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AutoZone Reports First Quarter Earnings Per Share Up 65%
MEMPHIS, Tenn., Dec 4, 2001 /PRNewswire via COMTEX/ -- AutoZone, Inc. (NYSE: AZO), today reported diluted earnings per share of $0.76 for its first quarter (12 weeks) ended November 17, 2001, a 65% increase from diluted earnings per share of $0.46 in the first quarter of fiscal 2001. Sales for the quarter increased 11% to $1.18 billion from $1.06 billion reported for the year ago quarter. Same store sales, or sales for domestic auto parts stores open at least one year, increased 9% during the quarter. Operating profits were up 40% to $156 million from $111 million, with operating margins of 13.2%, compared to 10.4% last year.

"We had a great quarter," said Steve Odland, chairman, president, and chief executive officer. "Our sales and gross margins indicate that our marketing and merchandising initiatives are making an impact. We also showed good operating expense leverage as we executed our operating plan. Our business is strong and we continue to find new ways to serve our customers as we focus on increasing shareholder value.

"We are in a dynamic and growing industry, and that growth is accelerating with the increase in the population of cars and light trucks seven years and older, the vehicles our typical customers drive. Moreover, growth in our industry is not hurt by the economic slowdown. We believe the number of miles driven may actually increase with lower gas prices and as people choose driving over flying. As miles driven increase, vehicles need more maintenance.

"The addition of new merchandise, along with more effective advertising and marketing have increased AutoZone's market share, and we believe, has helped expand the size of the industry. Our profit margins are improving as we implement our strategic plan. New merchandise, better product cost, strategic pricing, and relentless expense discipline have helped us restore and to begin to exceed our historically strong EBIT margins.

"Our cash flow and financial returns continue to improve. The strong, stable cash flow provided by our hard parts business, when combined with increased hurdle rates for new investments, should drive steady cash flow growth and improving return on invested capital. Finally, our share buyback program is a further boost to EPS. In the past three years, we have repurchased more than a third of our shares at bargain prices. Our reduced share base will continue to contribute significantly to shareholder value in the future."

Aggregate share repurchases under the currently authorized share repurchase program at the end of the quarter were $1.48 billion or 53.2 million shares at an average price of $28 per share, including $170 million or 3.8 million shares at an average price of $44 per share under forward purchase contracts.

In the quarter, AutoZone signed an agreement to sell TruckPro, its heavy- duty truck parts subsidiary, to an investment group. The transaction is subject to standard closing conditions and satisfactory due diligence by the buyer. AutoZone expects the sale to close in its second fiscal quarter.

AutoZone opened 15 new auto parts stores in the U.S., replaced 6 and, as previously announced, closed 35. In addition, one new auto parts store was opened in Mexico.

AutoZone will host a one-hour conference call Wednesday, December 5, 2001, beginning at 10 a.m. (EST) to discuss this press release. Investors may listen to the conference call live and review supporting slides on the AutoZone website, www.AutoZone.com, by clicking "About Us," "Investor Relations," "Conference Calls." The call will also be available by dialing (712) 271-3887. A replay of the call and slides will be available on AutoZone's website. In addition, a replay of the call will be available by dialing (402) 998-1093 through Wednesday, December 12, 2001, at midnight (EST).

As of November 17, 2001, AutoZone sells auto and light truck parts, chemicals and accessories through 2,999 AutoZone stores in 43 states plus the District of Columbia in the U.S. and 22 AutoZone stores in Mexico, and automotive diagnostic and repair software through ALLDATA, diagnostic and repair information through alldatadiy.com, and auto and light truck parts through AutoZone.com. AutoZone stock is traded on the New York Stock Exchange and is included in the Standard & Poors 500 Index.

