parts and chemicals experienced the largest gains in the quarter.   The combined lower comparable store sales resulted in sales per square foot being relatively flat.

SG&A expenses per store declined modestly in the quarter and for the year.   The SG&A reductions offset higher inflation costs.  Overall inventory investment per store declined slightly for the year as increased parts availability was offset by the removal of less productive inventory.

“Our strategic initiatives are beginning to take hold,” stated Elwyn Murray, Executive Vice President, Customer Development Officer.  “Our parts availability commercial trends are solid despite a tough economic environment.”

2008 Annual Guidance
	FY 08		FY 07		FY 06
Sales $  (in millions)		$5,100.0		$4,844.4		$4,616.5
Comp Sales %		0.0%		0.8%		2.1%
Operating Income %		8.7%		8.6%		8.7%
EPS $		$2.55		$2.28		$2.16
New Stores - AAP		100		175		190
New Stores - AI		15		21		25
Relocated Stores		10 - 20		29		47
Closed Stores		10 - 15		17		5
Capex $  (in millions)		$170 - $190		$219.6		$258.6

Annual Guidance Summary

The guidance for 2008 fiscal year is based on the prevailing economic environment where the Company believes it is prudent to forecast comparable store sales to be flat until Company trends demonstrate consistent and sustainable improvement. Operating income, as a percentage of sales, is expected to be approximately flat compared to 2007.   Gross margin is expected to improve modestly from continued lower costs and leverage of the logistics network.  The SG&A rate will modestly increase from higher occupancy and other fixed costs.  The SG&A rate would be expected to leverage were the company to achieve 1% comparable store sales.  With these assumptions, earnings per diluted share are anticipated to be approximately $2.55 in 2008 compared to $2.28 in 2007, or an increase of 12%.  It is anticipated that a 1% improvement in comparable store sales versus guidance would add approximately $0.10 to earnings per diluted share.  A 10 basis point improvement in operating margin rate would be expected to add approximately $0.03 earnings per diluted share.  Fiscal year 2008 includes 53 weeks and guidance is for that period.  The 53rd week is anticipated to have an approximate $0.10 positive impact on 2008 earnings per diluted share results.

“Our 2008 fiscal year guidance reflects our actual trends and the economic uncertainty which we believe is prudent,” said Mike Norona, Executive Vice President and Chief Financial Officer.  “However, we are focused on achieving higher levels of sales and earnings growth based on our strategic priorities.”

Dividend

On February 13, 2008, the Company’s Board of Directors declared a regular quarterly cash dividend of six cents per share to be paid on April 4, 2008 to stockholders of record as of March 21, 2008.

Investor Conference Call

The Company will host a conference call on Thursday, February 14, 2008 at 8:00 a.m. Eastern Standard Time to discuss its quarterly results.  To listen to the live call, please log on to the Company’s Web site, www.AdvanceAutoParts.com, or dial (866) 908-1AAP.  The call will be archived on the Company’s Web site until February 14, 2009.

About Advance Auto Parts

Headquartered in Roanoke, Va., Advance Auto Parts is the second-largest retailer of automotive aftermarket parts, accessories, batteries, and maintenance items in the United States, based on store count and sales.  As of December 29, 2007, the Company operated 3,261 stores in 40 states, Puerto Rico, and the Virgin Islands.  The Company serves both the do-it-yourself and professional installer markets.

Certain statements contained in this release are forward-looking statements, as that statement is used in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements address future events or developments, and typically use words such as believe, anticipate, expect, intend, plan, forecast, outlook or estimate.  These statements discuss, among other things, expected growth and future performance, including store growth, CAPEX, comparable-store sales, gross margin,  SG&A, operating income, and earnings per diluted share for fiscal year 2008.  These forward-looking statements are subject to risks, uncertainties and assumptions including, but not limited to, competitive pressures, demand for the Company’s products, the market for auto parts, the economy in general, inflation, consumer debt levels, the weather, acts of terrorism, availability of suitable real estate, dependence on foreign suppliers and other factors disclosed in the Company’s 10-K for the fiscal year ended December 30, 2006, on file with the Securities and Exchange Commission.  Actual results may differ materially from anticipated results described in these forward-looking statements.  The Company intends these forward-looking statements to speak only as of the time of this news release and does not undertake to update or revise them, as more information becomes available.

