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| 8-K - FORM 8-K FILING DOCUMENT - O REILLY AUTOMOTIVE INC | document.htm |
EXHIBIT 99.1
O'Reilly Automotive, Inc. Reports Fourth Quarter and Full-Year 2010 Results
- Full-year adjusted diluted EPS increased 37% to $3.05
- Comparable store sales increase of 8.8% for full-year 2010
- Full-year adjusted operating margin increased to 13.6%
SPRINGFIELD, Mo., Feb. 16, 2011 (GLOBE NEWSWIRE) -- O'Reilly Automotive, Inc. ("O'Reilly" or "the Company") (Nasdaq:ORLY), a leading retailer in the automotive aftermarket industry, today announced record revenues and earnings for the fourth quarter and year ended December 31, 2010. The results represent 18 consecutive years of comparable store sales growth and record revenue and operating income for O'Reilly since becoming a public company in April of 1993.
4th Quarter 2010 Financial Results
Sales for the fourth quarter ended December 31, 2010, increased $137 million, or 12%, to $1.31 billion from $1.17 billion for the same period a year ago. Gross profit for the fourth quarter ended December 31, 2010, increased to $637 million (or 48.6% of sales) from $570 million (or 48.5% of sales) for the same period a year ago, representing an increase of 12%. Selling, General and Administrative ("SG&A") expenses for the fourth quarter ended December 31, 2010, increased to $472 million (or 36.1% of sales) from $444 million (or 37.8% of sales) for the same period a year ago, representing an increase of 6%. Operating income for the fourth quarter ended December 31, 2010, increased to $164 million (or 12.5% of sales) from $125 million (or 10.7% of sales) for the same period a year ago, representing an increase of 31%.
Net income for the fourth quarter ended December 31, 2010, totaled $106 million (or 8.1% of sales), up 47% from $72 million (or 6.1% of sales) for the same period a year ago. Diluted earnings per common share for the fourth quarter ended December 31, 2010, increased 42% to $0.74 on 143 million shares versus $0.52 for the same period a year ago on 139 million shares.
The Company's results for the fourth quarter ended December 31, 2010, included a nonrecurring, non-operating gain of $11.6 million ($7.2 million, net of tax) in "Other income" related to the settlement of a note receivable acquired in the July 11, 2008, acquisition of CSK Auto Corporation ("CSK"). The note was favorably settled for a gain in the fourth quarter of 2010. Adjusted diluted earnings per common share, excluding the impact of the gain related to the settlement of the note receivable, increased 33% to $0.69 for the fourth quarter ended December 31, 2010, from $0.52 for the same period a year ago. The table below outlines the impact of the gain on the settlement of the note receivable for the fourth quarter ended December 31, 2010, (amounts in thousands, except per share data):
| For the Three Months Ended December 31, | ||||
| 2010 | 2009 | |||
| Amount | % of Sales | Amount | % of Sales | |
| Net income | $105,760 | 8.1% | $71,923 | 6.1% |
| Gain on settlement of note receivable, net of tax | (7,215) | (0.6)% | -- | --% |
| Adjusted net income | $98,545 | 7.5% | $71,923 | 6.1% |
| Diluted earnings per common share | $0.74 | $0.52 | ||
| Gain on settlement of note receivable, net of tax | (0.05) | -- | ||
| Adjusted diluted earnings per common share | $0.69 | $0.52 | ||
"O'Reilly finished the year with a very strong fourth quarter as we, again, delivered record breaking revenues and earnings," said Greg Henslee, CEO and Co-President. "We achieved comparable store sales growth of 9.2% for the fourth quarter which drove an increase of 33% in adjusted earnings per share, resulting in our eighth consecutive quarter of double digit earnings growth. In November, we converted our acquired Phoenix distribution center to the O'Reilly systems and simultaneously converted the final 151 CSK stores to our point-of-sale system. With these conversions, all acquired CSK stores now have same-day or overnight access to O'Reilly's broad range of hard parts product offerings, marking a significant milestone in the CSK integration process. Through the consistent execution of our proven dual market strategy and with the support of our robust distribution network, we continue to profitably grow market share in all the markets we serve."
