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1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended August 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission file number 1-10714
AUTOZONE, INC.
(Exact name of registrant as specified in its charter)
NEVADA 62-1482048
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
123 SOUTH FRONT STREET, MEMPHIS, TENNESSEE 38103
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (901) 495-6500
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
COMMON STOCK
($.01 PAR VALUE) NEW YORK STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the 115,337,257 shares of voting stock of the
registrant held by non-affiliates of the registrant (excluding, for this
purpose, shares held by officers, directors, or 10% stockholders) was
$2,955,517,210 based on the last sales price of the Common Stock on October 30,
1996 as reported on the New York Stock Exchange.
The number of shares of Common Stock outstanding as of October 30, 1996
was 150,298,667.
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PART I
ITEM 1 BUSINESS
INTRODUCTION
AutoZone is a leading specialty retailer of automotive parts and
accessories, primarily focusing on "Do-It-Yourself" ("D-I-Y") consumers. The
Company began operations in 1979 and at August 31, 1996, operated 1,423 stores
in 27 states, principally located in the Sunbelt and Midwest regions of the
United States. Each AutoZone store carries an extensive product line,
including new and re-manufactured automotive hard parts, such as alternators,
starters, water pumps, brake shoes and pads, carburetors, clutches and engines;
maintenance items, such as oil, antifreeze, transmission, brake and power
steering fluids, engine additives, protectants and waxes; and accessories, such
as car stereos and floor mats. The Company carries parts for domestic and
foreign cars, vans and light trucks. During fiscal year 1996, the Company
implemented a commercial sales program which provides commercial credit and
prompt delivery of parts and other products to local repair garages, dealers
and service stations. This program was offered in 1,183 of the Company's
stores at August 31, 1996. AutoZone does not perform automotive repairs or
installations.
AutoZone is dedicated to a marketing and merchandising strategy to provide
customers with superior service, value and parts selection at conveniently
located, well-designed stores. The Company has implemented this strategy
primarily with knowledgeable and motivated store personnel trained to emphasize
prompt and courteous customer service, through an everyday low price policy and
by maintaining an extensive product line with an emphasis on automotive hard
parts. AutoZone's stores are generally situated in high-visibility locations
and provide a distinctive merchandise presentation in an attractive store
environment.
At August 31, 1996, AutoZone had stores in the following 27 states:
Alabama . . . . . . 74 Louisiana . . . . 68 South Carolina . . . 41
Arizona . . . . . . 52 Michigan . . . . . 9 Tennessee . . . . . . 102
Arkansas . . . . . . 37 Mississippi . . . 58 Texas . . . . . . . . 239
Colorado . . . . . . 24 Missouri . . . . . 56 Utah . . . . . . . . 15
Florida . . . . . . 61 New Mexico . . . . 22 Virginia . . . . . . 23
Georgia . . . . . . 87 North Carolina . . 79 West Virginia . . . . 12
Illinois . . . . . . 43 Ohio . . . . . . . 138 Wisconsin . . . . . . 1
Indiana . . . . . . 66 Oklahoma . . . . . 56 Wyoming . . . . . . . 1
Kansas . . . . . . . 7 Pennsylvania . . . 10 -----
Kentucky . . . . . . 42 Total . . . . . . 1,423
=====
MARKETING AND MERCHANDISING STRATEGY
AutoZone's marketing and merchandising strategy is to provide customers
with superior service, value and parts selection at conveniently located,
well-designed stores. Key elements of this strategy are as follows:
CUSTOMER SERVICE
The Company believes that D-I-Y consumers place a significant value on
customer service. As a result, the Company emphasizes customer service as the
most important element in its marketing and merchandising strategy. The
Company attempts to promote a corporate culture which "always puts customers
first" and emphasizes knowledgeable and courteous service. To do so, the
Company employs parts personnel with technical expertise to advise customers
regarding the correct part type and application, utilizes a wide range of
training methods to educate and motivate its store personnel, and provides
store personnel with significant opportunities for promotion and incentive
compensation. Customer service is enhanced by proprietary electronic parts
catalogs which assist in the selection of parts; free testing of starters,
alternators, batteries, and sensors and actuators; and
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liberal return and warranty policies. AutoZone stores generally open at 8 a.m.
and close from 8 to 10 p.m. (with some open to midnight) Monday through
Saturday and typically open at 9 a.m. and close between 6 and 7 p.m. on Sunday.
