Unassociated Document
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
x
|
Quarterly
report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
For
the quarterly period ended February 10, 2007, or
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o
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Transition
report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
For
the transition period from _______ to
________.
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Commission
file number 1-10714
AUTOZONE,
INC.
(Exact
name of registrant as specified in its charter)
Nevada
|
62-1482048
|
(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
No.)
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123
South Front Street
Memphis,
Tennessee 38103
(Address
of principal executive offices) (Zip Code)
(901)
495-6500
(Registrant's
telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the
preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x
No o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See the definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act. (Check one):
Large
accelerated filer x
|
Accelerated
filer o
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Non-accelerated
filer o
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o
No x
Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
Common
Stock, $.01 Par Value - 69,966,422 shares outstanding as of March 1,
2007.
TABLE
OF CONTENTS
PART
I. FINANCIAL INFORMATION
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Item
1.
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Financial
Statements
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CONDENSED
CONSOLIDATED BALANCE SHEETS
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CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
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CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
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NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
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Item
4.
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Controls
and Procedures
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PART
II. OTHER INFORMATION
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Item
1.
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Legal
Proceedings
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Item
1A.
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Risk
Factors
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Item
2.
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Changes
in Securities and Use of Proceeds
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Item
3.
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Defaults
Upon Senior Securities
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Item
4.
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Submission
of Matters to a Vote of Security Holders
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Item
5.
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Other
Information
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Item
6.
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Exhibits
and Reports on Form 8-K
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SIGNATURES
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EXHIBIT
INDEX
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EX.
10.2 FORM OF STOCK OPTION AGREEMENT
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EX.
12.1 RATIO OF EARNINGS TO FIXED CHARGES
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EX.
15.1 LETTER FROM ERNST & YOUNG LLP
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EX.
31.1 SECTION 302 CERTIFICATION OF PEO
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EX.
31.2 SECTION 302 CERTIFICATION OF PFO
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EX.
32.1 SECTION 906 CERTIFICATION OF PEO
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EX.
32.2 SECTION 906 CERTIFICATION OF PFO
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PART
I. FINANCIAL INFORMATION
Item
1. Financial
Statements.
AUTOZONE,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in
thousands)
|
|
February
10,
2007
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August
26,
2006
|
|
ASSETS
|
Current
assets
|
|
|
|
|
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Cash
and cash equivalents
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$
|
86,062
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$
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91,558
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Accounts
receivable
|
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59,915
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80,363
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Merchandise
inventories
|
|
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1,910,849
|
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1,846,650
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Other
current assets
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123,522
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100,356
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Total
current assets
|
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2,180,348
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2,118,927
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Property
and equipment
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Property
and equipment
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3,307,703
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3,183,808
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Less:
Accumulated depreciation and amortization
|
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1,196,766
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1,132,500
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2,110,937
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2,051,308
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Other
assets
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Goodwill,
net of accumulated amortization
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302,645
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302,645
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Deferred
income taxes
|
|
|
21,957 |
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20,643 |
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Other
long-term assets
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30,619
|
|
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32,783
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355,221
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356,071
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|
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$
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4,646,506
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$
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4,526,306
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LIABILITIES
AND STOCKHOLDERS’ EQUITY
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Current
liabilities
|
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|
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Accounts
payable
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$
|
1,662,989
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$
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1,699,667
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Other
current liabilities
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290,990
|
|
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280,419
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Income
taxes payable
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75,759
|
|
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24,378
|
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Deferred
income taxes
|
|
|
50,641
|
|
|
50,104
|
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Total
current liabilities
|
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|
2,080,379
|
|
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2,054,568
|
|
|
|
|
|
|
|
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Long-term
debt
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1,854,304
|
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1,857,157
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Other
long-term liabilities
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168,233
|
|
|
145,053
|
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Stockholders’
equity
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543,590
|
|
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469,528
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$
|
4,646,506
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|
$
|
4,526,306
|
|
See
Notes to Condensed Consolidated Financial Statements
AUTOZONE,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in
thousands, except per share amounts)
|
|
Twelve
Weeks Ended
|
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Twenty-four
Weeks Ended
|
|
|
|
February
10,
2007
|
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February
11,
2006
|
|
February
10,
2007
|
|
February
11,
2006
|
|
|
|
|
|
|
|
|
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Net
sales
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$
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1,300,357
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$
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1,253,815
|
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$
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2,693,426
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$
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2,591,891
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Cost
of sales, including warehouse
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and
delivery expenses
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661,145
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637,625
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1,368,918
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1,320,172
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Operating,
selling, general and
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administrative
expenses
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450,289
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|
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437,845
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912,589
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888,081
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Operating
profit
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188,923
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178,345
