O'REILLY AUTOMOTIVE, INC EDITED TRANSCRIPT
ORLY - O'Reilly Automotive Inc at Gabelli & Company Automotive
Aftermarket Symposium
EVENT DATE/TIME: NOVEMBER 03, 2015 / 10:15PM GMT
So our next presenter continues to set a standard for the industry that really only they have been able to surpass, with continued same-store sales growth in the mid- to high-single-digit range. Just an outstanding operator that continues to drive not only operating profit dollars, but expand margins and use that cash flow to both grow their footprint and buy back shares, all of which they've done at a very smart-- that has been smart from a valuation range because, ho-hum, every year O'Reilly has gone up. And this year it's no different with the stock up about $50 year to date.
The Company has about 100 million shares and trades around $260 for about a $26.7 billion equity cap. About-- what I'd I do?
I asked Tom if we traded again at the $260.
$262.47 was not too long ago.
Yes.
$1.1 billion of net debt. $27.8 billion to enterprise value.
Thanks, Brian.
So we wanted to do our standard deck and they didn't want us to, so we're just going to answer questions. You guys have seen the deck before, I bet.
I think at this point few in here don't know who you are.
Oh. Okay.
Okay. Well, I think some of the positives are that miles driven's done a good pace of increase during the last year or so. The gas price is down. The economy seems to be doing a little better in general. And of course the average age of cars continues to increase, which I think we're all kind of learning for the first time what it means as cars get this old in the United States and, from our perspective, it's very positive.
Cars have proven to take more maintenance and it's the kind of maintenance that people are willing to invest in, because it's not engines and transmissions and differentials that might cause one to decide whether or not they keep the car or whether or not the car should be scrapped or continued to be driven. It's the kind of maintenance that people are willing to invest in because the car has a good drive train and a decent interior and decent exterior and things like that. So, we see that as very positive and we feel like the industry has a lot of tailwinds for that reason.
On I guess the other side, things I think of from a macro perspective, there's always the threat that fuel prices could increase abruptly because of some macroeconomic thing and that, as history has proven, hits miles driven pretty quick. And when that happens, that affects our business and others in our business.
I think it's been undeniable that you've gained a significant amount of market share just by virtue of your comps over the course of the last five years. We're seeing two competitors change how they think about distribution and investing heavily. How do you-- one, how do you continue to gain share if [first-store delivery] rises at some of your main competitors and, two, in the event that price is used as a differentiator, how do you hold price to maintain operating profit dollars?
Yes. Well, we've always had good competitors. I've been with O'Reilly for 31 years. And I remember back 31 years ago the store that I ran was a-- we had tough competitors back then. I mean I fought every day for the business that we did. And today we've got 4,550 store managers out there fighting for business. No customers on the wholesale side give us their business because they think we're this great company or they think that we deserve it because the trade rags recognize us as a leader and all that kind of that stuff. They give it to us because we have store managers that are out there working hard to provide the service levels that allow the shops to be more successful. And we support them with a distribution system that allows them to have the part and say yes; in many cases, more than our competitors.
So, it's a combination of high service level, strong relationships, professional parts people. And it's an ongoing battle. There's no day that we wake up and we feel like that we've got this book of business that's for sure coming to us. We feel like we have to go out and earn it every day. And that's what we say to our store managers and that's what they go out and do.
Yes. Well, the CSK stores have done great. I don't think we really have any that we would say are-- I think it's-- it's really hard to say that any of our stores are at full maturity. We've got a competitor in every market. And store managers would never say to me or to Jeff Shaw, our operations guys, that they think they've got all the business they can get in that market. I mean that's just never the case. If we thought that, we'd jump in the car and I'd run over the shop and say, well, why is there NAPA invoice on this guy's desk, because there would be. You hardly ever have all of a shop's business.
Yes. One of you guys want to take that or do you--?
|
distributed by
|