AutoZone has a satellite system for all its stores which, among other
things, enables the Company to speed credit card and check approval processes
and locate parts at neighboring AutoZone stores. The Company has a call center
in Memphis to support the sales staff at high volume stores. Call center
personnel handle inquiries and orders, enabling store personnel to concentrate
on serving in-store customers without having to field telephone calls. In
November, 1996, the Company consolidated the operations of the Houston call
center into the Memphis call center and offered to transfer all Houston call
center employees to AutoZone stores in the Houston area. The Company
anticipates that the call center consolidation will result in ongoing savings
to the Company.
In March 1996, Alldata Corporation became a wholly-owned subsidiary of
AutoZone in a stock-for-stock merger. Alldata has developed a database system
that provides comprehensive and up-to-date automotive diagnostic, service and
repair information which it will continue to market to professional repair
shops. In addition, the Company plans to integrate certain limited information
from the Alldata database, such as technical service bulletins, recall
information and specifications, into its electronic catalog.
PRODUCT SELECTION
The Company offers a wide selection of automotive parts and other products
designed to cover a broad range of specific vehicle applications. AutoZone's
stores generally carry between 16,000 and 19,000 stock keeping units ("SKUs").
Each AutoZone store carries the same basic product line with some regional
differences based on climate, demographics and age and type of vehicle
registration. The Company's "flexogram" program enables the Company to tailor
its hard parts inventory to the makes and models of the automobiles in each
store's trade area. In addition to brand name products, the Company sells a
number of products, including batteries and engines, under the "AutoZone" name
and a selection of automotive hard parts, including starters, alternators,
water pumps, brakes, and filters, under its private label names. In addition
to products stocked in stores, the Company offers a range of products,
consisting principally of automotive hard parts, through its Express Parts
program. The Express Parts program provides air-freight delivery of lower
turnover products to AutoZone's stores.
PRICING
The Company employs an everyday low price strategy and attempts to be the
price leader in hard parts categories. Management believes that its prices
overall compare favorably to those of its competitors.
COMMERCIAL SALES PROGRAM
During fiscal year 1996, the Company implemented a commercial sales program
which provides credit and prompt delivery of parts and other products to local
repair garages, dealers and service stations. This program was offered in 1,183
of the Company's stores at August 31, 1996. Commercial customers generally pay
the same everyday low prices for parts and other products as paid by AutoZone's
D-I-Y customers. The program will be tested in nearly all stores, but the
Company anticipates that optimum operating efficiencies will be achieved after
consolidating the commercial business of certain of these stores. Ultimately,
the Company expects that the program will be in 80 to 90 percent of its stores.
Although the commercial sales program is currently unprofitable, the Company
believes that the program should enhance its future financial performance and
will result in an expansion of its customer base at a relatively modest
incremental capital investment. There can be no assurance, however, that the
commercial sales program will enhance the Company's results of operations and
financial condition in future fiscal years.
STORE DESIGN AND VISUAL MERCHANDISING
AutoZone seeks to design and build stores with a high visual impact.
AutoZone stores are designed to have an industrial "high tech" appearance by
utilizing colorful exterior signage, exposed beams, and ductwork, and brightly
lighted interiors. Merchandise in stores is attractively displayed, typically
utilizing diagonally placed
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gondolas for maintenance and accessory products as well as specialized shelving
for batteries and, in many stores, oil products. The Company employs a uniform
("planogrammed") store layout system to promote consistent merchandise
presentation in all of its stores. In-store signage and special displays are
used extensively to aid customers in locating merchandise and promoting
products.