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|
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411,919
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383,638
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Interest
expense, net
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|
26,818
|
|
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24,333
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|
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53,911
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|
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48,072
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Income
before income taxes
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162,105
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154,012
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358,008
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335,566
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Income
taxes
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59,089
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56,990
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131,103
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124,170
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|
|
|
|
|
|
|
|
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Net
income
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$
|
103,016
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$
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97,022
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$
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226,905
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$
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211,396
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Weighted
average shares
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|
|
|
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for
basic earnings per share
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70,476
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|
76,784
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|
|
70,779
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76,686
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Effect
of dilutive stock equivalents
|
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|
751
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|
690
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741
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|
627
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Adjusted
weighted average shares
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|
|
|
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for
diluted earnings per share
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71,227
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|
77,474
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71,520
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77,313
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Basic
earnings per share
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$
|
1.46
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|
$
|
1.26
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$
|
3.21
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$
|
2.76
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Diluted
earnings per share
|
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$
|
1.45
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$
|
1.25
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$
|
3.17
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$
|
2.73
|
|
See
Notes to Condensed Consolidated Financial Statements
AUTOZONE,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in
thousands)
|
|
Twenty-Four
Weeks Ended
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February
10,
2007
|
|
February
11,
2006
|
|
Cash
flows from operating activities
|
|
|
|
|
|
Net
income
|
|
$
|
226,905
|
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$
|
211,396
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|
Adjustments
to reconcile net income to net
|
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|
|
|
|
|
cash
provided by operating activities
|
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|
|
|
|
|
|
Depreciation
and amortization of property and equipment
|
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71,659
|
|
|
62,309
|
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Amortization
of debt origination fees
|
|
|
810
|
|
|
731
|
|
Income
tax benefit from exercise of options
|
|
|
(12,168
|
)
|
|
(6,382
|
)
|
Deferred
income taxes
|
|
|
(215
|
)
|
|
(6,820
|
)
|
Share-based
compensation expense
|
|
|
8,757
|
|
|
7,982
|
|
Changes
in operating assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
20,448
|
|
|
(6,004
|
)
|
Merchandise
inventories
|
|
|
(64,199
|
)
|
|
(58,821
|
)
|
Accounts
payable and accrued expenses
|
|
|
(26,107
|
)
|
|
(100,616
|
)
|
Income
taxes payable
|
|
|
63,549
|
|
|
91,570
|
|
Other,
net
|
|
|
(8,978
|
)
|
|
3,803
|
|
Net
cash provided by operating activities
|
|
|
280,461
|
|
|
199,148
|
|
|
|
|
|
|
|
|
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Cash
flows from investing activities
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(102,262
|
)
|
|
(115,862
|
)
|
Purchase
of marketable securities
|
|
|
(59,480
|
)
|
|
(125,493
|
)
|
Proceeds
from sale of short-term investments
|
|
|
43,198
|
|
|
104,912
|
|
Disposal
of capital assets and other, net
|
|
|
138
|
|
|
913
|
|
Net
cash used in investing activities
|
|
|
(118,406
|
)
|
|
(135,530
|
)
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
Net
proceeds (repayments) of commercial paper
|
|
|
2,700
|
|
|
(81,200
|
)
|
Net
proceeds from sale of common stock
|
|
|
47,411
|
|
|
27,187
|
|
Purchase
of treasury stock
|
|
|
(219,658
|
)
|
|
(9,787
|
)
|
Income
tax benefit from exercised options
|
|
|
12,168
|
|
|
6,382
|
|
Other,
net
|
|
|
(10,172
|
)
|
|
362
|
|
Net
cash used in financing activities
|
|
|
(167,551
|
)
|
|
(57,056
|
)
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
(5,496
|
)
|
|
6,562
|
|
Cash
and cash equivalents at beginning of period
|
|
|
91,558
|
|
|
74,810
|
|
Cash
and cash equivalents at end of period
|
|
$
|
86,062
|
|
$
|
81,372
|
|
See
Notes to Condensed Consolidated Financial Statements
AUTOZONE,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note
A-Basis of Presentation
The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with U.S. generally accepted accounting principles for
interim financial information and with instructions to Form 10-Q and Article
10
of Regulation S-X. Accordingly, they do not include all of the information
and
footnotes required by U.S. generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, including
normal recurring accruals, considered necessary for a fair presentation have
been included. Certain prior year amounts have been reclassified to conform
to
current year presentations. For further information, refer to the consolidated
financial statements and footnotes included in the 2006 Annual Report to
Shareholders for AutoZone, Inc. (“AutoZone” or the “Company”), which is
incorporated by reference in its Annual Report on Form 10-K for the year ended
August 26, 2006.
Operating
results for the twelve and twenty-four weeks ended February 10, 2007 are not
necessarily indicative of the results that may be expected for the fiscal year
ending August 25, 2007. Each of the first three quarters of our fiscal year
consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. Each
of
the fourth quarters of fiscal 2006 and 2007 has 16 weeks. Additionally, the
Company’s business is somewhat seasonal in nature, with the highest sales
generally occurring in the summer months of June through August and the lowest
sales generally occurring in the winter months of December through
February.
Note
B-Share-Based Payments
Share-based
compensation transactions are accounted for in accordance with the provisions
of
Statement of Financial Accounting Standards (“SFAS”) No. 123(R) “Share-Based
Payment.” We recognize compensation expense for share-based payments based on
the fair value of the awards at the grant date. Share-based payments include
stock option grants and the discount on shares sold to employees under various
share purchase plans.
Total
share-based expense (a component of operating, selling, general and
administrative expenses) was $4.5 million for the twelve week period ended
February 10, 2007 and was $4.2 million for the comparable prior year period.
Share-based expense was $8.8 million for the twenty-four week period ending
February 10, 2007 and was $8.0 million for the comparable prior year period.
AutoZone
grants options to purchase common stock to some of its employees and directors
under various plans at prices equal to the fair market value of the stock on
the
dates the options are granted. Options have a term of 10 years or 10 years
and
one day from grant date. Director options generally vest three years from the
grant date, but upon retirement all unvested options immediately vest. Employee
options generally vest in equal annual installments on the first, second, third
and fourth anniversaries of the grant date. Employees generally have 30 days
after the employment relationship ends, or one year after death, to exercise
all
vested options. The fair value of each option grant is separately estimated
for
each vesting date. The fair value of each option is amortized into compensation
expense on a straight-line basis between the grant date for the award and each
vesting date. The Company has estimated the fair value of all stock option
awards as of the date of the grant by applying the Black-Scholes-Merton
multiple-option pricing valuation model. The application of this valuation
model
involves assumptions that are judgmental and highly sensitive in the
determination of compensation expense. The weighted average key assumptions
used
in determining the fair value of options granted in the twenty-four week period
ended February 10, 2007 as follows:
Expected
price volatility
|
|
|
26.0
|
%
|
Risk-free
interest rate
|
|
|
4.6
|
%
|
Weighted
average expected lives in years
|
|
|
3.9
|
|
Forfeiture
rate
|
|
|
10.0
|
%
|
Dividend
yield
|
|
|
0.0
|
%
|
The
Company generally issues new shares when options are exercised. A summary of
stock option activity since our most recent fiscal year end is as follows:
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Outstanding
August 26, 2006
|
|
|
3,355,542
|
|
$
|
70.73
|
|
Granted
|
|
|
675,298
|
|
|
103.90
|
|
Exercised
|
|
|
(723,392
|
)
|
|
68.41
|
|
Canceled
|
|
|
(95,406
|
)
|
|
80.71
|
|
Outstanding
February 10, 2007
|
|
|
3,212,042
|
|
$
|
77.93
|
|
At
February 10, 2007 the total compensation cost related to non-vested awards
not
yet recognized was $26.7 million with a weighted average expense recognition
period of 1.6 years.
