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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Advance Auto Parts | NYSE:AAP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
1.77 | 2.36% | 76.685 | 77.39 | 75.71 | 75.85 | 481,772 | 20:37:13 |
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Delaware
(State or other jurisdiction of
incorporation or organization)
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54-2049910
(I.R.S. Employer
Identification No.)
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5008 Airport Road
Roanoke, VA
(Address of Principal Executive Offices)
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24012
(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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ITEM 1.
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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
July 14, 2018
|
|
December 30, 2017
|
||||
Assets
|
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|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
902,249
|
|
|
$
|
546,937
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Receivables, net
|
664,149
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|
606,357
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|
||
Inventories
|
4,159,756
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4,168,492
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Other current assets
|
151,662
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|
105,106
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|
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Total current assets
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5,877,816
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5,426,892
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Property and equipment, net of accumulated depreciation of $1,874,396 and $1,783,383
|
1,338,931
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1,394,138
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Goodwill
|
991,934
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|
994,293
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|
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Intangible assets, net
|
571,953
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|
597,674
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|
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Other assets
|
54,922
|
|
|
69,304
|
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||
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$
|
8,835,556
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$
|
8,482,301
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Liabilities and Stockholders’ Equity
|
|
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Current liabilities:
|
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Accounts payable
|
$
|
2,909,990
|
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$
|
2,894,582
|
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Accrued expenses
|
635,896
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|
533,548
|
|
||
Other current liabilities
|
52,331
|
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|
51,967
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|
||
Total current liabilities
|
3,598,217
|
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|
3,480,097
|
|
||
Long-term debt
|
1,045,077
|
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1,044,327
|
|
||
Deferred income taxes
|
314,091
|
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|
303,620
|
|
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Other long-term liabilities
|
220,222
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|
239,061
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Commitments and contingencies
|
|
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|
|
|
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Stockholders’ equity:
|
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Preferred stock, nonvoting, $0.0001 par value
|
—
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—
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Common stock, voting, $0.0001 par value
|
8
|
|
|
8
|
|
||
Additional paid-in capital
|
678,416
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|
664,646
|
|
||
Treasury stock, at cost
|
(150,257
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)
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(144,600
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)
|
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Accumulated other comprehensive loss
|
(35,914
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)
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|
(24,954
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)
|
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Retained earnings
|
3,165,696
|
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|
2,920,096
|
|
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Total stockholders’ equity
|
3,657,949
|
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|
3,415,196
|
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|
$
|
8,835,556
|
|
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$
|
8,482,301
|
|
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Twelve Weeks Ended
|
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Twenty-Eight Weeks Ended
|
||||||||||||
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July 14, 2018
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July 15, 2017
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July 14, 2018
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|
July 15, 2017
|
||||||||
Net sales
|
$
|
2,326,652
|
|
|
$
|
2,263,727
|
|
|
$
|
5,200,500
|
|
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$
|
5,154,565
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Cost of sales,
including purchasing and warehousing costs
|
1,315,093
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1,270,639
|
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2,916,658
|
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2,890,793
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|
||||
Gross profit
|
1,011,559
|
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993,088
|
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2,283,842
|
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2,263,772
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|
||||
Selling, general and administrative expenses
|
844,018
|
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|
846,377
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1,918,061
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1,937,281
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||||
Operating income
|
167,541
|
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|
146,711
|
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365,781
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326,491
|
|
||||
Other, net:
|
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||||||
Interest expense
|
(12,855
|
)
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(13,921
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)
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(30,537
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)
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(32,351
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)
|
||||
Other income, net
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2,785
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3,169
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3,243
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7,982
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|
||||
Total other, net
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(10,070
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)
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(10,752
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)
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(27,294
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)
