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| 8-K - ADVANCE AUTO PARTS INC | a8k_q4x2011.htm |
Exhibit 99.1
ADVANCE AUTO PARTS REPORTS FOURTH QUARTER FISCAL 2011
DILUTED EPS INCREASE OF 57.9% TO $0.90 AND RECORD ANNUAL
FREE CASH FLOW OF $507 MILLION
ROANOKE, Va, February 16, 2012 - Advance Auto Parts, Inc. (NYSE: AAP), a leading retailer of automotive aftermarket parts, accessories, batteries, and maintenance items, today announced its financial results for its fourth quarter and fiscal year ended December 31, 2011.
Fourth quarter comparable earnings per diluted share (EPS) were $0.90 which was a 57.9% increase over the fourth quarter of fiscal 2010. For fiscal 2011, EPS increased 29.4% to $5.11 on top of a 31.7% increase in EPS during fiscal 2010.
Fourth Quarter Performance Summary | ||||||||||||||||
Twelve Weeks Ended | Fifty-Two Weeks Ended | |||||||||||||||
December 31, 2011 | January 1, 2011 | December 31, 2011 | January 1, 2011 | |||||||||||||
Sales (in millions) | $ | 1,327.6 | $ | 1,270.1 | $ | 6,170.5 | $ | 5,925.2 | ||||||||
Comp Store Sales % | 2.9 | % | 8.9 | % | 2.2 | % | 8.0 | % | ||||||||
Gross Profit % | 49.0 | % | 49.4 | % | 49.7 | % | 50.0 | % | ||||||||
SG&A % | 40.6 | % | 42.8 | % | 39.0 | % | 40.1 | % | ||||||||
Operating Income % | 8.4 | % | 6.6 | % | 10.8 | % | 9.9 | % | ||||||||
Diluted EPS | $ | 0.90 | $ | 0.57 | $ | 5.11 | $ | 3.95 | ||||||||
Avg Diluted Shares (in thousands) | 73,807 | 84,494 | 77,071 | 87,155 | ||||||||||||
“I would like to thank our 52,000 Team Members for their hard work and congratulate them on their outstanding performance in the fourth quarter and for the 2011 fiscal year. Our team's conviction and commitment helped build momentum throughout the year, which resulted in a very strong finish to another great year,” said Darren R. Jackson, President and Chief Executive Officer. “Once again, our team reached many record strategic and financial milestones in 2011 including sales of over $6 billion, continued improvement in customer satisfaction, and record profitability, free cash flow and returns on invested capital. Based on our Team's focus on execution combined with strong industry fundamentals, we expect 2012 will be another successful year.”
Fourth Quarter and Fiscal 2011 Highlights
Total sales for the fourth quarter increased 4.5% to $1.33 billion, compared with total sales of $1.27 billion during the fourth quarter of fiscal 2010. The 4.5% sales increase reflects the net addition of 99 new stores during the past 12 months and a comparable store sales gain of 2.9% compared to an 8.9% comparable store sales gain during the fourth quarter of fiscal 2010. Fiscal 2011 comparable store sales increased 2.2% on top of an 8.0% increase in fiscal 2010.
The Company's gross profit rate was 49.0% of sales during the fourth quarter as compared to 49.4% during the fourth quarter of fiscal 2010. The 39 basis-point decline in the gross profit rate was driven by increased supply chain expenses due to investments in hub stores and increased shrink expense. For fiscal 2011, the Company's gross profit rate was 49.7%, or a 24 basis-point decline from fiscal 2010.
The Company's SG&A rate was 40.6% of sales during the fourth quarter as compared to 42.8% during the same period in fiscal 2010. This 221 basis-point decrease was driven by productivity improvements from the Company's variable customer-driven labor model which includes the anniversary of investment rollout expenses, reduced incentive compensation as a result of the Company's lower comparable sales growth versus the fourth quarter of 2010, occupancy cost leverage and a significant decrease in overall administrative costs. The expense reductions were partially offset by continued strategic
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investments in support of the Company's Service Leadership and Superior Availability strategies. For fiscal 2011, the Company's SG&A rate decreased 114 basis points to 39.0% versus 40.1% in fiscal 2010.