On
December 13, 2006, stockholders approved the AutoZone, Inc. 2006 Stock Option
Plan and the AutoZone, Inc. Fourth Amended and Restated Executive Stock Purchase
Plan. There have been no other modifications to the Company’s share-based
compensation plans during the twenty-four week period ended February 10, 2007.
Note
C- Inventories
Inventories
are stated at the lower of cost or market using the last-in, first-out (“LIFO”)
method. Included in inventory are related purchasing, storage, delivery and
handling costs. Due to price deflation on the Company’s merchandise purchases,
the Company’s inventory balances are effectively maintained under the first-in
first-out method, as the Company’s policy is not to write up inventory in excess
of replacement cost, resulting in cost of sales being reflected at the higher
amount. The cumulative balance of this unrecorded adjustment, which would be
reduced upon experiencing price inflation on our merchandise purchases, was
$213.3 million at February 10, 2007, and $198.3 million at August 26,
2006.
AutoZone
has entered into pay-on-scan (“POS”) arrangements with certain vendors, whereby
AutoZone will not purchase merchandise supplied by a vendor until just before
that merchandise is ultimately sold to AutoZone’s customers. Title and certain
risks of ownership remain with the vendor until the merchandise is sold to
AutoZone’s customers. Since the Company does not own merchandise under POS
arrangements until just before it is sold to a customer, such merchandise is
not
recorded on the Company’s balance sheet. Upon the sale of the merchandise to
AutoZone’s customers, AutoZone recognizes the liability for the goods and pays
the vendor in accordance with the agreed-upon terms. Although AutoZone does
not
hold title to the goods, AutoZone controls pricing and has credit collection
risk and therefore, gross revenues under POS arrangements are included in net
sales in the income statement. AutoZone has financed the repurchase of existing
merchandise inventory by certain vendors in order to convert such vendors to
POS
arrangements. These receivables, reflected in accounts receivable, have
remaining durations up to 7 months and approximated $2.5 million at February
10,
2007, and $11.6 million at August 26, 2006. Merchandise under POS arrangements
was $50.5 million at February 10, 2007, and $92.1 million at August 26,
2006.
Note
D-Pension Plans
Prior
to
January 1, 2003, substantially all full-time employees were covered by a defined
benefit pension plan. The benefits under the plan were based on years of service
and the employee’s highest consecutive five-year average compensation. On
January 1, 2003, the plan was frozen, which resulted in plan participants no
longer earning new benefits under the plan formula and no new participants
being
able to join the pension plan.
On
January 1, 2003, the Company’s supplemental defined benefit pension plan for
certain highly compensated employees was also frozen, which resulted in plan
participants no longer earning new benefits under the plan formula and no new
participants being able to join the supplemental pension plan.
The
components of net periodic benefit (income) cost related to our pension plans
for all periods presented are as follows:
|
|
Twelve
Weeks Ended
|
|
Twenty-Four
Weeks Ended
|
|
(in
thousands)
|
|
February
10,
2007
|
|
February
11,
2006
|
|
February
10,
2007
|
|
February
11,
2006
|
|
|
|
|
|
|
|
|
|
|
|
Interest
cost
|
|
$
|
2,214
|
|
$
|
2,121
|
|
$
|
4,428
|
|
$
|
4,242
|
|
Expected
return on plan assets
|
|
|
(2,387
|
)
|
|
(1,978
|
)
|
|
(4,774
|
)
|
|
(3,956
|
)
|
Amortization
of prior service cost
|
|
|
(12
|
)
|
|
(145
|
)
|
|
(24
|
)
|
|
(290
|
)
|
Amortization
of net loss
|
|
|
173
|
|
|
1,303
|
|
|
346
|
|
|
2,606
|
|
Net
periodic benefit (income) cost
|
|
$
|
(12
|
)
|
$
|
1,301
|
|
$
|
(24
|
)
|
$
|
2,602
|
|
The
Company makes contributions in amounts at least equal to the minimum funding
requirements of the Employee Retirement Income Security Act of 1974. During
the
twenty-four week period ended February 10, 2007, the Company made $2.8 million
in contributions to the plan and expects to fund another $5.3 million during
the
remainder of this fiscal year.
The
Company’s long-term debt consisted of the following:
(in
thousands)
|
|
February
10,
2007
|
|
August
26,
2006
|
|
|
|
|
|
|
|
Bank
Term Loan due December 2009, effective interest rate of
4.55%
|
|
$
|
300,000
|
|
$
|
300,000
|
|
5.875%
Senior Notes due October 2012, effective interest rate of
6.33%
|
|
|
300,000
|
|
|
300,000
|
|
5.5%
Senior Notes due November 2015, effective interest rate of
4.86%
|
|
|
300,000
|
|
|
300,000
|
|
4.75%
Senior Notes due November 2010, effective interest rate of
4.17%
|
|
|
200,000
|
|
|
200,000
|
|
4.375%
Senior Notes due June 2013, effective interest rate of
5.65%
|
|
|
200,000
|
|
|
200,000
|
|
6.95%
Senior Notes due June 2016, effective interest rate of 7.09%
|
|
|
200,000
|
|
|
200,000
|
|
6.5%
Senior Notes due July 2008
|
|
|
190,000
|
|
|
190,000
|
|
Commercial
paper, weighted average interest rate of 5.4% at
February
10, 2007, and 5.3% at August 26, 2006
|
|
|
125,100
|
|
|
122,400
|
|
Other
|
|
|
39,204
|
|
|
44,757
|
|
|
|
$
|
1,854,304
|
|
$
|
1,857,157
|
|
On
June
20, 2006, the Company’s Mexican subsidiaries borrowed peso debt in the amount of
$43.3 million in U.S. dollars. The interest rates on these borrowings range
from
8.3% to 9.2% with an initial maturity of September 18, 2006. During September
2006, the Company repaid a portion of this indebtedness and extended the
maturity to March 2007 on the remaining unpaid balance. This indebtedness is
reflected as a component of Other borrowings in the above table.
Note
F-Leases
The
Company has a fleet of vehicles used for delivery to our commercial customers,
travel for members of field management, and field maintenance technicians.
