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By Counterman
Over the past couple of months, MEMA has been building on momentum to try and get the REPAIR Act passed the organization said. Now, it’s announcing the next step in a campaign called the “At Home REPAIR Campaign,” asking aftermarket suppliers to get involved.
“Members of Congress will be back at home frequently in April, May, June, and July. These recesses provide the perfect opportunities to meet with legislators and urge them, face-to-face, to pass the REPAIR Act in 2024,” MEMA said.
MEMA’s goal: Suppliers schedule in-person legislator meetings and facility visits during these recesses to advance the REPAIR Act.
This is after MEMA Aftermarket Suppliers completed their Washington D.C. fly-in to try and build momentum behind the REPAIR Act, also known as H.R. 906.
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By Advance Auto Parts
Advance Auto Parts Appoints Three New Independent Directors
03/11/2024 Enters into Cooperation Agreement with Third Point LLC and Saddle Point Management L.P.
RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America that serves both professional installer and do-it-yourself customers, today announced that it has appointed A. Brent Windom, Gregory L. Smith and Thomas W. Seboldt as independent directors to the Advance Auto Parts board, effective immediately. In connection with these appointments, the company has entered into a cooperation agreement with Third Point LLC (together with its affiliates, “Third Point”) and Saddle Point Management, L.P. (together with its affiliates, “Saddle Point”).
“We are pleased to welcome Brent, Greg and Tom to the Advance Auto Parts board,” said Gene Lee, independent chair of the board of directors. “These directors’ automotive industry and supply chain experience will help us progress in our plan to return the company to profitable growth. With new management in place, important strategic actions underway, and an enhanced board, we are confident that Advance is on the right path to create significant long-term value for shareholders.”
“At Advance, our board prioritizes ongoing refreshment to help ensure we have the right expertise and experience to oversee our strategy while profitably growing our business,” said Shane O'Kelly, president and chief executive officer. “As we continue our operational initiatives focusing on the fundamentals, improving our competitive position, and serving our customers better than anyone else, including through the consolidation of our supply chain to a single unified network, we look forward to benefiting from our new directors’ extensive industry relationships and experience.”
“These three directors bring essential operational experience and industry expertise to support Shane as he executes on an ambitious agenda,” said Daniel S. Loeb, chief executive officer of Third Point. “With fresh perspectives in the C-suite and board room and a long runway for growth, we believe Advance is well positioned to create meaningful value for shareholders.”
“Advance has enormous potential to deliver better results for customers, suppliers, team members, and shareholders. The company's collaborative and focused approach is a key enabling factor for success," said Roy J. Katzovicz, chief executive officer of Saddle Point Management, L.P.
The full cooperation agreement, which contains customary standstill, voting and other provisions, will be filed by the company with the U.S. Securities and Exchange Commission as an exhibit to a Current Report on Form 8-K. Additionally, Legion Partners Holdings, LLC (together with its affiliates, “Legion”), another Advance Auto Parts shareholder, has indicated its support for the additions of Mr. Windom, Mr. Smith and Mr. Seboldt to the company’s board of directors.
With the appointments announced today, the company’s board will temporarily expand to 12 directors. At the 2024 annual meeting scheduled for May 22, 2024, 11 director nominees are expected to stand for election to the Advance Auto Parts board, including the three newly appointed directors.
Advisors
Centerview Partners LLC is acting as financial advisor to Advance Auto Parts and Hogan Lovells US LLP is acting as legal counsel. Willkie Farr & Gallagher LLP is acting as legal counsel to Third Point and Saddle Point, and Proskauer Rose LLP is acting as legal counsel to Saddle Point.
About A. Brent Windom
Brent Windom, 63, is an experienced automotive industry executive, having spent nearly four decades working in roles across the sector. Most recently, Mr. Windom served as President and Chief Executive Officer of Uni-Select Inc., a leading automotive refinish, industrial coatings and automotive aftermarket parts distributor. Previously, Mr. Windom was President and COO of Canadian Automotive Group from July 2017 to May 2019, as well as president and Chief Executive Officer of Auto Plus ǀ Pep Boys, which was formed following Icahn Enterprises L.P.’s acquisition of Uni-Select USA, Inc. and Beck/Arnley Worldparts, Inc. Prior to joining IEH Auto Parts, Mr. Windom spent 10 years with Uni-Select, where he held positions of increasing responsibility including President and Chief Operating Officer, Uni-Select USA.
About Gregory L. Smith
Gregory L. Smith, 60, is a proven supply chain expert with nearly 30 years of experience across a variety of industries. Mr. Smith currently serves as Executive Vice President, Global Operation and Supply Chain of Medtronic plc. Prior to joining Medtronic in 2021, Mr. Smith was Executive Vice President, Supply Chain of Walmart Inc. from 2017 to 2021 and Senior Vice President, Global Operations of The Goodyear Tire and Rubber Company from 2011 to 2016. Earlier in his career, Mr. Smith spent a decade with Conagra Foods, Inc., where he served in several leadership positions, including Executive Vice President, Supply Chain. He previously held roles with United Signature Foods LLC and Aurora Foods Inc.
