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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 March 29, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------ ------------
Commission File No. 333-24029
CHIEF AUTO PARTS INC.
(Exact name of registrant as specified in its charter)
DELAWARE ONE LINCOLN CENTRE, SUITE 200 13-3440178
(State or other 5400 LBJ FREEWAY (IRS Employer
jurisdiction of DALLAS, TEXAS 75240-6223 Identification No.)
incorporation or (Address of principal executive
organization) offices) (Zip Code)
(972) 341-2000
(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 period 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 [ ]
There were 53,781.03 shares of the registrant's common stock ($.01 par value)
outstanding as of May 7, 1998. The registrant does not have any publicly traded
shares of common stock.
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CHIEF AUTO PARTS INC.
FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE
<S> <C> <C>
Condensed Balance Sheets - March 29, 1998 and December 28, 1997...................................3
Statements of Operations - three months ended March 29, 1998 and
March 30, 1997...................................................................................4
Condensed Statements of Cash Flows - three months ended March 29, 1998 and
March 30, 1997...................................................................................5
Statement of Stockholders' Equity - three months ended March 29, 1998.............................6
Notes to Condensed Financial Statements...........................................................7
Management's Discussion and Analysis of Financial Condition and Results of Operations.............9
PART II OTHER INFORMATION
Item 1 -- Legal Proceedings......................................................................13
Item 6 -- Exhibits and Reports on Form 8-K.......................................................13
Signatures.......................................................................................14
Index to Exhibits................................................................................15
</TABLE>
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PART I - FINANCIAL INFORMATION
CHIEF AUTO PARTS INC.
CONDENSED BALANCE SHEETS - MARCH 29, 1998 AND DECEMBER 28, 1997
(UNAUDITED)
(dollars in thousands)
<TABLE>
<CAPTION>
ASSETS
MARCH 29, DECEMBER 28,
1998 1997
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<S> <C> <C>
CURRENT ASSETS:
Cash and equivalents $ 1,189 $ 1,176
Accounts receivable, trade 2,999 2,423
Accounts receivable, other, less allowances of $300 5,347 6,684
Income tax refund receivable 4,519 4,519
Merchandise inventories 161,969 148,181
Deferred income taxes 4,128 3,696
Prepaid and other 1,783 1,037
-------- --------
Total current assets 181,934 167,716
PROPERTY AND EQUIPMENT, at cost 126,604 124,080
Less accumulated depreciation and amortization 35,742 33,145
-------- --------
Net property and equipment 90,862 90,935
GOODWILL, less accumulated amortization of $4,974 and $4,694 40,606 40,886
DEFERRED INCOME TAXES 10,008 8,952
OTHER ASSETS 6,030 6,246
-------- --------
TOTAL $329,440 $314,735
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 689 $ 675
Current portion of obligations under capital leases 1,191 1,293
Trade accounts payable 74,980 69,955
Other current and accrued liabilities 26,331 24,994
-------- --------
Total current liabilities 103,191 96,917
LONG-TERM DEBT, less current portion 186,449 174,194
OBLIGATIONS UNDER CAPITAL LEASES, less current portion 15,468 15,693
OTHER NONCURRENT LIABILITIES 19,398 20,733
COMMITMENTS AND CONTINGENCIES
Common stock, $.01 par, 100,000 shares authorized, 54,738 issued 1 1
Additional paid-in capital 5,858 5,858
Less management notes receivable (627) (835)
Retained earnings 14 2,174
Less treasury stock at cost, 957 shares (312) --
-------- --------
Total stockholders' equity 4,934 7,198
-------- --------
TOTAL $329,440 $314,735
======== ========
</TABLE>
See notes to condensed financial statements
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CHIEF AUTO PARTS INC.