The
majority of these vehicles are leased under arrangements that have historically
been accounted for as operating leases. On September 1, 2006 the Company
modified its leasing arrangements with one of its leasing vendors. As a result
of these modifications, many of the vehicles are now accounted for as capital
leases. At February 10, 2007, the Company had capital lease assets of $26.2
million, net of accumulated depreciation of $4.3 million, and capital lease
obligations of $25.7 million. The $4.7 million current portion of these
obligations was recorded as a component of other current liabilities and the
$21.0 million long-term portion was recorded as a component of other long-term
liabilities in the condensed consolidated balance sheets.
Note
G-Stock Repurchase Program
As
of
February 10, 2007, the Board of Directors had authorized the Company to
repurchase up to $4.9 billion of the Company’s common stock in the open market.
From January 1, 1998 to February 10, 2007, the Company has repurchased a total
of 95.1 million shares at an aggregate cost of $4.899 billion; including
1,863,365 shares of its common stock at an aggregate cost of $219.7 million
during the twenty-four week period ended February 10, 2007. Considering
cumulative repurchases as of February 10, 2007, the Company has $0.5 million
remaining under this authorization to repurchase its common stock in the open
market. On February 26, 2007 the Board of Directors raised the repurchase
authorization limit from $4.9 billion to $5.4 billion.
Note
H-Comprehensive Income
Comprehensive
income includes foreign currency translation adjustments; the impact from
certain derivative financial instruments designated and effective as cash
flow
hedges, including changes in fair value, as applicable, and the reclassification
of gains and/or losses from accumulated other comprehensive loss to net income
to offset the earnings impact of the underlying items being hedged; and changes
in the fair value of certain investments classified as available for sale.
Comprehensive income for all periods presented is as follows:
|
|
Twelve
Weeks Ended
|
|
Twenty-Four
Weeks Ended
|
|
(in
thousands)
|
|
February
10, 2007
|
|
February
11, 2006
|
|
February
10, 2007
|
|
February
11, 2006
|
|
|
|
|
|
|
|
|
|
|
|
Net
income, as reported
|
|
$
|
103,016
|
|
$
|
97,022
|
|
$
|
226,905
|
|
$
|
211,396
|
|
Foreign
currency translation adjustment
|
|
|
(901
|
)
|
|
2,392
|
|
|
(272
|
)
|
|
3,959
|
|
Net
impact from derivative instruments
|
|
|
431
|
|
|
769
|
|
|
(1,284
|
)
|
|
3,172
|
|
Unrealized
gains from marketable securities
|
|
|
(30
|
)
|
|
(137
|
)
|
|
33
|
|
|
(137
|
)
|
Comprehensive
income
|
|
$
|
102,516
|
|
$
|
100,046
|
|
$
|
225,382
|
|
$
|
218,390
|
|
Report
of
Independent Registered Public Accounting Firm
The
Board
of Directors and Stockholders
AutoZone,
Inc.
We
have
reviewed the condensed consolidated balance sheet of AutoZone, Inc. as of
February 10, 2007, the related condensed consolidated statements of income
for
the twelve and twenty-four week periods ended February 10, 2007 and February
11,
2006, and the condensed consolidated statements of cash flows for the
twenty-four week periods ended February 10, 2007 and February 11, 2006. These
financial statements are the responsibility of the Company’s
management.
We
conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based
on
our review, we are not aware of any material modifications that should be made
to the condensed consolidated financial statements referred to above for them
to
be in conformity with U.S. generally accepted accounting
principles.
We
have
previously audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheet
of
AutoZone, Inc. as of August 26, 2006, and the related consolidated statements
of
income, changes in stockholders’ equity, and cash flows for the year then ended,
not presented herein, and, in our report dated October 19, 2006, we expressed
an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying condensed consolidated balance
sheet as of August 26, 2006 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been
derived.
Memphis,
Tennessee
March
6,
2007
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
Overview
We
are
the leading retailer and a leading distributor of automotive replacement parts
and accessories in the United States. As of February 10, 2007, we operated
3,955
stores including 108 stores in Mexico compared with 3,743 stores including
88
stores in Mexico at February 11, 2006. Excluded from the store counts are 2
stores at February 10, 2007, and 10 stores at February 11, 2006, that were
closed as a result of last year’s hurricanes. Each of our stores carries an
extensive product line for cars, sport utility vehicles, vans and light trucks,
including new and remanufactured automotive hard parts, maintenance items,
accessories and non-automotive products. Many of our stores also have a
commercial sales program that provides commercial credit and prompt delivery
of
parts and other products to local, regional and national repair garages, dealers
and service stations. We also sell the ALLDATA brand diagnostic and repair
software. On the web, we sell diagnostic and repair information and auto and
light truck parts through www.autozone.com.
We do
not derive revenue from automotive repair or installation.
Operating
results for the twelve and twenty-four weeks ended February 10, 2007, are not
necessarily indicative of the results that may be expected for the fiscal year
ending August 25, 2007. Each of the first three quarters of our fiscal year
consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. Each
of
the fourth quarters of fiscal 2006 and 2007 has 16 weeks. Additionally, our
business is somewhat seasonal in nature, with the highest sales generally
occurring in the summer months of June through August and the lowest sales
generally occurring in the winter months of December through
February.
Twelve
Weeks Ended February
10, 2007,
Compared
with Twelve Weeks Ended February
11, 2006
Net
sales
for the twelve weeks ended February
10, 2007,
increased $46.5 million to $1.300 billion, or 3.7% over net sales of
$1.254 billion for the comparable prior year period. This increase in sales
was
primarily driven by sales from new stores. Domestic DIY sales increased 3.6%,
domestic commercial sales decreased 2.5%, and combined sales from our ALLDATA
and Mexico operations increased 22.2%.
Gross
profit for the twelve weeks ended February
10, 2007,
was
$639.2 million, or 49.2% of net sales, compared with $616.2 million, or 49.1%
of
net sales, during the comparable prior year period. We experienced improvements
in leveraging product acquisition costs and a benefit from the inclusion of
additional product delivery costs that were capitalized into inventory, which
were offset by a shift in sales mix toward lower margin, seasonally related
product and higher shrink expense.
Operating,
selling, general and administrative expenses for the twelve weeks ended
February
10, 2007,
was
$450.3 million, or 34.6% of net sales, compared with $437.8 million, or 34.9%
of
net sales, during the comparable prior year period. The favorable variance
in
operating expenses was primarily due to our store reset efforts in last year’s
second quarter and an ongoing focus to reduce expenditures throughout the
organization.
