O REILLY AUTOMOTIVE INC Quarterly Report for Q1 Ended Mar 31, 2011

Summary

O'Reilly Automotive, Inc. (ORLY) reported strong first-quarter 2011 results, with sales increasing by 8% year-over-year to $1.38 billion. This growth was driven by a 5.7% increase in comparable store sales and the opening of 55 new stores. Net income rose 5% to $102.5 million, or $0.72 per diluted share. A significant event during the quarter was the refinancing of the company's debt, including the issuance of $500 million in senior notes and the retirement of the asset-based revolving credit facility, which resulted in a one-time charge of $21.6 million for write-off of debt issuance costs and $4.2 million for termination of interest rate swaps. Excluding these one-time charges, adjusted net income increased by 22% to $118.4 million, and adjusted diluted EPS grew by 19% to $0.83, highlighting the underlying strength of the business operations.

Key Highlights

• 1Sales grew 8% to $1.38 billion in Q1 2011, driven by comparable store sales increase of 5.7%.
• 2Net income increased 5% to $102.5 million ($0.72/share) for the quarter.
• 3The company opened 55 new stores, expanding its footprint to 3,613 locations across 39 states.
• 4Completed a significant debt refinancing, issuing $500 million in 4.875% Senior Notes due 2021 and retiring the previous asset-based revolving credit facility.
• 5Excluding one-time charges related to debt refinancing, adjusted net income increased 22% to $118.4 million and adjusted diluted EPS increased 19% to $0.83.
• 6Implemented a new $500 million share repurchase program and repurchased $145 million of stock in Q1 2011.
• 7Cash flow from operations significantly improved, more than doubling to $294 million from $171 million in the prior year's comparable quarter.

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