STATEMENTS OF OPERATIONS - THREE MONTHS ENDED
MARCH 29, 1998 AND MARCH 30, 1997
(UNAUDITED)
(dollars in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
MARCH 29, MARCH 30,
1998 1997
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<S> <C> <C>
Net sales $110,438 $109,854
Cost of goods sold, warehousing and distribution 65,310 63,281
-------- --------
Gross profit 45,128 46,573
Selling, general and administrative 40,081 41,017
Depreciation and amortization 3,574 3,251
-------- -------
Operating income 1,473 2,305
Interest expense, net 5,244 1,784
Other (income) expense, net (52) 10
-------- -------
(Loss) income before income taxes (3,719) 511
Income tax (benefit) expense (1,559) 341
-------- -------
Net (loss) income $ (2,160) $ 170
======== =======
</TABLE>
See notes to condensed financial statements
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CHIEF AUTO PARTS INC.
CONDENSED STATEMENTS OF CASH FLOWS - THREE MONTHS ENDED
MARCH 29, 1998 AND MARCH 30, 1997
(UNAUDITED)
(dollars in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------
MARCH 29, MARCH 30,
1998 1997
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (2,160) $ 170
Depreciation and amortization 3,574 3,251
Increase in merchandise inventories (13,788) (724)
Increase in accounts payable 5,025 2,814
Other balance sheet changes, net (434) (1,902)
-------- -------
Net cash (used) provided by operating activities (7,783) 3,609
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment 176 343
Additions to property and equipment (4,218) (3,536)
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Net cash used by investing activities (4,042) (3,193)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under revolving credit loans 12,432 100
Deferred financing costs -- (54)
Principal payments on long-term debt (163) (152)
Payments on management notes receivable for common stock 208 --
Purchase of treasury stock (312) --
Principal payments on obligations under capital leases (327) (312)
-------- -------
Net cash provided (used) by financing activities 11,838 (418)
-------- -------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 13 (2)
CASH AND EQUIVALENTS, beginning of period 1,176 1,140
-------- -------
CASH AND EQUIVALENTS, end of period $ 1,189 $ 1,138
======== =======
</TABLE>
See notes to condensed financial statements
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CHIEF AUTO PARTS INC.
STATEMENT OF STOCKHOLDERS' EQUITY - THREE MONTHS ENDED
MARCH 29, 1998
UNAUDITED
(dollars in thousands)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TREASURY STOCK
------------------ PAID-IN NOTES RETAINED ------------------
SHARES PAR VALUE CAPITAL RECEIVABLE EARNINGS SHARES COST TOTAL
------- --------- ------- ---------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 28, 1997 54,738 $ 1 $ 5,858 $ (835) $ 2,174 -- $ -- $ 7,198
Payments on notes receivable 208 208
Purchase of treasury stock (957) (312) (312)
Net loss (2,160) (2,160)
------- ------- ------- ------- ------- ------- ------- -------
Balance, March 29, 1998 54,738 $ 1 $ 5,858 $ (627) $ 14 (957) $ (312) $ 4,934
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
See notes to condensed financial statements
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CHIEF AUTO PARTS INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Chief Auto Parts Inc. (the "Company" or "Chief") is engaged in the sale and
distribution of automotive parts to the retail and wholesale aftermarket through
a chain of 556 stores (located primarily in California and Texas) at March 29,
1998.
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and 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.
Operating results for the three months ended March 29, 1998 are not necessarily
indicative of the results that may be expected for the year ended December 27,
1998. 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
December 28, 1997.
2. LONG-TERM DEBT
Long-term Debt consists of the following at March 29, 1998 and December 28, 1997
(in thousands):
<TABLE>
<CAPTION>
MARCH 29, DECEMBER 28,
1998 1997
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<S> <C> <C>
10.5% Senior Notes, due May 2005 $130,000 $130,000
$100 million Revolving Credit Loan, due May 2002 55,900 43,468
$7.7 million industrial development bonds,
due through December 1999 1,238 1,401
-------- --------
Total 187,138 174,869
Less current portion 689 675
-------- --------
Long-term debt $186,449 $174,194
======== ========
</TABLE>
The 10.5% Senior Notes (the "Senior Notes") are unsecured, and are effectively
subordinated to the Company's secured indebtedness. Interest on the Senior Notes
is payable on May 15 and November 15 of each year, commencing November 15, 1997.
