Summary
O'Reilly Automotive, Inc. (ORLY) reported strong sales growth in the first quarter of 2009, driven significantly by the acquisition of CSK Auto Corporation. Total sales increased by 80.1% year-over-year to $1.16 billion, reflecting both organic growth in comparable O'Reilly branded stores (up 8.2%) and the substantial contribution from the newly integrated CSK stores. Despite the impressive top-line performance, net income saw a more modest increase of 35.6% to $62.8 million, resulting in diluted EPS of $0.46, up from $0.40 in the prior year. This divergence is attributed to increased selling, general, and administrative expenses, higher interest expenses related to acquisition financing, and the amortization of acquisition-related intangibles. Operationally, the company is focused on integrating the CSK acquisition, including rebranding CSK stores to the O'Reilly brand and optimizing inventory. While cash flow from operations decreased due to increased inventory investment, the company maintained a strong liquidity position with significant availability under its asset-based revolving credit facility. Investors should note the ongoing legal proceedings related to the CSK acquisition, though management believes they will not materially impact the company's financial condition.
Financial Highlights
24 data points| Revenue | $1.16B |
| Cost of Revenue | $621.08M |
| Gross Profit | $542.67M |
| SG&A Expenses | $429.33M |
| Operating Income | $113.34M |
| Interest Expense | $12.06M |
| Net Income | $62.84M |
| EPS (Basic) | $0.03 |
| EPS (Diluted) | $0.03 |
| Shares Outstanding (Basic) | 2.03B |
| Shares Outstanding (Diluted) | 2.04B |
Key Highlights
- 1Total sales surged by 80.1% to $1.16 billion, primarily due to the CSK acquisition and organic growth.
- 2Comparable store sales for O'Reilly branded stores increased by a healthy 8.2%.
- 3Net income grew by 35.6% to $62.8 million, resulting in diluted EPS of $0.46, up from $0.40 in Q1 2008.
- 4Gross profit margin improved to 46.6% from 44.6%, driven by product mix, cost efficiencies, and higher margins from acquired CSK stores.
- 5Operating income increased significantly by 52.8% to $113.3 million.
- 6The company operated 3,337 stores by the end of the quarter, a substantial increase from 1,867 stores in the prior year, reflecting the integration of CSK.
- 7Cash flow from operations decreased by 27.2% to $86.6 million, largely due to increased inventory investment in acquired stores.