CSK Auto Corporation (the �Company�) (NYSE:CAO), the parent company
of CSK Auto, Inc., today reported net sales of $461.1 million for
its first quarter of fiscal 2008 ended May 4, 2008, a decrease of
2.5%, or $11.9 million compared to the first quarter of fiscal
2007. The decrease in net sales was primarily due to decreased same
store sales, which were partially offset by sales from nine net new
stores added from May 7, 2007 through May 4, 2008. Total same store
sales declined by 3.1% for the quarter, comprised of a decrease of
5.1% in retail same store sales and an increase of 6.1% in
commercial same store sales. For the quarter, the Company reported
net income of $5.4 million, or $0.12 per diluted common share,
compared to net income of $1.7 million, or $0.04 per diluted common
share, for the same period last year. Gross profit as a percentage
of sales increased to 47.1% from 46.6% for the same period last
year. The Company recognized a pre-tax gain of $15.0 million in its
results of operations in the first quarter of fiscal 2008. The
Company recorded a pre-tax charge in the fourth quarter of fiscal
2007 for the settlement of its class action securities litigation
consisting of $10.0 million in cash and $1.7 million in Company
stock. The Company�s primary insurer under its directors and
officers liability insurance policy will pay the entire $10.0
million cash component of the settlement, in addition to $5.0
million in related litigation and regulatory legal expenses all of
which had previously been expensed. Safe Harbor Portions of this
release may constitute �forward-looking statements� as defined by
federal law. Although the Company believes any such statements are
based on reasonable assumptions, there is no assurance that actual
outcomes will not be materially different. Any such statements are
made in reliance on the �safe harbor� protections provided under
the Private Securities Litigation Reform Act of 1995. Additional
information about issues that could lead to material changes in the
Company�s performance is contained in the Company�s filings with
the Securities and Exchange Commission. The Company makes no
commitment to revise or update any forward looking statement in
order to reflect events or circumstances after the date any such
statement is made. About CSK Auto CSK Auto Corporation is the
parent company of CSK Auto, Inc., a specialty retailer in the U.S.
automotive aftermarket industry. As of May 4, 2008, the Company
operated 1,345 stores in 22 states under the brand names Checker
Auto Parts, Schuck's Auto Supply, Kragen Auto Parts and Murray�s
Discount Auto Stores. CSK AUTO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands,
except per share data) � � Thirteen Weeks Ended May 4, May 6, 2008
2007 Net sales $ 461,104 $ 473,035 Cost of sales � 243,801 � �
252,437 Gross profit 217,303 220,598 Other costs and expenses:
Operating and administrative 205,810 199,234 Investigation,
litigation and restatement costs 983 4,564 Insurance recovery
(15,000 ) - Store closing costs � 785 � � 706 Operating profit
24,725 16,094 Interest expense, net � 15,445 � � 13,322 Income
before income taxes 9,280 2,772 Income tax expense � 3,913 � �
1,102 Net income $ 5,367 � $ 1,670 � Earnings per common share:
Basic $ 0.12 � $ 0.04 Diluted $ 0.12 � $ 0.04 � Weighted average
shares outstanding: Basic � 44,032 � � 43,951 Diluted � 44,101 � �
44,697 CSK AUTO CORPORATION AND SUBSIDIARIES � � CONSOLIDATED
BALANCE SHEET (In thousands, except share data) (Unaudited) May 4,
February 3, 2008 2008 ASSETS Cash and cash equivalents $ 19,679 $
16,520 Receivables, net 36,721 37,322 Inventories, net 549,002
494,651 Deferred income taxes 44,527 50,649 Prepaid expenses and
other current assets � 50,434 � � 35,842 � Total current assets
700,363 634,984 � Property and equipment, net 159,267 165,115
Intangibles, net 61,905 63,020 Goodwill 224,937 224,937 Deferred
income taxes 17,288 15,380 Other assets, net � 33,667 � � 35,254 �
Total assets $ 1,197,427 � $ 1,138,690 � � LIABILITIES AND
STOCKHOLDERS' EQUITY Accounts payable $ 291,225 $ 236,879 Accrued
payroll and related expenses 59,666 57,593 Accrued expenses and
other current liabilities 98,950 107,211 Current maturities of
long-term debt 493,443 50,551 Current maturities of capital lease
obligations � 5,982 � � 6,351 � Total current liabilities � 949,266
� � 458,585 � � Long-term debt 16,131 452,420 Obligations under
capital leases 8,469 9,866 Other liabilities � 52,662 � � 53,281 �
Total non-current liabilities � 77,262 � � 515,567 � � Commitments
