FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended August 31, 1999
Commission file number 1-11276
DISCOUNT AUTO PARTS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-1447420
- ------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
4900 Frontage Road, South Lakeland, Florida 33815
- ----------------------------- -----------------------------
(Address of principal executive offices) (zip code)
(863) 687-9226
- --------------------------------------------------------------------------------
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
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock $.01 Par Value - 16,690,714 shares as of August 31, 1999
<PAGE>
Discount Auto Parts, Inc.
Index
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - August 31, 1999
and June 1, 1999 .................................................... 3
Condensed Consolidated Statements of Income - for the thirteen weeks
ended August 31, 1999 and September 1, 1998 .... .................... 4
Condensed Consolidated Statements of Cash Flows - for the thirteen
weeks ended August 31, 1999 and September 1, 1998 ................... 5
Notes to Condensed Consolidated Financial Statements................. 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................. 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk........... 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................... 12
Item 6. Exhibits and Reports on Form 8-K..................................... 12
SIGNATURES................................................................... 13
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Discount Auto Parts, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
<CAPTION>
August 31 June 1
1999 1999
------------------- ------------------
ASSETS (In thousands)
Current assets:
<S> <C> <C>
Cash $ 6,776 $ 8,795
Inventories 221,084 209,028
Prepaid expenses and other current assets 21,728 22,773
------------------- ------------------
Total current assets 249,588 240,596
Property and equipment 475,732 457,994
Less allowances for depreciation and amortization (88,727) (83,417)
------------------- ------------------
387,005 374,577
Other assets 5,761 5,141
------------------- ------------------
Total assets $ 642,354 $ 620,314
=================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 72,568 $ 87,867
Other current liabilities 21,878 21,390
Current maturities of long-term debt 2,400 2,400
------------------- ------------------
Total current liabilities 96,846 111,657
Deferred income taxes 7,091 7,091
Long-term debt 254,305 224,800
Stockholders' equity:
Preferred stock
- -
Common stock 167 167
Additional paid-in capital 142,230 142,230
Retained earnings 141,715 134,369
------------------- ------------------
Total stockholders' equity 284,112 276,766
------------------- ------------------
Total liabilities and stockholders' equity $ 642,354 $ 620,314
=================== ==================
See accompanying notes
</TABLE>
<PAGE>
<TABLE>
Discount Auto Parts, Inc.
Condensed Consolidated Statements of Income (Unaudited)
<CAPTION>
Thirteen Thirteen
Weeks Ended Weeks Ended
-------------- ------------------
August 31 September 1
1999 1998
-------------- ------------------
(In thousands, except per share
amounts)
<S> <C> <C>
Net sales $ 143,625 $ 123,039
Cost of sales, including distribution costs 85,198 73,695
-------------- ------------------
Gross profit 58,427 49,344
Selling, general and administrative expenses 43,694 35,069
-------------- ------------------
Income from operations 14,733 14,275
Other income, net 638 24
Interest expense (3,651) (2,662)
-------------- ------------------
Income before income taxes and cumulative effect of change
in accounting principle 11,720 11,637
Income taxes 4,374 4,492
-------------- ------------------
Income before cumulative effect of change in accounting principle 7,346 7,145
Cumulative effect of change in accounting principle, net of
income tax benefit - (8,245)
-------------- ------------------
============== ==================
Net income (loss) $ 7,346 $ (1,100)
============== ==================
Net income (loss) per basic share from:
Income before cumulative effect of change in accounting principle $ $
0.44 0.43
Cumulative effect of change in accounting principle -
(0.50)
-------------- ------------------
==============
Net income (loss) $ $
0.44 (0.07)
============== ==================
Net income (loss) per diluted share from:
Income before cumulative effect of change in accounting principle $ $
0.44 0.42
Cumulative effect of change in accounting principle -
(0.49)
-------------- ------------------
Net income (loss) $ $
0.44 (0.07)
============== ==================
Average common shares outstanding
16,690 16,634
Dilutive effect of stock options 117
194
-------------- ------------------
Average common shares outstanding - assuming dilution
16,807 16,828
============== ==================
See accompanying notes.
</TABLE>
<PAGE>
Discount Auto Parts, Inc.
