Advance Auto Parts recently revealed that its first quarter 2008 earnings per diluted share and total revenue had increased relative to the same period in 2007. The company, which now is including net sales from the Puerto Rico and Virgin Islands and Autopart International stores, in its comparable store sales, attributes these increases to the dedication and hard work of its team members. "The dedication and hard work of our team members and the actions we took to improve our performance are beginning to show up in our financial results as evidenced by the strong commercial double-digit comparable store sales increase as well as a lower cost structure," says Darren Jackson, the company's president and chief executive officer. "We are encouraged with our first quarter financial results yet we are realistic that our turnaround is in it formative stages." Total revenue for the first quarter increased 4.0 percent to $1.53 billion, compared with revenue of $1.47 billion in the first quarter of fiscal year 2007. The revenue increase reflected the net addition of 141 new stores in the past 12 months and a comparable store sales increase of 0.6 percent during the quarter compared to an increase of 0.7 percent in the first quarter last year. The comparable store sales gain was comprised of a 10.6 percent increase in commercial sales offset by a 3.0 percent decrease in do-it-yourself (DIY) sales. This compares to a 4.2 percent increase in commercial and a 0.5 percent decrease in DIY in the first quarter last year. The gross profit rate was 48.7 percent in the first quarter as compared to 48.3 percent in the prior year, which reflects a 39 basis point improvement from the prior year. The 39 basis point improvement is driven by lower supply chain and logistics costs combined with more effective pricing. The company's first quarter selling, general and administrative (SG&A) expenses were 39.3 percent of sales compared to 39.1 percent last year. This increase of 11 basis points was driven by de-leverage due to modest comp store sales and increased incentive compensation expenses, which was almost entirely offset by cost reduction initiatives that primarily occurred during the second half of fiscal year 2007. Operating cash flow for the quarter increased 14.3 percent. Free cash flow for the quarter increased 43.1 percent to $150.5 million from $105.1 million in first quarter 2007. Capital expenditures were $58.9 million for the quarter. This compares to $75.9 million in 2007, which results in a reduction of $17.0 million, driven by a decrease in store development as well as the timing associated with the construction of a new distribution center. As previously disclosed, the company repurchased approximately 4.6 million shares during the first quarter 2008 at an average price of $34.04 for a total expenditure of $155 million. The company repurchased 8.3 million and 3.7 million shares in fiscal 2007 and fiscal 2006, respectively. The company continues to focus on four key strategies to turn around the business — DIY Transformation, Commercial Acceleration, Availability Excellence and Superior Experience. The strategies are focused on what matters most to the customer. The company made progress on the turnaround including senior management changes to lead strategy implementation, launching a new brand campaign ";Keep the wheels turning," and introducing new brands including MOOG®, Wagner® and Remy® to enhance brand quality while improving parts availability. "The tangible strategic results are just beginning to emerge," adds Jackson. "The first phase of our turnaround is on track. We made material progress on focusing the organization on the four turnaround strategies. The company will continue to educate, engage and enable the team to execute and assess the strategies. We remain confident that our key financial metrics will improve as our turnaround progresses." The company's board of directors also authorized a $250 million share repurchase program. This new authorization replaces the company's $500 million share repurchase program authorized in August 2007, which had $105 million remaining. Under the $500 million share repurchase authorization, the company repurchased 11.6 million shares at an average price of $34.13 per share. During its annual meeting of stockholders the following individuals were approved to serve on the company's board of directors for the next year: - John C. Brouillard The company is pleased to announce that John F. Bergstrom, chairman and chief executive officer of Bergstrom Corporation, has been appointed to its Board of Directors. Bergstrom has served in his current role for the past five years. Bergstrom Corporation owns and operates 24 automobile dealerships representing 26 different brands. Bergstrom serves as a director of Kimberly-Clark Corporation, Wisconsin Energy Corporation, Midwest Airlines and the Green Bay Packers. He also serves as president of the Theda Clark Medical Center Foundation. "John Bergstrom's 30 years of automobile industry experience and his extraordinary track record of customer service excellence will be a great asset to our Board of Directors," states Jack Brouillard, chairman of the board. For more information about Advance Auto Parts, visit the company's Web site. |
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