The Senior Notes are not redeemable prior to May 15, 2001, except that until May
15, 2000, the Company may redeem up to an aggregate of 36% of the principal
amount of the Senior Notes at 110.5% of the principal amount plus accrued
interest to the date of redemption with the net proceeds of one or more Public
Equity Offerings (as defined) if at least 64% of the original aggregate
principal amount of the Senior Notes remains outstanding after each such
redemption. On or after May 15, 2001, the Senior Notes are redeemable at the
option of the Company, in whole or in part, at redemption prices ranging from
105.25% in 2001 to 100.00% in 2003, plus accrued interest to the date of
redemption. If a change of control (as defined) occurs, the Company may be
required to repurchase the Senior Notes at 101% plus accrued interest. The
related indenture contains various covenants that, among other things, provide
for the maintenance of minimum cash flow levels, and place restrictions on
additional indebtedness, payment of dividends, investments, certain asset
dispositions, and mergers.
The $100 million revolving credit loan (the "$100 million Revolving Credit
Loan") is secured by Chief's merchandise inventory. Borrowings under this
facility are available subject to a borrowing base formula and are reduced by
letter of credit usage. At March 29, 1998, $36,652,000 was available for
borrowing, excluding $55,900,000 outstanding at such date, and a $278,000 letter
of credit. A commitment fee of 0.375% is payable on the unused portion. The
commitment term of this facility expires in May 2002. At the Company's option,
interest on the $100 million
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<PAGE> 8
Notes to Condensed Financial Statements
Revolving Credit Loan is payable monthly, quarterly or on the last day of
defined interest periods, based on either (a) the higher of prime or the federal
funds rate plus 0.5% (plus, in either case, a defined margin rate ranging up to
1%), or (b) the London Interbank Offered Rate ("LIBOR") plus a defined margin
rate ranging from 1.5% to 2.5%. The weighted average interest rate in effect at
March 29, 1998 was 8.01%. Covenants contained in the $100 million Revolving
Credit Loan are similar to those described above for the Senior Notes.
3. EARNINGS PER SHARE
Earnings per share has not been presented because the information is not
considered to be meaningful.
4. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
130"), and No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS 131"). In February 1998, the Board issued No. 132,
"Employers' Disclosures about Pensions and Other Postretirement Benefits" ("SFAS
132").
Chief was required to implement SFAS 130 during the three months ended March 29,
1998. As the Company does not currently have any items of other comprehensive
income as defined in SFAS 130, the pronouncement is not applicable to Chief. The
Company will implement SFAS 131 and SFAS 132 in its annual financial statements
for the year ending December 27, 1998; as these statements only require
additional disclosures in the Company's financial statements, their
implementation will not have any effect on the Company's financial position or
results of operations.
5. INCOME TAXES
The effective income tax rate for the three months ended March 29, 1998 differs
from the expected statutory rate primarily due to the effect of state income
taxes and nondeductible goodwill amortization.
6. STOCK OPTIONS
On March 2, 1998, the Company granted 1,397 options to purchase common stock
at an exercise price of $450 per share to certain employees of the Company,
under the Chief Auto Parts Inc. 1997 Employee Option Plan. This price is below
the estimated market price of the Company's common stock and will result in
compensation expense to be amortized ratably over the options' vesting period
of four years.
7. CONTINGENCIES
The Company is a defendant in a class action entitled "Doug Winfrey, et. al. on
their own behalf and on behalf of a class and all others similarly situated, v.
Chief Auto Parts Inc., et. al.," filed in The Superior Court of California,
County of San Joaquin on August 22, 1995 and then transferred to The Superior
Court of California, County of San Francisco on October 26, 1995. The Superior
Court denied the plaintiffs' motion for class certification on December 7, 1996.