The Company's operating income increased 33.3% during the fourth quarter to $111.9 million as compared to the fourth quarter of fiscal 2010. The Company's operating income rate increased 182 basis points to 8.4% of sales. For the year, the Company's operating income rate increased 90 basis points to 10.8% as compared to fiscal 2010.
During fiscal 2011, the Company generated $828.8 million in operating cash flow and a record $507.2 million of free cash flow. Free cash flow was driven by a significant decrease in inventory, net of payables, and strong growth in net income, partially offset by an increase in capital expenditures. Capital expenditures were $268.1 million for fiscal 2011 as compared to $199.6 million in fiscal 2010.
“As a direct result of our Team's ability to respond, adapt and provide outstanding service, our operating income rate increased to a record 10.8% of sales in fiscal 2011 and our diluted EPS increased 29.4% on top of a 31.7% EPS increase in 2010,” said Mike Norona, Executive Vice President and Chief Financial Officer.
Comparable Key Financial Metrics and Statistics (1) | ||||||||||||||||||||
Twelve Weeks Ended | Fifty-Two Weeks Ended | |||||||||||||||||||
December 31, 2011 | January 1, 2011 | FY 2011 | FY 2010 | FY 2009 | ||||||||||||||||
Sales Growth % | 4.5 | % | 11.1 | % | 4.1 | % | 9.5 | % | 7.1 | % | ||||||||||
Sales per Store | $ | 1,708 | $ | 1,697 | $ | 1,708 | $ | 1,697 | $ | 1,595 | ||||||||||
Operating Income per Store | $ | 184 | $ | 168 | $ | 184 | $ | 168 | $ | 142 | ||||||||||
Return on Invested Capital | 19.5 | % | 17.5 | % | 19.5 | % | 17.5 | % | 15.1 | % | ||||||||||
Gross Margin Return on Inventory | $ | 6.60 | $ | 5.05 | $ | 6.60 | $ | 5.05 | $ | 3.98 | ||||||||||
Total Store Square Footage, end of period | 26,663 | 25,950 | 26,663 | 25,950 | 24,973 | |||||||||||||||
Total Team Members, end of period | 52,002 | 51,017 | 52,002 | 51,017 | 48,771 | |||||||||||||||
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(1) | In thousands except for gross margin return on inventory and total Team Members. The financial metrics have been reported on a comparable basis to exclude the impact of store divestiture expenses in fiscal 2009. The financial metrics presented are calculated on an annual basis and accordingly reflect the last four quarters completed, except for Sales Growth % and where noted. Refer to the presentation of the financial metrics on a GAAP basis, definitions of the financial metrics and reconciliation of the financial results reported on a comparable basis to the GAAP basis in the accompanying financial statements in this press release. |
Store Information
During the fourth quarter, the Company opened 19 stores, closed one Advance store and one Autopart International store. For fiscal 2011, the Company opened 104 stores, including 9 Autopart International stores, and closed 4 Advance stores and one Autopart International store. As of December 31, 2011, the Company's total store count was 3,662 including 202 Autopart International stores.
Share Repurchases
During fiscal 2011, the Company repurchased 9.9 million shares of its common stock at an aggregate cost of $609.7 million, or an average price of $61.51 per share. At the end of the fourth quarter, the Company had $200.0 million remaining under the $300.0 million share repurchase authorization approved by the Board of Directors in August 2011.
2012 Annual Financial Outlook
The Company has provided the following annual financial outlook and certain key assumptions for fiscal 2012.
Fiscal 2012 Annual Financial Outlook Key Assumptions
New Stores | 120 - 140 (110 - 120 Advance Auto Parts stores, 10 - 20 Autopart International stores) |
Comparable Store Sales | Low to mid-single digits |
EPS | $5.55 - $5.75 |
Capital Expenditures | $275 million - $300 million |
Diluted Share Count | Approximately 74 million shares |
Free Cash Flow | Minimum of $400 million |
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In fiscal 2012, the Company anticipates low to mid-single digit increase in comparable store sales driven by continued strong Commercial sales growth. The Company expects a modest increase in gross profit rate. The Company expects its rate of growth in SG&A dollars per store to increase low-single digits. The Company estimates an EPS range of approximately $5.55 to $5.75 for fiscal 2012, which assumes an average diluted share count of approximately 74 million shares.
