O'Reilly Automotive, Inc. Reports Record 2005 First Quarter Results; 7.1% Increase in Comparable Store Product Sales; 20.4% Increase in Earnings Per Share
SPRINGFIELD, Mo.--April 26, 2005--O'Reilly Automotive, Inc. ("O'Reilly" or "the Company") today announced record revenues and earnings for the first quarter of 2005, representing 46 quarters of record revenues and earnings for O'Reilly since becoming a public company in April 1993.Net income, before cumulative effect of accounting change, for the first quarter ended March 31, 2005, totaled $33.2 million, up 21.7% from $27.3 million for the same period in 2004. Diluted earnings per common share, before cumulative effect of accounting change, for the first quarter of 2005 increased 20.4% to $0.59 on 56.3 million shares compared to $0.49 for the first quarter of 2004 on 55.4 million shares. Product sales for the three months ended March 31, 2005, totaled $466.2 million, up 15.6% from $403.3 million for the same period a year ago. Gross profit for the first quarter of 2005 increased to $196.2 million (or 42.1% of product sales) from $169.6 million (or 42.1% of product sales) for the first quarter of 2004, representing an increase of 15.7%. Operating, Selling, General and Administrative ("OSG&A") expenses increased to $142.6 million (or 30.6% of product sales) for the first quarter of 2005 from $125.6 million (or 31.1% of product sales) for the first quarter of 2004, representing an increase of 13.6%.
Comparable store product sales for stores open at least one year increased 7.1% and 12.4% for the first quarter of 2005 and 2004, respectively.
"We are very pleased with our 7.1% comparable store product sales increase, especially considering the difficult comparison of the 12.4% comparable store sales increase in the first quarter of 2004," stated Greg Henslee, CEO and Co-President. "We're equally pleased with our team's focus on expense management during the quarter as we completed the opening of our eleventh distribution center in Atlanta, Georgia."
"New store openings are well underway with 37 net new stores opened during the first quarter of 2005," said Ted Wise, COO and Co-President.
The Company will host a conference call Wednesday, April 27, 2005, 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, on the Company's website.
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 1,286 stores within the states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Virginia as of March 31, 2005.
The Company claims the protection of the safe-harbor for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by forward-looking words such as "expect," "believe," "anticipate," "good," "plan," "intend," "estimate," "project," "will" or similar words. In addition, statements contained within this press release that are not historical facts are forward-looking statements, such as statements discussing 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 or implied 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, 2004, for more details.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2005 2004
--------- ------------
(Unaudited) (Note)
(In thousands)
Assets
Current assets:
Cash and cash equivalents $89,270 $69,028
Accounts receivable, net 63,180 60,928
Amounts receivable from vendors, net 42,631 52,976
Inventory 649,297 625,320
Other current assets 5,763 5,225
------- -------
Total current assets 850,141 813,477
Property and equipment, at cost 835,860 791,794
Accumulated depreciation and amortization 235,962 224,301
------- -------
Net property and equipment 599,898 567,493
Notes receivable, less current portion 27,375 21,690
Other assets, net 27,653 29,697
------- -------
Total assets $1,505,067 $1,432,357
========= =========
Liabilities and shareholders' equity
Current liabilities:
Income taxes payable $16,099 $9,736
Accounts payable 258,470 240,548
Accrued payroll 15,779 15,130
Accrued benefits and withholdings 40,159 35,794
Deferred income taxes 11,370 7,198
Other current liabilities 23,061 24,817
Current portion of long-term debt 591 592
------- -------
Total current liabilities 365,529 333,815
Long-term debt, less current portion 100,173 100,322
Deferred income taxes 38,165 38,440
Other liabilities 12,184 11,963
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares -- 90,000,000
Issued and outstanding shares --
55,602,945 at March 31, 2005,
and 55,377,130 at December 31, 2004 556 554
Additional paid-in capital 334,634 326,650
Retained earnings 653,826 620,613
------- -------
Total shareholders' equity 989,016 947,817
------- -------
Total liabilities and shareholders'
equity $1,505,067 $1,432,357
========= =========
Note: The balance sheet at December 31, 2004, has been derived from
the audited financial statements at that date, but does not include
all of the information and footnotes required by United States
generally accepted accounting principles for complete financial
statements.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
----------------------
2005 2004
---- ----
(In thousands, except per share data)
Product sales $466,239 $403,294
Cost of goods sold, including
warehouse and distribution expenses 270,070 233,701
------- -------
Gross profit 196,169 169,593
Operating, selling, general and
administrative expenses 142,588 125,566
------- -------
Operating income 53,581 44,027
Other expense, net (668) (446)
------- -------
Income before income taxes and
cumulative effect of accounting
change 52,913 43,581
Provision for income taxes 19,700 16,296
------- -------
Income before cumulative effect
of accounting change 33,213 27,285
Cumulative effect of accounting
change, net of tax, $13,303 - 21,892
------- -------
Net income $33,213 $49,177
======= =======
Net income per common share:
Income before cumulative effect
of accounting change $0.60 $0.50
Cumulative effect of accounting
change, net of tax - 0.40
------- -------
Net income $0.60 $0.90
======= =======
Net income per common share-assuming
dilution:
Income before cumulative effect of
accounting change $0.59 $0.49
Cumulative effect of accounting
change, net of tax - 0.39
------- -------
Net income $0.59 $0.88
======= =======
Weighted-average common shares
outstanding - basic 55,448 54,694
======= =======
Adjusted weighted-average common
shares outstanding - assuming
dilution 56,255 55,381
======= =======
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)
March 31,
----------------------
2005 2004
---- ----
Inventory turnover (1) 1.7 1.7
Inventory turnover, net of payables (2) 2.6 2.4
AP to inventory (3) 39.8% 32.9%
Debt-to-capital (4) 9.3% 10.8%
Return on equity (5) 13.5% 14.3%
Return on assets (6) 8.9% 9.4%
Square footage (in thousands) 8,561 7,510
Store count:
New stores, net (three months ended) 37 23
Total stores 1,286 1,132
Total employment 18,238 16,540
Three Months Ended
March 31,
-------------------
2005 2004
---- ----
Other information (in thousands):
Capital expenditures $45,570 $40,078
Depreciation & amortization $13,245 $10,894
Interest expense $1,100 $895
Lease & rental expense $10,156 $8,833
Sales per weighted-average square foot (7) $54.41 $53.44
Sales per weighted-average store
(in thousands) (8) $363 $354
(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.