O'Reilly Automotive, Inc. Reports Record 2005 Second Quarter Results
SPRINGFIELD, Mo.--July 26, 2005--O'Reilly Automotive, Inc. ("O'Reilly" or "the Company") today announced record revenues and earnings for the second quarter of 2005, representing 47 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 second quarter ended June 30, 2005, totaled $42.9 million, up 27.3% from $33.7 million for the same period in 2004. Diluted earnings per common share, before cumulative effect of accounting change, for the second quarter of 2005 increased 26.7% to $0.38 on 113.1 million shares compared to $0.30 for the second quarter of 2004 on 111.4 million shares.
Product sales for the three months ended June 30, 2005, totaled $521.2 million, up 19.8% from $435.2 million for the same period a year ago. Gross profit for the second quarter of 2005 increased to $229.0 million (or 43.9% of product sales) from $189.4 million (or 43.5% of product sales) for the second quarter of 2004, representing an increase of 20.9%. Operating, Selling, General and Administrative ("OSG&A") expenses increased to $160.8 million (or 30.9% of product sales) for the second quarter of 2005 from $135.2 million (or 31.1% of product sales) for the second quarter of 2004, representing an increase of 18.9%.
Net income, before cumulative effect of accounting change, for the first six months of 2005 totaled $76.1 million, up 24.8% from $61.0 million for the same period a year ago. Diluted earnings per common share, before cumulative effect of accounting change, for the first six months of 2005 increased 21.8% to $0.67 on 112.8 million shares compared to $0.55 a year ago on 111.1 million shares.
Product sales for the first six months of 2005 totaled $987.4 million, up 17.8% from $838.5 million for the same period a year ago. Gross profit for the first six months of 2005 increased to $425.1 million (or 43.1% of product sales) from $359.0 million (or 42.8% of product sales) for the same period a year ago, representing an increase of 18.4%. OSG&A expenses increased to $303.4 million (or 30.7% of product sales) for the first six months of 2005 from $260.8 million (or 31.1% of product sales) for the same period a year ago, representing an increase of 16.3%.
Comparable store product sales for stores open at least one year increased 9.6% and 8.4% for the second quarter and first six months of 2005 respectively.
On June 15, 2005, the Company issued dividend payments for all shareholders as of record on May 31, 2005, for a two-for-one stock split that was announced on May 2, 20054, 2005.
"We're very proud of Team O'Reilly's outstanding second quarter performance. The 9.6% comparable store product sales increase was the result of the outstanding efforts of each team member to give every customer the best service in our business," said Greg Henslee, CEO and Co-President.
"In addition to opening 41 stores during the quarter, we successfully closed our acquisition of Midwest Auto Parts which included 72 stores and 2 distribution centers in St. Paul, Minnesota, and Billings, Montana. We look forward to working with our new team members to grow the business in that region," said Ted Wise, COO and Co-President.
