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O’Reilly: 1St Quarter Earnings Press Release Exhibit

The following excerpt is from the company's SEC filing.

Exhibit 99.1

FOR IMMEDIATE RELEASE

O’REILLY AUTOMOTIVE, INC. REPORTS FIRST QUARTER 2016 RESULTS

First quarter comparable store sales increase of 6.1%

Record high first quarter operating margin of 20%

26% increase in first quarter diluted earnings per share to $2.59

Springfield, MO,

April 27, 2016

O’Reilly Automotive, Inc. (the “Company” or “O’Reilly”) (

Nasdaq:

ORLY), a leading retailer in the automotive aftermarket industry, today announced record revenues and earnings for its

quarter ended

March 31, 2016

Quarter Finan cial Results

Sales for the

, increased

$194 million

$2.10 billion

$1.90 billion

for the same period one year ago. Gross profit for the

quarter increased to

$1.10 billion

of sales) from

$987 million

of sales) for the same period one year ago, representing an increase of

. Selling, general and administrative expenses for the

$679 million

$637 million

. Operating income for the

$419 million

$350 million

Net income for the

$43 million

$255 million

$213 million

of sales) for the same period one year ago. Diluted earnings per common share for the

99 million

shares versus

103 million

shares for the same period one year ago.

Commenting on the Company’s first quarter results, O’Reilly’s President and CEO, Greg Henslee stated, “We are very proud to report a strong start to 2016, highlighted by a 6.1% increase in comparable store sales, which represents our 10th consecutive quarter of comparable store sales growth greater than 5%, and a 26% increase in first quarter diluted earnings per share to $2.59, which is our 29th consecutive quarter of diluted earnings per share growth greater than 15%. As we previously discussed, our first quarter 2016 results included one additional day due to Leap Day, which is excluded from our comparable store sales results, but benefited our first quarter EPS by approximately $0.05 per share. Our consistently strong performance is the direct result of the unwavering commitment of our over 73,000 Team Members dedicated to providing excellent customer service, and I would like to thank each of our hard working Team Members for our strong first quarter performance and their relentless focus on our long-term success.”

Mr. Henslee continued, “As we have commented on in the past, our gross margin results can face headwinds relating to merchandise acquisition cost improvements, which is a positive driver to our long-term gross margin expansion, but can create short term pressure on our gross margin results due to reducing our inventory value to the lower acquisition cost in accordance with our LIFO accounting. Our second quarter earnings per share guidance includes an expected non-cash impact from a specific new supplier contract resulting in LIFO headwinds of approximately $23 million. While this item impacts our second quarter gross margin expectations, we still anticipate full-year gross margin to be within our previously guided range of 52.3% to 52.7% of sales as our gross margin benefits from these cost reductions for the remainder of 2016.”

Share Repurchase Program

During the

, the Company repurchased

1.2 million

shares of its common stock, at an average price per share of

$254.02

, for a total investment of

$313 million

. Subsequent to the end of the

quarter and through the date of this release, the Company repurchased an additional

0.3 million

$270.61

$71 million

. The Company has repurchased a total of

52.7 million

shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through the date of this release, at an average price of

$108.84

, for a total aggregate investment of

$5.74 billion

. As of the date of this release, the Company had approximately

$509 million

remaining under its current share repurchase authorization.

Quarter Comparable Store Sales Results

Comparable store sales are calculated based on the change in sales for stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores and sales to Team Members, as well as the sales from Leap Day in the three months ended March 31, 2016. Comparable store sales increased

, versus

for the same period one year ago.

Quarter and Updated Full-Year

Guidance

The table below outlines the Company’s guidance for selected

quarter and updated full-year

financial data:

For the Three Months Ending

June 30, 2016

For the Year Ending

December 31, 2016

3% to 5%

Total revenue

$8.4 billion to $8.6 billion

Gross profit as a percentage of sales

Operating income as a percentage of sales

19.3% to 19.7%

Diluted earnings per share

$2.54 to $2.64

$10.10 to $10.50

Capital expenditures

$460 million to $490 million

Free cash flow

$750 million to $800 million

Weighted-average shares outstanding, assuming dilution, used in the denominator of this calculation, includes share repurchases made by the Company through the date of this release.

Calculated as net cash provided by operating activities less capital expenditures for the period.

Non-GAAP Information

This release contains certain financial information not derived in accordance with United States generally accepted accounting principles (“GAAP”). These items include adjusted debt to earnings before interest, taxes, depreciation, amortization, share-based compensation and rent (“EBITDAR”) and free cash flow. The Company does not, nor does it suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. The Company believes that the presentation of adjusted debt to EBITDAR and free cash flow provide meaningful supplemental information to both management and investors that is indicative of the Company’s core operations. The Company has included a reconciliation of this additional information to the most comparable GAAP measure in the selected financial information below.

