Back to GetFilings.com



 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

     
(Mark One)
   
þ
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
    For the quarterly period ended November 3, 2002
 
or
 
o
   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
    For the transition period from           to

Commission File Number 001-13927

CSK AUTO CORPORATION

(Exact name of registrant as specified in its charter)
     
Delaware
   86-0765798
(State or other jurisdiction of
Incorporation or organization)		   (I.R.S. Employer
Identification No.)
 
645 E. Missouri Ave. Suite 400, Phoenix, Arizona
(Address of principal executive offices)		   85012
(Zip Code)

(602) 265-9200

(Registrant’s telephone number, including area code)

N/ A

(Former name, former address and former fiscal year,
if changed since last reports)

     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 þ          No o

      As of December 16, 2002, CSK Auto Corporation had 45,148,900 shares of common stock outstanding.

 

PART I

FINANCIAL INFORMATION

 
Item 1.      Financial Statements

CSK AUTO CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)
                     
November 3, February 3,
2002 2002
(Unaudited)
ASSETS
                
Cash and cash equivalents
  $ 15,170     $ 16,084  
Receivables, net of allowances of $3,743 and $5,230, respectively
    102,952       84,793  
Inventories
    659,443       619,629  
Deferred income taxes
    —       2,718  
Assets held for sale
    —       1,710  
Prepaid expenses and other current assets
    16,800       19,847  
     
     
 
   
Total current assets
    794,365       744,781  
     
     
 
Property and equipment, net
    133,818       150,381  
Leasehold interests, net
    15,208       16,581  
Goodwill
    127,069       126,846  
Deferred income taxes
    —       739  
Other assets, net
    27,663       29,249  
     
     
 
   
Total assets
  $ 1,098,123     $ 1,068,577  
     
     
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Accounts payable
  $ 175,097     $ 157,284  
Accrued payroll and related expenses
    30,520       33,055  
Accrued expenses and other current liabilities
    44,965       44,529  
Deferred income taxes
    5,755       —  
Current maturities of capital lease obligations
    10,065       10,999  
     
     
 
   
Total current liabilities
    266,402       245,867  
     
     
 
Amounts due under senior credit facility
    209,000       227,000  
12% Senior Notes
    281,048       275,416  
11% Senior Subordinated Notes
    9,547       81,250  
7% Convertible Subordinated Debentures
    —       49,100  
Obligations under capital leases
    23,928       27,078  
Deferred income taxes
    1,729       —  
Other
    7,964       8,580  
     
     
 
   
Total non-current liabilities
    533,216       668,424  
     
     
 
Commitments and contingencies
               
 
Stockholders’ equity:
               
 
Common stock, $0.01 par value, 58,000,000 shares
authorized; 45,147,088 and 32,370,746 shares issued and
outstanding at November 3, 2002 and February 3, 2002, respectively
    452       324  
 
Additional paid-in capital
    448,261       322,667  
 
Stockholder receivables
    (342 )     (686 )
 
Accumulated deficit
    (149,866 )     (168,019 )
     
     
 
   
Total stockholders’ equity
    298,505       154,286  
     
     
 
   
Total liabilities and stockholders’ equity
  $ 1,098,123     $ 1,068,577  
     
     
 

The accompanying notes are an integral part of these consolidated financial statements.

1

 

CSK AUTO CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)
                                   
Thirteen Weeks Ended Thirty-nine Weeks Ended
November 3, November 4, November 3, November 4,
2002 2001 2002 2001
(Unaudited)
Net sales
  $ 383,045     $ 366,741     $ 1,156,901     $ 1,104,584  
Cost of sales
    202,266       195,628       628,924       617,811  
     
     
     
     
 
Gross profit
    180,779       171,113       527,977       486,773  
Other costs and expenses:
                               
 
Operating and administrative
    149,367       146,248       443,570       437,491  
 
Store closing and other restructuring costs
    12       11       551       23,782  
 
Legal settlement
    —       —       —       2,000  
 
Loss on sale of stores
    —       —       847       —  
 
Secondary stock offering costs
    —       —       265       —  
 
Goodwill amortization
    —       1,191       —       3,609  
     
     
     
     
 
Operating profit
    31,400       23,663       82,744       19,891  
Interest expense
    14,243       14,317       48,201       45,727  
     
     
     
     
 
Income (loss) before income taxes
    17,157       9,346       34,543       (25,836 )
Income tax expense (benefit)
    6,471       3,412       12,695       (10,186 )
     
     
     
     
 
Net income (loss) before extraordinary loss
    10,686       5,934       21,848       (15,650 )
Extraordinary loss, net of $2,313 of income tax
    —       —       (3,695 )     —  
     
