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O'Reilly Automotive, Inc. Reports First Quarter 2011 Results

/ Source: GlobeNewswire

    SPRINGFIELD, Mo., April 27, 2011 (GLOBE NEWSWIRE) -- O'Reilly Automotive, Inc. (the "Company") (Nasdaq:ORLY), a leading retailer in the automotive aftermarket industry, today announced record revenues and earnings for the first quarter ended March 31, 2011.

    1

    Sales for the first quarter ended March 31, 2011, increased $103 million, or 8%, to $1.38 billion from $1.28 billion for the same period a year ago. Gross profit for the first quarter increased to $670 million (or 48.4% of sales) from $618 million (or 48.3% of sales) for the same period a year ago, representing an increase of 8%. Selling, general and administrative expenses for the first quarter increased to $473 million (or 34.2% of sales) from $450 million (or 35.1% of sales) for the same period a year ago, representing an increase of 5%. Operating income for the first quarter increased to $196 million (or 14.2% of sales) from $168 million (or 13.2% of sales) for the same period a year ago, representing an increase of 17%.

    Net income for the first quarter ended March 31, 2011, increased to $102 million (or 7.4% of sales) from $97 million (or 7.6% of sales) for the same period a year ago, representing an increase of 5%. Diluted earnings per common share for the first quarter increased 3% to $0.72 on 143 million shares versus $0.70 for the same period a year ago on 140 million shares.

    The Company's results for the first quarter ended March 31, 2011, included one-time charges associated with the new financing plan the Company completed on January 14, 2011. These one-time charges included a non-cash charge to write off the balance of debt issuance costs related to the Company's previous credit facility in the amount of $22 million, and a charge related to the termination of the Company's interest rate swap agreements in the amount of $4 million. Adjusted diluted earnings per common share, excluding the impact of the charges relating to the Company's new financing plan, increased 19% to $0.83 for the first quarter ended March 31, 2011, from $0.70 for the same period a year ago. The table below outlines the impact of the charges related to the new financing plan for the first quarter, (amounts in thousands, except per share data):

    Commenting on the Company's quarterly results, Greg Henslee, O'Reilly's CEO and Co-President, stated, "We are happy to report another very profitable quarter. Our solid start to 2011 was highlighted by a comparable store sales increase of 5.7% and a 100 basis point improvement in operating margin which drove an increase in adjusted diluted earnings per share of 19%. Our 14.2% operating margin is the result of our strong comparable store sales growth coupled with our relentless focus on expense control. During the quarter, we began repurchasing shares of our stock on the open market and through the date of this release we had repurchased 3.6 million shares at an aggregate cost of $200 million. We will continue to prudently use cash generated from operations first to reinvest in the growth of our business and second to opportunistically execute our share repurchase program to enhance shareholder value. We would like to thank our dedicated Team Members for their commitment to our Company's continued success and to the O'Reilly Culture values of customer service and expense control and we look forward to the remainder of 2011 and the opportunity to continue to grow the O'Reilly brand in all of our markets."

    "The first quarter of 2011 marks the first full quarter in which all of our stores have operated on the O'Reilly point-of-sale and distribution systems," stated Ted Wise, COO and Co-President of O'Reilly. "The conversion of all the acquired CSK stores to the O'Reilly systems and distribution network provides same-day or overnight access to a broad selection of hard-to-find parts. The O'Reilly systems also provide important tools which enable the store managers to improve the profitability and efficiency of our stores. We are actively progressing through the final stage of our physical CSK store conversion process, which involves exterior signage and interior décor package changeovers and is scheduled for completion in mid-2011."

    Mr. Wise concluded, "During the first quarter, we opened 55 new stores, putting us on track to reach our goal of 170 net, new store openings in 2011. We also opened our first store in West Virginia this quarter, which increased our operations to 39 states. Our growth is the direct result of the hard work of our 47,000 Team Members and we would like to thank each of you for your commitment to providing excellent customer service."

    On January 11, 2011, the Company's Board of Directors authorized a $500 million share repurchase program. During the first quarter ended March 31, 2011, the Company repurchased 2.6 million shares of its common stock at an average price per share of $55.54, for a total investment of $145 million. Subsequent to the end of the first quarter and through the date of this release, the Company repurchased an additional 1.0 million shares of its common stock at an average price per share of $56.46, for a total investment of $55 million. As of the date of this release, the Company had $300 million remaining under its share repurchase program.

    1

    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. Comparable store sales increased 5.7% for the first quarter ended March 31, 2011, versus 6.9% for the same period a year ago.

    2

    The table below outlines the Company's guidance for selected second quarter and updated full-year 2011 financial data:

    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 net income, adjusted diluted earnings per common share, free cash flow, and rent-adjusted debt to adjusted earnings before interest, taxes, depreciation, amortization, stock option compensation and rent ("EBITDAR"). 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 financial results and estimates excluding the impact of the non-cash charge to write off the balance of debt issuance costs, the charge related to the termination of interest rate swap agreements, as well as the presentation of adjusted debt to adjusted 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 excludes these items in judging its performance and believes this non-GAAP information is useful to investors as well. The Company has included a reconciliation of this additional information to the most comparable GAAP measure in the accompanying reconciliation table.

    Earnings Conference Call Information

    The Company will host a conference call on Thursday, April 28, 2011, 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 web site, , by clicking on "Investor Relations" and then "News Room". Interested analysts are invited to join our call. The dial-in number for the call is (706) 679-5789; the conference call identification number is 52475849. A replay of the call will also be available on the Company's website following the conference call.

    About O'Reilly Automotive, Inc.

    O'Reilly Automotive, Inc. 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. Founded in 1957 by the O'Reilly family, the Company operated 3,613 stores in 39 states as of March 31, 2011.

    The O'Reilly Automotive, Inc. logo is available at

    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 "expect," "believe," "anticipate," "should," "plan," "intend," "estimate," "project," "will" 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, CSK Auto Corporation ("CSK") Department of Justice ("DOJ") investigation resolution, 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, competition, product demand, the market for auto parts, the economy in general, inflation, consumer debt levels, governmental approvals, the Company's increased debt levels, credit ratings on the Company's public debt, the Company's ability to hire and retain qualified employees, risks associated with the performance of acquired businesses such as CSK, weather, 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, 2010, for additional factors that could materially affect the Company's financial performance.

    CONTACT: Investor & Media Contact Mark Merz (417) 829-5878