O'Reilly Automotive, Inc. (?O'Reilly? or ?the Company?) (Nasdaq: ORLY) today announced record revenues and earnings for the first quarter ended March 31, 2007, representing 54 consecutive quarters of record revenues, earnings and comparable store sales increases for O'Reilly since becoming a public company in April 1993.

Net income for the first quarter ended March 31, 2007, totaled $48.4 million, up 19.3% from $40.6 million for the same period in 2006. Diluted earnings per common share for the first quarter of 2007 increased 20.0% to $0.42 on 115.5 million shares compared to $0.35 for the first quarter of 2006 on 114.6 million shares. Sales for the three months ended March 31, 2007, totaled $613 million, up 14.3% from $537 million for the same period a year ago. Gross profit for the first quarter of 2007 increased to $269 million (or 43.9% of sales) from $233 million (or 43.5% of sales) for the first quarter of 2006, representing an increase of 15.4%. Operating, Selling, General and Administrative (?OSG&A?) expenses increased to $192 million (or 31.3% of sales) for the first quarter of 2007 from $168 million (or 31.4% of sales) for the first quarter of 2006, representing an increase of 14.0%.

Comparable store sales for stores open at least one year increased 6.8% and 3.8% for the first quarter of 2007 and 2006, respectively.

?We are very pleased with our outstanding results in the first quarter, particularly our 6.8% increase in comparable store sales,? Greg Henslee, CEO and Co-President, stated. ?Team O'Reilly's continued commitment to customer service and expense control have resulted in another record quarter for sales and earnings. Every team member is focused on doing their part to make O'Reilly's 50th year in business our best year ever.?

?We opened 47 new stores during the first quarter and are on track to hit our target of 190 to 195 new stores in 2007,? stated Ted Wise, COO and Co-President. ?Our aggressive expansion efforts, dual market strategy and commitment to providing the best customer service in the industry are moving us toward achieving our goal of $4 billion in sales by 2010.?

The Company will host a conference call Wednesday, April 25, 2007, 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 1,687 stores in the states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Virginia, Wisconsin and Wyoming as of March 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 per share data)

 

March 31,

2007

March 31,

2006

December 31,

2006

(Unaudited) (Unaudited) (Note)
Assets
Current assets:
Cash and cash equivalents $90,217  $55,290  $29,903 
Accounts receivable, net 87,309  74,575  81,048 
Amounts receivable from vendors, net 46,828  60,372  47,790 
Inventory 825,206  753,760  812,938 
Other current assets 21,129  17,739  28,997 
Total current assets 1,070,689  961,736  1,000,676 
 
Property and equipment, at cost 1,276,410  1,038,221  1,214,854 
Accumulated depreciation and amortization 345,319  287,576  331,759 
Net property and equipment 931,091  750,645  883,095 
 
Notes receivable, less current portion 29,151  27,898  30,288 
Other assets, net 62,697  61,449  63,437 
Total assets $2,093,628  $1,801,728  $1,977,496 
 
Liabilities and shareholders' equity
Current liabilities:
Income taxes payable $1,571  $--  $-- 
Accounts payable 372,061  312,509  318,404 
Accrued payroll 25,130  20,286  21,171 
Accrued benefits and withholdings 44,905  46,236  44,032 
Deferred income taxes 10,111  10,868  5,779 
Other current liabilities 43,425  42,248  44,089 
Current portion of long-term debt 312  75,154  309 
Total current liabilities 497,515  507,301  433,784 
 
Long-term debt, less current portion 100,390  25,436  110,170 
Deferred income taxes 32,297  42,882  38,171 
Other liabilities 42,941  19,637  31,275 
 
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares ? 245,000,000

Issued and outstanding shares ? 114,126,459 as of March 31, 2007, 113,199,354 as of March 31, 2006 and 113,929,327 as of December 31, 2006

1,141  1,132  1,139 
Additional paid-in capital 408,532  380,456  400,552 
Retained earnings 1,010,812  824,884  962,405 
Total shareholders' equity 1,420,485  1,206,472  1,364,096 
Total liabilities and shareholders' equity $2,093,628  $1,801,728  $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

(Unaudited)

(In thousands, except per share data)

 
Three Months Ended
March 31,
2007  2006 
 
Sales $613,145  $536,547 
Cost of goods sold, including warehouse and distribution expenses

343,864 

303,119 

 
Gross profit 269,281  233,428 
Operating, selling, general and administrative expenses 192,089  168,462 
 
Operating income 77,192  64,966 
Other expense, net 10  452 
 
Income before income taxes 77,182  64,514 
Provision for income taxes 28,775  23,950 
 
Net income $48,407  $40,564 
 
Net income per common share $0.42  $0.36 
 
Net income per common share ? assuming dilution $0.42  $0.35 
 
Weighted-average common shares outstanding 113,936  112,523 
Adjusted weighted-average common shares

outstanding ? assuming dilution

115,537 

114,615 

O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

SELECTED FINANCIAL INFORMATION

(Unaudited)

 
March 31,
2007  2006 
 
Inventory turnover (1) 1.7  1.7 
Inventory turnover, net of payables (2) 2.9  2.9 
 
AP to inventory (3) 45.1% 41.5%
Debt-to-capital (4) 6.6% 7.7%
Return on equity (5) 14.2% 15.1%
Return on assets (6) 9.5% 10.0%
Three Months Ended
March 31,
2007  2006 
Other Information (in thousands):
Capital Expenditures $64,089  $47,450 
Depreciation and Amortization $17,436  $15,111 
Interest Expense $749  $1,359 
Lease and Rental Expense $13,694  $12,239 
 
Sales per weighted-average square foot (7) $53.82  $53.02 
 
Sales per weighted-average store

(in thousands) (8)

$361  $353 
Square footage (in thousands) 11,339  10,046 
 
Store count:
New stores, net 47  36 
Total stores 1,687  1,506 
 
Total employment 22,493  20,312 
 
(1) Calculated as cost of sales for the last 12 months divided by average inventory. Average inventory is calculated as the simple average of beginning and ending inventory for the same period used in determining the numerator.

(2) Calculated as cost of sales for the last 12 months divided by average inventory less accounts payable. Average inventory is calculated as the simple average of beginning and ending inventory for the same period 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 by taking a simple average of the beginning and ending shareholders' equity for the same period used in determining the numerator.

(6) Last 12 months net income divided by average total assets. Average total assets is calculated by taking a simple average of the beginning and ending total assets for the same period 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.