Condensed Consolidated Statements Of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Thirteen Thirteen
Weeks Ended Weeks Ended
--------------------------------------------
August 31 September 1
1999 1998
-------------------- -----------------
Operating activities
<S> <C> <C>
Net income (loss) $ 7,346 $ (1,100)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Cumulative effect of change in accounting principle - 8,245
Depreciation and amortization 5,411 4,312
(Gain) on disposals of property and equipment (664) -
Changes in operating assets and liabilities:
Increase in inventories (12,056) (5,714)
Decrease (increase) in prepaid expenses and
other current assets 1,045 (4,424)
Increase in other assets (755) (1)
Decrease in trade accounts payable (15,299) (8,576)
Increase in other current liabilities 488 2,301
-------------------- -----------------
Net cash used in operating activities (14,484) (4,957)
Investing activities
Proceeds from sales of property and equipment 1,149 1,157
Purchases of property and equipment (18,189) (22,356)
-------------------- -----------------
Net cash used in investing activities (17,040) (21,199)
Financing activities
Proceeds from short-term borrowings and long-term debt 38,492 35,503
Payments of short-term borrowings and long-term debt (8,987) (9,719)
Proceeds from other issuances of common stock - 138
-------------------- -----------------
Net cash provided by financing activities 29,505 25,922
Net decrease in cash (2,019) (234)
Cash at beginning of period 8,795 5,064
-------------------- -----------------
Cash at end of period $ 6,776 $ 4,830
==================== =================
See accompanying notes.
</TABLE>
<PAGE>
Discount Auto Parts, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
August 31, 1999
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of
Discount Auto Parts, Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the 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 generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. For
further information, refer to the financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for the year ended June 1,
1999.
Operating results for the thirteen week period ended August 31, 1999 are not
necessarily indicative of the results that may be expected for the entire fiscal
year.
2. Long-Term Debt
Long-term debt consists of the following (in thousands):
August 31 June 1
1999 1999
Revolving credit agreements $ 199,505 $ 170,000
Senior term notes 50,000 50,000
Senior secured notes 7,200 7,200
------------------------------------
256,705 227,200
Less current maturities (2,400) (2,400)
------------------------------------
$ 254,305 $ 224,800
====================================
Effective July 16, 1997, the Company entered into a three year $175 million
unsecured revolving credit agreement (the "Revolver") due in fiscal year 2001.
The rate of interest payable under the Revolver was a function of LIBOR or the
prime rate of the lead agent bank, at the option of the Company. During the term
of the Revolver, the Company was obligated to pay a fee of .125% per annum for
the unused portion of the Revolver.
Effective January 29, 1999, the Company entered into a separate $20 million
unsecured revolving credit agreement with a financial institution. The facility
was scheduled to mature September 1, 1999. The rate of interest payable under
the facility is a function of LIBOR.
Effective July 29, 1999, the Company entered into a new five year $265 million
unsecured revolving credit agreement (the "New Revolver"). The New Revolver
replaces both of the aforementioned revolving credit facilities. The rate of
interest payable under the New Revolver is a function of LIBOR or the prime rate
of the lead agent bank, at the option of the Company. During the term of the New
Revolver, the Company is also obligated to pay a fee, which fluctuates based on
the Company's debt-to-capitalization ratio, for the unused portion of the New
Revolver.
Effective August 8, 1997, the Company issued $50 million senior term notes
facility (the "Notes"). The Notes provide for interest at a fixed rate of 7.46%,
payable semi-annually, with semi-annual principal payments of $7.1 million,
beginning on July 15, 2004.
At August 31, 1999 and June 1, 1999, the Company's weighted average interest
rate on its borrowing under its revolving lines of credit was 6.2% and 5.3%,
respectively.
As of August 31, 1999, the Company had approximately $65.5 million of available
borrowings under the New Revolver.
The Company has issued two senior secured notes, each for an original principal
amount of $12 million, to an insurance company. The notes are collateralized by
a first mortgage on certain store properties, equipment and fixtures. The
agreements provide for interest at fixed rates of 10.11% and 9.8%, payable
quarterly, with annual principal payments of $1.2 million on each December 15
and May 31.