Interest
expense, net for the twelve weeks ended February
10, 2007,
was
$26.8 million compared with $24.3 million during the comparable prior year
period. This increase was primarily due to higher average borrowing levels
and
higher rates over the comparable prior year period and the recognition of
interest expense on capital lease obligations. Average borrowings for the twelve
weeks ended February
10, 2007,
were
$1.933 billion, compared with $1.912 billion for the comparable prior year
period. Weighted average borrowing rates were 5.7% at February
10, 2007,
and
5.5% February
11, 2006.
Our
effective income tax rate was 36.5% of pretax income for the twelve weeks ended
February
10, 2007,
and
37.0% for the comparable prior year period. The actual annual rate for fiscal
2007 will depend on a number of factors, including the amount and source of
operating income and the timing and nature of discrete income tax
events.
Net
income for the twelve week period ended February
10, 2007,
increased by $6.0 million to $103.0 million, and diluted earnings per share
increased by 15.5% to $1.45 from $1.25 in the comparable prior year period.
The
impact on current quarter diluted earnings per share from the stock repurchases
since the end of the comparable prior year period was an increase of
$0.09.
Twenty-Four
Weeks Ended February
10, 2007,
Compared
with Twenty-Four Weeks Ended February
11, 2006
Net
sales
for the twenty-four weeks ended February
10, 2007,
increased $101.5 million to $2.693 billion, or 3.9% over net sales of
$2.592 billion for the comparable prior year period. This increase in sales
was
primarily driven by sales from new stores, as domestic comparable store sales
(sales for domestic stores opened at least one year) were flat. Domestic DIY
sales increased 4.0%, domestic commercial sales decreased 1.4%, and combined
sales from our ALLDATA and Mexico operations increased 21.5%.
Gross
profit for the twenty-four weeks ended February
10, 2007,
was
$1.325 billion, or 49.2% of net sales, compared with $1.272 billion, or 49.1%
of
net sales, during the comparable prior year period. We experienced improvements
in leveraging product acquisition costs and a benefit from the inclusion of
additional product delivery costs that were capitalized into inventory, which
were offset by a shift in sales mix toward lower margin, seasonally related
product and higher shrink expense.
Operating,
selling, general and administrative expenses for the twenty-four weeks ended
February
10, 2007,
was
$912.6 million, or 33.9% of net sales, compared with $888.1 million, or 34.3%
of
net sales, during the comparable prior year period. A
substantial portion of the favorable variance in operating expenses reflects
a
$2.8 million hurricane related charge taken in last year’s first quarter, our
store reset efforts initiated in last year’s first quarter, and an ongoing focus
to reduce expenditures throughout the organization.
Interest
expense, net for the twenty-four weeks ended February
10, 2007,
was
$53.9 million compared with $48.1 million during the comparable prior year
period. This increase was primarily due to higher average borrowing levels
and
higher rates over the comparable prior year period and the recognition of
interest expense on capital lease obligations. Average borrowings for the
twenty-four weeks ended February
10, 2007,
were
$1.944 billion, compared with $1.922 billion for the comparable prior year
period. Weighted average borrowing rates were 5.7% at February
10, 2007,
and
5.5% at February
11, 2006.
Our
effective income tax rate was 36.6% of pretax income for the twenty-four weeks
ended February
10, 2007,
and
37.0% for the comparable prior year period. The actual annual rate for fiscal
2007 will depend on a number of factors, including the amount and source of
operating income and the timing and nature of discrete income tax
events.
Net
income for the twenty-four week period ended February
10, 2007,
increased by $15.5 million to $226.9 million, and diluted earnings per share
increased by 16.0% to $3.17 from $2.73 in the comparable prior year period.
The
impact on current year diluted earnings per share from the stock repurchases
since the end of the comparable prior year period was an increase of
$0.20.
Liquidity
and Capital Resources
The
primary source of our liquidity is our cash flows realized through the sale
of
automotive parts and accessories. For the twenty-four weeks ended February
10,
2007 our net cash flows from operating activities provided $280.5 million as
compared with $199.1 million during the comparable prior year period. The
increase is primarily due to improvements in accounts payable. Overall cash
flows from operating activities continue to benefit from our inventory purchases
being largely financed by our vendors, as evidenced by an 87% accounts payable
to inventory ratio and the use of pay-on-scan (“POS”) arrangements with certain
vendors. Under POS arrangements, we do not purchase merchandise supplied by
a
vendor until just before that merchandise is ultimately sold to our customers.
Title and certain risks of ownership remain with the vendor until the
merchandise is sold to our customer. Since we do not own merchandise under
POS
arrangements until just before it is sold to a customer, such merchandise is
not
recorded on our balance sheet. Upon the sale of the merchandise to our customer,
we recognize the liability for the goods and pay the vendor in accordance with
the agreed upon terms. Although we do not hold title to the goods, we control
pricing and have credit collection risk and therefore, gross revenues under
POS
arrangements are included in net sales in the income statement. We have financed
the repurchase of existing merchandise inventory by certain vendors in order
to
convert such vendors to POS arrangements. These receivables, reflected in
accounts receivable, have remaining durations up to 7 months and approximated
$2.5 million at February 10, 2007, and $11.6 million at August 26, 2006.
Merchandise under POS arrangements was $50.5 million at February 10, 2007,
and
$92.1 million at August 26, 2006.
Our
net
cash flows from investing activities for the twenty-four weeks ended February
10, 2007, used $118.4 million as compared with $135.5 million used in the
comparable prior year period. Capital expenditures for the twenty-four weeks
ended February 10, 2007, were $102.3 million compared to $115.9 million for
the
comparable prior year period. During this twenty-four week period, we opened
76
domestic stores, including two stores that were closed as a result of hurricane
damage in the prior year, and 8 in Mexico. In the comparable prior year period,
we opened 81 new stores, including 7 new stores in Mexico. We expect to invest
in our business consistent with historical rates during fiscal 2007, primarily
related to our new store development program and enhancements to existing stores
and other infrastructure. Investing cash flows were also impacted by our
wholly-owned insurance captive, which purchased $59.5 million in marketable
securities and sold $43.2 million in short-term investments during the
twenty-four week period ended February 10, 2007. During the comparable prior
year period, we purchased $125.5 million in marketable securities and sold
$104.9 million in short- term investments.