About Thomas W. Seboldt
Thomas W. Seboldt, 57, is a seasoned automotive executive with over three decades of industry experience. Mr. Seboldt spent the vast majority of his career with O’Reilly Automotive, Inc., where he held several titles of increasing responsibility, including Vice President, Merchandising. Mr. Seboldt has also served on the Board of prominent industry associations including the California Automotive Wholesalers' Association (“CAWA”) and the Auto Care Association. During his tenure on the CAWA Board, Mr. Seboldt has served in a variety of positions, including as President, Vice President, Executive Committee member and Treasurer.
About Advance Auto Parts
Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of December 30, 2023, Advance operated 4,786 stores and 321 Worldpac branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 1,245 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at
link hidden, please login to view. Forward-Looking Statements
Certain statements herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identifiable by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “likely,” “may,” “plan,” “position,” “possible,” “potential,” “probable,” “project,” “should,” “strategy,” “will,” or similar language. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about our strategic initiatives, operational plans and objectives, corporate governance, board performance, director nominees at the 2024 annual meeting of stockholders, expectations for economic conditions, future business results and future financial performance, as well as statements regarding underlying assumptions related thereto. Forward-looking statements reflect our views based on historical results, current information and assumptions related to future developments. Except as may be required by law, the company undertakes no obligation to update any forward-looking statements made herein. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. They include, among others, factors related to the company’s leadership transition, the timing and implementation of our initiatives, our potential divestiture of Worldpac and the company's Canada business, our ability to hire, train and retain qualified employees, deterioration of general macroeconomic conditions, the highly competitive nature of our industry, demand for our products and services, complexities in our inventory and supply chain and challenges with transforming and growing our business. Please refer to “Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), as updated by our subsequent filings with the SEC, for a description of these and other risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements.
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By Advance Auto Parts
Advance Auto Parts Reports Fourth Quarter and Full Year 2023 Results
02/28/2024 RALEIGH, N.C.--(BUSINESS WIRE)-- Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America, that serves both professional installer and do-it-yourself customers, announced its financial results for the fourth quarter and full year ended December 30, 2023.
“As we closed out 2023, we continued to act with a sense of urgency to stabilize the business and position the company to return to profitable growth,” said Shane O'Kelly, president and chief executive officer. “Our full year results are well below our expectations, and we are focused on instilling greater discipline and accountability both in the fundamental business and in how the organization executes across the board. In addition to the operational improvements we are implementing, we are strengthening internal controls and enhancing the quality of our accounting information to help better inform how we drive the business forward.
“We continue to advance our ongoing operational and strategic review of the business, including the separate sales processes for Worldpac and our Canadian business. We have streamlined and reorganized the company’s leadership structure and have made several important new hires, including the appointments of Ryan Grimsland as Chief Financial Officer and Elizabeth Dreyer as Chief Accounting Officer. Building on the $150 million in annualized SG&A reductions our team executed in the fourth quarter, we recently launched an initiative to eliminate costs related to our indirect spend by an additional $50 million on an annualized basis. We are also moving forward with the consolidation of our supply chain to a single, unified network to create efficiencies and better serve customers. Looking ahead, we are committed to driving enhanced value for shareholders by executing on the fundamentals of our business – focusing on the customer, investing in our frontline and strengthening our competitive position.”
Fourth Quarter and Full Year 2023 Results (1)
Fourth quarter 2023 Net sales totaled $2.5 billion, a 0.4% decrease compared with the prior year. Comparable store sales for the fourth quarter 2023 decreased 1.4%. For full year 2023, Net sales of $11.3 billion increased 1.2% from 2022. Comparable store sales for the full year decreased 0.3%.
The company's Gross profit decreased 11.9% from the fourth quarter of the prior year to $950.8 million or 38.6% of Net sales compared with 43.6% in the prior year quarter. This result reflects both business performance and atypical drivers, primarily attributable to a change in inventory related items and elevated supply chain costs. The company's full year Gross profit was $4.5 billion, or 40.1% of Net sales, representing a 414 basis points decrease from the prior year primarily driven by inventory related items and costs not fully covered by pricing actions.
The company's SG&A was $999.4 million in the fourth quarter, or 40.6% of Net sales compared with 38.8% for the prior year quarter. This was primarily driven by a year over year increase in occupancy costs and store labor. The company's full year SG&A was $4.4 billion, or 39.1% of Net sales compared with 38.2% in the prior year.
The company's fourth quarter Operating loss was $48.6 million, or (2.0)% of Net sales compared with the fourth quarter of the prior year Operating income of $119.3 million or 4.8% of Net sales. The company's full year Operating income was $114.4 million, or 1.0% of Net sales, compared with $670.3 million, or 6.0% of Net sales, in the prior year.