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 1,399 stores within the states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Virginia, Wisconsin and Wyoming as of June 30, 2005.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2005 2004
------------ -------------
(Unaudited) (Note)
(In thousands, except share data)
Assets
Current assets:
Cash and cash equivalents $36,452 $69,028
Accounts receivable, net 75,481 60,928
Amounts receivable from vendors, net 47,304 52,976
Inventory 695,842 625,320
Other current assets 13,093 5,225
------------ -------------
Total current assets 868,172 813,477
Property and equipment, at cost 895,448 791,794
Accumulated depreciation and amortization 248,527 224,301
------------ -------------
Net property and equipment 646,921 567,493
Notes receivable, less current portion 31,290 21,690
Other assets, net 61,726 29,697
------------ -------------
Total assets $1,608,109 $1,432,357
============ =============
Liabilities and shareholders' equity
Current liabilities:
Income taxes payable $29,379 $9,736
Accounts payable 272,100 240,548
Accrued payroll 16,884 15,130
Accrued benefits and withholdings 43,596 35,794
Deferred income taxes 5,209 7,198
Other current liabilities 51,946 24,817
Current portion of long-term debt 75,587 592
------------ -------------
Total current liabilities 494,701 333,815
Long-term debt, less current portion 25,471 100,322
Deferred income taxes 31,353 38,440
Other liabilities 12,998 11,963
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares - 250,000,000
Issued and outstanding shares -
111,816,886 at June 30, 2005,
and 55,377,130 at December 31,
2004 1,118 554
Additional paid-in capital 346,278 326,650
Retained earnings 696,190 620,613
------------ -------------
Total shareholders' equity 1,043,586 947,817
------------ -------------
Total liabilities and shareholders' equity $1,608,109 $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 Six Months
Ended Ended
June 30, June 30,
2005 2004 2005 2004
---- ---- ---- ----
(In thousands, except per share data)
Product sales $521,209 $435,167 $987,448 $838,461
Cost of goods sold, including
warehouse and distribution
expenses 292,239 245,732 562,309 479,433
-------- -------- -------- --------
Gross profit 228,970 189,435 425,139 359,028
Operating, selling, general
and administrative expenses 160,843 135,193 303,431 260,759
-------- -------- -------- --------
Operating income 68,127 54,242 121,708 98,269
Other income (expense), net 195 (438) (473) (884)
-------- -------- -------- --------
Income before income taxes and
cumulative effect of
accounting change 68,322 53,804 121,235 97,385
Provision for income taxes 25,399 20,109 45,099 36,405
-------- -------- -------- --------
Income before cumulative effect
of accounting change 42,923 33,695 76,136 60,980
Cumulative effect of
accounting change, net of tax - - - 21,892
-------- -------- -------- --------
Net income $ 42,923 $ 33,695 $ 76,136 $ 82,872
======== ======== ======== ========
Net income per
common share: (1)
Income before cumulative
effect of accounting change $ 0.39 $ 0.31 $ 0.68 $ 0.56
Cumulative effect of
accounting change,
net of tax - - - 0.20
-------- -------- -------- --------
Net income $ 0.39 $ 0.31 $ 0.68 $ 0.76
======== ======== ======== ========
Net income per common
share - assuming dilution: (1)
Income before cumulative
effect of accounting change $ 0.38 $ 0.30 $ 0.67 $ 0.55
Cumulative effect of
accounting change, net of tax - - - 0.20
-------- -------- -------- --------
Net income $ 0.38 $ 0.30 $ 0.67 $ 0.75
======== ======== ======== ========
Weighted-average common
shares outstanding -
basic (1) 111,448 109,868 111,174 109,627
======== ======== ======== ========
Adjusted weighted-average
common shares outstanding
- assuming dilution (1) 113,138 111,441 112,827 111,101
======== ======== ======== ========
(1) On June 15, 2005, the Company completed a two-for-one split of its
common stock. All share and per share amounts for the periods
presented have been adjusted to reflect the effect of the stock
split.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)
June 30,
2005 2004
------ ------
Inventory turnover (1) 1.7 1.7
Inventory turnover, net of payables (2) 2.7 2.5
AP to inventory (3) 39.1% 38.8%
Debt-to-capital (4) 8.8% 10.3%
Return on equity (5) 13.8% 14.4%
Return on assets (6) 9.0% 9.3%
Square footage(in thousands) (7) 8,860 7,768
Store count:
New stores, net (three months ended) (8) 113 38
Total stores 1,399 1,170
Total employment 19,426 17,203
Three Months Ended
June 30,
2005 2004
Other information (in thousands): ------ ------
Capital expenditures $ 56,924 $ 41,669
Depreciation & amortization $ 13,768 $ 11,670
Interest expense $ 1,034 $ 975
Lease & rental expense $ 10,615 $ 8,833
Sales per weighted-average square foot (9) $ 58.21 $ 55.98
Sales per weighted-average
store (in thousands) (10) $ 388 $ 371
(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) Square footage calculation excludes stores acquired with Midwest
Auto Parts.
(8) Net new stores includes 72 new stores acquired with Midwest Auto
Parts.
(9) 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.
This calculation excludes stores acquired with Midwest Auto Parts.
(10) 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. This
calculation excludes stores acquired with Midwest Auto Parts.