Our
net
cash flows from financing activities for the twenty-four weeks ended February
10, 2007, used $167.6 million compared to $57.1 million used in the comparable
prior year period. Net proceeds from commercial paper borrowings were $2.7
million versus $81.2 million in net repayments from commercial paper in the
comparable prior year period. Stock repurchases were $219.7 million in the
current period as compared with $9.8 million in the comparable prior year
period. For the twenty-four weeks ended February 10, 2007, proceeds from the
sale of common stock and exercises of stock options provided $59.6 million,
including $12.2 million in related tax benefits. In the comparable prior year
period, proceeds from the sale of common stock and exercises of stock options
provided $33.6 million, including $6.4 million in related tax benefits.
Depending
on the timing and magnitude of our future investments (either in the form of
leased or purchased properties or acquisitions), we anticipate that we will
rely
primarily on internally generated funds and available borrowing capacity to
support a majority of our capital expenditures, working capital requirements
and
stock repurchases. The balance may be funded through new borrowings. We
anticipate that we will be able to obtain such financing in view of our credit
rating and favorable experiences in the debt market in the past.
Credit
Ratings
At
February 10, 2007, AutoZone had a senior unsecured debt credit rating from
Standard & Poor’s of BBB+ and a commercial paper rating of A-2. Moody’s
Investors Service had assigned us a senior unsecured debt credit rating of
Baa2
and a commercial paper rating of P-2. As of February 10, 2007, Moody’s and
Standard & Poor’s had AutoZone listed as having a “stable” outlook. If our
credit ratings drop, our interest expense may increase; similarly, we anticipate
that our interest expense may decrease if our investment ratings are raised.
If
our commercial paper ratings drop below current levels, we may have difficulty
continuing to utilize the commercial paper market and our interest expense
will
increase, as we will then be required to access more expensive bank lines of
credit. If our senior unsecured debt ratings drop below investment grade, our
access to financing may become more limited.
Debt
Facilities
We
maintain $1.0 billion of revolving credit facilities with a group of banks
to
primarily support commercial paper borrowings, letters of credit and other
short-term unsecured bank loans. These facilities expire in May 2010, may be
increased to $1.3 billion at AutoZone’s election, allow up to $200 million in
letters of credit, and allow up to $100 million in capital leases. As the
available balance is reduced by commercial paper borrowings and certain
outstanding letters of credit, the Company had $818.9 million in available
capacity under these facilities at February 10, 2007. The rate of interest
payable under the credit facilities is a function of Bank of America’s base rate
or a Eurodollar rate (each as defined in the facility agreements), or a
combination thereof.
On
June
20, 2006, our Mexican subsidiaries borrowed peso debt in the amount of $43.3
million in U.S. dollars. These funds were primarily used to recapitalize certain
Mexican subsidiaries and to repay intercompany loans allowing the entities
to
claim value-added tax refunds from the Mexican authorities. The interest rates
on these borrowings range from 8.3% to 9.2% and had an initial maturity of
September 18, 2006. During September 2006, we repaid a portion of this
indebtedness and extended the maturity to March 2007 on the remaining unpaid
balance.
Our
borrowings under our Senior Notes arrangements contain minimal covenants,
primarily restrictions on liens. Under our other borrowing arrangements,
covenants include limitations on total indebtedness, restrictions on liens,
a
minimum fixed charge coverage ratio and a provision where repayment obligations
may be accelerated if AutoZone experiences a change in control (as defined
in
the agreements) of AutoZone or its Board of Directors. All of the repayment
obligations under our borrowing arrangements may be accelerated and come due
prior to the scheduled payment date if covenants are breached or an event of
default occurs. As of February 10, 2007, we were in compliance with all
covenants and expect to remain in compliance with all covenants.
Stock
Repurchases
As
of
February 10, 2007, the Board of Directors had authorized the Company to
repurchase up to $4.9 billion of the Company’s common stock in the open market.
From
January 1, 1998 to February 10, 2007 the Company has repurchased a total of
95.1
million shares at an aggregate cost of $4.899 billion; including 1,863,365
shares of its common stock at an aggregate cost of $219.7 million during the
twenty-four week period ended February 10, 2007. Considering cumulative
repurchases as of February 10, 2007, the Company has $0.5 million remaining
under this authorization to repurchase its common stock in the open market.
On
February 26, 2007 the Board of Directors raised the repurchase authorization
limit from $4.9 billion to $5.4 billion.
Off-Balance
Sheet Arrangements
In
conjunction with our commercial sales program, we offer credit to some of our
commercial customers. Certain of the receivables related to the credit program
are sold to a third party at a discount for cash with limited recourse. We
have
established a reserve for this recourse. At February 10, 2007, the receivables
facility had an outstanding balance of $56.0 million and the balance of the
recourse reserve was approximately $1.6 million.
Since
fiscal year end, we have issued new, cancelled and modified existing stand-by
letters of credit that are primarily renewed on an annual basis to cover premium
and deductible payments to our workers’ compensation carrier. Our total standby
letters of credit commitment at February 10, 2007 was $129.2 million compared
with $131.6 million at August 26, 2006, and our total surety bonds commitment
at
February 10, 2007, was $11.2 million compared with $12.8 million at August
26,
2006.
We
have
entered into pay-on-scan (“POS”) arrangements with certain vendors, whereby we
will not purchase merchandise supplied by a vendor until just before that
merchandise is ultimately sold to our customers. Title and certain risks of
ownership remain with the vendor until the merchandise is sold to our customers.
Since we do not own merchandise under POS arrangements until just before it
is
sold to a customer, such merchandise is not recorded on our balance sheet.
Upon
the sale of the merchandise to our customers, we recognize the liability for
the
goods and pay the vendor in accordance with the agreed-upon terms. Although
we
do not hold title to the goods, we control pricing and credit collection risk
and therefore, gross revenues under POS arrangements are included in net sales
in the income statement. Sales of merchandise under POS approximated $45.0
million and $110.2 million for the twelve and twenty-four weeks ended February
10, 2007, and $94.2 million and $217.4 million for the twelve and twenty-four
weeks ended February 11, 2006. Merchandise under POS arrangements was $50.5
million at February 10, 2007, and $92.1 million at August 26, 2006.
