ADVANCE AUTO PARTS COMPLETES Page 2
ACQUISITION OF DISCOUNT AUTO PARTS
compete is growing and continues to enjoy very favorable industry dynamics. We
will immediately begin to implement an integration plan that is anticipated to
add $30 million of synergies to EBITDA in the first full year."
Advance Auto Parts today provided additional details on its integration plan.
The Company said the approximately $30 million in synergies would come primarily
from purchasing and corporate administrative savings. The Discount Auto Parts
stores outside Florida are to be converted to the Advance Auto Parts banner
within the next year. For the Discount stores in Florida, the initial focus will
be on aligning their products with Advance's inventory assortment and converting
information systems. The physical store conversion of Florida stores will occur
over the next four years.
Mr. Castellani continued, "Our integration plan is focused on both the top and
bottom lines. We see opportunities to enhance the performance of the existing
Discount stores in terms of sales per store, comp-store sales and commercial
sales. Our new team members will be supported with extensive training and
in-store information systems to allow them to deliver enhanced customer service
and increase the customer count. We will also focus on reducing costs and
increasing the optimization of our distribution system. We have in place an
integration team with significant experience, including managing the successful
store conversions following the Western Auto acquisition in 1998 and the Carport
Auto Parts transaction in 2001."
Advance Auto Parts also reaffirmed its financial outlook for fiscal 2002. The
Company said that, based on currently available information, it expects to
generate sales in the range of $3.1 billion to $3.3 billion, EBITDA of $310
million to $325 million, and diluted earnings per share of $1.70 to $1.95. This
includes $30 million of synergies but excludes certain one-time cash conversion
expenses of approximately $50 million to $60 million of which approximately $40
million will be incurred in 2002.
Mr. Castellani concluded, "As we look ahead, we will continue to focus on
executing the operating strategy that has enabled Advance to become an industry
leader. That formula is superior customer service, competitive prices, a broad
product selection, a state-of-the-art distribution system, long-term
relationships with quality suppliers, targeted marketing and advertising and
Advance Auto Parts, Inc. is based in Roanoke, Va., and is the second largest
auto parts chain in the nation. Additional information about the company,
employment opportunities, services, as well as on-line purchase of parts and
accessories can be found on the company web site at www.advanceautoparts.com.