The Company's debt agreements contain various restrictions, including the
maintenance of certain financial ratios and restrictions on dividends, with
which the Company was in compliance as of August 31, 1999.
3. Business Acquisition
Effective September 28, 1998, the Company acquired, pursuant to a definitive
purchase agreement dated September 21, 1998, all the Rose Auto Parts stores
through an asset purchase from Eastern Automotive Warehouse, Inc., a
wholly-owned subsidiary of National Auto Parts Warehouse, Inc. The total
purchase price was approximately $8.2 million. The acquisition included 39
leased retail store locations, primarily located in south Florida, and a leased
warehouse facility in Miami, Florida. The acquisition involved the purchase of
inventory and furniture and equipment at these various locations and the
assumption of the respective leases. At August 31, 1999, 26 of the 39 Rose
retail locations were in operation. Consistent with its plan, Discount Auto
Parts has not continued operations in any of the remaining 13 stores.
The acquisition has been accounted for using the purchase method of accounting
and, accordingly, the purchase price has been allocated to the assets purchased
and the liabilities assumed based upon the fair values at the date of
acquisition. Operating results of the acquired business have been included in
operations since the date of the acquisition. Goodwill of $2.7 million,
resulting from the acquisition, is being amortized over twenty years.
The pro forma impact of the acquired business on results of operation is not
material.
4. Accounting Change
During the fourth quarter of fiscal year 1999, the Company changed its method of
accounting for store inventories from the first-in, first-out retail inventory
method to the weighted average cost method. The new method for computing
inventories is preferable because it more accurately measures the cost of the
Company's merchandise and produces a better matching of revenues and expenses.
The first quarter of fiscal 1999 has been restated to give effect to the change
in the Company's method of accounting for inventories. The effect of the change
as of the beginning of the first quarter of fiscal 1999 (i.e. June 3, 1998) has
been presented as a cumulative effect of a change in accounting method, net of a
$5,190,000 income tax benefit, of $8,245,000, and has been recorded as of such
date. In addition, the effect of this change on operations for the first quarter
of fiscal year 1999 was to decrease income before cumulative effect of change in
accounting principle by $203,000 ($.01 per diluted share).
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Thirteen Weeks Ended August 31, 1999 Compared to Thirteen Weeks Ended
September 1, 1998
Total sales for the first quarter of fiscal 2000 were $143.6 million as compared
to $123.0 million a year earlier. Comparable store sales (which include sales
under the Company's commercial delivery program) increased 1% for the first
quarter of fiscal 2000. The balance of the increase in total sales for the
fiscal 2000 first quarter was attributable to net sales from new stores opened
since the beginning of fiscal 1999.
At August 31, 1999, the Company had 580 stores in operation, compared with 558
stores at June 1, 1999 and 472 stores at September 1, 1998.
Gross profit for the first quarter of fiscal 2000 increased to $58.4 million, or
40.7% of net sales, as compared to $49.3 million, or 40.1% of net sales, for the
comparable period of fiscal 1999. The increase is primarily the result of
overall lower product cost.
Selling, general and administrative (SG&A) expenses increased as a percentage of
sales from 28.5% in the first quarter of fiscal 1999 to 30.4% in the first
quarter of fiscal 2000. The increase is primarily due to the expenses incurred
related to the implementation and expansion of the Company's commercial delivery
program and somewhat lower do-it-yourself ("DIY") comparable store sales for the
first quarter of fiscal 2000 as compared to the 1999 quarter, thus impacting the
ability of the Company to leverage these expenses.
Income from operations for the first quarter of fiscal 2000 was $14.7 million as
compared to $14.3 million in the first quarter of fiscal 1999. Operating margins
for the first quarter of fiscal 2000 were 10.3% as compared to 11.6% for the
first quarter of fiscal 1999. Operating income and the resulting margins for
both the first quarter of fiscal 2000 and the first quarter of fiscal 1999 were
negatively impacted by the implementation and expansion of the Company's
commercial delivery program. Excluding the impact of the commercial delivery
program, operating margins were approximately 11.6% for the first quarter of
fiscal 2000 versus approximately 12.2% for the first quarter of fiscal 1999.
Interest expense for the first quarter of fiscal 2000 was $3.7 million as
compared to $2.7 million for the first quarter of fiscal 1999. The increase was
the result of (1) increased borrowings associated with new store growth and (2)
higher interest rates.