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(24,369
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)
|
||||
Income before provision for income taxes
|
157,471
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|
135,959
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|
338,487
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|
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302,122
|
|
||||
Provision for income taxes
|
39,635
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|
48,910
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|
83,925
|
|
|
107,113
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|
||||
Net income
|
$
|
117,836
|
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$
|
87,049
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$
|
254,562
|
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$
|
195,009
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||||||||
Basic earnings per common share
|
$
|
1.59
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$
|
1.18
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$
|
3.44
|
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$
|
2.64
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Weighted average common shares outstanding
|
74,054
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|
73,848
|
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|
74,011
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|
73,810
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|
||||
Diluted earnings per common share
|
$
|
1.59
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$
|
1.17
|
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$
|
3.43
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$
|
2.63
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Weighted average common shares outstanding
|
74,244
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74,093
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74,222
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74,093
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|
||||
Dividends declared per common share
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$
|
0.06
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$
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0.06
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$
|
0.12
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$
|
0.12
|
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Twelve Weeks Ended
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Twenty-Eight Weeks Ended
|
||||||||||||
|
July 14, 2018
|
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July 15, 2017
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July 14, 2018
|
|
July 15, 2017
|
||||||||
Net income
|
$
|
117,836
|
|
|
$
|
87,049
|
|
|
$
|
254,562
|
|
|
$
|
195,009
|
|
Other comprehensive (loss) income:
|
|
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|
|
|
|
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||||||||
Changes in net unrecognized other postretirement benefit costs, net of tax of $24, $41, $56 and $95
|
(67
|
)
|
|
(63
|
)
|
|
(158
|
)
|
|
(148
|
)
|
||||
Currency translation adjustments
|
(7,035
|
)
|
|
13,973
|
|
|
(10,802
|
)
|
|
13,185
|
|
||||
Total other comprehensive (loss) income
|
(7,102
|
)
|
|
13,910
|
|
|
(10,960
|
)
|
|
13,037
|
|
||||
Comprehensive income
|
$
|
110,734
|
|
|
$
|
100,959
|
|
|
$
|
243,602
|
|
|
$
|
208,046
|
|
|
Twenty-Eight Weeks Ended
|
||||||
|
July 14, 2018
|
|
July 15, 2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
254,562
|
|
|
$
|
195,009
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
128,244
|
|
|
135,200
|
|
||
Share-based compensation
|
12,413
|
|
|
19,938
|
|
||
Loss on disposal and impairment of property and equipment
|
4,757
|
|
|
4,361
|
|
||
Provision (benefit) for deferred income taxes
|
11,195
|
|
|
(16,006
|
)
|
||
Other
|
1,180
|
|
|
1,851
|
|
||
Net change in:
|
|
|
|
||||
Receivables, net
|
(59,995
|
)
|
|
(37,012
|
)
|
||
Inventories
|
2,140
|
|
|
41,923
|
|
||
Accounts payable
|
19,083
|
|
|
(153,750
|
)
|
||
Accrued expenses
|
112,214
|
|
|
91,333
|
|
||
Other assets and liabilities, net
|
(41,825
|
)
|
|
(15,498
|
)
|
||
Net cash provided by operating activities
|
443,968
|
|
|
267,349
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property and equipment
|
(61,815
|
)
|
|
(122,364
|
)
|
||
Proceeds from sales of property and equipment
|
578
|
|
|
1,311
|
|
||
Other, net
|
—
|
|
|
20
|
|
||
Net cash used in investing activities
|
(61,237
|
)
|
|
(121,033
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Decrease in bank overdrafts
|
(8,362
|
)
|
|
(4,202
|
)
|
||
Borrowings under credit facilities
|
—
|
|
|
534,400
|
|
||
Payments on credit facilities
|
—
|
|
|
(534,400
|
)
|
||
Dividends paid
|
(13,398
|
)
|
|
(13,363
|
)
|
||
Proceeds from the issuance of common stock
|
1,697
|
|
|
2,281
|
|
||
Tax withholdings related to the exercise of stock appreciation rights
|
(304
|
)
|
|
(6,230
|
)
|
||
Repurchase of common stock
|
(5,657
|
)
|
|
(3,303
|
)
|
||
Other, net
|
784
|
|
|
(2,027
|
)
|
||
Net cash used in financing activities
|
(25,240
|
)
|
|
(26,844
|
)
|
||
Effect of exchange rate changes on cash
|
(2,179
|
)
|
|
2,580
|
|
||
Net increase in cash and cash equivalents
|
355,312
|
|
|
122,052
|
|
||
Cash and cash equivalents
, beginning of period
|
546,937
|
|
|
135,178
|
|
||
Cash and cash equivalents
, end of period
|
$
|
902,249
|
|
|
$
|
257,230
|
|
|
|
|
|
||||
Non-cash transactions:
|
|
|
|
||||
Accrued purchases of property and equipment
|
$
|
9,075
|
|
|
$
|
10,205
|
|
1.
|
Nature of Operations and Basis of Presentation:
|
2.
|
Significant Accounting Policies:
|
|
Twelve Weeks Ended
|
|
Twenty-Eight Weeks Ended
|
||||||||
|
July 14, 2018
|
|
July 15, 2017
|
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July 14, 2018
|
|
July 15, 2017
|
||||
Percentage of Sales, by Product Group
|
|
|
|
|
|
|
|
||||
Parts and Batteries
|
66
|
%
|
|
64
|
%
|
|
65
|
%
|
|
65
|
%
|
Accessories and Chemicals
|
20
|
|
|
21
|
|
|
20
|
|
|
20
|
|
Engine Maintenance
|
13
|
|
|
14
|
|
|
14
|
|
|
14
|
|
Other
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
3.
|
Inventories
|
(in thousands)
|
July 14, 2018
|
|
December 30, 2017
|
||||
Inventories at first in, first out (“FIFO”)
|
$
|
3,924,331
|
|
|
$
|
3,965,370
|
|
Adjustments to state inventories at LIFO
|
235,425
|
|
|
203,122
|
|
||
Inventories at LIFO
|
$
|
4,159,756
|
|
|
$
|
4,168,492
|
|
4.
|
Exit Activities and Other Initiatives
|
(in thousands)
|
|
Closed Facility Lease Obligations
|
|
Severance
|
|
Total
|
||||||
Balance, December 30, 2017
|
|
$
|
31,570
|
|
|
$
|
1,645
|
|
|
$
|
33,215
|
|
Reserves established
|
|
5,453
|
|
|
3,523
|
|
|
8,976
|
|
|||
Change in estimates
|
|
766
|
|
|
(381
|
)
|
|
385
|
|
|||
Cash payments
|
|
(8,142
|
)
|
|
(2,184
|
)
|
|
(10,326
|
)
|
|||
Balance, July 14, 2018
|
|
$
|
29,647
|
|
|
$
|
2,603
|
|
|
$
|
32,250
|
|
|
|
|
|
|
|
|
||||||
Balance, December 31, 2016
|
|
$
|
44,265
|
|
|
$
|
959
|
|
|
$
|
45,224
|
|
Reserves established
|
|
7,940
|
|
|
7,927
|
|
|
15,867
|
|
|||
Change in estimates
|
|
(1,116
|
)
|
|
(699
|
)
|
|
(1,815
|
)
|
|||
Cash payments
|
|
(19,519
|
)
|
|
(6,542
|
)
|
|
(26,061
|
)
|
|||
Balance, December 30, 2017
|
|
$
|
31,570
|
|
|
$
|
1,645
|
|
|
$
|
33,215
|
|
5.
|
Intangible Assets
|
6.
|
Receivables, net
|
(in thousands)
|
July 14, 2018
|
|
December 30, 2017
|
||||
Trade
|
$
|
466,957
|
|
|
$
|
389,963
|
|
Vendor
|
203,912
|
|
|
220,510
|
|
||
Other
|
14,556
|
|
|
14,103
|
|
||
Total receivables
|
685,425
|
|
|
624,576
|
|
||
Less: Allowance for doubtful accounts
|
(21,276
|
)
|
|
(18,219
|
)
|
||
Receivables, net
|
$
|
664,149
|
|
|
$
|
606,357
|
|
7.
|
Long-term Debt and Fair Value of Financial Instruments
|
(in thousands)
|
July 14, 2018
|
|
December 30, 2017
|
||||
Total long-term debt
|
$
|
1,045,258
|
|
|
$
|
1,044,677
|
|
Less: Current portion of long-term debt
|
(181
|
)
|
|
(350
|
)
|
||
Long-term debt, excluding current portion
|
$
|
1,045,077
|
|
|
$
|
1,044,327
|
|
|
|
|
|
||||
Fair value of long-term debt
|
$
|
1,080,000
|
|
|
$
|
1,109,000
|
|
8.