On February 6, 1998, the Court of Appeal reversed the Superior Court's order
denying class certification. No substantive proceedings regarding the merits of
this lawsuit have yet occurred.
The plaintiffs allege that the Company has a policy and practice of denying
hourly employees in California mandated rest periods during their scheduled
hours of work. The plaintiffs are seeking damages, restitution, disgorgement of
profits, statutory penalties, declaratory relief, injunctive relief, prejudgment
interest, and reasonable attorneys fees, expenses and costs. Management is
unable to predict the outcome of this lawsuit at this time. The Company believes
that the potential damages recoverable by any single plaintiff are minimal.
However, if the plaintiff class were to prevail on all of their claims, the
amount of damages could be substantial. The Company is vigorously defending
against this action.
The Company has been and is involved in various other legal proceedings.
Management believes that such other litigation is routine in nature and
incidental to the conduct of its business, and that none of such other
litigation, if determined adversely to the Company, would have a material
adverse effect, individually or in the aggregate, on the Company's financial
position or results of operations.
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<PAGE> 9
CHIEF AUTO PARTS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
PERCENTAGE
OF NET SALES
----------------------------
THREE MONTHS ENDED
----------------------------
MARCH 29, MARCH 30,
1998 1997
------------ ------------
<S> <C> <C>
Net sales 100.0 100.0
Cost of goods sold, warehousing and distribution 59.1 57.6
----- -----
Gross profit 40.9 42.4
Selling, general and administrative 36.3 37.3
Depreciation and amortization 3.3 3.0
----- -----
Operating income 1.3 2.1
Interest expense, net 4.7 1.6
Other (income) expense, net -- --
----- -----
(Loss) income before income taxes (3.4) 0.5
Income tax (benefit) expense (1.4) 0.3
----- -----
Net (loss) income (2.0) 0.2
===== =====
</TABLE>
THREE MONTHS ENDED MARCH 29, 1998 VS. THREE MONTHS ENDED MARCH 30, 1997
Net sales increased by $584,000, or 0.5%, to $110.4 million in 1998 from $109.9
million in 1997. The increase was due primarily to growth in the Company's store
base. Comparable store sales decreased by 1.6%, due in part to weather factors
in California (the El Nino rains), where a substantial portion of the Company's
stores are located.
There were 556 stores open at March 29, 1998 compared to 547 at March 30, 1997.
During 1998, the Company opened 14 new stores (including the relocation of 8
stores) and closed 10 stores (including the relocations).
Gross profit decreased by $1.4 million, or 3.1%, to $45.1 million in 1998 from
$46.6 million in 1997, due primarily to a decrease in the gross profit margin.
Gross profit margin decreased in 1998 compared to 1997 as a result of a planned
move towards more competitive pricing in several markets, as well as lower
purchasing incentives provided by vendors relating to store remodeling.
Selling, general and administrative expenses decreased by $936,000, or 2.3%, to
$40.1 million in 1998 from $41.0 million in 1997, and as a percentage of sales
decreased to 36.3% in 1998 from 37.3% in 1997. The decreases were due primarily
to a 1997 program ("The All New Chief" program) that had no equivalent in 1998,
resulting in lower store labor costs and net advertising expense in 1998 than in
1997. The program was comprised of an institutional advertising program
broadcast in the Los Angeles market and additional staffing at stores in that
market. The program was designed to emphasize the extensive remodeling of stores
in that market, and the related additional inventory and additional store
staffing to better serve customers.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
decreased by $447,000, or 8.1%, to $5.1 million in 1998 from $5.5 million in
1997, due to the factors discussed above. EBITDA is used by the Company for
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<PAGE> 10
Management's Discussion, cont.
the purpose of analyzing operating performance, leverage and liquidity.
Additionally, the indenture under which the Senior Notes were issued and the
$100 million Revolving Credit Loan contain various restrictive covenants which
are derived from EBITDA as defined in each of those agreements. EBITDA is not a
measure of financial performance under generally accepted accounting principles,
and should not be considered as an alternative to net income as an indicator of
the Company's operating performance.