“We believe 2012 will be another strong year based on the solid industry fundamentals, previous strategic and capability investments coupled with improving service levels. As a result, our Company is positioned to grow our comp store sales, expand our operating income rate and generate double-digit EPS growth for our fifth consecutive year,” said Mike Norona, Executive Vice President and Chief Financial Officer. “Our pursuit of increased growth and profitability requires a relentless focus on service, operational excellence and continued investments in the areas of Service Leadership and Superior Availability as we progress towards our goal of a 12% operating income.”
Dividend
On February 13, 2012, the Company's Board of Directors declared a regular quarterly cash dividend of $0.06 per share to be paid on April 6, 2012 to stockholders of record as March 23, 2012.
Investor Conference Call
The Company will host a conference call on Thursday, February 16, 2012 at 10:00 a.m. Eastern Standard Time to discuss its quarterly results. To listen to the live call, please log on to the Company's website, www.AdvanceAutoParts.com, or dial (866) 908-1AAP. The call will be archived on the Company's website until February 16, 2013.
About Advance Auto Parts
Headquartered in Roanoke, Va., Advance Auto Parts, Inc., a leading automotive aftermarket retailer of parts, accessories, batteries, and maintenance items in the United States, serves both the do-it-yourself and professional installer markets. As of December
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31, 2011, the Company operated 3,662 stores in 39 states, Puerto Rico, and the Virgin Islands. Additional information about the Company, employment opportunities, customer services, and online shopping for parts and accessories can be found on the Company's website at www.AdvanceAutoParts.com.
Certain statements contained in this release are forward-looking statements, as that statement is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address future events or developments, and typically use words such as believe, anticipate, expect, intend, plan, forecast, outlook or estimate. These statements discuss, among other things, expected growth and future performance, including store growth, capital expenditures, comparable store sales, SG&A, operating income, gross profit rate, free cash flow, profitability and earnings per diluted share for fiscal year 2012. These forward-looking statements are subject to risks, uncertainties and assumptions including, but not limited to, competitive pressures, demand for the Company's products, the market for auto parts, the economy in general, inflation, consumer debt levels, the weather, business interruptions, acts of terrorism, availability of suitable real estate, dependence on foreign suppliers and other factors disclosed in the Company's 10-K for the fiscal year ended January 1, 2011 on file with the Securities and Exchange Commission. Actual results may differ materially from anticipated results described in these forward-looking statements. The Company intends these forward-looking statements to speak only as of the time of this news release and does not undertake to update or revise them as more information becomes available.
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Advance Auto Parts, Inc. and Subsidiaries | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(in thousands) | ||||||||||
(unaudited) | ||||||||||
December 31, 2011 | January 1, 2011 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 57,901 | $ | 59,209 | ||||||
Receivables, net | 140,007 | 124,227 | ||||||||
Inventories, net | 2,043,158 | 1,863,870 | ||||||||
Other current assets | 52,754 | 76,965 | ||||||||
Total current assets | 2,293,820 | 2,124,271 | ||||||||
Property and equipment, net | 1,223,099 | 1,143,170 | ||||||||
Assets held for sale | 615 | 1,472 | ||||||||
Goodwill | 76,389 | 34,387 | ||||||||
Intangible assets, net | 31,380 | 25,360 | ||||||||
Other assets, net | 30,451 | 25,557 | ||||||||
$ | 3,655,754 | $ | 3,354,217 | |||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities: | ||||||||||