|
Warranty Liabilities
|
|
Twenty-Eight Weeks Ended
|
|
Fifty-Two Weeks Ended
|
||||
(in thousands)
|
July 14, 2018
|
|
December 30, 2017
|
||||
Warranty reserve, beginning of period
|
$
|
49,024
|
|
|
$
|
47,243
|
|
Additions to warranty reserves
|
20,005
|
|
|
50,895
|
|
||
Reserves utilized
|
(22,491
|
)
|
|
(49,114
|
)
|
||
Warranty reserve, end of period
|
$
|
46,538
|
|
|
$
|
49,024
|
|
9.
|
Share Repurchase Program
|
10.
|
Earnings per Share
|
|
Twelve Weeks Ended
|
|
Twenty-Eight Weeks Ended
|
||||||||||||
(in thousands, except per share data)
|
July 14, 2018
|
|
July 15, 2017
|
|
July 14, 2018
|
|
July 15, 2017
|
||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common shares
|
$
|
117,836
|
|
|
$
|
87,049
|
|
|
$
|
254,562
|
|
|
$
|
195,009
|
|
Denominator
|
|
|
|
|
|
|
|
|
|||||||
Basic weighted average common shares
|
74,054
|
|
|
73,848
|
|
|
74,011
|
|
|
73,810
|
|
||||
Dilutive impact of share-based awards
|
190
|
|
|
245
|
|
|
211
|
|
|
283
|
|
||||
Diluted weighted average common shares
|
74,244
|
|
|
74,093
|
|
|
74,222
|
|
|
74,093
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic earnings per common share
|
$
|
1.59
|
|
|
$
|
1.18
|
|
|
$
|
3.44
|
|
|
$
|
2.64
|
|
Diluted earnings per common share
|
$
|
1.59
|
|
|
$
|
1.17
|
|
|
$
|
3.43
|
|
|
$
|
2.63
|
|
11.
|
Share-Based Compensation
|
12.
|
Condensed Consolidating Financial Statements
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
23
|
|
|
$
|
834,069
|
|
|
$
|
68,180
|
|
|
$
|
(23
|
)
|
|
$
|
902,249
|
|
Receivables, net
|
—
|
|
|
617,483
|
|
|
46,666
|
|
|
—
|
|
|
664,149
|
|
|||||
Inventories
|
—
|
|
|
3,999,663
|
|
|
160,093
|
|
|
—
|
|
|
4,159,756
|
|
|||||
Other current assets
|
16,977
|
|
|
148,469
|
|
|
3,313
|
|
|
(17,097
|
)
|
|
151,662
|
|
|||||
Total current assets
|
17,000
|
|
|
5,599,684
|
|
|
278,252
|
|
|
(17,120
|
)
|
|
5,877,816
|
|
|||||
Property and equipment, net of accumulated depreciation
|
89
|
|
|
1,329,863
|
|
|
8,979
|
|
|
—
|
|
|
1,338,931
|
|
|||||
Goodwill
|
—
|
|
|
943,359
|
|
|
48,575
|
|
|
—
|
|
|
991,934
|
|
|||||
Intangible assets, net
|
—
|
|
|
529,429
|
|
|
42,524
|
|
|
—
|
|
|
571,953
|
|
|||||
Other assets, net
|
2,152
|
|
|
54,300
|
|
|
622
|
|
|
(2,152
|
)
|
|
54,922
|
|
|||||
Investment in subsidiaries
|
3,774,360
|
|
|
465,487
|
|
|
—
|
|
|
(4,239,847
|
)
|
|
—
|
|
|||||
Intercompany note receivable
|
1,048,856
|
|
|
—
|
|
|
—
|
|
|
(1,048,856
|
)
|
|
—
|
|
|||||
Due from intercompany, net
|
—
|
|
|
—
|
|
|
310,933
|
|
|
(310,933
|
)
|
|
—
|
|
|||||
|
$
|
4,842,457
|
|
|
$
|
8,922,122
|
|
|
$
|
689,885
|
|
|
$
|
(5,618,908
|
)
|
|
$
|
8,835,556
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
2,719,226
|
|
|
$
|
190,764
|
|
|
$
|
—
|
|
|
$
|
2,909,990
|
|
Accrued expenses
|
—
|
|
|
636,949
|
|
|
16,045
|
|
|
(17,098
|
)
|
|
635,896
|
|
|||||
Other current liabilities
|
—
|
|
|
52,767
|
|
|
(412
|
)
|
|
(24
|
)
|
|
52,331
|
|
|||||
Total current liabilities
|
—
|
|
|
3,408,942
|
|
|
206,397
|
|
|
(17,122
|
)
|
|
3,598,217
|
|
|||||
Long-term debt
|
1,045,077
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,045,077
|
|
|||||
Deferred income taxes
|
—
|
|
|
299,516
|
|
|
16,725
|
|
|
(2,150
|
)
|
|
314,091
|
|
|||||
Other long-term liabilities
|
—
|
|
|
218,946
|
|
|
1,276
|
|
|
—
|
|
|
220,222
|
|
|||||
Intercompany note payable
|
—
|
|
|
1,048,856
|
|
|
—
|
|
|
(1,048,856
|
)
|
|
—
|
|
|||||
Due to intercompany, net
|
139,431
|
|
|
171,502
|
|
|
—
|
|
|
(310,933
|
)
|
|
—
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity
|
3,657,949
|
|
|
3,774,360
|
|
|
465,487
|
|
|
(4,239,847
|
)
|
|
3,657,949
|
|
|||||
|
$
|
4,842,457
|
|
|
$
|
8,922,122
|
|
|
$
|
689,885
|
|
|
$
|
(5,618,908
|
)
|
|
$
|
8,835,556
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
23
|
|
|
$
|
482,620
|
|
|
$
|
64,317
|
|
|
$
|
(23
|
)
|
|
$
|
546,937
|
|
Receivables, net
|
—
|
|
|
567,460
|
|
|
38,897
|
|
|
—
|
|
|
606,357
|
|
|||||
Inventories
|
—
|
|
|
3,986,724
|
|
|
181,768
|
|
|
—
|
|
|
4,168,492
|
|
|||||
Other current assets
|
—
|
|
|
103,118
|
|
|
2,063
|
|
|
(75
|
)
|
|
105,106
|
|
|||||
Total current assets
|
23
|
|
|
5,139,922
|
|
|
287,045
|
|
|
(98
|
)
|
|
5,426,892
|
|
|||||
Property and equipment, net of accumulated depreciation
|
103
|
|
|
1,384,115
|
|
|
9,920
|
|
|
—
|
|
|
1,394,138
|
|
|||||
Goodwill
|
—
|
|
|
943,359
|
|
|
50,934
|
|
|
—
|
|
|
994,293
|
|
|||||
