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 25, 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: February 27, 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
------ -----------------------------------------------------------------
99.1 Press Release dated February 25, 2004
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
Exhibit 99.1
For further information contact: David O'Reilly
James R. Batten
(417) 862-3333
________________________________________________________________________________
O'REILLY AUTOMOTIVE REPORTS FOURTH QUARTER AND ANNUAL EARNINGS
11TH CONSECUTIVE YEAR OF RECORD REVENUES AND EARNINGS
7.8% INCREASE IN COMPARABLE STORE PRODUCT SALES
________________________________________________________________________________
Springfield, MO, February 25, 2004 -- 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, 2003, representing 11 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 for the year ended December 31, 2003, totaled $100.1 million, up
22.1% from $82.0 million for the same period a year ago. Diluted earnings per
common share for the year ended December 31, 2003, increased 20.3% to $1.84 on
54.5 million shares versus $1.53 a year ago on 53.7 million shares. Product
sales for the year ended December 31, 2003, totaled $1.51 billion, up 15.2% from
$1.31 billion for the year ending December 31, 2002. Gross profit for the year
ended December 31, 2003, increased to $638.3 million (or 42.2% of product sales)
from $553.4 million (or 42.2% of product sales) for the year ended December 31,
2002, representing an increase of 15.4%. Operating, selling, general and
administrative ("OSG&A") expenses for the year ended December 31, 2003,
increased to $473.1 million (or 31.3% of product sales) from $415.1 million (or
31.6% of product sales) for the year ended December 31, 2002, representing an
increase of 14.0%.
Net income for the fourth quarter ended December 31, 2003, totaled $23.9
million, up 27.8% from $18.7 million for the same period in 2002. Diluted
earnings per common share for the fourth quarter of 2003 increased 22.9% to
$0.43 on 55.3 million shares compared to $0.35 for the fourth quarter of 2002 on
53.7 million shares. Product sales for the fourth quarter ended December 31,
2003, totaled $367.0 million, up 16.8% from $314.2 million for the same period a
year ago. Gross profit for the fourth quarter ended December 31, 2003, increased
to $156.0 million (or 42.5% of product sales) from $131.0 million (or 41.7% of
product sales) for the same period a year ago, representing an increase of
19.1%. OSG&A expenses for the fourth quarter of 2003, increased to $117.2
million (or 31.9% of product sales) from $99.8 million (or 31.8% of product
sales) for the same period a year ago, representing an increase of 17.4%.
Comparable store product sales for stores open at least one year increased 9.8%
and 7.8% for the fourth quarter and year ending December 31, 2003, respectively,
representing 43 quarters of comparable store product sales increases since
becoming a public company in April 1993.
David O'Reilly, co-chairman and chief executive officer, stated, "We are proud
to report another strong year for Team O'Reilly. Our sales increased 15% over
last year and our net income increased 22%, reflecting our expansion into many
less populated but very profitable markets and our continuing efforts to control
expenses. Our net cash provided by operating activities allowed us to pay down
debt by approximately $70.0 million for 2003, a decrease of 36%. Our customers
continue to reward our good customer service, resulting in an industry leading
comparable store product sales increase of 7.8%."
"We opened 35, net new stores in the fourth quarter for a total of 128, net new
stores in 2003, bringing our total store count to 1,109" said Ted Wise,
co-president. "Our 2004 plans call for opening approximately 140 new stores."