Current portion of long-term debt | $ | 848 | $ | 973 | ||||||
Financed vendor accounts payable | — | 31,648 | ||||||||
Accounts payable | 1,653,183 | 1,292,113 | ||||||||
Accrued expenses (a) | 385,746 | 404,086 | ||||||||
Other current liabilities (a) | 148,098 | 119,229 | ||||||||
Total current liabilities | 2,187,875 | 1,848,049 | ||||||||
Long-term debt | 415,136 | 300,851 | ||||||||
Other long-term liabilities (a) | 204,829 | 165,943 | ||||||||
Total stockholders' equity | 847,914 | 1,039,374 | ||||||||
$ | 3,655,754 | $ | 3,354,217 | |||||||
(a) | Effective January 1, 2011, the Company reclassified $50.3 million of its self-insurance liability from Accrued expenses to Other long-term liabilities because the timing of future payments had become predictable based on historical patterns. Due to the maturity of the program, the Company can now rely upon these historical patterns in determining the current portion of these liabilities. This reclassification was partially offset by the related income tax impact. |
NOTE: These preliminary condensed consolidated balance sheets have been prepared on a basis consistent with our previously prepared balance sheets filed with the Securities and Exchange Commission for our prior quarter and annual report, but do not include the footnotes required by generally accepted accounting principles, or GAAP, for complete financial statements. | |
Advance Auto Parts, Inc. and Subsidiaries | ||||||||||
Condensed Consolidated Statements of Operations | ||||||||||
Twelve Week Periods Ended | ||||||||||
December 31, 2011 and January 1, 2011 | ||||||||||
(in thousands, except per share data) | ||||||||||
(unaudited) | ||||||||||
December 31, 2011 | January 1, 2011 | |||||||||
Net sales | $ | 1,327,572 | $ | 1,270,130 | ||||||
Cost of sales, including purchasing and warehousing costs | 676,834 | 642,645 | ||||||||
Gross profit | 650,738 | 627,485 | ||||||||
Selling, general and administrative expenses | 538,820 | 543,548 | ||||||||
Operating income | 111,918 | 83,937 | ||||||||
Other, net: | ||||||||||
Interest expense | (5,073 | ) | (6,727 | ) | ||||||
Other income, net | 314 | 454 | ||||||||
Total other, net | (4,759 | ) | (6,273 | ) | ||||||
Income before provision for income taxes | 107,159 | 77,664 | ||||||||
Provision for income taxes | 40,720 | 29,551 | ||||||||
Net income | $ | 66,439 | $ | 48,113 | ||||||
Basic earnings per share (a) | $ | 0.92 | $ | 0.58 | ||||||
Diluted earnings per share (a) | $ | 0.90 | $ | 0.57 | ||||||
Average common shares outstanding (a) | 72,394 | 82,983 | ||||||||
Average common shares outstanding - assuming dilution (a) | 73,807 | 84,494 | ||||||||
(a) | Average common shares outstanding is calculated based on the weighted average number of shares outstanding during the quarter. At December 31, 2011 and January 1, 2011, we had 72,799 and 81,956 shares outstanding, respectively. |
NOTE: These preliminary condensed consolidated statements of operations have been prepared on a basis consistent with our previously prepared statements of operations filed with the Securities and Exchange Commission for our prior quarter and annual report, but do not include the footnotes required by GAAP for complete financial statements. | |
Advance Auto Parts, Inc. and Subsidiaries | ||||||||||
Condensed Consolidated Statements of Operations | ||||||||||
Fifty-Two Week Periods Ended | ||||||||||
December 31, 2011 and January 1, 2011 | ||||||||||
(in thousands, except per share data) | ||||||||||
(unaudited) | ||||||||||
December 31, 2011 | January 1, 2011 | |||||||||
Net sales | $ | 6,170,462 | $ | 5,925,203 | ||||||
Cost of sales, including purchasing and warehousing costs | 3,101,172 | 2,963,888 | ||||||||
Gross profit | 3,069,290 | 2,961,315 | ||||||||
Selling, general and administrative expenses | 2,404,648 | 2,376,382 | ||||||||
Operating income | 664,642 | 584,933 | ||||||||
Other, net: | ||||||||||
Interest expense | (30,949 | ) | (26,861 | ) | ||||||
Other expense, net | (457 | ) | (1,017 | ) | ||||||
Total other, net | (31,406 | ) | (27,878 | ) | ||||||
Income before provision for income taxes | 633,236 | 557,055 | ||||||||
Provision for income taxes | 238,554 | 211,002 | ||||||||
