UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 27, 2004
O'REILLY AUTOMOTIVE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Missouri 44-0618012
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(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation)
233 S. Patterson
Springfield, Missouri 65802
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(Address of Principal Executive Offices)(Zip Code)
417-862-6708
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(Registrant's Telephone Number, Including Area Code)
(Not Applicable)
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(Former name or former address, if changed since last report.)
ITEM 9. REGULATION FD DISCLOSURE
The press release is attached hereto as Exhibit 99.1 and is incorporated herein
by reference.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 29, 2004
O'REILLY AUTOMOTIVE, INC.
By:/s/ James R. Batten
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James R. Batten
Executive Vice President of Finance
Chief Financial Officer and Treasurer
(principal financial officer)
EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release dated July 27, 2004
FOR IMMEDIATE RELEASE
For further information contact: David O'Reilly
James R. Batten
(417) 862-3333
________________________________________________________________________________
O'REILLY AUTOMOTIVE, INC. REPORTS SECOND QUARTER RESULTS
12.1% OPERATING MARGIN
21.3% INCREASE IN NET INCOME
________________________________________________________________________________
Springfield, MO, July 27, 2004 -- O'Reilly Automotive, Inc. ("O'Reilly" or "the
Company") (Nasdaq: ORLY) today announced record revenues and earnings for the
second quarter of 2004, representing 43 quarters of record revenues and earnings
for O'Reilly since becoming a public company in April 1993.
Net income for the second quarter ended June 30, 2004, totaled $32.7 million, up
21.3% from $26.9 million for the same period in 2003. Diluted earnings per share
for the second quarter of 2004 increased 18% to $0.59 on 55.7 million shares
compared to $0.50 for the second quarter of 2003 on 54.2 million shares. Product
sales for the second quarter ended June 30, 2004, totaled $435.2 million, up
10.7% from $393.1 million for the same period a year ago. Gross profit for the
second quarter of 2004 increased to $187.8 million (or 43.2% of product sales)
from $165.7 million (or 42.2% of product sales) for the second quarter of 2003,
representing an increase of 13.3%.
Net income for the first six months of 2004 totaled $59.8 million, up 28.1% from
$46.7 million for the same period a year ago. Diluted earnings per common share
for the first six months of 2004 increased 25.6% to $1.08 on 55.6 million shares
compared to $0.86 a year ago on 54.0 million shares. Product sales for the first
six months of 2004 totaled $838.5 million, up 14.5% from $732.6 million for the
same period a year ago. Gross profit for the first six months of 2004 increased
to $357.1 million (or 42.6% of product sales) from $306.7 million (or 41.9% of
product sales) for the same period a year ago, representing an increase of
16.5%.
Comparable store product sales for stores open at least one year increased 3.8%
and 7.8% for the second quarter and first six months of 2004, respectively.
"We are pleased with our overall performance this quarter," said David O'Reilly,
co-chairman and chief executive officer. "Despite unusually high amounts of
rainfall in the South and significantly cooler temperatures throughout our
markets, we posted a 3.8% increase in comparable store product sales for the
quarter. We continue to generate positive free cash flow and ended the quarter
with $88 million in cash."
The Company will host a conference call Wednesday, July 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 1,170
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 June 30, 2004.
