10-QPeriod: Q3 FY2012

O REILLY AUTOMOTIVE INC Quarterly Report for Q3 Ended Sep 30, 2012

Filed November 8, 2012For Securities:ORLY

Summary

O'Reilly Automotive, Inc. (ORLY) reported solid financial results for the nine months ended September 30, 2012, demonstrating continued growth and operational efficiency. Sales increased by 7% to $4.69 billion, driven by comparable store sales growth of 3.7% and the opening of 161 net new stores, bringing the total store count to 3,896. Gross profit also saw a significant increase of 10% to $2.35 billion, with gross margin improving to 50.0% from 48.7% in the prior year period, attributed to distribution center efficiencies, improved vendor negotiations, and better inventory shrinkage. Net income grew by 18% to $453 million, translating to diluted EPS of $3.60, up 30% year-over-year, reflecting effective cost management and share repurchases. The company maintained a strong liquidity position with $423 million in cash and cash equivalents and no outstanding borrowings on its $660 million revolving credit facility as of September 30, 2012. O'Reilly also actively managed its capital structure, issuing $300 million in 3.800% Senior Notes due 2022 and continuing its robust share repurchase program, which saw $1.13 billion invested in the first nine months of the year. The company appears well-positioned to navigate the current economic environment, leveraging its dual-market strategy and focus on customer service and operational excellence.

Financial Highlights

46 data points
Beta

Revenue

$1.60B

50.3% Gross Margin

Net Income

$159.33M

9.9% Net Margin

EPS (Diluted)

$0.09

Total Assets

$5.85B

Cash & Equivalents

$422.70M

Free Cash Flow

$275.65M

Financial Statements
Beta
Revenue$1.60B
Cost of Revenue$796.07M
Gross Profit$805.49M
SG&A Expenses$542.17M
Operating Income$263.32M
Interest Expense$10.45M
Net Income$159.33M
EPS (Basic)$0.09
EPS (Diluted)$0.09
Shares Outstanding (Basic)1.78B
Shares Outstanding (Diluted)1.81B

Key Highlights

  • 1Sales increased by 7% to $4.69 billion for the nine months ended September 30, 2012, compared to the prior year period.
  • 2Gross profit increased by 10% to $2.35 billion, with gross margin expanding to 50.0% from 48.7%, driven by operational efficiencies and vendor negotiations.
  • 3Net income rose by 18% to $453 million for the nine-month period.
  • 4Diluted earnings per share (EPS) grew by 30% to $3.60 for the nine months ended September 30, 2012.
  • 5The company opened 161 net new stores, expanding its retail footprint to 3,896 locations.
  • 6O'Reilly maintained a strong cash position and had no outstanding borrowings on its revolving credit facility.
  • 7Share repurchases totaled $1.13 billion in the first nine months of the year, demonstrating a commitment to returning capital to shareholders.

Frequently Asked Questions

O'Reilly reported a 7% increase in sales, reaching $4.69 billion for the nine months ended September 30, 2012, compared to $4.40 billion in the same period of 2011. This growth was supported by comparable store sales increases and the expansion of their store network.

Profitability improved significantly. Gross profit increased by 10% to $2.35 billion, with the gross margin rate expanding to 50.0% from 48.7% a year ago, attributed to operational efficiencies and cost improvements. Net income grew by 18% to $453 million, and diluted EPS increased by 30% to $3.60.

O'Reilly maintained a strong liquidity position, with $422.7 million in cash and cash equivalents as of September 30, 2012. Importantly, the company had no outstanding borrowings on its $660 million unsecured revolving credit facility, indicating ample financial flexibility.

O'Reilly continued its store growth strategy, opening 161 net new stores in the first nine months of 2012, bringing the total to 3,896 locations. The company also actively engaged in share repurchases, investing $1.13 billion in its stock during the period, demonstrating a balanced approach to reinvesting in growth and returning value to shareholders.