01—Abstract
Summary
Summary of the 10-K filed February 28, 2013. Cited figures are marked; the original filing is the authoritative source.
O'Reilly Automotive Inc. (ORLY) in its 2012 10-K filing demonstrates a strong operational year characterized by consistent sales growth and strategic expansion.
The company continued its aggressive new store opening strategy, adding 180 net new stores and acquiring 56 stores from VIP Parts, Tires & Service, bringing its total store count to 3,976 across 42 states. This expansion, coupled with a 3.8% increase in comparable store sales, drove total sales to $6.18 billiona, a 7% increase year-over-year. Financially, ORLY reported a 15% increase in net income to $586 million, translating to diluted earnings per share of $4.75, up 28% from the previous year.
The company also actively managed its capital structure, repurchasing $1.45 billionb in common stock under its share repurchase program and issuing $300 million in senior notes. Despite a higher debt-to-equity ratio, the company maintained compliance with its debt covenants, signaling a robust financial position and a commitment to shareholder value. The company highlighted its dual market strategy, strong customer service, and efficient distribution network as key competitive advantages contributing to its sustained growth.
02—Key points
Key Highlights
- O'Reilly Automotive reported total sales of $6.18 billion for the fiscal year ended December 31, 2012, a 7% increase from the prior year.
- Comparable store sales increased by 3.8%, indicating continued customer demand and market penetration.
- Net income grew by 15% to $586 million, with diluted earnings per share reaching $4.75, a 28% increase.
- The company expanded its footprint by opening 180 net new stores and acquiring 56 stores, bringing the total store count to 3,976.
- ORLY repurchased approximately $1.45 billion of its common stock during the year, demonstrating a commitment to returning capital to shareholders.
- The company issued $300 million in 3.800% Senior Notes due 2022, contributing to its financing strategy.
- Operating income as a percentage of sales improved to 15.8%, up from 15.0% in the prior year, reflecting operational efficiencies.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, O Reilly Automotive Inc kept $0.09.
- Revenue$6.18B100.0%
- Cost of revenue−$3.08B49.9%
- Gross profit$3.10B50.1%
- Operating costs−$2.12B34.3%
- Operating income$977.4M15.8%
- Interest, other & tax−$391.6M6.3%
- Net income$585.7M9.5%
Where FY2012 revenue went
$6.18B- Cost of revenue: $3.08B, 50% of revenue
- SG&A: $2.12B, 34% of revenue
- Net income: $585.7M, 9.5% of revenue
- Interest, other & tax: $391.6M, 6.3% of revenue
Kept 9.5% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 28, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $6.18B$5.79B | +6.8% |
| Cost of Revenue | $3.08B$2.95B | +4.5% |
| Gross Profit | $3.10B$2.84B | +9.2% |
| SG&A Expenses | $2.12B$1.97B | +7.4% |
| Operating Income | $977.39M$866.77M | +12.8% |
| Interest Expense | $40.20M$28.16M | +42.7% |
| Net Income | $585.75M$507.67M | +15.4% |
| EPS (Basic) | $0.32$0.25 | +28.1% |
| EPS (Diluted) | $0.32$0.25 | +28.0% |
| Shares Outstanding (Basic) | 1.82B2.02B | −10.0% |
| Shares Outstanding (Diluted) | 1.85B2.05B | −10.0% |
05—Questions
Frequently Asked Questions
What was O'Reilly's sales performance in 2012?
O'Reilly Automotive reported total sales of $6.18 billion for the fiscal year ended December 31, 2012, which represents a 7% increase compared to the previous year. This growth was supported by a 3.8% increase in comparable store sales and the addition of new stores.
How did O'Reilly's profitability change in 2012?
The company's profitability saw a significant increase in 2012. Net income rose by 15% to $586 million, and diluted earnings per share grew by 28% to $4.75. This improvement was driven by increased sales, gross profit margin expansion, and effective cost management.
What is O'Reilly's growth strategy as outlined in the 10-K?
O'Reilly's growth strategy focuses on aggressively opening new stores, growing sales in existing stores through superior customer service, selectively pursuing strategic acquisitions to consolidate the fragmented market, and continually enhancing store design and its e-commerce website.
How is O'Reilly managing its capital and debt structure?
O'Reilly is actively managing its capital structure through share repurchases and debt issuance. In 2012, the company repurchased $1.45 billion of its common stock and issued $300 million in senior notes. The company maintained compliance with its debt covenants, indicating a stable financial position.
06—Continue