Intangible assets, net
|
—
|
|
|
551,781
|
|
|
45,893
|
|
|
—
|
|
|
597,674
|
|
|||||
Other assets, net
|
3,224
|
|
|
68,749
|
|
|
554
|
|
|
(3,223
|
)
|
|
69,304
|
|
|||||
Investment in subsidiaries
|
3,521,330
|
|
|
448,462
|
|
|
—
|
|
|
(3,969,792
|
)
|
|
—
|
|
|||||
Intercompany note receivable
|
1,048,700
|
|
|
—
|
|
|
—
|
|
|
(1,048,700
|
)
|
|
—
|
|
|||||
Due from intercompany, net
|
—
|
|
|
—
|
|
|
332,467
|
|
|
(332,467
|
)
|
|
—
|
|
|||||
|
$
|
4,573,380
|
|
|
$
|
8,536,388
|
|
|
$
|
726,813
|
|
|
$
|
(5,354,280
|
)
|
|
$
|
8,482,301
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
2,657,792
|
|
|
$
|
236,790
|
|
|
$
|
—
|
|
|
$
|
2,894,582
|
|
Accrued expenses
|
1,134
|
|
|
511,841
|
|
|
20,648
|
|
|
(75
|
)
|
|
533,548
|
|
|||||
Other current liabilities
|
—
|
|
|
50,963
|
|
|
1,027
|
|
|
(23
|
)
|
|
51,967
|
|
|||||
Total current liabilities
|
1,134
|
|
|
3,220,596
|
|
|
258,465
|
|
|
(98
|
)
|
|
3,480,097
|
|
|||||
Long-term debt
|
1,044,327
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,044,327
|
|
|||||
Deferred income taxes
|
—
|
|
|
288,999
|
|
|
17,844
|
|
|
(3,223
|
)
|
|
303,620
|
|
|||||
Other long-term liabilities
|
—
|
|
|
237,019
|
|
|
2,042
|
|
|
—
|
|
|
239,061
|
|
|||||
Intercompany note payable
|
—
|
|
|
1,048,700
|
|
|
—
|
|
|
(1,048,700
|
)
|
|
—
|
|
|||||
Due to intercompany, net
|
112,723
|
|
|
219,744
|
|
|
—
|
|
|
(332,467
|
)
|
|
—
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity
|
3,415,196
|
|
|
3,521,330
|
|
|
448,462
|
|
|
(3,969,792
|
)
|
|
3,415,196
|
|
|||||
|
$
|
4,573,380
|
|
|
$
|
8,536,388
|
|
|
$
|
726,813
|
|
|
$
|
(5,354,280
|
)
|
|
$
|
8,482,301
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
2,231,229
|
|
|
$
|
138,070
|
|
|
$
|
(42,647
|
)
|
|
$
|
2,326,652
|
|
Cost of sales,
including purchasing and warehousing costs
|
—
|
|
|
1,263,912
|
|
|
93,828
|
|
|
(42,647
|
)
|
|
1,315,093
|
|
|||||
Gross profit
|
—
|
|
|
967,317
|
|
|
44,242
|
|
|
—
|
|
|
1,011,559
|
|
|||||
Selling, general and administrative expenses
|
4,848
|
|
|
827,733
|
|
|
23,241
|
|
|
(11,804
|
)
|
|
844,018
|
|
|||||
Operating (loss) income
|
(4,848
|
)
|
|
139,584
|
|
|
21,001
|
|
|
11,804
|
|
|
167,541
|
|
|||||
Other, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(12,059
|
)
|
|
(796
|
)
|
|
—
|
|
|
—
|
|
|
(12,855
|
)
|
|||||
Other income (expense), net
|
16,991
|
|
|
(1,211
|
)
|
|
(1,191
|
)
|
|
(11,804
|
)
|
|
2,785
|
|
|||||
Total other, net
|
4,932
|
|
|
(2,007
|
)
|
|
(1,191
|
)
|
|
(11,804
|
)
|
|
(10,070
|
)
|
|||||
Income before provision for income taxes
|
84
|
|
|
137,577
|
|
|
19,810
|
|
|
—
|
|
|
157,471
|
|
|||||
(Benefit) provision for income taxes
|
(204
|
)
|
|
35,512
|
|
|
4,327
|
|
|
—
|
|
|
39,635
|
|
|||||
Income before equity in earnings of subsidiaries
|
288
|
|
|
102,065
|
|
|
15,483
|
|
|
—
|
|
|
117,836
|
|
|||||
Equity in earnings of subsidiaries
|
117,548
|
|
|
15,483
|
|
|
—
|
|
|
(133,031
|
)
|
|
—
|
|
|||||
Net income
|
$
|
117,836
|
|
|
$
|
117,548
|
|
|
$
|
15,483
|
|
|
$
|
(133,031
|
)
|
|
$
|
117,836
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
2,175,274
|
|
|
$
|
138,291
|
|
|
$
|
(49,838
|
)
|
|
$
|
2,263,727
|
|
Cost of sales,
including purchasing and warehousing costs
|
—
|
|
|
1,224,648
|
|
|
95,829
|
|
|
(49,838
|
)
|
|
1,270,639
|
|
|||||
Gross profit
|
—
|
|
|
950,626
|
|
|
42,462
|
|
|
—
|
|
|
993,088
|
|
|||||
Selling, general and administrative expenses
|
5,370
|
|
|
833,966
|
|
|
18,864
|
|
|
(11,823
|
)
|
|
846,377
|
|
|||||
Operating (loss) income
|
(5,370
|
)
|
|
116,660
|
|
|
23,598
|
|
|
11,823
|
|
|
146,711
|
|
|||||
Other, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest (expense) income
|
(12,076
|
)
|
|
(1,863
|
)
|
|
18
|
|
|
—
|
|
|
(13,921
|
)
|
|||||
Other income (expense), net
|
17,567
|
|
|
(5,413
|
)
|
|
2,838
|
|
|
(11,823
|
)
|
|
3,169
|
|
|||||
Total other, net
|
5,491
|
|
|
(7,276
|
)
|
|
2,856
|
|
|
(11,823
|
)
|
|
(10,752
|
)
|
|||||
Income before provision for income taxes
|
121
|
|
|
109,384
|
|
|
26,454
|
|
|
—
|
|
|
135,959
|
|
|||||
Provision for income taxes
|
128
|
|
|
42,850
|
|
|
5,932
|
|
|
—
|
|
|
48,910
|
|
|||||
(Loss) income before equity in earnings of subsidiaries
|
(7
|
)
|
|
66,534
|
|
|
20,522
|
|
|
—
|
|
|
87,049
|
|
|||||
Equity in earnings of subsidiaries
|
87,056
|
|
|
20,522
|
|
|
—
|
|
|
(107,578
|
)
|
|
—
|
|
|||||
Net income
|
$
|
87,049
|
|
|
$
|