     
     
     
 
Net income (loss)
  $ 10,686     $ 5,934     $ 18,153     $ (15,650 )
     
     
     
     
 
Basic earnings (loss) per share:
                                
 
Income (loss) before extraordinary loss
  $ 0.24       0.21     $ 0.55       (0.56 )
 
Extraordinary loss, net of income tax
    —       —       (0.09 )     —  
     
     
     
     
 
 
Net income (loss)
  $ 0.24     $ 0.21     $ 0.46     $ (0.56 )
     
     
     
     
 
Shares used in computing per share amounts
    45,154,866       27,842,105       39,129,499       27,842,105  
     
     
     
     
 
Diluted earnings (loss) per share:
                                
 
Income (loss) before extraordinary loss
  $ 0.24       0.19     $ 0.55       (0.56 )
 
Extraordinary loss, net of income tax
    —       —       (0.09 )     —  
     
     
     
     
 
Net income (loss)
  $ 0.24     $ 0.19     $ 0.46     $ (0.56 )
     
     
     
     
 
Shares used in computing per share amounts
    45,313,673       31,939,105       39,236,096       27,842,105  
     
     
     
     
 

The accompanying notes are an integral part of these consolidated financial statements.

2

 

CSK AUTO CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)
                                                   
Common Stock Additional
Paid-in Stockholder Accumulated Total
Shares Amount Capital Receivable Deficit Equity
Balances at February 3, 2002.
    32,370,746     $ 324     $ 322,667     $ (686 )   $ (168,019 )   $ 154,286  
Conversion of Convertible Subordinated Debentures, net of costs (unaudited)
    5,753,740       58       46,058       —       —       46,116  
Common stock issued in lieu of cash interest paid (unaudited)
    136,580       1       1,408       —       —       1,409  
Stock offering, net of costs (unaudited)
    6,878,300       69       78,073       —       —       78,142  
Issuance of loan to stockholder (unaudited)
    —       —       —       (125 )     —       (125 )
Recovery of stockholder receivable (unaudited)
    —       —       —       469       —       469  
Retirement of common stock (unaudited)
    (11,000 )     —       (137 )     —       —       (137 )
Issuance of restricted stock (unaudited)
    2,285       —       31       —       —       31  
Exercise of stock options (unaudited)
    16,437       —       161       —       —       161  
Net income (unaudited)
    —       —       —       —       18,153       18,153  
     
     
     
     
     
     
 
Balances at November 3, 2002
                                               
 
(unaudited)
    45,147,088     $ 452     $ 448,261     $ (342 )   $ (149,866 )   $ 298,505  
     
     
     
     
     
     
 

The accompanying notes are an integral part of these consolidated financial statements.

3

 

CSK AUTO CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)
(Unaudited)
                       
Thirty-nine Weeks Ended
November 3, November 4,
2002 2001
Cash flows provided by (used in) operating activities:
               
 
Net income (loss)
  $ 18,153     $ (15,650 )
 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
               
   
Depreciation and amortization of property and equipment
    23,944       24,219  
   
Amortization of deferred financing costs
    4,044       2,658  
   
Amortization of other items
    2,817       6,196  
   
Accretion of discount
    682       —  
   
Provision for write down of inventory
    —       17,292  
   
Write downs on disposals of property, equipment and other assets
    769       7,675  
   
Extraordinary loss on early retirement of debt, net of income tax benefit
    3,695       —  
   
Premium paid on early retirement of debt
    (4,368 )     —  
   
Loss on sale of stores
    847       —  
   
Deferred income taxes
    13,254       (10,337 )
   
Change in operating assets and liabilities:
               
     
Receivables
    (18,161 )     (22,587 )
     
Inventories
    (43,487 )     (33,715 )
     
Prepaid expenses and other current assets
    3,047       (1,140 )
     
Accounts payable
    17,813       27,671  
     
Accrued payroll, accrued expenses and other current liabilities
    (1,115 )     10,602  
   
Other operating activities
    (1,047 )     4,652  
     
     
 
 
Net cash provided by operating activities
    20,887       17,536  
     
     
 
Cash flows provided by (used in) investing activities:
               
 
Capital expenditures
    (5,681 )     (10,218 )
 
Proceeds from sale of property and equipment and assets held for sale
    2,188       5,281  
 
Proceeds from sale of stores
    4,217       —  
 
Other investing activities
    (2,699 )     (2,908 )
     
     
 
   
Net cash used in investing activities
    (1,975 )     (7,845 )
     
     
 
Cash flows provided by (used in) financing activities:
               
 
Borrowings under senior credit facility
    247,000       232,000  
 
Payments under senior credit facility
    (265,000 )