Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
March 4, 2003
Date of Report
(Date of earliest event reported)
AUTOZONE, INC.
(Exact name of registrant as specified in its charter)
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incorporation or organization) |
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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
(not applicable)
Former name, former address and former fiscal year, if changed since
last report.
Item 7. Financial Statements and Exhibits
(c) Exhibits99.1 Press Release dated March 4, 2003.
On March 4, 2003, the company made the announcements contained in the press release filed as Exhibit 99.1 to this Current Report.
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/ Harry L. Goldsmith
Dated: March 4, 2003
EXHIBIT INDEX
99.1 Press Release dated March 4, 2003
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News:
For immediate release |
AUTOZONE SECOND QUARTER EPS UP 36% OVER PRIOR YEAR;
ROIC IMPROVES TO 21.4% ON A TRAILING FOUR QUARTERS BASIS
Memphis, Tenn. (March 4, 2003) -- AutoZone, Inc. (NYSE: AZO), today reported sales of $1.121 billion for its second fiscal quarter (12 weeks) ended February 15, 2003, an increase of 3.6% from fiscal 2002. Excluding the sales of the TruckPro subsidiary which was sold in December 2001 sales increased 4.8%. Same store sales, or sales for domestic stores open at least one year, increased 2.4% during the quarter. Gross profit, as a percentage of sales, for the quarter improved by 0.34 percentage points, while operating expenses, as a percentage of sales, declined by 1.62 percentage points. This resulted in a 13.2% operating profit margin, up 1.96 percentage points from last year. Net income for the quarter increased 24% to $79.3 million, while diluted earnings per share increased 36% to $0.79 from $0.58 reported in the year-ago quarter. Return on invested capital for the trailing four quarters increased to 21.4%.
For the fiscal year-to-date period (24 weeks), sales were $2.339 billion, an increase of 3.6% from the previous year, with a same store sales increase of 3.5%. Year-to-date net income increased 25% to $184.2 million, while diluted earnings per share for the period increased 37% to $1.83 from $1.34. On a trailing four quarters basis, AutoZone has achieved a 5.8% same store sales increase, including 4.0% for retail and 22.8% for commercial.
"We are pleased with our strong performance through the second quarter, even as we anniversaried 12% same store sales increases from the prior year," said Steve Odland, Chairman, President, and Chief Executive Officer. "The 29% same store sales increase in our AZ Commercial business reflects our commercial customers' positive response to our efforts. Additionally, we are excited about our new advertising initiatives.
"Our continued focus on controlling costs through relentless expense discipline continues to drive shareholder value. Operating expenses as a percentage of sales declined 1.62 percentage points to 31.1% in the second quarter. This rate is the lowest second quarter rate achieved since 1995. Additionally, we maintained our inventory per store at levels not exceeding the first quarter while reducing net inventory per store versus the previous year.
"AutoZone believes in the highest level of integrity in its operations and financial reporting. Among other things during 2000, we created a Nominating and Corporate Governance Committee which is comprised of independent directors. We restructured our Board of Directors, repealed our poison pill, and instituted a code of conduct. I am proud to say that our efforts have been recognized recently by Institutional Shareholder Services. Out of 5,000 companies assessed, ISS ranked AutoZone in the top ten in its overall Corporate Governance Quotient Research Tool. This rating confirms that we are focused on the right things for instilling honest, clear decision making procedures in all our day-to-day activities."
Additionally, AutoZone, Inc. announced on January 29, 2003 that its Board of Directors authorized the repurchase of an additional $500 million of the company's common stock, in connection with the ongoing share repurchase program. During the quarter, the company purchased 3.8 million shares for $259 million, including $178 million purchased under forward purchase contracts. Since 1998, cumulative share repurchases under the share repurchase program were $2.39 billion, or 66.3 million shares at an average price of $36.08 per share, including $297.5 million, or 4.3 million shares, under forward purchase contracts. Subsequent to the end of the quarter, the company purchased 1.5 million shares in settlement of certain forward contracts outstanding as of February 15, 2003, at an average cost of $64.92 per share.
