O'Reilly Automotive Reports Record Sales and Earnings for 3rd Quarter
SPRINGFIELD, Mo.--Oct. 22, 2002--O'Reilly Automotive, Inc. ("O'Reilly" or "the Company") today announced record revenues and earnings for the third quarter of 2002, representing 36 quarters of record revenues and earnings for O'Reilly since becoming a public company in April 1993.Net income for the third quarter ended September 30, 2002, totaled $24.1 million, up 19.6% from $20.1 million for the same period in 2001. Diluted earnings per common share for the third quarter of 2002 increased 18.4% to $0.45 on 53.7 million shares compared to $0.38 for the third quarter of 2001 on 53.2 million shares. Product sales for the three months ended September 30, 2002, totaled $359.6 million, up 22.3% from $294.0 million for the same period a year ago. Gross profit for the third quarter of 2002 increased to $152.2 million (or 42.3% of product sales) from $125.3 million (or 42.6% of product sales) for the third quarter of 2001, representing an increase of 21.5%.
Net income for the first nine months of 2002 totaled $63.3 million, up 25.5% from $50.4 million for the same period a year ago. Diluted earnings per common share for the first nine months of 2002 increased 22.9% to $1.18 on 53.7 million shares versus $0.96 a year ago on 52.6 million shares. Product sales for the first nine months of 2002 totaled $998.3 million, up 22.7% from $813.7 million in the first nine months of the previous year. Gross profit for the first nine months of 2002 increased to $422.4 million (or 42.3% of product sales) from $345.5 million (of 42.5% of product sales) for the first nine months of the prior year, representing an increase of 22.3%.
Comparable store product sales for stores open at least one year increased 3.23% and 3.26% for the third quarter and first nine months of 2002, respectively.
David O'Reilly, co-chairman and chief executive officer, stated: "We are pleased with the results this quarter highlighted by an operating margin of 11.3% and net margin of 6.7%. Our overall gross margin remains strong in spite of the .3% negative impact of the Mid-State independent jobber business. We continue to make good progress with the relocations and renovations of Mid-State stores while continuing to open new stores, including 29 this quarter. Our balance sheet is solid and positions us well for our continued expansion and our goal of reaching $2 billion in sales per year by 2005."
The Company will host a conference call Wednesday, October 23, 2002, at 10:00 a.m. central time to discuss its results as well as future expectations. The call will be available by webcast at www.oreillyauto.com, www.vcall.com or www.streetevents.com. Investors may listen to the conference call live on the Company Web site, www.oreillyauto.com, by clicking "Investor Information," then "Conference Calls." A replay will also be available on the Web site shortly after the call.
O'Reilly Automotive is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States, serving both the do-it-yourself and professional installer markets. Founded in 1957 by the O'Reilly family, the Company operated 958 stores within the states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Oklahoma, Tennessee and Texas as of September 30, 2002.