87,056
|
|
|
$
|
20,522
|
|
|
$
|
(107,578
|
)
|
|
$
|
87,049
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
5,007,131
|
|
|
$
|
290,190
|
|
|
$
|
(96,821
|
)
|
|
$
|
5,200,500
|
|
Cost of sales,
including purchasing and warehousing costs
|
—
|
|
|
2,814,953
|
|
|
198,526
|
|
|
(96,821
|
)
|
|
2,916,658
|
|
|||||
Gross profit
|
—
|
|
|
2,192,178
|
|
|
91,664
|
|
|
—
|
|
|
2,283,842
|
|
|||||
Selling, general and administrative expenses
|
9,658
|
|
|
1,882,123
|
|
|
53,823
|
|
|
(27,543
|
)
|
|
1,918,061
|
|
|||||
Operating (loss) income
|
(9,658
|
)
|
|
310,055
|
|
|
37,841
|
|
|
27,543
|
|
|
365,781
|
|
|||||
Other, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(28,137
|
)
|
|
(2,400
|
)
|
|
—
|
|
|
—
|
|
|
(30,537
|
)
|
|||||
Other income (expense), net
|
38,248
|
|
|
(4,204
|
)
|
|
(3,258
|
)
|
|
(27,543
|
)
|
|
3,243
|
|
|||||
Total other, net
|
10,111
|
|
|
(6,604
|
)
|
|
(3,258
|
)
|
|
(27,543
|
)
|
|
(27,294
|
)
|
|||||
Income before provision for income taxes
|
453
|
|
|
303,451
|
|
|
34,583
|
|
|
—
|
|
|
338,487
|
|
|||||
Provision for income taxes
|
1,059
|
|
|
75,964
|
|
|
6,902
|
|
|
—
|
|
|
83,925
|
|
|||||
(Loss) income before equity in earnings of subsidiaries
|
(606
|
)
|
|
227,487
|
|
|
27,681
|
|
|
—
|
|
|
254,562
|
|
|||||
Equity in earnings of subsidiaries
|
255,168
|
|
|
27,681
|
|
|
—
|
|
|
(282,849
|
)
|
|
—
|
|
|||||
Net income
|
$
|
254,562
|
|
|
$
|
255,168
|
|
|
$
|
27,681
|
|
|
$
|
(282,849
|
)
|
|
$
|
254,562
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
4,977,128
|
|
|
$
|
310,295
|
|
|
$
|
(132,858
|
)
|
|
$
|
5,154,565
|
|
Cost of sales,
including purchasing and warehousing costs
|
—
|
|
|
2,801,921
|
|
|
221,730
|
|
|
(132,858
|
)
|
|
2,890,793
|
|
|||||
Gross profit
|
—
|
|
|
2,175,207
|
|
|
88,565
|
|
|
—
|
|
|
2,263,772
|
|
|||||
Selling, general and administrative expenses
|
20,167
|
|
|
1,901,621
|
|
|
43,266
|
|
|
(27,773
|
)
|
|
1,937,281
|
|
|||||
Operating (loss) income
|
(20,167
|
)
|
|
273,586
|
|
|
45,299
|
|
|
27,773
|
|
|
326,491
|
|
|||||
Other, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest (expense) income
|
(28,366
|
)
|
|
(4,023
|
)
|
|
38
|
|
|
—
|
|
|
(32,351
|
)
|
|||||
Other income (expense), net
|
49,351
|
|
|
(12,766
|
)
|
|
(830
|
)
|
|
(27,773
|
)
|
|
7,982
|
|
|||||
Total other, net
|
20,985
|
|
|
(16,789
|
)
|
|
(792
|
)
|
|
(27,773
|
)
|
|
(24,369
|
)
|
|||||
Income before provision for income taxes
|
818
|
|
|
256,797
|
|
|
44,507
|
|
|
—
|
|
|
302,122
|
|
|||||
(Benefit) provision for income taxes
|
(1,616
|
)
|
|
100,296
|
|
|
8,433
|
|
|
—
|
|
|
107,113
|
|
|||||
Income before equity in earnings of subsidiaries
|
2,434
|
|
|
156,501
|
|
|
36,074
|
|
|
—
|
|
|
195,009
|
|
|||||
Equity in earnings of subsidiaries
|
192,572
|
|
|
36,074
|
|
|
—
|
|
|
(228,646
|
)
|
|
—
|
|
|||||
Net income
|
$
|
195,006
|
|
|
$
|
192,575
|
|
|
$
|
36,074
|
|
|
$
|
(228,646
|
)
|
|
$
|
195,009
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
117,836
|
|
|
$
|
117,548
|
|
|
$
|
15,483
|
|
|
$
|
(133,031
|
)
|
|
$
|
117,836
|
|
Other comprehensive loss
|
(7,102
|
)
|
|
(7,102
|
)
|
|
(7,035
|
)
|
|
14,137
|
|
|
(7,102
|
)
|
|||||
Comprehensive income
|
$
|
110,734
|
|
|
$
|
110,446
|
|
|
$
|
8,448
|
|
|
$
|
(118,894
|
)
|
|
$
|
110,734
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
87,049
|
|
|
$
|
87,056
|
|
|
$
|
20,522
|
|
|
$
|
(107,578
|
)
|
|
$
|
87,049
|
|
Other comprehensive income
|
13,910
|
|
|
13,910
|
|
|
13,973
|
|
|
(27,883
|
)
|
|
13,910
|
|
|||||
Comprehensive income
|
$
|
100,959
|
|
|
$
|
100,966
|
|
|
$
|
34,495
|
|
|
$
|
(135,461
|
)
|
|
$
|
100,959
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
254,562
|
|
|
$
|
255,168
|
|
|
$
|
27,681
|
|
|
$
|
(282,849
|
)
|
|
$
|
254,562
|
|
Other comprehensive loss
|
(10,960
|
)
|
|
(10,960
|
)
|
|
(10,802
|
)
|
|
21,762
|
|
|
(10,960
|
)
|
|||||
Comprehensive income
|
$
|
243,602
|
|
|
$
|
244,208
|
|
|
$
|
16,879
|
|
|
$
|
(261,087
|
)
|
|
$
|
243,602
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
195,006
|
|
|
$
|
192,575
|
|
|
$
|
36,074
|
|
|
$
|
(228,646
|
)
|
|
$
|
195,009
|
|
Other comprehensive income
|
13,037
|
|
|
13,037
|
|
|
13,185
|
|
|
(26,222
|
)
|
|
13,037
|
|
|||||
Comprehensive income
|
$
|
208,043
|
|
|
$
|
205,612
|
|
|
$
|
49,259
|
|
|
$
|
(254,868
|
)
|
|
$
|
208,046
|
|
(in thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
