O'Reilly Automotive Announces Record Q3 Sales and Earnings
28 October 1998
O'Reilly Automotive Corrects and Replaces Previous Third Quarter Sales and Earnings Announcement, BW1739, O'REILLY-AUTOMOTIVE, Released Tuesday, Oct. 27
SPRINGFIELD, Mo.--Oct. 27, 1998--O'Reilly Automotive, Inc. ("O'Reilly") (Nasdaq-ORLY) today announced record revenues and earnings for the third quarter and first nine months of 1998. This represents the 22nd consecutive quarter of record revenues and earnings for O'Reilly since becoming a public company in April 1993. Included in the first nine months of 1998 are eight months of operations from Hi-Lo Automotive, Inc. (Hi/LO), which was acquired by O'Reilly effective, January 31, 1998.For the three months ended September 30, 1998, net income totaled $8.4 million, up 26.3% from $6.6 million a year ago. Earnings per common share (diluted) for the quarter increased 22.6% to $0.38 on 21.9 million shares versus $0.31 a year ago on 21.3 million shares. Product sales for the third quarter increased to $172.8 million from $87.5 million for the same period in the prior year, representing an increase of 97.4%. Gross profit for the third quarter of 1998 increased to $69.3 million (or 40.1% of product sales) from $36.5 million (or 41.7% of product sales) for the third quarter of 1997, representing an increase of 89.8%.
Net income for the first nine months of 1998 totaled $21.9 million, up 23.4% from $17.7 million for the same period a year ago. Earnings per common share (diluted) for the first nine months of 1998 increased 19.0% to $1.00 on 21.7 million shares compared to $0.84 a year ago on 21.2 million shares. Product sales for the first nine months of 1998 totaled $456.3 million, up 91.4% from $238.4 million in the previous year. Gross profit for the first nine months of 1998 increased to $186.2 million (or 40.8% of product sales) from $100.4 million (or 42.1% or product sales) for the first nine months of the prior year, representing an increase of 85.4%.
Comparable store product sales for the O'Reilly stores for the third quarter of 1998 and the first nine months of 1998 increased by 9.3% and 7.3%, respectively. The Hi/LO stores comparable store product sales increased by 2.2% and 1.6% for the third quarter of 1998 and first nine months of 1998, respectively. This resulted in a total comparable store product sales increase of 6.1% for the three months ended September 30, 1998 and 4.9% for the first nine months of 1998. Comparable store product sales are calculated based on the change in product sales of only those O'Reilly and Hi/LO stores open during both full periods being compared.
David O'Reilly, President and Chief Executive Officer, stated "Our comparable store product sales increases continue to be strong in our O'Reilly markets while Hi/LO continues to show improvement."
"We are also pleased to announce our agreement to purchase the assets of Hinojosa Auto Parts, a chain of 10 stores and a distribution center, effective April 1, 1999," stated Larry O'Reilly, President and Chief Operating Officer.
In addition to the acquisition of the Hi/LO stores, O'Reilly opened 36 net new stores in the first nine months of 1998, which includes 14 net new stores in the three months ended September 30, 1998. O'Reilly plans to open 15 additional stores in 1998 and 80 stores in 1999. Also, O'Reilly will open its distribution center in Des Moines, Iowa, on March 1, 1999.
O'Reilly Automotive is a specialty retailer and supplier of automotive aftermarket parts, tools, supplies, equipment and accessories to both do-it-yourself customers and professional mechanics and service technicians. Founded in 1957 by the O'Reilly family, the company currently operates 477 stores within the states of Missouri, Texas, Nebraska, Iowa, Kansas, Oklahoma, Arkansas, Louisiana and Illinois as of September 30, 1998.
Statements contained in this press release, which are not historical facts, are forward-looking statements. Such forward-looking statements are necessary estimates reflecting the best judgment of the party making such statements based upon current information and involve a number of risks and uncertainties. Forward-looking statements contained in this press release or in other public statements of the parties should be considered in light of those factors. There can be no assurance that such factors will not affect the accuracy of such forward-looking statements.
O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Sept. 30, Dec. 31,
1998 1997
---------- -----------
(Unaudited) (Note)
Numbers in thousands
Assets
Current assets:
Cash $1,584 $2,285
Short-term investments 1,000 1,000
Accounts receivable 26,459 12,469
Inventory 234,849 111,848
Deferred income taxes 7,255 1,424
Other current assets 5,873 5,114
---------- -----------
277,020 134,140
Property and equipment, at cost 241,591 137,533
Accumulated depreciation and amortization 78,354 29,093
---------- -----------
163,237 108,440
Other assets 13,809 5,037
---------- -----------
Total assets $454,066 $247,617
========== ===========
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $40,090 $29,713
Income taxes payable 3,697 2,501
Other current liabilities 33,359 8,033
Current portion of long-term debt 7,098 130
---------- -----------
Total current liabilities 84,244 40,377
Long-term debt, less current portion 160,474 22,641
Other liabilities 2,616 2,560
Stockholders’ equity:
Common stock, $.01 par value:
Authorized shares – 30,000,000
Issued and outstanding shares –
21,286,884 at September 30, 1998
and 21,125,493 at December 31, 1997 213 211
Additional paid-in capital 79,916 77,077
Retained earnings 126,603 104,751
---------- -----------
Total stockholders’ equity 206,732 182,039
---------- -----------
Total liabilities and stockholders’ equity $454,066 $247,617
========== ===========
Note: The balance sheet at December 31, 1997 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)
(Numbers in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------------
1998 1997 1998 1997
--------------------------------------
Product sales $172,784 $87,517 $456,295 $238,437
Cost of goods sold,
including warehouse
and distribution expenses 103,439 50,986 270,080 138,000
Operating, selling, general
and administrative expenses 53,910 26,064 146,199 72,549
--------------------------------------
157,349 77,050 416,279 210,549
--------------------------------------
Operating income 15,435 10,467 40,016 27,888
Other income (expense), net (1,955) 76 (4,770) 313
--------------------------------------
Income before income taxes 13,480 10,543 35,246 28,201
Provision for income taxes 5,119 3,922 13,394 10,491
--------------------------------------
Net income $8,361 $6,621 $21,852 $17,710
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Net income per share $0.39 $0.31 $1.03 $0.84
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Net income per share –
assuming dilution $0.38 $0.31 $1.00 $0.83
======================================
Weighted average common
shares outstanding 21,256 21,081 21,209 21,019
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Diluted weighted average
common shares outstanding 21,883 21,347 21,744 21,221
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