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): February 23, 2005
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.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-d(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240-13e-4(c))
Section 2 - Financial Information
Item 2.02 Results of Operations and Financial Condition.
On February 25, 2005, O'Reilly Automotive, Inc. issued a press release
announcing fourth quarter earnings. The text of the press release is attached
hereto as Exhibit 99.1.
Section 7 - Regulation FD
ITEM 7.01. REGULATION FD DISCLOSURE
On February 25, 2005, O'Reilly Automotive, Inc. issued a press release
announcing fourth quarter earnings. The text of the press release is attached
hereto as Exhibit 99.1.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
Exhibit
Number Description
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99.1 Press Release dated February 25, 2005
The information in this Current Report on Form 8-K, including the exhibit
hereto, shall not be deemed "filed" for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference in
any filing under the Securities Act of 1933, as amended.
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: February 25, 2005
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)
For further information contact: David O'Reilly
James R. Batten
(417) 862-3333
________________________________________________________________________________
O'REILLY AUTOMOTIVE, INC., REPORTS FOURTH QUARTER AND ANNUAL EARNINGS
12TH CONSECUTIVE YEAR OF RECORD REVENUES AND EARNINGS
8.5% INCREASE IN FOURTH QUARTER COMPARABLE STORE PRODUCT SALES
________________________________________________________________________________
Springfield, MO, February 23, 2005 -- O'Reilly Automotive, Inc. ("O'Reilly" or
"the Company") (Nasdaq: ORLY) today announced record revenues and earnings for
the fourth quarter and year ended December 31, 2004, representing 12 consecutive
years of record revenues and earnings and positive comparable store product
sales increases for O'Reilly since becoming a public company in April 1993.
Net income, before the cumulative effect of accounting change, for the year
ended December 31, 2004, totaled $124.2 million, up 24.1% from $100.1 million
for the same period a year ago. Diluted earnings per common share, before the
cumulative effect of accounting change, for the year ended December 31, 2004,
increased 21.2% to $2.23 on 55.7 million shares versus $1.84 a year ago on 54.5
million shares. Product sales for the year ended December 31, 2004, totaled
$1.72 billion, up 13.9% from $1.51 billion for the year ending December 31,
2003. Gross profit for the year ended December 31, 2004, increased to $743.2
million (or 43.2% of product sales) from $638.3 million (or 42.2% of product
sales) for the year ended December 31, 2003, representing an increase of 16.4%.
Operating, selling, general and administrative ("OSG&A") expenses for the year
ended December 31, 2004, increased to $542.3 million (or 31.5% of product sales)
from $473.1 million (or 31.3% of product sales) for the year ended December 31,
2003, representing an increase of 14.6%. The cumulative effect of accounting
change resulted in a one-time benefit of $21.9 million, net of taxes, or an
additional $0.39 per diluted share, bringing total earnings for the year to
$146.1 million or $2.62 per diluted share.
Net income for the fourth quarter ended December 31, 2004, totaled $28.5
million, up 19.2% from $23.9 million for the same period in 2003. Diluted
earnings per common share for the fourth quarter of 2004 increased 18.6% to
$0.51 on 56.0 million shares compared to $0.43 for the fourth quarter of 2003 on
55.3 million shares. Product sales for the fourth quarter ended December 31,
2004, totaled $427.6 million, up 16.5% from $367.0 million for the same period a
year ago. Gross profit for the fourth quarter ended December 31, 2004, increased
to $186.0 million (or 43.5% of product sales) from $156.0 million (or 42.5% of
product sales) for the same period a year ago, representing an increase of
19.2%. OSG&A expenses for the fourth quarter of 2004, increased to $139.5
million (or 32.6% of product sales) from $117.2 million (or 31.9% of product
sales) for the same period a year ago, representing an increase of 19.0%.
Comparable store product sales for stores open at least one year increased 8.5%
and 6.8% for the fourth quarter and year ending December 31, 2004, respectively,
representing 47 quarters of comparable store product sales increases since
becoming a public company in April 1993.
David O'Reilly, Chairman of the Board, stated, "We are extremely proud of the
tremendous effort by all O'Reilly team members with this quarter's same store
sales performance. Clearly there have been challenges in the market and through
hard work and determination we have been able to gain market share. This has
been accomplished by leading edge product availability and a very high level of
customer service. 2005 is another year of opportunity as we expect to add
approximately 160 new O'Reilly stores and continue to focus on growing our
existing store volumes and providing outstanding customer service."
Effective January 1, 2004, the Company changed its method of applying its LIFO
accounting policy for inventory costs. Under the new method, the Company has
inventoried certain procurement, warehousing and distribution center costs. The
previous method was to recognize those costs as incurred, reported as a
component of costs of goods sold. The Company believes the new method is
preferable as it better matches revenues and expenses and is the prevalent
method used by other entities within the automotive aftermarket. The cumulative
effect of this change was a one-time benefit of $21.9 million, net of income
taxes, or an additional $ 0.39 per diluted share.
The change increased income before income taxes and cumulative effect of
accounting change by $4.4 million and $123,000 for the year and fourth quarter
ended December 31, 2004, respectively. The change increased income before
cumulative effect of accounting change by $2.7 million (or $0.05 per diluted
share) and $76,000 (or $0.00 per diluted share) for the year and fourth quarter
ended December 31, 2004, respectively.
Also, the Company is currently reviewing certain lease accounting practices in
light of recent SEC guidance relating to operating leases. Based upon it's
preliminary review, management believes that any adjustments determined to be
appropriate, if any, would be immaterial to its current and prior years'
financial results and condition.