-Financial Tables to Follow-

Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
	December 29,		December 30,
	2007		2006
Assets
Current assets:
Cash and cash equivalents	$	14,654	$	11,128
Receivables, net		84,983		97,046
Inventories, net		1,529,469		1,463,340
Other current assets		53,719		40,459
Total current assets		1,682,825		1,611,973
Property and equipment, net		1,047,944		994,977
Assets held for sale		3,274		1,548
Goodwill		33,718		33,718
Intangible assets, net		26,844		27,926
Other assets, net		10,961		12,539
	$	2,805,566	$	2,682,681
Liabilities and Stockholders' Equity
Current liabilities:
Bank overdrafts	$	30,000	$	34,206
Current portion of long-term debt		610		67
Financed vendor accounts payable		153,549		127,543
Accounts payable		688,970		651,587
Accrued expenses		301,414		252,975
Other current liabilities		51,385		47,042
Total current liabilities		1,225,928		1,113,420
Long-term debt		505,062		477,173
Other long-term liabilities		50,781		61,234
Total stockholders' equity		1,023,795		1,030,854
	$	2,805,566	$	2,682,681
NOTE: These preliminary condensed consolidated balance sheets have been prepared on a basis consistent with our previously prepared balance sheets filed with the Securities and Exchange Commission for our prior quarter and annual report, but do not include the footnotes required by generally accepted accounting principles, or GAAP, for complete financial statements.

Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Twelve Week Periods Ended
December 29, 2007 and December 30, 2006
(in thousands, except per share data)
(unaudited)
		December 29,			December 30,
		2007			2006
Net sales		$	1,048,382		$	1,016,150
Cost of sales, including purchasing and warehousing costs			554,790			537,719
Gross profit			493,592			478,431
Selling, general and administrative expenses			430,045			414,346
Operating income			63,547			64,085
Other, net:
Interest expense			(8,175	)		(7,845	)
Other (expense) income, net			(189	)		818
Total other, net			(8,364	)		(7,027	)
Income before provision for income taxes			55,183			57,058
Provision for income taxes			20,431			21,704
Net income		$	34,752		$	35,354
Basic earnings per share		$	0.35		$	0.34
Diluted earnings per share		$	0.35		$	0.33
Average common shares outstanding ( a )			99,955			105,292
Dilutive effect of stock options			699			949
Average common shares outstanding - assuming dilution			100,654			106,241
( a )	Average common shares outstanding is calculated based on the weighted average number of shares outstanding for the quarter. At December 29, 2007 and December 30, 2006, we had 99,060 and 105,351 shares outstanding, respectively.
NOTE: These preliminary condensed consolidated statements of operations have been prepared on a basis consistent with our previously prepared statements of operations filed with the Securities and Exchange Commission for our prior quarter and annual report, but do not include the footnotes required by GAAP for complete financial statements.

Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Fifty-Two Week Periods Ended
December 29, 2007 and December 30, 2006
(in thousands, except per share data)
(unaudited)
		December 29,			December 30,
		2007			2006
Net sales		$	4,844,404		$	4,616,503
Cost of sales, including purchasing and warehousing costs			2,523,435			2,415,339
Gross profit			2,320,969			2,201,164
Selling, general and administrative expenses			1,904,540			1,797,814
Operating income			416,429			403,350
Other, net:
Interest expense			(34,809	)		(35,992	)
Gain on extinguishment of debt, net			-			986
Other income, net			1,014			1,571
Total other, net			(33,795	)		(33,435	)
Income before provision for income taxes			382,634			369,915
Provision for income taxes			144,317			138,597
Net income		$	238,317		$	231,318
Basic earnings per share		$	2.30		$	2.18
Diluted earnings per share		$	2.28		$	2.16
Average common shares outstanding ( a )			103,826			106,129
Dilutive effect of stock options			828			995
Average common shares outstanding - assuming dilution			104,654			107,124
( a )	Average common shares outstanding is calculated based on the weighted average number of shares outstanding for the year. At December 29, 2007 and December 30, 2006, we had 99,060 and 105,351 shares outstanding, respectively.
NOTE: These preliminary condensed consolidated statements of operations have been prepared on a basis consistent with our previously prepared statements of operations filed with the Securities and Exchange Commission for our prior quarter and annual report, but do not include the footnotes required by GAAP for complete financial statements.

Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Fifty-Two Week Periods Ended
December 29, 2007 and December 30, 2006
(in thousands)
(unaudited)
		December 29,			December 30,
		2007			2006
Cash flows from operating activities:
Net income	$	238,317		$	231,318
Depreciation and amortization		147,264			139,423
Share-based compensation		18,096			19,052
Benefit for deferred income taxes		(20,535	)		(6,562	)
Excess tax benefit from share-based compensation		(11,841	)		(5,272	)
Loss on extinguishment of debt		-			1,887
Other non-cash adjustments to net income		11,302			2,637
Decrease (increase) in:
Receivables, net		5,951			(2,318	)
Inventories, net		(66,129	)		(92,239	)
Other assets		(10,709	)		9,412
Increase (decrease) in:
Accounts payable		37,383			22,339
Accrued expenses		64,256			15,264
Other liabilities		6,187			(1,337	)
Net cash provided by operating activities		419,542			333,604
Cash flows from investing activities:
Purchases of property and equipment		(219,600	)		(258,586	)
Insurance proceeds related to damaged property		6,636			-
Business acquisitions, net of cash acquired		-			(12,500	)
Proceeds from sales of property and equipment		1,821			12,444
Net cash used in investing activities		(211,143	)		(258,642	)
Cash flows from financing activities:
Decrease in bank overdrafts		(4,206	)		(15,964	)
Increase in financed vendor accounts payable		26,006			8,192
Early extinguishment of debt		-			(433,775	)
Dividends paid		(25,152	)		(19,153	)
Net borrowings on credit facilities		24,200			472,275
Net borrowings (payments) on note payable		4,232			(60	)
Payment of debt related costs		(821	)		(1,070	)
Proceeds from the issuance of common stock, primarily exercise
of stock options		42,547			17,203
Excess tax benefit from share-based compensation		11,841			5,272
Repurchase of common stock		(282,910	)		(137,560	)
Other		(610	)		23
Net cash used in financing activities		(204,873	)		(104,617	)
Net increase (decrease) in cash and cash equivalents		3,526			(29,655	)
Cash and cash equivalents, beginning of period		11,128			40,783
Cash and cash equivalents, end of period	$	14,654		$	11,128
NOTE: These preliminary condensed consolidated statements of cash flows have been prepared on a consistent basis with previously prepared statements of cash flows filed with the Securities and Exchange Commission for our prior quarter and annual report, but do not include the footnotes required by GAAP for complete financial statements.

Advance Auto Parts, Inc. and Subsidiaries
Supplemental Financial Schedules
Fifty-Two Week Periods Ended
December 29, 2007 and December 30, 2006
(in thousands, except per share data)
(unaudited)
Reconciliation of Free Cash Flow
	December 29,			December 30,
	2007			2006
Cash flows from operating activities	$	419,542		$	333,604
Cash flows used in investing activities		(211,143	)		(258,642	)
		208,399			74,962
Increase in financed vendor accounts payable		26,006			8,192
Free cash flow	$	234,405		$	83,154
Note: Management uses free cash flow as a measure of our liquidity and believes it is a useful indicator to stockholders of our ability to implement our growth strategies and service our debt. Free cash flow is a non-GAAP measure and should be considered in addition to, but not as a substitute for, information contained in our condensed consolidated statement of cash flows.