Exhibit 99.1

FOR IMMEDIATE RELEASE

 

O’REILLY AUTOMOTIVE, INC. REPORTS SECOND QUARTER 2012 RESULTS

 

 

Springfield, MO, July 25, 2012 – O’Reilly Automotive, Inc. (the “Company” or “O’Reilly”) (Nasdaq: ORLY), a leading retailer in the automotive aftermarket industry, today announced record revenues and earnings for its second quarter ended June 30, 2012. 

 

2nd Quarter Financial Results

Sales for the second quarter ended June 30, 2012, increased $84 million, or 6%, to $1.56 billion from $1.48 billion for the same period one year ago.  Gross profit for the second quarter increased to $780 million (or 49.9% of sales) from $719 million (or 48.6% of sales) for the same period one year ago, representing an increase of 9%.  Selling, general and administrative expenses (“SG&A”) for the second quarter, increased to $536 million (or 34.3% of sales) from $496 million (or 33.5% of sales) for the same period one year ago, representing an increase of 8%.  Operating income for the second quarter, increased to $244 million (or 15.6% of sales) from $222 million (or 15.0% of sales) for the same period one year ago, representing an increase of 10%.

 

Net income for the second quarter ended June 30, 2012, increased $12 million, or 9%, to $146 million (or 9.3% of sales) from $134 million (or 9.0% of sales) for the same period one year ago.  Diluted earnings per common share for the second quarter increased 20% to $1.15 on 127 million shares versus $0.96 for the same period one year ago on 140 million shares.

 

“We are pleased to report solid second quarter results, highlighted by a 20% increase in diluted earnings per share, which was driven by a 56 basis point increase in operating margin,” stated Greg Henslee, O’Reilly’s CEO and Co-President.  “Despite the challenging environment during the quarter, our continued commitment to providing industry-leading customer service allowed us to profitably grow sales with a comparable store sales increase of 2.5%, while also increasing our gross profit by 132 basis points.  I would like to thank our over 52,000 Team Members for their continued dedication and hard work - your commitment to providing the highest level of customer service in the industry remains the key to our current and long-term success.”

 

Year-to-Date Financial Results

Sales for the first six months of 2012 increased $230 million, or 8%, to $3.09 billion from $2.86 billion for the same period one year ago.  Gross profit for the first six months of 2012 increased to $1.54 billion (or 49.9% of sales) from $1.39 billion (or 48.5% of sales) for the same period one year ago, representing an increase of 11%.  SG&A for the first six months of 2012 increased to $1.05 billion (or 34.0% of sales) from $970 million (or 33.9% of sales) for the same period one year ago, representing an increase of 8%.  Operating income for the first six months of 2012 increased to $491 million (or 15.9% of sales) from $419 million (or 14.6% of sales) for the same period one year ago, representing an increase of 17%.

 

Net income for the first six months of 2012 increased $57 million, or 24%, to $294 million (or 9.5% of sales) from $236 million (or 8.3% of sales) for the same period one year ago.  Diluted earnings per common share for the first six months of 2012 increased 37% to $2.29 on 128 million shares versus $1.67 for the same period one year ago on 141 million shares.

 

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As previously announced, the Company’s results for the first six months of 2011 included one-time charges associated with the financing transactions the Company completed in January of 2011.  The one-time charges included 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 $22 million ($13 million, net of tax) and a charge related to the termination of the Company’s interest rate swap agreements in the amount of $4 million ($3 million, net of tax).  The charges related to the Company’s financing transactions were included in “Other income (expense)” on the Company’s Condensed Consolidated Statements of Income for the six months ended June 30, 2011.  The results discussed in the paragraph below are adjusted for these nonrecurring items for the six months ended June 30, 2012 and 2011, and are reconciled in the table accompanying this release.

 

Adjusted net income for the first six months of 2012 increased $41 million, or 16%, to $294 million (or 9.5% of sales) from $252 million (or 8.8% of sales) for the same period one year ago.  Adjusted diluted earnings per common share for the first six months of 2012 increased 29% to $2.29 from $1.78 for the same period one year ago.

 

Mr. Henslee commented, “We continue to make significant progress on our initiative to operate the business with less working capital – highlighting our progress is an increase in year-to-date free cash flow of 31% to $540 million, and we have used this free cash to directly return value to our shareholders through our share repurchase program.  We have repurchased $861 million of our stock this year and, since the inception of the program last year, we have repurchased over $1.8 billion of our stock." 