Critical
Accounting Policies
As
there
have been no changes to our critical accounting policies during fiscal 2007,
refer to our Annual Report to Shareholders, which is incorporated by reference
in our Annual Report on Form 10-K for the fiscal year ended August 26, 2006,
for
a summary of our policies.
Forward-Looking
Statements
Certain
statements contained in this Quarterly Report on Form 10-Q are forward-looking
statements. Forward-looking statements typically use words such as “believe,”
“anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,”
“project,” “positioned,” “strategy” and similar expressions. These are based on
assumptions and assessments made by our management in light of experience and
perception of historical trends, current conditions, expected future
developments and other factors that we believe to be appropriate. These
forward-looking statements are subject to a number of risks and uncertainties,
including without limitation, competition; product demand; the economy; the
ability to hire and retain qualified employees; consumer debt levels; inflation;
weather; raw material costs of our suppliers; energy prices; war and the
prospect of war, including terrorist activity; availability of commercial
transportation; construction delays; access to available and feasible financing;
and changes in laws or regulations. Forward-looking statements are not
guarantees of future performance and actual results, developments and business
decisions may differ from those contemplated by such forward-looking statements,
and such events could materially and adversely affect our business.
Forward-looking statements speak only as of the date made. Except as required
by
applicable law, we undertake no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Actual results may materially differ from anticipated
results. Please refer to the Risk Factors section contained in our Annual Report
on Form 10-K for the fiscal year ended August 26, 2006, for more information
related to those risks.
Item
3.
|
Quantitative
and Qualitative Disclosures About Market
Risk.
|
At
February 10, 2007, the only material changes to our instruments and positions
that are sensitive to market risk since the disclosures in our 2006 Annual
Report to Shareholders, which is incorporated by reference in our Annual Report
on Form 10-K,
was
the $2.7 million increase in commercial paper, the purchase of $59.5 million
in
marketable securities, partially off-set by the sale of $43.2 million in
short-term investments, to support the self-insurance reserves in our
wholly-owned insurance captive subsidiary, and the execution of two
forward-starting fuel swaps to economically hedge a portion of our diesel fuel
and unleaded fuel exposure. Mark-to market losses of $0.2 million are recorded
in operating, selling, general and administrative expenses and a portion are
then reclassed based on diesel gallons used to cost of sales as a component
of
distribution costs.
The
fair
value of our debt was estimated at $1.833 billion as of February
10, 2007,
and
$1.825 billion as of August 26, 2006, based on the quoted market prices for
the
same or similar debt issues or on the current rates available to AutoZone for
debt of the same remaining maturities. Such fair value is less than the carrying
value of debt by $21.5 million at February
10, 2007,
and by
$32.3 million at August 26, 2006. Considering the effect of any interest rate
swaps designated and effective as cash flow hedges, we had $164.3 million of
variable rate debt outstanding at February
10, 2007,
and
$167.2 million of variable rate debt outstanding at August 26, 2006. At these
borrowing levels for variable rate debt, a one percentage point increase in
interest rates would have had an unfavorable annual impact on our pre-tax
earnings and cash flows of $1.6 million in fiscal 2007 and fiscal 2006, which
includes the effects of interest rate swaps. The primary interest rate exposure
on variable rate debt is based on LIBOR. Considering the effect of any interest
rate swaps designated and effective as cash flow hedges, we had outstanding
fixed rate debt of $1.690 billion at February
10, 2007,
and
August 26, 2006. A one percentage point increase in interest rates would reduce
the fair value of our fixed rate debt by $64.9 million at February
10, 2007 and
$68.3
million at August 26, 2006.
Item
4.
|
Controls
and Procedures.
|
An
evaluation was performed under the supervision and with the participation of
our
management, including the Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls
and
procedures as of February 10, 2007. Based on that evaluation, our management,
including the Chief Executive Officer and Chief Financial Officer, concluded
that our disclosure controls and procedures were effective as of February 10,
2007. During or subsequent to the quarter ended February 10, 2007 there were
no
changes in our internal controls that have materially affected or are reasonably
likely to materially affect, internal controls over financial
reporting.
PART
II. OTHER INFORMATION
Item
1.
|
Legal
Proceedings.
|
As
of the
date of this filing, there have been no additional material legal proceedings
or
material developments in the legal proceedings disclosed in our 2006
Annual Report to Shareholders for AutoZone, Inc, which is incorporated by
reference in our Annual Report on Form 10-K for the year ended August 26, 2006.
As
of the
date of this filing, there have been no material changes in our risk factors
from those disclosed in Part I, Item 1A, of our Annual Report on Form 10-K
for
the fiscal year ended August 26, 2006.
Item
2.
|
Changes
in Securities and Use of
Proceeds.
|
Shares
of
common stock repurchased by the Company during the quarter ended February 10,
2007, were as follows:
Issuer
Repurchases of Equity Securities
Period
|
|
Total
Number
of
Shares
Purchased
|
|
Average
Price
Paid
per Share
|
|
Total
Number
of
Shares
Purchased
as
Part of Publicly
Announced
Plans
or
Programs
|
|
Maximum
Dollar
Value
that
May
Yet Be
Purchased
Under
the
Plans
or
Programs
|
|
November
19, 2006 to
December
16, 2006
|
|
|
-
|
|
$
|
-
|
|
|
94,038,309
|
|
$
|
129,401,552
|
|
December
17, 2006 to
January
13, 2007
|
|
|
406,715
|
|
|
120.48
|
|
|
94,445,024
|
|
|
80,401,517
|
|
January
14, 2007 to
February
10, 2007
|
|
|
640,450
|
|
|
124.74
|
|
|
95,085,474
|
|
|
510,655
|
|
Total
|
|
|
1,047,165
|
|
$
|
123.09
|
|
|
95,085,474
|
|
$
|
510,655
|
|
All
of
the above repurchases were part of publicly announced plans that were authorized
by the Company’s Board of Directors for a maximum of $4.9 billion in common
shares as of February 10, 2007. The program was initially announced in January
1998, and subsequent to quarter-end was amended on February 26, 2007, to
increase the repurchase authorization to $5.4 billion from $4.9 billion. The
program does not have an expiration date.
Item
3.
|
Defaults
Upon Senior Securities.
|
Not
applicable.
