AutoZone 1998 Annual Report Download

Download and view the complete annual report

Please find the complete 1998 AutoZone annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 31

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31

1998 ANNUAL REPORT

Table of contents

  • Page 1
    19 9 8 A N N U A L REPO RT

  • Page 2
    Company Description AutoZone is more than just the nation's leading auto parts chain. We sell auto and light truck parts, chemicals and accessories in 38 states through 2,657 AutoZone and Chief stores. We also sell heavy-duty truck parts and accessories through 43 TruckPro stores in 14 states, plus ...

  • Page 3
    ... 96 97 98 94 95 96 97 98 94 95 96 97 98 94 95 96 97 98 Financial Highlights 19 9 8 Sales Operating Profit Net Income Earnings Per Share Stockholders' Equity Number of Auto Parts Stores $3,242,922,000 $382,307,000 $227,903,000 $1.48 $1,302,057,000 2,657 19 97 $2,691,440,000 $321,351...

  • Page 4
    ...1998 * TruckPro with 43 stores in 14 states on May 1, 1998 * Chief Auto Parts with 560 stores in five states on June 29, 1998 Our internal growth plans remain on track as well. Acquiring nearly 700 net stores did divert some resources, but we still opened 275 net new AutoZone stores during the year...

  • Page 5
    ... industry took a giant leap forward this year. Our acquisitions added stores and market share, but more importantly they added talented people. AutoZone is now 38,000 people strong, and they are the driving force behind the most efficient operation in auto parts. John Adams Chairman & CEO Customer...

  • Page 6
    Buckle up and turn the key. We're just getting started. 4

  • Page 7
    5

  • Page 8
    ... helps make that tough job a little easier. So when we say we' re set on customer service, we' re not just yanking your timing chain. It 's the foundation of our culture, and it 's ours alone. It 's what drives us. AutoZone' s clean, well-lit stores broke the stereotype for the auto parts business...

  • Page 9
    A guide to catchy acronyms WITTDTJR - What It Takes To Do The Job Right GOTTChA - Go Out To The Customer' s Automobile Drop/ Stop-30/ 30- Drop what ' s in your hands and stop what you' re doing to greet customers before they' re 30 feet or 30 seconds into the store. 7

  • Page 10
    ... seen an AutoZone store Our Commercial Accounts help their customers faster thanks to our 30-minute delivery. industry, we hope TruckPro's growth is equally impressive. Last year we touted our first California store. This year we' re operating over 400 California stores, thanks in large part to the...

  • Page 11
    Last year, our commercial trucks logged over 42 million miles delivering parts to our professional customers. That ' s the equivalent of driving round trip from our San Diego store to our Boston store nearly 7,000 times. 9

  • Page 12
    ... our customers need us, whether We' re only halfway to the 5,000 stores we believe the U.S. can support. We currently operate 2,657 auto parts stores. to. Are we going too fast? We don' t think so. By keeping an eye on the charts and gauges that have guided things to this point, we' ve managed to...

  • Page 13
    It ' s no coincidence that this globe shows Mexico on top. This fall, AutoZone will open its first international store in Nuevo Laredo, a city just across the border from Laredo, TX. 11

  • Page 14
    ... net sales per auto parts store square foot ...Total employment ...Gross profit - percentage of sales...Operating profit - percentage of sales ...Net income - percentage of sales ...Debt-to-capital - percentage...Inventory turnover ...Return on average equity ...* 53 weeks. Comparable store sales...

  • Page 15
    Fiscal Year Ended August 1996* $2,242,633 1,307,638 666,061 268,934 (1,969) 266,965 99,800 $...39.9% 9.7% 5.4% 3.4% 2.6x 31% 1990 $671,725 416,846 205,609 49,270 (10,936) 38,334 14,840 $ 23,494 $0.19 121,212 $191,736 26,803 327,368 164,933 74,851 80,356 504 38 7 4 34 538 3,031 10% 13% $1,289 $232 9,...

  • Page 16
    ...in thousands, except per share data) Sixteen Weeks Ended May 9, 1998 $743,661 2% $311,080 90,457 86,240 53,940 0.35 0.35 $36.25 $29.00 November 22, 1997 Net sales ...Increase in comparable store sales ...Gross profit ...Operating profit ...Income before income taxes ...Net income ...Basic earnings...

