ORLY O Reilly Automotive Inc

O�Reilly Automotive, Inc. (�O�Reilly� or �the Company�) (Nasdaq: ORLY) today announced revenues and earnings for the fourth quarter and year ended December 31, 2007, representing 15 consecutive years of record revenues and earnings and positive comparable store sales increases for O�Reilly since becoming a public company in April 1993. Sales for the fourth quarter ended December 31, 2007, totaled $604 million, up 8.2% from $558 million for the same period a year ago. Gross profit for the fourth quarter ended December 31, 2007, increased to $270 million (or 44.7% of sales) from $249 million (or 44.6% of sales) for the same period a year ago, representing an increase of 8.5%. Operating, selling, general and administrative (�OSG&A�) expenses for the fourth quarter of 2007 increased to $207 million (or 34.2% of sales) from $185 million (or 33.1% of sales) for the same period a year ago, representing an increase of 11.7%. Net income for the fourth quarter ended December 31, 2007, totaled $40.6 million, up 0.6% from $40.4 million for the same period in 2006. Diluted earnings per common share for the fourth quarter ended December 31, 2007 were even at $0.35 on 116.3 million shares versus $0.35 a year ago on 115.4 million shares. For the year ended December 31, 2007, sales increased $239 million, or 10.5%, to $2.52 billion from $2.28 billion for the year ended December 31, 2006. Gross profit for the year ended December 31, 2007, increased to $1.12 billion (or 44.4% of sales) from $1.01 billion (or 44.1% of sales) for the year ended December 31, 2006, representing an increase of 11.3%. OSG&A expenses for the year ended December 31, 2007, increased to $815 million (or 32.3% of sales) from $724 million (or 31.7% of sales) for the year ended December 31, 2006, representing an increase of 12.6%. Net income for the year ended December 31, 2007, totaled $194.0 million, up 8.9% from $178.1 million for the year ended December 31, 2006. Diluted earnings per common share for the year ended December 31, 2007, increased 7.7% to $1.67 on 116.1 million shares versus $1.55 a year ago on 115.1 million shares. Comparable store sales for stores open at least one year increased 2.1% and 3.7% for the fourth quarter and year ended December 31, 2007, respectively, representing 59 quarters of positive comparable store sales results since O�Reilly became a public company in April 1993. �We would like to thank every member of Team O�Reilly for their hard work and dedication in 2007. We generated an 11.3% increase in gross profit through our continued focus on providing unparalleled service to all of our customers,� stated CEO and Co-President Greg Henslee. �In spite of a very challenging economic environment in 2007, we were able to increase net income by 8.9%. Our focus remains on customer service and gaining market share in new and existing markets. We look forward to all of the opportunities 2008 will present.� Ted Wise, COO and Co-President, stated, "We added 56 new stores in the fourth quarter bringing us to a total of 190 for the year. We are very pleased with our marketing efforts during the year and will continue to build the O�Reilly brand through regional and local events during 2008. Team O�Reilly is more focused than ever on providing outstanding service to both Do-It-Yourself and Do-It-For-Me customers, and we will expand the O�Reilly culture to every market we enter in 2008.� The Company will host a conference call Wednesday, February 20, 2008, 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, www.oreillyauto.com, by clicking on �Investor Relations� then �News Room.� 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 installer markets. Founded in 1957 by the O�Reilly family, the Company operated 1,830 stores in the states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Virginia, Wisconsin and Wyoming as of December 31, 2007. 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. These statements can be identified 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 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, our ability to hire and retain qualified employees, risks associated with the integration of acquired businesses, 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 sections of the Company�s Form 10-K for the year ended December 31, 2006, for more details. O�REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) � December 31,2007 December 31,2006 (Unaudited) (Note) Assets Current assets: Cash and cash equivalents $ 47,555 $ 29,903 Accounts receivable, net 84,242 81,048 Amounts receivable from vendors 48,263 47,790 Inventory 881,761 812,938 Other current assets � 40,483 � 28,997 Total current assets 1,102,304 1,000,676 � Property and equipment, at cost 1,479,779 1,214,854 Accumulated depreciation and amortization � 389,619 � 331,759 Net property and equipment 1,090,160 883,095 � Notes