STORE DEVELOPMENT AND EXPANSION STRATEGY
The following table sets forth the Company's store development activities
during the past five fiscal years:
FISCAL YEAR
----------------------------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
Beginning Stores ................................ 598 678 783 933 1,143
New Stores ...................................... 82 107 151 210 280
Replaced Stores(1)............................... 14 20 20 29 31
Closed Stores (1)................................ (16) (22) (21) (29) (31)
--- --- --- ----- -----
Ending Stores ................................... 678 783 933 1,143 1,423
=== === === ===== =====
- ---------------------
(1) Replaced stores are either relocations or conversions of existing
smaller stores to larger formats. Closed stores include replaced stores.
The Company opened 280 net new stores in fiscal 1996, representing an
increase in total square footage from fiscal 1995 of approximately 26%, and had
70 stores under construction at fiscal year end. The Company plans to open
approximately 335 stores in fiscal 1997, representing an increase in total
store square footage of approximately 26%.
The Company believes that expansion opportunities exist both in markets
which it does not currently serve and in markets where it can achieve a larger
presence. The Company attempts to obtain high visibility sites in high
traffic locations and undertakes substantial research prior to entering new
markets. Key factors in selecting new site and market locations include
population, demographics, vehicle profile and number and strength of
competitors' stores. The Company generally seeks to open new stores within or
contiguous to existing market areas and attempts to cluster development in new
urban markets in a relatively short period of time in order to achieve
economies of scale in advertising and distribution costs. The Company may also
expand its operations through acquisitions of existing stores from third
parties. The Company regularly evaluates potential acquisition candidates, in
new as well as existing market areas.
AutoZone's net sales have grown significantly in the past several years,
increasing from $1,002 million in fiscal 1992 to $2,243 million in fiscal 1996.
The continued growth and financial performance of the Company will be
dependent, in large part, upon management's ability to open new stores on a
profitable basis in existing and new markets and also upon its ability to
continue to increase sales in existing stores. There can be no assurance the
Company will continue to be able to open and operate new stores on a timely and
profitable basis or will continue to attain increases in comparable store
sales.
STORE OPERATIONS
STORE FORMATS
Substantially all of AutoZone's stores are based on standard store formats
resulting in generally consistent appearance, merchandising and product mix.
Although the smaller store formats were generally used by the Company for its
earlier stores, the Company has increasingly used larger format stores starting
with its 8,100 square foot store introduced in 1987, its 6,600 square foot store
introduced in 1991 and its 7,700 square foot store introduced in 1993. In fiscal
1997, the 6,600 square foot and larger store formats are expected to account for
more than 85% of new and replacement stores. Total store space as of August 31,
1996 was as follows:
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Total Store
Store Format Number of Stores Square Footage(1)
------------ ---------------- -----------------
8,100 sq. ft.................................... 201 1,628,100
7,700 sq. ft.................................... 303 2,333,100
6,600 sq. ft.................................... 452 2,983,200
5,400 sq. ft.................................... 446 2,408,400
4,000 sq. ft.................................... 21 84,000
----- ---------
Total ..................................... 1,423 9,436,800
===== =========
- --------------------------
(1) Total store square footage is based on the Company's standard store
formats, including normal selling, office, stockroom and receiving space, but
excluding excess space not utilized in a store's operations.
Approximately 85% to 90% of each store is selling space, of which
approximately 30% to 40% is dedicated to automotive parts inventory. The parts
inventory area is fronted by a counter staffed by knowledgeable parts personnel
and equipped with proprietary electronic parts catalogs. The remaining selling
space contains gondolas for accessories, maintenance items, including oil and
air filters, additives and waxes, and other parts together with specifically
designed shelving for batteries and, in many stores, oil products.
Approximately three quarters of the Company's stores are freestanding, with
the balance principally located within strip shopping centers. Freestanding
large format stores typically have parking for approximately 45 to 50 cars on a
lot of approximately 3/4 to one acre. The Company's 5,400 and 4,000 square
foot stores typically have parking for approximately 25 to 40 cars and are
usually located on a lot of approximately 1/2 to 3/4 acre.
