Exhibit 99.1
CSK Auto Corporation Announces Fourth Quarter and Fiscal 2007 Financial
Results
PHOENIX, AZ, April 18, 2007 — CSK Auto Corporation (the “Company”) (NYSE:CAO), the parent company of CSK Auto, Inc., today reported net sales of $427.0 million for its fourth quarter of fiscal 2007 ended February 3, 2008, a decrease of 9.6%, or $45.2 million compared to the fourth quarter of fiscal 2006. The decrease in net sales was primarily due to one additional week of sales in the fourth quarter of fiscal 2006, which resulted in additional sales of approximately $34.3 million. Same store sales decreased 3.5% for the quarter, comprised of a decrease of 4.9% in retail same store sales and an increase of 3.1% in commercial same store sales.
For the quarter the Company reported a net loss of $12.3 million, or $0.28 loss per diluted common share compared to a net loss of $1.3 million or $0.03 loss per diluted common share for the same period last year. Gross profit as a percentage of sales increased to 47.2% from 46.9% last year.
The Company recorded a pre-tax charge in the fourth quarter of fiscal 2007 for the settlement of its class action securities litigation consisting of $10.0 million in cash and $1.7 million in Company stock. The Company’s primary insurer under its directors and officers liability insurance policy will pay the entire cash component of the settlement, in addition to $5.0 million in litigation and regulatory-related defense costs. The Company expects to recognize a pre-tax gain of $15.0 million in its results of operations in the first quarter of fiscal 2008.
For the fiscal year ended February 3, 2008, net sales were $1,851.6 million, a decrease of 2.9% from the prior year. For fiscal 2007, net income decreased by $17.4 million to a net loss of $11.2 million, resulting in a $0.25 loss per diluted common share for the fiscal year. Our 2007 fiscal year consisted of 52 weeks as compared to our fiscal year 2006, which had 53 weeks.
Safe Harbour
Portions of this release may constitute “forward-looking statements” as defined by federal law. Although the Company believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the “safe harbor” protections provided under the Private Securities Litigation Reform Act of 1995. Additional information about issues that could lead to material changes in the Company’s performance is contained in the Company’s filings with the Securities and Exchange Commission. The Company makes no commitment to revise or update any forward looking statement in order to reflect events or circumstances after the date any such statement is made.
About CSK Auto
CSK Auto Corporation is the parent company of CSK Auto, Inc., a specialty retailer in the U.S. automotive aftermarket industry. As of February 3, 2008 the Company operated 1,349 stores in 22 states under the brand names Checker Auto Parts, Schuck’s Auto Supply, Kragen Auto Parts and Murray’s Discount Auto Stores.
Investor Contact: Brenda Bonn — Manager, Investor Relations 602-631-7483
- Financial Tables Follow -

-1-


 

CSK AUTO CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                 
    Fiscal Year Ended  
    February 3,     February 4,  
    2008     2007  
    (In thousands, except share and per share data)  
Net sales
  $ 1,851,647     $ 1,907,776  
Cost of sales
    984,649       1,011,712  
 
           
Gross profit
    866,998       896,064  
Other costs and expenses:
               
Operating and administrative
    804,265       788,400  
Investigation and restatement costs
    12,348       25,739  
Securities class action settlement
    11,700        
Store closing costs
    1,983       1,487  
 
           
Operating profit
    36,702       80,438  
Interest expense
    54,163       48,767  
Loss on debt retirement
          19,450  
 
           
Income (loss) before income taxes and cumulative effect of change in accounting principle
    (17,461 )     12,221  
Income tax expense (benefit)
    (6,309 )     4,991  
 
           
Income (loss) before cumulative effect of change in accounting principle
    (11,152 )     7,230  
Cumulative effect of change in accounting principle, net of tax
          (966 )
 
           
Net income (loss)
  $ (11,152 )   $ 6,264  
 
           
 
               
Basic earnings (loss) per share:
               
Income (loss) before cumulative effect of change in accounting principle
  $ (0.25 )   $ 0.16  
Cumulative effect of change in accounting principle
          (0.02 )
 
           
Net income (loss) per share
  $ (0.25 )   $ 0.14  
 
           
Shares used in computing per share amounts
    43,971,417       43,876,533  
 
           
 
               
Diluted earnings (loss) per share:
               
Income (loss) before cumulative effect of change in accounting principle
  $ (0.25 )   $ 0.16  
Cumulative effect of change in accounting principle
          (0.02 )
 
           
Net income (loss) per share
  $ (0.25 )   $ 0.14  
 
           
Shares used in computing per share amounts
    43,971,417       44,129,278  
 
           
                 