Income before the cumulative effect of a change in accounting method for the
first quarter of fiscal 2000 was $7.3 million or $.44 per diluted share as
compared to $7.1 million or $.42 per diluted share reported for the first
quarter of fiscal 1999.
During the fourth quarter of fiscal 1999, the Company implemented a change in
its method of accounting for store inventories from the first-in, first-out
method calculated using a form of the retail inventory method to the weighted
cost method. The Company believes the new method for computing inventory is
preferable because it provides for better matching of revenues and expenses. The
Company made this change in connection with new store-level perpetual inventory
systems installed throughout fiscal 1999. Accordingly, it is believed that the
new inventory valuation method will better correspond with the Company's current
operating practices for store inventory management. As a result of this change
in accounting method, the Company reported a non-cash, fiscal 1999 after tax
charge of $8.2 million, or $.49 per diluted share which is reflected as of the
beginning of the first quarter of fiscal 1999 and which represents the beginning
of the 1999 fiscal year impact of the change in accounting method.
The Company's effective tax rate for the first quarter of fiscal 2000 was 37.3%
as compared to 38.6% for the first quarter fiscal 1999. The lower tax rate
primarily is reflective of estimated reductions anticipated as a result of state
tax planning and restructuring initiatives, which are in the process of being
implemented.
The Company reported net income was $7.3 million or $.44 per diluted share for
the first quarter of fiscal 2000 as compared to, for the reasons described
above, a net loss of $1.1 million, or $.07 loss per diluted share for the first
quarter of fiscal 1999.
Liquidity and Capital Resources
For the thirteen weeks ended August 31, 1999, net cash of $14.5 million was
utilized by the Company's operations versus $5.0 million utilized by the
Company's operations for the comparable thirteen week period of fiscal 1999.
During the thirteen weeks ended August 31, 1999, this net use of cash was due
primarily to a reduction in trade accounts payable (which was largely a result
of fiscal 1999 year-end extended vendor terms coming due), and an increase in
inventories resulting primarily from new store growth and additional inventory
added to commercial designated stores. These uses of cash were offset in part by
current period earnings and depreciation.
Capital expenditures for the thirteen weeks ended August 31, 1999 were $18.2
million. The majority of the capital expenditures related to the 22 stores
opened during that period. For all of fiscal 2000, the Company expects to open
approximately 80 to 90 new stores.
The Company is currently in the process of planning and developing a second
distribution center. The new distribution center is expected to be opened and
operational in the fall of calendar year 2000. Capital expenditures associated
with the second distribution center are still being finalized, but are expected
to be approximately $15 million to $20 million.
The Company also continued the roll-out of a commercial delivery service, which
began in the third quarter of fiscal 1998. The Company's commercial delivery
service consists of a program whereby commercial customers (such as auto service
centers, commercial mechanics, garages and the like) establish commercial
accounts with the Company and order automotive parts from the Company and such
parts will be delivered from, or can be picked up from, nearby Discount Auto
Parts stores. The commercial delivery program is expected to require the Company
to extend trade credit to certain of the commercial account customers as part of
the ordinary course of business. The extension of such trade credit will
increase the capital requirements associated with the roll-out of the program
and will expose the Company to credit risk from uncollectible accounts. The
Company has established systems to manage and control such credit risk. The
amount of capital that is needed to cover extension of trade credit will be
dependent in large part upon the success of the commercial delivery service
roll-out and how quickly the commercial business develops. Because this is a
relatively new aspect of the auto parts supply business for the Company, there
are risks associated with the Company's entry into this new aspect of the
business and there can be no assurance as to if or when the commercial delivery
service business will be profitable or as to whether the Company will experience
any financial or other challenges in managing and controlling the credit risk.
The Company anticipates that total capital expenditures for all of fiscal 2000
including the costs associated with the addition of 80 to 90 new stores, initial
construction of the second distribution center and the working capital costs
associated with the continued expansion of the commercial delivery service, will
be in the range of $70 million to $75 million.
As of August 31, 1999, the Company had $65.5 million of additional availability
under its existing financing agreements.
