Advance Auto Parts announced its financial results for the fourth quarter and fiscal year ended December 28, 2013. Fourth quarter comparable earnings per diluted share (EPS) were $0.94, an increase of 6.8% versus the fourth quarter last year.
These fourth quarter results exclude transaction expenses of $0.24 associated with the acquisition of General Parts International, Inc. (GPI) and $0.03 of integration costs associated with the integration of B.W.P. Distributors, Inc. (BWP). Full year comparable diluted EPS of $5.67, increased 8.6% from fiscal 2012. These full year results exclude transaction expenses of $0.28 associated with the acquisition of GPI and $0.07 of integration costs associated with the integration of BWP.
"I would like to thank all our Team Members for their hard work during the fourth quarter and the 2013 fiscal year," said Darren R. Jackson, Chief Executive Officer. "The acquisition of General Parts was another strategic step forward for our great company positioning Advance as the largest parts provider in North America with considerable sales growth and earnings opportunities. Operationally, we were very encouraged with the progress we made in 2013, which resulted in improved fourth quarter sales performance and record operating profits in 2013. We look forward to 2014 with excitement as we begin the integration of General Parts and build on our performance from 2013.”
Fourth quarter and fiscal 2013 highlights
Total sales for the fourth quarter increased 6.0% to $1.41 billion, as compared with total sales during the fourth quarter of fiscal 2012 of $1.33 billion. The sales increase was driven by the net addition of 151 new stores over the past 12 months, the acquisition of BWP and a comparable same store sales increase of 0.1%. For fiscal 2013, total sales increased 4.7% to $6.49 billion, compared with total sales of $6.21 billion during fiscal 2012. For fiscal 2013, comparable store sales decreased 1.5%.
The Company's gross profit rate was 49.8% of sales during the fourth quarter as compared to 49.9% during the fourth quarter last year. The 8 basis-point decrease in gross profit rate was the result of a higher mix of commercial sales, which has a lower gross margin rate driven primarily by the acquisition of BWP partially offset by increased merchandise margins due to lower acquisition costs and improvements in supply chain efficiencies. For fiscal 2013, the Company's gross profit rate was 50.1%, a 15 basis-point increase from fiscal 2012.
The Company's comparable SG&A rate was 41.7% of sales during the fourth quarter as compared to 41.4% during the same period last year. The 36 basis-point increase was the result of higher incentive compensation and increased new store openings partially offset by lower administrative and support costs and improved labor productivity. For fiscal 2013, the Company's comparable SG&A rate was 39.4% versus 39.3% during fiscal 2012. On a GAAP basis, the Company's SG&A rate was 43.4% of sales during the fourth quarter as compared to 41.4% during the same period last year primarily due to transaction expenses associated with the acquisition of GPI. On a GAAP basis, the Company's SG&A rate was 39.9% for fiscal 2013 versus 39.3% during fiscal 2012.
The Company's comparable operating income during the fourth quarter of $113.8 million increased 0.6% versus the fourth quarter of fiscal 2012. On a rate basis, comparable operating income in the fourth quarter was 8.1% of total sales as compared to 8.5% during the fourth quarter of fiscal 2012. For fiscal 2013, the Company's comparable operating income rate was 10.7% versus 10.6% during fiscal 2012. On a GAAP basis, the Company's operating income during the fourth quarter of $90.8 million decreased 19.7% versus the fourth quarter of fiscal 2012. On a rate basis, operating income was 6.4% of total sales during the fourth quarter as compared to 8.5% during the fourth quarter of fiscal 2012. For fiscal 2013, on a GAAP basis, the Company's operating income rate was 10.2% versus 10.6% during fiscal 2012.
During fiscal 2013, the Company generated $545.3 million in operating cash flow, a 20.4% reduction as compared to $685.3 million in fiscal 2012. Free cash flow in fiscal 2013 was $183.1 million versus $412.3 million last year. This decrease in free cash flow was primarily due to the Company’s acquisition of BWP and an increase in owned inventory partially offset by a reduction in capital expenditures. Capital expenditures in fiscal 2013 were $195.8 million as compared to $271.2 million in fiscal 2012.
During the fourth quarter, the Company opened 55 stores, and closed 24 stores including planned consolidations of 17 BWP stores and 5 Autopart International stores. For fiscal 2013, the Company opened 172 Advance Auto Part and Autopart International stores in addition to the acquisition of 124 BWP stores and closed 41 stores including planned consolidations of 20 BWP stores and 13 Autopart International stores. The resulting net addition in fiscal 2013 was 255 stores. As of December 28, 2013, the Company's total store count was 4,049 including 217 Autopart International stores.
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