Advance Auto Parts earnings per diluted share for the third quarter ended October 5, 2002 rose 45.3% to $US0.77 after integration expenses and an extraordinary item.

Year-to-date earnings per diluted share, after integration expense and the extraordinary item, rose 35.3% to $1.57.

The company incurred pre-tax integration expenses related to the Discount Auto Parts acquisition of $8.2 million during the third quarter and $26.4 million during the first three fiscal quarters. The company anticipates its total integration expenses to be approximately $3 million lower than originally announced at approximately $37 million for 2002.

During the quarter, the company recorded an after-tax extraordinary loss of $0.3 million from the cancellation of debt including unamortised discounts and premiums paid to repurchase $3.5 million face value of its 10.25% senior subordinated notes.

Third quarter sales increased 31.7% to $788.7 million, compared to $598.8 million last year. Same store sales grew 5.5% for the third quarter compared to 7.1% in the comparable period last year. Discount Auto Parts stores, which are not yet in the reported comparable store base, produced a comparable store sales increase of 6.3% during the third quarter compared to 2.4% last year.

Year-to-date sales rose 33.6% to approximately $2.6 billion from $1.9 billion last year. Same store sales rose 6.2% year-to-date, compared to 6.5% last year. The majority of same store sales gains were generated from an increase in customers, with the remainder being achieved through an increase in transaction size.

Operating income, including integration expenses, increased 68.4% to $62.5 million, producing an increase in operating margin to 7.9%.

Year-to-date operating income, including integration expenses, rose 69.2% to $168.1 million, taking operating margin to 6.5%.

Net income, including integration expenses and the extraordinary item, increased 86.2% to $28.3 million.

Year-to-date net income, including integration expense and the extraordinary item, increased 69.7% to $56.4 million.

The company generated $22.3 million in free cash flow in the third quarter and $166.9 million during the first-three quarters and anticipates generating $100 to $110 million in free cash flow in 2002.

Advance Auto Parts confirmed its earnings per diluted share guidance of $0.38 to $0.42 per share, before integration expenses and extraordinary items, for the fourth quarter of 2002 and, for fiscal 2003, believes it can achieve a 25% increase in earnings per diluted share.

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