Net income | $ | 394,682 | $ | 346,053 | ||||||
Basic earnings per share (a) | $ | 5.21 | $ | 4.00 | ||||||
Diluted earnings per share (a) | $ | 5.11 | $ | 3.95 | ||||||
Average common shares outstanding (a) | 75,620 | 86,082 | ||||||||
Average common shares outstanding - assuming dilution (a) | 77,071 | 87,155 | ||||||||
(a) | Average common shares outstanding is calculated based on the weighted average number of shares outstanding during the year-to-date period. At December 31, 2011 and January 1, 2011, we had 72,799 and 81,956 shares outstanding, respectively. |
NOTE: These preliminary condensed consolidated statements of operations have been prepared on a basis consistent with our previously prepared statements of operations filed with the Securities and Exchange Commission for our prior quarter and annual report, but do not include the footnotes required by GAAP for complete financial statements. | |
Advance Auto Parts, Inc. and Subsidiaries | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
Fifty-Two Week Periods Ended | ||||||||
December 31, 2011 and January 1, 2011 | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
December 31, 2011 | January 1, 2011 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 394,682 | $ | 346,053 | ||||
Depreciation and amortization | 175,949 | 164,437 | ||||||
Share-based compensation | 19,553 | 22,311 | ||||||
Provision for deferred income taxes | 53,037 | 40,503 | ||||||
Excess tax benefit from share-based compensation | (9,663 | ) | (7,260 | ) | ||||
Other non-cash adjustments to net income | 6,326 | 7,640 | ||||||
(Increase) decrease in: | ||||||||
Receivables, net | (15,372 | ) | (31,667 | ) | ||||
Inventories, net | (179,288 | ) | (232,003 | ) | ||||
Other assets | 23,073 | (13,105 | ) | |||||
Increase (decrease) in: | ||||||||
Accounts payable | 360,678 | 325,839 | ||||||
Accrued expenses | (15,901 | ) | 38,715 | |||||
Other liabilities | 15,775 | 4,696 | ||||||
Net cash provided by operating activities | 828,849 | 666,159 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (268,129 | ) | (199,585 | ) | ||||
Business acquisitions, net of cash acquired | (23,133 | ) | — | |||||
Proceeds from sales of property and equipment | 1,288 | 235 | ||||||
Net cash used in investing activities | (289,974 | ) | (199,350 | ) | ||||
Cash flows from financing activities: | ||||||||
Increase in bank overdrafts | 6,625 | 28 | ||||||
Decrease in financed vendor accounts payable | (31,648 | ) | (444 | ) | ||||
Net borrowings (payments) on credit facilities | 115,000 | — | ||||||
Issuance of senior unsecured notes | — | 298,761 | ||||||
Early extinguishment of debt | — | (200,000 | ) | |||||
Payment of debt related costs | (3,656 | ) | (4,572 | ) | ||||
Dividends paid | (18,554 | ) | (21,051 | ) | ||||
Proceeds from the issuance of common stock, primarily exercise of stock options | 14,474 | 36,113 | ||||||
Excess tax benefit from share-based compensation | 9,663 | 7,260 | ||||||
Repurchase of common stock | (631,149 | ) | (622,442 | ) | ||||
Other | (938 | ) | (1,271 | ) | ||||
Net cash used in financing activities | (540,183 | ) | (507,618 | ) | ||||
Net decrease in cash and cash equivalents | (1,308 | ) | (40,809 | ) | ||||
Cash and cash equivalents, beginning of period | 59,209 | 100,018 | ||||||
Cash and cash equivalents, end of period | $ | 57,901 | $ | 59,209 | ||||
NOTE: These preliminary condensed consolidated statements of cash flows have been prepared on a consistent basis with previously prepared statements of cash flows filed with the Securities and Exchange Commission for our prior quarter and annual report, but do not include the footnotes required by GAAP for complete financial statements. | ||||||||
Advance Auto Parts, Inc. and Subsidiaries | |||||||||||||
Supplemental Financial Schedules | |||||||||||||
Fifty-Two Week Periods Ended | |||||||||||||
December 31, 2011 and January 1, 2011 | |||||||||||||
(in thousands, except per share data) | |||||||||||||
(unaudited) | |||||||||||||
Reconciliation of Free Cash Flow: | |||||||||||||
December 31, 2011 | January 1, 2011 | ||||||||||||
Cash flows from operating activities | $ | 828,849 | $ | 666,159 | |||||||||
