FOR IMMEDIATE RELEASE
For further information contact: David O'Reilly
James R. Batten
(417) 862-3333
________________________________________________________________________________
O'REILLY AUTOMOTIVE REPORTS RECORD SALES AND EARNINGS FOR THE THIRD QUARTER AND
COMPARABLE STORE SALES OF 8.3%
________________________________________________________________________________
Springfield, MO, October 28, 2003 -- O'Reilly Automotive, Inc. ("O'Reilly" or
"the Company") (Nasdaq: ORLY) today announced record revenues and earnings for
the third quarter of 2003, representing 40 quarters of record revenues and
earnings for O'Reilly since becoming a public company in April 1993.
Net income for the third quarter ended September 30, 2003, totaled $29.5
million, up 22.6% from $24.1 million for the same period in 2002. Diluted
earnings per common share for the third quarter of 2003 increased 20.0% to $0.54
on 54.9 million shares compared to $0.45 for the third quarter of 2002 on 53.7
million shares. Product sales for the third quarter ended September 30, 2003,
totaled $412.2 million, up 14.6% from $359.6 million for the same period a year
ago. Gross profit for the third quarter of 2003 increased to $175.7 million (or
42.6% of product sales) from $152.2 million (or 42.3% of product sales) for the
third quarter of 2002, representing an increase of 15.4%.
Net income for the first nine months of 2003 totaled $76.2 million, up 20.4%
from $63.3 million for the same period a year ago. Diluted earnings per common
share for the first nine months of 2003 increased 18.6% to $1.40 on 54.3 million
shares versus $1.18 a year ago on 53.7 million shares. Product sales for the
first nine months of 2003 totaled $1.14 billion, up 14.7% from $998.2 million in
the first nine months of the previous year. Gross profit for the first nine
months of 2003 increased to $482.3 million (or 42.1% of product sales) from
$422.4 million (or 42.3% of product sales) for the first nine months of 2002,
representing an increase of 14.2%.
Comparable store product sales for stores open at least one year increased 8.3%
and 7.2% for the third quarter and first nine months of 2003, respectively.
"The hard work and dedication of Team O'Reilly can be seen in yet another record
breaking quarter," stated David O'Reilly, co-chairman and chief executive
officer. "An operating margin of 11.7%, net margin of 7.2% and comparable store
sales of 8.3% highlighted this quarter's results. Our positive free cash flow
has allowed us to reduce our outstanding indebtedness by more than $80 million
this year. We are also excited to have expanded into Virginia this quarter,
bringing our presence to 18 contiguous states."
The Company will host a conference call Wednesday, October 29, 2003, 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 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 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 1,074 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 September 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 and regulations, 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
September 30, December 31,
2003 2002
--------------- ---------------
(Unaudited) (Note)
(In thousands)
Assets
Current assets:
Cash $ 33,045 $ 29,333
Accounts receivable, net 55,870 45,421
Amounts receivable from vendors 51,715 42,918
Inventory 538,463 504,098
Deferred income taxes 5,514 5,040
Other current assets 4,719 4,235
--------------- ---------------
Total current assets 689,326 631,045
Property and equipment, at cost 589,309 491,523
Accumulated depreciation and amortization 167,071 137,922
--------------- ---------------
Net property and equipment 422,238 353,601
Notes receivable 1,793 1,880
Other assets 27,260 22,893
--------------- ---------------
Total assets $ 1,140,617 $ 1,009,419
=============== ===============
Liabilities and shareholders' equity
Current liabilities:
Income taxes payable $ 23,950 $ 9,798
Accounts payable 154,767 85,370
Accrued payroll 15,327 15,257
Accrued benefits and withholdings 28,881 19,165
Other current liabilities 25,701 17,150
Current portion of long-term debt 407 682
--------------- ---------------
Total current liabilities 249,033 147,422
Long-term debt, less current portion 110,216 190,470
Deferred income taxes 25,237 15,939
Other liabilities 7,133 5,064
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares - 90,000,000
Issued and outstanding shares -
54,279,497 at September 30, 2003,
and 53,371,242 at December 31, 2002 543 534
Additional paid-in capital 291,310 269,030
Retained earnings 457,145 380,960
--------------- ---------------
Total shareholders' equity 748,998 650,524
--------------- ---------------
Total liabilities and shareholders' equity $ 1,140,617 $ 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 accounting principles generally accepted in the United
States.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
(In thousands, except per share data)
Product sales $ 412,182 $ 359,579 $ 1,144,769 $ 998,249
Cost of goods sold, including warehouse and distribution expenses 236,529 207,383 662,457 575,839
------------ ------------ ------------ ------------
Gross profit 175,653 152,196 482,312 422,410
Operating, selling, general and administrative expenses 127,291 111,473 355,883 315,280
------------ ------------ ------------ ------------
Operating income 48,362 40,723 126,429 107,130
Other expense, net (1,179) (1,972) (4,594) (5,370)
------------ ------------ ------------ ------------
Income before income taxes 47,183 38,751 121,835 101,760
Provision for income taxes 17,650 14,655 45,650 38,475
------------ ------------ ------------ ------------
Net income $ 29,533 $ 24,096 $ 76,185 $ 63,285
============ ============ ============ ============
Net income per common share $ 0.55 $ 0.45 $ 1.42 $ 1.19
============ ============ ============ ============
Net income per common share - assuming dilution $ 0.54 $ 0.45 $ 1.40 $ 1.18
============ ============ ============ ============
Weighted-average common shares outstanding 54,090 53,187 53,711 53,044
============ ============ ============ ============
Adjusted weighted-average common shares
outstanding - assuming dilution 54,864 53,715 54,282 53,675
============ ============ ============ ============
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)
September 30,
-------------------------
2003 2002
----------- -----------
Inventory turnover (1) 1.64 1.65
Inventory turnover, net of payables (2) 2.16 1.97
AP to Inventory (3) 28.7% 18.9%
Debt-to-capital (4) 12.9% 20.4%
Return on equity (5) 13.8% 13.6%
Return on assets (6) 9.0% 9.1%
Square footage (in thousands) 6,989 6,150
Store count:
New stores, net 33 29
Total stores 1,074 958
Total employment 15,660 14,420
Three Months Ended
September 30,
-------------------------
2003 2002
----------- -----------
Capital Expenditures $ 32,448 $ 27,266
Depreciation & Amortization $ 10,651 $ 9,691
Interest Expense $ 1,546 $ 2,402
Lease & Rental Expense $ 8,559 $ 8,027
Sales per weighted-average
square foot (7) $ 57.63 $ 56.71
Sales per weighted-average store
(in thousands) (8) $ 380 $ 369
(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
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 Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
(In thousands)
Net cash provided by operating activities $ 59,164 $ 44,305 $ 172,119 $ 105,124
Capital expenditures 32,448 27,266 100,047 72,610
---------- ---------- ---------- ----------
Free cash flow $ 26,716 $ 17,039 $ 72,072 $ 32,514
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