receivable, less current portion 25,437 30,288 Goodwill 50,447 49,065 Other assets � 11,389 � 14,372 Total assets $ 2,279,737 $ 1,977,496 � Liabilities and shareholders' equity Current liabilities: Accounts payable $ 380,683 $ 318,404 Self insurance reserve 29,967 31,084 Accrued payroll 23,739 21,171 Accrued benefits and withholdings 13,496 12,948 Deferred income taxes 6,235 5,779 Other current liabilities 49,536 44,089 Current portion of long-term debt � 25,320 309 Total current liabilities 528,976 433,784 � Long-term debt, less current portion 75,149 110,170 Deferred income taxes 27,241 38,171 Other liabilities 55,894 31,275 � Shareholders' equity: Common stock, $0.01 par value: Authorized shares � 245,000,000 Issued and outstanding shares �115,260,564 at December 31, 2007, and 113,929,327 at December 31, 2006 1,153 1,139 Additional paid-in capital 441,731 400,552 Retained earnings 1,156,393 962,405 Accumulated other comprehensive loss � (6,800) � -- Total shareholders� equity � 1,592,477 � 1,364,096 Total liabilities and shareholders� equity $ 2,279,737 $ 1,977,496 � Note: The balance sheet at December 31, 2006, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) � Three Months Ended Year Ended December 31, December 31, 2007 � 2006 � 2007 � 2006 � (Unaudited) (Note) (Unaudited) (Note) � Sales $ 604,288 $ 558,332 $ 2,522,319 $ 2,283,222 Cost of goods sold, including warehouse and distribution expenses � 333,995 � 309,303 � � 1,401,859 � 1,276,511 � � Gross profit 270,293 249,029 1,120,460 1,006,711 Operating, selling, general and administrative expenses � 206,608 � 185,000 � � 815,309 � 724,396 � � Operating income 63,685 64,029 305,151 282,315 Other income (expense), net � 810 � (32 ) � 2,337 � (50 ) � Income before income taxes 64,495 63,997 307,488 282,265 Provision for income taxes � 23,900 � 23,645 � � 113,500 � 104,180 � � Net income $ 40,595 $ 40,352 � $ 193,988 $ 178,085 � � Net income per common share $ 0.35 $ 0.35 � $ 1.69 $ 1.57 � � Net income per common share � assuming dilution $ 0.35 $ 0.35 � $ 1.67 $ 1.55 � � Weighted-average common shares outstanding � 115,147 � 113,755 � � 114,667 � 113,253 � Adjusted weighted-average common shares outstanding � assuming dilution � 116,349 � 115,430 � � 116,080 � 115,119 � � Note: The income statement for the year ended December 31, 2006, has been derived from the audited consolidated financial statements but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIESSELECTED FINANCIAL INFORMATION(Unaudited) December 31, 2007 � � � � 2006 � � Inventory turnover (1) 1.6 1.6 Inventory turnover, net of payables (2) 3.0 2.8 � AP to inventory (3) 43.2 % 39.2 % Debt-to-capital (4) 5.9 % 7.5 % Return on equity (5) 12.8 % 13.8 % Return on assets (6) 8.8 % 9.3 % Three Months EndedDecember 31, � Year EndedDecember 31, 2007 � 2006 2007 � 2006 Other Information (in thousands): Capital Expenditures $ 63,025 $ 54,004 $ 282,655 $ 228,871 Depreciation and Amortization $ 22,127 $ 17,563 $ 78,943 $ 64,938 Interest Expense $ 1,154 $ 970 $ 3,723 $ 4,322 Lease and Rental Expense $ 14,341 $ 13,331 $ 56,130 $ 50,138 $ $ Sales per weighted-average square foot (7) $ 48.64 $ 50.30 $ 212.03 $ 215.30 � Sales per weighted-average store (in thousands) (8) $ 330 $ 337 $ 1,430 $ 1,439 Square footage (in thousands) 12,439 11,004 � Store count: New stores, net (9) 56 44 190 170 Total stores 1,830 1,640 � Total employment 23,576 21,920 � (1) Calculated as cost of sales 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 numerator. (2) Calculated as cost of sales for the last 12 months divided by average net inventory. Average net inventory is calculated as the average of inventory less accounts payable for the trailing four quarters used in determining the numerator. (3) Accounts payable divided by inventory. (4) The sum of long-term debt and current portion of long-term debt, divided by the sum of long-term debt, current portion of long-term debt and total shareholders' equity. (5) Last 12 months net income divided by average shareholders' equity. Average shareholders' equity is calculated as the average of shareholders' equity for the trailing four quarters used in determining the numerator. (6) Last 12 months net income divided by average total assets. Average total assets is calculated as the average total assets for the trailing four quarters used in determining the numerator. (7) Total sales less jobber sales, divided by weighted-average square feet. Weighted-average sales per square foot is weighted to consider the approximate dates of store openings or expansions. (8) Total sales less jobber sales, divided by weighted-average stores. Weighted-average sales per store is weighted to consider the approximate dates of store openings or expansions. (9) New stores, net for the year ended December 31, 2007 reflects the closing of 2 stores during the second quarter of 2007. There were no store closings in 2006.