STORE PERSONNEL AND TRAINING
While subject to fluctuation based on seasonal volumes and actual store
sales, the 4,000, 5,400 and 6,600 square foot stores typically employ 12 to 18
persons, including a manager and an assistant manager, and the larger stores
typically employ 14 to 23 persons. The Company generally hires personnel with
prior automotive experience. Although the Company relies primarily on
on-the-job training, it also provides formal training programs, which include
regular store meetings on specific sales and product issues, standardized
training manuals and a specialist program under which store personnel can
obtain Company certification in several areas of technical expertise. The
Company is testing a multimedia program that will permit store personnel to
train at their own pace. The Company supplements training with frequent store
visits by management.
The Company provides financial incentives to store managers through an
incentive compensation program and through participation in the Company's stock
option plan. In addition, AutoZone's growth has provided opportunities for the
promotion of qualified employees. Management believes these opportunities are
an important factor in AutoZone's ability to attract, motivate and retain
quality personnel.
The Company supervises store operations primarily through approximately 196
area advisors who report to one of 27 district managers, who, in turn, report
to one of six regional managers, as of August 31, 1996. Purchasing,
merchandising, advertising, accounting, cash management, store development and
other store support functions are centralized in the Company's corporate and
administrative headquarters in Memphis, Tennessee. The Company believes that
such centralization enhances consistent execution of the Company's
merchandising and marketing strategy at the store level.
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STORE AUTOMATION
In order to assist store personnel in providing a high level of customer
service, all stores have proprietary electronic parts catalogs that provide
parts information based on the make, model and year of an automobile. The
catalog display screens are placed on the hard parts inventory counter so that
both employees and customers can view the screen. In addition, the Company's
satellite system enables the Company to speed up credit card and check approval
processes and locate parts at neighboring AutoZone stores.
All stores utilize the Company's computerized Store Management System,
which includes optical character recognition scanning and point-of-sale data
collection terminals. The Store Management System provides productivity
benefits, including lower administrative requirements and improved personnel
scheduling at the store level, as well as enhanced merchandising information
and improved inventory control. The Company believes the Store Management
System also enhances customer service through faster processing of transactions
and simplified warranty and product return procedures.
PURCHASING AND DISTRIBUTION
Merchandise is selected and purchased for all stores at the Company's
headquarters in Memphis. No one class of product accounts for as much as 10%
of the Company's total sales. In fiscal 1996, the Company purchased products
from approximately 200 suppliers and no single supplier accounted for more than
6% of the Company's total purchases. During fiscal year 1996, the Company's
ten largest suppliers accounted for approximately 31% of the Company's
purchases. The Company generally has no long-term contracts for the purchase
of merchandise. Management believes that AutoZone's relationships with
suppliers are excellent. Management also believes that alternative sources of
supply exist, at similar cost, for substantially all types of product sold.
Substantially all of the Company's merchandise is shipped by vendors to the
Company's distribution centers. Orders are typically placed by stores on a
weekly basis with orders shipped from the warehouse in trucks operated by the
Company on the following day.
COMPETITION
The Company competes principally in the D-I-Y and, more recently, the
commercial automotive aftermarket. Although the number of competitors and the
level of competition experienced by AutoZone's stores varies by market area,
the automotive-aftermarket is highly fragmented and generally very competitive.
The Company believes that the largest share of the automotive-aftermarket is
held by independently owned jobber stores which, while principally selling to
wholesale accounts, have significant D-I-Y sales. The Company also competes
with other automotive specialty retailing chains and, in certain product
categories, such as oil and filters, with discount and general merchandise
stores. The principal competitive factors which affect the Company's business
are store location, customer service, product selection and quality, and price.
While AutoZone believes that it competes effectively in its various geographic
areas, certain of its competitors have substantial resources or have been
operating longer in particular geographic areas.
TRADEMARKS
The Company has registered several service marks and trademarks in the
United States Patent and Trademark office, including its service mark
"AutoZone" and its trademarks "AutoZone," "Duralast," "Valucraft," "Ultra
Spark," "Deutsch," "Albany" and "Alldata". The Company believes that the
"AutoZone" service mark and trademarks have become an important component in
its merchandising and marketing strategy.
