PHOENIX — CSK Auto Corp. today reported its financial results for the fourth quarter and fiscal year, which ended on Jan. 30.
Net sales for the fourth quarter of 2004 were $369.9 million as compared to $372.3 million for the fourth quarter of 2003. Net sales for the fiscal year were $1,577.5 million as compared to $1,578.1 million for the 2004 fiscal year. Same store sales decreased 1.9 percent for the fourth quarter and decreased 0.7 percent for the fiscal year. Retail same stores sales decreased by 3 percent for the fourth quarter and decreased by 1.2 percent for the full year, and commercial same store sales increased by 4.3 percent for the fourth quarter and 1.8 percent full year.
Gross profit was $163.1 million for the fourth quarter, compared to $172.8 million for the fourth quarter of fiscal 2003. Gross profit for fiscal 2004 was $733.9 million as compared to $717.1 million for the same period of fiscal 2003.
Operating and administrative expenses were $157.3 million for the fourth quarter of fiscal 2004 as compared to $156.9 million for the same period of fiscal 2003. Operating and administrative expenses were $635.5 million and $619.9 million for fiscal 2004 and fiscal 2003, respectively.
The operating profit for the fourth quarter of fiscal 2004 was $5.2 million compared to an operating profit of $3.5 million for the fourth quarter of fiscal 2003. Operating profit for fiscal 2004 totaled $96.1 million (6.1 percent of net sales) compared to $84.5 million (5.3 percent of net sales) for fiscal 2003.
On a GAAP basis, the net loss for the fourth quarter of fiscal 2004 was $3.4 million, or (7 cents) per diluted common share, compared to a net loss of $31.8 million, or (68 cents) per diluted common share, for the fourth quarter of fiscal 2003. GAAP net income for fiscal 2004 was $36.9 million or 80 cents per diluted common share, compared to a GAAP net loss of $9.6 million, or (21 cents) per diluted common share, in fiscal 2003.
Other key financial performance indicators which have shown improvement year-over-year include: (1) net cash provided by operating activities which increased by $49.3 million to $101.9 million in fiscal 2004 from $52.6 million in fiscal 2003; (2) capital expenditures increased to $26.3 million in fiscal 2004 from $19.0 million in fiscal 2003; (3) adjusted free cash flow (a non-GAAP measure defined below) increased $3.7 million to $76.5 million in fiscal 2004 from $72.8 million in fiscal 2003; and (4) net debt (a non-GAAP measure defined below) was reduced by $48.7 million in fiscal 2004 to $440.8 million from $489.5 million in fiscal 2003.
Maynard Jenkins, chairman and CEO of CSK Auto Corp. said fiscal 2004 financial performance was adversely affected by a difficult sales environment.
“The sales trends have continued to improve in the first quarter of fiscal 2005,” Jenkins said. “We remain optimistic about the sales outlook and the strength of our business. In spite of the tough environment, we continue to generate strong free cash flow. We are focused on addressing issues within our control such as our inventory mix, average ticket and customer service. Also, we have increased our advertising exposure and have instituted a new incentive program for our sales associates to help increase sales.”
In the fourth quarter, CSK elected to change its method of inventory valuation from the Last-in, First-out method (“LIFO”) to First-in, First-out (“FIFO”) method. The company said it believes FIFO is a preferable method that better measures the cost of such inventories, results in a better matching of revenues and cost of sales, and more accurately reflects its financial position. CSK’s fourth quarter 2004 financial results were prepared on the FIFO basis and the company has retroactively restated previously reported financial results to conform to this presentation.
For fiscal year 2005, the company is forecasting same store sales increases of approximately 3 percent, and said it expects to open or relocate approximately 50 stores. CSK anticipates net income to be between $51.5 and $57.5 million, resulting in diluted earnings per common share of between $1.12 and $1.22, assuming approximately 46 million diluted shares outstanding. The full-year forecast takes into consideration the impact of a reduction of $2.4 million or $0.04 per share impact of the lease accounting. This assumes that diluted earnings per common share for the first quarter of fiscal 2005 will be between 16 and 19 cents. Free cash flow (as defined below) in fiscal year 2005 is expected to be between $80 and $90 million. The company said it expects to use this excess cash primarily to reduce outstanding debt.
For more information about CSK Auto, go to: www.cskauto.com.
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