    Thirteen Weeks Ended     Fourteen Weeks Ended  
    February 3,     February 4,  
    2008     2007  
    (In thousands, except share and per share data)  
Net sales
  $ 426,999     $ 472,191  
Cost of sales
    225,542       250,762  
 
           
Gross profit
    201,457       221,429  
Other costs and expenses:
               
Operating and administrative
    193,360       205,585  
Investigation and restatement costs
    1,725       3,371  
Securities class action settlement
    11,700        
Store closing costs
    230       442  
 
           
Operating profit (loss)
    (5,558 )     12,031  
Interest expense
    14,491       14,139  
Loss on debt retirement
          24  
 
           
Loss before income taxes
    (20,049 )     (2,132 )
Income tax benefit
    (7,751 )     (864 )
 
           
Income (loss) before cumulative effect of change in accounting principle
    (12,298 )     (1,268 )
Cumulative effect of change in accounting principle, net of tax
           
 
           
Net loss
  $ (12,298 )   $ (1,268 )
 
           
 
               
Basic and diluted loss per share:
               
Loss before cumulative effect of change in accounting principle
  $ (0.28 )   $ (0.03 )
Cumulative effect of change in accounting principle
           
 
           
Basic and diluted loss per share
  $ (0.28 )   $ (0.03 )
 
           
Shares used in computing per share amounts
    44,018,817       43,936,674  
 
           

-2-


 

CSK AUTO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                 
    February 3,     February 4,  
    2008     2007  
    (In thousands, except share data)  
ASSETS
 
               
Cash and cash equivalents
  $ 16,520     $ 20,169  
Receivables, net
    37,322       43,898  
Inventories
    494,651       502,787  
Deferred income taxes
    50,649       46,500  
Prepaid expenses and other current assets
    35,842       31,585  
 
           
Total current assets
    634,984       644,939  
 
               
Property and equipment, net
    165,115       174,409  
Intangibles, net
    63,020       67,507  
Goodwill
    224,937       224,937  
Deferred income taxes
    15,380       4,200  
Other assets, net
    35,254       35,770  
 
             
Total assets
  $ 1,138,690     $ 1,151,762  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
               
Accounts payable
  $ 236,879     $ 260,146  
Accrued payroll and related expenses
    57,593       60,306  
Accrued expenses and other current liabilities
    107,211       81,569  
Current maturities of long-term debt
    50,551       56,098  
Current maturities of capital lease obligations
    6,351       8,761  
 
           
Total current liabilities
    458,585       466,880  
 
           
 
               
Long-term debt
    452,420       451,367  
Obligations under capital leases
    9,866       15,275  
Other liabilities
    53,281       46,730  
 
           
Total non-current liabilities
    515,567       513,372  
 
           
 
               
Commitments and contingencies
               
 
               
Stockholders’ equity:
               
Common stock, $0.01 par value, 90,000,000 shares authorized, 44,030,644 and 43,950,751 shares issued and outstanding at February 3, 2008 and February 4, 2007, respectively
    440       440  
Additional paid-in capital
    438,092       433,912  
Accumulated deficit
    (273,994 )     (262,842 )
 
           
Total stockholders’ equity
    164,538       171,510  
 
           
 
               
Total liabilities and stockholders’ equity
  $ 1,138,690     $ 1,151,762  
 
           

-3-


 

CSK AUTO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
                         
    Fiscal Year Ended  
    February 3,     February 4,     January 29,  
    2008     2007     2006  
    (In thousands)  
Cash flows provided by (used in) operating activities:
                       
Net income (loss)
  $ (11,152 )   $ 6,264     $ 57,790  
Adjustments:
                       
Depreciation and amortization on property and equipment
    40,668       40,645       36,628  
Amortization of other items
    5,513       7,585       4,231  
Amortization of debt discount and deferred financing costs
    5,701       4,539       2,161  
Stock-based compensation expense
    2,779       4,972       571  
Tax benefit relating to exercise of stock options
                231  
Write downs of property, equipment and other assets
    4,459       3,354       2,145  
Loss on debt retirement
          8,496       1,600  
Deferred income taxes
    (6,593 )     3,771       36,008  
Changes in operating assets and liabilities:
                       
Receivables
    8,126       (13,412 )     6,747  
Inventories
    8,136       3,652       (23,588 )
Prepaid expenses and other current assets
    (4,257 )     (11,538 )     7,616  
Accounts payable
    (23,267 )     51,639       17,329  
Accrued payroll, accrued expenses and other current liabilities
    23,816       4,838       9,987  
Other operating activities
    185       (5,165 )     2,867  
 