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, 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,
2003, for more details.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2004 2003
------------- -------------
(Unaudited) (Note)
(In thousands, except per share
data)
Assets
Current assets:
Cash and cash equivalents $ 88,117 $ 21,094
Accounts receivable, net 60,573 52,235
Amounts receivable from vendors, net 51,603 50,695
Inventory 582,993 554,309
Deferred income taxes 2,393 4,753
Other current assets 7,084 4,399
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Total current assets 792,763 687,485
Property and equipment, at cost 704,045 626,142
Accumulated depreciation 196,512 177,084
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Net property and equipment 507,533 449,058
Notes receivable 22,456 24,313
Other assets, net 29,963 26,736
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Total assets $ 1,352,715 $ 1,187,592
============= =============
Liabilities and shareholders' equity
Current liabilities:
Income taxes payable $ 17,380 $ 6,872
Accounts payable 258,987 176,513
Accrued payroll 19,447 17,307
Accrued benefits and withholdings 32,831 27,368
Other current liabilities 21,442 16,883
Current portion of long-term debt 776 925
------------- -------------
Total current liabilities 350,863 245,868
Long-term debt, less current portion 100,616 120,977
Deferred income taxes 35,400 29,448
Other liabilities 7,691 7,014
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares - 90,000,000
Issued and outstanding shares -
55,108,052 at June 30, 2004,
and 54,664,976 at December 31, 2003 551 547
Additional paid-in capital 316,769 302,691
Retained earnings 540,825 481,047
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Total shareholders' equity 858,145 784,285
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Total liabilities and shareholders' equity $ 1,352,715 $ 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 Six Months Ended
June 30, June 30,
--------------------- ---------------------
2004 2003 2004 2003
--------- --------- --------- ---------
(In thousands, except per share data)
Product sales $ 435,167 $ 393,112 $ 838,461 $ 732,587
Cost of goods sold, including warehouse
and distribution expenses 247,409 227,399 481,365 425,928
--------- --------- --------- ---------
Gross profit 187,758 165,713 357,096 306,659
Operating, selling, general and
administrative expenses 135,193 120,987 260,759 228,592
--------- --------- --------- ---------
Operating income 52,565 44,726 96,337 78,067
Other expense, net (438) (1,652) (884) (3,415)
--------- --------- --------- ---------
Income before income taxes 52,127 43,074 95,453 74,652
Provision for income taxes 19,475 16,150 35,675 28,000
--------- --------- --------- ---------
Net income $ 32,652 $ 26,924 $ 59,778 $ 46,652
========= ========= ========= =========
Net income per common share $ 0.59 $ 0.50 $ 1.09 $ 0.87
========= ========= ========= =========
Net income per common share
- assuming dilution $ 0.59 $ 0.50 $ 1.08 $ 0.86
========= ========= ========= =========
Weighted-average common shares outstanding 54,934 53,634 54,814 53,518
========= ========= ========= =========
Adjusted weighted-average common shares
outstanding - assuming dilution 55,720 54,222 55,551 53,988
========= ========= ========= =========
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)
June 30,
----------------------
2004 2003
--------- ---------
Inventory turnover (1) 1.7 1.6
Inventory turnover, net of payables (2) 2.6 2.1
AP to inventory (3) 44.4% 27.0%
Debt-to-capital (4) 10.6% 16.1%
Return on equity (5) 14.4% 13.6%
Return on assets (6) 9.3% 8.8%
Square footage (in thousands) 7,768 6,851
Store count:
New stores, net (three months ended) 38 30
Total stores 1,170 1,041
Total employment 17,203 15,568
Three Months Ended
June 30,
----------------------
2004 2003
--------- ---------
Other information (in thousands):
Capital expenditures $ 41,669 $ 35,409
Depreciation & amortization $ 11,670 $ 10,211
Interest expense $ 975 $ 2,075
Lease & rental expense $ 8,833 $ 7,943
Sales per weighted-average square foot (7) $ 55.98 $ 57.04
Sales per weighted-average store (in thousands) (8) $ 371 $ 375
(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 Six Months Ended
June 30, June 30,
---------------------- ----------------------
2004 2003 2004 2003
--------- --------- --------- ---------
(In thousands)
Net cash provided by operating activities $ 78,867 $ 55,611 $ 160,878 $ 112,955
Capital expenditures 41,669 35,409 81,747 67,599
--------- --------- --------- ---------
Free cash flow (1)(2) $ 37,198 $ 20,202 $ 79,131 $ 45,356
========= ========= ========= =========
(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.