The Company has historically been able to finance most of its new store growth
through unsecured lines of credit and medium and longer term mortgage financing
provided by banks and other institutional lenders, and through cash flow from
operations. Consistent with its historical practice, the Company expects to
finance much of its short and long-term liquidity needs for new store growth, as
to land and buildings, primarily through these lines of credit and mortgage
financing (renewals and replacements thereof), and as to equipment and fixtures,
primarily through cash flow from operations. In addition, the Company is
exploring options to utilize sale/leaseback arrangements and synthetic leases to
secure additional liquidity and to address new store growth.
The Company's new store development program also requires significant working
capital, principally for inventories. The Company has historically used trade
credit to partially finance new store inventories and has been successful in
negotiating extended payment terms and incentives from many suppliers through
volume purchases. The Company believes that it will be able to continue
financing some of its inventory growth through the extension of favorable
payment terms and incentives from its vendors, but there can be no assurance
that the Company will be successful in doing so. The additional funding for
inventory expansion has been provided in large part from cash flow from
operations.
The Company believes that the expected cash flows from operations, available
bank borrowings and trade credit, will be sufficient to fund the capital and
liquidity needs of the Company through fiscal 2001. The Company expects that by
the end of fiscal 2001 additional funding sources, such as sale/leaseback
arrangements, will be necessary to supplement the new revolving credit facility.
Inflation and Seasonality
The Company does not believe its operations have been materially affected by
inflation. The Company has been successful, in many cases, in reducing the
effects of merchandise cost increases principally by taking advantage of vendor
incentive programs, economies of scale resulting from increased volumes or
purchases, and selective forward buying.
Although sales have historically been somewhat higher in the Company's fourth
quarter (March through May), the Company does not consider its business to be
seasonal.
Year 2000 Issue
The Year 2000 issue results from computer programs and electronic circuitry that
do not differentiate between the year 1900 and the year 2000 because they are
written using two rather than four digit dates to define the applicable year. If
not corrected, many computer applications and date-sensitive devices could fail
or produce erroneous results when processing dates after December 31, 1999. The
Year 2000 issue affects virtually all companies and organizations, including the
Company.
The Company employs a number of information technology systems in its
operations, including, without limitation, computer networking systems,
financial systems and other similar systems, some of which are internally
developed and others are licensed from outside vendors. A number of these
systems have been recently implemented by the Company and thus most of these
recently implemented systems are believed to be Year 2000 compliant. Management
developed and has been pursing a plan to modify the Company's other information
technology systems. As of the end of September 1999, this plan was substantially
complete.
Throughout its operations, the Company also employs electronic equipment such as
building security, product handling and other devices containing embedded
electronic circuits. The Company has identified and prioritized the embedded
technology devices which may be deemed to be mission critical or that tend to
have a more significant impact on normal operations. A team of internal staff
and management that was identified to manage the Company's Year 2000 initiative
developed and implemented a separate plan to upgrade these higher priority
embedded technology devices. The implementation of this separate plan was
substantially complete as of the end of September 1999.
When fully addressed, the Company anticipates having spent less than $250,000 to
address the year 2000 issue. This includes the estimated costs of all equipment
upgrades, software modification, the salaries of employees, and the fees of
consultants addressing the issue. The majority of these funds were spent January
through June 1999. The funds to pay for addressing the Year 2000 issue will have
come from available funds. The Company believes that the cost of addressing the
Year 2000 issue have not and will not have a material effect on the Company's
consolidated financial position or results of operations.
The Company has sought to evaluate and manage the potential risk posed by the
impact of the Year 2000 issue on its major suppliers and vendors. Formal and
informal communications with these major suppliers and vendors were initiated,
and substantially completed as of September 1999. However, it has been difficult
to determine with any certainty whether such suppliers and vendors will be able
to successfully address the Year 2000 issue with respect to their own systems
and thus be able to process purchase orders immediately following January 1,
2000.
Should the Company or any third party with whom the Company has a significant
business relationship have a systems failure due to the century change, the
Company believes that the most significant impact would likely be the inability,
with respect to a store or group of stores, to conduct operations due to a power
failure, to timely deliver inventory, to receive certain products from vendors,
or to electronically process sales to the customer at the store level. The
Company does not expect any such event to have a significant effect on its
overall operations. However, the Company's initiatives with respect to the Year
2000 issue are subject to a variety of risks and uncertainties, some of which
are beyond the Company's control. The failure of the Company or any of its major
suppliers or vendors to achieve Year 2000 readiness could have adverse impacts
on the Company's business operations not currently anticipated, which in turn
could have an adverse effect on the Company's future financial results.