Depreciation and amortization expense increased by $323,000, or 9.9%, to $3.6
million in 1998 from $3.3 million in 1997. This increase was primarily due to an
increase in the depreciable asset base, including leasehold improvements and
furniture and equipment, resulting from an extensive store remodeling program
that was ongoing throughout fiscal 1996 and which was completed early in 1997,
as well as to an increase in the number of stores open.
Interest expense increased by $3.5 million, or 194.0%, to $5.2 million in 1998
from $1.8 million in 1997. This increase was due primarily to the sale of the
Senior Notes in May 1997, which resulted in an increase to long-term debt.
Net income decreased by $2.3 million, to a loss of $2.2 million in 1998 from
$170,000 in 1997, due to the factors discussed above.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
The Company utilizes funds generated from operations and borrowings under credit
facilities to meet working capital requirements (principally merchandise
inventory) and to fund capital expenditures (principally the opening of new
stores, remodeling and expansion of existing stores, information systems
improvements and distribution center improvements). At March 29, 1998, the
Company had net working capital of $78.7 million (compared to $70.8 million at
December 28, 1997) and $36.7 million available for borrowing under the $100
million Revolving Credit Loan.
During 1998, the Company used $7.8 million in operating activities, primarily to
increase merchandise inventory in conjunction with the relocation of its
California warehouse distribution center to a new facility (discussed below).
Funding for the inventory increase was provided by both trade credit and through
$12.4 million from borrowings under the $100 million Revolving Credit Loan,
which also was used to fund $4.2 million of capital expenditures and to
otherwise service working capital requirements.
The Company completed the process of relocating its Cerritos, California
warehouse distribution center to a new facility in Ontario, California during
1998. The new facility consists of 447,000 square feet, as compared to 304,000
at the Cerritos location. Both of these facilities are leased under operating
leases. The remaining lease commitment for the Cerritos location will be
absorbed through a sublet arrangement, and as such there should be minimal
future cash outlays for this location after the sublet has commenced. The lease
commitment for the Ontario location (initial term of ten years, plus options)
will be funded by operations. In February 1998, the Ontario warehouse
distribution center became fully operational, and in April the Cerritos location
was vacated and physical possession was given to the subtenant.
During 1998, the Company plans to open approximately 70 new stores,
approximately half of them as relocations of existing stores, and to expand
approximately five stores. The total estimated capital expenditures for such new
store openings and existing store relocations and expansions is approximately
$13.6 million. The Company anticipates that substantially all of its new and
relocated stores during 1998 will be financed by arrangements structured as
operating leases that require no net capital expenditures by the Company except
for fixtures and store equipment. Merchandise inventories and related capital
expenditures for the new stores and remodeling are expected to be funded by
operations, working capital and credit facilities.
The Company plans to expand its commercial sales program during 1998. Marketed
as the Professional Parts Warehouse ("PPW"), the commercial sales program is
directed towards the professional installer segment. As of March 29, 1998, the
Company had 38 PPW locations, three of which were added during 1998. The Company
plans to add more commercial locations during 1998, and to add approximately
3,000 to 4,000 new items to the stock keeping
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<PAGE> 11
Management's Discussion, cont.
units ("SKUs") at existing PPW locations, such that the typical commercial
location will carry approximately 24,000 to 25,000 SKUs. Chief's stores with
commercial sales capability generally stock approximately 21,000 SKUs, compared
to an average of 17,000 SKUs in other Company stores.
