Summary
O'Reilly Automotive, Inc. (ORLY) filed its 2009 10-K on February 25, 2010, detailing a year marked by the significant integration of the CSK Auto Corporation acquisition completed in July 2008. The company operated 3,421 stores across 38 states at the close of 2009. O'Reilly emphasizes its "dual market strategy," serving both do-it-yourself (DIY) and professional installer customers, which it believes is a key competitive advantage. The integration of CSK involved converting store systems, enhancing distribution infrastructure, and aligning product offerings, with the process expected to continue into 2011. The company highlighted its experienced management team and a proven ability to execute its growth strategy, which includes opening new stores and selectively pursuing strategic acquisitions. Financially, O'Reilly reported increased sales driven by the full inclusion of CSK's results and comparable store sales growth. The company also saw improvements in gross profit margins attributed to lower product acquisition costs, favorable product mix, and distribution system enhancements. However, the acquisition also led to increased debt levels and higher selling, general, and administrative (SG&A) expenses. Despite economic headwinds, O'Reilly expressed confidence in its liquidity and ability to fund future growth through operating cash flows and its credit facility.
Financial Highlights
47 data points| Revenue | $4.85B |
| Cost of Revenue | $2.52B |
| Gross Profit | $2.33B |
| SG&A Expenses | $1.79B |
| Operating Income | $537.62M |
| Interest Expense | $45.18M |
| Net Income | $307.50M |
| EPS (Basic) | $0.15 |
| EPS (Diluted) | $0.15 |
| Shares Outstanding (Basic) | 2.04B |
| Shares Outstanding (Diluted) | 2.07B |
Key Highlights
- 1O'Reilly operated 3,421 stores in 38 states by the end of 2009, following the acquisition of CSK Auto Corporation.
- 2The company continued to focus on its "dual market strategy" (DIY and professional installers), a key competitive advantage.
- 3Sales increased significantly due to the full inclusion of CSK's operations and positive comparable store sales growth.
- 4Gross profit margin improved, driven by lower product acquisition costs and better product mix.
- 5Significant investments were made in distribution infrastructure, including new distribution centers to support the acquired CSK stores.
- 6The company maintained strong executive and store management with extensive tenure, contributing to operational consistency.
- 7Increased debt levels from the CSK acquisition were noted as a risk factor, alongside integration challenges.