                 
Net cash provided by operating activities
    54,114       109,640       162,323  
 
                 
Cash flows used in investing activities:
                       
Capital expenditures
    (34,772 )     (37,529 )     (36,775 )
Business acquisitions, net of cash acquired
          (4,292 )     (177,658 )
Other investing activities
    (1,623 )     (1,778 )     (1,499 )
 
                 
Net cash used in investing activities
    (36,395 )     (43,599 )     (215,932 )
 
                 
Cash flows provided by (used in) financing activities:
                       
Payments under senior credit facility — term loan
                (252,450 )
Borrowings under senior credit facility — line of credit
    258,300       84,800       230,300  
Payments under senior credit facility — line of credit
    (263,800 )     (126,800 )     (136,300 )
Borrowings under term loan facility
          350,000        
Payments under term loan facility
    (3,478 )     (875 )      
Payment of debt financing costs
    (5,376 )     (13,166 )     (9,612 )
Proceeds from issuance of 4.625% exchangeable notes
                100,000  
Proceeds from issuance of 3.375% exchangeable notes
                125,000  
Retirement of 3.375% exchangeable notes
          (125,000 )      
Retirement of 7% senior notes
          (225,000 )      
Payments on capital lease obligations
    (8,513 )     (10,301 )     (10,893 )
Proceeds from seller financing arrangements
    2,145       428       3,164  
Payments on seller financing arrangements
    (685 )     (484 )     (381 )
Proceeds from repayment of stockholder receivable
                10  
Proceeds from exercise of stock options
    443       1,196       1,130  
Purchase of common stock
                (25,029 )
Net proceeds from termination of common stock call option and warrants
          1,555        
Premium on common stock call option
                (26,992 )
Premium from common stock warrants
                17,820  
Other financing activities
    (404 )     (189 )     (423 )
 
                 
Net cash (used in) provided by financing activities
    (21,368 )     (63,836 )     15,344  
 
                 
 
                       
Net increase (decrease) in cash
    (3,649 )     2,205       (38,265 )
Cash and cash equivalents, beginning of period
    20,169       17,964       56,229  
 
                 
Cash and cash equivalents, end of period
  $ 16,520     $ 20,169     $ 17,964  
 
                 

-4-


 

The following table provides certain financial information not derived in accordance with GAAP. We have included calculations of these non-GAAP measures and reconciliations to the most comparable GAAP financial measures.
We believe that EBITDA is a recognized supplemental measurement tool widely used by analysts and investors to help evaluate a company’s overall operating performance, its ability to incur and service debt, and its capacity for making capital expenditures. We use EBITDA, in addition to operating income and cash flows from operating activities, to assess our performance relative to our competitors and relative to our own performance in prior periods. We believe that it is important for investors to have the opportunity to evaluate us using the same measures. EBITDA is calculated as follows ($ in thousands):
Preliminary Calculation of EBITDA:
                                 
    Thirteen Weeks Ended     Fourteen Weeks Ended     Fiscal Year Ended  
    February 3, 2008     February 4, 2007     February 3, 2008     February 4, 2007  
       
Income (loss) before income taxes and cumulative effect of change in accounting principle
  $ (20,049 )   $ (2,132 )   $ (17,461 )   $ 12,221  
Interest expense
    14,491       14,139       54,163       48,767  
Depreciation
    9,648       10,491       40,668       40,645  
Amortization
    1,480       847       5,513       7,585  
 
                       
EBITDA
    5,570       23,345       82,883       109,218  
 
                       
 
                               
Non-cash stock compensation expense
    1,036       1,647       2,779       4,972  
Investigation and restatement
    1,725       3,371       12,348       25,739  
Asset retirements and impairment
    789       457       4,732       3,902  
Securities class action settlement
    11,700             11,700        
Non-recurring charges
    1,263       24       4,853       21,287  
 
                       
EBITDA, as adjusted
  $ 22,083     $ 28,844     $ 119,295     $ 165,118  
 
                       
EBITDA, and EBITDA as adjusted, do not represent funds available for our discretionary use and are not intended to represent or to be used as substitute for net income or cash flow from operations data as measured under GAAP. The Company’s definition of EBITDA as adjusted, is consistent with the definitions applied in our term loan facility. The items excluded from EBITDA, and EBITDA as adjusted, are significant components of our statement of operations and must be considered in performing a comprehensive assessment of our overall financial performance. EBITDA, and EBITDA as adjusted, and the associated year-to-year trends should not be considered in isolation. EBITDA, and EBITDA as adjusted, may differ in method of calculation from similarly titled measures used by other companies.

-5-