Certain statements contained in this press release are forward-looking statements. These statements discuss, among other things, expected growth, store development and expansion strategy, business strategies, future revenues and future performance. These forward-looking statements are based on estimates, projections, beliefs and assumptions and are not guarantees of future events and results. Such statements are subject to risks, uncertainties and assumptions, including, but not limited to, competition, product demand, the market for auto parts, the economy in general, inflation, consumer debt levels, governmental approvals, our ability to hire and retain qualified employees, risks associated with the integration of acquired businesses, weather, terrorist activities, war and the threat of war. Actual results may materially differ from anticipated results described in these forward-looking statements. Please refer to the Risk Factors sections of the company's Form 10-K for the year ended December 31, 2001, for more details.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2002 2001
---- ----
(Unaudited) (Note)
In thousands
Assets
Current assets:
Cash $ 31,881 $ 15,041
Short-term investments 500 500
Accounts receivable, net 50,133 41,486
Amounts receivable from vendors 40,832 38,440
Inventory 490,402 447,793
Refundable income taxes -- 168
Deferred income taxes 2,588 3,908
Other current assets 3,482 3,327
--------- ---------
Total current assets 619,818 550,663
Property and equipment, at cost 463,221 392,365
Accumulated depreciation and amortization 128,847 103,361
--------- ---------
Net property and equipment 334,374 289,004
Notes receivable 2,016 2,557
Other assets 18,755 14,635
--------- ---------
Total assets $ 974,963 $ 856,859
========= =========
Liabilities and shareholders' equity
Current liabilities:
Note payable to bank $ -- $ 5,000
Income taxes payable 10,746 --
Accounts payable 92,643 61,875
Accrued payroll 13,015 12,866
Accrued benefits and withholdings 23,639 14,038
Other current liabilities 25,513 15,514
Current portion of long-term debt 748 11,843
--------- ---------
Total current liabilities 166,304 121,136
Long-term debt, less current portion 160,619 165,618
Deferred income taxes 12,723 9,141
Other liabilities 5,178 4,673
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares - 90,000,000
Issued and outstanding shares -
53,295,765 at September
30, 2002, and 52,850,713
at December 31, 2001 533 528
Additional paid-in capital 267,353 256,795
Retained earnings 362,253 298,968
--------- ---------
Total shareholders' equity 630,139 556,291
--------- ---------
Total liabilities and
shareholders' equity $ 974,963 $ 856,859
========= =========
Note: The balance sheet at December 31, 2001, has been derived from
the audited financial statements at that date, but does not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
(In thousands, except per share data)
Product sales $ 359,579 $ 293,996 $ 998,249 $ 813,735
Cost of goods sold,
including warehouse and
distribution expenses 207,383 168,709 575,839 468,233
--------- --------- --------- ---------
Gross profit 152,196 125,287 422,410 345,502
Operating, selling,
general and administrative
expenses 111,473 91,145 315,280 258,870
--------- --------- --------- ---------
Operating income 40,723 34,142 107,130 86,632
Other expense, net (1,972) (1,764) (5,370) (5,362)
--------- --------- --------- ---------
Income before income taxes 38,751 32,378 101,760 81,270
Provision for income taxes 14,655 12,238 38,475 30,826
--------- --------- --------- ---------
Net income $ 24,096 $ 20,140 $ 63,285 $ 50,444
========= ========= ========= =========
Net income per
common share $ 0.45 $ 0.38 $ 1.19 $ 0.97
========= ========= ========= =========
Net income per common
share - assuming dilution $ 0.45 $ 0.38 $ 1.18 $ 0.96
========= ========= ========= =========
Weighted average common
shares outstanding 53,187 52,404 53,044 51,942
========= ========= ========= =========
Adjusted weighted average
common shares outstanding
- assuming dilution 53,715 53,205 53,675 52,563
========= ========= ========= =========
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)
Three Months Ended
September 30,
2002 2001
---- ----
Inventory turnover (1) 1.7 1.6
Inventory turnover, net of payables (2) 2.0 1.9
AP to Inventory 18.9% 12.6%
Debt-to-capital 20.4% 18.3%
Return on equity 13.6% 12.1%
Return on assets 9.1% 8.0%
Total employment 14,420 12,035
Miscellaneous (in thousands):
Capital Expenditures $ 27,266 $ 17,913
Depreciation & Amortization $ 9,692 $ 7,832
Interest Expense $ 2,402 $ 2,235
Lease & Rental Expense $ 8,027 $ 6,862
Store count:
New stores, net 29 32
Total stores 958 764
Square footage (in thousands):
O'Reilly 5,963 5,131
Mid-State 477 --
---------- ----------
Totals 6,440 5,131
Sales per weighted average square foot:
O'Reilly $ 58.22 $ 59.85
Mid-State $ 42.40 $ --
Consolidated $ 56.96 $ 59.85
Sales per weighted average store
(in thousands):
O'Reilly $ 394 $ 401
Mid-State $ 252 $ --
Consolidated $ 382 $ 401
(1) Inventory turnover is calculated as cost of sales for the last 12
months divided by the average of beginning and ending inventory.
(2) Inventory turnover, net of payables is calculated as cost of sales
divided by the average of beginning and ending inventory less
accounts payable.