Accordingly, the Company has developed contingency plans for such events.
Forward Looking Statements
The Management's Discussion and Analysis of Financial Condition and Results of
Operations and other sections of this quarterly report contain forward looking
statements that are based on the current expectations, estimates and projections
about the industry in which the Company operates, management's beliefs and the
assumptions made by management. These statements include the words
"anticipates", "expects", "expected", "should" and "believes", variations of
such words, and similar expressions which are intended to identify such forward
looking statements. These forward looking statements are subject to potential
risks and uncertainties that could cause actual results to differ materially
from historical results or those currently anticipated.
These potential risks and uncertainties include, but are not limited to,
increased competition, extent of the market demand for auto parts, availability
of inventory supply, propriety of inventory mix, adequacy and perception of
customer service, product quality and defect experience, availability of and
ability to take advantage of vendor pricing programs and incentives, sourcing
availability, rate of new store openings, cannibalization of store sites, mix
and types of merchandise sold, governmental regulation of products, new store
development and the like, performance of information systems, effectiveness of
deliveries from the distribution center, ability to hire, train and retain
qualified team members, availability of quality store sites, ability to
successfully implement the commercial delivery service, credit risk associated
with the commercial delivery service, environmental risks, availability of
expanded and extended credit facilities, year 2000 compliance issues, expenses
associated with investigations concerning freon matters, potential for liability
with respect to these matters and other risks.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company is exposed to changes in interest rates, primarily from its
long-term revolving credit agreement. The Company also has long term debt that
bears a fixed rate. There is a risk that market rates will decline and the
required payments will exceed those based on current market rates on the
long-term debt.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is currently involved in litigation with its insurance carrier
pursuant to which the Company is seeking recovery under its insurance policy of
certain amounts incurred in connection with the previously reported Airgas, Inc.
litigation and the settlement thereof. Recently, the separate motions for
summary judgment by the Company and by the insurance carrier were denied and the
litigation is proceeding. The ultimate outcome of such litigation or an estimate
of the amount of potential insurance recoveries, if any, cannot be determined at
this time. No benefit for any recovery, which may result, has been reflected in
the Company's fiscal year 2000 financial statements.
Discount Auto Parts is not a party to any other legal proceedings, other than
various claims and lawsuits arising in the normal course of the Company's
business. The Company does not believe that such claims and lawsuits,
individually or in the aggregate, will have a material adverse effect on its
financial condition or results of operations.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule (For SEC Use Only)
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the thirteen
week period ended August 31, 1999.
<PAGE>
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.
DISCOUNT AUTO PARTS, INC.
Date: October 14, 1999 By: /s/ Peter J. Fontaine
---------------------
Peter J. Fontaine
Chief Executive Officer
(Principal Executive Officer)
Date: October 14, 1999 By: /s/ C. Michael Moore
--------------------
C. Michael Moore
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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<CIK> 0000889409
<NAME> n/a
<MULTIPLIER> 1000
<CURRENCY> $
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> May-30-2000
<PERIOD-START> Jun-2-1999
<PERIOD-END> Aug-31-1999
<EXCHANGE-RATE> 1
<CASH> 6,776
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 221,084
<CURRENT-ASSETS> 249,588
<PP&E> 475,732
<DEPRECIATION> 88,727
<TOTAL-ASSETS> 642,354
<CURRENT-LIABILITIES> 96,846
<BONDS> 254,305
0
0
<COMMON> 167
<OTHER-SE> 283,945
<TOTAL-LIABILITY-AND-EQUITY> 642,354
<SALES> 143,625
<TOTAL-REVENUES> 143,625
<CGS> 85,198
<TOTAL-COSTS> 85,198
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,651
<INCOME-PRETAX> 11,720
<INCOME-TAX> 4,374
<INCOME-CONTINUING> 7,346
<DISCONTINUED> 0
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</TABLE>