Full-Year 2010 Financial Results
Sales for the year ended December 31, 2010, increased $550 million, or 11%, to $5.4 billion from $4.85 billion for the year ended December 31, 2009. Gross profit for the year ended December 31, 2010, increased to $2.62 billion (or 48.6% of sales) from $2.33 billion (or 48.0% of sales) for the year ended December 31, 2009, representing an increase of 13%. SG&A expenses for the year ended December 31, 2010, increased to $1.89 billion (or 35.0% of sales) from $1.79 billion (or 36.9% of sales) for the year ended December 31, 2009, representing an increase of 6%. Operating income for the year ended December 31, 2010, increased to $713 million (or 13.2% of sales) from $538 million (or 11.1% of sales) for the year ended December 31, 2009, representing an increase of 33%.
Net income for the year ended December 31, 2010, totaled $419 million (or 7.8% of sales), up 36% from $307 million (or 6.3% of sales) for the year ended December 31, 2009. Diluted earnings per common share for the year ended December 31, 2010, increased 32% to $2.95 on 142 million shares versus $2.23 one year ago on 138 million shares.
The Company's results for the year ended December 31, 2010, included charges related to the legacy United States Department of Justice ("DOJ") investigation of CSK. As previously disclosed, prior to O'Reilly's acquisition of CSK in July of 2008, the DOJ began an investigation of CSK relating to CSK's historical accounting practices. O'Reilly and the DOJ have agreed in principle, subject to final documentation, to resolve the DOJ investigation of CSK's legacy accounting practices. Based upon the agreement in principle for a final settlement, the Company recorded a charge of $20.9 million for the year ended December 31, 2010, in anticipation of the DOJ, CSK and O'Reilly executing a Non-Prosecution Agreement and the Company paying a one-time monetary penalty of $20.9 million to the DOJ. The Company's results for the year ended December 31, 2010, also include other income related to a nonrecurring, non-operating gain of $11.6 million ($7.2 million, net of tax) on the settlement of a note receivable acquired in the acquisition of CSK, as discussed above.
Adjusted operating income for the year ended December 31, 2010, excluding the impact of the charges related to the CSK DOJ investigation discussed above, increased to $734 million (or 13.6% of sales) from $538 million (or 11.1% of sales) for the year ended December 31, 2009. Adjusted diluted earnings per common share, excluding the impact of the charges related to the CSK DOJ investigation and the gain on the settlement of the note receivable discussed above, increased 37% to $3.05 for the year ended December 31, 2010, from $2.23 for the same period one year ago. The table below outlines the impact of the CSK DOJ investigation charge and the gain on the settlement of the note receivable for the year ended December 31, 2010, (amounts in thousands, except per share data):
| For the Year Ended December 31, | ||||
| 2010 | 2009 | |||
| Amount | % of Sales | Amount | % of Sales | |
| Operating income | $712,776 | 13.2% | $537,619 | 11.1% |
| Legacy CSK DOJ investigation charge | 20,900 | 0.4% | -- | --% |
| Adjusted operating income | $733,676 | 13.6% | $537,619 | 11.1% |
| Net income | $419,373 | 7.8% | $307,498 | 6.3% |
| Legacy CSK DOJ investigation charge | 20,900 | 0.4% | -- | --% |
| Gain on settlement of note receivable, net of tax | (7,215) | (0.2)% | -- | --% |
| Adjusted net income | $433,058 | 8.0% | $307,498 | 6.3% |
| Diluted earnings per common share | $2.95 | $2.23 | ||
| Legacy CSK DOJ investigation charge | 0.15 | -- | ||
| Gain on settlement of note receivable, net of tax | (0.05) | -- | ||
| Adjusted diluted earnings per common share | $3.05 | $2.23 | ||
Ted Wise, COO and Co-President, stated, "During 2010, we opened 156 new stores, closed 7 stores and opened a record four new DCs, increasing our store count to 3,570 and our DC count to 23. We also converted 884 acquired CSK stores to the O'Reilly systems and converted one CSK DC to the O'Reilly systems. During the first half of 2011, we will finish the rebranding and signage changeovers of all the acquired CSK stores, including front-room remodels, decor package installations and outside sign replacements. We also plan to open 170 new stores in 2011. Our continued growth and success is the direct result of our Team's relentless dedication to providing excellent customer service to all of our retail and professional service providers. Due to the hard work of our Team Members, 2010 has been a very successful year for Team O'Reilly, and we are excited to continue to grow our business in 2011."