The Company will host a conference call Thursday, February 26, 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 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 1,109
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 December 31, 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
December 31, December 31,
2003 2002
--------------- ---------------
(Unaudited) (Note)
(In thousands, except share data)
Assets
Current assets:
Cash $ 21,094 $ 29,333
Accounts receivable, net 52,235 45,421
Amounts receivable from vendors 43,608 42,918
Inventory 554,309 504,098
Deferred income taxes 4,753 5,040
Other current assets 4,399 4,235
--------------- ---------------
Total current assets 680,398 631,045
Property and equipment, at cost 626,142 491,523
Accumulated depreciation and amortization 177,084 137,922
--------------- ---------------
Net property and equipment 449,058 353,601
Notes receivable 1,743 1,880
Long-term receivable 37,654 3,761
Other assets 18,739 19,132
--------------- ---------------
Total assets $ 1,187,592 $ 1,009,419
=============== ===============
Liabilities and shareholders' equity
Current liabilities:
Income taxes payable $ 6,872 $ 9,798
Accounts payable 176,513 85,370
Accrued payroll 17,307 15,257
Accrued benefits and withholdings 27,368 19,165
Other current liabilities 16,883 17,150
Current portion of long-term debt 925 682
--------------- ---------------
Total current liabilities 245,868 147,422
Long-term debt, less current portion 120,977 190,470
Deferred income taxes 29,448 15,939
Other liabilities 7,014 5,064
Commitments and contingencies -- --
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares - 90,000,000
Issued and outstanding shares -
54,664,976 at December 31, 2003,
and 53,371,242 at December 31, 2002 547 534
Additional paid-in capital 302,691 269,030
Retained earnings 481,047 380,960
--------------- ---------------
Total shareholders' equity 784,285 650,524
--------------- ---------------
Total liabilities and shareholders' equity $ 1,187,592 $ 1,009,419
=============== ===============
Note: The condensed consolidated balance sheet at December 31, 2002, 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 consolidated
financial statements.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------- -------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
(In thousands, except per share data)
Product sales $ 367,047 $ 314,241 $ 1,511,816 $ 1,312,490
Cost of goods sold, including warehouse
and distribution expenses 211,024 183,251 873,481 759,090
----------- ----------- ----------- -----------
Gross profit 156,023 130,990 638,335 553,400
Operating, selling, general and
administrative expenses 117,177 99,819 473,060 415,099
----------- ----------- ----------- -----------
Operating income 38,846 31,171 165,275 138,301
Other expense, net (639) (1,949) (5,233) (7,319)
----------- ----------- ----------- -----------
Income before income taxes 38,207 29,222 160,042 130,982
Provision for income taxes 14,305 10,515 59,955 48,990
----------- ----------- ----------- -----------
Net income $ 23,902 $ 18,707 $ 100,087 $ 81,992
=========== =========== =========== ===========
Net income per common share $ 0.44 $ 0.35 $ 1.86 $ 1.54
=========== =========== =========== ===========
Net income per common share
- assuming dilution $ 0.43 $ 0.35 $ 1.84 $ 1.53
=========== =========== =========== ===========
Weighted average common shares outstanding 54,492 53,322 53,908 53,114
=========== =========== =========== ===========
Adjusted weighted average common shares
outstanding - assuming dilution 55,266 53,740 54,530 53,692
=========== =========== =========== ===========
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)
December 31,
-------------------------
2003 2002
----------- -----------
Inventory turnover (1) 1.7 1.6
Inventory turnover, net of payables (2) 2.2 1.9
AP to Inventory (3) 31.8% 16.9%
Debt-to-capital (4) 13.5% 22.7%
Return on equity (5) 14.0% 13.6%
Return on assets (6) 9.1% 8.8%
Square footage (in thousands) 7,348 6,408
Store count:
New stores, net (twelve months ended) 128 106
Total stores 1,109 981
Total employment 15,484 14,273
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Other Information (in thousands):
Capital Expenditures $ 36,450 $ 29,647 $ 136,497 $ 102,257
Depreciation & Amortization $ 11,131 $ 9,786 $ 42,374 $ 36,979
Interest Expense $ 956 $ 2,296 $ 6,864 $ 9,248
Lease & Rental Expense $ 8,587 $ 8,268 $ 33,456 $ 31,383
Sales per weighted-average square foot (7) $ 49.82 $ 48.44 $ 214.73 $ 211.38
Sales per weighted-average
store (in thousands) (8) $ 330 $ 316 $ 1,413 $ 1,372
(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 Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2003 2002 2003 2002
--------- --------- --------- ---------
(In thousands)
Net cash provided by operating activities $ 722 $ (591) $ 172,841 $ 104,533
Capital expenditures 36,450 29,647 136,497 102,257
--------- --------- --------- ---------
Free cash flow (1)(2) $ (35,728) $ (30,238) $ 36,344 $ 2,276
========= ========= ========= =========
(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.