Certain statements contained in this press release are forward-looking statements. These statements discuss, among other things, business strategies and future performance. These forward-looking statements are subject to risks, uncertainties and assumptions, including, without limitation, accuracy of estimates, competition, product demand, the economy, inflation, gasoline prices, the ability to hire and retain qualified employees, consumer debt levels, war and the prospect of war, including terrorist activity, and availability of commercial transportation. Actual results may materially differ from anticipated results. AutoZone undertakes no obligation to publicly release any revisions to any forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this release or to reflect the occurrence of unanticipated events.

    AutoZone's 1st Quarter - Fiscal 2002

    Condensed Consolidated Statements
    (in thousands, except per share data and selected operating data)

                                         12 Weeks Ended      12 Weeks Ended
                                       November 17, 2001   November 18, 2000
                                           (unaudited)         (unaudited)

    Net sales                              $1,176,052          $1,063,566
    Cost of goods sold                        659,916             618,001
    Gross profit                              516,136             445,565
    Operating expenses                        360,632             334,797
    Operating profit                          155,504             110,768
    Interest expense, net                      19,427              22,980
    Income before taxes                       136,077              87,788
    Taxes                                      52,000              34,000
    Net income                                $84,077             $53,788
    Net income per share:
           Basic                                $0.78               $0.46
           Diluted                              $0.76               $0.46
    Shares outstanding:
           Basic                              107,984             116,717
           Diluted                            110,605             117,050


    Selected Balance Sheet Information

                         November 17, 2001  November 18, 2000  August 25, 2001
                              (unaudited)        (unaudited)

    Merchandise
     inventories              $1,325,437         $1,179,999       $1,242,896
    Current assets             1,416,383          1,256,358        1,328,511
    Property & equipment,
     net                       1,698,124          1,749,414        1,710,443
    Total assets               3,504,852          3,409,708        3,432,512
    Accounts payable             894,928            791,611          945,666
    Current liabilities        1,241,770          1,047,374        1,266,654
    Stockholders' equity         910,268            895,851          866,213
    Debt                       1,280,642          1,408,378        1,225,402
    Working capital              174,613            208,984           61,857


    Selected Cash Flow Information

                                         12 Weeks Ended       12 Weeks Ended
                                       November 17, 2001    November 18, 2000
                                          (unaudited)           (unaudited)

    Capital spending                        $16,211              $55,048
    Share repurchases                       $69,447             $154,640
    Depreciation & amortization             $28,169              $30,464



    AutoZone's 1st Quarter - Fiscal 2002
    Selected Operating Highlights
    (unaudited)

    Store Count & Square Footage:

                                     12 Weeks Ended       12 Weeks Ended
                                   November 17, 2001    November 18, 2000
    Domestic auto parts stores:
      Store count:
      Stores opened                         15                   41
      Stores closed                         35                   --
      Replacement stores                     6                    5
      Total domestic auto parts stores   2,999                2,956

      Square footage (000's)            19,272               18,962

    Auto parts stores in Mexico:
      Stores opened                          1                   --
      Total auto parts stores in
       Mexico                               22                   13

    TruckPro stores:
      Stores opened                         --                   --
      Total TruckPro stores                 49                   49



    Sales & Inventory Statistics:
    (Domestic auto parts)
                                     12 Weeks Ended        12 Weeks Ended
                                   November 17, 2001     November 18, 2000

    Sales per average store ($ in
     thousands)                           $371                 $345
    Sales per average sq foot              $58                  $54

    Same store sales - rolling 13 periods
       Total                                 9%                   2%
       Organic vs acquired:
         Organic stores                      8%                   0%
         Acquired                           14%                  12%
       Retail vs commercial:
         Retail                              8%                   1%
         Commercial                         14%                  10%

    Inventory turns:
       Based on average inventories        2.2 X                2.2 X
       Based on ending inventories         2.1 X                2.2 X
    Inventory turns, net of payables:
       Based on average inventories        7.2 X                6.5 X
       Based on ending inventories         6.9 X                7.1 X

    Accounts payable/inventory (total)      68%                  67%

                     
SOURCE AutoZone, Inc.

CONTACT:          Emma Jo Kauffman of AutoZone, Inc., +1-901-495-7005