Mr. Henslee added, "As we look ahead to 2011, our focus will continue to be on profitable growth and margin improvements by providing unsurpassed levels of customer service. With the completion of the system conversions in the acquired CSK stores, we are well positioned to aggressively expand our market share during the coming years. I would like to thank all 47,000 of our hard working and dedicated Team Members for the fantastic results they achieved in 2010; we look forward to building upon those results in 2011."
4th Quarter and Full-Year 2010 Comparable Store Sales Results
Comparable store sales are calculated based on the change in sales for stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores, sales to team members and sales during the one- to two-week period certain CSK branded stores were closed for conversion. Comparable store sales increased 9.2% for the fourth quarter of 2010 versus 2.7% for the same period one year ago. Comparable store sales increased 8.8% for the year ended December 31, 2010, versus 4.6% for the year ended December 31, 2009.
1st Quarter and Full-Year 2011 Guidance
The table below outlines the Company's guidance for selected first quarter and full-year 2011 financial data:
|
Three Months Ended March 31, 2011 |
Year Ended December 31, 2011 |
|
| New store openings | 170 | |
| Comparable store sales | 3% to 5% | 3% to 6% |
| Total revenue | $5.7 billion to $5.8 billion | |
| Gross profit margin | 48.4% to 48.8% | |
| Operating margin | 13.9% to 14.4% | |
| Diluted earnings per share | $0.63 to $0.67 | $3.26 to $3.36 |
| Adjusted diluted earnings per share (1) | $0.74 to $0.78 | $3.37 to $3.47 |
| Capital expenditures | $310 million to $340 million | |
| Free cash flow (2) | $320 million to $350 million | |
| (1) The adjusted diluted earnings per share guidance excludes $0.11 related to one-time charges associated with the new financing plan the Company completed on January 14, 2011. These one-time items include an adjustment to earnings per share of $0.09, net of tax, for a non-cash charge to write-off the balance of debt issuance costs related to the Company's previous credit facility in the amount of $21.6 million and an adjustment to earnings per share of $0.02, net of tax, for a charge related to the termination of the Company's interest rate swap agreements in the amount of $4.2 million. | ||
| (2) Calculated as net cash flows provided by/used in operating activities less capital expenditures for the period. | ||
Non-GAAP Information
This release contains certain financial information not derived in accordance with United States generally accepted accounting principles ("GAAP"). These items include adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per common share, free cash flow, as well as rent-adjusted debt to earnings before interest, taxes, depreciation, amortization, stock option compensation and rent ("EBITDAR"). The Company does not, and nor does it suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. The Company believes that the presentation of financial results and estimates excluding the impact of the CSK DOJ investigation charge, the gain from the settlement of the note receivable, as well as the presentation of EBITDAR and free cash flow, provide meaningful supplemental information to both management and investors that is indicative of the Company's core operations. The Company excludes these items in judging its performance and believes this non-GAAP information is useful to investors as well. The Company has included a reconciliation of this additional information to the most comparable GAAP measures in the accompanying reconciliation table.
Earnings Conference Call Information
The Company will host a conference call Thursday, February 17, 2011, at 10:00 a.m. central time to discuss its results as well as future expectations. Investors may listen to the conference call live on the Company's web site, www.oreillyauto.com, by clicking on "Investor Relations" and then "News Room". We invite interested analysts to join our call. The dial-in number for the call is (706) 679-5789; the conference call ID number is 33644868. A replay of the call will also be available on the Company's website following the conference call.
