O'Reilly Automotive Reports Record First Quarter Sales and Earnings Share Growth
SPRINGFIELD, Mo.--April 27, 2004--O'Reilly Automotive, Inc. ("O'Reilly" or "the Company") today announced record revenues and earnings for the first quarter of 2004, representing 42 quarters of record revenues and earnings for O'Reilly since becoming a public company in April 1993.Net income for the first quarter ended March 31, 2004, totaled $27.1 million, up 37.5% from $19.7 million for the same period in 2003. Diluted earnings per common share for the first quarter of 2004 increased 32.4% to $0.49 on 55.4 million shares compared to $0.37 for the first quarter of 2003 on 53.8 million shares. Product sales for the three months ended March 31, 2004, totaled $403.3 million, up 18.8% from $339.5 million for the same period a year ago. Gross profit for the first quarter of 2004 increased to $169.3 million (or 42.0% of product sales) from $140.9 million (or 41.5% of product sales) for the first quarter of 2003, representing an increase of 20.1%. Operating, Selling, General and Administrative ("OSG&A") expenses increased to $125.6 million (or 31.1% of product sales) for the first quarter of 2004 from $107.6 million (or 31.7% of product sales) for the first quarter of 2003, representing an increase of 16.7%.
Comparable store product sales for stores open at least one year increased 12.4% and 6.2% for the first quarter of 2004 and 2003, respectively.
"This was an outstanding quarter for our team," said David O'Reilly, co-chairman and chief executive officer. "We entered the quarter with great momentum and delivered record results highlighted by the industry-leading 12.4% increase in comparable store product sales and strong earnings performance. We added 23 new stores and reduced debt by $20.0 million. We are pleased with these results and remain enthusiastic about the opportunities that lie ahead in 2004."
The Company will host a conference call Wednesday, April 28, 2004, 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's web site, www.oreillyauto.com, by clicking "News." A replay will also be available on the web site shortly after the call.
O'Reilly Automotive, Inc. 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 1,132 stores within the states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, Tennessee, Texas and Virginia as of March 31, 2004.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2004 2003
--------- ------------
(Unaudited) (Note)
In thousands
Assets
Current assets:
Cash $45,337 $21,094
Accounts receivable, net 58,068 52,235
Amounts receivable from vendors 47,673 50,695
Inventory 561,914 554,309
Deferred income taxes 427 4,753
Other current assets 9,219 4,399
----------- -----------
Total current assets 722,638 687,485
Property and equipment, at cost 663,294 626,142
Accumulated depreciation and amortization 185,550 177,084
----------- -----------
Net property and equipment 477,744 449,058
Notes receivable 23,377 24,313
Other assets 29,218 26,736
----------- -----------
Total assets $1,252,977 $1,187,592
=========== ===========
Liabilities and shareholders' equity
Current liabilities:
Income taxes payable $14,214 $6,872
Accounts payable 216,536 176,513
Accrued payroll 16,883 17,307
Accrued benefits and withholdings 31,343 27,368
Other current liabilities 17,833 16,883
Current portion of long-term debt 833 925
----------- -----------
Total current liabilities 297,642 245,868
Long-term debt, less current portion 100,823 120,977
Deferred income taxes 32,578 29,448
Other liabilities 7,129 7,014
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares - 90,000,000
Issued and outstanding shares -
54,784,667 at March 31, 2004,
and 54,664,976 at December 31, 2003 548 547
Additional paid-in capital 306,084 302,691
Retained earnings 508,173 481,047
----------- -----------
Total shareholders' equity 814,805 784,285
----------- -----------
Total liabilities and shareholders' equity $1,252,977 $1,187,592
=========== ===========
Note: The balance sheet at December 31, 2003, has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
O'reilly Automotive, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended
March 31,
2004 2003
---- ----
(Numbers in thousands,
except per share data)
Product sales $ 403,294 $ 339,475
Cost of goods sold, including warehouse
and distribution expenses 233,956 198,529
--------- ---------
Gross profit 169,338 140,946
Operating, selling, general and
administrative expenses 125,566 107,605
--------- ---------
Operating income 43,772 33,341
Other expense, net (446) (1,763)
--------- ---------
Income before income taxes 43,326 31,578
Provision for income taxes 16,200 11,850
--------- ---------
Net income $ 27,126 $ 19,728
========= =========
Net income per common share $ 0.50 $ 0.37
========= =========
Net income per common share -
assuming dilution $ 0.49 $ 0.37
========= =========
Weighted average common shares outstanding 54,694 53,402
========= =========
Adjusted weighted average common shares
outstanding - assuming dilution 55,381 53,753
========= =========
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)
March 31,
2004 2003
---- ----
Inventory turnover (1) 1.7 1.6
Inventory turnover, net of payables (2) 2.5 2.0
AP to Inventory (3) 38.5% 22.4%
Debt-to-capital (4) 11.1% 18.8%
Return on equity (5) 14.5% 13.6%
Return on assets (6) 9.4% 8.9%
Square footage (in thousands) 7,510 6,619
Store count:
New stores, net (three months ended) 23 30
Total stores 1,132 1,011
Total employment 16,540 14,563
Three Months Ended
March 31,
2004 2003
Other Information (in thousands): ---- ----
Capital Expenditures $ 40,078 $ 32,189
Depreciation & Amortization $ 10,894 $ 10,381
Interest Expense $ 895 $ 2,287
Lease & Rental Expense $ 8,833 $ 8,367
Sales per weighted-average square foot (7) $ 53.44 $ 50.36
Sales per weighted-average
store (in thousands) (8) $ 354 $ 329
(1) Calculated as cost of sales for the last 12 months divided
by average inventory. Average inventory is calculated as the
simple 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 simple 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 shareholders' 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
March 31,
2004 2003
---- ----
(In thousands)
Net cash provided by operating activities $ 82,011 $ 57,344
Capital expenditures 40,078 32,189
-------- --------
Free cash flow (1)(2) $ 41,933 $ 25,155
-------- --------
(1) Free cash flow is calculated as net cash provided by
operating activities less capital expenditures. (2) The Company
believes that presenting free cash flow provides investors a
metric to evaluate the Company's ability to fund its planned
growth.