AutoZone will host a one-hour conference call Wednesday, March 5, 2003, beginning at 9 a.m. (CST) to discuss this press release and the outlook for the remainder of fiscal 2003. Investors may listen to the conference call live and review supporting slides on the AutoZone website, www.autozone.com, by clicking "Investor Relations," "Conference Calls," or by going directly to http://www.autozone.com/Investors. The call will also be available by dialing (712) 271-3887. 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 (402) 998-1323 through Tuesday, April 8, 2003.
During the quarter, AutoZone opened 30 new stores, replaced 3 stores and closed 6 stores in the U.S. and opened 1 new store in Mexico. As of February 15, 2003, AutoZone sells auto and light truck parts, chemicals and accessories through 3,122 AutoZone stores in 44 states plus the District of Columbia in the U.S. and 41 AutoZone stores in Mexico and also sells the ALLDATA brand automotive diagnostic and repair software. On the web, AutoZone sells diagnostic and repair information through www.alldatadiy.com, and auto and light truck parts through www.autozone.com.
Certain statements contained in this press release
are forward-looking statements. These statements discuss, among other
things, business strategies and future performance. These forward-looking
statements are subject to risks, uncertainties and assumptions, including,
without limitation, competition, product demand, the economy, inflation,
gasoline prices, consumer debt levels, war and the prospect of war, including
terrorist activity, and availability of commercial transportation.
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 31, 2002, for more information related to those risks.
AutoZone undertakes no obligation to publicly release any revisions to
any forward-looking statements contained in this press release to reflect
events or circumstances occurring after the date of this release or to
reflect the occurrence of unanticipated events.
Contact Information:
Media: Ray Pohlman at (901) 495-7962, ray.pohlman@autozone.com
Financial: Brian Campbell at (901) 495-7005, brian.campbell@autozone.com
AutoZone's 2nd Quarter Highlights - Fiscal 2003
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
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February 15, 2003 |
February 9, 2002 |
February 15, 2003 |
February 9, 2002 |
February 15, 2003 |
February 9, 2002 |
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| Net sales |
$
1,120,696
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$
1,081,311
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$
2,339,331
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$
2,257,363
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$
5,407,478
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$
5,037,983
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| Cost of goods sold |
624,697
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606,411
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1,293,942
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1,266,327
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2,977,738
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2,876,556
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| Gross profit |
495,999
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474,900
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1,045,389
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991,036
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2,429,740
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2,161,427
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| Operating expenses |
348,501
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353,751
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709,565
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714,383
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1,599,561
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1,558,442
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| Restructuring and
impairment charges |
- ---
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- ---
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- ---
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- ---
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- ---
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126,689
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| Operating profit |
147,498
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121,149
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335,824
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276,653
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830,179
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476,296
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| Interest expense, net |
19,633
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18,278
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38,738
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37,705
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80,893
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89,846
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| Income before taxes |
127,865
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102,871
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297,086
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238,948
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749,286
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386,450
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| Taxes |
48,590
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39,100
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112,900
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91,100
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284,800
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148,600
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| Net income |
$
79,275
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$
63,771
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$
184,186
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$
147,848
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$
464,486
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$
237,850
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| Net income per share: | ||||||||||||
| Basic |
$
0.81
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$
0.60
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$
1.87
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$
1.38
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$
4.63
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$
2.18
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| Diluted |
$
0.79
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$
0.58
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$
1.83
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$
1.34
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$
4.52
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$
2.14
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| Shares outstanding: | ||||||||||||
| Basic |
98,446
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106,846
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98,627
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107,415
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100,388
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109,189
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| Diluted |
100,393
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109,797
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100,800
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110,201
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102,772
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111,229
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Selected Balance Sheet Information
(in thousands)
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| Merchandise inventories |
$ 1,490,172
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$ 1,273,420
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$ 1,375,584
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| Current assets |
1,577,914
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1,350,012
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1,450,128
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| Property and equipment, net |
1,662,567
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1,682,335
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1,661,728
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| Total assets |
3,614,582
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3,421,448
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3,477,791
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| Accounts payable |
1,048,077
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838,092
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1,145,533
