BADM 622Financial StatementAnalysis Presentation MOOREFIELD: Matthew Alt Lori McDonald Dave Houdyschell Jason Umstot Advance Auto Parts, Inc. (NYSE:AAP) Roanoke, Va
Who is Advance Auto Parts? • Headquarters: Roanoke, Va • Second Largest Automotive Parts and Accessories Retailer in the U.S. • 2,675 Stores Operating as of 4/23/05 • 40 States • Puerto Rico • Virgin Islands • Serves Both Do-It-Yourself and Professional Installer Markets • IPO in 2001
Major Company Competitors • AutoZone (Largest) • Pep Boys • Genuine Parts • CSK
Advance Auto Parts $3.8 Billion Total Revenue $191.3 Million Net Income $2.2 Billion Total Assets 2,652 Total Stores AutoZone $5.6 Billion Total Revenue $566.2 Million Net Income $3.9 Billion Total Assets 3,483 Total Stores Advance Auto Parts (AAP) vs. AutoZone (AZO) FY 04 AAP is the second largest retailer compared to AZO.
AAP Current Ratio: ttm=1.43 Debt to Assets: ttm=0.65 Operating Cash Flow as % of NI= 138% FY04 Sales Growth= 8% FY04 Operating Income Growth= 10% FY04 Avg Age PP&E=4.5 yrs FY04 Current Market Value of T stock = $285 Mil AZO Current Ratio: ttm=1.05 Debt to Assets: ttm=0.93 Operating Cash Flow as % of NI= 113% FY04 Sales Growth= 3% FY04 Operating Income Growth= 9% FY04 Avg Age PP&E=8.6 yrs FY04 Key Strengths With greater flexibility and liquidity AAP shows higher growth than that of AZO in various areas.
Per Store Cost Volume Profit Analysis AAP growth is both new store and rate growth while AZO is growing primarily by new stores.
Stock Growth AAP stock price is growing at a higher rate than its top competitor.
PEG / Growth Rate • PEG Ratio of 1.14 • Industry at approximately 1.42 • Growth Rate 17.4% • 4.3% greater than AZO • 2.85 % greater than the industry AAP is poised to continue growth at a higher rate than industry level.
Current Stock Analysis • Stock Price $60.82 • 9/9/05 (COB) • TTM EPS $3.02 • 7/16/05 • 19% increase • Calculated current PE ratio matches annalist projections Calculated PEG and Growth rates are supported by current numbers.
CONCLUSION • Advance Auto Parts is a Growth-Oriented Company in a Growing Industry • Raising Sales Per Store • Expanding Operating Margins • Generating Strong Free Cash-Flow