7
EMPLOYEES
As of August 31, 1996, the Company employed approximately 26,800 persons,
approximately 18,700 of whom were employed full-time. Approximately 86% of the
Company's employees were employed in stores or in direct field supervision,
approximately 7% in distribution centers and approximately 7% in corporate and
support functions.
The Company's employees currently are not members of any unions. The
Company has never experienced any material labor disruption. Management
believes that its labor relations are generally good.
ITEM 2 PROPERTIES
The following table sets forth certain information concerning AutoZone's
principal properties:
SQUARE NATURE OF
LOCATION PRIMARY USE FOOTAGE OCCUPANCY
-------- ----------- ------- ----------
Memphis, TN Corporate and Administrative Office 360,000 Owned
Lavonia, GA Distribution Center 421,700 Owned
Lexington, TN Distribution Center 341,000 Owned
Danville, IL Distribution Center 304,500 Owned
Memphis, TN Express Parts Warehouse 233,100 Leased
Lafayette, LA Distribution Center 464,000 Owned
San Antonio, TX Distribution Center 217,000 Owned
Phoenix, AZ Distribution Center 212,000 Owned
Zanesville, OH Distribution Center 550,000 Owned
The Company relocated its headquarters in Memphis, Tennessee in October
1995 and completed the sale of its former headquarters in December 1995. The
Company opened a new distribution center in Zanesville, Ohio in February 1996.
The lease of the Express Parts warehouse in Memphis expires in March 2000. The
Company also rents additional warehouse space, various district offices and
training and other office facilities which are not material in the aggregate.
At August 31, 1996, the Company leased 538 and owned 885 of its 1,423 store
properties. Original lease terms generally range from five to 20 years with
renewal options. Leases on 248 stores that are currently operating expire
prior to the end of fiscal 2001; however, leases on 231 of such stores contain
renewal options.
ITEM 3 LEGAL PROCEEDINGS
AutoZone is a party to various claims and lawsuits arising in the ordinary
course of business. The Company does not believe that such claims and lawsuits,
singularly or in the aggregate, will have a material adverse effect on its
business, properties, results of operations, financial condition or prospects.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fiscal
quarter (17 weeks) ended August 31, 1996.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The following table lists AutoZone's executive officers. The title of each
executive officer includes the words "Customer Satisfaction" which reflects the
Company's commitment to customer service as part of its marketing and
merchandising strategy. Officers are elected by and serve at the discretion of
the Board of Directors.
J.R. HYDE, III, 53--CHAIRMAN AND CHIEF EXECUTIVE OFFICER
J. R. Hyde, III, has been Chairman of the Board of Directors and Chief
Executive Officer since 1986. Previously, Mr. Hyde was Chief Executive Officer
of Malone & Hyde (the former parent company of AutoZone). Mr. Hyde has been
employed by AutoZone or Malone & Hyde since 1965.
JOHNSTON C. ADAMS, JR., 48--VICE CHAIRMAN, CHIEF OPERATING OFFICER, AND
DIRECTOR
Johnston C. Adams, Jr. was elected Vice Chairman and Chief Operating
Officer and Director in March 1996. Previously he was Executive Vice
President-Distribution since 1994. From 1990 to 1994 Mr. Adams was a co-owner
of Nicotiana Enterprises, Inc., a company primarily engaged in food
distribution. From 1983 to 1990, Mr. Adams was President of the Miami Division
of Malone & Hyde. The Company anticipates that Mr. Adams will be elected
President and Chief Operating Officer upon Mr. Hanemann's retirement on December
12, 1996.
TIMOTHY D. VARGO, 44--VICE CHAIRMAN AND DIRECTOR
Timothy D. Vargo was elected Vice Chairman and Director in March 1996.
Previously, he was Executive Vice President-Merchandising and Systems
Technology since June 1995 and had been Senior Vice President-Merchandising
since March 1995. Previously, Mr. Vargo was Senior Vice
President-Merchandising for the Company from 1986 to 1992 and was Director of
Stores for AutoZone from 1984 to 1986.