The Company expects to broaden its commercial expansion during 1998 by
introducing a newly-developed depot store concept that will allow for further
market penetration in each of the Company's regions by adding approximately
20,000 to 25,000 new SKU items to be housed at strategically-located commercial
depot stores that will serve nearby Chief retail stores. Such depot stores will
carry approximately 40,000 to 45,000 SKUs, and are expected to be introduced
during 1998 (with initial funding provided via vendor participation), with an
expected broader implementation during 1999 and beyond. In addition, the Company
has implemented a program in certain of its commercial stores in which it stocks
6,000 SKUs of Beck-Arnley products, a quality name brand of import replacement
parts, in addition to the approximately 21,000 SKUs normally stocked by
commercial stores. The Company believes that the Beck-Arnley products will
appeal to commercial customers that repair foreign automobiles which could
potentially create a broader commercial customer base for the PPW program.
During 1997, the Company completed the installation of portable radio frequency
("RF") computer terminals in all stores to reduce labor, increase productivity
and facilitate inventory management. Enhancements are expected to be added to
the RF terminals during 1998 to allow for further inventory management
capabilities, the cost of which will primarily be in-house. The Company expects
to upgrade its IBM AS/400 during 1998 to facilitate technological growth.
Additionally, Chief expects to install several major information systems
improvements during 1998. The most significant systems improvements are the
replacement of the primary information system components, including major
financial, merchandising and distribution systems, at an estimated total cost of
approximately $3.0 million. The new systems are currently in process and are
expected to be phased in during 1998. The Company also expects to begin a
phased-in implementation of a new store point-of-sale system late in 1998, from
which point all new stores are expected to be equipped with the new system;
existing stores are expected to receive the new system in phases over the
following three years.
The Company believes that funds provided from operations and from credit
facilities currently in place will be sufficient to meet planned financial
commitments.
YEAR 2000 COMPLIANCE
As described above in the Liquidity discussion, Chief is currently engaged in
the replacement of its primary information system components, including major
financial, merchandising and distribution systems. These new systems, which are
required in order to address the Company's recent and planned future growth, are
all Year 2000-certified. The estimated cost to implement these new systems,
which are currently scheduled to be phased into use during 1998, is
approximately $3.0 million.
Regarding other significant system components, such as the Company's present
store point-of-sales system, networks and personal computers, Chief will utilize
both internal and external resources to identify and assess the Year 2000
functionality of such components. The Company has initiated discussions with its
primary system vendors regarding Year 2000 compliance, and is currently testing
and authenticating such systems. Currently, the total cost of addressing the
Year 2000 issue is not expected to have a material adverse effect on the
Company's business, financial condition or results of operations.
The Company has initiated formal communications with its primary business
partners to determine the extent to which the Company is exposed to failure by
those third parties to remediate their own Year 2000 conversion issues. There
can be no assurance that the systems of other companies on which the Company's
systems rely will be timely converted or that any such failure to convert by
another company would not have an adverse effect on the Company's systems.
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<PAGE> 12
Management's Discussion, cont.
FORWARD-LOOKING STATEMENTS
The information discussed above in Management's Discussion and Analysis of
Financial Condition and Results of Operations contains statements regarding
matters that are not historical facts (including statements as to plans,
beliefs, intentions, anticipations or expectations of the Company) which are
forward-looking statements. Because such forward-looking statements include
risks, uncertainties and contingencies, including those risks discussed in
Exhibit 99.1 to the Company's Annual Report on Form 10-K for the year ended
December 28, 1997, which is incorporated herein by reference, the Company's
actual results could differ materially from those discussed above.
Forward-looking statements speak only as of the date on which such statement is
made. The Company undertakes no obligation and does not intend to update, revise
or otherwise publicly release the result of any revisions to these
forward-looking statements that may be made to reflect future events or
circumstances.
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<PAGE> 13
Chief Auto Parts Inc.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to Note 7 of the notes to condensed financial statements.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following exhibits are filed as part of this report:
3.1 Fourth Restated Certificate of Incorporation of Chief Auto Parts
Inc. Incorporated by reference to Exhibit 3.1 to Pre-Effective
Amendment No. 5 to the Form S-1 Registration Statement filed by
the Company under the Securities Act (No. 333-24029).