Item
4.
|
Submission
of Matters to a Vote of Security
Holders.
|
|
(a)
|
The
Annual Meeting of Stockholders was held on December 13,
2006.
|
|
(b)
|
The
following directors were elected at the Annual Meeting on December
13,
2006:
|
Charles
M. Elson
Sue
E. Gove
Earl
G. Graves, Jr.
N.
Gerry House
J.R.
Hyde, III
W.
Andrew McKenna
George
R. Mrkonic, Jr.
William
C. Rhodes, III
Theodore
W. Ullyot
|
(c)
1.
All nominees for director were elected pursuant to the following
vote:
Nominee
|
Votes
For
|
Votes
Withheld
|
Charles
M. Elson
|
65,228,430
|
423,242
|
Sue
E. Gove
|
65,268,458
|
383,214
|
Earl
G. Graves, Jr.
|
65,249,133
|
402,539
|
N.
Gerry House
|
58,733,633
|
6,918,039
|
J.R.
Hyde, III
|
65,076,393
|
575,279
|
W.
Andrew McKenna
|
63,182,349
|
2,469,323
|
George
R. Mrkonic, Jr.
|
65,167,359
|
484,313
|
William
C. Rhodes, III
|
65,265,623
|
386,049
|
Theodore
W. Ullyot
|
65,237,864
|
413,808
|
|
2.
|
The
AutoZone, Inc. 2006 Stock Option Plan was approved pursuant to the
following vote:
|
For:
|
|
|
53,359,532
|
|
Against:
|
|
|
6,495,793
|
|
Abstain:
|
|
|
314,172
|
|
|
3. |
The AutoZone, Inc. Fourth Amended and Restated Executive
Stock Purchase Plan was approved pursuant to the
following vote: |
For:
|
|
|
58,681,040
|
|
Against:
|
|
|
1,169,219
|
|
Abstain:
|
|
|
319,238
|
|
|
4. |
Ernst & Young LLP was ratified as the Company’s
independent registered public accounting firm pursuant to
the following vote: |
For:
|
|
65,096,148
|
|
Against:
|
|
254,279
|
|
Abstain:
|
|
|
301,245
|
|
Item
5.
|
Other
Information.
|
Not
applicable.
The
following exhibits are filed as part of this report:
3.1
|
Restated
Articles of Incorporation of AutoZone, Inc. incorporated by reference
to
Exhibit 3.1 to the Form 10-Q for the quarter ended February 13,
1999.
|
|
|
3.2
|
Third
Amended and Restated By-laws of AutoZone, Inc. incorporated by
reference
to Exhibit 3.1 to the Form 8-K dated October 1, 2002.
|
|
|
10.1
|
AutoZone,
Inc. 2006 Stock Option Plan incorporated by reference to Appendix
A to the
definitive proxy statement dated October 25, 2006, for the annual
meeting
of stockholders held December 13, 2006.
|
|
|
10.2
|
Form
of Stock Option Agreement.
|
|
|
10.3
|
AutoZone,
Inc. Fourth Amended and Restated Executive Stock Purchase Plan
incorporated by reference to Appendix B to the definitive proxy
statement
dated October 25, 2006, for the annual meeting of stockholders
held
December 13, 2006.
|
|
|
10.4
|
Agreement
dated January 19, 2007, between AutoZone, Inc. and Bradley W.
Bacon
incorporated by reference to Exhibit 99.1 to the Form 8-K dated
January
19, 2007.
|
|
|
12.1
|
Computation
of Ratio of Earnings to Fixed Charges.
|
|
|
15.1
|
Letter
Regarding Unaudited Interim Financial Statements.
|
|
|
31.1
|
Certification
of Principal Executive Officer Pursuant to Rules 13a-14(a) and
15d-14(a)
under the Securities Exchange Act of 1934, as adopted pursuant
to Section
302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification
of Principal Financial Officer Pursuant to Rules 13a-14(a) and
15d-14(a)
under the Securities Exchange Act of 1934, as adopted pursuant
to Section
302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification
of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
|
32.2
|
Certification
of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
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/ WILLIAM T. GILES
|
|
William
T. Giles
|
|
Chief
Financial Officer, Executive Vice
|
|
President
Information Technology and
|
|
Store
Development
|
|
(Principal
Financial Officer)
|
|
|
|
|
|
By:
/s/ CHARLIE PLEAS, III
|
|
Charlie
Pleas, III
|
|
Vice
President, Controller
|
|
(Principal
Accounting Officer)
|
Dated:
March 8, 2007
EXHIBIT
INDEX
The
following exhibits are filed as part of this report:
3.1
|
Restated
Articles of Incorporation of AutoZone, Inc. incorporated by reference
to
Exhibit 3.1 to the Form 10-Q for the quarter ended February 13,
1999.
|
|
|
3.2
|
Third
Amended and Restated By-laws of AutoZone, Inc. incorporated by
reference
to Exhibit 3.1 to the Form 8-K dated October 1, 2002.
|
|
|
10.1
|
AutoZone,
Inc. 2006 Stock Option Plan incorporated by reference to Appendix
A to the
definitive proxy statement dated October 25, 2006, for the annual
meeting
of stockholders held December 13, 2006.
|
|
|
10.2
|
Form
of Stock Option Agreement.
|
|
|
10.3
|
AutoZone,
Inc. Fourth Amended and Restated Executive Stock Purchase Plan
incorporated by reference to Appendix B to the definitive proxy
statement
dated October 25, 2006, for the annual meeting of stockholders
held
December 13, 2006.
|
|
|
10.4
|
Agreement
dated January 19, 2007, between AutoZone, Inc. and Bradley W.
Bacon
incorporated by reference to Exhibit 99.1 to the Form 8-K dated
January
19, 2007.
|
|
|
12.1
|
Computation
of Ratio of Earnings to Fixed Charges.
|
|
|
15.1
|
Letter
Regarding Unaudited Interim Financial Statements.
|
|
|
31.1
|
Certification
of Principal Executive Officer Pursuant to Rules 13a-14(a) and
15d-14(a)
under the Securities Exchange Act of 1934, as adopted pursuant
to Section
302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification
of Principal Financial Officer Pursuant to Rules 13a-14(a) and
15d-14(a)
under the Securities Exchange Act of 1934, as adopted pursuant
to Section
302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification
of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
|
32.2
|
Certification
of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|