O'Reilly Automotive Reports Comparable Store Sales of 6.9% and Record Second Quarter Sales And Earnings
SPRINGFIELD, Mo.--July 29, 2003--O'Reilly Automotive, Inc. ("O'Reilly" or "the Company") today announced record revenues and earnings for the second quarter of 2003, representing 39 quarters of record revenues and earnings for O'Reilly since becoming a public company in April 1993.Net income for the second quarter ended June 30, 2003, totaled $26.9 million, up 19.4% from $22.5 million for the same period in 2002. Diluted earnings per share for the second quarter of 2003 increased 19.1% to $0.50 on 54.2 million shares compared to $0.42 for the second quarter of 2002 on 53.7 million shares. Product sales for the three months ended June 30, 2003, totaled $393.1 million, up 14.6% from $343.2 million for the same period a year ago. Gross profit for the second quarter of 2003 increased to $165.7 million (or 42.2% of product sales) from $144.2 million (or 42.0% of product sales) for the second quarter of 2002, representing an increase of 14.9%.
Net income for the first six months of 2003 totaled $46.7 million, up 19.0% from $39.2 million for the same period a year ago. Diluted earnings per common share for the first six months of 2003 increased 17.8% to $0.86 on 54.0 million shares versus $0.73 a year ago on 53.7 million shares. Product sales for the first six months of 2003 totaled $732.6 million, up 14.7% from $638.7 million in the first six months of the previous year. Gross profit for the first six months of 2003 increased to $306.7 million (or 41.9% of product sales) from $270.2 million (or 42.3% of product sales) for the first six months of the prior year, representing an increase of 13.5%.
Comparable store product sales for stores open at least one year increased 6.9% and 6.6% for the second quarter and first six months of 2003, respectively.
"We continue to be very pleased with our performance this quarter, highlighted by comparable store sales of 6.9%, operating margin of 11.4% and a net margin of 6.9%," said David O'Reilly, co-chairman and chief executive officer. "We generated positive free cash flows of $20.2 million and reduced debt resulting in a debt to total capital ratio of 16.1%."
The Company will host a conference call Wednesday, July 30, 2003, 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 1,041 stores within the states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, Tennessee and Texas as of June 30, 2003.
The Company claims the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. 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, 2002, for more details.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2003 2002
-------- ------------
(Unaudited) (Note)
(In thousands)
Assets
Current assets:
Cash $26,230 $29,333
Accounts receivable, net 56,344 45,421
Amounts receivable from vendors 47,192 42,918
Inventory 528,006 504,098
Deferred income taxes 3,681 5,040
Other current assets 5,020 4,235
--------- ---------
Total current assets 666,473 631,045
Property and equipment, at cost 557,916 491,523
Accumulated depreciation and amortization 157,108 137,922
--------- ---------
Net property and equipment 400,808 353,601
Notes receivable 1,820 1,880
Other assets 24,701 22,893
--------- ---------
Total assets $1,093,802 $1,009,419
========= =========
Liabilities and shareholders' equity
Current liabilities:
Income taxes payable $18,133 $9,798
Accounts payable 142,750 85,370
Accrued payroll 16,061 15,257
Accrued benefits and withholdings 22,330 19,165
Other current liabilities 19,476 17,150
Current portion of long-term debt 475 682
--------- ---------
Total current liabilities 219,225 147,422
Long-term debt, less current portion 135,317 190,470
Deferred income taxes 22,025 15,939
Other liabilities 7,103 5,064
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares -- 90,000,000
Issued and outstanding shares --
53,933,788 at June 30, 2003,
and 53,371,242 at December 31, 2002 539 534
Additional paid-in capital 281,981 269,030
Retained earnings 427,612 380,960
--------- ---------
Total shareholders' equity 710,132 650,524
--------- ---------
Total liabilities and shareholders' equity $1,093,802 $1,009,419
========= =========
Note: The balance sheet at December 31, 2002, 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 Six Months Ended
June 30, June 30,
------------------ ----------------
2003 2002 2003 2002
---- ---- ---- ----
(In thousands, except per share data)
Product sales $393,112 $343,181 $732,587 $638,670
Cost of goods sold, including
warehouse and distribution
expenses 227,399 198,995 425,928 368,456
------- ------- ------- -------
Gross profit 165,713 144,186 306,659 270,214
Operating, selling, general
and administrative expenses 120,987 106,417 228,592 203,807
------- ------- ------- -------
Operating income 44,726 37,769 78,067 66,407
Other expense, net (1,652) (1,527) (3,415) (3,398)
------- ------- ------- -------
Income before income taxes 43,074 36,242 74,652 63,009
Provision for income taxes 16,150 13,695 28,000 23,820
------- ------- ------- -------
Net income $26,924 $22,547 $46,652 $39,189
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Net income per common share $0.50 $0.42 $0.87 $0.74
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Net income per common share
-- assuming dilution $0.50 $0.42 $0.86 $0.73
======= ======= ======= =======
Weighted average common
shares outstanding 53,634 53,058 53,518 52,971
======= ======= ======= =======
Adjusted weighted average
common shares outstanding
-- assuming dilution 54,222 53,698 53,988 53,653
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O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)
June 30,
--------------------
2003 2002
---- ----
Inventory turnover (1) 1.62 1.58
Inventory turnover, net of payables (2) 2.09 1.92
AP to Inventory (3) 27.0% 17.6%
Debt-to-capital (4) 16.1% 22.5%
Return on equity (5) 13.6% 13.6%
Return on assets (6) 8.8% 8.8%
Square footage (in thousands) 7,070 6,304
Store count:
New stores, net 30 30
Total stores 1,041 929
Total employment 15,568 14,030
Three Months Ended
June 30,
------------------
2003 2002
---- ----
Miscellaneous (in thousands):
Capital Expenditures $35,409 $23,916
Depreciation & Amortization $10,211 $8,946
Interest Expense $2,075 $2,113
Lease & Rental Expense $7,943 $6,783
Sales per weighted-average square foot (7) $55.24 $54.19
Sales per weighted-average store
(in thousands) (8) $375 $366
(1) Calculated as cost of sales for the last 12 months divided by
average inventory. Average inventory is calculated as the average of
beginning and ending inventory for the same period used in determining
the numerator.
(2) Calculated as cost of sales divided by average inventory less
accounts payable. Average inventory is calculated as the average of
beginning and ending inventory for the same period used in determining
the numerator.
(3) Accounts payable divided by inventory.
(4) The sum of long-term debt and current portion of long-term debt,
divided by the sum of long-term debt, current portion of long-term
debt and total shareholder's equity.
(5) Last 12 months net income divided by average shareholders'
equity. Average shareholders' equity is calculated by taking a simple
average of the beginning and ending shareholders' equity for the same
period used in determining the numerator.
(6) Last 12 months net income divided by average total assets.
Average total assets is calculated by taking a simple average of the
beginning and ending total assets for the same period used in
determining the numerator.
(7) Total sales less jobber sales, divided by weighted average square
feet. Weighted-average sales per square foot is weighted to consider
the approximate dates of store openings or expansions.
(8) Total sales less jobber sales, divided by weighted-average
stores. Weighted-average sales per store is weighted to consider the
approximate dates of store openings or expansions.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
RECONCILIATION OF FREE CASH FLOW TO OPERATING CASH FLOW
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2003 2002 2003 2002
---- ---- ---- ----
(In thousands)
Net cash provided by operating
activities $55,611 $32,858 $112,955 $60,820
Capital expenditures 35,409 23,916 67,599 45,344
------- ------- ------- -------
Free cash flow $20,202 $8,942 $45,356 $15,476
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