3.2 Bylaws of Chief Auto Parts Inc. Incorporated by reference to
Exhibit 3.2 to the Form S-1 Registration Statement filed by the
Company under the Securities Act (No. 333-24029).
4.1 Form of Indenture between Chief Auto Parts Inc. and First Trust
National Association, as trustee. Incorporated by reference to
Exhibit 4.1 to Pre-Effective Amendment No. 5 to the Form S-1
Registration Statement filed by the Company under the Securities
Act (No. 333-24029).
10.1 Second Amendment to the Chief Auto Parts Inc. 1994 Executive
Option Plan. Incorporated by reference to Exhibit 10.1 to the
Company's Form 10-K for the year ended December 28, 1997.
10.2 First Amendment to the Chief Auto Parts Inc. 1997 Employee Option
Plan. Incorporated by reference to Exhibit 10.2 to the Company's
Form 10-K for the year ended December 28, 1997.
10.3 Chief Auto Parts Inc. Severance Plan in the Event of Change of
Control. Incorporated by reference to Exhibit 10.3 to the
Company's Form 10-K for the year ended December 28, 1997.
27.1 Financial Data Schedule (electronic filing only).
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the quarterly period ended
March 29, 1998.
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<PAGE> 14
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.
CHIEF AUTO PARTS INC.
Date: May 12, 1998 /s/ Thomas A. Hough
----------------------------------------------
Thomas A. Hough
Senior Vice President - Finance, Treasurer,
and Chief Financial Officer
(Principal Financial Officer)
Date: May 12, 1998 /s/ Patrick J. Corbett
----------------------------------------------
Patrick J. Corbett
Director of Financial Reporting
(Principal Accounting Officer)
<PAGE> 15
CHIEF AUTO PARTS INC.
INDEX TO EXHIBITS
LIST OF EXHIBITS FILED WITH FORM 10-Q
FOR THE PERIOD ENDED MARCH 29, 1998
<TABLE>
<S> <C>
3.1 Fourth Restated Certificate of Incorporation of Chief Auto Parts
Inc. Incorporated by reference to Exhibit 3.1 to Pre-Effective
Amendment No. 5 to the Form S-1 Registration Statement filed by
the Company under the Securities Act (No. 333-24029).
3.2 Bylaws of Chief Auto Parts Inc. Incorporated by reference to
Exhibit 3.2 to the Form S-1 Registration Statement filed by the
Company under the Securities Act (No. 333-24029).
4.1 Form of Indenture between Chief Auto Parts Inc. and First Trust
National Association, as trustee. Incorporated by reference to
Exhibit 4.1 to Pre-Effective Amendment No. 5 to the Form S-1
Registration Statement filed by the Company under the Securities
Act (No. 333-24029).
10.1 Second Amendment to the Chief Auto Parts Inc. 1994 Executive
Option Plan. Incorporated by reference to Exhibit 10.1 to the
Company's Form 10-K for the year ended December 28, 1997.
10.2 First Amendment to the Chief Auto Parts Inc. 1997 Employee Option
Plan. Incorporated by reference to Exhibit 10.2 to the Company's
Form 10-K for the year ended December 28, 1997.
10.3 Chief Auto Parts Inc. Severance Plan in the Event of Change of
Control. Incorporated by reference to Exhibit 10.3 to the
Company's Form 10-K for the year ended December 28, 1997.
27.1 Financial Data Schedule (electronic filing only).
</TABLE>
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<S> <C>
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<FISCAL-YEAR-END> DEC-27-1998
<PERIOD-START> DEC-29-1997
<PERIOD-END> MAR-29-1998
<CASH> 1,189
<SECURITIES> 0
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<CURRENT-ASSETS> 181,934
<PP&E> 126,604
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0
0
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<TOTAL-LIABILITY-AND-EQUITY> 329,440
<SALES> 110,438
<TOTAL-REVENUES> 110,438
<CGS> 65,310
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<INCOME-PRETAX> (3,719)
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