About O'Reilly Automotive, Inc.
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 3,570 stores in 38 states as of December 31, 2010.
The O'Reilly Automotive, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5430
Forward-Looking Statements
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. You can identify these statements by forward-looking words such as "expect," "believe," "anticipate," "should," "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, CSK DOJ investigation resolution, integration 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 such as the integration of CSK Auto Corporation, 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" section of the annual report on Form 10-K for the year ended December 31, 2009, for additional factors that could materially affect our financial performance.
| O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
|
(In thousands, except share data) |
||
|
|
December 31, 2010 |
December 31, 2009 |
|
|
(Unaudited) | (Note) |
| Assets |
|
|
| Current assets: |
|
|
| Cash and cash equivalents | $29,721 | $26,935 |
| Accounts receivable, net | 121,807 | 107,887 |
| Amounts receivable from vendors | 61,845 | 63,110 |
| Inventory | 2,023,488 | 1,913,218 |
| Deferred income taxes | 33,877 | 85,934 |
| Other current assets | 30,514 | 29,635 |
| Total current assets | 2,301,252 | 2,226,719 |
|
|
|
|
| Property and equipment, at cost | 2,705,434 | 2,353,240 |
| Less: accumulated depreciation and amortization | 775,339 | 626,861 |
| Net property and equipment | 1,930,095 | 1,726,379 |
|
|
|
|
| Notes receivable, less current portion | 18,047 | 12,481 |
| Goodwill | 743,975 | 744,313 |
| Other assets, net | 54,458 | 71,579 |
| Total assets | $5,047,827 | $4,781,471 |
| Liabilities and shareholders' equity |
|
|
| Current liabilities: |
|
|
| Accounts payable | $895,736 | $818,153 |
| Self-insurance reserves | 51,192 | 55,348 |
| Accrued payroll | 52,725 | 42,790 |
| Accrued benefits and withholdings | 45,542 | 44,295 |
| Income taxes payable | 4,827 | 8,068 |
| Other current liabilities | 177,505 | 143,781 |
| Current portion of long-term debt | 1,431 | 106,708 |
| Total current liabilities | 1,228,958 | 1,219,143 |
|
|
|
|
| Long-term debt, less current portion | 357,273 | 684,040 |
| Deferred income taxes | 68,736 | 18,321 |
| Other liabilities | 183,175 | 174,102 |
| Shareholders' equity: |
|
|
| Common stock, $0.01 par value: |
|
|
| Authorized shares – 245,000,000 |
|
|
|
Issued and outstanding shares – 141,025,544 at December 31, 2010, and |
|
|
| 137,468,063 at December 31, 2009 | 1,410 | 1,375 |
| Additional paid-in capital | 1,141,749 | 1,042,329 |
| Retained earnings | 2,069,496 | 1,650,123 |
| Accumulated other comprehensive loss | (2,970) | (7,962) |
| Total shareholders' equity | 3,209,685 | 2,685,865 |
| Total liabilities and shareholders' equity | $5,047,827 | $4,781,471 |
|
|
||
|
Note: The balance sheet at December 31, 2009, 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. Certain prior period amounts have been reclassified to conform to current period presentation. |
||
| O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
| (In thousands, except per share data) | ||||
| Three Months Ended | Year Ended | |||
| December 31, | December 31, | |||
| 2010 | 2009 | 2010 | 2009 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Note) | |
| Sales | $1,310,330 | $1,173,697 | $5,397,525 | $4,847,062 |
| Cost of goods sold, including warehouse and distribution expenses | 673,733 | 604,163 | 2,776,533 | 2,520,534 |
| Gross profit | 636,597 | 569,534 | 2,620,992 | 2,326,528 |
| Selling, general and administrative expenses | 472,461 | 444,122 | 1,887,316 | 1,788,909 |
| Legacy CSK DOJ investigation charge | -- | -- | 20,900 | -- |