THOMAS S. HANEMANN, 59--PRESIDENT AND DIRECTOR
Thomas S. Hanemann has been a Director and President since 1994. He had
previously been Executive Vice President-Stores and Distribution between 1992
and 1994 and had been Senior Vice President-Stores of AutoZone since 1986.
Previously, Mr. Hanemann was President of Ike's and Super D, drug store
divisions of Malone & Hyde. Mr. Hanemann has been employed by AutoZone or
Malone & Hyde since 1974. Mr. Hanemann has expressed his intention to retire
as President of the Company as of December 12, 1996.
LAWRENCE E. EVANS, 52--EXECUTIVE VICE PRESIDENT-STORE DEVELOPMENT
Lawrence E. Evans has been Executive Vice President-Store Development since
1995. Previously he was Senior Vice President-Development from 1993 to 1995
and Vice President-Real Estate since 1992, Mr. Evans was Director of Real
Estate from 1991, and had been an attorney for either Malone & Hyde or AutoZone
since 1986. Mr. Evans was first employed by Malone & Hyde from 1969 until 1976
and returned to Malone & Hyde in 1986.
ROBERT J. HUNT, 47--EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Robert J. Hunt has been Executive Vice President and Chief Financial
Officer since 1994. Prior to that time, Mr. Hunt was Executive Vice
President, Chief Financial Officer, and a Director of the Price Company from
1991 to 1993. Previously, Mr. Hunt had been employed by Malone & Hyde since
1984, where he was Executive Vice President and Chief Financial Officer from
1988 to 1991.
SHAWN P. MCGHEE, 33--EXECUTIVE VICE PRESIDENT-MERCHANDISING
Shawn P. McGhee was elected Executive Vice President-Merchandising in 1996.
Previously, he was Senior Vice President-Merchandising since 1994, Vice
President-Merchandising since 1993, and a Senior Product Manager since 1991.
Mr. McGhee commenced his employment with the Company in 1988.
ANTHONY DEAN ROSE, JR., 36--SENIOR VICE PRESIDENT-ADVERTISING
Anthony Dean Rose, Jr. has been Senior Vice President-Advertising since
1995. Prior to that time, he had been Vice President-Advertising since 1989
and a Director of Advertising since 1987. Mr. Rose has been employed by
AutoZone or Malone & Hyde since 1982.
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STEPHEN W. VALENTINE, 34--SENIOR VICE PRESIDENT-SYSTEMS TECHNOLOGY AND SUPPORT
Stephen W. Valentine has been Senior Vice President-Systems Technology and
Support since 1995. Prior to that time, he had been Vice President-Systems
Technology and Support since 1994, and a Director of Store Management Systems
since 1990. Mr. Valentine commenced his employment with the Company in 1989.
MICHAEL E. BUTTERICK, 45--VICE PRESIDENT-CONTROLLER
Michael E. Butterick has been Vice President-Controller since 1995. Prior
to that time, Mr. Butterick was Chief Financial Officer of United Medical
Incorporated from 1993 to 1995. From 1990 to 1993 Mr. Butterick was Vice
President-Finance of the Mid South General Merchandise Division, a division of
Fleming Companies. Previously, Mr. Butterick had been employed by Malone &
Hyde or AutoZone since 1983, where he was Controller of AutoZone from 1986 to
1990.
HARRY L. GOLDSMITH, 45--VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
Harry L. Goldsmith has been Vice President, General Counsel, and Secretary
since 1993. Prior to that time, he was an attorney at Federal Express
Corporation since 1989.
ANDREW M. CLARKSON, 59--DIRECTOR AND CHAIRMAN OF THE FINANCE COMMITTEE
Andrew M. Clarkson has been a Director of the Company since 1986 and is
employed by the Company as the Chairman of the Finance Committee. Mr. Clarkson
had been Vice President and Treasurer of the Company in 1986, Senior Vice
President and Treasurer of the Company from 1986 to 1988, was Secretary from
1988 to 1993 and was Treasurer from 1990 to 1995. Previously, Mr. Clarkson
was Chief Financial Officer of Malone & Hyde from 1983 to 1988.