The Company will host a conference call Thursday, February 24, 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 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 1,249
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
December 31, 2004.
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, 2003, for more details.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
December 31, December 31,
2004 2003
------------ -----------
(Unaudited) (Note)
Assets
Current assets:
Cash and cash equivalents $ 69,028 $ 21,094
Accounts receivable, net 60,928 52,235
Amounts receivable from vendors, net 52,976 50,695
Inventory 625,320 523,750
Deferred income taxes - 4,753
Other current assets 5,225 4,399
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Total current assets 813,477 656,926
Property and equipment, at cost 791,794 626,142
Accumulated depreciation and amortization 218,243 177,084
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Net property and equipment 573,551 449,058
Notes receivable, less current portion 21,690 24,313
Other assets, net 29,697 26,736
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Total assets $ 1,438,415 $ 1,157,033
=========== ===========
Liabilities and shareholders' equity
Current liabilities:
Income taxes payable $ 9,736 $ 6,872
Accounts payable 240,548 145,954
Accrued payroll 15,130 17,307
Accrued benefits and withholdings 35,794 27,368
Deferred income taxes 7,198 -
Other current liabilities 24,817 16,883
Current portion of long-term debt 592 925
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Total current liabilities 333,815 215,309
Long-term debt, less current portion 100,322 120,977
Deferred income taxes 42,381 29,448
Other liabilities 7,596 7,014
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares - 90,000,000
Issued and outstanding shares - 55,377,130 at
December 31, 2004, and
54,664,976 at December 31, 2003 554 547
Additional paid-in capital 326,650 302,691
Retained earnings 627,097 481,047
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Total shareholders' equity 954,301 784,285
----------- -----------
Total liabilities and shareholders' equity $ 1,438,415 $ 1,157,033
=========== ===========
Note: The balance sheet at December 31, 2003, has been derived from the audited
consolidated 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
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------ ------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Note)
Product sales $ 427,618 $ 367,047 $ 1,721,241 $ 1,511,816
Cost of goods sold, including
warehouse and distribution expenses 241,650 211,024 978,076 873,481
----------- ----------- ----------- -----------
Gross profit 185,968 156,023 743,165 638,335
Operating, selling, general
and administrative expenses 139,484 117,177 542,282 473,060
----------- ----------- ----------- -----------
Operating income 46,484 38,846 200,883 165,275
Other expense, net (1,046) (639) (2,721) (5,233)
----------- ----------- ----------- -----------
Income before income taxes and
cumulative effect of accounting change 45,438 38,207 198,162 160,042
Provision for income taxes 16,947 14,305 74,004 59,955
----------- ----------- ----------- -----------
Income before cumulative effect
of accounting change 28,491 23,902 124,158 100,087
Cumulative effect of accounting
change, net of tax - - 21,892 -
----------- ----------- ----------- -----------
Net income $ 28,491 $ 23,902 $ 146,050 $ 100,087
=========== =========== =========== ===========
Net income per common share:
Income before cumulative effect
of accounting change $ 0.52 $ 0.44 $ 2.26 $ 1.86
Cumulative effect of accounting
change, net of tax - - 0.40 -
----------- ----------- ----------- -----------
Net income $ 0.52 $ 0.44 $ 2.66 $ 1.86
=========== =========== =========== ===========
Net income per common share -
assuming dilution:
Income before cumulative effect
of accounting change $ 0.51 $ 0.43 $ 2.23 $ 1.84
Cumulative effect of accounting
change, net of tax - - 0.39 -
----------- ----------- ----------- -----------
Net income $ 0.51 $ 0.43 $ 2.62 $ 1.84
=========== =========== =========== ===========
Weighted average common
shares outstanding 55,267 54,492 55,010 53,908
Adjusted weighted average common =========== =========== =========== ===========
shares outstanding
- assuming dilution 55,962 55,266 55,711 54,530
=========== =========== =========== ===========
Note: The income statement at December 31, 2003, has been derived from the
audited consolidated financial statements 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
SELECTED FINANCIAL INFORMATION
(Unaudited)
December 31,
------------------------------------------------------------------------
Excluding Cumulative Including Cumulative
Effect of Accounting Effect of Accounting
Change 2004 Change 2004 2003
-------------------- -------------------- --------------------
Inventory turnover (1) 1.8 1.7 1.7
Inventory turnover, net of payables (2) 2.7 2.6 2.2
AP to Inventory (3) 40.8% 38.5% 27.9%
Debt-to-capital (4) 9.8% 9.6% 13.5%
Return on equity (5) 14.5% 16.8% 14.0%
Return on assets (6) 9.7% 11.3% 9.2%
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------- ---------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Other Information (in thousands):
Capital Expenditures $ 47,266 $ 36,450 $ 173,486 $ 136,497
Depreciation & Amortization $ 13,192 $ 11,131 $ 48,268 $ 42,374
Interest Expense $ 1,288 $ 956 $ 4,700 $ 6,864
Lease & Rental Expense $ 9,659 $ 8,587 $ 35,803 $ 33,456
Sales per weighted-average square foot (7) $ 51.31 $ 49.82 $ 217.13 $ 214.73
Sales per weighted-average
store (in thousands) (8) $ 342 $ 330 $ 1,443 $ 1,413
Square footage (in thousands) 8,318 7,348
Store count:
New stores, net (twelve months ended) 140 128
Total stores 1,249 1,109
Total employment 17,410 15,484
(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 for the last 12 months 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.