| Operating income | 164,136 | 125,412 | 712,776 | 537,619 |
| Other income (expense): | ||||
| Interest expense | (7,492) | (11,069) | (39,273) | (45,176) |
| Interest income | 532 | 416 | 1,941 | 1,543 |
| Gain on settlement of note receivable | 11,639 | -- | 11,639 | -- |
| Other, net | 445 | 1,214 | 2,290 | 2,912 |
| Total other income (expense) | 5,124 | (9,439) | (23,403) | (40,721) |
| Income before income taxes | 169,260 | 115,973 | 689,373 | 496,898 |
| Provision for income taxes | 63,500 | 44,050 | 270,000 | 189,400 |
| Net income | $105,760 | $71,923 | $419,373 | $307,498 |
| Basic earnings per share: | ||||
| Earnings per share | $0.76 | $0.52 | $3.02 | $2.26 |
| Weighted-average common shares outstanding – basic | 139,850 | 137,302 | 138,654 | 136,230 |
| Earnings per share-assuming dilution: | ||||
| Earnings per share | $0.74 | $0.52 | $2.95 | $2.23 |
|
Weighted-average common shares outstanding – assuming dilution |
143,203 | 139,049 | 141,992 | 137,882 |
|
Note: The income statement for the year ended December 31, 2009, 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 | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (In thousands) | ||
| Year Ended December 31, | ||
| 2010 | 2009 | |
| (Unaudited) | (Note) | |
| Operating activities: | ||
| Net income | $419,373 | $307,498 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||
| Depreciation and amortization on property and equipment | 159,730 | 142,912 |
| Amortization of intangibles | 1,712 | 5,267 |
| Amortization of premium on exchangeable notes | (707) | (750) |
| Amortization of debt issuance costs | 8,559 | 8,508 |
| Excess tax benefit of stock options exercised | (18,587) | (10,215) |
| Deferred income taxes | 99,257 | 50,381 |
| Gain on settlement of note receivable | (11,639) | -- |
| Stock option compensation programs | 14,947 | 13,451 |
| Other share based compensation programs | 2,026 | 7,962 |
| Other | 6,893 | 8,739 |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (21,748) | (9,714) |
| Inventory | (110,271) | (339,742) |
| Accounts payable | 82,574 | 79,824 |
| Income taxes payable | 15,346 | 6,505 |
| Other | 56,222 | 14,574 |
| Net cash provided by operating activities | 703,687 | 285,200 |
| Investing activities: | ||
| Purchases of property and equipment | (365,419) | (414,779) |
| Proceeds from sale of property and equipment | 2,124 | 4,288 |
| Payments received on notes receivable | 17,364 | 5,819 |
| Other | (5,346) | (5,989) |
| Net cash used in investing activities | (351,277) | (410,661) |
| Financing activities: | ||
| Proceeds from borrowings on asset-based revolving credit facility | 548,700 | 664,550 |
| Payments on asset-based revolving credit facility | (871,500) | (599,950) |
| Principal payments on debt and capital leases | (108,527) | (13,648) |
| Excess tax benefit of stock options exercised | 18,587 | 10,215 |
| Net proceeds from issuance of common stock | 63,116 | 59,508 |
| Other | -- | 420 |
| Net cash (used in)/provided by financing activities | (349,624) | 121,095 |
| Net increase/(decrease) in cash and cash equivalents | 2,786 | (4,366) |
| Cash and cash equivalents at beginning of year | 26,935 | 31,301 |
| Cash and cash equivalents at end of year | $29,721 | $26,935 |
| Supplemental disclosures of cash flow information: | ||
| Income taxes paid | $154,146 | $130,720 |
| Interest paid, net of capitalized interest | 31,211 | 36,881 |
| Property and equipment acquired through issuance of capital lease obligations | -- | 8,337 |
|
Note: The cash flow statement for the year ended December 31, 2009, 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. Certain prior period amounts have been reclassified to conform to current period presentation. |
||