 

Mr. Henslee continued, “We believe the key drivers for demand in our industry remain intact, however, more importantly, we remain dedicated to executing our proven dual market strategy and providing the highest level of customer service in the industry.  Our unwavering commitment to both our do-it-yourself and professional service provider customers, supported by our robust distribution infrastructure, unsurpassed parts availability and highly trained and knowledgeable parts professionals, is the key to our continued future, profitable growth.”

 

O’Reilly’s COO and Co-President, Ted Wise, commented, “We currently operate 3,859 stores, after opening 50 new stores during the quarter, keeping us on track to open 180 net, new stores during 2012.  July marks the fourth anniversary of our acquisition of CSK Auto Inc. and we continue to build strong relationships with our professional service provider customers, as well as increase O’Reilly brand recognition, in these acquired markets.  We remain focused on growing our retail market share and thus far this year, we have relocated 17 stores and renovated 34 stores to improve both our retail image and ensure the best customer experience possible.  Our continued growth and success is the direct result of our Team Members’ commitment to providing excellent customer service every day and I want to thank each of you for your dedication and hard work.”

 

Share Repurchase Program

As previously announced, on June 1, 2012, the Company’s Board of Directors approved a resolution to increase the authorization under the Company’s share repurchase program by an additional $500 million, raising the cumulative authorization under the share repurchase program to $2 billion.  During the second quarter ended June 30, 2012, the Company repurchased 4.5 million shares of its common stock at an average price per share of $97.47 for a total investment of $440 million.  During the six months ended June 30, 2012, the Company repurchased 6.3 million shares of its common stock at an average price per share of $94.52 for a total investment of $594 million.  Subsequent to the end of the second quarter and through the date of this release, the Company repurchased an additional 3.1 million shares of its common stock at an average price per share of $85.48 for a total investment of $267 million.  The Company has repurchased a total of 25.3 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 through the date of this release, at an average price of $72.67, for a total investment of $1.84 billion.  As of the date of this release, the Company had approximately $163 million remaining under its share repurchase program.

 

 

2nd Quarter and Year-to-Date 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 and sales to team members.  Comparable store sales increased 2.5% for the second quarter ended June 30, 2012, versus 4.4% for the same period one year ago.  Comparable store sales increased 4.9% for the first six months of 2012, versus 5.0% for the same period one year ago.

 

 

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3rd Quarter and Updated Full-Year 2012 Guidance

The table below outlines the Company’s guidance for selected third quarter and updated full-year 2012 financial data:

 

 

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 net income, adjusted diluted earnings per common share, free cash flow, and rent-adjusted debt to adjusted earnings before interest, taxes, depreciation, amortization, share-based compensation and rent (“EBITDAR”).  The Company does not, 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 former CSK Auto Corporation (“CSK”) officer clawback, the non-cash charge to write off the balance of debt issuance costs, the charge related to the termination of interest rate swap agreements, the nonrecurring, non-operating gain related to the settlement of a note receivable acquired in the acquisition of CSK, the charges related to the legacy CSK DOJ investigation, as well as the presentation of adjusted debt to adjusted 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 measure in the tables accompanying this release.

 

Earnings Conference Call Information

The Company will host a conference call on Thursday, July 26, 2012, 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 website at www.oreillyauto.com by clicking on “Investor Relations” and then “News Room”.  Interested analysts are invited to join the call.  The dial-in number for the call is (706) 679-5789; the conference call identification number is 93846243.  A replay of the call will 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 service provider markets.  Founded in 1957 by the O’Reilly family, the Company operated 3,859 stores in 39 states as of June 30, 2012.

 

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, 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 regulations, the Company’s increased debt levels, credit ratings on the Company’s public debt, the Company’s ability to hire and retain qualified employees, risks associated

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with the performance of acquired businesses such as CSK, 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, 2011, for additional factors that could materially affect the Company’s financial performance.  The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

For further information contact:            Investor & Media Contact                                          Mark Merz (417) 829-5878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

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Note:  The balance sheet at December 31, 2011, 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 Sates for complete financials.

 

O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share data)

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O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

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O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

SELECTED FINANCIAL INFORMATION

(Unaudited)

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O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(Unaudited)

 

 

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