Exhibit 99.1
[LETTERHEAD OF ADVANCED AUTO PARTS]
CONTACT: Jim Wade
President and CFO
Advance Auto Parts
(540) 561-1833
Investors: Jeffrey Zack/
Meredith Pudalov
Media: Evan Goetz/Emily Brunner
Morgen-Walke Associates
(212) 850-5600
ADVANCE AUTO PARTS COMPLETES ACQUISITION OF DISCOUNT AUTO PARTS;
TO COMMENCE TRADING ON NYSE UNDER TICKER "AAP"
-- EBITDA synergies of $30 million expected in year one --
Roanoke, VA. November 28, 2001 -- Advance Auto Parts, Inc. today announced that
it has completed its acquisition of Discount Auto Parts, Inc., further
strengthening Advance's position as the nation's second largest retailer of auto
parts and accessories. With the completion of the transaction, Advance Auto
Parts has become a publicly traded company and its common stock will begin
trading November 29 on the New York Stock Exchange (NYSE) under the symbol
"AAP."
Advance Auto Parts will now operate more than 2,400 stores in 38 states,
primarily located in the eastern, mid-western and southeastern regions of the
United States and in Puerto Rico and the Virgin Islands. The combined companies
generated more than $3.1 billion in revenues and approximately $254 million in
earnings before interest, taxes, depreciation and amortization (EBITDA) on a pro
forma trailing twelve-month basis ended September 8, 2001 for Advance and August
26, 2001 for Discount.
Larry Castellani, Chief Executive Officer of Advance Auto Parts, stated, "Today
marks an important milestone for Advance. We are pleased to begin trading on the
New York Stock Exchange and welcome all of our new shareholders and team
members. The addition of Discount Auto Parts is an important strategic step that
creates significant growth opportunities for us in both the "do-it-yourself"
(DIY) and "do-it-for-me" (DIFM) segments. With this transaction, we have gained
increased critical mass and scale, especially in Florida where we grew from 26
stores to 462 stores. Our stores hold the number one or number two market
position in a majority of markets in which we operate. The $100 billion industry
in which we
ADVANCE AUTO PARTS COMPLETES Page 2
ACQUISITION OF DISCOUNT AUTO PARTS
compete is growing and continues to enjoy very favorable industry dynamics. We
will immediately begin to implement an integration plan that is anticipated to
add $30 million of synergies to EBITDA in the first full year."
Advance Auto Parts today provided additional details on its integration plan.
The Company said the approximately $30 million in synergies would come primarily
from purchasing and corporate administrative savings. The Discount Auto Parts
stores outside Florida are to be converted to the Advance Auto Parts banner
within the next year. For the Discount stores in Florida, the initial focus will
be on aligning their products with Advance's inventory assortment and converting
information systems. The physical store conversion of Florida stores will occur
over the next four years.
Mr. Castellani continued, "Our integration plan is focused on both the top and
bottom lines. We see opportunities to enhance the performance of the existing
Discount stores in terms of sales per store, comp-store sales and commercial
sales. Our new team members will be supported with extensive training and
in-store information systems to allow them to deliver enhanced customer service
and increase the customer count. We will also focus on reducing costs and
increasing the optimization of our distribution system. We have in place an
integration team with significant experience, including managing the successful
store conversions following the Western Auto acquisition in 1998 and the Carport
Auto Parts transaction in 2001."
Advance Auto Parts also reaffirmed its financial outlook for fiscal 2002. The
Company said that, based on currently available information, it expects to
generate sales in the range of $3.1 billion to $3.3 billion, EBITDA of $310
million to $325 million, and diluted earnings per share of $1.70 to $1.95. This
includes $30 million of synergies but excludes certain one-time cash conversion
expenses of approximately $50 million to $60 million of which approximately $40
million will be incurred in 2002.
Mr. Castellani concluded, "As we look ahead, we will continue to focus on
executing the operating strategy that has enabled Advance to become an industry
leader. That formula is superior customer service, competitive prices, a broad
product selection, a state-of-the-art distribution system, long-term
relationships with quality suppliers, targeted marketing and advertising and
innovative merchandising."
Advance Auto Parts, Inc. is based in Roanoke, Va., and is the second largest
auto parts chain in the nation. Additional information about the company,
employment opportunities, services, as well as on-line purchase of parts and
accessories can be found on the company web site at www.advanceautoparts.com.
------------------------
-2-
ADVANCE AUTO PARTS COMPLETES Page 3
ACQUISITION OF DISCOUNT AUTO PARTS
Certain statements contained in this news release are forward-looking
statements. These statements discuss, among other things, expected growth, store
development and expansion strategy, business strategies, future revenues and
future performance. The 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, terrorist
activities, war and other risk factors listed from time to time in the Company's
filings with the Securities and Exchange Commission. Actual results may
materially differ from anticipated results described in these forward-looking
statements.
# # #
-3-