| O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES | ||
| SELECTED FINANCIAL INFORMATION | ||
| (Unaudited) | ||
| For the Year Ended | ||
| (In thousands, except adjusted debt to adjusted EBITDAR ratio) | December 31, | |
| 2010 | 2009 | |
| Debt | $358,704 | $790,748 |
| Add: Letters of credit | 71,206 | 72,381 |
| Rent X 6 | 1,361,274 | 1,374,804 |
| Less: Premium on exchangeable notes | -- | 718 |
| Adjusted debt | $1,791,184 | $2,237,215 |
| Adjusted net income (1) | $433,058 | $307,498 |
| Add: Interest expense | 39,273 | 45,176 |
| Taxes (2) | 265,576 | 189,400 |
| Adjusted EBIT | 737,907 | 542,074 |
| Add: Depreciation and amortization | 161,442 | 148,179 |
| Rent expense | 226,879 | 229,134 |
| Stock option compensation expense | 14,947 | 13,451 |
| Adjusted EBITDAR | $1,141,175 | $932,838 |
| Adjusted debt to adjusted EBITDAR | 1.6 | 2.4 |
| December 31, | ||
| 2010 | 2009 | |
| Selected Balance Sheet Ratios: | ||
| Inventory turnover (3) | 1.4 | 1.4 |
| Inventory turnover, net of payables (4) | 2.5 | 2.6 |
| Average inventory per store (in thousands) (5) | $567 | $559 |
| AP to inventory (6) | 44.3% | 42.8% |
| Debt-to-capital (7) | 10.1% | 22.7% |
| Return on equity (8) | 14.4% | 12.1% |
| Return on assets (9) | 8.7% | 6.7% |
| Three Months Ended | Year Ended | |||
| December 31, | December 31, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Selected Financial Information (in thousands): | ||||
| Capital expenditures | $88,956 | $97,584 | $365,419 | $414,779 |
| Free cash flow (10) | $22,168 | $(101,364) | $338,268 | $(129,579) |
| Depreciation and amortization | $40,711 | $37,054 | $161,442 | $148,179 |
| Interest expense | $7,492 | $11,069 | $39,273 | $45,176 |
| Lease and rental expense | $56,967 | $57,642 | $226,879 | $229,134 |
| Three Months Ended | Year Ended | |||
| December 31, | December 31, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Store Information: | ||||
| Sales per weighted-average square foot (11) | $51.44 | $48.10 | $215.58 | $201.51 |
| Square footage (in thousands) | 25,315 | 24,200 | ||
| Sales per weighted-average store (in thousands) (12) | $365 | $340 | $1,527 | $1,424 |
| Total employment | 46,858 | 44,880 | ||
| Store Count by Brand | |||||
| O'Reilly | Checker | Schuck's | Kragen | Total | |
| December 31, 2009 | 2,533 | 321 | 75 | 492 | 3,421 |
| New | 156 | -- | -- | -- | 156 |
| Converted | 884 | (321) | (75) | (488) | -- |
| Closed | (3) | -- | -- | (4) | (7) |
| December 31, 2010 | 3,570 | -- | -- | -- | 3,570 |
| (1)Excludes the charge related to the CSK DOJ investigation and the nonrecurring, non-operating gain related to the settlement of the CSK note receivable, net of tax, for the year ended December 31, 2010. |
| (2) Excludes the tax impact of the nonrecurring, non-operating gain related to the settlement of the CSK note receivable. |
| (3) Calculated as cost of sales for the last 12 months divided by average inventory. Average inventory is calculated as the average of inventory for the trailing four quarters used in determining the denominator. |
| (4) Calculated as cost of sales for the last 12 months divided by average net inventory. Average net inventory is calculated as the average of inventory less accounts payable for the trailing four quarters used in determining the denominator. |
| (5) Calculated as total inventory divided by store count at end of the reported period. |
| (6) Calculated as accounts payable divided by inventory. |
| (7) Calculated as 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. |