The company's effective tax rate in the fourth quarter of 2023 was 42.3%. The company's Diluted loss per share was $0.59 compared with Diluted earnings per share of $1.39 in the fourth quarter of the prior year. The company's effective tax rate for full year 2023 was 6.6%. The company's 2023 Diluted earnings per share was $0.50 compared with $7.65 in the prior year.
Net cash provided by operating activities was $0.3 billion for the full year 2023 versus $0.7 billion for the prior year. The decrease was primarily driven by lower Net income and working capital. Free cash flow for the full year 2023 was $43.7 million, compared with $312.5 million for the prior year.
During management’s review, the company identified issues with certain previously reported financials. All comparisons are based on the corrected historical results as depicted in the financial tables herein, which include the correction of non-material errors in previously reported results.
The company filed a Form 12b-25 with the Securities and Exchange Commission and disclosed that it expects to file its Form 10-K prior to the expiration of the extension period.
(1) All comparisons are based on the same time period in the prior year. Comparable store sales include locations open for 13 complete accounting periods and excludes sales to independently owned Carquest locations.
Capital Allocation
On February 13, 2024, the company declared a regular cash dividend of $0.25 per share to be paid on April 26, 2024 to all common stockholders of record as of April 12, 2024.
Subsequent Events
On February 26, 2024, the company entered into an amendment to its revolving credit facility to enable certain addbacks to financial covenants for specific write-downs of inventory and vendor receivables. As of December 30, 2023, considering the amendment, the company was in compliance with the credit facility’s financial covenants.
Full Year 2024 Guidance (1)
"In 2024, we are refining our operational improvement plans and building on the decisive actions we have taken to turn around the company’s performance. We are committed to improving overall productivity and taking a disciplined approach to reducing expenses, which will support our focus on investing in our team members. Our 2024 full year guidance is reflective of the steps we must take to reset the business and solidify our foundation for the long term," said Ryan Grimsland, executive vice president and chief financial officer.
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By Counterman
Dayco is the newest member of the Kalitta Motorsports family of corporate partners, and Kalitta Motorsports is the newest distributor of Dayco belts, the team recently announced.
The 2024 NHRA Mission Foods Drag Racing Series begins March 8-10 at the Amalie Oil NHRA Gatornationals in Gainesville, Florida.
Through the new partnership, Dayco will have branding on J.R. Todd’s DHL GR Supra funny car, and Kalitta Motorsports is now the exclusive at-track distributor of Dayco 11-millimeter racing blower belts for nitro engines.
Dayco and Team Kalitta will work together to expand the available Dayco blower-belt offerings in the near future, they said.
The Dayco 11-millimeter blower belt is specially engineered for Top Fuel and Funny Cars with nitromethane engines. Featuring a hybrid carbon cord encapsulated in custom rubber compounds and patented low-friction PTFE tooth fabric, the belt offers one of the highest load ratings in racing and has helped numerous teams cross the finish line first, according to Dayco.
That success is due in large part to the Dayco team’s utilization of real-world track data to enhance its belt designs, the company added.
“We are excited to kick off this new partnership with Kalitta Motorsports for the 2024 season,” said Jay Buckley, director of marketing, Dayco North America. “Theirs is a phenomenal team, and we can’t wait to see how they perform with the Dayco 11 mm belt installed on their funny cars.”
“This new partnership is great news for Team Kalitta,” General Manager Chad Head said. “We are so happy to partner with a company that’s Detroit-based like we are. We strive to provide our race team with components that give our teams the best chance of reaching the finish line first. That’s really what drag racing is all about – running quicker and faster than the opponent, and we’re confident Dayco belts will make a positive impact on J.R. Todd’s DHL funny car. We look forward to a long relationship with Dayco that has potential to expand in the future.”
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By Counterman
new national survey by Atomik Research reveals 91% of American motorists say they’ve experienced a dead battery, but nearly two-thirds (65%) of motorists admit they don’t think about having their car battery checked until it’s too late.
To raise awareness of the importance of having a reliable car battery, Advance Auto Parts is giving away free DieHard batteries on National Battery Day, which is Sunday, Feb. 18.
Advance said it will surprise randomly selected customers with a free DieHard battery, including those getting their current battery tested, at participating stores nationwide.
As part of National Battery Day, Advance is partnering with Tampa Bay Buccaneers quarterback Baker Mayfield to encourage motorists to get their car batteries tested.
“Checking the performance of your car battery can prevent unfortunate and even unsafe events caused by dead batteries,” said Junior Word, Advance’s executive vice president, U.S. stores.
Additional data from the national Atomik survey commissioned by Advance in January underscores the need to remind motorists to get their car batteries checked:
Sixty-five percent of motorists say they’ve missed or been late to something due to a dead car battery; nearly 10% say they missed or were late to an important life event – such as a wedding, funeral or birth of a child. Only 2% of motorists indicate they’ve had their car battery checked before a cross-country road trip. Only 5% of motorists report having ever checked their car battery when there is a drop in temperature. The post
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