  • Page 17
    ... in the Company's newer auto parts stores and the added sales of the Company's commercial program) and an increase in net sales of $485.7 million for stores opened or acquired since the beginning of fiscal 1997. At August 29, 1998, the Company had 2,657 auto parts stores in operation, a net increase...

  • Page 18
    ... in the open market. Under this plan, in fiscal 1998 the Company repurchased nearly one million shares of its common stock for $28.7 million. Subsequent to year end, the Company announced an agreement to acquire real estate and real estate leases for approximately 100 Express auto parts stores from...

  • Page 19
    ... principally due to economies of scale resulting from increased volumes of purchases, selective forward buying and the use of alternative suppliers. Seasonality and Quarterly Periods The Company's business is somewhat seasonal in nature, with the highest sales occurring in the summer months of June...

  • Page 20
    ... taxes Net income Weighted average shares for basic earnings per share Effect of dilutive stock options Adjusted weighted average shares for diluted earnings per share Basic earnings per share Diluted earnings per share Year Ended August 29, August 30, August 31, 1998 1997 1996 (52 Weeks) (52 Weeks...

  • Page 21
    ... Sheets August 29, 1998 August 30, 1997 (in thousands, except per share data) Assets Current assets: Cash and cash equivalents Accounts receivable Merchandise inventories Prepaid expenses Deferred income taxes Income taxes receivable Total current assets Property and equipment: Land Buildings and...

  • Page 22
    ... cash used in investing activities Cash flows from financing activities: Repayment of acquired companies' debt Increase in commercial paper Proceeds from debentures Net increase (decrease) in revolver Repayment of long-term debt Net proceeds from sale of Common Stock, including related tax benefit...

  • Page 23
    ...Total Balance at August 26, 1995 Net income Equity of pooled entity (issued 1,697 shares) Sale of 1,386 shares of Common Stock under stock option and stock purchase plans Tax benefit of exercise of stock options Balance at August 31, 1996 Net income Sale of 1,176 shares of Common Stock under stock...

  • Page 24
    ... Accounting Policies Business: The Company is principally a specialty retailer of automotive parts and accessories. At the end of fiscal 1998, the Company operated 2,657 auto parts stores in 38 states. In addition, the Company sells heavy duty truck parts and accessories through its 43 TruckPro...

  • Page 25
    ... At August 29, 1998, the Company has net operating loss carryforwards (NOLs) of approximately $60 million that expire in years 2000 through 2018. These carryforwards resulted from the Company's acquisition of ALLDATA Corporation during fiscal 1996 and Chief Auto Parts Inc. and ADAP, Inc. (which had...

  • Page 26
    ... at August 29, 1998 and August 30, 1997; payable in December 2001 Other Total long term debt $200,000 305,000 $ Note E - Employee Stock Plans The Company has granted options to purchase common stock to certain employees and directors under various plans at prices equal to the market value of the...

  • Page 27
    ... per share As reported Pro forma As reported Pro forma As reported Pro forma Substantially all full-time employees are covered by a defined benefit pension plan. The benefits are based on years of service and the employee's highest consecutive five-year average compensation. The Company makes annual...

  • Page 28
    ...169,201 $530,034 Company acquired the assets and liabilities of TruckPro, L.P., including the service mark " TruckPro." The 43 TruckPro stores in 14 states specialize in the sale of heavy duty truck parts. Additionally, in June 1998, the Company acquired Chief Auto Parts Inc. for approximately $280...

  • Page 29
    ... 30, 1998 Corporate Information Transfer Agent and Registrar First Chicago Trust Company of New York P.O. Box 2500 Jersey City, New Jersey 07303-2500 (800) 756-8200 (201) 324-0498 http:/ / www.fctc.com/ share.html Auditors Ernst & Young LLP Memphis, Tennessee Store Support Center 123 South...

  • Page 30
    ... Supplier Quality Thomas Newbern Stores David W. Nichols Stores Robert F. Osswald AutoZoner Development & Training Mark A. Palazola Purchasing William C. Rhodes, III Operations Analysis & Support Richard C. Smith Stores Dennis P. Tolivar, Sr. Stores Other Corporate Officers Customer Satisfaction...

  • Page 31