435,890
|
|
|
$
|
8,078
|
|
|
$
|
—
|
|
|
$
|
443,968
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
—
|
|
|
(61,337
|
)
|
|
(478
|
)
|
|
—
|
|
|
(61,815
|
)
|
|||||
Proceeds from sales of property and equipment
|
—
|
|
|
534
|
|
|
44
|
|
|
—
|
|
|
578
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
(60,803
|
)
|
|
(434
|
)
|
|
—
|
|
|
(61,237
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Decrease in bank overdrafts
|
—
|
|
|
(6,760
|
)
|
|
(1,602
|
)
|
|
—
|
|
|
(8,362
|
)
|
|||||
Dividends paid
|
—
|
|
|
(13,398
|
)
|
|
—
|
|
|
—
|
|
|
(13,398
|
)
|
|||||
Proceeds from the issuance of common stock
|
—
|
|
|
1,697
|
|
|
—
|
|
|
—
|
|
|
1,697
|
|
|||||
Tax withholdings related to the exercise of stock appreciation rights
|
—
|
|
|
(304
|
)
|
|
—
|
|
|
—
|
|
|
(304
|
)
|
|||||
Repurchase of common stock
|
—
|
|
|
(5,657
|
)
|
|
—
|
|
|
—
|
|
|
(5,657
|
)
|
|||||
Other, net
|
—
|
|
|
784
|
|
|
—
|
|
|
—
|
|
|
784
|
|
|||||
Net cash used in financing activities
|
—
|
|
|
(23,638
|
)
|
|
(1,602
|
)
|
|
—
|
|
|
(25,240
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(2,179
|
)
|
|
—
|
|
|
(2,179
|
)
|
|||||
Net increase in cash and cash equivalents
|
—
|
|
|
351,449
|
|
|
3,863
|
|
|
—
|
|
|
355,312
|
|
|||||
Cash and cash equivalents
, beginning of period
|
23
|
|
|
482,620
|
|
|
64,317
|
|
|
(23
|
)
|
|
546,937
|
|
|||||
Cash and cash equivalents
, end of period
|
$
|
23
|
|
|
$
|
834,069
|
|
|
$
|
68,180
|
|
|
$
|
(23
|
)
|
|
$
|
902,249
|
|
(In thousands)
|
Advance Auto Parts, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
—
|
|
|
$
|
285,164
|
|
|
$
|
(17,815
|
)
|
|
$
|
—
|
|
|
$
|
267,349
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
—
|
|
|
(121,615
|
)
|
|
(749
|
)
|
|
—
|
|
|
(122,364
|
)
|
|||||
Proceeds from sales of property and equipment
|
—
|
|
|
1,311
|
|
|
—
|
|
|
—
|
|
|
1,311
|
|
|||||
Other, net
|
—
|
|
|
480
|
|
|
(460
|
)
|
|
—
|
|
|
20
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
(119,824
|
)
|
|
(1,209
|
)
|
|
—
|
|
|
(121,033
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Increase in bank overdrafts
|
—
|
|
|
(5,488
|
)
|
|
1,286
|
|
|
—
|
|
|
(4,202
|
)
|
|||||
Borrowings under credit facilities
|
—
|
|
|
534,400
|
|
|
—
|
|
|
—
|
|
|
534,400
|
|
|||||
Payments on credit facilities
|
—
|
|
|
(534,400
|
)
|
|
—
|
|
|
—
|
|
|
(534,400
|
)
|
|||||
Dividends paid
|
—
|
|
|
(13,363
|
)
|
|
—
|
|
|
—
|
|
|
(13,363
|
)
|
|||||
Proceeds from the issuance of common stock
|
—
|
|
|
2,281
|
|
|
—
|
|
|
—
|
|
|
2,281
|
|
|||||
Tax withholdings related to the exercise of stock appreciation rights
|
—
|
|
|
(6,230
|
)
|
|
—
|
|
|
—
|
|
|
(6,230
|
)
|
|||||
Repurchase of common stock
|
—
|
|
|
(3,303
|
)
|
|
—
|
|
|
—
|
|
|
(3,303
|
)
|
|||||
Other, net
|
—
|
|
|
(2,027
|
)
|
|
—
|
|
|
—
|
|
|
(2,027
|
)
|
|||||
Net cash (used in) provided by financing activities
|
—
|
|
|
(28,130
|
)
|
|
1,286
|
|
|
—
|
|
|
(26,844
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
2,580
|
|
|
—
|
|
|
2,580
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
137,210
|
|
|
(15,158
|
)
|
|
—
|
|
|
122,052
|
|
|||||
Cash and cash equivalents
, beginning of period
|
22
|
|
|
78,543
|
|
|
56,635
|
|
|
(22
|
)
|
|
135,178
|
|
|||||
Cash and cash equivalents
, end of period
|
$
|
22
|
|
|
$
|
215,753
|
|
|
$
|
41,477
|
|
|
$
|
(22
|
)
|
|
$
|
257,230
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Twelve Weeks Ended
|
|
Twenty-Eight Weeks Ended
|
||||||||||||
|
July 14, 2018
|
|
July 15, 2017
|
|
July 14, 2018
|
|
July 15, 2017
|
||||||||
GPI integration and store consolidation costs
|
$
|
0.01
|
|
|
$
|
0.06
|
|
|
$
|
0.03
|
|
|
$
|
0.17
|
|
GPI amortization of acquired intangible assets
|
$
|
0.09
|
|
|
$
|
0.08
|
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
Transformation expenses
(1)
|
$
|
0.28
|
|
|
$
|
0.27
|
|
|
$
|
0.40
|
|
|
$
|
0.27
|
|
Other income adjustment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.07
|
)
|
(1)
|
For the
twelve
and
twenty-eight
weeks ended
July 14, 2018
,
$0.23
and
$0.35
of the total
$0.28
and
$0.40
Adjusted EPS related to Transformation expenses are included in Selling, general and administrative expenses (“SG&A”) in the accompanying condensed consolidated statements of operations. The remainder of the Adjusted EPS impact is included in Cost of sales in the accompanying condensed consolidated statements of operations.