Earnings Conference Call Information

The Company will host a conference call on

Thursday, April 28, 2016

, at 10:00 a.m. central time to discuss its results as well as future expectations. Investors may listen to the conference call live on the Company’s website at

www.oreillyauto.com

by clicking on “Investor Relations” and then “News Room.” Interested analysts are invited to join the call. The dial-in number for the call is (847) 585-4405; the conference call identification number is 42060798. A replay of the conference call will be available on the Company’s website through

Thursday, April 27, 2017

About O’Reilly Automotive, Inc.

O’Reilly Automotive, Inc. was founded in 1957 by the O’Reilly family and is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States, serving both the do-it-yourself and professional service provider markets. Visit the Company’s website at

for additional information about O’Reilly, including access to online shopping and current promotions, store locations, hours and services, employment opportunities and other programs. As of

, the Company operated

stores in

states.

Forward-Looking Statements

The Company claims the protection of the safe-harbor for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as “estimate,” “may,” “could,” “will,” “believe,” “expect,” “would,” “consider,” “should,” “anticipate,” “project,” “plan,” “intend” or similar words. In addition, statements contained within this press release that are not historical facts are forward-looking statements, such as statements discussing, among other things, expected growth, store development, integration and expansion strategy, business strategies, future revenues and future performance. These forward-looking statements are based on estimates, projections, beliefs and assumptions and are not guarantees of future events and results. Such statements are subject to risks, uncertainties and assumptions, including, but not limited to, the economy in general, inflation, product demand, the market for auto parts, competition, weather, risks associated with the performance of acquired businesses, our ability to hire and retain qualified employees, consumer debt levels, our increased debt levels, credit ratings on public debt, governmental regulations, terrorist activities, war and the threat of war. Actual results may materially differ from anticipated results described or implied in these forward-looking statements. Please refer to the “Risk Factors” section of the annual report on Form 10-K for the year ended

December 31, 2015

, for additional factors that could materially affect the Company’s financial performance. Forward-looking statements speak only as of the date they were made and the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

For further information contact:

Investor & Media Contact

Mark Merz (417) 829-5878

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

March 31, 2015

(Unaudited)

(As Adjusted, Unaudited)

(Note)

Assets

Current assets:

Cash and cash equivalents

716,008

473,646

116,301

Accounts receivable, net

178,282

162,020

161,078

Amounts receivable from suppliers

68,486

69,545

72,609

Inventory

2,701,760

2,527,982

2,631,015

Other current assets

36,927

39,326

29,023

Total current assets

3,701,463

3,272,519

3,010,026

Property and equipment, at cost

4,473,747

4,080,350

4,372,250

Less: accumulated depreciation and amortization

1,559,820

1,381,502

1,510,694

Net property and equipment

2,913,927

2,698,848

2,861,556

Notes receivable, less current portion

12,172

12,414

13,219

Goodwill

757,130

756,384

757,142

Other assets, net

35,081

37,605

34,741

Total assets

7,419,773

6,777,770

6,676,684

Liabilities and shareholders’ equity

Current liabilities:

Accounts payable

2,782,609

2,470,749

2,608,231

Self-insurance reserves

71,069

67,676

72,741

Accrued payroll

66,842

75,059

59,101

Accrued benefits and withholdings

49,175

42,413

72,203

Income taxes payable

114,321

78,939

Other current liabilities

231,661

200,888

232,678

Current portion of long-term debt

Total current liabilities

3,315,677

2,935,730

3,046,398

Long-term debt, less current portion

1,885,877

1,388,801

1,390,018

Deferred income taxes

76,450

97,981

79,772

Other liabilities

201,928

211,758

199,182

Shareholders’ equity:

Common stock, $0.01 par value:

Authorized shares – 245,000,000

Issued and outstanding shares –

101,347,744 as of March 31, 2015, and

97,737,171 as of December 31, 2015

Additional paid-in capital

1,301,057

1,234,133

1,281,497

Retained earnings

637,817

908,354

678,840

Total shareholders’ equity

1,939,841

2,143,500

1,961,314

Total liabilities and shareholders’ equity

Note: The balance sheet at

, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

Certain amounts as of March 31, 2015, have been reclassified to conform to current period presentation, due to the Company’s adoption of new accounting standards during the fourth quarter ended December 31, 2015. See Note 1 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements of the annual report on Form 10-K for the year ended December 31, 2015.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