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| Current liabilities |
1,469,797
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1,206,581
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1,533,571
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| Stockholders' equity |
747,774
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891,600
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689,127
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| Debt |
1,339,542
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1,251,942
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1,194,517
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| Working capital |
108,117
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143,431
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(83,443
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) |
Selected Cash Flow Information
(in thousands)
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February 15, 2003 |
February 9, 2002 |
February 15, 2003 |
February 9, 2002 |
February 15, 2003 |
February 9, 2002 |
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| Depreciation & amortization |
$
25,243
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$
27,924
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$
50,836
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$
56,093
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$
112,998
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$
126,183
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| Capital spending |
$
31,367
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$
24,411
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$
61,832
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$
40,622
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$
138,449
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$
116,847
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| Cash flow before share repurchases |
$
54,522
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$ 128,464
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$
14,470
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$
142,671
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$
601,667
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$
598,699
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| Share repurchases |
$
80,972
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$
99,764
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$
159,495
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$
169,211
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$
689,267
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$
330,596
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Other Selected Financial Information
(in thousands)
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| Cumulative share repurchases ($): | |||||
| On balance sheet |
$ 2,095,191
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$ 1,405,944
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| Forward contracts |
297,525
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115,332
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| Total |
$ 2,392,716
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$ 1,521,276
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| Cumulative share repurchases (shares): | |||||
| On balance sheet |
62,032
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51,423
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| Forward contracts |
4,283
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2,492
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| Total |
66,315
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53,915
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| Shares outstanding, end of quarter |
97,857
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106,433
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| After-tax return on invested capital |
21.4%
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15.7%
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AutoZone's 2nd Quarter Fiscal 2003
Selected Operating Highlights
Store Count & Square Footage
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February 15, 2003 |
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February 9, 2002 |
February 15, 2003 |
February 9, 2002 |
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| Domestic stores: | ||||||||
| Store count: | ||||||||
| Stores opened |
30
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38
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61
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53
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| Stores closed |
6
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--
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7
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35
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| Replacement stores |
3
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4
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4
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10
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| Total domestic stores |
3,122
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3,037
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3,122
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3,037
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| Stores with commercial sales |
1,954
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1,643
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1,954
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1,643
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| Square footage (in thousands): |
19,986
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19,505
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19,986
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19,505
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| Stores in Mexico: | ||||||||
| Stores opened |
1
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1
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2
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2
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| Total auto parts stores in Mexico |
41
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23
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41
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23
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Sales & Inventory Statistics (Domestic stores):
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February 15, 2003 |
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February 9, 2002 |
February 15, 2003 |
February 9, 2002 |
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| Sales per average store
($ in thousands) |
$ 349
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$ 345
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$ 734
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$ 712
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| Sales per average square foot |
$
55
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$
54
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$ 115
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$
111
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| Same store sales - rolling 13 periods | ||||||||
| Total |
2.4 %
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11.9 %
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3.5 %
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10.2 %
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| Retail vs. commercial | ||||||||
| Retail |
(0.6) %
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11.3 %
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0.7 %
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9.6 %
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| Commercial |
29.2 %
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17.9 %
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28.7 %
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15.8 %
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| Inventory turns: | ||||||||
| Based on average inventories |
2.1 X
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2.3 X
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| Based on ending inventories |
2.0 X
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2.2 X
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| Inventory turns, net of payables: | ||||||||
| Based on average inventories |
8.4 X
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7.1 X
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| Based on ending inventories |
6.9 X
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6.6 X
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| Accounts payable/inventory (total company) |
70 %
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66 %
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