|
•
|
Total Net sales during the
second
quarter of
2018
were
$2.3 billion
,
an increase
of
2.8%
as compared to the
second
quarter of
2017
, which is primarily driven by an increase in comparable store sales of
2.8%
.
|
•
|
Operating income for the
second
quarter of
2018
was
$167.5 million
,
an increase
of
$20.8 million
as compared to the
second
quarter of
2017
. As a percentage of total sales, operating income was
7.2%
,
an increase
of
72
basis points as compared to the
second
quarter of
2017
, which is due to an increase in comparable store sales and savings in labor and insurance costs, partially offset by increased supply chain costs and higher bonus.
|
•
|
Inventories as of
July 14, 2018
decrease
d
$8.7 million
, or
0.2%
, from inventories as of
December 30, 2017
, as compared to a 0.8% decrease in the same period of last year. This
decrease
was driven by our inventory optimization efforts.
|
•
|
We generated operating cash flow of
$444.0 million
for the
twenty-eight
weeks ended
July 14, 2018
,
an increase
of
66.1%
as compared to the same period in
2017
, primarily due to a focus on managing working capital and an increase in net income.
|
•
|
On August 8, 2018, our Board of Directors authorized a
$600.0 million
share repurchase program. This new authorization replaces the
$500.0 million
share repurchase program authorized in May 2012, which had
$415.1 million
remaining.
|
•
|
Focused on continuous improvement of our common catalog across our Professional and DIY businesses - AAP, Carquest (“CQ”), Worldpac (“WP”) and Autopart International (“AI”) that was completed in Q1 2018.
|
•
|
Development of a demand-based assortment, leveraging purchase history and look-ups from the common catalog, versus our existing push-down supply approach. This technology is a first step in moving from a supply-driven to a demand-driven assortment.
|
•
|
Progression in the early development of a more efficient end-to-end supply chain to deliver our broad assortment.
|
•
|
Continued movement towards optimizing our footprint by focusing on evaluating all of our assets by market to drive share, repurposing of our in-market store and asset base and optimizing our distribution centers.
|
•
|
Creation of new DIY omni-channel capabilities to reach our customers in the manner that is most desirable for them, including the 2017 launch of our enhanced website and future launch of a mobile application.
|
•
|
Entered into a strategic partnership with Uber in the first quarter of 2018 as their aftermarket auto parts supplier, which we expect will not only drive more traffic into our stores, but will also foster stronger relationships with new and existing customers to help drive long-term success.
|
•
|
Continued focus on Worldpac branch openings in 2018 to drive Professional growth while investing in online and digital to drive DIY improvements.
|
•
|
Fuel costs
|
•
|
Unemployment rates
|
•
|
Consumer confidence
|
•
|
Competition
|
•
|
Changes in new car sales
|
•
|
Miles driven
|
•
|
Vehicle manufacturer warranties
|
•
|
Increasing number of vehicles 11 years and older
|
•
|
Economic and political uncertainty
|
•
|
Deferral of elective automotive maintenance and improvements in new car quality
|
|
|
Twelve Weeks Ended
|
|
$ Increase/(Decrease)
|
|
Basis Points
|
|||||||||||||||
(in millions)
|
|
July 14, 2018
|
|
July 15, 2017
|
|
|
|||||||||||||||
Net sales
|
|
$
|
2,326.7
|
|
|
100.0
|
%
|
|
$
|
2,263.7
|
|
|
100.0
|
%
|
|
$
|
63.0
|
|
|
—
|
|
Cost of sales
|
|
1,315.1
|
|
|
56.5
|
|
|
1,270.6
|
|
|
56.1
|
|
|
44.5
|
|
|
39
|
|
|||
Gross profit
|
|
1,011.6
|
|
|
43.5
|
|
|
993.1
|
|
|
43.9
|
|
|
18.5
|
|
|
(39
|
)
|
|||
Selling, general and administrative expenses
|
|
844.0
|
|
|
36.3
|
|
|
846.4
|
|
|
37.4
|
|
|
(2.4
|
)
|
|
111
|
|
|||
Operating income
|
|
167.5
|
|
|
7.2
|
|
|
146.7
|
|
|
6.5
|
|
|
20.8
|
|
|
72
|
|
|||
Interest expense
|
|
(12.9
|
)
|
|
(0.6
|
)
|
|
(13.9
|
)
|
|
(0.6
|
)
|
|
1.0
|
|
|
—
|
|
|||
Other income, net
|
|
2.8
|
|
|
0.1
|
|
|
3.2
|
|
|
0.1
|
|
|
(.4
|
)
|
|
—
|
|
|||
Provision for income taxes
|
|
39.6
|
|
|
1.7
|
|
|
48.9
|
|
|
2.2
|
|
|
(9.3
|
)
|
|
(50
|
)
|
|||
Net income
|
|
$
|
117.8
|
|
|
5.1
|
%
|
|
$
|
87.0
|
|
|
3.8
|
%
|
|
$
|
30.8
|
|
|
130
|
|
|
|
Twenty-Eight Weeks Ended
|
|
$ Increase/(Decrease)
|
|
Basis Points
|
|||||||||||||||
(in millions)
|
|
July 14, 2018
|
|
July 15, 2017
|
|
|
|||||||||||||||
Net sales
|
|
$
|
5,200.5
|
|
|
100.0
|
%
|
|
$
|
5,154.6
|
|
|
100.0
|
%
|
|
$
|
45.9
|
|
|
—
|
|
Cost of sales
