O'Reilly Automotive Reports Fourth Quarter and Annual Earnings
SPRINGFIELD, Mo.--Feb. 25, 2003--O'Reilly Automotive, Inc. ("O'Reilly" or "the Company") today announced record revenues and earnings for the fourth quarter and year ended December 31, 2002, representing 10 consecutive years of record revenues and earnings for O'Reilly since becoming a public company in April 1993.Net income for the year ended December 31, 2002, totaled $82.0 million, up 23.6% from $66.4 million for the same period a year ago. Diluted earnings per common share for the year ended December 31, 2002, increased 21.4% to $1.53 on 53.7 million shares versus $1.26 a year ago on 52.8 million shares. Product sales for the year ended December 31, 2002, totaled $1.31 billion, up 20.2% from $1.09 billion for the year ending December 31, 2001. Gross profit for the year ended December 31, 2002, increased to $553.4 million (or 42.2% of product sales) from $467.8 million (of 42.8% of product sales) for the year ended December 31, 2001, representing an increase of 18.3%. Operating, selling, general and administrative ("OSG&A") expenses for the year ended December 31, 2002, increased to $415.1 million (or 31.6% of product sales) from $354.0 million (or 32.4% of product sales) for the year ended December 31, 2001, representing an increase of 17.3%.
Net income for the fourth quarter ended December 31, 2002, totaled $18.7 million, up 17.6% from $15.9 million for the same period in 2001. Diluted earnings per common share for the fourth quarter of 2002 increased 16.7% to $0.35 on 53.7 million shares compared to $0.30 for the fourth quarter of 2001 on 53.4 million shares. Product sales for the three months ended December 31, 2002, totaled $314.2 million, up 12.9% from $278.4 million for the same period a year ago. Gross profit for the fourth quarter of 2002 increased to $131.0 million (or 41.7% of product sales) from $122.3 million (or 43.9% of product sales) for the fourth quarter of 2001, representing an increase of 7.1%. OSG&A expenses for the fourth quarter of 2002 increased to $99.8 million (or 31.8% of product sales) from $95.1 million (or 34.2% of product sales) for the fourth quarter of 2001, representing an increase of 4.9%.
Comparable store product sales for stores open at least one year increased 5.2% and 3.7% for the fourth quarter and year ending December 31, 2002, respectively, representing 39 quarters of comparable store product sales increases since becoming a public company in April 1993.
David O'Reilly, co-chairman and chief executive officer, stated: "This was another solid year for Team O'Reilly especially considering a struggling economy. Our comparable store product sales this quarter improved two percentage points over the third quarter. We opened 23 new stores this quarter making a total of 106 new stores for the year. We will continue to focus on our planned expansion, including 130 new stores for 2003, supported by our strong balance sheet and financial flexibility."
The Company will host a conference call Wednesday, February 26, 2003, at 10:00 a.m. central time to discuss its results as well as future expectations. The call will be available by web cast 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 981 stores within the states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Oklahoma, Tennessee and Texas as of December 31, 2002.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2002 2001
------------ ------------
(Unaudited) (Note)
In thousands
Assets
Current assets:
Cash $29,333 $15,041
Short-term investments 502 500
Accounts receivable, net 45,421 41,486
Amounts receivable from vendors 42,918 38,440
Inventory 504,098 447,793
Refundable income taxes -- 168
Deferred income taxes 5,040 3,908
Other current assets 3,733 3,327
--------- ---------
Total current assets 631,045 550,663
Property and equipment, at cost 491,523 392,365
Accumulated depreciation and amortization 137,922 103,361
--------- ---------
Net property and equipment 353,601 289,004
Notes receivable 1,880 2,557
Other assets 22,893 14,635
--------- ---------
Total assets $1,009,419 $856,859
========= =========
Liabilities and shareholders' equity
Current liabilities:
Note payable to bank $ -- $5,000
Income taxes payable 9,798 --
Accounts payable 85,370 61,875
Accrued payroll 15,257 12,866
Accrued benefits and withholdings 19,165 14,038
Other current liabilities 17,150 15,514
Current portion of long-term debt 682 11,843
--------- ---------
Total current liabilities 147,422 121,136
Long-term debt, less current portion 190,470 165,618
Deferred income taxes 15,939 9,141
Other liabilities 5,064 4,673
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares -- 90,000,000
Issued and outstanding shares --
53,371,242 at December 31, 2002,
and 52,850,713 at December 31, 2001 534 528
Additional paid-in capital 269,030 256,795
Retained earnings 380,960 298,968
--------- ---------
Total shareholders' equity 650,524 556,291
--------- ---------
Total liabilities and shareholders' equity $1,009,419 $856,859
========= =========
Note: The balance sheet at December 31, 2001, has been derived from the audited consolidated 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 Twelve Months Ended
December 31, December 31,
------------------ -------------------
2002 2001 2002 2001
---- ---- ---- ----
(In thousands, except per share data)
Product sales $ 314,241 $ 278,377 $1,312,490 $1,092,112
Cost of goods sold,
including warehouse and
distribution expenses 183,251 156,061 759,090 624,294
-------- -------- -------- --------
Gross profit 130,990 122,316 553,400 467,818
Operating, selling, general
and administrative
expenses 99,819 95,117 415,099 353,987
-------- -------- -------- --------
Operating income 31,171 27,199 138,301 113,831
Other expense, net (1,949) (1,742) (7,319) (7,104)
-------- -------- -------- --------
Income before income taxes 29,222 25,457 130,982 106,727
Provision for income taxes 10,515 9,549 48,990 40,375
-------- -------- -------- --------
Net income $ 18,707 $ 15,908 $ 81,992 $ 66,352
======== ======== ======== ========
Net income per common
share $ 0.35 $ 0.30 $ 1.54 $ 1.27
======== ======== ======== ========
Net income per common
share -- assuming dilution $ 0.35 $ 0.30 $ 1.53 $ 1.26
======== ======== ======== ========
Weighted average common
shares outstanding 53,322 52,652 53,114 52,121
======== ======== ======== ========
Adjusted weighted average
common shares outstanding
-- assuming dilution 53,740 53,449 53,692 52,786
======== ======== ======== ========
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)
Three Months Ended
December 31,
------------------
2002 2001
---- ----
Inventory turnover (1) 1.6 1.5
Inventory turnover, net of payables (2) 1.9 1.8
AP to Inventory 16.9% 13.8%
Debt-to-capital 22.7% 24.7%
Return on equity 13.6% 13.0%
Return on assets 8.8% 8.0%
Total employment 14,273 12,676
Miscellaneous (in thousands):
Capital Expenditures $ 29,647 $ 30,031
Depreciation & Amortization $ 9,786 $ 8,356
Interest Expense $ 2,296 $ 2,342
Lease & Rental Expense $ 8,268 $ 8,035
Store count:
New stores, net 23 111
Total stores 981 875
Square footage (in thousands):
O'Reilly 6,132 5,346
Mid-State 485 535
------- -------
Totals 6,617 5,882
Sales per weighted average square foot:
O'Reilly $ 49.87 $ 51.75
Mid-State $ 39.68 $ 26.81
Consolidated $ 49.08 $ 49.30
Sales per weighted average store (in thousands):
O'Reilly $ 338 $ 347
Mid-State $ 236 $ 171
Consolidated $ 329 $ 328
(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.