Summary
O'Reilly Automotive, Inc. (ORLY) reported solid financial results for the quarter and six months ended June 30, 2009, demonstrating strong sales growth primarily driven by the acquisition of CSK Auto Corporation. Despite an increase in expenses and interest costs associated with the acquisition and integration, the company managed to improve its gross profit margin due to favorable product mix, lower acquisition costs, and distribution efficiencies. The company's balance sheet shows growth in assets and liabilities, reflecting the significant impact of the CSK acquisition. While operational cash flow saw a decrease, this was largely due to increased inventory investment, and overall liquidity appears managed through its credit facility. Key areas for investor focus include the continued successful integration of CSK, the management of increased debt levels, and the company's ability to sustain comparable store sales growth amidst a challenging economic environment. The company also highlighted initiatives to manage product quality differentiation and its strategy to expand store footprint. Legal matters related to the CSK acquisition are being actively managed, with significant reserves in place, and management believes these will not materially impact the company's financial position.
Financial Highlights
25 data points| Revenue | $1.25B |
| Cost of Revenue | $647.61M |
| Gross Profit | $603.77M |
| SG&A Expenses | $454.09M |
| Operating Income | $149.68M |
| Interest Expense | $10.96M |
| Net Income | $85.52M |
| EPS (Basic) | $0.04 |
| EPS (Diluted) | $0.04 |
| Shares Outstanding (Basic) | 2.04B |
| Shares Outstanding (Diluted) | 2.06B |
Key Highlights
- 1Total sales for the six months ended June 30, 2009, increased by 79% to $2.42 billion, primarily driven by the acquisition of CSK Auto Corporation.
- 2Gross profit increased by 89% to $1.15 billion for the six months ended June 30, 2009, with gross profit margin improving to 47.5% from 44.8% in the prior year period.
- 3Selling, general, and administrative expenses (SG&A) increased by 99% to $883 million for the six months ended June 30, 2009, largely due to the integration costs of CSK.
- 4Net income for the six months ended June 30, 2009, rose by 46% to $148 million, with diluted earnings per share (EPS) increasing to $1.08 from $0.88 in the prior year.
- 5Net cash provided by operating activities decreased to $152.8 million for the six months ended June 30, 2009, from $215.5 million in the prior year, mainly due to increased inventory investment at acquired CSK stores.
- 6The company's total assets grew to $4.57 billion as of June 30, 2009, from $4.19 billion as of December 31, 2008, reflecting the ongoing impact of the CSK acquisition.
- 7The company has $676.3 million in outstanding borrowings under its $1.2 billion asset-based revolving credit facility as of June 30, 2009, with $445.8 million in aggregate availability for additional borrowings.