Cash flows used in investing activities | (289,974 | ) | (199,350 | ) | |||||||||
538,875 | 466,809 | ||||||||||||
Decrease in financed vendor accounts payable | (31,648 | ) | (444 | ) | |||||||||
Free cash flow | $ | 507,227 | $ | 466,365 | |||||||||
Note: Management uses free cash flow as a measure of our liquidity and believes it is a useful indicator to stockholders of our ability to implement our growth strategies and service our debt. Free cash flow is a non-GAAP measure and should be considered in addition to, but not as a substitute for, information contained in our condensed consolidated statement of cash flows. | |||||||||||||
Key Financial Metrics and Statistics(1): | ||||||||||||||||||||
Twelve Weeks Ended | ||||||||||||||||||||
December 31, 2011 | January 1, 2011 | FY 2011 | FY 2010 | FY 2009 | ||||||||||||||||
Sales Growth % | 4.5 | % | 11.1 | % | 4.1 | % | 9.5 | % | 5.3 | % | ||||||||||
Sales per Store (2)(3) | $ | 1,708 | $ | 1,697 | $ | 1,708 | $ | 1,697 | $ | 1,595 | ||||||||||
Operating Income per Store (2)(4) | $ | 184 | $ | 168 | $ | 184 | $ | 168 | $ | 134 | ||||||||||
Return on Invested Capital (2)(5) | 19.5 | % | 17.5 | % | 19.5 | % | 17.5 | % | 14.6 | % | ||||||||||
Gross Margin Return on Inventory (2)(6) | $ | 6.60 | $ | 5.05 | $ | 6.60 | $ | 5.05 | $ | 3.98 | ||||||||||
Total Store Square Footage, end of period | 26,663 | 25,950 | 26,663 | 25,950 | 24,973 | |||||||||||||||
Total Team Members, end of period | 52,002 | 51,017 | 52,002 | 51,017 | 48,771 | |||||||||||||||
(1) | In thousands except for gross margin return on inventory and total Team Members. These financial metrics have been reported on a GAAP basis which include the impact of store divestiture expenses in fiscal 2009. These financial metrics should be read in conjunction with our financial metrics presented on a comparable basis earlier in this press release. Refer to the “Selected Consolidated Data” on page 18 of our 2010 Form 10-K for further explanation of these items. |
(2) | The financial metrics presented are calculated on an annual basis and accordingly reflect the last four quarters completed. |
(3) | Sales per store is calculated as net sales divided by an average of beginning and ending store count. |
(4) | Operating income per store is calculated as operating income divided by an average of beginning and ending store count. |
(5) | Return on invested capital (ROIC) is calculated in detail in these supplemental financial schedules. |
(6) | Gross margin return on inventory is calculated as gross profit divided by an average of beginning and ending inventory, net of accounts payable and financed vendor accounts payable. |
Detail of Return on Invested Capital (ROIC) Calculation: | ||||||||
Last Four Quarters Ended | ||||||||
December 31, 2011 | January 1, 2011 | |||||||
Net income | $ | 394,682 | $ | 346,053 | ||||
Add: | ||||||||
After-tax interest expense and other, net | 19,575 | 17,318 | ||||||
After-tax rent expense | 194,755 | 187,407 | ||||||
After-Tax Operating Earnings | 609,012 | 550,778 | ||||||
Average assets (less cash) | 3,446,432 | 3,133,977 | ||||||
Less: Average liabilities (excluding total debt) | (2,202,439 | ) | (1,799,674 | ) | ||||
Add: Capitalized lease obligation (rent expense * 6) (a) | 1,874,814 | 1,810,056 | ||||||
Total Invested Capital | 3,118,807 | 3,144,359 | ||||||
ROIC | 19.5 | % | 17.5 | % | ||||
Rent expense | $ | 312,469 | $ | 301,676 | ||||
Interest expense and other, net | $ | 31,406 | $ | 27,877 | ||||
(a) | Capitalized lease obligation is estimated as annualized rent expense for the applicable period times six years. |
Note: Management uses ROIC to evaluate return on investments to the business and believes it is a useful indicator to stockholders given the future investments the Company plans to make in areas including information technology, supply chain and stores. ROIC is a non-GAAP measure and should be considered in addition to, but not as a substitute for, information contained in our condensed consolidated financial statements. Management believes our comparable results of operations are a useful indicator to stockholders for consistency purposes.