News:
For immediate release
AutoZone Files Form 10-Q for Fiscal Second Quarter 2005
Memphis, Tenn. (March 11, 2005) - AutoZone, Inc. (NYSE: AZO) today announced the filing of its Form 10-Q for the fiscal second quarter ended February 12, 2005.
As previously announced, based upon recent SEC clarification, these financial statements include an adjustment associated with its accounting for leases and related leasehold improvements. The non-cash adjustment expensed in the quarter was $25.4 million net of tax ($0.31 per share), substantially all of which related to prior years. For the remainder of fiscal 2005, the Company expects this change in accounting to have an immaterial impact on its results of operations.
As of February 12, 2005, AutoZone sells auto and light truck parts, chemicals and accessories through 3,474 AutoZone stores in 48 states plus the District of Columbia in the U.S. and 67 AutoZone stores in Mexico and 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.
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; the ability to hire and retain qualified employees; consumer debt levels; inflation; raw material costs of our suppliers; gasoline prices; war and the prospect of war, including terrorist activity; availability of consumer transportation; construction delays; access to available and feasible financing; and our ability to continue to negotiate pay-on-scan and other arrangements with our vendors. 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 28, 2004, for more information related to those risks.
Contact Information:
Financial: Brian Campbell at (901) 495-7005, brian.campbell@autozone.com
Media: Ray Pohlman at (901) 495-7962, ray.pohlman@autozone.com
AutoZone’s 2nd Quarter Highlights — Fiscal 2005
Condensed Consolidated Statements of Operations
2nd Quarter
(in thousands, except per share data)
| GAAP Results
| Adjustments
| Adjusted
|
|---|
| 12 Weeks Ended
February 12, 2005
| 12 Weeks Ended
February 14, 2004
| 12 Weeks Ended
February 12, 2005*
| 12 Weeks Ended
February 14, 2004
| 12 Weeks Ended
February 12, 2005*
| 12 Weeks Ended
February 14, 2004
|
|---|
| Net sales | | $1,204,055 | | $1,159,236 | | $ — | | $ — | | $1,204,055 | | $1,159,236 | |
| Cost of sales | | 621,684 | | 594,925 | | — | | — | | 621,684 | | 594,925 | |
| | |
| |
| |
| |
| |
| |
| |
| Gross profit | | 582,371 | | 564,311 | | — | | — | | 582,371 | | 564,311 | |
| Operating SG&A expenses | | 433,652 | | 395,785 | | (40,321 | ) | — | | 393,331 | | 395,785 | |
| | |
| |
| |
| |
| |
| |
| |
| Operating profit (EBIT) | | 148,719 | | 168,526 | | 40,321 | | — | | 189,040 | | 168,526 | |
| Interest expense, net | | 23,645 | | 21,922 | | — | | — | | 23,645 | | 21,922 | |
| | |
| |
| |
| |
| |
| |
| |
| Income before taxes | | 125,074 | | 146,604 | | 40,321 | | — | | 165,395 | | 146,604 | |
| Income taxes | | 30,981 | | 54,950 | | 30,219 | | — | | 61,200 | | 54,950 | |
| | |
| |
| |
| |
| |
| |
| |
| Net income | | $ 94,093 | | $ 91,654 | | $ 10,102 | | $ — | | $ 104,195 | | $ 91,654 | |
| | |
| |
| |
| |
| |
| |
| |
| Net income per share: | |
| Basic | | $ 1.18 | | $ 1.06 | | $ 0.13 | | $ — | | $ 1.31 | | $ 1.06 | |
| Diluted | | $ 1.16 | | $ 1.04 | | $ 0.12 | | $ — | | $ 1.29 | | $ 1.04 | |
| Weighted average shares outstanding: | |
| Basic | | 79,692 | | 86,618 | | 79,692 | | 86,618 | | 79,692 | | 86,618 | |
| Diluted | | 80,860 | | 88,028 | | 80,860 | | 88,028 | | 80,860 | | 88,028 | |
* Fiscal year 2005 includes a non-cash adjustment, substantially all of which relates to prior years, of $25.4 million (net of tax) associated with accounting for leases and leasehold improvements. Additionally, fiscal year 2005 income taxes include a $15.3 million benefit primarily from the planned one-time repatriation from foreign subsidiaries.
Year-to-date 2nd Quarter, F2005
| | GAAP Results
| Adjustments
| Adjusted
|
|---|
| | 24 Weeks Ended
February 12, 2005
| 24 Weeks Ended
February 14, 2004
| 24 Weeks Ended
February 12, 2005*
| 24 Weeks Ended
February 14, 2004**
| 24 Weeks Ended
February 12, 2005*
| 24 Weeks Ended
February 14, 2004**
|
|---|
| Net sales | | $2,490,258 | | $2,441,276 | | $ — | | $ — | | $2,490,258 | | $2,441,276 | |
| Cost of sales | | 1,287,086 | | 1,263,875 | | — | | 16,000 | | 1,287,086 | | 1,279,875 | |
| |
| |
| |
| |
| |
| |
| |
| Gross profit | | 1,203,172 | | 1,177,401 | | — | | (16,000 | ) | 1,203,172 | | 1,161,401 | |
| Operating SG&A expenses | | 838,140 | | 793,771 | | (40,321 | ) | — | | 797,819 | | 793,771 | |
| |
| |
| |
| |
| |
| |
| |
| Operating profit (EBIT) | | 365,032 | | 383,630 | | 40,321 | | (16,000 | ) | 405,353 | | 367,630 | |
| Interest expense, net | | 45,435 | | 42,182 | | — | | — | | 45,435 | | 42,182 | |
| |
| |
| |
| |
| |
| |
| |
| Income before taxes | | 319,597 | | 341,448 | | 40,321 | | (16,000 | ) | 359,918 | | 325,448 | |
| Income taxes | | 102,981 | | 128,050 | | 30,219 | | (6,003 | ) | 133,200 | | 122,048 | |
| |
| |
| |
| |
| |
| |
| |
| Net income | | $ 216,616 | | $ 213,398 | | $ 10,102 | | $ (9,997 | ) | $ 226,718 | | $ 203,400 | |
| |
| |
| |
| |
| |
| |
| |
| Net income per share: | |
| Basic | | $ 2.72 | | $ 2.43 | | $ 0.13 | | $ (0.11 | ) | $ 2.84 | | $ 2.32 | |
| Diluted | | $ 2.68 | | $ 2.39 | | $ 0.13 | | $ (0.11 | ) | $ 2.81 | | $ 2.28 | |
| Weighted average shares outstanding: | |
| Basic | | 79,702 | | 87,679 | | 79,702 | | 87,679 | | 79,702 | | 87,679 | |
| Diluted | | 80,803 | | 89,219 | | 80,803 | | 89,219 | | 80,803 | | 89,219 | |
* Fiscal year 2005 includes a non-cash adjustment, substantially all of which relates to prior years, of $25.4 million (net of tax) associated with accounting for leases and leasehold improvements. Additionally, fiscal year 2005 income taxes include a $15.3 million benefit primarily from the planned one-time repatriation from foreign subsidiaries.
** Fiscal 2004 cost of sales includes a $16 million pre-tax gain from warranty.