and contingencies � Stockholders' equity: Common stock, $0.01 par
value, 90,000,000 shares authorized, 44,035,913 and 44,030,644
shares issued and outstanding at May 4, 2008 and February 3, 2008,
respectively � 440 440 Additional paid-in capital 439,086 438,092
Accumulated deficit � (268,627 ) � (273,994 ) Total stockholders'
equity � 170,899 � � 164,538 � Total liabilities and stockholders'
equity $ 1,197,427 � $ 1,138,690 � CSK AUTO CORPORATION AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
(Unaudited) � � � � Thirteen Weeks Ended May 4, � May 6, 2008 2007
Cash flows provided by (used in) operating activities: Net income $
5,367 $ 1,670 Adjustments: Depreciation and amortization on
property and equipment 9,395 9,947 Amortization of other items
1,384 1,336 Amortization of debt discount and deferred financing
costs 1,782 1,319 Stock-based compensation expense 1,244 1,367
Write downs of property, equipment and other assets 447 1,398
Deferred income taxes 3,756 1,046 Changes in operating assets and
liabilities: Receivables (229 ) (2,344 ) Inventories (54,351 )
(25,559 ) Prepaid expenses and other current assets (14,592 ) (773
) Accounts payable 54,347 13,630 Accrued payroll, accrued expenses
and other current liabilities (6,401 ) 4,838 Other operating
activities � 189 � � (192 ) Net cash provided by operating
activities � 2,338 � � 7,683 � � Cash flows used in investing
activities: Capital expenditures (4,046 ) (8,858 ) Other investing
activities � (320 ) � (477 ) Net cash used in investing activities
� (4,366 ) � (9,335 ) � Cash flows provided by (used in) financing
activities: Borrowings under senior credit facility - line of
credit 85,900 65,600 Payments under senior credit facility - line
of credit (79,400 ) (57,100 ) Payments under term loan facility
(864 ) (873 ) Payment of debt financing costs (125 ) - Payments on
capital lease obligations (1,694 ) (2,684 ) Proceeds from seller
financing arrangements 1,550 - Payments on seller financing
arrangements (168 ) (156 ) Proceeds from exercise of stock options
40 - Other financing activities � (52 ) � (44 ) Net cash provided
by financing activities � 5,187 � � 4,743 � � Net increase in cash
3,159 3,091 Cash and cash equivalents, beginning of period � 16,520
� � 20,169 � Cash and cash equivalents, end of period $ 19,679 � $
23,260 � The following table provides certain financial information
not derived in accordance with GAAP. We have included calculations
of these non-GAAP measures and reconciliations to the most
comparable GAAP financial measures. We believe that EBITDA is a
recognized supplemental measurement tool widely used by analysts
and investors to help evaluate a company's overall operating
performance, its ability to incur and service debt, and its
capacity for making capital expenditures. We use EBITDA, in
addition to operating income and cash flows from operating
activities, to assess our performance relative to our competitors
and relative to our own performance in prior periods. We believe
that it is important for investors to have the opportunity to
evaluate us using the same measures. EBITDA is calculated as
follows ($ in thousands): Calculation of EBITDA: � � � Thirteen
weeks ended May 4, 2008 May 6, 2007 Income before income taxes $
9,280 $ 2,772 Interest expense, net 15,445 13,322 Depreciation
9,395 9,947 Amortization � 1,384 � � 1,336 EBITDA � 35,504 � �
27,377 � Non-cash stock compensation expense 1,244 1,367
Investigation, litigation and restatement costs 983 4,564 Insurance
recovery (15,000 ) - Asset retirements and impairment 466 982
Non-recurring charges � 2,729 � � - EBITDA, as adjusted $ 25,926 �
$ 34,290 EBITDA, and EBITDA as adjusted, do not represent funds
available for our discretionary use and are not intended to
represent or to be used as substitute for net income or cash flow
from operations data as measured under GAAP. The Company�s
definition of EBITDA as adjusted, is consistent with the
definitions applied in our term loan facility. The items excluded
from EBITDA, and EBITDA as adjusted, are significant components of
our statement of operations and must be considered in performing a
comprehensive assessment of our overall financial performance.
EBITDA, and EBITDA as adjusted, and the associated year-to-year
trends should not be considered in isolation. EBITDA, and EBITDA as
adjusted, may differ in method of calculation from similarly titled
measures used by other companies.
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