What was the impact of the Midwest acquisition on O'Reilly's financial performance?

O'Reilly acquired Midwest Auto Parts Distributors for $63 million on May 31, 2005. The results of Midwest are included in the consolidated statements from the acquisition date. The company stated that the pro forma effect on earnings from this acquisition was not material.

How did the company's store count change during the period?

O'Reilly opened 41 net new stores during the second quarter of 2005 and 78 net new stores during the first six months of 2005, excluding the impact of the Midwest acquisition. This brought the total store count to 1,399 as of June 30, 2005, compared to 1,170 stores as of June 30, 2004.

What is the company's current liquidity position?

As of June 30, 2005, O'Reilly had $36.5 million in cash and cash equivalents. The company had $126.0 million in available borrowings under its $150 million revolving credit facility, which was subsequently renewed on July 29, 2005, to a $100 million five-year facility. Management believes its current cash, expected operating cash flows, and credit facilities are sufficient to meet its capital and liquidity needs.

What accounting changes or new standards are expected to impact O'Reilly?

The company is preparing for the adoption of SFAS No. 123R, Share-Based Payment, effective January 1, 2006, which will require the expensing of stock options and could change the classification of tax benefits from operating to financing cash flows. They do not expect material impacts from SFAS 151 (Inventory Costs) or SFAS 153 (Exchanges of Nonmonetary Assets).

ORLY 10-Q Quarterly Report Q2 FY2005 — Revenue, Net Income, EPS

Summary

O'Reilly Automotive Inc. (ORLY) reported strong performance for the second quarter and first six months of 2005. Total sales increased by 19.8% year-over-year for the quarter and 17.8% for the year-to-date period, driven by both new store openings and a comparable store sales increase of 9.6% and 8.4%, respectively. Gross profit also saw significant growth, improving in both dollar amount and as a percentage of sales, attributed to favorable inventory costs, sales mix, and distribution efficiencies. The company successfully integrated the acquisition of Midwest Auto Parts Distributors, Inc. in May 2005 for $63 million, expanding its reach into new geographic areas. Furthermore, O'Reilly completed a two-for-one stock split in June 2005, which has been reflected retroactively in EPS calculations. Despite increased investment in property and equipment and the acquisition, the company maintained a strong liquidity position, with no outstanding amounts on its revolving credit facility at the end of the quarter and a renewed facility in place.

Key Highlights

1Net sales for the second quarter of 2005 increased by 19.8% to $521.2 million, and for the first six months increased by 17.8% to $987.4 million, year-over-year.
2Comparable store sales increased by 9.6% for the second quarter and 8.4% for the first six months of 2005.
3Gross profit margin improved to 43.9% in Q2 2005 from 43.6% in Q2 2004, driven by lower inventory costs and improved efficiencies.
4The company acquired W.E. Lahr Company (Midwest Auto Parts Distributors) for $63 million on May 31, 2005, expanding its retail footprint.
5A two-for-one stock split was effected on June 15, 2005, with all prior period EPS data restated.
6Operating cash flow decreased to $125.4 million in the first six months of 2005 from $159.5 million in the prior year, primarily due to smaller increases in accounts payable.
7Capital expenditures increased, reflecting investment in new store growth and the recent acquisition.

O REILLY AUTOMOTIVE INC Quarterly Report for Q2 Ended Jun 30, 2005

Summary

Key Highlights

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