What was O'Reilly's revenue growth in the first quarter of 2006?

O'Reilly reported a 15.1% increase in product sales, reaching $536.5 million for the first quarter ended March 31, 2006, compared to $466.2 million in the same period of 2005. This growth was attributed to new store openings and a 3.8% increase in comparable store sales.

How did the adoption of SFAS No. 123R affect the financial statements?

The company adopted SFAS No. 123R, 'Share-Based Payment,' using the modified prospective method starting January 1, 2006. This required recognizing stock-based compensation expense based on the fair value of awards. For Q1 2006, this resulted in approximately $234,000 in stock option compensation costs and $188,000 for employee stock purchases, along with other employee benefit plans. Prior periods were not restated, but pro forma disclosures for 2005 showed the impact of fair-value-based accounting.

What is the company's outlook for store expansion?

O'Reilly Automotive is aggressively expanding, having opened 36 net new stores in the first quarter of 2006. The company plans to open an additional 134 to 139 stores during the remainder of 2006, with expansion plans to be financed through operating activities and existing credit facilities.

How is O'Reilly managing its liquidity and capital resources?

The company maintains a strong liquidity position with $55.3 million in cash and cash equivalents at March 31, 2006. They have a $100 million unsecured revolving credit facility, of which none was outstanding, leaving $64.7 million in availability after accounting for outstanding letters of credit. O'Reilly believes its current cash, operating cash flow, and available credit are sufficient to meet its short-term and long-term capital and liquidity needs, including its expansion program.

ORLY 10-Q Quarterly Report Q1 FY2006 — Revenue, Net Income, EPS

Summary

O'Reilly Automotive, Inc. reported a solid first quarter for 2006, demonstrating robust sales growth and improved profitability. Product sales increased by 15.1% to $536.5 million, driven by both new store openings and a healthy 3.8% increase in comparable store sales. This top-line growth translated into a significant expansion of gross profit, which grew by 19.0% to $233.4 million, with gross margin improving to 43.5% from 42.1% in the prior year, reflecting better product acquisition costs and distribution efficiencies. The company also navigated increased operating expenses, which rose by 18.1% but were managed effectively as a percentage of sales, slightly increasing to 31.4% from 30.6%. This was attributed to supporting operational growth and increased energy and property tax costs. Despite these pressures, net income saw a healthy increase of 22.1% to $40.6 million, leading to earnings per diluted share of $0.35, up from $0.30 in the same period last year. The company's financial condition remains strong, with ample liquidity and a clear strategy for continued expansion, funded by operating cash flow and available credit facilities.

Key Highlights

1Product sales increased by 15.1% to $536.5 million in Q1 2006, driven by new stores and comparable store sales growth of 3.8%.
2Gross profit grew by 19.0% to $233.4 million, with gross margin expanding to 43.5% due to improved acquisition and distribution costs.
3Net income rose by 22.1% to $40.6 million, resulting in diluted EPS of $0.35, an increase from $0.30 in Q1 2005.
4The company adopted SFAS No. 123R (Share-Based Payment) using the modified prospective method, recognizing stock-based compensation expenses.
5Operating, selling, general, and administrative expenses increased 18.1% but remained relatively stable as a percentage of sales (31.4% vs. 30.6%).
6Cash provided by operating activities was $56.9 million, a decrease from the prior year, primarily due to increased inventory to support store growth.
7O'Reilly plans to open 134 to 139 additional stores in the remainder of 2006, funded by operations and credit facilities.

O REILLY AUTOMOTIVE INC Quarterly Report for Q1 Ended Mar 31, 2006

Summary

Key Highlights

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