|
|
2,916.7
|
|
|
56.1
|
|
|
2,890.8
|
|
|
56.1
|
|
|
25.9
|
|
|
—
|
|
|||
Gross profit
|
|
2,283.8
|
|
|
43.9
|
|
|
2,263.8
|
|
|
43.9
|
|
|
20.0
|
|
|
—
|
|
|||
Selling, general and administrative expenses
|
|
1,918.1
|
|
|
36.9
|
|
|
1,937.3
|
|
|
37.6
|
|
|
(19.2
|
)
|
|
70
|
|
|||
Operating income
|
|
365.8
|
|
|
7.0
|
|
|
326.5
|
|
|
6.3
|
|
|
39.2
|
|
|
70
|
|
|||
Interest expense
|
|
(30.5
|
)
|
|
(0.6
|
)
|
|
(32.4
|
)
|
|
(0.6
|
)
|
|
1.9
|
|
|
4
|
|
|||
Other income, net
|
|
3.2
|
|
|
0.1
|
|
|
8.0
|
|
|
0.2
|
|
|
(4.8
|
)
|
|
(9
|
)
|
|||
Provision for income taxes
|
|
83.9
|
|
|
1.6
|
|
|
107.1
|
|
|
2.1
|
|
|
(23.2
|
)
|
|
(46
|
)
|
|||
Net income
|
|
$
|
254.6
|
|
|
4.9
|
%
|
|
$
|
195.0
|
|
|
3.8
|
%
|
|
$
|
59.6
|
|
|
111
|
|
|
|
Twelve Weeks Ended
|
|
Twenty-Eight Weeks Ended
|
||||||||||||
(in millions, except per share data)
|
|
July 14, 2018
|
|
July 15, 2017
|
|
July 14, 2018
|
|
July 15, 2017
|
||||||||
Net income (GAAP)
|
|
$
|
117.8
|
|
|
$
|
87.0
|
|
|
$
|
254.6
|
|
|
$
|
195.0
|
|
Cost of sales adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Transformation expenses
|
|
5.3
|
|
|
—
|
|
|
5.3
|
|
|
—
|
|
||||
SG&A adjustments:
|
|
|
|
|
|
|
|
|
||||||||
GPI integration and store consolidation costs
|
|
0.7
|
|
|
6.9
|
|
|
2.9
|
|
|
19.8
|
|
||||
GPI amortization of acquired intangible assets
|
|
8.8
|
|
|
9.1
|
|
|
20.5
|
|
|
21.4
|
|
||||
Transformation expenses
|
|
23.0
|
|
|
32.8
|
|
|
34.9
|
|
|
32.8
|
|
||||
Other income adjustment
(1)
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(8.9
|
)
|
||||
Provision for income taxes on adjustments
(2)
|
|
(9.4
|
)
|
|
(18.4
|
)
|
|
(15.9
|
)
|
|
(24.7
|
)
|
||||
Adjusted net income (Non-GAAP)
|
|
$
|
146.2
|
|
|
$
|
117.0
|
|
|
$
|
302.3
|
|
|
$
|
235.3
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share (GAAP)
|
|
$
|
1.59
|
|
|
$
|
1.17
|
|
|
$
|
3.43
|
|
|
$
|
2.63
|
|
Adjustments, net of tax
|
|
0.38
|
|
|
0.41
|
|
|
0.64
|
|
|
0.55
|
|
||||
Adjusted EPS (Non-GAAP)
|
|
$
|
1.97
|
|
|
$
|
1.58
|
|
|
$
|
4.07
|
|
|
$
|
3.18
|
|
(1)
|
The adjustment to Other income for the
twelve
and
twenty-eight
weeks ended
July 15, 2017
relates to income recognized from an indemnification agreement associated with the acquisition of GPI.
|
(2)
|
The income tax impact of non-GAAP adjustments is calculated using the estimated tax rate in effect for the respective non-GAAP adjustments.
|
|
Twenty-Eight Weeks Ended
|
||||||
(in millions)
|
July 14, 2018
|
|
July 15, 2017
|
||||
Cash flows provided by operating activities
|
$
|
444.0
|
|
|
$
|
267.3
|
|
Cash flows used in investing activities
|
(61.2
|
)
|
|
(121.0
|
)
|
||
Cash flows (used in) provided by financing activities
|
(25.2
|
)
|
|
(26.8
|
)
|
||
Effect of exchange rate changes on cash
|
(2.2
|
)
|
|
2.6
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
355.3
|
|
|
$
|
122.1
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
(in thousands, except per share data)
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid per Share
(1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(2)
|
|
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(2)
|
||||||
April 22, 2018 to May 19, 2018
|
|
2,281
|
|
|
$
|
118.30
|
|
|
—
|
|
|
$
|
415,092
|
|
May 20, 2018 to June 16, 2018
|
|
1,198
|
|
|
125.90
|
|
|
—
|
|
|
415,092
|
|
||
June 17, 2018 to July 14, 2018
|
|
96
|
|
|
132.46
|
|
|
—
|
|
|
415,092
|
|
||
Total
|
|
3,575
|
|
|
$
|
121.23
|
|
|
—
|
|
|
$
|
415,092
|
|
(1)
|
The aggregate cost of repurchasing shares in connection with the net settlement of shares issued as a result of the vesting of restricted stock units was
$0.4 million
, during the
twelve
weeks ended
July 14, 2018
.
|
(2)
|
Our share repurchase program authorizing the repurchase of up to
$500 million
in common stock was authorized by our Board of Directors and publicly announced on
May 14, 2012
.
|
ITEM 6.
|
EXHIBITS
|
|
|
Incorporated by Reference
|
Filed
|
||
Exhibit No.
|
Exhibit Description
|
Form
|
Exhibit
|
Filing Date
|
Herewith
|
|
|
|
X
|
||
10-Q
|
3.2
|
5/22/2018
|
|
||
|
|
|
X
|
||
|
|
|
X
|
||
|
|
|
X
|
||
101.INS
|
XBRL Instance Document
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
ADVANCE AUTO PARTS, INC.
|
|
|
|
|
August 14, 2018
|
By:
|
/s/ Jeffrey W. Shepherd
|
|
Jeffrey W. Shepherd
Executive Vice President, Chief Financial Officer,
Controller and Chief Accounting Officer
|
1 Year Advance Auto Parts Chart |
1 Month Advance Auto Parts Chart |
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