10
PART II
ITEM 5 MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Common Stock Market Prices for the Company's stock as traded on the New
York Stock Exchange on page 12 of the annual stockholders report for the year
ended August 31, 1996 are incorporated herein by reference.
At October 30, 1996, there were 2,852 stockholders of record, excluding the
number of beneficial owners whose shares were held in street name.
ITEM 6 SELECTED FINANCIAL DATA
Selected Financial Data on pages 10 and 11 of the annual stockholders
report for the year ended August 31, 1996, is incorporated herein by reference.
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations on pages 13 through 15 of the annual stockholders report for the
year ended August 31, 1996, are incorporated herein by reference.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements included on pages 16 through 23 and the quarterly
summary on page 12 of the annual stockholders report for the year ended August
31, 1996, are incorporated herein by reference.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10 DIRECTORS AND OFFICERS OF THE REGISTRANT
The information required by this item is incorporated by reference to Part
I of this document and to the Company's definitive Proxy Statement filed
pursuant to Regulation 14A under the Securities Exchange Act of 1934 in
connection with the Company's annual meeting of stockholders.
ITEM 11 EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the
Company's definitive Proxy Statement filed pursuant to Regulation 14A under the
Securities Act of 1934 in connection with the Company's annual meeting of
stockholders.
11
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this item is incorporated by reference to the
Company's definitive Proxy Statement filed pursuant to Regulation 14A under the
Securities Exchange Act of 1934 in connection with the Company's annual meeting
of stockholders.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference to the
Company's definitive Proxy Statement filed pursuant to Regulation 14A under the
Securities Exchange Act of 1934 in connection with the Company's annual meeting
of stockholders.
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 10-K
(a) 1. Financial Statements
The following financial statements included on pages 16 through 23
in the annual report to stockholders for the year ended August 31,
1996, are incorporated by reference in Item 8:
Report of Independent Auditors
Statements of Income for the fiscal years ended August 31, 1996,
August 26, 1995, and August 27, 1994
Balance Sheets as of August 31, 1996 and August 26, 1995
Statements of Shareholders' Equity for the fiscal years ended August
31, 1996, August 26, 1995 and August 27, 1994
Statements of Cash Flows for the fiscal years ended August 31, 1996,
August 26, 1995 and August 27, 1994
Notes to Financial Statements
2. Financial Statement Schedule II - Valuation and Qualifying Accounts
SCHEDULE II
AUTOZONE, INC.
VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
--------------------------------------------------------------------------------------------------------------------------
COL A COL B COL C COL D COL E
--------------------------------------------------------------------------------------------------------------------------
Balance
CLASSIFICATION Beginning of ADDITIONS Deductions- Balance at
Period Describe End of Period
(1) (2)
Charged to Costs Charged to Other
and Expenses Accounts-Describe
--------------------------------------------------------------------------------------------------------------------------
Year Ended August 27, 1994:
Reserve for warranty claims $ 6,961 $17,409 $15,309(1) $ 9,061
Other reserves 8,014 5,840
Year Ended August 26, 1995:
Reserve for warranty claims $ 9,061 $23,124 $19,572(1) $12,613
Other reserves 5,840 9,229
Year Ended August 31, 1996:
Reserve for warranty claims $12,613 $26,982 $25,443(1) $14,152
Other reserves 9,229 9,015
------------
(1) Cost of product for warranty replacements, net of salvage and
amounts collected from customers.
All other schedules are omitted because the information is not
required or because the information required is included in the
financial statements or notes thereto.
3. Exhibits
The following exhibits are filed as part of this annual report:
3.1 Articles of Incorporation of AutoZone, Inc. Incorporated by
reference to Exhibit 3.1 to the Form 10-K dated November 22, 1994.
3.2 Amendment to Articles of Incorporation of AutoZone, Inc. dated
December 16, 1993, to increase its authorized shares of common
stock to 200,000,000. Incorporated by reference to Exhibit 3.2 to
the Form 10-K dated November 22, 1994.