For the Three Months Ended

March 31,

2,096,150

1,901,903

Cost of goods sold, including warehouse and distribution expenses

998,571

914,944

1,097,579

986,959

678,953

636,586

418,626

350,373

Other income (expense):

Interest expense

(14,821

(14,402

Interest income

Other, net

Total other expense

(13,052

(12,709

Income before income taxes

405,574

337,664

Provision for income taxes

150,200

124,800

255,374

212,864

Earnings per share-basic:

Weighted-average common shares outstanding – basic

97,140

101,612

Earnings per share-assuming dilution:

Weighted-average common shares outstanding – assuming dilution

98,537

103,257

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of property, equipment and intangibles

52,778

54,950

Amortization of debt discount and issuance costs

Excess tax benefit from share-based compensation

(14,762

(21,188

(3,322

(4,441

Share-based compensation programs

Changes in operating assets and liabilities:

(19,206

(19,867

(70,745

26,807

174,378

53,582

127,638

117,221

(21,183

(21,673

Net cash provided by operating activities

488,155

406,025

Investing activities:

Purchases of property and equipment

(103,974

(91,140

Proceeds from sale of property and equipment

Payments received on notes receivable

Net cash used in investing activities

(102,063

(89,547

Financing activities:

Proceeds from the issuance of long-term debt

499,160

Payment of debt issuance costs

(3,725

Principal payments on capital leases

Repurchases of common stock

(312,656

(134,813

Net proceeds from issuance of common stock

16,074

20,252

Net cash provided by (used in) financing activities

213,615

(93,392

Net increase in cash and cash equivalents

599,707

223,086

Cash and cash equivalents at beginning of the period

250,560

Cash and cash equivalents at end of the period

Supplemental disclosures of cash flow information:

Income taxes paid

23,765

Interest paid, net of capitalized interest

23,063

23,435

SELECTED FINANCIAL INFORMATION

(Unaudited)

For the Twelve Months Ended

Adjusted Debt to EBITDAR:

(In thousands, except adjusted debt to EBITDAR ratio)

GAAP debt

1,388,807

Letters of credit

38,936

50,506

Discount on senior notes

Debt issuance costs

10,537

Six-times rent expense

1,651,944

1,597,278

Adjusted debt

3,590,880

3,047,790

GAAP net income

973,726

817,186

57,548

54,283

554,550

467,700

208,084

201,678

Share-based compensation expense

21,187

23,889

Rent expense

275,324

266,213

2,090,419

1,830,949

Adjusted debt to EBITDAR

Selected Balance Sheet Ratios:

Inventory turnover

Average inventory per store (in thousands)

Accounts payable to inventory

Return on equity

Return on assets

(1)(6)

Selected Financial Information (in thousands):

384,181

314,885

70,003

67,938

Store and Team Member Information:

Beginning store count

New stores opened

Stores closed

Ending store count

Total employment

73,599

69,708

Square footage (in thousands)

33,559

32,101

Sales per weighted-average square foot

247.28

234.98

Sales per weighted-average store (in thousands)

(1)

Prior period amount has been reclassified to conform to current period presentation, due to the Company’s adoption of new accounting standards during the fourth quarter ended December 31, 2015. See Note 1 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements of the annual report on Form 10-K for the year ended December 31, 2015.

(2)

Calculated as cost of goods sold for the last 12 months divided by average inventory. Average inventory is calculated as the average of inventory for the trailing four quarters used in determining the denominator.

(3)

Calculated as inventory divided by store count at the end of the reported period.

Calculated as accounts payable divided by inventory.

(5)

Calculated as net income for the last 12 months divided by average total shareholders’ equity. Average total shareholders’ equity is calculated as the average of total shareholders’ equity for the trailing four quarters used in determining the denominator.

(6)

Calculated as net income for the last 12 months divided by average total assets. Average total assets is calculated as the average of total assets for the trailing four quarters used in determining the denominator.

(7)

(8)

Calculated as sales less jobber sales, divided by weighted-average square footage. Weighted-average square footage is determined by weighting store square footage based on the approximate dates of store openings, acquisitions, expansions or closures.

(9)

Calculated as sales less jobber sales, divided by weighted-average stores. Weighted-average stores is determined by weighting stores based on their approximate dates of opening, acquisition or closures.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Notice of exempt solicitation - April 14, 2016
O'Reilly: O’Reilly Automotive, Inc. Announces Dates For Its FIRST QUARTER 2016 EARNINGS RELEASE AND CONFERENCE CALL - April 1, 2016
O'Reilly Automotive's CEO & PRESIDENT just cashed-in 10,000 options - March 29, 2016