| (8) Calculated as the last 12 months net income, before the impact of the charge related to the legacy CSK DOJ investigation and the gain on the settlement of the CSK note receivable, net of tax, divided by average shareholders' equity. Due to the nature of the CSK related charge and gain, the adjustments are made to provide comparable results. Average shareholders' equity is calculated as the average of shareholders' equity for the trailing four quarters used in determining the denominator. |
| (9) Calculated as the last 12 months net income, before the impact of the charge related to the legacy CSK DOJ investigation and the gain on the settlement of the CSK note receivable, net of tax, divided by average total assets. Due to the nature of the CSK related charge and gain, the adjustments are made to provide comparable results. Average total assets are calculated as the average total assets for the trailing four quarters used in determining the denominator. |
| (10) Calculated as net cash flows provided by/used in operating activities less capital expenditures for the period. |
| (11) Calculated as total sales less jobber sales, divided by weighted-average square feet. Weighted-average sales per square foot are weighted to consider the approximate dates of store openings or expansions. |
| (12) Calculated as total sales less jobber sales, divided by weighted-average stores. Weighted-average sales per store are weighted to consider the approximate dates of store openings or expansions. |
| O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES | ||||
| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION | ||||
| (Unaudited) | ||||
| Three Months Ended | Twelve Months Ended | |||
| (In thousands, except per share and operating margin data) | December 31, | December 31, | ||
| 2010 | 2009 | 2010 | 2009 | |
| GAAP operating income | $164,136 | $125,412 | $712,776 | $537,619 |
| Legacy CSK DOJ investigation charge | -- | -- | 20,900 | -- |
| Non-GAAP adjusted operating income | $164,136 | $125,412 | $733,676 | $537,619 |
| GAAP operating margin | 12.5% | 10.7% | 13.2% | 11.1% |
| Legacy CSK DOJ investigation charge | -- | -- | 0.4% | -- |
| Non-GAAP adjusted operating margin | 12.5% | 10.7% | 13.6% | 11.1% |
| GAAP net income | $105,760 | $71,923 | $419,373 | $307,498 |
| Legacy CSK DOJ investigation charge | -- | -- | 20,900 | -- |
| Gain on settlement of note receivable, net of tax | (7,215) | -- | (7,215) | -- |
| Non-GAAP adjusted net income | $98,545 | $71,923 | $433,058 | $307,498 |
| GAAP diluted earnings per share | $0.74 | $0.52 | $2.95 | $2.23 |
| Legacy CSK DOJ investigation charge | -- | -- | 0.15 | -- |
| Gain on settlement of note receivable, net of tax | (0.05) | -- | (0.05) | -- |
| Non-GAAP adjusted diluted earnings per share | $0.69 | $0.52 | $3.05 | $2.23 |
| Weighted-average common shares outstanding – assuming | ||||
| dilution | 143,203 | 139,049 | 141,992 | 137,882 |
| Twelve Months Ended | ||
| (In thousands, except adjusted debt to EBITDAR ratio) | December 31, | |
| 2010 | 2009 | |
| GAAP debt | $358,704 | $790,748 |
| Add: Letters of credit | 71,206 | 72,381 |
| Rent X 6 | 1,361,274 | 1,374,804 |
| Less: Premium on exchangeable notes | -- | 718 |
| Non-GAAP adjusted debt | $1,791,184 | $2,237,215 |
| GAAP net income | $419,373 | $307,498 |
| Legacy CSK DOJ investigation charge | 20,900 | -- |
| Gain on settlement of note receivable, net of tax | (7,215) | -- |
| Non-GAAP adjusted net income | 433,058 | 307,498 |
| Add: Interest expense | 39,273 | 45,176 |
| Taxes, net of impact of gain on settlement of note receivable | 265,576 | 189,400 |
| Adjusted EBIT | 737,907 | 542,074 |
| Add: Depreciation and amortization | 161,442 | 148,179 |
| Rent expense | 226,879 | 229,134 |
| Stock option compensation expense | 14,947 | 13,451 |
| Adjusted EBITDAR | $1,141,175 | $932,838 |
| Adjusted debt to adjusted EBITDAR | 1.6 | 2.4 |
CONTACT: Investor & Media Contacts
Mark Merz (417) 829-5878