3.3 By-laws of AutoZone, Inc. Incorporated by reference to Exhibit 3.2
to the February 1992 Form S-1.
4.1 Form of Common Stock Certificate. Incorporated by reference to
Exhibit 4.1 to
12
Pre-Effective Amendment No. 2 to the February 1992 Form S-1.
4.2 Registration Rights Agreement, dated as of February 18, 1987, by
and among Auto Shack, Inc. and certain stockholders. Incorporated
by reference to Exhibit 4.9 to the Form S-1 Registration Statement
filed by the Company under the Securities Act (No. 33-39197) (the
"April 1991 Form S-1").
4.3 Amendment to Registration Rights Agreement dated as of August 1,
1993. Incorporated by reference to Exhibit 4.1 to the Form S-3
Registration Statement filed by the Company under the Securities
Act (No. 33-67550).
10.1 Amended and Restated Stock Option Plan of AutoZone, Inc., as amended
on February 26, 1991. Incorporated by reference to Exhibit 10.4 to
the April 1991 Form S-1.
10.2 Amendment No. 1 dated December 18, 1992, to the Amended and Restated
Stock Option Agreement. Incorporated by reference to Exhibit 10.5
to the Form 10-K for the fiscal year ended August 28, 1993.
10.3 Form of Non-Qualified Stock Option Agreement between AutoZone and
certain employees of AutoZone. Incorporated by reference to Exhibit
10.5 to the April 1991 Form S-1.
10.4 Form of Non-Qualified Stock Option Agreement dated as of February
11, 1987, between Auto Shack, Inc. and certain of its employees.
Incorporated by reference to Exhibit 10.6 to the April 1991 Form
S-1.
11.1 Computation of Earnings Per Common Share Equivalents.
13.1 Annual Report to stockholders for fiscal year ended August 31, 1996.
21.1 Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young LLP.
27.1 Financial Data Schedule.
(b) The Company did not file a Form 8-K during the last quarter of the
fiscal year ended August 31, 1996.
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
AUTOZONE, INC.
By: /s/ J.R. Hyde, III November 27, 1996
---------------------------------------------------
J.R. Hyde, III
Chairman, Chief Executive Officer and Director
Pursuant to the requirement of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on
the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ J. R. Hyde, III Chairman, Chief Executive Officer November 27, 1996
- ------------------------------------- and Director (Principal Executive Officer)
(J.R. Hyde, III)
/s/ J. C. Adams, Jr. Vice Chairman, Chief Operating November 27, 1996
- ------------------------------------- Officer and Director
(J. C. Adams, Jr.)
/s/ Timothy D. Vargo Vice Chairman and Director November 27, 1996
- -------------------------------------
(Timothy D. Vargo)
/s/ Thomas S. Hanemann President and Director November 27, 1996
- -------------------------------------
(Thomas S. Hanemann)
/s/ Andrew M. Clarkson Director and Chairman of the November 27, 1996
- ------------------------------------- Finance Committee
(Andrew M. Clarkson)
/s/ Robert J. Hunt Executive Vice President and November 27, 1996
- ------------------------------------- Chief Financial Officer
(Robert J. Hunt) (Principal Financial Officer)
/s/ Michael E. Butterick Vice President and Controller November 27, 1996
- ------------------------------------ (Principal Accounting Officer)
(Michael E. Butterick)
/s/ N. Gerry House Director November 27, 1996
- ------------------------------------
(N. Gerry House)
/s/ Ronald A. Terry Director November 27, 1996
- ------------------------------------
(Ronald A. Terry)
Director
- ------------------------------------
(James F. Keegan)
Director
- ------------------------------------
(Henry R. Kravis)
/s/ Robert I. MacDonnell Director November 27, 1996
- ------------------------------------
(Robert I. MacDonnell)
14
/s/ Michael W. Michelson Director November 27, 1996
- ------------------------------------
(Michael W. Michelson)
/s/ John E. Moll Director November 27, 1996
- ------------------------------------
(John E. Moll)
/s/ George R. Roberts Director November 27, 1996
- ------------------------------------
(George R. Roberts)